HomeMy WebLinkAbout _ 9.11(i)--Contractor's Control Termination with Abacus Construction, Inc. � � �' � � �
� � � ' � �' � � ' � ` CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: November 19, 2024 FROM: Michael Webb, Public Works
ITEIVI NO. 9.11(i) Director
***APPROVED BY***
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mwebb@cityofredding.org btippin@cityofredding.org
SUBJECT: 9.11(j)--Consider Contractor's Control Termination with Abacus Construction,
Inc. and Potential Findings of Fact with regard to Public Works Agreement dated June 17, 2022
for the Eastside Road over Olne Creek Brid e Project, Bid Schedule 5180, (Job No. 2477).
Recommendation
Authorize and approve the following:
(1) Find that Abacus Construction, Inc. has failed to commence satisfactory corrective
actions under the Public Works Agreement (Agreement) dated June 17, 2022, for the
Eastside Road over Olney Creek Bridge Project, Bid Schedule 5180 (Job No. 2477), as
the City of Redding reguested via a Notice of Contractor's Control Termination letter
dated November 4, 2024;
(2) Find that Abacus Construction, Inc. is in default of the Agreement; and
(3) Authorize the City Manager, or designee, to take all appropriate action necessary to
complete the proj ect, including, as appropriate, written notice of termination for default
to the Contractor and its Surety.
Fiscal Impact
The Eastside Road over 01ney Creek Bridge Project (Project) is funded by the Federal Highway
Bridge Program (HBP) and the City of Redding (City), Citywide Transportation Tmpact Fee
Program (TIF). The HBP funds 88.53 percent of the project while the remaining 11.47 percent
will be funded by the TIF. Staff anticipates the HBP to fu11y fund its share of eligible project
total costs based upon previous experience with prior HBP funded projects. On February 6,
2024, City Council (Council) authorized funding increases for a total budget of approximately
$5,756,000 as a result of eneountering unanticipated contaminated soils within the project limits.
Alte�^native Action
The Council could choose not to authorize the Contraetor's Control Termination for default and
provide alternative direction to staff,
Report to Redding City Council November 14,2024
Re: 9.12(i)--Contractor's Control Termination with Abacus Construction, Inc. Page 2
Background/flnalysis
On May 17, 2022, Council awarded construction for the project to the second ]ow bidder,
Abacus Construction, Inc. (Contractor), of Redding, California in the amount of$3,703,683.84.
To date, the contractor has been compensated for work performed in the amount of
$1,169,966.04 including $685,010.80 in authorized contract change orders.
A Notice of Contractor's Control Termination, attached, was sent to the contractor via certified
mail on June 25, 2024, notifying the contractor that they were in default of the contract and
directed to commence satisfactory corrective actions within five working days after receipt of the
notice.
On July 2, 2025, the contractor provided a response which failed to include the corrective actions
but did include additional information which had not been previously discussed with staff. At
that time, staff continued communications with the contractor to provide additional clarification
in the hopes to find an amicable resolve. Since receipt of the contractor's response, staff has
continued communications with the contractor but those conversations have not presented a
suitable resolve and thus a second Notice of Contractor's Control Termination(Notice), attached,
was sent to the contractor via certified mail on November 4. 2024. The Notice informed the
contractor that they are in default of the contract as they materially violated provisions of the
contract documents by failing to maintain the required insurance coverage and not completing
the work in accordance with the contract documents; they disregarded written instructions from
the City Engineer; and failed to prosecute the work according to the schedule approved by the
City Engineer. Within the notice, the contractor was directed to commence satisfactory
corrective actions within five working days after receipt of the notice.
The contractor received and replied to the notice on November 5, 2024, and November 7, 2024,
respectively. Unfortunately, the contractor's November 7, 2024, response did not cure the
defaults identified in the notice. Subsequently, the contractor was notified that the defaults had
not been cured and that the five working day period for curing the defaults, as described in the
notice, ends on November 13, 2024. Ultimately, the contractor failed to cure the defaults
described in the notice. As a result, staff is recommending terminating the contractor's control of
the project in accordance with the contract and Section 8-11.3, Contractor's Control
Termination, of the Caltrans Standard Specifications, 2018 Edition and commencement of
communications with the contractor's surety in order to successfully complete the project.
Environmental Review
This action is an administrative activity and is not a project as defined by the California
Environmental Quality Act (CEQA). On February 6, 2018, the Council adopted the Mitigated
Negative Declaration and the Mitigation Monitoring Program, and approved the Eastside Road at
Olney Creek Bridge Replacement Project thereby satisfying the requirements of the CEQA
Guidelines §15074. No further action is required.
On March l, 2018, Caltrans determined that the project is categorically excluded from review
under the National Environmental Policy Act, pursuant to 23 CFR 771.117(c): activity (c)(28) —
Bridge Replacement. No further action is required.
Report to Redding City Council November 14,2024
Re: 9.12(i)--Contractor's Control Termination with Abacus Construction, Inc. Page 3
Council Priority/City Manager Goals
• Communication and Transparency — "Improve the quality of communication with the
public and City employees to enhance kriowledge and increase transparency to improve
public trust."
• Government of the 21 SY Century — `Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."
Attachments
^Location Map
^Notice of Contractors Control Termination Letter with Attachments - 11-04-24
^NEPA CE
Previous Staff Report 02-06-24
Previous Staff Report 02-06-18
Notice of Contractors Control Termination Letter- 6-25-24
Contractor Response 7-2-24 to Notice of Contractors Control Termination Letter
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{See'#A��f�15300�#s�q.}:
* I�Yhi�proj�c�faiis wi�hin�x�rrrp#c�#���3,4,5,�cae 11,st do�s n�ti�ra�pa�t�n environmenta[r�sours.�of hazardous or cri�ica€carrc�r€�
exh�re d�sig�ated,precis�iy rs��pp�d„�e�d ca�ci�t8y at��pt�d pursaaant tct 9�uv.
m There wiBB no#b�a sig�aif6c�s�i cu€nuE�t€v��ff�cf hy�his projeet��d successive prcaj�cts of the s�m�type in the sa�ne p1ac�,crver tirr�e.
+ The��is ncst a re�sora�ble pos�ib68��th�g 8h�prta�e�t II�a��a s�gr�ificant�ffeef cs�fihe�n�ironment due ta urcusual circumsfanc�s_
� This pr�;ecfi does n�t damag��s nic r o�r ��thir�a€�cs�r�ial6�r de�igrtated���t�ss.�raic h€ghv�ay.
� This project i�no4 I�s�t�d on�s'st�ir�cEc�d€��r�a�t�Bis�c�rr���t�d pt�r��zan��cs Gca�tt.Cod�§65962.5(.<Cortese List"}.
� �'hi�pra�j�et doe�nofi c�ca��a sti€bsffa�it6�i adv� c�a�r�g��n fihe signi�acance of a histsarical resource.
�a�.7' iS5 c�t2�t C9�T�R�tN�76Uid(�n�ck ane} .
� h�sct��ag�Ba��bl�–��I����s i��a����t������-���«��e�cy �Racc R���or��u�a��r cE�s s reas�r�pa�ea an��'e�a�sc4ay or�n�����ment�
�t � �,���affeae�.{��zc 2€a�o�b7,�a c:cr���2so��s�.�
Bas�d on an e"�' � �Pais prap�sa6,s 'rtg€cbfao*n�Riccn,arci fhe sbove sEaYemet�ts,the praject is:
(� Categereoc�Iiy Ereem�ei.�kass�.. "°""'� �;�n�, 9�CC�t 453��tsnx�.p
.C'] Categavacaiig+E�em�s�.£`aee�er�i Etuke exearoptiorr.�iS b.t'���"�'1 withln an exempt c6ass.bui it can be seen with certsinty tttaf there as na poss'rbif's€y#hs8 the
aetivity may have a signiflaant effecE on€he env�ron�rren€¢CG�15f,1G'f "� . *. ,,..
,t,.:,..�,.�-
Prirrt Narne:Seniar Environmental Pianner ar Em+ironme�tal&as�ch Print Name:Projed hAanager '"��z�.,.. .
Chief
Sign2ture �����. Dalc Signafure [Ia{�. N .
