AGENDA #4c

 

MEMORANDUM

 

TO:

Roger L. Stancil, Town Manager

FROM:

Lance Norris, Director of Public Works

Kenneth C. Pennoyer, Business Management Director

SUBJECT:

Award of Bid for the Town Hall HVAC Project

DATE:

June 9, 2008

 

PURPOSE

 

Adoption of the attached resolution would award a contract to HM Kern Corporation for the Town Hall Heating, Venting and Air Condition (HVAC) Replacement Project, and allow change orders as necessary provided that the contract cost remains within the amount budgeted.

 

BACKGROUND

 

This project was previously bid on November 15, 2007.  The low bid exceeded the available funding for the project.  The Town, along with the design firm, and the low bidder entered into negotiations for value engineering on the project.  The negotiations resulted in a change in the scope of the work that deleted a substantive component related to structural work on the north wing of the building.  Upon review of these changes, the Town Attorney and Purchasing and Contracts Manager were in agreement that the modifications resulted in a change in the material basis of the bid and recommended that the project be re-advertised and rebid in accordance with State Statutes.  On May 5, 2008 the Council formally rejected the bids and directed the Manager to rebid the project.

 

DISCUSSION

 

The current HVAC system at Town Hall is nineteen years old and at the end of its useful life.  Funding has been allocated to design and install an energy efficient system.  The project budget totals $666,500, of which a total of $571,500 is capital improvement funds allocated for design, contract management and installation and $95,000 is from the Energy Bank Fund to pay for a computerized energy management control system.  So far, a total of $61,750 has been spent, encumbered or reserved for design and contract oversight, and 1%, or $6,665 for art acquisition, resulting in an available balance of $598,085 for contract improvements.

 

The Notice to Bidders for rebidding the project was published on the Town website on May 6, 2008 and in the Greater Diversity News on May 8.  A pre-bid conference was held on May 15, 2008.  Based on the plans and specifications for this project were prepared by Engineered Designs, Inc.  Three bids were received on May 27, 2008 and publically opened and read.  The low bid was submitted by HM Kern Corporation in the amount of $519,100, including the cost for the selected alternate bids for the computerized energy management control system and the gas heat option, but excluding any funds for contingency.

 

The bids received were as follows:

 

Contractor                    Base Bid          Alternate 1       Alternate 2       Alternate 3       Total    _

 

HM Kern Corp.           $437,000*       $ 0              $ 55,900*        $26,200           $519,100

 

Incline Const.               $505,540**     $ 0**          $      0**          $20,713           $526,253

 

United Mech.             $400,145        $113,685***   $113,685***   $21,027           $534,857***

 

*          Part of the cost for the desired energy management control system included in the base bid and the balance listed under Alternate 2.

 

**        The cost for the desired energy management control system included in the base bid.

 

***      The cost for the desired energy management control system is the same as the generic  control system.

 

The first two alternates specified allow for budget flexibility in choosing the computerized energy management control system.  While there were some differences in how the three bidders listed their costs, the above is a true comparison of the total for the recommended energy management control system (product of the first two alternates as bid – asterisks) and the cost (third alternate) to upgrade to natural gas heating. 

 

The fourth alternate shown below would have allowed an option to upgrade the electrical feed, if that form of heating was chosen. 

 

HM Kern Corporation              Incline Construction                  United Mechanical

 

$7,500                                     $7,925                                     $18,000

 

The low bid including Alternates 2 and 3, of $519,100 by HM Kern Corporation complies with all of the requirements set forth in the bid documents and is within the allocated funding for the project.

 

RECOMMENDATION

 

We recommend that the Council adopt the following resolution authorizing the Town Manager to award the bid including the cost for Alternates 2 and 3 associated with the Town Hall HVAC Replacement Project to HM Kern Corporation and allow change orders as necessary provided that the contract cost remains within the amount budgeted.