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HomeMy WebLinkAbout31-Development Services ((;~[?)W CITY OF SAN BERNARDINO DEVELOPMENT SERVICES DEPARTMENT INTEROFFICE MEMORANDUM To: Judith Valles, Mayor From: Michael E. Hays, Director of Development Services Subject: Highland Avenue Street Tree Project: Default of Colarossi Construction- Request for Continuance from February 22, 2000 Council Meeting to March 20, 2000. Date: February 10,2000 Copies: Fred Wilson, City Administrator File: 7.37-5040 The Mayor and Common Council originally heard this item on January 24, 2000, and the backup was distributed at that time. At the request of Colarossi Construction, its attorney and the attorney for the bonding company, the item was continued to February 22, 2000. On January 14, 2000 and again on February 10, 2000, staff met with the attorneys for Colarossi Construction and its bonding company. Negotiations are continuing and additional time is necessary to coinpletely review new documentation )Jeing supplied by the contractor. Upon completion of negotiations, staff will bring the item before the Mayor and Common Council with a recommendation. We anticipate that the additional review and negotiations will be completed by March 20, 2000. Therefore, we are requesting that the item be continued until the regular meeting of the Mayor and Common Council on March 20, 2000. 'It 31 t2.J~JOD "';::~.;. ,---," '- \ , \ I, I i ~ ! ~ OF SAN BERNARD~O - REQUEST FOR COUNCIL ACI10N From: Michael E. Hays Subject: Declaration of Default by Contractor and Cancellation of Contract- Installation of Street Trees along Highland Avenue from "E" Street to WatefIlliU1 Avenue (Colarossi Construction) per PIan No. 9845. MCC Date: 01-24-2000 Dept: Development Services Date: January 18,2000 (G(Q) [P)W File: 7.37-5040 Synopsis of Previous CoUDcil Action: May 3, 1999 -- authorized the Director of Development Services to Advertise for Bids for the Installation of Street Trees along Highland Avenue from "E" Street to Waterman Avenue. August 2, 1999 - Resolution A warding Contract to Colarossi Construction for lnstaIIation of Street Trees along Highland Avenue from "E" Street to Waterman Avenue in the amount of $158,433. Recommended Motion: That the Mayor and Common Council declare Colarossi Construction in default and cancel the Contract pursuant to Section 6-4 "Default by Contractor" of the Standard Specifications for project "Installation of Streetscaping on Highland Avenue from "E" Street to Waterman Avenue per Plan No. 9845". -(af~ Contact person: Michael Grubbs, Sr. Civil Engineer Phone: 5179 Supporting data atlacbed: Staff Report & Project Correspondence Ward: 2 & 7 FUNDING REQUIREMENTS: Amount: None Source: (Acct. No.) Acct. Description: Fmance: ;$ounci1 Notes: ~17'I^~ J/.J..V/' 0 . g/7/06/ /#17 ~ ;).3 :II 21 d./;)./OO CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT Subject: Declaration of Default by Contractor and Cancellation of Contract-Installation of Street Trees along Highland Avenue from "E" Street to Waterman Avenue (Colarossi Construction) per Plan No. 9845. BackgrowxI: On August 2, 1999, the City entered into a Contract with Colarossi Construction for Installation of Street Trees along Highland Avenue from "E" Street to Waterman Avenue for the contract amount of $158,433. ,------- The "Notice to Proceed" was given on August 27, 1999. Colarossi Construction began work at the southeast comer of "E" Street and Highland Avenue and started trenching. east as required by Bid Item No. 8 "Trenching, Backfil1ing and Restoration of Asphalt concrete Pavement". On 9/1/99 the contractor encountered 9" to 10" thick asphalt concrete pavement. On 9/7/99 the contractor encountered a 6" thick layer of concrete underneath the asphalt concrete pavement. The extra thick asphalt concrete pavement and the subsurface concrete was not shown on the plans and appeared to affect the entire reach of the project., therefore, Colarossi Construction immediately stopped work and verbally requested a change order to compensate them for the extra cost incurred due to "Changed Conditions" under Section 3-4 of the Standard Specifications. In a meeting with the Contractor, City Staff acknowledged the "Changed Condition" and authorized the Contractor to proceed under Section 3-4 of the Standard Specifications, which requires the Agency to issue a change oroer to adjust the compensation for the affected work. However, it was not possible to immediately process a change order before the City Council because the locatioJ;l and amount