� �,A �""�S 6a �_
In acct�rda�ace�ith 23 CF€i 771.117,a�st#F�as�d an an�x�€ndna8�ta�a af fhis proposai and suppsar�isag information,th�Sta�e fi�s
deferrnined that�hi�p€�ojeck:
� do�s n��9r�dividually car es�mt�i�f�v�I�ha���s`sg�tifi' rtfi imp��t on tfi���natironra-r�rr4 as defiiraed by N��'A,enu is exciud�d frasn�he
reqc�ir�m�ea#s�o pre�ar�an�rsu6re�r�ra��r�t�E�,�����eo�e�t{�A�)or�nerircrnrnee�#al Impact Statement{�IS),�nd
� has c�nside�ed us�usu�d circurr�sfanc����arsuar�!ta 23 CFl�771.117{b}. ��
� 1�1' A 5 ���A °f t �T`f {�h�c�c€ar�e)-
� 2�tl���26:'ihe S#ate h�s d�terr�ein�e�Yh�t�h6s pr€ajec:�has rro signifi�n�ireapact�on fihe�rrvironment as de�n�d kry���€'�,a�€d
4h�t�h�s��r�r��unusua[circ�rrts4arsee�a�desc�bed`an 23��Ft 771.117(b).Rs sa�ch,the pro}ec€is categorieally excHuded�sorr�
the reqtsirerrsen4s tc�pr�pare ar� c�r�€S tareder��e�taticsr�ai Es�virc�nmentaE 1'olicy Aet.The Sta4s has been assignsdf and her�hy
c��tifi�s�hat it has earried aut�h�r�spans€bitE#y tc�rra�ke this d�termir�atiora pursuant ta Chapt�r 3 of Titls 23,t�nited S�at�s Code,
Sectian 328 and a�errsarandrarn�f 4�nders�a€�die�g da�ed�ay 31,2Q16,exeeuted bet�een the FFIW�and the S�ate."�tre ita#e
has determined that the proje�t ts�Gat�garicat Exeiusion c�r�der.
�23�F�771.177g��:��favi�Y 4�1�_2�_¢ �t'at����e�laGemerat
❑23 GF�77�,�R7(c��:��ti�i�+�e�}4��
❑��t�s�a�g� �istect irs��p�e������f t�e t'�l!��; �en�F! ��s�si t�a��#�te
❑ 23 11��3Z�: �ased csn an examirsaticar�of kh[s�ropcasal ancf supporting�a�fi�rmation,the�ta#e has determined fhat th�prca�ecf is a
C�#egoricai�xcl�asian under 23 llSG 327. 'fh€:�csvirc�nrnental reuiew,eansultatqon,and any other ar.tians reqts�red by�pplicable
Feder�i er�virontv�ent�t taws�or�ta6s preajee�are�€rag,car Pt�ve b�en,c�rried€aut by Galtra�s pursuan�to 23 USC 327 and�he
Is�ernorandeam af CPradeestanding�atecl December 23.2(716 and�x�cu#�d by F A and Caltrans.
���1��.Jcahr�,��� .�.�. m�r��ca�at, ��AE,[32 _ r
F'rir�t�Iarne:Senior EnuirQnm�ntal Planner a€ Print Name:Pra#ect Manager/DLA Engineer
Environanentai Pranch Chief
��.� g�� f�,� �,x�.��,�'� "� a ��1,� � ��'"�,a�� ��� .mw,a„�„�� � �� ����
'� �r a��__ �C?at� � Sign� Giate
�Si akure _�. �
,� �_��
Cla�e of Ga4egorica(Exc9usian Checkt"sst cc�mpte��an.t�2/26I2{}18 �Iate of�CE2 car equivalent:d2f1�t2tt98 _..—__ �
�rsefly iisQ enviranmertal comm�trz�er�ts on coc�4inua�€ora sheefi.Fieference adclitional infarma�ion,as appropriate{e.g.,CE ci�eck��st,
additianal studies and desicgn condi��ans}.
� �
�'agc€�si�2 Sepfers�ber&,2Q17
CATEGORtCAL EXE PTf�DN/CATEGORICAL EXCLUSION DETERMINATIC}N FAR�tI
Continuation Shee�
o2-sHA-c� gr�a��#sG-o��� g�Ls sosa�oss�
Dist:Co.-Rte. or Loeal A er�c P.�fi.IP.�. E.AIPro'ect No. Federai-Aid Pra'sct No. Locai P ` ct ro ect No.
Continued fram page 1:
The new bridge will rr�eet current design standards and hydraulic capacity needs,The new roadwa�approach wili
include two 12-faat wide irauei lanes,8-foot wide shoulders,and 6-foot wide sidswalks on both sides of Eastside
Road.The sidewaik on the eas#side ofthe rc�ad will connect to an existing sidewalk in the sautheasterc�eorner ofihe
project area.Approach roadwork will extend appraximately 200 feet to the south,and up to 300 feet tt�the ncsrth of the
. bridge,Construction of the project woutd require two seasons,beginning in the Spring af 2019,with completion by late
Fa112020.
The bridge faundation system witl[ikety cansist af spread-faotings supporting the pier walls aa�d cast-in-drilted-hoie
(CIDH)piies at the abutments.If CIDH is used,pile driving would nat be necessary;however,driven piles may be
needed to suppart falsework.If pite driving is nsad,it wiil accur during the dry summer montl3s when water would
likeiy be absent from the channel.If water is preseni during canstructian,a temporary stream daversican using standard
culverts and ro�nded fish gravei will be azsed fluring construction.The spread foating will require an excavation of 6 to
$feet in the channel,and the bridge abutments will be armored with rock slope protection(RSP}.7'he new abuUnents '
will sit above the flcsw Iine,with twcs p�ers in the channel.Appraximatety 180 cubic yards of°le tan RSF wilt be�alaced
around the bridge abutments,caf w�ich apprc�xirnately I6Q cubic yards wili be placed bel�w tlae ordin high water
mark.
Utilities,ineluding a It�-inch gas�ine and a 10-inch water tine,wilt be relocated from the elcisting br�dge sfructure to
the new bridge structure.Qver�ead utilities wili not require relocation.An existing storm drain that ctsrrently
discharges into the creek at the n�rthwest camer of the bridge will be reconstreacted through the new bridge abutment.
The storm drain w�ll outlet at the nc�rthem abutment and anta the RSP,which wiil dissipate flow ener�y.
Staged constructian will be used to bu21d the bridge.Traffic controis,such as a temporary signal or one way traffic
comtrol,wilt be used to maintain c fiow through the praject area.Alternative rcautes such as SIZ 2'�3 and Sauth
Bonr►yview Road will be ava�Iable during eonstruction.The conte-actor staging area will be located on the abandoned
raad extension immedaateiy north of the bridge.
Three temporary canstruction easernents wi11 be required far the project.It wi11 not be necessary to acqa�ire Right-of-
Way to canstruct this proj�ct.
Section"7�onsultafiion with the Nationai Marine Fisheries Service(NMFS}was completed on 12Jt}6l2fl16,with a
Letter of Concurrence from the Service far a not likely ta adversely affecY species under NMFS jurisdiction,and no
effect to Essent�al Fish Iiabitat.(NMFS#WCR-2016-5904).
Sectioro �06 studies dete ined that no historic propert'res will be affected bythis praject.
An Environmental Commitments F2ecord(ECR)was placed in the project's fiie on 02J1212�'i�:
Page 2 of 2 September 8,2017
� � �' � � �
� � � ' � �' � � ' � CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: February 6, 2024 FROM: Michael Webb, Public Works
ITEIVI NO. 4.11(d)� Director
***APPROVED BY***
i d.it,i . r.,.x � .,tr.r,,..�
i
t„ } s
,�„<,k7z`=�
�c� �� ��� ubl��� ������7�rec�rar ���,,,, il�f2�r2fl`��#�� � � �p�z��,C`i � �� �� l,f�(��'2{�2
;, Y
�,�j�tyf{.'' 1t��{
mwebb(u;cityofre ,�� .org S}t .,,�,,,, btippinna,cityofredding.oeg
SUBJECT: �,��'�t�l(d)--Approve Incx��� to Project Budget and Adopt Budget Resolution for
t „ ,
the Eastside �����1 Over Olne �Creek'����'d� e Pro��ect
}
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i �i t �
Ft���t t
f �
Y � i 1 ' }t t�7ft�{
RL'COyiZyiZBlZl�ll�`107Z 7t'�f��'}ri��#����< � ���yt� J z b1�'` f 4+'�l�y��t
��,s„��� t �,}3ar� }t� tir,�
rs��t jfra;�` G?}ftt
Authorize the follawing actions����pprove mcr����s to the project budget in the amount of
�$1,250,000 for the coinpletio��'�tf Bid Sched��{.�'No. 5180, Eas��side Road over Oln�y
�Creek Bridge Project as outh���below for�����4ona1����ect costs:
� a� ,
(1) Increase of $700;000 s�'%,4z�� ����`uctio�,x` ;;��`���ement budget, bringing the
nt { tt It � � t�} '7 �..j ttd�c��t t! �
�construction management to��� ��z����'�,OOQ,����lta�r��� ����� ;
(2) Increase of$5�50,000 to the cons����n contin� �l�y� budget, bringing the
�construction �contingency total to $1,2�;����,�0; and ��it�z
(3)� Adopt Resolution approving an�;�f`t�`''�`���ng� the 29t�,'� ,�enc���,�t to City� Budge�
i�t 7}t ii t rt 1 .
