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HomeMy WebLinkAboutSupplmnt Info - HA29410Boptimis NSTRUCTION I N C . July 3, 2014 Heather Buck City Council City of Palm Desert Palm Desert Civic 73-510 Fred Waring Drive Palm Desert, CA 92260 440 Westem Ave., Ste. 202 Glendale, CA 91201 (voice) 818.550.8411 (fax) 818.550.9411 Via Fax: (760) 341-7098 Via Certified Mail: 7013 3020 0002 0314 7753 Via Email: hbuck@cityofpalmdesert.org cgaugush@cityofpalmdesert.org Re: Supplement Letter regarding Protest of ProWest PCM, Inc. to Award of Contract for Carlos Ortega Villas Project to Optimus Construction, Inc. Dear Ms. Buck: We have received ProWest's June 30, 2014 supplemental letter regarding its protest, apparently received by the City on July 2, 2014. Optimus continues to urge the City to reject the bid protest. As discussed below and in Optimus' June 27, 2014 response, Optimus is a responsible bidder submitting the lowest responsive bid in connection with the Project. ProWest's supplemental letter includes a number of incorrect statements. Once those statements are corrected, the City will see that there is no basis for the City to reject Optimuzs' bid. ProWest contends that Optimus' bid was non -responsive because it failed to include three work requirements, to wit: dry utilities, metal fabrication and fire detection FIRE DETECTION Optimus' Designation of Subcontractors did not list a fire protection subcontractor. Accordingly, in its Amended Designation, Optimus added its fire detection subcontractor, Pyro-Comm. However, as of its June 13, 2014 request for consent of subcontractor substitution, it realized that Pyro- Comm's subcontract value was less than the one-half of one percent threshold of Public Contracts Code section 4104 such that Optimus was no longer requesting consent for substitution. The Pyro-Comm's fire detection bid was $61,490. Attached to Optimus' June 27, 2014 Response to ProWest' bid protest, as Exhibit 16, was a true and correct copy of Pyro-Comm's bid. Optimus' bid price is $15,423,351.39. Hence, Pyro-Comm's subcontract price is only .4% of Optimus' total bid. Public Contract Code section 4104 only requires that bidders set forth the name and location of each subcontractor who will perform work "in an amount in excess of one-half of 1 percent of the prime contractor's total bid." Accordingly, there was no need for Optimus to list Pyro-Comm in either the Designation or the Amended Designation. Therefore, it withdrew its request to substitute Pyro-Comm as its fire protection subcontractor because it never needed to list it in the first place, pursuant to section Public Contract Code section 4014. Optimus advised the City that it is free under the Subletting and Subcontracting 19100724vI RECEIVED CITY CLERK'S OFFICE PALM DESERT. CA 2014 JUL -7 AM I I: 30 REQUEST: SUBMITTED BY: CONTRACTOR: DATE: CONTENTS: Contract No. HA29410B PALM DESERT HOUSING AUTHORITY STAFF REPORT AUTHORIZE AWARD OF CONTRACT NO. HA29410B TO OPTIMUS CONSTRUCTION, INC., GLENDALE, CALIFORNIA, FOR CONSTRUCTION OF THE CARLOS ORTEGA VILLAS PROJECT IN AN AMOUNT NOT TO EXCEED $15,423,351.39 (PROJECT NO. 825-11) Heather Buck, Project Coordinator Optimus Construction, Inc. 440 Western Avenue, Suite 202 Glendale, CA 91201 July 10, 2014 Contractor's Bid Contract Agreement and Bonds June 4, 2014, Letter indicating Clerical Error June 9, 2014, Letter requesting Relief from Bid June 13, 2014, Letter requesting Withdrawal of Relief from Bid June 27, 2014 Subcontractor Substitution Hearing Decision June 25, 2014, Bid Protest from ProWest PCM, Inc. June 27, 2014, Response to Protest from Optimus Construction, Inc. June 30, 2014, Supplemental Bid Protest from ProWest PCM, Inc. Recommendation By Minute Motion that the Authority Board: 1. Approve Optimus' request to withdraw its Relief from Bid letter; 2. Approve the substitution of Floor Technology Group with Residential Design Services; 3. Approve the substitution of Builder's Choice Roofing Company with DBR Premium, Inc.; 4. Reject all bid protests, including the supplemental bid protest received from ProWest PCM, Inc.; C:\Users\hbeck\AooData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\PKZ374X2\PALM Supplemental Staff Report re Award HA29410B to Outimus for Construction of COV (BBK Edi.DO to DESERT 04342.00000\9075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 