of the unforeseen asphalt and concrete was highly variable and the total cost of the change order could not be estimated. The Contractor and City Staff agreed that Bid Item No. 8 "Trenching, Backfilling and Restoration of Asphalt Concrete Pavement" would be deleted and the work covered would be completed on a "Time and Materials" basis as provided by Section 3-3.2.2 "Basis for Establishing .Costs" of the Standard Specifications. It was further agreed that Colarossi Construction would attempt to complete 300 linear feet per work day of trenching. The Contractor resumed work on 9/8/99. An evaluation by City Staff of the progress of the work was made on 9/22/99 and the rate of trenching was found to be only 188 linear feet per day, substantially less than the performance goal of 300 linear feet per day. City Staff suggested that Colarossi Construction investigate alternative methods of trenc.hing, such as a "rock saw" trencher. Representatives of Colarossi Construction, rejected the suggestion and insisted on conrinnil'1g the work by conventional methods. Each family member performed various tasks, such as laborer, equipment operator, fIagger, truck driver, etc. CoIarossi Construction refused- to bring in additional workers or hire subcontractors to speed up the trenching operation. On September 22, 1999, the City issued a "Stop Work Notice" to CoIarossi Construction. The "Stop Work Notice" was to remain in effect until the Colarossi Construction: 1) Formally requested a "Change in Condition" from the City in writing; and 2) that Colarossi Construction submit a fair and reasonable request for additional performance time and cost based on an economical alternative trenching methodology. On October 19, 1999, a meeting was held with Colarossi Construction and their Attorney, Blake A. Hudson. Henry Empeno, Deputy City Attorney, was in attendance on behalf of the City together with Public Works Staff. It was agreed that CoIarossi Construction would resume work on 11/1/99 with a goal of 300 linear feet per day of trenching. The Contractor would further attempt to complete trenching in the street between "E" Street and Sierra Way before 12/1/99 so that our Highland Avenue Pavement Rehabilitation Project, a separate contract, could proceed. Additionally, City Staff agreed to seek approval to pay for materials that had been delivered but not incorporated in the work. Further, City Staff agreed to consider a claim by tIie Contractor for "lost time cost" due to the "Stop Work Notice". ,---- In the spirit of cooperation with the Contractor and to alIeviate unfair impacts to its material supplier M & M Boys, Inc. the City processed Change Order No. 1 to delete the portion of Section 6-1.06 PAYMENTS, which read as follows: "No partial payment will be made for any materials which are furnished but not incorporated in the work.". The purpose of this change order was to enable payment to the Contractor for materials delivered to the job, but not yet incorporated into the work. This was a "no cost" change order and did not require City Council approval. -~- The Contractor resumed work on 11/1/99 and worked continuously until 12/29/99, when the Contractor without notice to the City, abandoned the Project. The Contractor failed to provide "Time and Material" reports as required by SeCtion 3-3.3 "Daily Reports by Contractor" for anytime during that period. Measurement by City Staff of the work completed during that time period indicated that the Contractor averaged 67 linear feet per day of trenching, backfilling and restoring asphalt concrete pavement. City Staff felt that the Contractor's lack of manpower was the cause of the extremely low rate of progress. On December 28, 1999, City Staff attempted to deliver two checks to Colarossi Construction. One check was to CoIarossi Construction for work completed during the period 8/27/99 through 9/20/99. The other check was a joint check made payable to Colarossi Construction and M & M Boys, Inc. and was intended to pay for grates and irrigation materials stored at M & M Boys' yard in Corona, but not yet incorporated in the work. Larry COlarossi, Sr. refused to accept either of the checks indicating that he felt that approximately $80,000 is owed to him for work completed to date. On December 29, 1999, the Contractor stopped work, without notice to the City, and moved their equipment off the site. City Staff believed they had abandoned the project. A letter was sent on 1/3/2000, by certified mail to Colarossi Construction, its bonding company and ~ts