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Home My WebLink About07. Draft Position Paper to conduct Public Hearing to increase retention for Headworks Screening Upgrade, DP 7327Central Contra Costa Sanitary District BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 6, 2016 Subject: 7. CONDUCT A PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION TO INCREASE THE CONSTRUCTION CONTRACT RETENTION AMOUNT TO 10% FOR THE HEADWORKS SCREENING UPGRADE, DISTRICT PROJECT 7327 Submitted By: Craig Mizutani Senior Enginineer Initiating Dept./Div.: Engineering and Technical Services/ Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: E. Lopez Capital Projects Division Manager JM. Petit — Director of Engineering and Technical Services Kent AIm Roger S. Bailey Counsel for the District General Manager ISSUE: California Public Contract Code Section 7201 states that the maximum a public agency may hold as contract retention is 5%, unless a public agency finds 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. BACKGROUND: Effective January 1, 2012, a public agency may increase the retention amount on a specific project upon finding that the project is sufficiently complex to justify the increased retention. The finding to increase the construction contract retention amount must be made prior to receiving bids for the project. If the Resolution is adopted by the Board, the increased retention amount and resolution will be included in the project bid documents. This project is currently advertised for public bid with an anticipated bid opening by late October. Staff believes that the Headworks Screening Upgrade Project, District Project 7327, is sufficiently complex and includes critical plant equipment used to convey raw sewage into the plant. The planned construction includes replacement of the Headworks mechanical screens, new screening conveyance and disposal equipment, modifications to the process mechanical, electrical, and control systems. Staff anticipates that a number of sub -contractors and suppliers will be used by the general contractor, and that the coordination efforts will be critical. The current engineer's estimate for construction is $6,250,000. A significant portion of the construction costs is related to procuring equipment and supplies. The project is expected to require almost 18 months to complete due to the complexity of the work, equipment lead times and wet weather construction restrictions. Page 1 of 2 POSITION PAPER Board Meeting Date: October 6, 2016 Subject: CONDUCT A PUBLIC HEARING TO CONSIDER ADOPTING A RESOLUTION TO INCREASE THE CONSTRUCTION CONTRACT RETENTION AMOUNT TO 10% FOR THE HEADWORKS SCREENING UPGRADE, DISTRICT PROJECT 7327 The general contractor, its sub -contractors, and vendors will have to carefully coordinate the work to ensure the timely and safe completion of the project. In the event that stop notices or claims arise from sub -contractors or vendors, a 10% retention is more likely to provide for sufficient funds to help address potential claims. ALTERNATIVES/CONSIDERATIONS: The Board may elect to not hold the public hearing and keep the retention amount at 5%. However, this is not recommended due to the substantial complexity of the project. FINANCIAL IMPACTS: No District financial impact related to this action. COMMITTEE RECOMMENDATION: The Engineering and Operations Committee reviewed this subject at the September 22, 2016 meeting, and recommended adopting the Resolution. RECOMMENDED BOARD ACTION: Adopt a Resolution finding that, in accordance with the California Public Contract Code Section 7201, the Headworks Screening Upgrade, District Project 7327, is substantially complex to justify increasing the construction contract retention amount from 5% to 10%. Attached Supporting Document: 1. Proposed Resolution Page 2 of 2 RESOLUTION 2016-0XX A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT INCREASING THE RETENTION AMOUNT TO 10% FOR THE HEADWORKS SCREENING UPGRADE, DP 7327 WHEREAS, the Central Contra Costa Sanitary District's (District) Treatment Plant Headworks Facilities 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 Headworks Screening Upgrade, District Project (DP) 7327, will improve the performance of the downstream treatment processes by upgrading equipment and piping; and WHEREAS, DP 7327 is a unique, atypical Project for the District; and WHEREAS, the project includes the replacement of the mechanical climber screens, installing new equipment for raw wastewater screening conveyance and disposal, electrical, mechanical, and controls, all of which needs to be coordinated in a 24-hour operating facility; 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 project; and WHEREAS, the nature of the proposed work increases the likelihood of prime contractor and subcontractor claims; and WHEREAS, the Board of Directors held a noticed public hearing on October 6, 2016, to establish that the Headworks Screening Upgrade, DP 7327, 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, the Headworks Screening Upgrade, DP 7327, is a complex project. Furthermore, that this project's complexity necessitates a retention amount greater than 5%. 2. That the Board of Directors finds that the retention amount for the Headworks Screening Upgrade, DP 7327, shall be 10%. PASSED AND ADOPTED this 6th day of October, 2016, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R. Boehme, CMC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. AIm, Esq. Counsel for the District CONSTRUCTION CONTRACT RETENTION AMOUNT FOR HEADWORKS SCREENING UPGRADE DISTRICT PROJECT 7327 September 22, 2016 Engineering and Operations Committee Meeting Craig Mizutani, Senior Engineer PUBLIC CONTRACT CODE AMENDMENT • In 2011, the Governor signed SB 293 modifying Public Contract Code Section 7201 to set the maximum retention on a construction contract at 5%. • This requirement began January 1, 2012, and sunsets January 1, 2018. • The intent of the bill is to provide some financial relief to contractors and subcontractors during these challenging economic times by reducing retention from 10% to 5%. • The retention amount may be increased for a specific project with a finding by the elected Board of Directors that the project is substantially complex to justify the increased retention. The finding must be made at a properly noticed and scheduled public earing. The finding must be explained in the bid documents. BACKGROUND • On September 15, 2016, the Board established October 6, 2016, as the date for a Public Hearing to receive comments on increasing the construction contract retention amount to 10% for the Headworks Screening Upgrades, DP 7327. • Notice of the Hearing was advertised in the East Bay Times on September 26, 2016 PROJECT OVERVIEW • The Headworks Screening Upgrades is a substantially complex project with important operational constraints. • Summary of proposed renovations: Replace mechanically cleaned bar screens in channels 1 through 4 Refurbish existing bar screens and install in wet weather channels Install screenings sluiceway for screenings conveyance Install screenings washer/compactors Install screenings tipping troughs Construct screenings handling facility Construct access platforms, stairways, and guardrail Replace and install new process piping Improve ventilation and odor control capture Complex construction sequencing due to continuous operation of online critical facility and wet weather constraints 2 EXISTING SCREENS AND GRINDERS 3D MODEL OVERVIEW NEW SCREENS AND EQUIPMENT 3 3D MODEL: SLUICE 3D MODEL: WASHER/COMPACTOR UNITS 3D MODEL: TIPPING TROUGHS CONSTRUCTION SEQUENCE AND CONSTRAINTS • The existing Headworks facility will operate continuously during the project with the majority of construction activities limited to the dry weather season • Construction in the Headworks is of retrofit type with critical and complex elements, including: Newer equipment technology — tipping troughs • New process equipment and refurbishment of existing equipment • Multiple pieces of process equipment with central control and integration isolation and bulk heading of raw sewage flow • Confined space entries Class I Division hazardous areas per NFPA 820 To be successful, the contractor will be required to: • Understand the project complexities, sequence, and operational constraints Produce an accurate and realistic construction schedule using the critical path method Execute the schedule and coordinate construction activities as conditions change • Coordinate with equipment manufacturer during submittals, procurement, and startup Actively lead the process startup and responsively troubleshoot system STAFF RECOMMENDATION Find that, in accordance with Public Contract Code Section 7201, the Headworks Screening Upgrades, District Project 7327, is substantially complex to justify increasing retention and adopt a resolution increasing the construction contract retention amount from 5% to 10%. QUESTIONS 6