Resolution No. 2023-060 appro��,���ig ���r the����'��`�`. {i ,f'f'
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The majority ($8.53%0) of the project is anticipated to be funded����1�,', `'`'����c�eral Highway
Bridge Program� (HBP)� �and the balance� (1 L47%) is�,�unded ���,,rry`����'�'ide �Transportatian
Impact F�ee Program (TIF)� funds. Staff� will be wi��`��t� �`1�����"'California �Department of�
�Transportation (Caltrans) to��bbtain additional HBP func�f�g for the�project. Staff anticipates
�the HBP to fully func�its�share of the project total costs based upon�previous experience with
�other bridge HBP funded projects�. Staff �anticipates�� additional I�BP funds within nine
manths �nd daes not expect it to delay or impact any currently id�ntified TIF projects: Any
additional� HBP funds� will� be presented and budgeted in a separate� resolution. Until those
additional funds become available, the TIF �vill cover the additional costs. TIF funds are
�being re-budgeted from the Victor-Rancho-Churn Creek project as staff�is anticipating grant
�funding to complete�construction. The�total project cost, incl�uding the proposed increase�and��
�change orders paid�through December�2023�;�is expe�ted to be just under $5,756,000�.
Report to Redding City Council January 32,2024
Re. 4.12(d)--Approve Increase to Project Budget&Adopt Reso for Eastside Rd over Olney
Creek Bridge Page 2
Alternative Action
The City Council (Council) may choose to reject the request and provide alternative
direction to staff. Should Council choose to reject this request, the project would need to be
terminated, repackaged and redesigned to show the� current changes in the field, new
environmental permits would need to be processed and acquired, a new request for funding
�through the Department of Transportation (DOT) would need to be�processed and acquired
which could� potentially�place this project�back in constr�tction in abaut three years� or more
�with significant cost increases to design an�l the potential for the DOT to deny the
reimbursement request for funds.
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Background/AnalY�����Y ,f� �` ,
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The Eastside I�,���`� over Olney Cre��r{j�3ridge Project (Project) includes replacement of the
Eastside Roa�'���ge over Olney �Cr���� and the rehabilitation of the approach roadway. The
wark wi11 mc�,��e remowal of the �e��'��ig bridge�in stages, construction �of a new bridge��over
�two summeri$r��asons, construction '�' retaining walls, sidewalk, curb and gntter, utility
�relocation,ro��,���y construction, and other miscellaneous�i�ems�of work.
��=r'��t r
�� t�� `����$ ' ''�f`'}��t` " ��' '�`��� � � nstruction �contract for� the Pro'ect �to Abacus��
On May� 17, 202�,`�,���t��?����'� aw���'!`�'�`��� J
Construction, Inc The notice to�,�1���ed was'�����ed June�23, 2022, but due to material� 1ead�
times (40-50 weeks) the proj�ec�11���s suspended�`l�d construction did not begin until May 22,
�2023. On June 5, 2023 Abacus „j,r � working to �.���`�ll�a temporary diversion in the O1ney�Creek
�channel �vhen potentially �on�ated so���;����s en���tered on Unian� Pacific� Railroad
(UPRR) property. Work was h����'�{sy�,r�,���,s��`iplm�,���}�����mg was done to determine the
�nature of contaminants and to prep`���t��;���`�ioval �t�����;�`��i� ���taminated soiL No work was
�done onsite from June� 6, 2023 through July ,��,�"�023. Duri��=}this time; a City consultant
� ,�
prepared the�soil removal plan and it was ap�������'��by the�vano���t�ermitting�agencies.
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Work to remove the contaminated sol�,����� 0��1�� 19� �,�[�;`and �'��'uly 26, 2023, a utility
line belonging to UPRR was damaged`��iile inst�������r{�����'�ig usec�'�t�,`�emove the soil. UPRR
required the City�to update�the access agreement to UPRR's prope�'���submit the�ontaminated
soil removal plan for their approval, make notifications to var�o���it�TPRR �����C��,�,�coordinate�
�i s ,; ,,�t r,�,�,
UPRR preco�struction meetings and rail flaggers before grantin `}���� � ;� ��r{'failroad ro ert
�
P p Y
� �� :�
�fo perfcsrm the �eontaminated soil removal. No worl�dfwas d���,>�������"e�fram July 28; 2023�
�through November 26, 2023, to�complete UPRR's re������,�����'��`ss. (�n November 2'7, �2023,
the contaminated soil removal work began, and the�wor�`�v"as�completed, including re-opening
Eastside Road to two lanes, on December 8,2023.
During the 2023 construction season, this project was delayed for about five and one-half
months in total. Abacus� was�paid on a�time and materials basis� for traffic control equipment,
pumping equipment, and daily pump maintenance, During construction, a transfer of
constructian management funds in the amount of $320;000 into the construction contingency
was necess��y to fully fund the change orders resulting from the delays and extra wark
described above.
Report to Redding City Council January 32,2024
Re. 4.12(d)--Approve Increase to Project Budget&Adopt Reso for Eastside Rd over Olney
Creek Bridge Page 3
The additional work will cause the project budget to exceed the awarded amounts. An additional
$�1,250,000 is� reque�st�d� to �cover increases to� the construction contingency ($550,000) and
construction m�nagement($700,000)project corriponents.
COST SUMMARY
tem AwaNded Adjusted Balance Projected This IncNease
Contract Administration, $567,000 $(320,000) $247,000 $947,000 $700,000
Ins ection, Testin
Construction Contin enc $370,000 $320,000 $690,000 $1,240,000 $550,000
Totals $937,000 $0 $937,000 $2,187,000 $1,250,000
Environmental Revaew , ,�t�
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This activity is r����i�j{�i'oject as c�k�=�`4's by the California Environmental Quality Act (CEQA).
On February 6,,�t,�E��;the Council ad����d the Mitigated Negative Declaration and the Mitigation
Monitoring Pr,� �m and approved th��;'t'��t�ject, thereby sati�fying the requirements of the�CEQA
�
�Guidelines 5���,�n 15074.No furthe�� �',7on is required.