2 of 7 July 10, 2014 5. Authorize the award of Contract No. HA29410B to Optimus Construction, Inc., Glendale, California, for construction of the Carlos Ortega Villas project in an amount not to exceed $15,423,351.39 (Project No. 825-11); 6. Authorize the Finance Director to set aside the amount of $1,542,335.13 as 10 percent contingency; 7. Authorize the Executive Director to approve Change Orders up to the amount of $100,000.00 per occurrence in the aggregate amount not to exceed the 100 percent of the contingency ($1,542,335.13); 8. Authorize the Executive Director to make payments, in cases of exigencies and in amounts not to exceed $100,000, to agencies and utilities for costs related to construction of the project that may be in excess of his current authorization; and 9. Authorize the Chairman to execute the Agreement. Funds are available in Housing Authority Capital Improvements Account No. 871-8691- 466-4001. Strategic Plan Obiective The construction of the Carlos Ortega Villas contributes to the Strategic Plan priorities for Land Use, Housing & Open Space; Energy & Sustainability; and Transportation. The project contributes to these goals through: • Development of high -quality housing for people of all income levels • Reduction of per capita consumption of energy and water • Greater usage of more sustainable materials • Development of the project as net zero energy in design • Exceeding the current Coachella Valley Water District efficiency standards. • Creating a walkable neighborhood and area that includes residential, retail, services and employment centers, and parks, recreation and open space to reduce the use of low occupancy vehicles. Commission Recommendation The Housing Commission reviewed the recommendation at the regularly scheduled meeting of July 9, 2014. Staff will provide a verbal report upon request of the Authority Board. 04342.00000\9075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 3 of 7 July 10, 2014 Executive Summary Approval of this request authorizes the Chairman to execute the Agreement for construction with Optimus Construction, Inc., for the Carlos Ortega Villas project. Construction is anticipated to commence in August 2014. The construction will take 14 months to complete. Background The Carlos Ortega Villas is a 72-unit affordable senior housing project, located on approximately 3.9 acres at the intersection of Washington Street and Avenue of the States. Carlos Ortega Villas will be a flagship project, incorporating the latest in energy efficiencies into both design and construction with the ultimate goal being a net -zero energy project. On April 8, 2010, the Palm Desert Redevelopment Agency Board ("Agency Board") authorized the Executive Director to contract with Interactive Design Corporation (IDC) for architectural services for the Carlos Ortega Villas. Since 2011, staff's ability to move this project forward has been limited by the dissolution of the former Palm Desert Redevelopment Agency ("Agency"). Despite this, the project entitlement process was completed and the project design approved by the Successor Agency/Housing Authority on March 22, 2012. As a requirement of the State Department of Finance, a Bond Proceeds Funding Agreement was approved to facilitate this project by the Oversight Board on October 7, 2013, and by the Authority Board on October 10, 2013. On April 23 and April 30, 2014, staff advertised the Notice Inviting Bids for the Carlos Ortega Villas project, and on June 2, 2014, sealed bids were opened by the City Clerk. Below is a summary of the bids received: Company Name Optimus Construction, Inc. ProWest Constructors Doug Wall Construction, Inc. The Sun Group Morillo Construction, Inc. Angeles Contractor, Inc. Gee-Ar-Gee Construction Company, Inc. City Glendale Wildomar Bermuda Dunes Costa Mesa Pasadena Buena Park North Palm Springs Base Bid $15,423, 351.39 $17,052,385.00 $17,521,057.65 $18,694,316.00 $18,764,843.00 $19,497,986.02 Non responsive Optimus Construction, Inc., located in Glendale, California, was the apparent lowest bidder. On June 4 staff received correspondence from Optimus declaring a clerical 04342.0000019075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 4 of 7 July 10, 2014 error was made on their Designation of Subcontractor form by listing two roofing subcontractors and two flooring subcontractors (see attached). On June 9 Optimus submitted a letter requesting Relief from Bid due to inadvertent clerical error (see attached). Then, on June 23, Optimus submitted a letter withdrawing the Relief from Bid letter and requesting to proceed with a subcontractor substitution pursuant to Public Contract Code Section 4107.5 (see attached). Subcontractor Substitution In accordance with Public Contract Code Sections 4107 and 4107.5 and Sections 3.30.190 and 3.30.200 of the Palm Desert Municipal Code, written notice of a subcontractor substitution hearing scheduled for June 24, 2014, was given to the two roofing subcontractors and the two flooring subcontractors listed in Optimus's Designation of Subcontractor form. No objections were received regarding the flooring subcontractor substitution. Builder's Choice Roofing Company (Builder's Choice) submitted a written objection to the roofing subcontractor substitution. Pursuant to Public Contract Code Section 4107.5, the subcontractor substitution hearing was conducted on June 24. Following review of affidavits, declarations, testimony and other evidence submitted by the parties, the hearing officer granted Optimus' request for substitution of Residential Design Services for Floor Technology Group, and for substitution of DBR Premium, Inc., for Builder's Choice . The hearing officer concluded that in both cases, no compelling evidence was presented that demonstrated that the listing of Floor Technology Group and Builder's Choice was anything but an inadvertent clerical error. A copy of the Subcontractor Substitution Request Hearing Officer Decision dated June 27, 2014, is attached. Bid Protest On June 25, 2014, staff received a letter from ProWest PCM, Inc. ("ProWest"), protesting the intended award of the contract for the construction of the Carlos Ortega Villas to Optimus (see attached). Staff has reviewed this protest with legal counsel and recommends rejection of the bid protest. As a threshold matter, the Authority has broad discretion to determine responsiveness and may accept a responsive bid even if there are minor irregularities or mistakes, as long as such mistakes do not affect the price of the bid or otherwise give a bidder an unfair competitive advantage. (See Menefee v. County of Fresno (1985) 163 Cal. App. 3d 1175; Ghilloti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897.) ProWest's protest asserts that Optimus's bid is nonresponsive because it double listed subcontractors and omitted subcontractors in the Designation of Subcontractor form. The California Attorney General has opined that a public entity may accept a bid where a violation of the Subcontracting and Subletting Fair Practices Act has occurred. (86 Cal.Ops.Atty.Gen 90 (2003).) Further, as noted above, in compliance with the 04342.0000019075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 5 of 7 July 10, 2014 Subletting and Subcontracting Fair Practices Act, a subcontractor substitution hearing was conducted on the matter of the double listed subcontractors for flooring and roofing. In both cases, the hearing officer concluded that a subcontractor substitution was permissible based on the lack of compelling evidence demonstrating that the double listing of subcontractors was anything but an inadvertent clerical error. With respect to Optimus's alleged omission of subcontractors, the Authority will require Optimus to self - perform all such work in accordance with Public Contract Code Section 4106. Optimus has additional provided a written response to ProWest's protest, a copy of which is attached. Therefore, staff recommends that the Authority Board reject ProWest's protest as meritless, approve Optimus' request to substitute Residential Design Services for Floor Technology Group, and DBR Premium, Inc., for Builder's Choice Roofing Company, and award the Agreement for construction to Optimus, the lowest responsible bidder submitting a responsive bid. Staff has reviewed Optimus' qualifications and found them to be in accordance with the type of work to be performed under the Agreement for construction. Optimus recently successfully completed the Coral Mountain Apartment Homes in La Quinta, which is a comparable affordable housing development. ProWest submitted a supplemental letter of protest dated June 30, 2014 in addition to its letter of protest filed on June 