AGENDA #8a

MEMORANDUM

TO:                  Roger Stancil, Town Manager 

FROM:            Bill Letteri, Public Works Director 

SUBJECT:      Bid:  Community Center System Replacement and Repairs Project

DATE:            September 27, 2006

Resolution A would award the bid for the Community Center System Replacement and Repairs Project in the amount of $1,960,500 to Lomax Construction, Inc., the lowest responsive bidder, for the base bid and alternates 1, 2, 3, 4, 5 and 7. Recommended Ordinance A would provide an additional $350,000 for this project from the appropriated fund balance.  

Resolution B would award the bid for the Community Center System Replacement and Repairs Project in the amount of $1,710,800 to Lomax Construction, Inc., the lowest responsive bidder, for the base bid and alternates 1, 3, 5 and 7, eliminating the gym air conditioning and gym floor replacement from the project.  Ordinance B would provide an additional $36,000 for this project from the appropriated fund balance.  

Either Resolution A or B would also authorize the Manager to enter into a contract with the successful bidder.

BACKGROUND

The 2000 Facilities Condition Assessment identified $577,000 in maintenance deficiencies at the Community Center.  Subsequent to the 2000 assessment, the building has continued to deteriorate and we have identified some deficiencies that were not noted by the original assessment. The Town staff estimates that the actual backlog of maintenance and repair for this building may now be on the order of $1,300,000.  In response to citizen feedback and in order to increase the year-round utility of the facility, this project also includes about $170,000 for the addition of an air conditioning system to the gymnasium.  The project also includes about $25,000 for the addition of accessible shower room facilities on the pool deck to better serve our physically disabled patrons and $19,600 for public art.

The FY 2006–2021 Capital Improvements Program 15-year plan includes a 10-year installment financed capital maintenance project in the amount of $1,750,000 to address these deficiencies with the borrowing planned for January of 2007.  Because the financing was planned for January of 2007, no debt service payment would be required until 2007-08, when we would expect a debt service payment of about $262,000.  The project budget also includes a $160,000 from the FY 2005-2020 Capital Improvements Program Budget for a total project budget of $1,910,000.  After deducting design fees ($129,800), one percent for art ($19,600) and a 5 percent contingency ($98,700), the available balance for funding the construction is $1,661,900.       

On June 2, 2005, the Town entered into a contact with Corley Redfoot Zack Inc. for the architectural and engineering design work for a Community Center System Replacement and Repairs Project.  The completed project design includes the following elements:

• Roofing replacement for the gym and the pool
• Replacement of sliding glass doors with energy efficient fixed glass panels
• Replacement of all pool mechanical systems (filtration and chemical feeding)
• Replacement of pool deck tiles
• Replacement of pool heating, cooling and dehumidification systems
• Replacement of HVAC systems throughout and addition of HVAC in the gym
• Replacement of bathroom and locker room fixtures and wall lockers
• Replacement of the wooden gym floor
• Selective replacement of interior and exterior doors
• Addition of automatic door openers at the main entrance
• Addition of accessible toilet/shower rooms on the pool deck
• Interior painting throughout
• Installation of solar hot water heating panels

DISCUSSION AND EVALUATION

Bid Results:  Based on the plans and specifications for this project prepared by Corley Redfoot Zack Inc., bids were solicited from general contractors on a single-prime basis.  The notice to bidders was published on the Town website on July 10, 2006 and in the July 13, 2006 edition of Greater Diversity.  Eight bids were received and opened on August 17, 2006 at 3:00 p.m.  The bid results are as follows:

Contractor	Base Bid	Alt. 1 Pool Roof	Alt 2 Gym Floor	Alt 3 Central Area HVAC	Alt 4 Gym HVAC	Alt 5 Replace Wall Lockers	Alt 6 Pool Balance Tank	Alt 7 Automatic Chemical Feed Controls	Grand Total
Bar Construction	$1,471,000	$280,230	$103,220	$127,400	$185,600	$21,300	$28,600	$1,200	$2,218,550
Harrod and Associates	$1,830,000		$100,000	$130,000	$187,000	$23,000	$0	$1,500	$2,271,500
H.M. Kern Construction	$2,046,000		$95,000	$134,000	$189,000	$41,000	$64,000	$1,200	$2,570,200
Lomax Construction	$1,721,400		$111,200	$121,700	$186,800	$24,600	$20,500	$1,600	$2,187,800
Resolute Building Co.	$1,762,300		$99,300	$129,300	$183,300	$22,325	$0	$2,300	$2,198,825
Van Thomas	$1,865,000		$133,000	$125,000	$203,000	$0	$12,000	$1,300	$2,339,300
D.W. Ward	$1,828,300		$91,622	$128,913	$182,283	$22,693	$0	$1,650	$2,255,461
C.T. Wilson Construction	$1,893,302		$96,755	$121,317	$173,707	$23,194	$7,972	$2,000	$2,318,247

We have reviewed the bids with the project architect and concluded that the lowest responsive bidder is Lomax Construction, Inc. in the amount of $2,187,800 for the base bid plus alternates 1, 2, 3, 4, 5, 6 and 7.  This amount exceeds the $1,661,900 available balance in the project budget by $525,900. 

Negotiations with the Apparent Low Bidder: Upon completion of our analysis of the bid results, we began negotiations with the apparent low bidder and the architect in an attempt to reduce the cost of the project.  Our goal was to find sufficient cost reductions so that all of the alternates, with the exception of Alternate 6 (prefabricated pool balance tank), would be affordable.  (We rejected Alternate 6 because we expected it to be a deductive rather than an additive alternate.)  As a result of these negotiations were able to identify several opportunities to reduce the costs of various aspects of the project. 

Attachment 1 is a summary tabulation of the results of the cost reduction process (referred to as value engineering on the attachments) that accepts the base bid, all alternates (less Alternate 6) and the changes indicated.  The revised bid price under this option is $1,960,500.  Acceptance of this bid would require additional funding in the amount of $350,000.  Of this amount, $298,600 would be to cover the cost of the contract and $51,400 would be to increase the project contingency from $98,000 (5 percent) to $149,400 (7.6 percent).  It is our standard practice to include a 10 percent contingency in most project budgets, particularly for renovation projects such as this where hidden conditions may be revealed after construction begins.  Holding a portion of the supplemental funding in reserve will reduce the risk associated with unforeseen or hidden conditions.       

Attachment 2 is a summary tabulation of the results of the cost reduction process that accepts the base bid plus alternates 1, 3, 5 and 7.  The revised bid price under this option is $1,710,800.  Acceptance of this bid would eliminate Alternates 2 (gym floor replacement) and 4 (addition of air conditioning in the gym) and would require additional funding in the amount of $36,000.  Of this amount, $33,300 would be to cover the cost of the contract and $2,700 would be to increase the project contingency form $85,600 (5 percent) to $88,300 (5.2 percent).  

We received unbudgeted sales tax revenues in 2005-06 from sales from 2000 through 2004 for amounts that should have been attributed to Orange County.  These funds are available to use towards funding either Option A or Option B.

RECOMMENDATION

We recommend that the Council adopt Resolution A awarding the bid in the amount of $1,960,500 to Lomax Construction, Inc. for the base bid plus alternates 1, 2, 3, 4, 5 and 7 for the Community Center System Replacement and Repairs Project.

We further recommend that the Council adopt Ordinance A transferring $350,000 from the appropriated fund balance for additional funding for the Community Center System Replacement and Repairs Project.