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Cauncil PNaoNt�,��ity Manage� Goals
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RESOLiJTION NO. 2024-
A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE
29��H AMENDMENT TO CITI' BUDGET RESOLUTION NO. 2023-060
APPROPRIATING $0 IN FUNDING FOR THE EASTSIDE ROAD OVER OLNEY
CREEK BRIDGE PROJECT FOR FISCAL YEAR 2023-2024
BE�T RESOL VED BY THE CITY COUNCIL OF TI�E CITY OF REDDING
THAT Budget Resolution No. 2023-060 be and is hereby amended as follows:
FUND DIVISION DESCRIPTION INCREASE DECREASE
151 1691 Construction Tax Capital $0
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THAT accour������s and numbers rec���,;�ng adjustments by this Resolution are as follows:
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Increase(Decrea���€,���penditures
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THAT the purpose is to appropriate $0 in fun�����'or the Eas$���e Road over Ol�ey Creek bridge
project for the fiscal y�ar 2023-2024 '`' ,"� �`� '"
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I HEREBY CERTIFY that the forego����,��so1����was j������ced �����regular meeting of the City
�Council of the City of Redding on th�<��th day 't��'�����,t t, �'�', 2024�}`�`�i�d was duly adopted at said
meeting by the following vote: '��4 ���
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AYES: COUNCIL MEMBERS: 'i{''t�{}� 3t t'�f 5� �_'���
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�ABSENT: �COUNCIL�M�MBERS: �"" ' `"�'��
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ABSTAIN:� �COUNCIL MEMBERS: �,�r�,
TENESSA AUDETTE,Mayor
ATTEST: FORM APPROVAL:
SHARLENE TIPTON, City Clerk CHRISTIAN M. CURTIS, City At�orney
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��� �0��� CITY OF REDDING EXHIBIT A
� EASTSIDE RD AT OLNEY CREEK BRIDGE
� : i �f � PUB�IC WORKS REP�ACEMENT PROJECT
�,¢t'���.�' DEPARTMENT LOCATION MAP
� � �' � � �
� � � ' � �' � � ' � CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: May 17,2022 FROM: Ryan Bailey, Assistant
ITElVI NO. 4.11(a)� Director of Public�WoTks�
***APPROVED BY***
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SUBJECT: �`#f,�'�l(a)--Award Bid ����dule No. 5180 (Job No. 2477), Eastside Road over
�Olne Creek '��i e Pro'ect�and Ado` '`,�ud et Resolution
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Recommendat�oi�`''tj�tl��� � � �`��'���, � }���'� `�`�1;�`,'}}�,t
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Authorize the following action�{`S���ative to Bi��;�chedule No. 5180 (Job No. 2477), Eastside
Road over�Olney�Creek Bridge ,``�j ect(Pro�ect)��'��;�`
(1) Reject �the apparent lov�}j$�1d by �Stew�����ngine�',�ng Inc�. (SEI)� as nonresponsive� and
award the�project �to���the �����d lo� ����er Al�`'4 '�onstruction Inc. in the amount of
� �� �i� �t�t{itii�tiiii.� tlts4tt�f�;�}{� yittty� � �
$3,703,683:84; �� ,�r� , , ,,,s t l, ,f t..,� 14,c
�,�t,�,i �����h f�,'
(2}�� Approve an additional $56'7,000 to c���� the cost ;�� contract administration and�
�inspection fees�and $645;000 for�pro�e�����elapm�nt co���"�
, t''��5, «i . �,E��`�
(3)� Approve�$3�'70;000�to provide const���r�����cont�ngency�i��ding�f,�
(4) Authorize the �City Manager to }����v�����ditiona�����'���asesx����5`either the construction
management or construction coi��'gency��y����'�`,�}����o a tot���$15,000; and
(5}� �Adopt Resolution approving and adopting"�`�fie 42nd A����dment to City Budget
Resolution No. 2021-078��appropriating $2,056,690 in fede.���j�t��rant f 3 ��'�'{�� $1,380,390�
, x t ��u;���z�,:�r
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in Transportati�n I�npact Fee�funds for the Praje�t�. , �{��, tt,�� '��,�
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Fiscallmpact� ',�,r�, ,,, ��r� {����f �
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The Eastside Road over Olney Creek Bridge Project (Project) is being funded by two sources
which consist of t}�e Federal Highwa� Bridge Pragram (HBP} a�d the City of R�dding (Citiy)
��itywid� Transportation Impact Fee l�rogram�(TIF). The HBP will fund 88�:5� percent of the
project while the remaining 11.47 percent �ill be through TIF. Since the bids were higher than
the engineer's estimated cost, staff�will be working with California Department��of Transportation
(Caltrans) to obtain additional HBP funding for the project. Staff anticipates the HBP to fully
�fund its share of th��project total costs basecl upon previous �experience� with other bridge HBP
�funded proj�ec�s. �Until those� additional funds become available, the� TIF� will co�er the costs��
�above� the estimate. Any additional I�BP funds will be� prese�ted �and budgeted in �a separate�
resolution�. The HBP funds being appropriated at �this time are� current�y authorized �funds that
were not previously budgeted.
Report to Redding City Council May 10,ZOZ2
Re. 4.12(a)--Award BSNo.5180, Eastside Road over Olney CreekBridge Page Z
Cost Summar
Item Estimated
Pro'ect Develo ment Costs $ 645,000
Construction Contract+Contin enc $4,073,683.84
Contract Administration,Ins ection,Testin $ 567,000
Additional Cit Mana er Authorit $ ]5;000
Total Pro'ect Costs $ 5,300;683.84
Pro'ect Bud et $ 5�;300;'700
Project cost components are estimated, and some shifting of the funds may be necessary to
balance the project within the approved budget.
Alternative Action
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Without this pro�e����,`��5''�i"ric�ge �`���,��ot be replaced, and unsafe conditions for pedestrians and
motorists will re��_����Tn addition, t�����zty would be at risk of losing federal funds and may have
'�r� 4��� � � '
to reimburse p����t dev�lopment fed����fund� spenf to�c�ate�.�The�City Council has the following�
�alternative ac������s: �� '�_
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�
• Choos�`i��t to award the bid for�the Eastside Road over Olney Creek Bridge Project to the
�second� ;�,,,�idder Abacus�Construction Inc (Abacus),�determine that SEI, the low bidder;
did ma�e '��,`�;��,������d Fa�t��;������ (GFE), and �award the project to�� SEL This may�
ti ,� u f, ��� i 14���,
j eopardize cui������'�`utur������a��ui���,��if�the�City is audited and the audit determines
that�SEI did not perform��,£�i`�equate GF�{r�:.
• Choose not to award th�,�t��d for the Eas�t��`�,�Road over Olney Creek Bridge Project and
re-advertise the project t},��£�,�iis action w `� ��delaX,�he project; thereby missing the 2022
construction season anc�r`,t,} ;�tential��in�{����iinn���'���ff to update current environmental
permits which would furt���tt������,���� pro���,j,�'������rtising the project would, most
likely, iticrea��e� the number of bi�.s recei�����r'�nd there�`�i��no guarantees �h� 1ow bidder�
� , �t�,�� � ,��,},�
will Ineet the�project s� Disadvantage�,����ness Enterp���� (DBE)� goal or that it��would
perform an adequate Good Falth Ef£���,���E). r�j,,r}4 �, ,
�•� Provide staff with other di�ectlo� �'��`�,t{� '�j�`��k, �����i���'� ��'�;��
tr� ,!,ti� r) � rjtlls 1St` t yititri+�.
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BackgNound/Analysis '�j�`t' j '��
4z� 4y t�l j��i t .
}ty�lft t�7�{tfx� 4�,,�� „r
Attached is a tabulation of bids opened on January 25, 2022{�{s���te�}��'���}��i`�"in the amount of
��$3,539,305 was received from SEI of F�.edding, Cal��xnla ����,���ie HBP grant funds �are
from a federal source, the City was� required to esta��;����,,�t,���aclvantaged Business Enterprise
't�z,<„1.
�(DBE)participation goal�specifically for�the�project, and a goal��of 1�9 percent was established for�
this�proj�e�t. �SEI�did not�achi�ve the�goal; therefore; per federal regulations; the contractor must�
perform a Good Faith Effort (GFE) to be awarded the project. Staff's evaluation of a bidder's
�GFE�is based on Section 9 of�the Caltrans�Local Assistance Pracedures Manual (LAPM}as well
�as Appendix A of Title 49 CFR Part 26 of the Code of Federal Regulations (CFR). Staff
performed the following�rocess�in GFE�evaluation for SEI.
• Staff received SEI GFE dacumentation per the specified five days after bid opening.
���� Staff�received a bid protest letter (January 31, 2022) from the 2"d low bidder, Abacus,
which did not provide any reasonable argument as to vvhy the Cit� shc�uld reject SEI's
bid. It simply stated that because SEI did not meet the goal regardless of an adequate�
Report to Redding City Council May 10,ZOZ2
Re. 4.12(a)--Award BSNo.5180, Eastside Road over Olney CreekBridge Page 3
GFE, SEI's bid should be rejected and the project should be awarded to Abacus, which is
not allowed per�the�CFR.
• Staff completed its GFE evaluation and determined that SEI did demonstrate an adequate
GFE.
• Per LAPM Section 9'.8 (Local Public Agency Responsibilities), because the project
contract exceeds $2� million and the low bidder did not meet the DB�goa1, the City�must
�submit the low bidder's�GFE documentation to�the��Caltrans�Divi�ion of Local Assistance��
(DLA). In addition, �he City may not award �the contract without receiving a
memorandum from the DLA indicating that Caltrans has determined that the low bidder
made a GFE. The City submitted SEI's GFE to Caltrans District 2 DLA for review.
��•� ��Staff received,�via email from Caltrans District 2�DLA, a memorandum (March 2, 2022)�
stating that Caltrans did nat eoneur with the City's determination that SEI had
�demonstrated an,�������t� GFE and c�ncluded that SEI did n�ot demonstrate it performed
a GFE. Caltar���t�t���' �`�;����� on Caltrans Office of Civil Rights (OCR) to perform the
�GFE eval������i�. '
��.;,41' t
, � t�x s
• Staff re��'�r {�cl the Abacus D�t ''�mplaint on March 9, 2022.
�•� Per L������ Sectlon 9.8; becau��altrans did�not concur�with the��City,�the City�must��talce�
Caltra���';�eedback and �re-ev�����te the �GFE�. The City�did re-evaluate SET's GFE and
deter���'�d that SEI did not dei�it'onstrate�an adequate GFE�for the�reasons noted in the��re-�
�evalua���and�a letter was sent tio�SEI dated March 21, 2�022.
f t7t=�` �� 1 z
J��r �r4� l�£�i�l v����.� 3t � }jtxtli t . . . .
