TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Erick Lee, Public Works Director
Gilbert Gamboa, Acting City Engineer
Marzena Laskowska, Senior Civil Engineer
SUBJECT:Title
Consideration of Accepting the Withdrawal of the Bid Submitted by MMC, Inc. for the Pacific Sewer Lift Station Conversion to Gravity Line Project, Resolutions Making a Determination that the Project Qualifies for a Categorical Exemption Pursuant to Section 15302 Class 2 of the State CEQA Guidelines, Approving Plans and Specifications, Awarding a Construction Contract to Environmental Construction, Inc. for $8,619,574, Including Contingency; and Approving the Professional Services Agreement with Butier Engineering, Inc. for $468,137 for Construction Management and Inspection Services (No Budget Impact) (Public Works Director Lee).
A) ACCEPT
B) ADOPT RESOLUTION NOS. 25-0076 AND 25-0077
Body
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RECOMMENDATION:
Staff recommends that the City Council:
1. Accept the request by MMC, Inc. to be relieved of its bid and authorize the City Manager or his/her designee to transmit this staff report as the City’s written report in accordance with Public Contract Code Section 5103.
2. Adopt Resolution No. 25-0076:
a. Make a Determination of Exemption Pursuant to Sections 15302 Class 2 of the State CEQA Guidelines Section for the Pacific Sewer Lift Station Conversion to Gravity Line Project (Pacific Project);
b. Approving the Plans and Specifications for the Pacific Project;
c. Awarding a Construction Contract to the second-lowest bidder, Environmental Construction, Inc., for the Pacific Project for $7,835,574; and
d. Authorizing the City Manager to execute the contract no earlier than July 1, 2025, and authorizing the City Manager and/or his/her designee to approve an extra work contingency up to $784,000.
3. Adopt Resolution No. 25-0077:
a. Approving a professional services agreement with Butier Engineering, Inc. for $468,137 for construction management and inspection services for the Pacific Project; and
b. Authorizing the City Manager and/or his/her designee to execute the agreement.
FISCAL IMPLICATIONS:
Sufficient funds of $8,619,574 are available within the Sewer Fund after July 1, 2025, for the agreement with Environmental Construction, Inc. for the Pacific Project. Sufficient funds of $468,137 are currently available within the Sewer Fund for the agreement with Butier Engineering, Inc. for the Pacific Project. A Project Budget and Expenditures Summary is attached.
BACKGROUND:
The City operates and maintains an extensive sanitary sewer system. The City’s existing wastewater collection system is comprised of a network of gravity sewer pipelines, lift (pump) stations, and force mains. The gravity system consists of approximately 81.6 miles (430,784 linear feet) of pipe and 2,086 manholes and cleanouts. It includes eight pump stations and 5,114 linear feet of associated force mains to lift and convey wastewater from the lower elevation areas to the gravity system. The City’s local sewer system connects to the Los Angeles County Sanitation District system, which provides regional wastewater conveyance and treatment services to the City and neighboring agencies.
In 2010, the City Council adopted a Wastewater Master Plan that analyzed various facilities and operations of the City’s existing wastewater collection system. The Wastewater Master Plan included a list of capital improvement projects that will enhance the system to meet established criteria, properly maintain the system assets, and replace the facilities that have reached the end of their useful lives. The 2010 Wastewater Master Plan identified six sewer lift stations requiring major rehabilitation. After reviewing this plan, staff identified the Voorhees Avenue, Pacific Avenue, and Poinsettia Avenue stations as priorities. The Pacific Avenue Sewer Lift Station was built in the early 1950s and has reached the end of its useful life after nearly 70 years. Once the useful life has been exceeded, these facilities become less reliable, more costly to maintain, and are subject to failure.
In October 2019, the City issued a Request for Proposals (RFP) for the Basis of Design Reports (BODRs) for the sewer lift stations at Voorhees Avenue, Pacific Avenue, and Poinsettia Avenue. An agreement was entered into with Pacific Advanced Civil Engineering (PACE), Inc. for these services. These preliminary engineering studies identified the improvements needed to provide greater emergency storage and pumping capacities and other enhancements for these three sites.
