Purpose

The purpose of this report is to request the City Council approval to award an annual contract for street repairs associated with Burbank Water and Power projects.

Background

BWP routinely excavates in City streets during construction and maintenance activities of the water and electric facilities throughout the year.  In order to make repairs in a timely manner, a contractor must be retained and be ready to perform this work as needed.  The work to be performed is categorically exempt, as the maintenance of existing streets, Section 15301(c) of the State California Environmental Quality Act guidelines.  Therefore, no action is required under the CEQA.

The existing contract with Paveco Construction Inc. was issued in 2002 for a one-year term.  The contract is renewable and could be extended annually for one-year periods not to exceed three years following the initial period of one year.  The contract costs are adjusted for the annual extensions based on the Consumer Price Index (CPI).  The contract was renewed in 2003 for another year, with an expiration date of October 14, 2004.

The contract renewal was being prepared in October of 2004.  The contractor declined to renew because of the escalated local costs for fuel, waste disposal, and Asphaltic Concrete and Portland Cement Concrete materials that went well beyond the current 4% CPI.

Continuing with the current contract was clearly a losing proposition for the contractor.  Local cost escalation was also far beyond any reasonable range for price negotiation.  Further discussions with Paveco Construction, Inc. resulted in the conclusion that it would be equitable to all parties to go out to bid and establish new unit prices on an open competitive basis.

The contractor agreed to a 90-day contract extension period, in order to continue our construction and maintenance projects.  The 90-day contract extension period expired on January 14, 2004.

On November 13, 2004, and November 17, 2004, Bid Schedule No. 1178 was advertised in the Burbank Leader.  Nine copies of the bid schedule were taken out, and four bids were received at the bid opening.  The indefinite quantity unit price bids were evaluated utilizing a confidential, pre-determined mix of typical annual quantities of paving repair work.  Paveco Construction, Inc. was the lowest bid among all four bidders.  Paveco Construction, Inc. has performed this type of work under other bid schedules for the City for over thirteen years in a satisfactory manner.  The unit prices in Bid Schedule No. 1178 reflect significant increase of unit cost from the current contract.  The contract�s unit costs for the lowest bid came approximately 60% higher than the current contract.  The unit costs for the other three bids ranged between 80% to 120% increase beyond the current contract.

Analysis

• Paving costs have increased significantly in the last year.

• On November 13, 2004, and November 17, 2004, Bid Schedule No. 1178 was advertised in the Burbank Leader.  Nine copies of the bid schedule were taken out.

• Four bids were received at the bid opening on December 7, 2004.

• The bids were evaluated utilizing a confidential, pre-determined mix of typical annual quantities of paving repair work.

• Paveco Construction, Inc. was the lowest bid among all four bidders.

• The unit prices for the lowest bid reflect Significant increase of the unit cost from the current contract, approximately 60% higher than the current contract.  The unit costs for the other three bids ranged between 80% to 120% increase beyond the current contract.

• All paving work done during the term of this contract for the current and next fiscal year will be funded directly from budgeted and approved Capital Projects, or Operation and Maintenance activities.

Under the current circumstances, and with the expiration of the 90-day contract extension period, we need to award the new contract under Bid Schedule No. 1178, in order for us to provide repair services in a timely manner and continue with our construction and maintenance activities for water, electric, and fiber optic facilities.

Fiscal Impact Statement

The expenditure for work under this Bid Schedule is estimated Not-to-Exceed $250,000.  Funds are available in the Fiscal Year 2004-2005 BWP Budget under Account 62445 and also from Aid in Construction and other sources.  All paving work done during the term of this contract for the current and next fiscal year will be funded directly from budgeted and approved Capital projects, or budgeted Operation and Maintenance activities.

Recommendation

Staff recommends that the City Council approve awarding the contract to Paveco Construction, Inc. for work under Bid Schedule No. 1178 - Annual Contract to Perform Asphaltic Concrete and Portland Cement Concrete Repairs for Water, Electric and Fiber Optic Services Projects for Burbank Water and Power.

If the City Council concurs, the necessary action is a motion to adopt the Resolution entitled: �A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING AND ADOPTING CONTRACT DOCUMENTS, PLANS AND SPECIFICATIONS, AND DETERMINING THE LOWEST RESPONSIBLE BIDDER, ACCEPTING THE BID, AND AUTHORIZING EXECUTION OF A CONTRACT FOR THE ANNUAL CONTRACT FOR ASPHALTIC CONCRETE AND PORTLAND CEMENT CONCRETE REPAIRS PROJECT, BID SCHEDULE  NO. 1178.�

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