Therefore, in accc������,���������� 4,�,',;f� �„�r��,$�,�,� the City must allow the bidder/offeror an
��, ��3«,
�opportunity for admini�strative re�������eration a����tlined below:
�t' �� � �.r,r,
i(fk�ii�� i}1�tit Sl
1. As part of this reconsic���tion, the bid���fferor must have the opportunity to provide
written documentation t'���rgument ����``' in�,��� issue� of whether it met �the goal or�
, �
made an adequate GFE to���;��t�r�}�,f �,�;��„'���� � �}�tz,f',i,_�;t`���;;t
. ,t� rqI r� ,iti t.,,. � i s � fi zl{t�
2�.� �City decision on reconsiderati��`�����t be �€�����y an���`��t1al�who did�not take part in the
�original� determination that the� bidder/���`�r failed to ����t� the goal or make adequate
�GFE to�do sa. tt ��}'�,� `,�''f;'�� ,
3. The bidder/offeror must have ��"$���ortunity ta,£f}`�iet l�',f�erson with the City
4
reconsideration official to� dls��,{��he �������s o�,�����er it,��� the goal �or �made� an
��,, > t�,�� � � �� rr�
�adequate GFE to do so. F�� � `��1�� s'',�: ``�� �'��} `�
,��?.�.�,�, z tt>,<
tufl}`
4. City must send the��bidder/offeror a written decision on r����sideratio����xplaining the
basis�for finding that the bidder�did or did not meet�the g����;���r ma��E���4����uate GFE to
���S�. tt�{t t tt�.si �t� �(i .
tt� v��ti l{�,<t)w` ..
5. The result of the reconsideration process i{� i�ot �z�;������Ive1y appealable to the
Department of Transportatian. �; t�l�,,; c'�,��,h,�:�
�f=:.,t� �
The City's March 2l, 2022; letter to SEI was notification of the City's determination and its right
�tt� reconsideration. SEI resp�nded by email on March 21, �022; requesting �reconsideratiion and
on March 28,2022, provided the City with a written argument that it made an adequate GFE to
�meet �the goal. The �City acknow]edged SEI's request for reconsideration and began the�
reconsideratiion process as provided in tihe City's letter tio SEIj which was dated April l, 2022.
The reconsideration hearing was held on April 14, 202�� and in attendance were SEI, two
�Reconsideration �Officials� (Officials), and staff. �11 par�ies agreed on the meeting format� �nd
presented pasitiions regarding the SE� GFE to the C)fficials. After the reconsideration meeting,
�the Officials deliberated independently to� make� �a final �determination. The Officials�' final
determination concluded that SEI did not perform an adequate GF� to meet the DBE
participation goal for the reasons identified in the final GFE determination letter to� SET�dated
Report to Redding City Council May 10,ZOZ2
Re. 4.12(a)--Award BSNo.5180, Eastside Road over Olney CreekBridge Page 4
April 22, 2022. All correspondence is attached for reference. Therefore, SEI's bid is deemed
nonresponsive to the bid solicitation. It should be noted that a nonresponsive bid is not unusual
in the industry, and in no way provides a reflection of the contractor's ability to perform the
work; nor does it reflect the qua]ity af work or affect the ability to bid on future �nblic works
proj ects.
The City proceeded to evaluate the second low bidder, Abacus, of Redding, California in the
amount of $3,703,683.84. The City reviewed Abacus's proposal and DBE commitment form.
Abacus achieved a �23�.18� percent participation goal, thereby exceeding the project goal� of 19
percent. Since Ab�cus�met��the�proje�t DBE goa]; the CFR�does not requirt�the�bidder to subtnit�a�
GFE, although one was provided by Abacus. Staff recommends awarding the project to the
�second low bidder, Abacus Construction, Inc. The engineer's estimate�was $2,929,35�1.17. Total
�projeet development costs,t�£��' this project are estimated to be $645,000. Projeet development
�costs include engme����������������right-of-way, environm�ental, and�consultant services,
tt�t S�'i}t j�F}�tJ„` 4t ';d 4 �
t 1 It {
This project m���y3�r°`s the replacem���$f�f the Eastside Road bridge over Olney Creek and the
rehabilitation ,���'�e�approach roadwa,7 1���'he work will include removal of the existing�bridge in
�
�stages, constr;t�'��on�of a new bridge ���r two summer seasons, construction of retaining wa11s,
�sidewalk, cur�{���d�gutter, utility reloc��`on,roadway construetion,and other miscellaneous iteins
�of work, t'���'���
,�
, ,t;Y,;
�{i
On February 6, 24����4f,��`�`�;���;�cil ��'��� ����Mitigated Negative Declaration (MND) and the
�u, r l,��jt � , ��;
Mitigation Monitoring �`�ogram�t,'����P) an�tf�,��proved the project, thereby satisfying �the�
requirements of the California��`��'�onmental Q���ty Act Guidelines Section 150'74 (C��QA)�.
{;� {����f
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Council Prior�ity/City Manage�f��,als ,r$,f,j�t�' t�,' t
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�+�� This agenda item is a�routm��������al ste�f�}�� $, �
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Attachments ����,�
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^Location Map� ��� ,,, , ��,� � > �� �.� �1���
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�^Bid Tab� � ' '�t
�,,�
^Mitigated Negative Declaration t z«t'� , ,����;��'',_�
��1-31-2022 Abacus BS 5180 Protest of�pparent Low Bidder �'t�'j�`" ,,I7�� �,,;��£{,'�� 4�°"�� �� �
��02-15-2022��Stewart�GFE Evaluation Final ��rt��t�t`�`'{�',{�'�r�f �����
03-02-2022�Caltrans�GFE Memo t� ��jt��� ���'��"y�
i� s `
4�5 J 22! � t}.V4{Yi�
�03�-09-2022��Abacus DBE Complaint Form ���'���' `
�03-21-2022�COR GFE Letter to�SEI
�03-21-2022 Stewart GFE Re-Evaluation�nal
�03-28-2022��SEI Response Letter to GFE Evalua�ion
�04-01-2022�COR Response to SEI GFE Evaluation L;etter�
�04-01-2022��CORReconsideration Meeting�Letter�
04-22-2022 COR SEI GFE Reconsideration Fina1 Determination Letter
�Title 49 CFR 26.53
Title 49 CFR 26.53 Appendix A
Caltrans LAPM Section 9.8
��n� ;
� ��� �����" CITY OF REDDING
� ���
��� ,
� REPORT TO THE CITY COUNCIL
MEETING DATE: February 6, 2018 FROM: Brian Crane, Public Works
ITElVI NO. 4.11(c) Director
[5-070-050/A-O50-300]
***APPROVED BY***
�
�
� ��`�"� � _
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�i�s� r��r��, ���Sli�� c�r��I)ir� c�r�� � 1F'��1?t?lf� � .� v ��pz�.(`i ���� a�a� � 1�='?�sf�£}l��
bcrane@cityofredding.org btippin@cityofredding.org
SUBJECT: 4.11(c)--Adoption of Eastside Road Bridge over Olney Creek Mitigated Negative
Declaration
Recommendation
Adopt Mitigated Negative Declaration and the Mitigation Monitoring Program, and approve the
Eastside Road Bridge at Olney Creek Bridge Replacement Project as described. With this action,
the City of Redding will be in compliance with the requirements of the California Environmental
Quality Act (CEQA Guidelines §15074).
Fiscal Impact
Adoption of the Mitigated Negative Declaration and the Mitigation Monito�ing Program allows
the project to move forward toward the final design and construction phases. There is no fiscal
impact as a direct result of adopting the Mitigated Negative Declaration, and Mitigation
Monitoring Program.
Alte�native Action
The City Council (Council) can choose to not adopt the Mitigated Negative Declaration. Without
approval of the Mitigated Negative Declaration and the Mitigation Monitoring Program, the
project would not proceed forward as a City project, as it would be out of compliance with the
California Environmental Quality Act(CEQA).
Backg�ound/Analysis
The City's Public Works Department proposes to replace the existing 30-foot wide, '70-foot long,
three span bridge on Eastside Road over Olney Creek. The new 52-foot wide, 86-foot long, three
span cast-in-place concrete slab bridge will meet current design standards and hydraulic capacity
needs. The new roadway approach will include two 12-foot wide travel lanes, eight foot wide
shoulders, and six foot wide sidewalks on Eastside Road. The proposed sidewalk on the east side
of the road will connect to an existing sidewalk in the southeastern corner of the project area.
Report to Redding City Council January 30,2028
Re: 4.11(c)--Adoption of Eastside Road Bridge over Olney Creek MND Page 2
Approaching roadwork will extend approximately 200-feet to the south, and up to 300-feet to the
north of the bridge. Construction of the proposed project would require two seasons; beginning
in the spring of 2019, with completion by late Fa112020.
