Seismic Retrofit - Phase II Contract Award

The following excerpt from a report was presented at the Building and Operating Committee on Thursday, May 10 and to the Board of Directors on Friday, May 11. The contract was awarded May 11 as recommended below.

AUTHORIZE ACTIONS RELATIVE TO CONTRACT NO. 99-B-5 GOLDEN GATE BRIDGE SEISMIC RETROFIT (PHASE II), SOUTH APPROACH STRUCTURES

Recommendation:

The Building and Operating Committee recommends that the Board of Directors authorize the following actions relative to Contract No. 99-B-5, Golden Gate Bridge Seismic Retrofit (Phase II) of the South Approach Structures, subject to the District obtaining Federal Highway Administration's approval of these actions:

Authorize award of Contract No. 99-B-5 to Shimmick Construction Company, Inc./Obayashi Corporation, a Joint Venture, in the amount of $122,292,503, including Bid Option "A", Builder's Risk Insurance.

Approve a project budget of $157,302,503 and authorize allocation of additional external funding obligated for the Golden Gate Bridge Seismic Retrofit Project to Contract No. 99-B-5 upon receipt of Caltrans/FHWA obligation of the funds.

Summary:

Contract No. 99-B-5, Golden Gate Bridge Seismic Retrofit (Phase II) of the South Approach Structures, involves the seismic retrofit of the following structures: the South Approach Viaduct, the South Anchorage Housing, the Fort Point Arch, and Pylons S1 and S2. Contract No. 99-B-5 was advertised for construction bids on October 10, 2000. During the bid phase, a total of 141 firms obtained sets of bid documents.

At 2:00 p.m. on March 27, the Secretary of the District opened the five bids received and announced the results. A summary follows:

BIDDER/TOTAL BID PRICE

Shimmick Construction Co., Inc. & Obayashi Corporation JV of Hayward, CA: $122,292,503.00
Traylor Bros., Inc. (DBA Traylor Pacific) of Irvine, CA: $129,921,093.00
Cleveland Bridge California, Inc of Crokett, CA: $149,971,182.82
Balfour Beatty/Christie of Vallejo, CA: $153,432,669.90
Tutor-Saliba-Koch JV of Sylmar, CA: $155,377,377.00

Based on the above bids, the apparent low bidder is Shimmick Construction Company, Inc./Obayashi Corporation, a Joint Venture, of Hayward, California, with a bid price of $122,292,503, which includes Bid Option "A" for a Builder's Risk insurance premium in the amount of $550,000.

The bid proposal from Shimmick/Obayashi has been found to be responsive, and the bidder has been found to be responsible based on the following factors:

The bidder has submitted its bid in accordance with the requirements of Contract No. 99-B-5 and in particular has complied with the following:

Proper completion of all Bid Proposal Forms.
Submittal of complete estimating/bid documentation to the District.
Compliance with the contract requirement that the bidder and its team have the requisite quality, fitness and capacity to satisfactorily perform the contract work.
Compliance with the Disadvantaged Business Enterprise (DBE) Program requirements applicable to the Contract.

The competition for the Contract has been found to be satisfactory in view of the fact that there were 141 planholders and the District received five bids from major construction companies. This number of bids is comparable to the number of bids that had been submitted for Caltrans' major bridge projects within the past year.
The contract item prices that were included with the low bid have generally been found to be reasonable after considering the present active construction market in the Bay Area and the bidders' perception that this Contract involves a relatively high degree of risk and difficulty of work. The prices of the low bid are also comparable to the bids received by Caltrans for major bridge construction projects within the last year. It has been concluded that re-advertising the Contract would not result in a lower price for the construction work. Furthermore, a re-advertisement of the Contract would cause a significant delay to the District's seismic retrofit program that would result in additional staff and consultant costs as well as public safety concerns.
The Builder's Risk insurance premium of $550,000 has been determined to be reasonable, and staff recommends that the District proceed with including this item as a part of the award of Contract No. 99-B-5. This determination is based on prices submitted with the other bids and the current insurance market, which is experiencing price increases. Furthermore, Shimmick/Obayashi's proposal regarding Builder's Risk insurance is based on a quote from their broker for a policy with Allianz, which has a Best's Rating of A++, XV.

Based on the above factors, staff recommends that Contract No. 99-B-5 be awarded to Shimmick/Obayashi for an amount of $122,292,503, which includes an acceptance of Shimmick/Obayashi's Bid Option "A" regarding Builder's Risk Insurance. The award of this Contract is subject to the approval of the Federal Highway Administration.

The Golden Gate Bridge Seismic Advisory Committee, at its meeting of April 26, 2001, concurred with this award recommendation.

Fiscal Impact:

A budget of $120,000,000 was previously established for Contract No. 99-B-5. This budget included $104,000,000 for construction and construction contingency, and $16,000,000 for construction administration support services. The apparent low bid of $122,292,503 exceeds the budgeted construction cost.

