HomeMy WebLinkAboutAGENDA REPORT 2000 0202 CC REG ITEM 10CTo.
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City of Moorpark
Agenda Report
ITEM 10 • C •
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BY:
The Honorable City Council
Kenneth C. Gilbert, Director of Public Works
January 21, 2000 (Council Meeting 2 -2 -00)
Consider Changes to Format of Bid Packages for Public
Works Construction Projects
BACKGROUND
1. On November 17, 1999, the City ACouncil asked staff to provide
information to the City Council about the bidding process for
Public Works construction projects. A Memorandum on the matter,
dated November 19, 1999, was provided to the City Council.
2. On December 1, 1999, the City Council asked that this matter be
placed on an upcoming City Council agenda. The report was
discussed by the City Council at their meeting of January 5,
2000.
3. Subsequent to discussion of the matter at the January 5 meeting,
the City Council directed staff to prepare a report on any
recommended changes to the structure and content of the standard
Public Works bid package, designed to enable the City to better
evaluate the capability of bidders to perform the required work
in a "satisfactory"1 manner. This report presents those
recommendations..
4. Attached as Exhibit 1, is a summary of the substantive segments
of the prior staff report, setting forth certain legal
requirements and procedures pertaining to public bidding.
1 As previously discussed, the Public Contracts Code requires the awarding
agency to award the contract to the lowest "satisfactory" bidder, not the
best qualified.
Bids2 0 ®V:14�
Bids for Construction Projects
January 21, 2000
Page 2
DISCUSSION
A. Current Language Re: Qualifications
The current standard language set forth in bid packages for
public works projects asks for the following information:
1. Contractor's License: Number, Class, Issue Date and
Expiration Date;
2. Sureties: Name, address and telephone number of brokers and
sureties to provide bonds and insurance for the project;
3. Bankruptcy: Information on any voluntary or involuntary
bankruptcy judgement against any principal having an
interest in the bid;
4. DBA's: Information on all current and prior DBA's [Doing
Business As], aliases or fictional business names for any
principal having an interest in the bid; and,
5. References: A list of at least three public agencies for who
the Bidder has performed similar work within the past two
years.
B. Additional Bidder Information
Certain additional information could be required to be provided
by each Bidder, including but not limited to the following:
Contractors' Licenses
1. Provide statement that Bidder's contractor's license(s) is /are
valid and in good standing.
2. Provide statement as to whether or not Bidder's license had
ever been revoked or suspended.
3. Provide statement as to whether or not the license of any
Principal of the firm, or the Principal of any Fictitious
Business Name of said firm (herein referred to as DBA -- "Doing
Business As "), had ever been revoked or suspended.
Sureties
1. Provide statement as to the ability of the Bidder to obtain
bonds in the amounts required.
2. Provide statement regarding whether or not a surety or bonding
company has ever undertaken and completed a contract awarded
to the Bidder.
3. Provide information on any time a surety refused to issue
bonds, and state why.
4. Provide a list of all sureties utilized by the Bidder within
the past five ( 5 ) years.
Insurance
1. Provide statement regarding the Bidder's ability to obtain
insurance coverage in the amounts and with the coverage
required.
Bids2 000114.3
Bids for Construction Projects
January 21, 2000
Page 3
2. Provide information on any time an Insurance Company refused
to issue an insurance policy and state why.
Financial Capacity and Resources
1. Provide statement that the Bidder possesses the financial
capacity to undertake the project (could require the submittal
of financial statement).
2. Provide description of the Bidder's manpower, plant and
resources including, but not limited to number of employees,
types and number of equipment owned, etc.;
3. Provide a statement regarding the percent of the contract to
be let to subcontractors.
References: The Bidder shall provide the following information on
the firm submitting the bid, any firm registered as a DBA of said
firm and every principal (as defined in the Specification) of the
bidding firm or any DBA of that firm:
1. Provide a list of all owners /agencies which have awarded
contracts to the Bidder within the past five (5) years (could
be limited to contracts in excess of $500,000).
2. Provide a list of all projects constructed in the past ten
(10) years which were of a similar nature to the work
required.