The bridge foundation system will likely consist of spread footings supporting the pier wa11s and
cast-in-drilled-hole (CT�DH) piles at the abutments. Tf CIDH piles are used, pile driving wi11 not
be necessary. F�owever, driven piles may be needed to support falsework. If pile driving is used,
it would occur during the dry summer months when water would like]y be absent from the
channel. If water is present during construction, a temporary stream diversion using standard
culverts and rounded fish gravel would be used during construction. The spread footing would
require an excavation of 6 to 8-feet in the channel, and the bridge abutments would be armored
with rock slope protection (RSP). The new abutments would sit above the flow line, with two
piers in the channel. Approximately 180 cubic yards of%4 ton RSP would be placed around the
bridge abutments, of which approximately 160 cubic yards would be placed below the ordinary
high water mark.
Utilities, including a 10-inch gas line and a 10-inch water line, will be relocated from the existing
bridge structure to the new bridge structure. Overhead utilities will not require relocation. An
existing storm drain that currently discharges into the creek at the northwest corner of the bridge
will be reconstructed through the new bridge abutment. The storm drain will outlet at the
northern abutment and onto the RSP, which would dissipate flow energy.
Staged construction will be used to build the bridge. Traffic controls, such as a temporary signal
or one way traffic control, will be used to maintain traffic flow through the project area.
Alternative routes such as SR 273 and South Bonnyview Road will be available during
construction. The contractor staging area will be located on the abandoned road extension
immediately north of the bridge. Temporary construction easements would be required for the
proj ect.
An Initial Study (IS) was prepared to satisfy the requirements of the California Environmental
Quality Act (CEQA). It describes why the Project is being proposed and the potential impacts to
the existing environment. The IS shows that the proposed Project could have a significant effect
on biological resources, but with implementation of mitigation measures, those impacts wi11 be
reduced to a level considered less than significant. The mitigation measures and conservation
measures to be implemented are common practices and include,but are not limited to, biological
pre-construction surveys, in-water work windows, impact minimization, exclusionary fencing,
erosion control, and on-site plant restoration.
Based on the conclusions made in the IS, a Mitigated Negative Declaration (MND) was
prepared. The MND describes the project, including mitigation measures, and makes the
determination that there wi11 be no significant effect on the environment provided that the
defined mitigation measures are implemented as part of the project.
In addition, a Mitigation and Monitoring Program (MMP) has been written and inco�rporated into
the MND (CEQA Section 21081.6). The MMP will be used by City staff, contractors, agencies,
and monitoring personnel during and after the project to ensure effective implementation of the
adopted mitigation measures outlined in the NIND.
Report to Redding City Council January 30,2028
Re: 4.11(c)--Adoption of Eastside Road Bridge over Olney Creek MND Page 3
The IS, MND, and MMP documents were sent to the State Clearinghouse for a 30-day public
review period before distribution to pertinent state agencies. They were sent to local resource
agencies and the Shasta County Clerk, and posted on the Public Works Department website. A
public notice was also sent to landowners in the vicinity of the project and posted in the local.
newspaper. No comments were received during the public comment period.
The City of Redding is the lead agency for the Project pursuant to CEQA. As the lead CEQA
agency, the City Council is authorized to adopt the 1VIND per Redding Municipal Code Section
§18.24.070.E and state law. Upon adoption of the MND and approval of the project by the City
Council, a N�otice of Determination will be filed with the Shasta County Clerk's Office and the
State Clearinghouse, completing the environmental review process. The IS and MND are
available in the City Clerk's office for review.
Council Priority/City Manager Goals
This agenda item is a routine operational item.
Attachments
Mitigated Negative Declaration
Site Location Map
Initial Study(available online)
Mitigation Monitoring Program
� � � � � � �w%"� �� �� E[� ��C�
'` 777 Cy�ress Avenu�, f�edcling; C1�96001
`�.. ,' PC7 BC3X 4�607�., Reddirig, CA 960�9-G071.
+c� �, � �' C,� t� t }�-''y �i���fr�c�c�da��.�r�
PuB�,�c wo��cs
Et��tnt��Rt�t�Dtv►stant
530.225:�117fJ'
��a:���.7o�a� �une 25,'2024
Bid Sch. #51$0 JO #2477
Abacus Construction,Inc.
8490 Hartmey�r Lane
Redding,CA 96002
SLJBJECT: Notice af Cantractc�r's Cantrol Termination = Eastside Road over Olney Creel�
Bridge Project
1�ear Mr. L�ngum:
In accordance with the contract documents as part of the executed agreeznent (May 17, 2022)
between the City c�f Redding (City) and Abacus C�nstruction, Inc. {Contractor), including
Sectic�n 4-1.13, Contractor'� Cc�n�ral Termir�ation, of the 2018 Edition of the "Caltrans Standard
Specifications", this letter serves as nc�tice to y�u and yQur �urety that yaur failures must be
addressed within five(5)business days af receipt ofth�s letter tc�avc�id terminat�on ofthe Contract.
You have failed by failzng to prosecute the work as described in the contract, failing ta maintain
insurance caverage and abandoning the project, You have five �5) business days to.
• Pravide a canstructic�n schedule accurately depicting yaur plan to complete the prc�ject
within the stipulated contract time.
As indicated ab+�ve, you are hereby natified to eommence satis�actc�ry corrective acti�ans within
five (5) business days �f re�eipt of thas letter. If you da not compiy and the failures are not '
remedaed; the City wrll take control of the wc�rk and pursue the next steps with yt�ur surety tc�
complete the project.
If you haVe any questians,please call me at 530-225-4170:
Sincerel
Michael R, Webb,P.E:
T)irectar of Public Works
� ,
� � � �� ee� , � � �
Copy Mailed to:
The Ohio Casualty Insurance Company
Attn: Liberiy Mutual Surety Claims
1001 4`"Avenue, Suite 3800
Seattle, WA 98154
c: Christian Curtis,City Attorney
Natalia Ebersole,Assistant City Attorney
Josh Anthony,Assistant Director of Public Works
Nick Visconti,Construction Manager
Misty Kufner,Contract Compliance Tech
James Triantafillou,Assistant Director of Public Works,P.E.
Corri Vandiver, Senior Civil Engineer,P.E.
... .... .,� .,. �.,»�� �
�
■ 1 1
PO Box 761 Palo Cedro, CA 96073 Office: 530-215-3104 Fax: 530-466-3459
License#: 837300 SBE#: 39826 DIR#: 1000063345
July 2, 2024
Michael R. Webb
Director of Public Works
City of Redding
777 Cypress Ave
Redding, CA 96001
Subject: Olney Creek Bridge - Your letter of June 25, 2024
Dear Mr. Webb:
This is in response to your letter of June 25, 2D24, subjecf"Notice of Contractor's
Control Termination".
Your letter is defective and wrong, including because (1) you do not have the
authority to send the letter, (2) the City has failed to use the Disputes Resolution
Advisor (DRA), (3) your letter fails to provide specificity, (4) your letter demands a
schedule that is not possible because the City is in breach of contract by failing to
provide site access, (5) your letter conceals the real issue which is the City's wrongful
attempt to force Abacus ta enter into a separate unconscianable contract with a third
party, the Union Pacific Railroad (UPRR), that is beyond the scope of the changes
clause, (6) your letter seeks to effect changes to its contract through the proposed
�` separate contract, (7) the City improperly seeks to make Abacus bear the brunt of the
City's mismanagement.
The City has a duty to provide Abacus site access to perform the work and the City is
failing and refusing to provide that site access, which is a material breach of the
Contract, excusing Abacus from any performance. In addition, the City's conduct in
insisting Abacus sign an unconscionable separate cantract with a third party, the
UPRR, in an attempt by the City ta transfer the City's Pegal duty to provide site access
to Abacus, and profoundly change the City's Contract with Abacus to the extreme
financial detriment of Abacus, are breaches by the City of the covenant of good faith
and fair dealing that are so serious they are material breaches, also excusing Abacus
from further performance.
City of Redding
July 2, 2024
Page 2 of 10
Your letter, by failing to address the real issue is misleading on its face, which
appears what you intended, and the City's refusal to communicate on the real issue,
are breaches of contract including of the covenant of good faith and fair dealing by
the City.
The City, in essence, is trying to force the City's duty to provide site access, which
include providing access on railroad property, on Abacus by demanding Abacus sign
a separate cantract with the UPRR, so if the UPRR decides to not give access or
delays access, the City can claim it does not have to pay Abacus for no site access,
claiming it is Abacus' responsibility. The City is also trying to get Abacus to sign a
separate contract with the UPRR so the City can claim it does not have to pay
Abacus the increased cost of some $740,000 for working under the new restrictions
in the separate contract with the third party, the UPRR. What the City is doing is flat
wrong.
We strongly urge the City, instead of its continued bad faith and unfair dealing, make
efforts to resolve the problem it created for itself with the Union Pacific Railroad and
stop trying to harm Abacus with the City created problem. We will continue to try to
work with the City to help it solve its problems but are not willing to finance the City
created problems to the ruin of Abacus.
