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Home My WebLink AboutSR - R22600A - Henderson Cmnty BldgPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: DENIAL OF THE SUBSTITUTION OF SUBCONTRACTOR WILLIAMS MECHANICAL, INC. FOR AB LUJAN CO. FOR THE HENDERSON COMMUNITY BUILDING CONTRACT NO. R22600A SUBMITTED BY: MISSY WIGHTMAN, PROJECT COORDINATOR CONTRACTOR: STETON CONSTRUCTION GROUP 145 S. STATE COLLEGE BLVD. MEETING DATE SUITE 450 � BREA, CA 92821-5818 B CONTINUED TO DATE: JANUARY 25, 2007 0 PASSED TO 2ND READING CONTENTS: REQUEST FOR SUBSTITUTION NOTICE OF SUBSTITUTION TO AB LUJAN CO. CERTIFIED MAIL RECEIPT AB LUJAN COMPANY RESPONSE LETTER Recommendation: By Minute Motion, that the Agency Board deny the substitution of Williams Mechanical, Inc. for AB Lujan Co. for the Henderson Community Building Contract No. R22600A. Executive Summanr: Staff recommends denial of the subject Substitution of Subcontractor in accordance with California Public Contract Code 4107 for the Henderson Community Building. Discussion: The subject Contract No. R22600A was awarded on July 13, 2006 to Steton Construction Group, for the Henderson Community Building. Notice to Proceed was issued on August 28, 2006 to commence work on August 28, 2006, and construction is currently underway. As part of their Information Required of Bidder document, Steton Construction Group listed the following subcontractor, and is now requesting that this subcontractor be withdrawn from the subject project due to suspension of AB Lujan's California State Contractor's License Bond. AB Lujan Co. 13432 Roberta Circle Garden Grove, CA 92843 (Work to be performed: Site Utilities) Staff Report Denial of the Substitution of Subcontractor Williams Mechanical Inc. for AB Lujan Co. for the Henderson Community Building Contract No. R22600A Page 2 January 25, 2007 In accordance with California Public Contract Code 4107, written notice has been given to the above subcontractor to be withdrawn from the subject project. AB Lujan sent a response stating that their contractor's license bond was not renewed due to an error of their bonding agency and that a new contractor's license bond would be issued in a timely manner. Supporting documents were attached to this response. The subcontractor has also stated, "AB Lujan Company desires to perform this work and does not approve of our substitution on this project. We are ready, willing, and able to perform this work and we were listed at bid time as the subcontractor for a portion of work." Steton Construction Group is requesting that the following subcontractor be substituted in for the above subcontractor. Williams Mechanical Inc. 75-090 St Charles PI. Suite B Palm Desert, CA 92211 AB Lujan Company did respond within the five working days within which to submit written objections to the substitution of the awarding authority. They have also stated that they are able and willing to complete the work. Staff has verified with the bonding company that AB Lujan does have an active California State Contractor's License Bond, and is recommending denial of the subject Substitution of Subcontractor in accordance with California Public Contract Code 4107. Submitted by: Missy Wigh m Project Coor inator Department Head: Dave Yrigo Director Redevelopment/Housing Approval: J ti McCarthy, AC elopment Carlos L. Ortegai�Kxecutive Director `Lauri Aylaian Redevelopment Manager Paul S. Gibson, Director of Finance GARDA\Melissa W ightman\Henderson Community Building\Staff Reports\Staff Report- AB Lujan Denial of Subcontractor Substitution.doc JAN 2.4 ' 07 19! 44 FP. TO 1460340057.4 P. 01./02 RAMemnv OO 1 C M10MON INN AV6NUC. VrYCR LCVCL RfMSIDE, CAUFORNIA 02501 cps ) 603. 1 1 22 FAX925 11 GCD. 1 1 -14 6'lf=ssNrroN S77e STONERIDCE MALL nOAD, ouRL LOo PLCAaANTON, CAUFORNIA 94SOB iSEW 227-9200 FAX 4001A1 $87.0202 ATKINSON, ANDELSON, LOYA, RUUD & ROMO A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 1 7071 PARK P6A=A DRIVE, 91.111E 200 CERAMS, CALIMPNIA 00703-8507 (56z) 1553-3z00 - (714) B26.5480 FAX (562) 053-3333 WWW,AALRR.00M January 24, 2007 VIA FACSIMILE AND FIRST CLASS MAIL R=11AW O 2405 NATOMAS PARK DRIVE, SURE 240 SACRAMEN70. CAUFORNIA 05e33 CID 1 61 032.1 moo ►A1c cm I of V me- I Eaa Raw QL62Q 1 I4Y0 WEST OEIRNA/c00 COURT, 6VRL 1 74 SAN DIEGO. CAUFORNIA 02 1 27 case) 465.0526 FAX (6=6) 485.94 19 OUR FILE NUMBER! 