In June 2022, the City Council received the BODRs for all three sewer lift stations and approved the removal of the Pacific Avenue Sewer Lift Station, moving forward with designing a gravity pipeline replacement instead. This option became viable after the Los Angeles County Sanitation District constructed its sewer gravity line in 2000. At this time, City Council also approved a professional services agreement to design the improvements for the Pacific Project (and the Voorhees Avenue sewer lift project). By September 2024, the Pacific Project had reached 100% design completion and was ready for bidding.
Lastly, the Pacific Project required extensive coordination with the Southern California Gas Company (SoCal Gas). In April 2024, SoCal Gas relocated its distribution gas line along Pacific Avenue from Valley Drive to 27th Street, including house laterals. Additionally, in December 2024, SoCal Gas completed the relocation of its transmission gas line along Ardmore Avenue from Pacific Avenue to Laurel Avenue as part of the Pacific Project.
DISCUSSION:
The Pacific Project involves the demolition of the existing sewer lift station in front of 2308 Pacific Avenue. The project will install approximately 800 feet of 12-inch vitrified clay pipe No-Dig gravity pipeline via trenchless technology with five new manholes from 2308 Pacific Avenue to Ardmore Avenue at the Pacific Avenue intersection, where the new gravity line will connect to the existing Los Angeles County Sanitation District gravity sewer trunk line. This sewer lift station replacement project was prioritized in the Sewer Master Plan due to its age and capacity deficiencies. The major components of the project include:
• Construction of a new 12-inch gravity line.
• Construction of five new manholes.
• 70-foot-deep excavation connection to the existing Los Angeles County Sanitation District gravity sewer trunk line.
• Demolition of the existing sewer lift station and appurtenances.
Competitive Bidding
In November 2024, bids for the Pacific Project were solicited on a competitive basis, in conformance with provisions of the California Public Contract Code. The Project was advertised in The Beach Reporter and on the City of Manhattan Beach Public Works Department Bid Opportunities webpage and the City’s Bid Portal with PlanetBids (an online service that connects vendors, suppliers, and contractors to government procurement opportunities). In addition, to allow for adequate examination of the project site before bidding, staff conducted an on-site pre-bid meeting for contractors, material suppliers, and interested parties.
The Engineer’s Estimate for this project was $5,065,720. Seven bids were received on February 12, 2025, as follows:
CONTRACTOR TOTAL BID AMOUNT
MMC, Inc. $ 4,947,300
Environmental Construction, Inc. $ 7,835,574
Mike Bubalo Construction Co., Inc. $ 7,996,000
Mladen Buntich Construction Co., Inc. $ 8,589,350
Blois Construction, LLC $ 9,855,499
Steve P. Rados, Inc. $10,706,000
Mike Prlich and Sons, Inc. $11,866,146
Bid Withdrawal
On Tuesday, February 18, 2025, staff received a written notice from MMC, Inc. requesting their bid be withdrawn from consideration due to a clerical error in their bid. MMC, Inc. claims that an error occurred during the transposition of one bid item amount from their worksheet to the online bid document. This error resulted in the bid item amount being entered at 77% lower than what they intended, leading to a $2,000,000 discrepancy. California Public Contract Code Sections 5101, 5103, and 5106 provide criteria under which a prime contractor may request to have their bid withdrawn. The clerical error by the contractor on the bid document falls within these criteria. To verify the MMC, Inc. claim, staff requested additional information and held a meeting with the contractor. MMC, Inc. provided the requested worksheets showing their intended bid amount. The City Attorney’s Office reviewed the bid withdrawal request. The letter and additional information supported MMC, Inc.'s claim of a clerical error. Therefore, staff recommends that the City Council permit the withdrawal of the bid submitted by MMC, Inc. without pursuing their bid surety.
2nd Lowest Bidder - Environmental Construction, Inc.
As a result of the withdrawal of the bid by MMC, Inc., staff reviewed the bid package from the second-lowest bidder, Environmental Construction, Inc. The bid was analyzed for completeness, accuracy, etc., and was found to be responsive. Representatives of agencies where work has been performed by Environmental Construction, Inc. have indicated that the work performed was comparable to the Pacific Project scope of work and completed in a satisfactory manner. The current project was discussed with representatives of the firm, and they expressed confidence in their bid and a desire to perform the work in a timely and acceptable manner. The firm provided a letter extending their bid and bid bonds until September 10, 2025.