3. Provide the following additional information for the three to
five references given:
• description of project;
• bid amount,
• change order amount;
• final contract price;
• initial contract time;
• number of days completed early /late;
• reasons for late completion date;
• number and amount of claims made;
- total amount of all claims;
- nature of dispute;
- nature of resolution of claims;
• letters of reference from prior clients describing the
workmanship or quality of the final work product of prior
projects;
• a statement from the reference that they were satisfied with
the work and that they would hire the contractor again to
perform similar work;
Other Background Information
1. Provide additional on any "Principal" of the firm, Principal
being defined as any person holding certain designated offices
of the firm or of any firm DBA, and /or any person having at
least five percent (5 %) ownership of the firm or any firm DBA;
Bids2 0001
Bids for Construction Projects
January 21, 2000
Page 4
2. Provide information regarding how the Bidder's firm is
organized (corporation, Limited Liability Partnership, etc.)
and the nature of the extent of and /or limitations of the
responsibilities of the principals;
3. Provide information pertaining to any time the Bidder or any
principal of the firm had been disqualified by another public
agency within the past five (5) years;
4. Provide information pertaining to any time Bidder or any
Principal of the firm was assessed penalties by a public
agency for non - compliance with the requirements of the project
plans and specifications (e.g. Liquidated damages).
5. Provide information pertaining to any time the Bidder or any
Principal of the firm was assessed penalties by any public
agency for non - compliance with any Local, State or Federal
law;
6. Provide information pertaining to any on -going investigations
by any public agency regarding any possible violation of any
local, State or Federal law.
7. Provide Resume and /or summary of background and experience of
Project Manager and Project Superintendent to be assigned to
the project [require any subsequent replacement of the Project
Manager or Project Superintendent to have comparable
qualifications as those of the initial parties identified and
be subject to the approval of the City] .
8. Provide some or all of the above background and reference
information on Subcontractors to be retained to perform
designated segments of the work.
In addition to the above described additional information which
could be requested from the Bidder, the City's procedures could
include, for certain classes of projects, the use of
computerized search engines, such as Nexus to seek and obtain
information pertaining to past issues and /or problems
encountered by the Bidder.
C. Cost / Benefit
The possible costs and /or benefits of requesting from each Bidder
any of the additional information listed above, include the
following:
Costs:
• may add cost by discouraging smaller, more competitive firms
from preparing more complicated bid documents; and
• may add costs by eliminating "qualified" firms which feel they
do not meet certain of the criteria cited in the bid
documents.
000:14�5
Bid92
Bids for Construction Projects
January 21, 2000
Page 5
Benefits:
• discourages firms with questionable
submitting bids;
• allows the City to disqualify
complete the bid forms (City also
any irregularities in the bids);
• enables the City to acquire more
in evaluating qualifications.
D. Bidder Disqualification
backgrounds from
Bidders who do not fully
retains the ability to waive
and
in -depth information to use
It should be noted that, in of itself, the addition of any of
the above listed Additional Bidder Information does little to
provide the City with the ability to disqualify bidders. Even
based upon specific information provided in the Bid, an action
to disqualify a Bidder could be seen as arbitrary or subjective
absent a "pre- defined" standard. In order to avoid such a
determination, the Bid documents should include a list of
criteria which must be met in order for the Bidder to be
considered "Qualified." An example of such a definition of
Qualified is as follows:
"In order to be considered "Qualified" each Bidder must meet
or exceed the following minimum criteria:
• must possess a valid license with the Class required
for the work requested;
• must be able to demonstrate ability to secure the
minimum bonds and insurance specified;
• must not have had any project undertaken and completed
by a surety or bonding company;
• must not have been disqualified by any public agency ;
• must have constructed at least two (2) projects of a
similar nature within the past five (5) years; and,
• must provide a list of all projects constructed for a
public agency within the past five (5) years.
E. Pre- qualification
Another approach would be to pre - qualify interested prospective
Bidders prior to project advertising and limit bids received on
a project to only "approved" Bidders. AB574, passed by the
state legislature last year and codified (in part) as Section
20101 of the Public Contracts Code, adds a number of
restrictions to that process. [A copy of PCC Sec. 20101 is
attached as Exhibit 2.1 One of the new requirements placed upon
cities who choose to utilize this process is that said agency
must use a "standardized" Qualifications Questionnaire to be
developed by the State Department of Industrial Relations.