010167.00013 71 a I0zVI Raehelle Klassen, City Cleric Lauri Aylaian, Redevelopment Manager City of palm Desert City of Palm Desert 73510 Fred Waring Drive 73510 Fred Waring Drive Palm Desert, CA 92260 Palm Desert, CA 92260 n Fax (760) 340-0574 Fax (760) 341-6372 N V M>;`; r-n morn Re: Steton Construction Group rT .� Henderson Community Building Project (Contract No. R22600A) Co - -" Request for Substitution of Listed Subcontractor On Agenda as Consent Item "E" for January 25, 2007 Psalm Desert Redevelopment Agency Meeting Dear Ms. Klassen and Ms. Aylaian: This firm represents Steton Constriction Group, Inc. On the project referred to above, Steton has requested to substitute Williams Mechanical Co, in place of its listed subcontractor, A. B. Lujan Co. Steton's request is currently on the Redevelopment Agency's Board agenda for tomorrow, January 25, 2007. We respcctfully request that this matter be pulled from the consent calendar and rc-set as an agenda item for the Agency's February 8, 2007 (or otherwise next) Board meeting. This will give Steton and my firm the opportunity to supplement the submission(s) previously made in regards to this matter, and to ascertain the basis for the current recommendation, whicb is for the Agency to Steton's request. My impression of this matter is that there is merit to the Stcton's request, but I need some timq to review the matter with Steton and have only just been called into the matter. Received Jan-24-07 07:42pm From- To -CITY OF PALM DESERT Pase 01 JAN 24 107 19:44 FP, TO 17603400574 P.02i02 ATKINSON, ANDELSON, LOYA, RuuD & ROMO Rachello Klassen, City Clerk Lauri Aylaian, Redevelopment Manager January 24, 2007 Page 2 There is little in the way of prejudice that will accrue as a result of two week delay sought by Steton. It will not delay work on the project as a whole, and will not have any impact on the start or finish date for Lujan's scope of work. We appreciate your consideration of this request and ask that you notify the affected parties as soon as possible with the Agency's decision. I plan to call Ms. Klassen around lunchtime tomorrow if I have not received word by then. Thank you for your cooperation. Very truly ours, ATKINSON, ANDELSON, LOYA, RUUD & ROMO tt er MS/rnam cc: David Erwin. Esq.. BEST. BEST & KRIEGER (via e-mail to david.erwi.n@bbklaw.eom) Phyllis St. George, STETON CONSTRUCTION GROUP (via e-mail to Phyllis@)stetogcg.com) ** TOTAL PAGE.02 ** Received Jan-24-07 07s42pm From— To —CITY OF PALM DESERT Page 02 December 1, 2006 Mark Chappell Douglas E. Barnhart, Inc. 41-945 Boardwalk, Suite D Palm Desert, CA 92211 RE: Henderson Community Building Underground Utility Subcontractor Substitution Request. Dear Mr. Chappell, In the process of finalizing our subcontracts for the above mentioned project, Steton Construction Group has discovered that AB Lujan Co., our listed underground utility subcontractor, has had their California State Contractors License suspended due to non payment of Contractor's License Bond. Since discovered, we have not received any further communication from this STETON subcontractor. Our last known contact information is as follows: CONSTRUCTION GROUP AB Lujan Co. W. Antonio Lujan 145 S. State College Blvd. Suite 450 P.O. Box 2131 Brea, CA 92821 Garden Grove, CA 92843 (714) 255-7080 714 757-9624 Fax (714) 255-7086 Lic. No. 641454 Pursuant to Palm Desert Municipal Code 3.30.190—A.l.f, we are hereby info@stetonog.00m requesting approval to substitute this subcontractor with a qualified licensed umv.stetonog.com subcontractor for the scope of Underground Utilities. Respectfully, STETON CONSTRUCTION GROUP s Ed Feng Project Engineer Cc: Justin Kazak, Jeff Contenta, Phyllis St. George V.Steton-nsl\CompanyVobsTendemon Community Building\Subconumctor Comespondence\Hegge Electric I , 73-510 FRED WARING DRIVE PALM DESERT, CALIFORNIA 92260-2578 TEL: 760 346—o6ii FAX: 760 30-6372 info@palm-dmert.org December 19, 2006 CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Antonio Lujan AS Lujan Co. 13432 Roberta Circle