Therefore, staff recommends that the City Council award a Construction Agreement to Environmental Construction, Inc. for $7,835,574 and authorize the City Manager and/or his or her designee to approve change orders up to $784,000 (10% of construction contract cost) for additional work if necessary.
Due to the escalation of construction costs across the industry, the restrictive work hours due to the project location, and overall risk assessment by all bidders, the second-lowest bid received was 55% higher than the Engineer’s Estimate of $5,065,720 utilized to establish the project’s budget. The Pacific Project will receive additional budget from the Sewer Fund in the adopted 2026-2030 Capital Improvement Plan. Therefore, staff recommends executing the contract agreement after July 1, 2025.
The Notice to Proceed to fulfill preconstruction requirements and order materials will be issued as soon as the Construction Contract is executed, which will be no earlier than July 1, 2025. Construction is anticipated to start in fall 2025 and end in fall 2026. Allowable construction hours will be from 7:30 AM to 4:30 PM, Monday through Friday, with reduced hours during lane closures for work in the roadway. The contractor shall provide traffic control plans for City Traffic Engineer review and approval before the implementation of any lane closures or detours by the contractor.
Construction Management and Inspection Services
The City issued a Request for Proposals on November 20, 2024, seeking full-time construction management and inspection services for the Pacific Project. The scope of work includes:
• Ensuring the contractor complies with the plans, specifications, and applicable standards;
• Performing field project oversight;
• Documenting the daily work performed by the contractor;
• Verifying the completed work; monitoring, providing supporting documentation, and inspecting any additional work performed; and
• Preparing a list of items for correction.
Five proposals were received by the January 29, 2025 deadline. An evaluation committee of City staff evaluated these proposals according to the following selection criteria:
• Demonstrated understanding of the Scope of Services requested;
• Firm qualifications and experience performing similar work;
• Project/Construction management methods and quality control;
• Qualifications and experience of key personnel; and
• Consultant’s familiarity with local (sensitivity) conditions.
Based on the selection criteria, Butier Engineering, Inc. submitted the most responsive and comprehensive proposal. The assigned staff has excellent experience on similar projects, identified and understands the key project issues, and proposed an appropriate level of staffing for the size and complexity of the project. Butier Engineering, Inc.’s methodology for executing the scope of work was clear and organized. Per Government Code Section 4526, Professional Services Consultants are selected based on qualifications. Therefore, staff recommends that the City Council approve a construction management and inspection services agreement for $468,137 with Butier Engineering, Inc., for the Pacific Project.
PUBLIC OUTREACH:
A community meeting for the Project was held on December 20, 2024 at the Joslyn Community Center. Additionally, the Project was presented to the Parking and Public Improvements Commission (PPIC) on March 28, 2024. Direct outreach was made with the property owner at 2513 Pacific Avenue.
Furthermore, once the project progresses to the construction phase, public outreach will include construction update notices, message boards, social media coordination, and updates on the City’s website.
ENVIRONMENTAL REVIEW:
The preliminary engineering BODR included a pre-screening Initial Study, prepared in accordance with the California Environmental Quality Act (CEQA), to disclose and evaluate short-term construction-related and long-term operational impacts of the Pacific project. Based on the Pre-Screening Initial Study analysis, no potentially significant impacts would occur from the proposed project.
Given that the existing conditions and project scope have not changed since the time the pre-screening Initial Study was conducted, the determination of a Categorical Exemption pursuant to Section 15302 Class 2 of the State CEQA Guidelines for replacement or reconstruction of existing facilities within the same footprint, with the same proposed usage, and with same capacity is still appropriate. Thus, no further environmental review is necessary.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Bid Withdrawal Request - MMC, Inc.
2. Resolution No. 25-0076
3. Letter Extension of Bid and Bid Bond - Environmental Construction, Inc.
4. Agreement - Environmental Construction, Inc.
5. Resolution No. 25-0077
6. Agreement - Butier Engineering, Inc.
7. Plans and Specifications (Web-Link Provided)
8. Budget and Expenditure Summary
9. Location Map