HomeMy WebLinkAboutMinutes - City Council - 1981-05-28 200
City Council Adjourned Special Meeting
Police Dept. & Council Chambers
Redding, California
May 28 , 1981 6 : 00 P.M.
The meeting was called to order by Mayor Pugh with the following
Council Members present: Demsher, Fulton, Gard, and Kirkpatrick.
Also present were City Manager Brickwood, Assistant City Manager
Courtney, City Attorney Hays , Public Works Director Arness,
Electric Director Simpson, Superintendent-Electric Mix, Senior
Electric Engineer Lindley, Electrical Engineer Baysinger,
Assistant Electrical Engineer Lourenco, and City Clerk Richter.
AWARD OF BID - Bid Schedule No. 1287 , Hydroelectric Generation
System, Whiskeytown Dam
Electric Director Simpson reviewed his memorandum to Council
dated May 28 , 1981. He stated that at the special meeting of
the City Council on May 26 , 1981, the Electric Department
recommended that the Bid for the Whiskeytown Power Project be
awarded to the Brown-Boveri Corporation. At that meeting,
Council requested additional information necessary to make a
decision on staff' s recommendation.
Mr. Simpson advised that one item that was not clear was the
type of bid that the City had specified as it related to firm
price. The Invitation to Bid on this project provided that a
bidder could provide a firm price or a price with escalation,
but inasmuch as it is an extended project, staff did not antici-
IU pate any bidder would provide firm prices for the length of the
project. He noted that all bidders bid some form of escalation.
Mr. Simpson explained that the Invitation to Bid also requested
that all bidders provide a bid to design, furnish and install;
therefore, the City would have the opportunity to determine the
most efficient generating equipment available and
the price of that equipment.
Mr. Simpson stated that the Invitation to Bid placed the respon-
sibility on all bidders to make field inspections and accept
responsibilities for field conditions as they exist, and all
bidders did so.
Mr. Simpson explained that the high bidder, Jaxon Enterprises ,
has challenged the award to a lower bidder primarily based on
two items--one, the requirement of a contractor' s license, and
the other based on the City' s inability to determine what the
project would cost if it was awarded to the low, qualified
bidder, Brown-Boveri Corporation.
Charts were submitted to Council indicating the method the
Electric Department utilized to determine the price the City
would pay for the Whiskeytown Power Project if it was awarded to
either the high bidder, Jaxon Enterprises , or to Brown-Boveri .
Mr. Simpson stated that if the City authorizes the bidder to
proceed with the project on October 1, 1982 , Jaxon Enterprises '
bid is $3, 886 , 000. The total of the Brown-Boveri Corp. bid
would be $3,125 , 600 . The savings to the City of Redding to
award this project to Brown-Boveri Corp. is $760 ,400 . He noted
that Jaxon Enteprises escalated its bid after October 1, 1982 in
the amount of $38 , 195 per month. Brown-Boveri ' s bid will
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escalate in the amount of $27 , 820 per month although the
Electric Department does not expect the authorization to proceed
on the project to be delayed past the October 1, 1982 date.
Staff considers it reasonable that the bidders would escalate
/ their bids as the project may take three to four years to
complete from the date of bid award. Mr. Simpson advised that
this escalation is not an open-ended bid that the City will not
have some control of and it is erroneous for the high bidder to
allege Brown-Boveri ' s bid to be open-ended when in reality they
bid a similar escalation. Mr. Simpson noted that the third
bidder, General Electric Company, is not being discussed this
evening due to the complexity of its escalation and it being
somewhat more difficult to determine what the price would be on
October 1 , 1982 .
Mr. Simpson added that staff feels the turbine as proposed by
Brown-Boveri will have somewhat higher flexibility and higher
efficiency than the one proposed by Jaxon.
Mr. Simpson noted that staff has met with three of the members
of Council to clarify some of their concerns and added that it
is staff' s belief that the Jaxon bid will exceed in dollars , •
that of Brown-Boveri.
It is the recommendation of the Electric Department that this
bid be awarded to Brown-Boveri Corporation and that the Mayor be
authorized to sign the necessary documents.
City Attorney Hays reviewed his memorandum to Council dated
May 28 , 1981, which is hereby made a part of these minutes by
reference. He discussed the confusion in the bid specifications
regarding the question of whether or not it is necessary for the
person submitting the bid to be a properly licensed contractor.
Mr. Hays advised that the State Contractors Licensing Laws,
codified in the Business and Professions Code of the State of
California, beginning with Section 7000 , states that this
Section does not apply to construction on Federally-owned sites .
He stated that since the Whiskeytown Power Project is totally
located on property owned by the Federal Government, it is his
opinion that this exemption applies in this case and that the
Brown-Boveri bid is responsive and meets the requirements of the
Contractors Licensing Laws in the State of California.
Mr. Hays explained that another point of confusion that may
exist is that, in the bid proposal, which was signed, language
indicates that the undersigned declares that he is a licensed
contractor in the State of California and that the license that
he holds is of the class required to perform the work . He noted
that Addendum No. 2 to the Request for Bids modified that
paragraph to state that only the contractor who was to perform
the work at the project site had to be licensed correctly. This
change made it incumbent upon the bidder to have on the site at
whatever time construction began, a licensed contractor holding
the proper class to do the required work, or be in breach of the
contract.
Mr. Hays advised that it is his opinion that the Brown-Boveri
bid was responsive to Bid Schedule No. 1287 , and that an award
of this project to them is a correct award to the lowest respon-
sible bidder and would be a legally defensible award.
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202
Mayor Pugh stated that each Council Member received a letter
from Kenealy & Reiner, dated May 27 , 1981, which is hereby made
a part of these records by reference.
Councilman Kirkpatrick stated that after spending considerable
time with Mr. Simpson and other staff members , the questions he 1
had dealing with the escalation clause, have been resolved. He
noted that he wished this would have occurred earlier as it
would have prevented many problems . Council Members concurred
with Mr. Kirkpatrick.
Mayor Pugh agreed and commented that this is an area which is
somewhat new to the City as it is its first generating plant to
progress so close to construction. He added that the City will
be involved in many more such projects in the future and hopes
that we have learned how to improve our processing procedures.
Councilman Kirkpatrick noted that in the future, the City will
be more definitive in its bid schedules and this will help
alleviate some of the problems which occurred with this award.
MOTION: Made by Councilman Demsher, seconded by Councilwoman
Gard that Bid Schedule No. 1287 , Whiskeytown Power Project, be
awarded to Brown-Boveri Corporationin the amount of $2 , 939 ,525 ,
sales tax not to exceed $105 , 220 , plus escalation in accordance
with the Electric Director' s memorandum to Council dated May 28 ,
1981. The Vote : Unanimous Ayes
•
Councilman Demsher commented that the details and explanations
of the process were late in coming but when they did, they were
clear and he thanked staff for this information.
Mayor Pugh thanked the other bidders on the project and expres-
sed his appreciation for the comments made as to the nature of
the requirements of bidders and the problems they experienced.
He noted that in the future the City hopes to work much more
closely with all bidding agencies and expressed the hope that
this will not deter any agencies who bid on Whiskeytown from
bidding on such projects in the future. Mayor Pugh emphasized
that the City is looking for the best projects at the best
prices as this is directly related to the price the City charges
customers for power. He added that the City is working very
strongly in the area of energy sources at competitive prices.
ADJOURNMENT
There being no further business, at the hour of 6 : 15 P.M. , Mayor
Pugh declared the meeting adjourned.
APPROVED:
ATTEST:
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City Clerk /r
5/28/81