(1) Your Lack of Authority under Section 8-1.12
Caltrans' 2Q18 Standard Specifications, Section 8-1.13. allows the "Department" to
give notices under that section. Other sections of these Standard Specifications give
authority to the Engineer depending on the importance or gravity of the provision.
The City's Contract with Abacus provides that where "Department" is used in the
Standard Specifications, it will be interpreted to be the "City of Redding". (See City
Contract, Division 1, General, page 25.) The same Contract section says that where
� the term "Engineer" is used in the Standard Specifications it is to be interpreted to
mean "The Director of Public Works/City Engineer, City of Redding, acting either
directly or through properly authorized agent or consultant." (See City Contract,
Division 1, General, page 25.)
Therefore you, the Public Works Director, which the Contract defines as the
"Engineer", do not have the authority to issue notices under Section 8-1.12, only the
City of Redding which can only act through its City Council can do so. This is to be
expected for such a serious clause as Section 8-1.13 to terminate the contractor's
contro! and since the City Council must act to approve entering into all but the
smallest contracts, the City Council must also approve a notice under Section 8-1.13.
City af Redding
July 2, 2024
Page 3 of 10
O it il t r t t i t t .
The City's contract pravides: "The ADR process must be used for the timely
resalution of disputes that arise out of the work." (Caltrans 2018 Standard
Specifications, Section 5-1.43E(1)(a).)
The City has failed to comply with this provision.
(3) Your letter fails to provide specificity, making it misleading.
Your claims that Abacus is failing to prosecute the work as described in the contract,
failing to maintain insurance, and abandoning the project are not true, which you
tacitly admit by failing to provide specifics.
Your claim that Abacus is failing to prosecute the work as described in the contract is
not true. First, the work has been on winter suspension until the contractor's right of
entry is received from the UPRR. Secand, the City has a legal duty to provide site
access to Abacus and has failed to do so, thus the City, not Abacus, is preventing the
prosecution of work.
Your claim that Abacus is failing to maintain insurance caverage is not true. Abacus
has the insurance that the Contract requires.
Your claim that Abacus abandoned the praject is not true. To the contrary, Abacus is
ready, willing, and able to proceed with work as soon as the City provides site
access.
(4) Your letter demands a schedule that is not possible due to City failure to
provide site access to contractor.
� You demand that Abacus "Provide a construction schedule accurately depicting your
plan to camplete the project within the stipulated contract time." As you know, the
Contract requires the City to provide site access for Abacus to perform the contract
work, which the City is failing to provide, thus the attached schedule is premised on
the City providing that site access and the schedule will be extended until the City
provides that access, all per the Contract.
(5) The City cannot change the contract by a directive to Abacus to sign a
contract with a third party.
The City has refused, despite repeated requests, to tell Abacus where the Cantract
says Abacus is required to sign a contract with the third party, the UPRR, that the
City of Redding
July 2, 2024
Page 4 of 10
City sent attached to an unsigned "agreement" between the City and the UPRR. The
City cannot point to where in the contract it says Abacus is required to sign the
contract with the third party, the UPRR.
All that has been found is that buried in a document attached to a letter from the City
dated May 31, 2024, entitled "Prior Approval of Contract Change Order and Authority
to Proceed with Work" includes in the "Remarks" section an unclear, essentially
incomprehensible, statement:
"Section 5-1.2QB of the Standard Specifications says changes to
an agreement will be made under section 4-1.05."
Caltrans 2018 Standard Specifications, Section 5-1.20B refers to "Permits, Licenses,
Agreement, and Certifications" ("PLAC"). While this is not the clearest provision of the
City's Contract documents, it differentiates between PLACs made available before
award and "after-award PLACs". (Section 5-1.20B(2) Before Award versus Section 5-
1.20B(3) After Award.)
The UPRR PLAC had expired on June 10, 2020, long before the time of award and
thus did not fall within the definition of a Before Award PLAC. However, for Before
Award PLAC ar After Award PLAC, Sections 5-1.20B(2) and 5-1.20B(3) provide only
for changes by the contractor, not the City. "You" means the Contractor, Abacus.
(Section 1-1.Q1: ". . . interpret you as the Contractor . . .".) Thus, the City's reference
to these sections is not applicable.
Section 4-1.05A provides;
"The Department may make changes within the scape of work
and add extra work. The Engineer describes the changes and
extra work, the payment basis, and any time adjustment in a
Change Order."
�
This provision does not allaw the City to direct Abacus to sign the separate contract
with a third party, the UPRR. First, a demand that the contractor sign a separate
contract with a third party is not "within the scope of work" or "extra work". The
Standard Specifications repeatedly refer to work as the physical work being done, not
to legal provisions. Thus, the City has no authority to demand that Abacus sign a
separate contract with a third party.
Second, even if the City had the authority, which it does not, the demand by the City
that Abacus sign the separate contract with the third party UPRR far exceeds any
change ta obligations contemplated by the City-Abacus Contract and would be a
profound and unreasonable alteration of the character of the work and unduly
City of Redding
July 2, 2024
Page 5 of 10
increase the cost, burden and risk on Abacus. Indeed, signing the separate contract
with the third party, UPRR, could put Abacus out of business.
The City has a legal duty to provide site access to Abacus to perform the contract
work which the City now wants to reverse and make Abacus responsible for site
access by demanding Abacus sign a separate contract with a third party, the UPRR.
Site access is a huge part of the Contract as evidenced by the fact that the City's
failure to provide that access has stopped the Contract from being performed. If the
City does not provide site access to Abacus, such as on the UPRR property, the City
is liable to Abacus for all the costs from that failure, including relieving Abacus from
having to perForm the Contract.
The City, by demanding Abacus sign a separate contract with the UPRR wants to
change its legal responsibility of providing site access and make Abacus responsible,
a profound change. Apparently, the City thinks by forcing Abacus into signing the
separate contract with the UPRR that the City can claim that it is not responsible to
Abacus far the costs or consequences of the UPRR delaying or not allowing Abacus
access to the work site.
Nowhere does the City say it will be responsible for increased costs ar delays by the
UPRR. We do not believe that the City can order Abacus into signing a separate
contract with a third party under which Abacus would lose money and with huge risks
that Abacus never bid to take on. In fact, the City's Contract that Abacus bid said that
the City was taking on the risk and cost of the UPRR and the City had entered into a
contract with the UPRR, which the City attached as Appendix A to the Contract.
The proposed separate contract with the third party UPRR says UPRR can terminate
the contract on ten.days' notice, apparently for no reason and with impunity. What
happens then? Who is responsible? Is the City going to claim that Abacus is at fault
for not continuing with the work when the UPRR terminates the proposed separate
contract and will not allow access to the site to work? Where does the City promise to
�` pay Abacus if the UPRR terminates the separate contract or decides not to extend it?
This is a profound change and way beyond the changes within the scope of work
allowed by Section 4-1.05A.
Normally where a contractor contracts with a subcontractor, the subcontract provides
that the contractor can direct the scheduling of the subcontractor's work and the
subcontractor is liable to the contractor for the subcontractor's failure to comply with
the subcontract and with the prime contract. The proposed separate contract with the
third party UPRR reverses that situation, it would give the UPRR the right to decide
what work it wants the contractor to do and when and it says that the UPRR is not
responsible for the delay or increased costs it causes.
City of Redding
July 2, 2024
Page 6 of 10
( ) it t t t it c r ct t r r
r tr t i ir t .
The proposed separate contract with a third party the UPRR adds the following
change that reduces Abacus' work area as follows:
"When not in use, Contractor's machinery and materials shall be
kept at least fifty (50) feet from the centerline af Railroad's nearest
track . . ."
This was not in the original City-UPRR agreement that was Appendix A to the
Contract. We understand the City asked the UPRR to clarify this change from the
City-UPRR agreement and the UPRR would not do so, thus the City is fully aware of
this cfiange to the work area and site access and the impact on the cost and time of
the wark.
We roughly estimate the increased costs caused by the change to the work area by
the proposed separate contract with third party UPRR to be in excess of$742,500.00
and to add three seasons to the time to construct the project, that is to 2028. The City
fails to provide how, when, and even if it will pay these increased costs for its
changes. The City cannot force a contractor to do $742,500.00 worth of work for free,
which it is trying to do. That is way beyond the scope of what Abacus bid especially
coupled with all the other unconscionable risks and requirements of the proposed
separate contract with third party UPRR.
The restrictions on working in the propased separate contract with the UPRR will also
increase the time to perform the work by we estimate two work seasons. The original
job was to be anly two seasons.
