AGENDA #2c
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Bids for Construction of the Town Operations Center
DATE: June 20, 2005
The attached resolution would award the bid for construction of the Town Operations Center on Millhouse Road in the amount of $36,686,811 to D.H. Griffin Construction Company. The resolution would also authorize the Manager to enter into a contract with the successful bidder upon approval of the contract by the North Carolina Department of Transportation.
On November 24, 2003, the Council approved two project ordinances, totaling $42,926,500 to fund construction of the Town Operations Center on Millhouse Road. The Public Works and Public Housing portions totaled $24,391,000. The Transportation project portion totaled $18,535,500.
The entire Town Operations Center is to be constructed using a single prime contractor who would work on both sites; however, the contractor will be required to separate costs between the Public Works and Transportation sites. This is necessary to meet the financial accounting requirements of the federal and State Grants that will be used to pay for part of the Transportation site. Also, because of the level of commitment of State funds, $7,335,392 from its "Moving Ahead" Program, the State has asked for review and approval of contracts to be awarded under this project.
The construction work for the Town Operations Center project is to occur in phases. The first, Phase A, is nearing completion and includes clearing, grubbing, grading and installing erosion control measures and preliminary stormwater treatment facilities. The remaining two phases, B and C, include off-site improvements required for the project and on-site construction respectively. Bids were received on June 14, 2004 for the off-site improvements which have been broken down into two sub-phases. Contract awards for these projects are included in separate Council reports.
Awarding the bid tonight will
allow the Town to sell Certificates of Participation beginning Tuesday, June 21
and close on the sale by June 30. This
closing is important to the Town’s financial situation, as it allows
reimbursement to the General Fund of advances made to the project within this
fiscal year. That would allow us to
maintain a fund balance according to the policies of the Council.
Specifications for the Phase C work were developed and Notices to Bidders were published in the March 27, 2005, edition of The Chapel Hill Newspaper and also in the March 31, 2005, edition of Greater Diversity, a minority publication. On May 3, 2005, the town received only two bids and, pursuant to North Carolina General Statutes, the bids were not opened as the minimum three bid requirement was not met. Notices to Bidders were republished in the May 5, 2005, edition of The Herald Sun Newspaper and also in the May 5, 2005, edition of Greater Diversity, a minority publication.
Three bids were received, publicly opened, and read at 4:00 p.m. on May 13, 2005. The bids were as follows:
|
Contractors |
Public Works |
Transportation |
Shared Areas |
Total |
|
Clancy and Theys Construction Company |
$23,863,000 |
$16,000,000 |
$1,400,000 |
$41,263,000 |
|
D.H. Griffin Construction Company |
$21,430,700 |
$15,369,000 |
$1,152,000 |
$37,951,700 |
|
T.A. Loving Company |
$23,950,000 |
$15,900,000 |
$1,650,000 |
$41,500,000 |
The lowest responsive bid was received from D.H. Griffin Construction Company. The bid from D.H. Griffin Construction Company met all federal and State requirements and included a disadvantaged business enterprise (DBE) participation of 5.755%. The DBE participation goal set for all phases of the project was 12%. The contractor further satisfied federal requirements by submission of their “good-faith-efforts” to achieve minority participation. The specifications also required that all DBE contractors working on the project be certified by the North Carolina Department of Transportation. D. H. Griffin is still working with NCDOT staff to complete this requirement.
The totals of all of the bids received exceeded the budget estimate for work on this Phase of the overall project. Consequently, Town Staff pursued and identified additional sources of revenue for the project. Transportation and Planning Staff identified approximately $1,671,000 in additional Federal Transit Administration grant funding, through the rescheduling of projects in the approved Transportation Improvement Program that could be used for the Transportation portion of the project (see Attachment 1). The use of these funds has been approved by the Transportation Advisory Committee. We also determined additional funds would be available through sales tax returns and interest and premium earned on the Certificates of Participation that could be used for the Public Works portion of the project.