Attorney, Blake A. Hudson advising them that the City considered them in default as defined by Section 6-4 of the Standard Specifications. The Contractor was given five (5) days to respond to the "Notice of Default" letter. The Contractor was advised that if it failed to resume work and diligently pursue the work to completion, the City would declare the Contractor in default, cancel the contract and exclude the Contractor from the project site taking possession of all materials and equipment at the site. On Wednesday, January 12, 2000, without notice to the City, the Contractor returned to the job site and resumed work. City staff has monitored the work since the Contractor's return and the Contractor's perforrnanre still falls far shon of the mutually agree upon goal of 300 linear feet per day. The average rate of progress since returning has been less than 100 linear feet per day. In addition to stopping work and moving off the site on December 29, 1999, Colarossi Construction had reponedly directed its supplier, M & M Boys of Corona, to return to the manufacturer approximately $44,000 worth of tree grates and irrigation material. This action indicated to City Staff that Colarossi Construction was not acting in good faith and had no intention of returning to complete the project. In addition to the substandard performance indicated above, staff has been unable to obtain from Colarossi Construction documents required by HUD for the City to obtain reimbursement under the CDBG Grant. Except for the period 8/27/99 to 9/20/99, the Contractor has failed to submit acceptable Certified Payroll Records for the payroll periods during which contract work was completed. No Certified Payroll records have been submitted for work completed between 11/1/199 and 12/29/99. Without acceptable Certified Payroll Records for all pay periods worked after 9/20/99, Staff is unable to authorize any further payment to Colarossi Construction. City Staff had been in contact with Colarossi's bonding company and has attempted to have the bonding company intervene and influence the Contractor to remedy the deficiencies in his performance to no avail. Consequently, on January 18, 2000, Staff mailed and delivered to C01arossi Construction a notice to suspend work pursuant to Section 6-3 "Suspension of Work" of the Standard Specifications pending resolution of the "Notice of Default" action before the Mayor and Common Council on January 24, 2000. A copy of the letter and all other correspondence between the City and Colarossi Construction or their representatives is attached. , . Therefore, Staff is recommending that the Mayor and Common Council declare Colarossi Construction in default and Cancel the Contract pursuant to Section 6-4 "Default by Contractor" of the Standard Specifications which provides that "The Contract may be canceled by the Board without liability for damage, when in the Board's opinion the Contractor is not complying in good faith, has become insolvent, or has assigned or subcontracted any part of the Work without the Board's consent". Staff contends that the Contractor is not "complying in good faith" as evidenced by the following actions and performance deficiencies: . 1. Abandoned the Work on 12/29/1999 without notice to the City and subsequently returned to work, also without notice to City, on 1/12/2000, but only after receiving a written notice from Staff regarding their abandonment. 2. Directed M & M Boys, Inc. to return approximately $44,000 in tree grates and irrigation supplies which were intended to be included in the work, indicating a lack of commitment to complete the Project even though the City attempted to deliver to them a joint check to pay for the materials. 3. Made no effon to achieve the agreed upon perfonnance goal of 300 linear feet per day of trenching, backfilling and restoration of pavement. 4. Have not submitted proper and complete documentation of Cenified Payroll Repons and Time and Materials repons that are required for the City to pay Contractor and obtain reimbursement from the Community Development Block Grant (CDBG) Fund. Financial 'mpn: There is no immediate financial impact due to the proposed action declaring the default and canceling of the contract. Recommendation: That the Mayor and Common Council declare Colarossi Construction in default and cancel the Contract pursuant to Section 6-4 "Default by Contractor" of the Standard Specifications for project "Installation of Streetscaping on Highland Avenue from "E" Street to Waterman Avenue per Plan No. 9845".