25, 2014. City staff has determined that the supplemental letter of protest, for the same reasons as the initial letter of protest, is without merit. ProWest contends that the bid submitted by Optimus, failed to list subcontractors to perform the dry utilities, metal fabrication and fire detection work under the contract and is, therefore, non -responsive. However, subcontractor listing issues do not require a public agency to reiect a bid. (See D.H. Williams Construction, Inc. v. Clovis Unified School District (2007) 146 Cal.App.4th 757.1 As such, the City is not required to reiect Optimus's bid as non -responsive due to Optimus's failure to specify subcontractors for dry utilities, metal fabrication and fire detection. The California Attorney General has opined on this very issue. (86 Cal.Ops.Attv.Gen. 90, 90 (2003).1 The Attorney General concluded that a public entity may accept a bid where the contractor failed to correctly list subcontractors in violation of the Subletting and Subcontracting Fair Practices Act ("Act"). (Id.) Relying on Public Contract Code section 4110, the Attorney General found that a local agency has a statutorily Prescribed remedy in the event bidders violate any of the provisions of the Act. Specifically, Section 4110 authorizes the awarding body, at its discretion, to cancel the contract or assess the prime contractor a penalty in an amount of not more than 10 Percent of the amount of the subcontract involved in the event the prime contractor fails to comply with its obligations under the Act. (Pub. Cont. Code, 4110.) Implicit within the public entity's power to cancel the contract for failure to comply with the Act is the Power to either accept or reiect the bid in the first instance. (86 Cal.Ops.Attv.Gen. 90, 04342.00000\9075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 6 of 7 July 10, 2014 94 f" ftlhe permissive authority to cancel the contract necessarily includes the authority to execute the contract"l.) Further, the City may require Optimus to self -perform all of the work that Optimus failed to list a subcontractor for in violation of the Act in accordance with Public Contract Code section 4106. In light of the foregoing and contrary to ProWest's assertion, Optimus's failure to list certain subcontractors does not require the City to reiect Optimus's bid as non- responsive. In addition to reiectinq the initial letter of protest from ProWest, City staff recommends reiectinq ProWest's supplemental letter of protest as meritless. Executive Director Authorization The Executive Director's authority to approve expenditures is limited per the Palm Desert Municipal Code. Staff requests authorization for the Executive Director to approve expenditures related to this construction project in excess of his approved authority for the following reasons: • The construction schedule is aggressive. • To minimize delays to the Contractor. Delays could increase the cost of the project to the Authority. • To keep the project moving to minimize disruption to adjacent residents, businesses, and traffic. • Staff understands there is a possibility the contractor will encounter unforeseen conditions because this is an in -fill project on a previously developed site. Therefore, staff recommends that the Executive Director be authorized to approve Change Orders related to construction up to $100,000.00 per occurrence and $1,542,335.13 aggregate (equal to 100% of the contract contingency). A report of Change Orders approved by the Executive Director will be brought to the Authority Board at the next regularly scheduled meeting for informational purposes. Additionally, staff recommends that the Executive Director be authorized to make payments in cases of exigencies and in amounts not to exceed $100,000, that may be above his normal authority for utilities, outside agencies, City of Palm Desert (for plan check and permits), etc., related to construction of the project. Fees will be based upon invoices to be submitted to the Housing Authority as they are available. Such costs may include, but are not limited to: • Permit fees • School fees • Utility fees • Plan check fees for deferred submittals (i.e. fire sprinklers, trusses, pool) 04342.00000\9075150.1 Staff Report Award Contract No. HA29410B to Optimus for construction of the Carlos Ortega Villas Page 7 of 7 July 10, 2014 Fiscal