Bids2 000146
Bids for Construction Projects
January 21, 2000
Page 6
Staff has called that department in an attempt to learn the
status of the development of that questionnaire. At the writing
of this report no response had been received.
F. Specific Content Based Upon Cost and /or Type of Project
In order to improve the quality of the bids received and /or the
contractor selected, it may be necessary to revise the City's
Bid Documents to include some of the additional information
and /or selection criteria noted above. However, in order to
best provide for the most cost effective approach toward
achieving those ends, it may be prudent to develop two or more
types of Bidding Documents based upon the anticipated level of
expenditure (project cost). In addition, it may also be
necessary to require certain specific bidder information and /or
provide for unique selection criteria, based upon the specific
nature of the project. It is recommended below that changes to
the City's Bidding Documents provide for this level of
flexibility.
G. Cost Effectiveness
It should be noted that the more intensive the effort to
attempt to evaluate the qualifications of a Bidder, the more
the costly will become the bidding and selection process. Also,
as discusses elsewhere in this report, the more intensive the
Bidder requirements become, the more likely the amount of the
bids will increase. Final decisions on the scope of the Bidder
screening effort should attempt to find the proper balance
between these "up- front" costs and costs which might be
generated by a unqualified Bidder.
H. Guidelines
Should the City Council wish to direct staff to make changes to
the City's Bidding Documents, it is recommended that staff be
able to implement those changes in manner consistent with the
following guidelines:
1. When deemed necessary or appropriate by staff, the Bid
Documents shall require the Bidder to provide additional
information deemed necessary to fully evaluate the Bidder's
background and /or qualifications;
2. When deemed necessary or appropriate by staff, the Bid
Documents shall set forth Criteria defining minimum
qualifications;
3. As necessary, staff shall develop two or more categories of
Bid Documents having increasing requirements for Bidder
information, for various levels of expenditure;
Bids2 00014Y
Bids for Construction Projects
January 21, 2000
Page 7
4. As necessary, specific Bidder information and /or
qualifications criteria shall be developed to accommodate
the unique elements of any given project; and
5. The specific content of any given Bid Document shall be
designed to best achieve efficiency and economy in the
delivery of the final project.
I. City Attorney Review
This report has not been reviewed by the City Attorney. It is
the intent of staff to meet with the City Attorney to discuss
the possible Additional Bidder Information and Bidder
Qualifications information set forth in this report prior to
the February 2 City Council meeting.
STAFF RECOMMENDATION
Direct staff as deemed appropriate.
Bids2
0Q®148
Exhibit 1: Background: Bidding Requirements and Procedures
January 21, 2000
A. Code Requirements
Matters pertaining to the letting of contracts for construction
of public projects are governed by the Public Contracts Code of
the State of California. That Code requires that all major
projects be competitively bid and that the contract be awarded
to the lowest responsible bidder - not the most qualified
bidder.
A responsible bidder is defined as a bidder who: 1) has
adequately responded to all of the requirements set forth in the
bid documents [Responsive]; and 2) has been found to be
qualified to satisfactorily perform the required work
[Qualified] .
The operative terms set forth in the above requirements are
restated as follows:
• Responsive: If a bid is complete and adequately addresses all
of the requirements set forth in the bidding documents, the
bidder is a "responsive" bidder.
• Qualified: If no problems are discovered regarding a bidder's
License or past performance on other projects, it is presumed
that the bidder can satisfactorily perform the work and, is
therefore, deemed to be qualified.
B. Award Based Upon Qualifications: Not Allowed
Public agencies are prohibited from awarding a contract for the
construction of a public project on the basis of qualifications.
A public agency may not award a contract to a company with a
higher bid because it believes that firm to be "more qualified."
C. Qualified Contractor Defined
As stated above, any contractor who can "satisfactorily" perform
the work is deemed [by law] to be qualified to perform the work.
D. Rejection of Low Bid
In order to reject the bid from the lowest responsive bidder,
the agency must find that that bidder is not qualified to
perform the work. The agency must then state the reasons for
such a finding and allow the contractor an opportunity to rebut
those reasons. The reasons stated for such a finding should cite
specific evidence of the contractor's failure to satisfactorily
meet the requirements of a prior contract with that or another
agency. Such evidence could include such things as failure to
complete the project on schedule or failure to perform the
required work in a satisfactory manner.