Garden Grove, CA 92843 RE: Notice of Substitution Contract No. R22600A Henderson Community Building Dear Mr. Lujan: We are in receipt of a Request for Substitution from Steton Construction Group requesting substitution of subcontractor AS Lujan Co., for subcontractor Williams Mechanical Inc. Steton Construction Group listed AB Lujan Co. as a subcontractor on their "Information Required of Bidder" document for Contract No. R22600A, awarded on July 13, 2006, for the Henderson Community Building. The reason stated by Steton Construction Group, to substitute AS Lujan Co., for Williams Mechanical Inc., is that they"have had their California State Contractors License suspended due to non-payment of Contractor's License Bond". Copies of their letters dated October 25, 2006 and December 1, 2006, are enclosed. You have five working days awarding authority. Failure substitution. Sincerely, Missy Wightman Project Coordinator Enclosures (as noted) within which to submit written objections to the substitution of the to file these written objections constitutes your consent to the a„o mmowrton®,w COMMUNITY SUILDINGILETTERS, MEMOS, AND WORD DOCUMENTSISUBSTNUTION LETTER AB LUJAN.DOC d e • Lfl ,..i,o.� F.F 11EiY�l Mi�R. Pi..USE ir;Yl�iwnn Y: i.L�IY'.1 ,•il. d,•VniP a PU Pcetage I $ . . `^ c®nleea Fe. ' DEC 19 2MG a , ORemm Receipt Fas PoHere (EtMorsement RequhedJl a flee ,'Delivery Fee M (EedoreerygM Requhe�- Ri Total Postage&Fee.,,$ a u7 a SW T. WOBazNc. r �, \ o A q7 December 27, 2006 Mtsy Wightman Palm Desert Redevelopement .Agency 73=510 Fred Waring Drive palm Desert, California 92260 Attn: Missy Wightman Re: Notice of Substitution, Contract R22600A, Henderson Community Bldng. Dear Missy Wightman, We have responded to the letter of December 1, 2006 from Steton Construction Group. They were told that our. Contractor's License Bond was not renewed due to an error by . our bonding agency. They were also notified that a new Contractor's ticnse Bond would be issued in a timely manner and it has been issued. AB Luian Companv desires to perform this work and' does not aaorove of our substitution on this nroidct. We are ready. willinn and able to perform this work and we were listed at bid lime as the subcontractor for a vortion of work_ i am a small business and companies like Steton Construction Group often abuse us in the bidding process. I will be happy to speak with you regarding this situation. Again I stress that AB Lujan is ready, willing and able to perform on this project and we look forward to a pleasant working environment, we will seek legal action should your agency allow the illegal and unlawful substitution which the Steton Construction Group has requested. We have attended a pre -Construction meeting regarding this project and are looking forward to working.with those involved in completion of this project. I can be contacted at 714-757-9624 and loots forward to talking with you. A copy of this letter is also being sent to the university representative. .Sincerely; Antonio Lujan Owner, ...... __._. _...._.. .._... 12/27/2006 09:36 7148167328 PAGE 02/04 AB Lujan PO Box 2131 Garden Grove, California 92843 October 23, 2006 STETON CONSTRUCTION GROUP 145 S. State College Blvd. Brea, California 92821 Re: L13CC Gas Line Work Justin, Please find attached a copy of the Contractors License Bond, which is being provided to the California State Board of Contractors. I apologize for any inconvenience this may have cause your company, I was not aware of any lapse in my Contractor's Bond. Sincerely, Antonio Lujan (C/])! President ft- 12/27/2006 09:36 7148167328 PAGE 03/04 jr` balance - surety '""' insurance services To: Company: From: Date. Re: MEMORANDUM Antonio Lujan A B Lujan Co Ana Lara October 20, 2006 CA Contractors License Bond Bond No 100013036 Enclosed are the following 1. A copy of the Balance Insurance Agency Privacy Notice for your records 2. A payment invoice and proof of payment 3. Your original bond (which you must file with CA Contractors State License Board) 4. A copy of the bond (for your records) 5. A copy of your original application (for your records) Should you have any questions please feel free to call. Thank you for choosing Balance