Analysis The estimated costs for the project are listed on ROPS lines 171 and 186. Although the Housing Authority would initially advance the funds for this work, the SARDA may reimburse the Authority for the costs from bond proceeds. The 2007 Housing Set -Aside bond issuance included the Carlos Ortega Villas as a project in the bond covenants. As a requirement of the State Department of Finance, a Bond Proceeds Funding Agreement was approved to facilitate this purpose by the Oversight Board on October 7, 2013, and by the Authority Board on October 10, 2013. Submitted By: /7, Heather Buck, Project Coprdinator M rtin Alvarez Director of Economic Development Reviewed: cal Paul S. , hector of Finance Approval: John M. Wohlmuth, Executive Director i�Janet Moore, Director of Housing Rudy ,costa Assistant City Manager _''BY HOUSG AUTH 5 ` VERIFIED BY: 120/f 23 Original on file with City Clerk's Office AYES: etran gornik, aid T i er; NOES: &u 'J 46500 : 4)ic 04342.00000\9075150.1 Klassen, Rachelle From: Amber Everding [aeverding@optimusconstruction.com] Sent: Thursday, July 03, 2014 10:48 AM To: Gaugush, Cora Cc: Klassen, Rachelle; Robert.Hargreaves@bbklaw.com; David.Erwin@bbklaw.com; Sophie.Akins@bbklaw.com; Kevin.Wang@bbklaw.com; Buck, Heather; Moore, Janet; Alvarez, Martin; Acosta, Rudy; Wohlmuth, John; Greenwood, Mark; jboysen@optimusconstruciton.com; Robert Gibson; Emily Geller; Klinger, Marilyn Subject: RE: Supplemental Bid Protest-ProWest Constructors -Carlos Ortega Villas 825-11 Attachments: Carlos Ortega_Optimus Response to ProWest_2014-07-03.pdf Follow Up Flag: Follow up Flag Status: Flagged Good Morning Ms. Gaugush, Please see attached response to ProWest Constructors supplemental letter. Originals will be sent via certified mail this afternoon. Please feel free to contact me should you require anything further. Thank you, Amber Everdiniq I Project Coordinator optimis n Ml 818.550.8411 x 232 (v) 1818.550.9411 (f) aeverdincOootimusconstruction.corn I www.00timusconstruction.com This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Optimus Construction, Inc 440 Westem Ave., Suite 202 , Glendale , Ca. 91201 From: caauaushOcitvofpalmdesert.orq f mailto:caauaushOcitvofpalmdesert.ora1 Sent: Wednesday, July 02, 2014 4:40 PM To: Amber Everding; jbovserKaootimusconstruciton.com Cc: rklassenOcitvofpalmdesert.ora; Robert. HarareavesCc�bbklaw.com; David. Erwin(abbklaw.com; Sophie.Akins@bbklaw.com; Kevin.Wanc a)bbklaw.com; hbuckOcitvofDalmdesert.ora; imoore@citvofpalmdesert.ora; malvarez(&citvofpalmdesert.ora; racostac@citvofpalmdesert.ora; iohlmuthCa�citvofoalmdesert.ora; ma reenwood©acitvofpalmdesert.ora Subject: Supplemental Bid Protest-ProWest Constructors -Carlos Ortega Villas 825-11 Mr. Boysen, Attached is a supplemental letter of protest received today from ProWest Constructors for your review and response. I will be out of the office tomorrow, July 3 and will return on Monday, July 7. Should you require anything in my absence, please contact Martin Alvarez at 760-346-0611. Thank you, Carty C3auA Capital Improvement Projects Technician Public Works Department City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 760-776-6450-Direct Line 760-346-0611 Ext. 490- City Hall 760-341-7098 Fax cciauaush @ citvofpalmdesert.orq i Law to subcontract that fire detection portion of the work and it advised the City that Optimus intends to subcontract the fire protection scope of work to Pyro-Comm. DRY UTILITIES AND METAL FABRICATION SUBSTITUTION REQUEST Optimus included James A. Shirley's price for dry utilities work and White's Steel price for metal fabrication in its bid price, just like ProWest and the other bidders.. The only difference is that Optimus inadvertently left off their names on its Designation of Subcontractors. Accordingly, contrary to ProWest's suggestion, Optinnis did not leave that work out of its bid price. And, it did not receive an unfair advantage over other bidders who listed those subcontractors on their Designations. Further, Optimus immediately sought consent from the City to substitute James A. Shirley (dry utilities) and White's Steel (metal fabrication) in Optimus' place. Optimus obtained and provided to the City signed affidavits of acknowledgement of inadvertent clerical errors from both of those subcontractors for the purpose of requesting this substitution. Optimus also