REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Chau Vu, Director of Public Works
PREPARED BY: Patrick Bannon, Capital Projects Supervisor
Subject:
title
Reject lowest bid for the Civic Center - Generator & Switchgear Replacement Project, CC-1720; reject all remaining bids, re-scope, and re-bid the project
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Statement of Issue:
On April 7, 2025, the Public Works Department received six bids for the Civic Center - Generator & Switchgear Replacement Project. The lowest bid, submitted by MINAKO AMERICA CORPORATION, came in at $3,088,777-significantly exceeding the City's allocated budget of $1,435,000. Given the disparity, staff recommends that the City Council reject all bids. This will allow the department to revise the project scope, re-advertise, and rebid the work in alignment with the City’s allocated budget.
Financial Impact:
There are no fiscal impacts related to the recommended action.
Recommended Action:
recommendation
Reject all bids for the Civic Center - Generator & Switchgear Replacement Project, CC-1720.
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Alternative Action(s):
Do not accept the recommended action, and direct staff accordingly.
Analysis:
The Civic Center - Generator & Switchgear Replacement Project consists of removing two existing 200 kW generators at the Civic Center and replacing them with one 1,000 kW generator and belly tank. The work will involve demolition of the existing generators and mechanical systems, preparation of the new generator pad and fencing, installation of the new generator, conduit routing to facility electrical rooms, patching of concrete and paving, and mechanical work needed to commission the generator. Work will also include refurbishment of the facility switchgear system, as well as removal of the existing generator underground storage tank located in the civic center basement.
The bids received for the project significantly exceed the previously approved budget. Upon review, staff has identified several key factors contributing to the cost increases:
Market Volatility in Electrical Equipment Pricing:
Ongoing global economic challenges have led to sharp fluctuations in the cost and availability of essential electrical distribution components, such as generators, automatic transfer switches (ATS), and switchgears. These supply chain disruptions have resulted in longer lead times and higher material costs, increasing contractor risk and driving up bid amounts.
Rising Labor Costs:
The construction industry is experiencing upward pressure on labor costs. The California Department of Industrial Relations (DIR) has issued new prevailing wage determinations effective March 2025, which include increases in both base wages and fringe benefits for electrical workers.
Outdated Engineer’s Estimate:
The original engineer’s estimate was prepared before the recent surge in prices for commercial-grade electrical equipment and did not accurately account for current market trends. Additionally, it did not fully consider the added complexity and expense of integrating new systems into the existing infrastructure.
As a result of these factors, the previously budgeted amount is no longer aligned with actual market conditions. Staff will work with the architect to identify options for upgrading electrical equipment and still work within the existing building footprint to reduce costs.
Environmental Status:
This project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301(d) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Bid Results Report
2. PowerPoint Presentation