Bids2 000149
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§ 20101. Prospective bidders; questionnaires and financial statements; prequalification
(a) Except as provided in Section 20111.5, a public entity subject to this part may require that each
prospective bidder for a contract complete and submit to the entity a standardized questionnaire and
financial statement in a form specified by the entity, including a complete statement of the prospective
bidder's experience in performing public works. The standardized questionnaire may not require
prospective bidders to disclose any violations of Chapter 1 (commencing with Section 1720) of Part 7 of
Division 2 of the Labor Code committed prior to January 1, 1998, if a violation was based on a
sul:oontractor's failure to comply with these provisions and the bidder had no knowledge of the
subcontractor's violations. The Department of Industrial Relations, in collaboration with affected
agencies and interested parties, shall develop model guidelines for rating bidders, and draft the
standardized questionnaire, that may be used by public entities for the purposes of this part. The
Department of Industrial Relations, in developing the standardized questionnaire, shall consult with
affected public agencies, cities and counties, the construction industry, the surety industry, and other
interested parties. The questionnaire and financial statement shall be verified under oath by the bidder
in the manner in which civil pleadings in civil actions are verified. The questionnaires and financial
statements shall not be public records and shall not be open to public inspection; however, records of the
names of contractors applying for prequalification status shall be public records subject to disclosure
under Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code.
(b) Any public entity requiring prospective bidders to complete and submit questionnaires and financial
statements, as described in subdivision (a), shall adopt and apply a uniform system of rating bidders on
the basis of the completed questionnaires and financial statements, in order to determine both the
minimum requirements permitted for qualification to bid, and the type and size of the contracts upon
which each bidder shall be deemed qualified to bid. The uniform system of rating prospective bidders
shall be based on objective criteria.
(c) A public entity may establish a process for prequalifying prospective bidders pursuant to this
section on a quarterly basis and a prequalification pursuant to this process shall be valid for one calendar
year following the date of initial prequalification.
(d) Any public entity requiring prospective bidders on a public works project to prequalify pursuant to
this section shall establish a process that will allow prospective bidders to dispute their proposed
prequalification rating prior to the closing time for receipt of bids. The appeal process shall include the
following:
(1) Upon request of the prospective bidder, the public entity shall provide notification to the
prospective bidder in writing of the basis for the prospective bidder's disqualification and any supporting
evidence that has been received from others or adduced as a result of an investigation by the public
entity.
(2) The prospective bidder shall be given the opportunity to rebut any evidence used as a basis for
disqualification and to present evidence to the public entity as to why the prospective bidder should be
found qualified.
(8) if the prospective bidder chooses not to avail itself of this process, the proposed prequalification
rating- may be adopted without further proceedings.
(e) For the purposes of subdivision (a), a financial statement shall not be required from a contractor
who has qualified as a Small Business Administration entity pursuant to paragraph (1) of subdivision (d)
of Section 14887 of the Government Code, when the bid is no more than 25 percent of the qualifying
amount provided in paragraph (1) of subdivision (d) of Sectiop 14887 of the Government Code.
(f) Nothing in this section shall preclude an awarding agency from prequalifYing or disqualifying a
subcontractor. The disqualification of a subcontractor by an awarding agency does not disqualify an
otherwise prequalified contractor.
(Added by Stats.1999, c. 972 (A.B.574), 1 4.)
Historical and Statutory Notes
1998 Legislation
Sections 1 and b of Stata.1998, c. 872, provide:
"SECTION 1. The Legislature hereby finds and de-
clares that the establislanent by public agencies of a
uniform system to evalmsts the ability, competency, and
Integrity of bidders as public. works projects is in the
public interest, will result in the construction of public
works projects of the highest quality for the lowest costs,
and is in Autherance of the objectives stated in Section
100 of the Public Contract Code."
"SEC. & Nothing contained in this act shall apply to
services procured pursuant to Chapter 10 (commencing
with Section 4W of Division b of Title 1 of the Govern-
ment Code." �, .
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