advised the City that if the City will not consent to the substitution, Optimus is prepared to self perform the dry utilities and metal fabrication trades, notwithstanding ProWest's contention to the contrary. See Optimus' June 25, 2014 letter. To date, Optimus has not received word from the City as to whether it will consent to that substitution. LICENSING REOUIREMENT ProWest has suggested that Optimus does not have the required licensing to self -perform the dry utilities and metal fabrication if the City will not consent to Optimus' substitution request. ProWest is incorrect. Optimus is a Class "B" — General Building Contractor. Business & Professions Code section 7057 provides, in relevant part: (a) Except as provided in this section, a general building contractor is a contractor whose principal contracting business is in connection with any structure built, being built, or to be built, for the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind, requiring in its construction the use of at least two unrelated building trades or crafts, or to do or superintend the whole or any part thereof.... (b) [A] general building contractor shall not take a prime contract for any project involving trades other than framing or carpentry unless the prime contract requires at least two unrelated building trades or crafts other than framing or carpentry, or unless the general building contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor to perform the work.... The general building contractor may not count framing or carpentry in calculating the two unrelated trades necessary in order for the general building contractor to be able to take a prime contract... for a project involving other trades.... 19100724v1 2 Accordingly, Optimus is licensed to perform virtually any trade on the Project.' Hazard, Jr. Enterprises, Inc. v. Insurance Co. of the West (1997) 52 Cal.App.4th 1088 (Class B general contractor can perform site work even if its contract does not include building a structure); Hazard, Jr. Enterprises, Inc. v. Insurance Co. of the West (1997) 52 Ca1.App.4th 1088 (same); Martin v. Mitchell Cement Contracting Co., Inc. (1977) 74 Ca1.App.3d 15 (contractor with valid general contractor license but no specialty license for masonry could nevertheless recover for masonry work under masonry subcontract); 45 Op.Atty.Gen. 1, 1-1-65 (licensed general contractor entitled to plumbing permit if plumbing part of over-all contractor's building project). Business & Professions Code section 7059(b) provides, in relevant part: "In public works contracts, as defined in Section 1101 of the Public Contract Code, the awarding authority shall determine the license classification necessary to bid and perform the project...." Pursuant to Business & Professions Code section 7059, the City advised in its Request For Bids: "At the time of contract bid, the prime Contractor shall possess a Class "B" Contractor's license." Section 00 11 13. The City did not include any other license requirements for any other portion of the work. BID SHOPPING Contrary to ProWest's assertion, Optimus is not engaged in bid shopping. As far back as June 2, 2014, Optimus had already identified all of the subcontractors it intends to use to construct the Project and, as noted in its June 27, 2014 response: "Optimus...has requested that the City consent to substitute Shirley as its dry utilities subcontractor and White's Steel as its metal fabrication subcontractor. However, Optimus has confirmed that if the City will not consent to these substitutions, it will self - perform this work." ProWest states: "Even if Optimus' total price is not affected by the addition, it now has knowledge of the subcontractor bids used by the other bidders. This gives Optimus an unfair advantage over other bidders and undermines the integrity of the public contracting process." This statement is nonsensical. There is absolutely no opportunity for Optimus to use any knowledge it has now obtained regarding other subcontractors' prices. Indeed, it cannot change subcontractors without following a further substitution procedure. Simply knowing other subcontractors' prices has no impact upon the competitive bidding process and certainly does not give Optimus an unfair advantage in performing the contract. PRO -WEST'S BID PROTEST IS WITHOUT MERIT Optimus is the lowest