The praposed separate contract with the third party, the UPRR, would require
Abacus to pay UPRR far railroad flaggers, contrary to the Contract which provided
� that the City would pay UPRR for the railroad flaggers. The cost of the railroad
flaggers is estimated to be $1,OOQ,000. This on a contract that is anly $3.7M and this
does not include the prior extra work of some $685,010.80 nor does it include the
estimated increased cost af$740,000 for the increased work restriction in the
proposed separate contract with the UPRR, nor does it include the increased costs
caused by the City installing electric poles and lines interfering with the work. It also
does not include the potential increased cost of excavating in the Creek caused by
the City direction to place spawning gravel there, nor does it include the increased
cost to remove, replace, and extend asbestos cement pipe found buried in concrete
that was not shown on the plans that may require work within 25 feet of railroad
tracks.
City of Redding
July 2, 2024
Page 7 of 10
This also does not include the cost of the UPRR terminating or further restricting or
delaying access to the work area.
The City did say it would reimburse Abacus for railroad flagging expenses, although
estimating only $100,000. The City overlooks the increased cash flow cost to Abacus.
Abacus would have to borrow money to pay the UPRR in the 30 days per the
proposed separate cantract with the UPRR before Abacus wauld get reimbursed by
the City a month or two later, assuming the City pays on time and in full. The railroad
flagging cost will be about $40,000 per month so that means if the City pays within a
month and a half, Abacus would still have to borrow $60,000 just to pay the UPRR
before being reimbursed by the City. This is a big and unfair burden on a small
contractor. This would become an even bigger problem if the City delays or fails to
pay Abacus for which the City nowhere says it will be responsible.
The proposed separate contract with the UPRR requires insurance that was not
required in the City-Abacus Contract. While the City has said it will reimburse Abacus
for the increased costs of insurance, Abacus' broker advises that the insurance
known as Form CA2070 is not available. Thus, the City is demanding that Abacus
sign a separate contract with the UPRR that the City knows cannot be performed by
Abacus. This is wrong.
The proposed separate contract with the third party, the UPRR, has a broader and
more onerous indemnity clause, section 8, that the City-UPRR agreement Contract
as Appendix A, section 10.
The proposed separate contract with the UPRR fails to include the statutes required
by California Labor Code section 1775(b)(1) to be included which would appear to
make it illegal, and we have doubts our surety would allow us to sign it even if we
wanted to (which we do not). The proposed separate contract with a third party fails
to include the Federal contract provisions required. Because the City's contract is
Federal-Aid contract, all subcontract and lower-tier contracts exceeding $100,000 are
�' required to include the Federal Lobbying Restrictions and reporting requirements of
City of Redding Technical Specifications, Instructions to Bidders, section I, page17.
The proposed separate contract with third party UPRR doe� not include such
provisions, which wauld appear a violation of law. Similarly, it does not appear that
the UPRR has a contractor's license required to perForm work on the site.
Another major and unfair change that would be caused by the separate contract with
the third party, the UPRR, is that the separate contract says that disputes with the
UPRR go to court but the City-Abacus Contract says disputes go to arbitration.
Each one of the above changes to the Contract resulting from the proposed separate
contract between Abacus and the UPRR shaws the City's demand to sign the
City of Redding
July 2, 2024
Page 8 of 10
separate contract with the UPRR is beyond the scope of changes to the Contact
allowed by Section 4-1.05A. However, in considering all the changes resulting from
the City demand that Abacus sign the separate contract with the UPRR, the City has
na authority to change the Contract by demanding that Abacus sign the separate
contract with the third party, UPRR.
(7) The City is improperly trying to make Abacus bear the brunt of the City's
mismanagement.
The City failed to conduct an adequate soil investigation. It is normal to conduct a soil
investigation at the location of the piers that will support a new bridge. The City failed
to do so. When excavating for the temporary creek diversion system, Abacus
encauntered a differing site condition of hazardous materials in Olney Creek. The
City directed Abacus to remove these materials and approved Abacus' removal plan
including driving sheetpiles. The sheetpiles cut undergraund cables belonging to the
Railroad that the City had not disclosed and had failed to notify the Railroad of the
driving of the sheetpiles. The work cost over $650,OOQ.00 and will likely increase
future costs of excavation in the Creek due to the spawning gravel the City directed
be installed; it delayed the job a construction season and angered the UPRR against
the Gity.
All this could have been avoided if the City had done a proper soil investigation
before putting the contract out to bid.
The City, after this encountering of contaminated soil in the Creek, should have
investigated downstream while work has been stopped to see if there is any
contaminates soil where excavation in the Creek will be done when the City stops
delaying the work; this cauld avoid a repeat of last year's delay.
The City on June 10, 2019, reached an agreement with the UPRR for temporary
constructian access for one year. Under this agreement the UPRR could not
� terminate the agreement unless the City did not use the access. However, this
temporary railroad access ended June 10, 2020, long before the City put this
Contract out to bid in 2022.
The City, without negotiating an extension or new agreement with the UPRR,
included this old June 10, 2019 UPRR Agreement as Appendix A to the Cantract.
This was gross mismanagement by the City because the City needed to give the
contactor access ta the railroad property to perform the Contract but the City was
now at the complete mercy of the UPRR to agree to that access.
Before work started, Abacus reminded the City at meetings that the City needed to
update a majority of its permits and agreements. The City told Abacus that was being
City of Redding
July 2, 2024
Page 9 of 10
done in-house by the City. Also, before work started, Abacus told the City in writing to
notify the railroad that work on railroad property would be starting in order that the
railroad would provide permission to enter. The City did not respond to this
notification sent to them and it is not clear what the City did with said notification at
that time. However, in our May 17�2024, DRA meeting at City Hall, it was released
that City had actually passed Abacus' notification to City's design engineer pokken
Engineering who presumably forwarded to UPRR and received the "good to go" from
the Railroad.
On October 23, 2023, the City obtained from the UPRR an extension of the June 10,
2019 agreement to October 23, 2Q24. However, because of the City's
mismanagement of putting out the construction contract before the City acquired
railroad access, the UPRR had the City at its mercy and the extension agreement
provided that it could be terminated by the UPRR for any reasan on 30 days' notice.
If the UPRR terminated the extension, the City would not be able to provide site
access to Abacus to perform the contract work, work would have to stop, and the City
would be liable to Abacus for all the delay and other damages from denying site
access and for material breach of contract.
In addition, it was mismanagement by the City to agree that the extension was only to
October 23, 2024 because the City knew that was not enough time to complete the
contract work, there were two seasons of work, 2024 and 2Q25, to complete the
work, assuming no other delays.
On May 3, 2024, City Associate Engineer Darin Strege emailed Abacus a document
entitled a "Supplemental Agreement" between the City and the UPRR with a date of
April 29, 2024, however this "Supplemental Agreement" is not signed by the City or
the UPRR. We have never seen this document signed by the City and the UPRR.
This unsigned "Supplemental Agreement" document had attached to it a proposed
separate cantract between Abacus and the UPRR. There was no contract
requirement for Abacus to sign a separate contract with a third party, the UPRR, and
� on May 29, 2024 Abacus wrote the City advising there was no contract requirement
for Abacus to sign a contract with a third party, the UPRR, and of some of the
problems with the prapased separate contract.
The City has improperly demanded that Abacus sign a separate contract with a third
party, the UPRR before the City will allow Abacus to proceed with the work, because
the City failed to handle matters properly with the UPRR before bid and has obviously
angered the UPRR. Now the City wants to push the City's risks and costs onto a
small contractor, Abacus.
The City's threat that it will terminate the Contract if Abacus does not sign an
unconscionable and improper separate contract with a third party, the Union Pacific
City of Redding
July 2, 2024
Page 10 of 10
Railroad, is in essence economic extortion and is bad faith and unfair dealing by the
City. This City conduct is particularly troublesome because it is an effort by the City to
try to push the Gity's legal responsibilities and risks for providing site access onto a
small contractor, because the City mismanaged its contracting process.
Conclusion
Abacus requests the City withdraw its letter of June 25, 2024, including for the
reasons stated above, and provide site access to Abacus to perForm the work, or
terminate the contract for the City's convenience. We will continue to work with the
City.
Sincerely,
������
,� '
Garret Langum
President
Attachments:
Schedule dependent on the City fulfilling its duty to provide site access
Abacus letter to the City dated May 29, 2024
Abacus letter to the City dated June 3, 2024
Abacus letter to the City dated June 20, 2024
Abacus letter to the City dated July 1, 2024
cc:
Christian Curtis, City Attorney
Natalia Ebersole, Assistant City Attorney
°' Josh Anthony, Assistant Director of Public Works
Nick Visconti, Construction Manager
Misty Kufner, Contract Compliance Tech
James Triantafillou, Assistant Director of Public Works
Corri Vandiver, Senior Civil Engineer
Ohio Casualty Insurance Company