It is proposed that the project budget be revised to include additional construction cost, increased construction contingency and other costs associated with the Phase II construction as follows:

Contract No. 99-B-5 $122,292,503.00
Contract No. 99-B-5 Contingency, 10% $12,300,000.00
Seismic Instrumentation $220,000.00
Construction Administration Support Services (Consultants) $16,000,000.00
District Construction Engineering $6,000,000.00
Temporary Construction Trailer and Equipment $250,000.00
Construction Vehicle Lease $240,000.00

TOTAL PROJECT BUDGET $157,302,503.00

A total of $151 million is available to fund this phase of the Seismic Retrofit Project: approximately $75 million federally earmarked funds, $26 million STIP funds provided by MTC, $5 million state grant funds from California's Traffic Congestion Relief Program and $45 million from the state's share of the Highway Bridge Replacement and Rehabilitation (HBRR) Program funds. Caltrans has indicated verbal concurrence with the District's request for an increase of approximately $6 million in the amount of the HBRR funds for this project. It is anticipated that Caltrans will formalize its approval upon approval of the District's revised project Finance Letter. Background:

Staff, the Attorney and the District's Insurance Advisor have analyzed various aspects of the apparent low bid. The following is a summary of this review.

Submittal of Complete Estimating/Bid Documentation.

As required by the Contract, the three low bidders submitted their complete estimating/bid documentation to the District. These records were reviewed for completeness by staff on April 3, 2001, and they were placed in secured double-lock storage at the District's offices. After execution of the Contract, the bid documentation of the successful bidder will be kept in secured storage throughout the duration of the Contract and may be jointly reviewed by the District and the Contractor to aid in the resolution of any disputes. The bid documentation of the two unsuccessful bidders will be returned to them after contract award.

Bidder's Responsiveness and Responsibility

Staff has concluded that Shimmick/Obayashi properly completed all the necessary Proposal Forms. Staff also reviewed and verified pertinent information provided by the low bidder in its "Bidder's Statement of Qualifications and Business References" form, which was included within the Proposal Forms.

In addition, on April 3, 2001, the apparent low bidder participated in a Pre-Award Interview. The interview was conducted by the Bidder Qualification Committee consisting of representatives of the District, Federal Highway Administration and Caltrans. Upon conclusion of the interview, the Committee determined that Shimmick/Obayashi and its team have the requisite quality, fitness and capacity to satisfactorily perform the work of the Contract.

Accordingly, based on its own investigation and the recommendation of the Bidder Qualification Committee, staff has concluded that Shimmick/Obayashi is a responsible bidder.

No formal bid protests have been filed with the Office of the Secretary of the District. After receipt of the bids on March 27, 2001, staff received a letter from the second low bidder regarding whether the Shimmick/Obayashi bid was responsive based on the experience and qualification levels of the tiedown anchor subcontractor that was proposed with the Shimmick/Obayashi bid. (The District also received a second letter from a competitor of the proposed tiedown anchor subcontractor raising the same issues.) Both Shimmick/Obayashi and the proposed tiedown anchor subcontractor have responded to these letters. Staff reviewed the information contained in the letters and verified the accuracy of the pertinent points raised by the Shimmick/Obayashi response. Based on this review, staff has concluded that the Shimmick/Obayashi bid was responsive.

Analysis of Bid

Staff has evaluated the bids to determine whether there was good competition for the Contract and whether a reasonable low bid was obtained as a result of the competition. As for competition, there was a strong level of interest in this Contract, as indicated by planholders and the receipt of bids from five major construction companies. In addition, the two lowest bids were relatively close, differing by only approximately 6%. The remaining three bids were 22% to 27% higher than the lowest bid. This level of competition, and the range of bids between the lowest and highest bidders, is consistent with Caltrans' experience regarding the competitive bids of their major bridge retrofit projects.

The low bid from Shimmick/Obayashi exceeded the Engineer's Estimate by 21%. It has been determined that the low bid was higher because of the following factors:

Numerous large transportation projects, including bridge retrofit contracts, are presently under construction in California, and they have created a shortage of skilled labor and have raised labor costs.
As indicated by the potential bidders during the bid phase, the bidders perceive work under this contract to be of a high degree of risk and difficulty, which is primarily associated with the retrofitting of a 60-year-old bridge in a harsh marine environment, difficult job site access and the constraints of project environmental requirements. These higher risks and difficulties, coupled with the active construction market in the Bay Area, are reflected in the higher than anticipated prices of the various major contract items. For example, contract item prices for removal of portions of the structures, foundation excavations, and construction of concrete foundations at the edge of the Pacific Ocean were higher than anticipated. Furthermore, staff compared the Shimmick/Obayashi bid with the bid prices received by Caltrans during the past year for their major bridge construction projects and concluded that there is a similar trend in pricing with regard to this type of project.

Accordingly, staff has concluded that, based on the high degree of competition with regard to this Contract, the bid from Shimmick/Obayashi reflects the present market conditions, and any re-advertisement of the Contract will not result in a lower contract price.

Disadvantaged Business Enterprise (DBE).

No specific DBE participation goal was established for this Contract. However, bidders were urged to obtain DBE participation and were required to document their activities in the solicitation and selection of subcontractors and suppliers to ensure that this process was carried out in a nondiscriminatory manner.

Within three days after the bid opening, the bidders submitted documentation regarding the solicitation and selection of subcontractors, including Disadvantaged Business Enterprise (DBE) subcontractors. The DBE Program Office reviewed the DBE documentation and, with the concurrence of the Diversity Program for Contracts Review Committee and the Attorney, it has been determined that Shimmick/Obayashi has complied with the DBE Program requirements applicable to the Contract. At this time, 3.9% DBE participation is anticipated during the performance of the Project by the first low bidder. The second low bidder reported 1.8% DBE participation. The third low bidder did not complete the documentation; therefore, its DBE participation could not be determined.