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Home My WebLink About06.a. Public hearing to increase contract retention from 5% to 10% for Primary Treatment Renovations, District Project 72856.Q. PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION TO INCREASE THE CONSTRUCTION CONTRACT RETENTION AMOUNT TO 10% FOR THE PRIMARY TREATMENT RENOVATIONS, DISTRICT PROJECT 7285 SUGGESTED AGENDA February 7, 2013 Request staff presentation Hearing A. Open hearing B. Receive comments, if any C. Close hearing III. Board deliberation regarding proposed resolution IV. Recommended Action: Adopt a resolution finding that, in accordance with California Public Contract Code Section 7201, the Primary Treatment Renovations, District Project 7285, is substantially complex to justify increasing the constructing contract retention amount from 5% to 10 %. Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: February 7, 2013 Subject: CONDUCT A PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION TO INCREASE THE CONSTRUCTION CONTRACT RETENTION AMOUNT TO 10% FOR THE PRIMARY TREATMENT RENOVATIONS PROJECT, DISTRICT PROJECT 7285 REVIEWED AND RECOMMENDED FOR BOARD ACTION: N. Morales — Associate Engineer �J�6 P. Seitz — Senior Engineer m C. Swanson A. Antkowiak — Division Manager Counsel for the District Provisional General Manager ISSUE: California Public Contract Code section 7201 was amended in 2011 to establish that the maximum a public agency may hold as the construction contract retention is 5 %. However, a public agency may find, at a properly noticed and normally scheduled public hearing that a project is substantially complex to justify that a higher amount of retention should be withheld. RECOMMENDATION: Adopt a resolution finding that, in accordance with California Public Contract Code Section 7201, the Primary Treatment Renovations Project, District Project (DP) 7285, is substantially complex to justify increasing the construction contract retention amount from 5% to 10 %. FINANCIAL IMPACTS: No direct District - related impacts will result from this action. ALTERNATIVES /CONSIDERATIONS: The Board may elect to not hold the hearing and keep the retention amount at 5 %. However, this is not recommended due to the substantial complexity of the Project. BACKGROUND: In 2011, the Legislature changed the Public Contract Code to establish the maximum amount a public agency could withhold on a construction contract as 5 %. The new maximum retention amount became effective January 1, 2012. A public agency's governing body may increase the retention amount, via a properly noticed public hearing on a specific project, by making a finding that the project is sufficiently complex to justify the increased retention. Staff requests that the Board conduct a public hearing to consider increasing to 10% the construction contract retention. The finding to increase the construction contract retention must be made prior to the Project bidding. If approved by the Board, the increased retention amount and resolution will be included in the bid documents. The Project is currently scheduled to advertise for public bid on March 12 and 21, 2013. NAPESUP \Position Papers \Morales \7285 - PP Conduct 10% Hearing 012813.DOC Page 1 of 2 POSITION PAPER Board Meeting Date: February 7, 2013 Subject: CONDUCT A PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION TO INCREASE THE CONSTRUCTION CONTRACT RETENTION AMOUNT TO 10% FOR THE PRIMARY TREATMENT RENOVATIONS PROJECT, DISTRICT PROJECT 7285 Staff believes that the Primary Treatment Renovations Project, DP 7285, is sufficiently complex to justify 10% retention. The planned improvements require modifications to the primary process' mechanical, electrical, controls and systems. Staff anticipates that a number of sub - contractors and suppliers will be used by the general contractor, and that the coordination of this work will be difficult. Two of the four primary sedimentation tanks were constructed in the mid 1960s and the final two tanks were constructed in the mid 1970s as part of the 5A expansion project. Most of the piping and components in the primary treatment area are more than 35 years old, with some approximately 50 years old. Some piping and process components are heavily corroded and are nearing the end of their respective service life. This project will renovate or replace the scum collection system and the water and air pipelines at the primary sedimentation tanks. In addition, the project will include renovation of concrete, hand railing, lighting, and electrical upgrades to the motor control center that provides power to the primary treatment facilities. The project will also include installation of a scum thickening unit on the third floor of the Solids Conditioning Building, construction of a new grit handling facility, a PE pump VFD and the upgrade of a PE pump . Due to complexity of work, long equipment lead times, and wet weather construction restrictions, the project is expected to require a minimum of 18 months to complete. The construction cost estimate (80% design) for the Primary Treatment Renovations project is $10.5 million. This includes installation of baffles and replacement of two Primary Effluent pumps. The general contractor, subcontractors, and suppliers will have to carefully coordinate the work to ensure the timely and safe completion of the Project. In the event that claims arise from sub - contractors or suppliers, 10% retention is more likely to provide sufficient funds to address claims. RECOMMENDED BOARD ACTION: Adopt a resolution finding that, in accordance with California Public Contract Code Section 7201, the Primary Treatment Renovations, DP 7285, is substantially complex to justify increasing the construction contract retention amount from 5% to 10 %. N:\PESUP \Position Papers \Morales \7285 - PP Conduct 10% Hearing 012813.DOC Page 2 of 2 RESOLUTION 2013 -003 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT INCREASING THE RETENTION AMOUNT TO 10% FOR THE PRIMARY TREAMENT RENOVATIONS PROJECT, DP 7285 WHEREAS, the Central Contra Costa Sanitary District's (District) Primary Treatment Systems are a part of the wastewater treatment process, and are critical to the effective treatment of wastewater; and WHEREAS, in 2011 the Legislature modified Public Contract Code Section 7201 to set the maximum amount that could be withheld by a special district as retention on a construction contract at 5% and that this retention amount could only be increased if the public agency found the specific project was sufficiently complex to warrant it; and WHEREAS, the Primary Treatment Renovations Project (DP) 7285, will improve the performance of the primary treatment process by upgrading equipment and piping; and WHEREAS, DP 7285 is a unique, atypical Project for the District; and WHEREAS, the project includes the replacement of the grit handling system, scum thickening system, primary effluent pump(s), and motor control center, all of which appear to be corroding or ending the term of their useful lives; and WHEREAS, the General Contractor, subcontractors, and suppliers will have to coordinate a substantial amount of the work to ensure the timely and safe completion of the renovation; and WHEREAS, the nature of renovation work increases the likelihood of prime contractor and subcontractor claims; and WHEREAS, the Board of Directors held a noticed public hearing on February 7, 2013, to establish that the Primary Treatment Renovations Project, DP 7285, is sufficiently complex to require an increased retention amount of 10 %. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District as follows: That, after holding a noticed public hearing, the Board of Directors finds that in accordance with Public Contract Code Section 7201, Primary Treatment Renovations Project, DP 7285, is a complex project. Furthermore, that this project's complexity necessitates a retention amount greater than 5 %.