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HomeMy WebLinkAboutSupplmnt Info - HA29410BPROWESr CONSTRUCTORS June 25, 2014 Heather Buck City Council City of Palm Desert Palm Desert Civic 73-510 Fred Waring Drive Palm Desert, CA 92260 Re: Protest of ProWest PCM, Inc. to Award of Contract for Carlos Ortega Villas Project to Optimus Construction, Inc. Dear Ms. Buck: za =h Nd sz Nnr plot ProWest PCM, Inc. ("ProWest") hereby protests the intended award by the City of Palm Desert ("City") of the contract for the construction of the Carlos Ortega Villas Project (the "Contract") to Optimus Construction, Inc. ("Optimus"). This protest is submitted within five days of the City's internet posting of the Agenda for the June 26, 2014 City Council meeting requesting award of the Contract to Optimus. As a result, ProWest's protest is timely. As the second lowest bidder for the Contract, ProWest has standing to submit this protest. Factual Background The Contract for the Project was bid on June 2, 2014 at 2:00 p.m. Optimus was the low bidder at a price of $15,423,351. ProWest was the second low bidder at a price of $17,052,385. Doug Wall Construction, Inc. was the third low bidder at a price of $17,521,668. At the time of bid opening the City did not issue a statement of intent to award the Contract to Optimus. The City also refused to release the subcontractor lists and bid forms submitted by the bidders. On June 6, 2014 the City posted on its website an Agenda for the City Council's June 12, 2014 meeting that contained an entry requesting award of the Contract to Optimus. On June 10, 2014, before the deadline for protesting the intended award had expired, you telephoned ProWest and informed it that the City was pulling from the June 12, 2014 meeting Agenda the request for approval of to the award of the Contract to Optimus. You informed ProWest that Optimus had requested relief from its bid under Public Contract Code section 5103 on the grounds that it had made a clerical mistake in the preparation of its bid. The clear implication is that Optimus acknowledged leaving Contract requirements out of its bid due to an alleged clerical error, and that it could not perform the required work at the price it proposed. That conclusion is also supported by the fact that Optimus' bid is more than $1,600,000 lower than both the second and third lowest bids for the Contract, which were only 10% apart. You also asked ProWest questions about the subcontractors it listed in its bid, giving ProWest the impression that it would be awarded the Contract. After 5:00 p.m. on Friday, June 20, 2014, the City posted on its website an Agenda for the City Council meeting on June 26, 2014. The Agenda includes a request for the award of the Contract to Optimus in an amount not to exceed $15,423,351. Page 1 of 4 ProWest PCM, Inc. 22710 Palomar Street, Wildomar, CA, 92595 Telephone: 951-678-1038 Facsimile: 951-678-1034 PRoWEsr CONSTRUCTORS On Monday, June 22, 2013, ProWest called you to inquire about the proposed award to Optimus. You informed ProWest that Optimus had withdrawn its request to be relieved of its bid, and the City intended to go forward with an award to Optimus. ProWest asked for a copy of Optimus' withdrawal letter. Later that day you sent Pro West copies of Optimus' letter dated June 9, 2014 requesting relief from its bid pursuant to Public Contract Code section 5103, and Optimus' letter dated June 13, 2014 withdrawing its request for relief. On June 25, 2014 ProWest requested and received from you a copy of the Optimus' June 4, 2014 correspondence and revised Designation of Subcontractors. That letter is referenced in a footnote in Optimus' June 13, 2014 letter, but had not been previously provided to ProWest. In its June 4, 2014 letter Optimus asks the City to allow Optimus to "make substitutions" to the Designation of Subcontractors Optimus submitted with its bid for the Project. Optimus claims that as a result of an "inadvertent clerical error" it listed two roofing subcontractors: DBR Roofing for the roofing requirement and Builder's Choice for the membrane roofing requirement. In its letter Optimus states that it did not intend to list both subcontractors; and it intends to use DBR Roofing for the entire roofing scope of work. In its June 4, 2014 letter Optimus also claims to have "inadvertently neglected to include three trades." Optimus asks to add subcontractors for the dry utilities, fire detection and metal fabrication work required by the Contract. Optimus makes no attempt to explain how the double listing of two subcontractors and failure to list three additional trades required by the Contract specifications was an "inadvertent clerical error" and not the result of an error in judgment or carelessness by Optimus. Optimus also makes no reference to Public Contract Code section 4106 which requires Optimus to self -perform the work at issue. By asking to now add subcontractors for the omitted work requirements, Optimus admitted it left those significant work requirements out of its bid. After sending its June 4, 2014 letter asking to "substitute" subcontractors, Optimus obviously realized that it could not perform the Contract at its bid price. Optimus' June 9, 2014 letter clearly states that it is a request for relief from its bid under Public Contract Code