ITEM 7.5 East Oxidation Ditch contracteF Ot�co
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Lori Johnson, City Administrator
May 23, 2016
PRESENTER(s):
REVIEWED BY:
ITEM #:
Scott Schaefer, AE2S
Scott Schaefer, AE2S
7.5
AGENDA ITEM DETAILS
RECOMMENDATION:
Recommend award of East Oxidation Ditch contract to Gridor Construction.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
No
BACKGROUND/JUSTIFICATION:
Bids for the East Oxidation Ditch project were received on Thursday, May 19, 2016. Only one bid was
received. Attached is Scott Schaefer's summary and analysis of the bid results.
SUPPORTING DOCUMENTS: X ❑ ATTACHED Xo NONE
• Otsego East WWTF Aerator Upgrade Bid Summary from Scott Schaefer, AE2S
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to award construction contract to Gridor Construction for $461,200 and to approve Amendment
1 to the Owner -Engineer agreement (East WWTF, March 15, 2016) pending City Attorney review of the
draft amendment.
BUDGET INFORMATION
FUNDING BUDGETED: X o YES
Waste Water Fund
❑ NO
Otsego East WWTF Aerator Upgrade
Bid Summary
City Council Meeting, May 23rd, 2016
I. General Summary Bid Opening
Bids were opened May 19th, 2016 for the East WWTF Oxidation Ditch
Improvements project. The project received moderate initial interest from prospective
bidders, but only one bid was received. Of the three anticipated bidders, one likely
dropped out due to winning a project of approximately $40MM to rehabilitate the
filter plant at Minneapolis Water Works the previous week, and the cause of the other
non -bid is unknown at this time. Gridor Construction was the apparent low bidder and
is also the General Contractor for the on -going West WWTF Digester Improvements
project. The bid tabulation is attached. Note that Gridor was also the prime contractor
for the original construction of the East WWTF.
The bid was higher than the Opinion of Cost, and this issue was thoroughly explored
with Gridor. A number of causes for the difference were identified, which all
increased the bid amount. Typically, there are differences that both increase and
decrease the bid amount, and in this case, the significant item that would have
decreased the bid amount was the favorable bids for the aerator equipment, which
were opened via a pre -procurement bid on April 21St ($134,694 low bid versus a
$160,000 opinion of cost). Bid contingencies were reduced due to the pre -procured
equipment, which further contributed to the spread. After discussion with Gridor and
analysis of the bid, AE2S has concluded that an immediate re -bid or delaying the
project to re -bidding is unlikely to substantially change the project cost.
The East WWTF aeration improvements have become higher than initially budgeted
due primarily to increases in the scope of the project between initial budgeting and
design/bidding. Within an overall context of 2016 wastewater facility improvements,
the costs are in line with the budget as shown on the attached summary table despite
scope increases on both projects.
AE2S recommends awarding the project to Gridor Construction.
II. Request for Council Action
a. The following council actions are requested:
i. Award of construction contract in the amount of $461,200. Following
Council approval, the Notice of Contract Award will be issued, and
construction contracts will be prepared and executed pending review and
approval of bonds and other relevant information.
ii. Approval of Amendment 1 to the Owner -Engineer agreement (East
WWTF, March 15, 2016) pending City Attorney review of the draft
amendment. Contract amendment amounts are shown on the attached
Summary Table.
III. Subcontractor Relationship Notification
a. The electrical subcontractor for Gridor Construction was indicated to be EIM,
which is a subsidiary of AE2S Construction LLC (ACL). AE2S and ACL are
separate companies wholly owned by Advanced Elements, Inc. The relationship
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k ) Think Big. Go Beyond.
Otsego East WWTF Aerator Upgrades
Page 2 of 2
was previously reviewed by the City Attorney for the West WWTF Digester
Improvements project, and the attached supplemental representation and
agreement was prepared and executed.
IV. Attachments
a. Signed Bid Tab
b. Summary Table with East and West WWTF Projects
c. AE2S-EIM Representation and Agreement
4
01
i ) Think Big. Go Beyond.
East WWTF Oxidation Ditch Improvements
Otsego, MN
P05409-2015-005
Bid Opening 10:00 AM, May 19, 2016
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General Construction
Contractor
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$461,200.00
Engineer's Estimate I I I I I I I 1 1 $360, 000.00 1
Respectfully Submitted by:
Scott Schaefer, PE
Advanced Engineering and Environmental Services, Inc.
Water Tower Place Business Center
6901 E Fish Lake Rd Ste 184
Maple Grove, MN 55369
Tel: 763-463-5036
Fax: 763-463-5037
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www.ae2s.com
REPRESENTATION AND AGREEMENT OF ADVANCED ENGINEERING AND ENVIRONMENTAL SERVICES, INC.
Advanced Engineering and Environmental Services, Inc. (AE2S) has entered into a contract with the City
of Otsego, Wright County, Minnesota (City) for the provision of professional services regarding certain
upgrades to the City's Wastewater Treatment Facility. Part of AE2S's responsibility is for construction
observation of the work done to upgrade the facility.
AE2S assisted the City in advertising for bids for the Project. The apparent low bidder has identified a
subcontractor for electrical work as AE2S Construction, LLC d/b/a EIM (EIM). The possibility that EIM
may be a chosen subcontractor of the general contractor's bidding on the Project was brought to the
City's attention prior to bids being let. AE2S, upon receipt of bids also promptly notified the City that
EIM was listed as the apparent low bidder for electrical contractor work.
EIM is a company separate from Advanced Engineering and Environmental Services, Inc. but which is
wholly -owned by the same holding company Advanced Elements, Inc.
In order to provide assurance to the City that AE2S will oversee the work done by EIM pursuant to the
terms of its professional services agreement with the City, AE2S hereby states and agrees as follows:
1. That there is sufficient separation between the two companies so as not to impair AE2S's ability
to review and recommend corrections (if necessary) regarding the work of EIM on the Project.
2. That EIM has not been provided from AE2S any additional information not provided to other
subcontractors that would unfairly benefit EIM in making a bid to the general contractor.
3. That AE2S will fairly and impartially review EIM's work during the Project.
4. In the event that any issue arises regarding EIM's work or AE2S's role as project engineer that
could be perceived as a conflict of interest on the part of either entity, that issue will be
immediately brought to the City's attention.
5. In the event that problems or issues arise with the work undertaken by EIM or AE2S's services
related to EIM which the City, at its sole discretion, determines raise issues of, objectivity; the
City may hire other professionals to undertake the review or observation of EIM work; and ther
costs of any additional professionals hired by the City will be borne by AE2S, up to the amount
of AE2S's electrical construction and instrumentation and control administration fee. AE2S
agrees that it will abide by and institute any findings or recommendations made by said third
party professionals regarding EIM work on the Project.
Dated: 3 3
AdvancedE in ering vironmental Services, Inc.
y:
Grant L. Meyer, P.E.
Its Client Program Leader
Advanced Engineering and Environmental Services, Inc.
Water Tower Place Business Center • 6901 East Fish'Lake Road Suite 184 • Maple Grove, MN 55369 • (t) 763-463-5036 • (fl 763-463-5037