In light of this additional revenue, the lowest responsive bid from D.H. Griffin Construction Company was within the budget for the Transportation portion of the project. However it remained about $1,265,000 over the amount budgeted for the Public Works portion of the project. Therefore, pursuant to North Carolina General Statutes, Town staff has undertaken negotiations with the low bidder to identify potential cost savings measures, to permit the contract to be executed within the available funding limits.
Attachment 2 is a detailed listing of items for which we have received preliminary cost reduction figures from the contractor. These items as submitted total $780,418. We intend to continue negotiating with the contractor to attempt to obtain greater savings from some of the items and to identify which of the items we would accept and which we would not. In addition, in anticipation of bids possibly exceeding our budget, we asked for deductive alternates that could be considered. We recommend taking three of the deductive alternates that would eliminate the surplus storage building and the brushless vehicle wash facility and attendant building and part of the covered storage for Field Operations. These cuts will save $569,500. These facilities could be added in future years. We also propose one additive alternate in the amount of $12,600 for the infrastructure to support a brine system for winter storm abatement.
The deductive alternates and the modifications to specifications will provide us with a sufficient reduction in cost to be able to award a contract for the recommended amount of the adjusted low bid.
We believe that the proposed deductive alternates will have some adverse effects on the envisioned operation of the complex, but the changes to materials and components of the project are reasonable changes to make and will have minimal impact on its functioning. We believe that deferring construction of the Emergency Operations and Training Center is a reasonable reduction in the scope of the building project. We hope that we may be able to obtain funding through Homeland Security grants in the future to construct the Emergency Operations and Training Center.
The low bidder’s financial status, stability, reputation, quality and timeliness of their work, responsiveness to their clients, and sensitivity to neighbors of other construction projects in the area are known by our consultants for this project and were scrutinized through a pre-qualification process. Based on this information, we believe that D.H. Griffin Construction Company is responsible and well qualified to complete the project within the designated project period.
Funding
Town funding for this project will be available from financing by Certificates of Participation, now scheduled to occur on June 22, 2005.
1% for Art
The Town Operations Center project budget includes a dedication of 1% for public art. The cost of all construction phases has been included when calculating the funds available for public art. The Art component of the Town Operations Center is being accomplished under a separate contract.
We recommend that the Council adopt the attached resolution awarding the bid in the amount of $36,686,811 for the construction of the Town Operations Center and authorize the Manager to execute a contract with D.H. Griffin Construction Company upon completion of a review of the contract by NCDOT and upon successful completion of the Town’s DBE requirements applicable to this project.
ATTACHMENTS
A RESOLUTION AWARDING A BID FOR CONSTRUCTION OF THE TOWN OPERATIONS CENTER (2005-06-20/R-1c)
WHEREAS, the Town of Chapel Hill has solicited formal bids by legal notice on May 5, 2005 in accordance with G.S. 143-129 for construction of the Town Operations Center; and
WHEREAS, the following bids were received and opened on May 13, 2005;
|
Contractors |
Public Works |
Transportation |
Shared Areas |
Total |
|
Clancy and Theys Construction Company |
$23,863,000 |
$16,000,000 |
$1,400,000 |
$41,263,000 |
|
D.H. Griffin Construction Company |
$21,430,700 |
$15,369,000 |
$1,152,000 |
$37,951,700 |
|
T.A. Loving Company |
$23,950,000 |
$15,900,000 |
$1,650,000 |
$41,500,000 |
WHEREAS, cost reduction measures have been negotiated with the low bidder to provide a savings of approximately $1,265,000 to the Public Works portion of the project;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town authorizes the Town Manager to execute a contract, contingent on the review and approval of the North Carolina Department of Transportation, to the lowest responsive bidder, D.H. Griffin Construction Company, in the amount of $36,686,811.
This the 20th day of June, 2005.