responsible bidder and the City should award the contract to Optimus so as to comply with the competitive bidding laws of California. The taxpayers of the City of Palm Desert will reap the benefits of a fair and thoroughly vetted competitive bidding process and a project built by a top-notch expert in this type of construction at a price significantly lower than any of the other bidders. Very truly yours Jeffrey Boyse President The two exceptions are fire protection systems as provided for in Business & Professions Code section 7026.12 or 7026.13, or the "C-57" Well Drilling classification as provided for in Water Code section 13750.5. Neither of these exceptions applies to dry utilities or metal fabrication. 19100724v1 3 TRANSMISSION VERIFICATION REPORT DATE,TIME 07/03 10:51 FAX NO./NAME 17603417098 DURATION 00:01:20 PAGE(S) 03 RESULT OK MODE STANDARD ECM optics QNSTRUGTI KIN 1NC_ July 3, 2014 Heather Buck City Council City of Palm Desert Palm Desert Civic 73-510 Fred Waring Drive Palm. Desert, CA 92260 TIME : 07/03/2014 10:53 NAME : FAX TEL . SER.0 : BROH4J816411 440 Western Ave., Ste. 202 Glendatt', c 41201 (voice) 818.550.8411 (fax) 818.5503411 Via Fax; (760) 341-7098 Via Certified Mail: 7013 3020 0002 03147753 Vitt Email: libuck@cityof' a1mdesert_org cgaugush@cityofpal mdesert. org Re: Supplement Letter regarding Protest of ProWest PCM, Inc. to Award of. Contract for Carlos Ortega Villas Project to Optiznuss Construction, Inc. Dear Ms. Buck: We have received ProWcst's June 30, 2014 supplemental letter regarding its protest, apparently received by the City on July 2, 2014. Optimus continues to urge the City to reject the bid protest. .As discussed below and in Optimus' June 27, 2014 response, Optimus is a responsible bidder submitting the lowest responsive bid in connection with the Project. P.roWest's supplemental letter includes a number of incorrect statements. Once those statements are corrected, the City will see that there is no basis for the City to reject Optinnis' bid. ProWest contends that Optimus' bid was non -responsive because it failed to include three work requirements, to wit: dry utilities, metal fabrication and fire detection FIRE DETECTION Optimus' Designation of Subcontractors did not list a fire t?rotection subcontractor. Klassen, Rachelle From: Sophie Akins [Sophie.Akins@bbklaw.com] Sent: Thursday, July 03, 2014 2:34 PM To: Klinger, Marilyn Cc: Amber Everding; Gaugush, Cora; Klassen, Rachelle; Robert Hargreaves; David Erwin; Kevin Wang; Buck, Heather; Moore, Janet; Alvarez, Martin; Acosta, Rudy; Wohlmuth, John; Greenwood, Mark; jboysen@optimusconstruciton.com; Robert Gibson; Emily Geller Subject: Re: Carlos Ortega Villas 825-11 Supplemental Bid Protest-ProWest Constructors Thank you Marilyn for your response. We appreciate your prompt attention. Regards, Sophie Sent from my iPhone On Jul 3, 2014, at 2:33 PM, "Klinger, Marilyn"<Marilvn.Klinger@?sedgwicklaw.com> wrote: Ms. Akins: Optimus has requested that I respond directly to your email below. Optimus is confirming that it will self -perform the dry utilities and metal fabrication scope of work for the Project. Optimus will not self -perform the fire detection scope --it is not required to do so. Optimus' June 2, 2014 Designation of Subcontractors did not list a fire protection subcontractor. It intends to use subcontractor Pyro-Comm to perform that scope of work. Pyro-Comm's fire detection bid was $61,490. A copy of that bid was attached to Optimus' June 27, 2014 letter to Heather Buck of the City of Palm Desert. Optimus' bid price is $15,423,351.39. Hence, Pyro-Comm's subcontract price is only .4% of Optimus' total bid. Public Contract Code section 4104 only requires that bidders set forth the name and location of each subcontractor who will perform work "in an amount in excess of one-half of 1 percent [.5%] of the prime contractor's total bid." Accordingly, there was no need for Optimus to list Pyro-Comm in its Designation. On June 4, 2014, in the flurry of activity to request subcontractor substitution, it also listed Pyro-Comm, not realizing that its price was below the section 4104 threshold. Once it realized that Pyro-Comm's price was below the threshold, Optimus withdrew its request for substitution regarding its fire detection subcontractor. Optimus never needed to list Pyro-Comm in the first place. 