AGENDA #4h

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Lance Norris, Director of Public Works Ken Pennoyer, Business Management Director
SUBJECT:	Rejection of Bids for the Town Hall HVAC Project
DATE:	May 5, 2008

PURPOSE

Adoption of the attached resolution would  reject all bids and direct the Town Manager to rebid the Town Hall Heating, Venting and Air Condition (HVAC) Replacement Project. 

BACKGROUND

The current HVAC system at Town Hall is nineteen years old and at the end of its useful life.  Funding has been allocated in the CIP and through the Energy Bank to design and install an energy efficient system.  The project budget totals $655,000, of which a total of $560,000 has been allocated through the CIP for design, contract management and installation and $95,000 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 $6,550, for art acquisition, resulting in an available balance of $586,700 for contract improvements.

The Notice to Bidders for the project was published in the Greater Diversity News and on the Town website on October 18, 2007.  Based on the plans and specifications for this project prepared by Engineered Designs, Inc., four bids were received on November 15, 2007 and publically opened and read.  The low bid was submitted by H.M. Kern in the amount of $687,600, including the cost for the selected alternate bid for the computerized energy management control system, but excluding any funds for contingency.

The bids received were as follows:

Contractor        Base Bid Alternate Total    _

H.M. Kern                   $607,500         $80,100           $687,600

John J. Kirlin                $746,000         $78,000           $824,000

Incline Construction      $760,000         $82,000           $842,000

Bar Construction          $768,500         $84,000           $852,500

DISCUSSION

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.  We believe we have identified changes in the project that would allow for us to proceed with the rebid project.  We also have identified some operating funds we could use to supplement the capital budget for 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.  If the Council agrees to rebid the project, we anticipate advertising for bids in early May.  We anticipate submitting a recommendation to Council on June 9, 2008, for its consideration.

RECOMMENDATION

We recommend that the Council adopt the attached resolution rejecting all bids and directing the Manager to rebid the Town Hall HVAC Replacement Project.