Title:
Title
Suspend Competitive Bidding: Sacramento Valley Station Suite 100 Tenant Improvement Project (Two-Thirds Vote Required)
End
FileID
File ID: 2019-01695
Location
Location: District 3, 401 I Street, Suite 100
Recommendation:
Recommendation
Pass a Motion by two-thirds vote: 1) determining that suspending competitive bidding is in the best interests of the City for the Sacramento Valley Station Suite 100 Tenant Improvement Project; 2) suspending competitive bidding; and 3) authorizing the use of a design-build project delivery method involving a Request for Proposal, qualifications based-solicitation, for the design build delivery of this project.
Contact: Richard Sanders, Facilities & Real Property Superintendent (916) 808-7034; James Christensen, Facilities Manager (916) 808-5863, Department of Public Works
Body
Presenter: None
Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: Since late 2016, the City has marketed the vacant retail and office space within the Sacramento Valley Station (SVS) for lease. Suite 100 is located on the ground floor and consists of approximately 7,275 square feet of unfinished office space. The State of California Department of General Services (State DGS) has selected Suite 100 as a possible location for the newly created State of California Office of Digital Innovation (ODI). ODI is tasked with improving the technology within existing California state agencies and has an annual budget of $14.6 million. In addition, ODI will be hiring 50 new full-time, highly skilled employees. State DGS and City staff have had detailed discussions regarding what would be required in order to enter into a lease between State DGS and the City for Suite 100.
State DGS has provided the City with its parameters and requirements for the tenant improvements needed within Suite 100 in order to accommodate ODI. State DGS requires the delivery of a “turn-key” office space based on their requirements, with occupancy to begin by November 1, 2020. This will require the City to construct the tenant improvements within Suite 100. In order to meet the State DGS requirements and timeline, staff is recommending suspending competitive bidding and utilizing the design-build method of project delivery.
If City Council elects to suspend competitive bidding and utilize the design-build method of delivery, the City will issue a Request for Proposals (RFP) for contractors which will include a fee proposal for design-build services at a guaranteed maximum price. The results of the RFP process will inform both the City and State DGS as to the total cost of the Project. This will enable both parties to negotiate the terms of a lease for Suite 100, which will include details as to which aspects of the tenant improvement costs each party will be responsible for.
Staff shall review all proposals and return to City Council at a later date for approval of the recommended proposal prior to entering into any contract for construction, approval of a lease with State DGS, and transferring of any funds required to complete the project.
Policy Considerations: The recommendation in this report is in accordance with City Code Section 3.60.170(D), which states that the restrictions and provisions of City Code requiring the award of contracts by competitive bidding shall not apply when, upon two-thirds vote of the City Council, it is determined that it is in the best interests of the City to suspend competitive bidding for any contract.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns the suspension of competitive bidding and authorization to issue an RFP for construction services. The activities resulting from this action will not have any effect on the environment and are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines (Title 14 Cal. Code Reg. §15000 et seq.). Section 15061(b)(3), states that a project is exempt from CEQA if the activity is covered by the commonsense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Prior to approval of contracts for construction services appropriate environmental review, in compliance with CEQA, will be completed.
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: Suspending competitive bidding is recommended as being in the best interests of the City to allow the use of the design-build alternative project delivery method. This project delivery method has proven to be successful in delivering construction projects on schedule and within budget. The design-build method is recognized as providing the following additional benefits:
• Design-build is a faster delivery method than the traditional design-bid-build method.
• It allows the contractor to hire the design team and determine the construction details & methods and complete the constructability reviews early in the process.
• It provides a smoother construction environment and reduces the potential for change orders.
The request for suspension of competitive bidding and use of the Design-Build method of procurement would address the following critical issues of the Project:
1. The critical time constraint for designing and constructing tenant improvements to the satisfaction of the State of California Department of General Services.
2. Retaining a qualified contractor with knowledge and experience in designing and constructing tenant improvements following the parameters required by the State of California Department of General Services.
3. Potential to recognize cost reductions over the low-bid system by working through the design and constructability at the same time and structuring the plans and specifications in advance rather than relying on assumptions typically found in the low-bid system. The low-bid system increases the possibility of change orders due to such assumptions.
4. The Sacramento Valley Station is a registered historic landmark, and expertise in construction projects involving historic structures is paramount due to the unique nature of the building materials and systems not typically found in modern buildings.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.