1 Based on the foregoing, Optimus is free under the Subletting and Subcontracting Law to subcontract that fire detection portion of the work and it has advised the City that Optimus intends to subcontract the fire protection scope of work to Pyro-Comm. Hopefully, this settles the final issues facing the City such that the City will be in a position at the City Council meeting next week to award the contract to Optimus. As noted in Optimus' letter to you of earlier today, Optimus is the lowest responsive responsible bidder. The taxpayers of the City of Palm Desert will reap the benefits of a fair and thoroughly vetted competitive bidding process and a project built by a top-notch expert in this type of construction at a price significantly lower than any of the other bidders. Please do not hesitate to contact Optimus or me with any further questions you may have. Thank you. Marilyn Marilyn Klinger Chair Emeritus - Construction Practices Group marilvn.klinaer@sedawicklaw.com 1213.615.8038 <image001.png> 801 S. Figueroa Street, 19th Floor Los Angeles, CA 90017 213.426.6900 phone 1213.426.6921 fax 1213.268.8105 cell I www.sedgwicklaw.com From: Sophie Akinsfmailto:Sophie.AkinsCa�bbklaw.com1 Sent: Thursday, July 03, 2014 1:27 PM To: Amber Everding Cc: caauausl-acitvofpalmdesert.ora; rklassen(c�citvofpalmdesert.ora; Robert Hargreaves; David Erwin; Kevin Wang; hbuck(@citvofpaImdesert.ora: imoore(acitvofpalmdesert.ora; malvarez(acitvofoalmdesert.orQ; racostaC@citvofpalmdesert.ora; iwohlmuthCa�citvofpalmdesert.ora; mareenwood(Thcitvofoalmdesert.ora; ibovsen(a�optimusconstruciton.com; Robert Gibson; Emily Geller; Klinger, Marilyn Subject: Re: Supplemental Bid Protest-ProWest Constructors -Carlos Ortega Villas 825-11 Amber As you are aware, the City will not permit Optimus to add subcontractors for the dry utilities, metal fabrication and fire detection work. Please confirm that Optimus will be self -performing that work. Regards, Sophie Sent from my iPhone On Jul 3, 2014, at 10:46 AM, "Amber Everding"<aeverdingPoptimusconstruction.com> wrote: 2 Good Morning Ms. Gaugush, Please see attached response to ProWest Constructors supplemental letter. Originals will be sent via certified mail this afternoon. Please feel free to contact me should you require anything further. Thank you, Amber Everding I Project Coordinator <image001.png> 818.550.8411 x 232 (v) 1818.550.9411 (f) aeverdina@ ootimusconstruction.com I www.00timusconstruction.com This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Optimus Construction, Inc 440 Western Ave., Suite 202 , Glendale , Ca. 91201 From: caauaushCacitvofoalmdesert.ora fmailto:caauaushCa�citvofDalmdesert.oral Sent: Wednesday, July 02, 2014 4:40 PM To: Amber Everding; ibovsen@ ootimusconstruciton.com Cc: rklassen(citvofoalmdesert.orq; Robert. Ha rareavesbbklaw.com; David. Erwin(ahbbklaw.com; SoDhie.AkinsChbbklaw.com; Kevin.Wancabbklaw.com; hbuckc&citvofnalmdesert.ora; imooreChcitvofDalmdesert.ora.; malvarez(&citvofoalmdesert.ora; racostacitvofDalmdesert.ora; iwohlmuthacitvofDalmdesert.ora; mareenwoodC&citvofnalmdesert.ora Subject: Supplemental Bid Protest-ProWest Constructors -Carlos Ortega Villas 825-11 Mr. Boysen, Attached is a supplemental letter of protest received today from ProWest Constructors for your review and response. I will be out of the office tomorrow, July 3 and will return on Monday, July 7. Should you require anything in my absence, please contact Martin Alvarez at 760-346-0611. Thank you, Cora. Gaucjiksh, Capital Improvement Projects Technician Public Works Department City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 760-776-6450-Direct Line 760-346-0611 Ext. 490- City Hall 760-341-7098 Fax caauaush @ citvofpalmdesert.ora <Carlos Ortega_Optimus Response to ProWest_2014-07-03.pdf> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). This email and any files or attachments transmitted with it may contain privileged or otherwise 3 confidential information. If you are not the intended recipient, or believe that you may have received this communication in error, please advise the sender via reply email and immediately delete the email you received. erntibI Ltten.c.leci for tne fl oaly. It niay t.enficient,.:31 platter. it t:ris ern ad'M error, pIease nOtHIV C-if? sender immedt,:t.ttE?iy by rei.-...;1,./!pg t.t; fl brit chsclosy:,:h(--, to :::frr,v(.)r,(.. III-ank you. 4