insurance for your bond needs. Ana 17780 FfrCH, SUITE 150 IRVINE, CA 92614 TEf,; 5491263-34.10 FAX: Y4R/263.3434 72/27/2006 09:36 7148167328 PAGE 04J04 THIS BOND SHALL BE FILED VIM THE REGISTRAR of CONTRACTORS STATE OF CALIFORNIA CONTRACTORS STATE LICENSE BOARD Contractor's Bond �� (BVEI//EdSANB PRpFEbEIDN$r.OGESECiION$IA11.Sr01� 1n is SuaE1v CODE BOND NO. G62 100013036 LICENSE No. 706665 OR AFF FEE NO. The premium on this bond is $ $1,067.00 for the term 10/`20/2006 TO 1012012007 KNOW ALL BY THESE PRESENTS: That A B LUJAN CO BUO NESS NAME BNOWNONARRLIGTION OR LIC1NdE whose address for service is P.O BOX 213 GARDEN GROVE CA 92843 STREETAOORESS c1Tr crnre ZIPCOOE as Principal, and AMERICAN CONTRACTORS INDEMNITY COMPANY 1 Orsumw a corporation organized under the laws of r.Al IFnRNIA and authorized to transact a general surety business in the State of California, as Surety, are held and firmly bound unto the State of California, for the penal sum of Ten Thousand Dollars ($10,000) for the payment of which well and truly to be made we bind ourselves, our heirs, administrators, su=ssora and assigns, jointly and severally, firmly by these presents. WHEREAS, The provisions of Sections 7071.6 and 7071.8, Business and professions Code, require that the Principal file or have an file with the Registrar a bond issued by an admitted surety in the sum of $10,000 and this band is executed and tendered in accordance therewith. NOW THEREFORE; The conditions of the foregoing Obligation are that if the Principal shall comply with and be subject to the provisions of Division 3, Chapter 9 (commencing with Section 7000) of the Business and Professions Code, then this obligation shall be null and void; otherwise to remain in full force and effect PROVIDED HOWEVER, This band Is issued subject to the following express conditions: 1. This bond may be cancelled by the Surety in accordance with the provisions of Sections 096.310 et seq- of the Code of Civil Procedure. 2. This bond shall be deemed continuous in form and shall remain in full force and effect and shall run concurrently with the license period for which license is granted and each and every succeeding license period or periods for which sold Principal may be licensed, after which liability hereunder shall mesa except as to any liability or indebtedness therefore incurred or accrued hereunder. 3. The limitation of the liability of the Surety and the conditions of the bond are set forth In Sections 7071.5, 7071.6, and 7071.11, Business and Professions Code and any person claiming against sold band may bring an action in a proper court on this bond for the amount of the damage he may suffer as the result of such acts or omissions by the Principal, except that such action must be brought within two (2) years after the expiration of the license period during which the act or omission occurred, except provided further that a claim for fringe benefits shall be brought within six (6) months attar the date the fringe benefit delinquencies were discovered, and any civil action thereon shall be filed within two (2) years after the date the fringe benefit contributions were due. 4. This bond is executed by the Surety to comply with the provisions of Division 3, Chapter 9, (commencing with Section 7000) of the 1usiness and Professions Code and of Chapter 2, Title 14. Part 2 (commencing with Section 995.010) of the Cade of Civil Procedure and said bond shall be subject to all of the terms and provisions thereof- 5. This band to become effective 10/20/2006 Dore . AMERICAN CONTRACTORS INDEMNITY COMPANY 9841 AIRPORT BLVD,. NINTH FLOOR. LOS ANGELES, CA 90045 NANR Or &URM I . ABORESS FOR SERIRGE I certify (or declare) under penalty of pedury under the laws of the State of California that I have executed the foregoing bond under an unrevoked power of attorney. Executed in IRVINE, CA an 10/20/2006 under t lawsv of a State of California. U11ANOdT M ' DAM Certificate of Authority Vf 5906 Signature ofAftomey-in-Fact ///mead Printed or Typed Name ofAttomey-in- act rTALIE CAICEDO LOPEZ Address of Attomeyfn•FBCt 17780 FITCH, STE. 150 IRVINE, CA 92814 �a.;ysy II IIIII� �IIII I�Iq � Telephone Number of (9491 263-3430 II0 ass htrost