section 5103. That statute is intended to provide relief for inadvertent underbidding under limited circumstances. Section 5103 allows a public agency to relieve a bidder from its bid without forfeiting its bid bond only if the bidder demonstrates it made a clerical error in filling out its bid that made the bid materially different than he or she intended it to be. In its June 9, 2014 letter Optimus claims that the "clerical error" it made in filling out its bid form was listing different subcontractors for the "roofing" and "membrane roofing" requirements, and two different subcontractors for the "flooring" and "tiling" requirements. Optimus claims that the "mistake" made its bid "materially different" than what it intended because it intended to have a single subcontractor perform "roofing" and a single subcontractor perform "flooring" under the Contract. Again, Optimus presents no facts showing that the alleged mistakes were clerical errors and not the result of carelessness or an error in judgment. In its June 9, 2014 request for relief, Optimus states that it did not intend to self -perform either the roofing or flooring work as it would be required to do under Public Contract Code section 4106 based on its admitted listing of more than one subcontractor for the same portion of work. Optimus makes no mention of its omission of the three other trades from its bid, apparently abandoning its argument that the omission was a "clerical error." Optimus' June 4, 2014 and June 9, 2014 letters are admissions that it violated Public Contract Code section 4106. Optimus admits it identified more than one subcontractor for the same portion of the work to be performed, and failed to list at least two subcontractors for work in excess of one-half of Page 2 of 4 ProWest PCM, Inc. 22710 Palomar Street, Wildomar, CA, 92595 Telephone: 951-678-1038 Facsimile: 951-678-1034 PRoLVESr CONSTRUCTORS one percent of Optimus' total bid. Under section 4106, which is intended to prevent bid shopping and bid peddling by prime contractors, Optimus is deemed to have agreed that it is fully qualified to perform the roofing, flooring, dry utilities, fire detection and metal fabrication requirements itself, and that it will in fact perform that work itself. If Optimus is awarded the Contract, it is precluded from subcontracting that work to others. If Optimus does subcontract the work after award of the Contract it will be subject to disciplinary action by the Contractors State Licensing Board, potential suspension of its contracting license, cancellation of the Contract and a penalty of up to 10% of the roofing and flooring subcontracts involved. In its request for relief from its bid, Optimus states that it does not intend to self -perform the roofing and flooring work. Although it does not address the dry utilities, fire detection and metal fabrication work, its request to add subcontractors for those trades is an admission Optimus does not intend to perform that significant work itself either. Optimus has effectively acknowledged that it is now "shopping" for subcontractors to perform the work Optimus omitted from its bid. That is a clear violation of the Subletting and Fair Practices Act, Public Contract Code sections 4100, et seq. In its June 13, 2014 letter Optimus purports to withdraw it request for relief under section 5103 and states that it "intends to proceed pursuant to Public Contract Code section 4107(5)." Optimus' withdrawal of its request for relief is likely motivated by its recognition that it will lose its bid bond because it cannot establish that its underbid was the result of a "clerical error." While Optimus initially claimed its mistake materially affected its bid price to the extent it warranted relief under section 5103, it now tries to characterize its mistake as an "inadvertent clerical error" in the listing duplicate subcontractors and failing to list others, and asks for permission to substitute its intended subcontractors. Although it is obligated under section 4106 to perform the roofing, flooring dry mechanical and metal fabrication work itself, Optimus is asking the City to relieve it of that obligation and allow it to remove subcontractors it listed and add subcontractors it did not list. Optimus' request is a blatant example of the type of bid shopping that is prohibited by California's public contracting laws. Optimus' actions show that its bid is not responsive and must be rejected by the City. Moreover, by admitting it has not included trades in its bid and does not intend to perform the omitted work itself, Optimus has thrown into question its responsibility and ability to satisfy the Contract requirements in its entirety. Protest Grounds A basic rule of competitive bidding is that bids must conform to the specifications, and that if a bid does not conform it may not be accepted. A bid that substantially conforms may only be accepted where the variance cannot have affected the amount of the bid or given the bidder an advantage or benefit not allowed other bidders. See, Ghilotti Construction Co. v. City of Richmond, 45 Cal. App. 4•th 897 (1996). In this case Optimus has admitted that its bid deviated from the specifications in a way that materially affected its price and gave Optimus an advantage not allowed to the other bidders. Optimus has admitted that its bid did not include at least three Contract requirements: dry utilities, fire detection and metal fabrication. This omission artificially deflated Optimus' bid and helped make Optimus the low bidder by more than $1.6 million. Optimus has also admitted that the double listing of roofing and flooring subcontractors materially affected its bid price so significantly that Optimus sought relief from its bid under section 5103. Obviously the omission of the work requirements makes Optimus' bid non -responsive, affected its pricing and gave it an unfair advantage over the bidders that included all of the requirements in their pricing. Page 3 of 4 ProWest PCM, Inc. 22710 Palomar Street, Wildomar, CA, 92595 Telephone: 951-678-1038 Facsimile: 951-678-1034 PRO WEsr CONSTRUCTORS The double listing and the omission of subcontractors gives Optimus an unfair advantage over the bidders who played by the rules. Optimus now has the benefit of the prices the subcontractors gave to other bidders and not listed by Optimus. If awarded the Contract Optimus will be able to bid shop the work and coerce the subcontractors to lower their prices. This is exactly the type of conduct the bid shopping statutes are intended to prevent. The City should not allow Optimus to violate bid shopping laws and then grant Optimus relief from the serious penalties associated with its conduct. Optimus should not be permitted to "buy into" the Contract with an artificially low price that is the result of a violation of Public Contract Code section 4106. That is exactly what will happen if the City accepts Optimus' bid and then allows it to substitute subcontractors it listed and add others it omitted. ProWest also protests the proposed award on the ground that Optimus is not a responsible bidder under the circumstances. A bidder is responsible if it can perform the contract as promised. The concept of responsibility focuses on the contractor's trustworthiness, quality, fitness and capacity to satisfactorily perform. See, City of Inglewood -Los Angeles Civic Center Auth. v. Superior Court, 7 Cal 3d 861 (1972). Optimus has admitted that it failed to list subcontractors and identified duplicate subcontractors for work that Optimus is not qualified to perform and does not intend to perform itself. Public Contract Code section 4106 requires Optimus to perform the work itself or face cancellation of the Contract and monetary penalties. Optimus has admitted that its bid does not include funding for significant Contract requirements. Based on its own admissions, there is serious doubt that Optimus will be able to complete the roofing, flooring, dry mechanical, fire detection and metal fabrication work required by the Contract. In addition, Optimus' complete disregard for competitive bidding laws calls into question its trustworthiness and fitness to perform this public Contract. Conclusion Optimus has admitted that it underpriced its bid by omitting significant work items. That alone makes Optimus' bid non -responsive because it does not confirm to the Contract specifications. To protect its bid bond Optimus asks the City to cure its non -responsive bid by ignoring competitive bidding laws. Optimus asks the City to allow Optimus to fix its bid by adding omitted trades and removing contractors it listed when it submitted its bid, in direct violation of Public Contract Code section 4106. What Optimus requests will violate the law and place the Project at risk. The solution is for the City to sustain ProWest's protest, reject Optimus' bid, and award the Contract to ProWest as the next lowest bidder. The City will not be required to conduct hearings into Optimus' claims it committed clerical errors in its subcontractor listing and its request to add and substitute subcontractors. Moreover, the City will be assured it will have a responsible contractor who has included all Contractor requirements in its bid. Sincerely, Prot/ st Constructor andy Craig President Page 4 of 4 ProWest PCM, Inc. 22710 Palomar Street, Wildomar, CA, 92595 Telephone: 951-678-1038 Facsimile: 951-678-1034 Klassen, Rachelle From: Buck, Heather Sent: Wednesday, June 25, 2014 3:42 PM To: Klassen, Rachelle Cc: Sophie Akins; David Erwin; Robert Hargreaves; Wohlmuth, John; Acosta, Rudy; Greenwood, Mark; Alvarez, Martin; Moore, Janet Subject: FW: Carlos Ortega Bid Protest Attachments: 3907_001. pdf Rachelle, See attached bid protest for the Carlos Ortega Villas project. I will confer with legal and determine whether to continue the item to the next meeting so we have time to review the protest. Heather Buck, LEED AP BD+C, O+M Project Coordinator Public Works City of Palm Desert Please consider the environment before printing this email. From: Bill Reifsteck fmailto:reifsteck(aprowestpcm.coml Sent: Wednesday, June 25, 2014 3:33 PM To: Buck, Heather Cc: RANDY CRAIG; Robert Kenny; Jeff Rising Subject: Carlos Ortega Bid Protest Dear Heather, Please see the attached protest letter regarding the above subject project. If you have any questions please contact me at my office. William E. Reifsteck II, DBIA, CRIS Director of Preconstruction Services ProWest Constructors 22710 Palomar Street Wildomar, CA 92595 re ifsteck Cal D rowestp c m . co m http://www.linkedin.com/pub/william-reifsteck/0/655/ba2 Phone 951-678-1038 Cell 562-708-6357 1