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03 Staff Report - Prospective Builders for PPW Projectstr3 N 0 MEETING DATE: 3/3/08 ITEM NO: ~0S Ga os COUNCIL/AGENCY AGENDA REPORT DATE: FEBRUARY 22, 2008 TO: MAYOR AND TOWN COUNCIL/ CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: ORRY P. KORB, TOWN ATTORNEY/GENERAL COUNSEL SUBJECT: ADOPT A JOINT RESOLUTION PURSUANT TO PUBLIC CONTRACT CODE SECTION 20101 ADOPTING A UNIFORM SYSTEM OF RATING BIDDERS AND AN APPEAL PROCESS FOR THE PRE-QUALIFICATION OF PROSPECTIVE BIDDERS FOR PUBLIC WORKS PROJECTS RECOMMENDATION: Adopt a joint resolution pursuant to Public Contract Code section 20101 adopting a uniform system of rating bidders and an appeal process for the pre-qualification of prospective bidders for public works projects. DISCUSSION: Staff is beginning the process to select a contractor for the Police Operations Building. A contractor cannot be selected until the construction documents are completed and all necessary permits have been obtained. However, in 1999, the California Legislature enacted Public Contract Code section 20101, which allows public agencies to pre-qualify contractors to bid on public works construction projects. This allows staff to receive bids from general contractors who have been screened and determined to have a proven track record and capacity to undertake the project. Under Public Contract Code section 20101, public agencies that establish a prequalification procedure must adopt the following: PREPARED BY: ORRY P. KORB Town Attorney/General Counsel N:AMGR\AdminWorkFiles\Town Attorneffouncil Reports\3-3-08 Bidder Pre-Qualifieation.doc Reviewed by: ;S Assistant Town Manager/Deputy Director wn ft Hager/Executi,ae Director Counsel Clerk Administrator/Secretary Finance _-Community Development I- I PAGE 2 MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: ADOPT A JOINT RESOLUTION PURSUANT TO PUBLIC CONTRACT CODE SECTION 20101 ADOPTING A UNIFORM SYSTEM OF RATING BIDDERS AND AN APPEAL PROCESS FOR THE PRE-QUALIFICATION OF PROSPECTIVE BIDDERS FOR PUBLIC WORKS PROJECTS FEBRUARY 22, 2008 1) A standardized questionnaire and form; 2) A uniform system of rating bidders on objective criteria, and 3) An appeal procedure. As part of Assembly Bill 574, under which Public Contract Code section 20101 was enacted, the State of California Department of Industrial Relations ("DIR") was required to establish model pre-qualification guidelines for public agencies. These documents are the basis of the attached rating and appeal procedures. The standardized questionnaire requests basic information about the business entity and its personnel, its California contractor's license status and its liability and worker's compensation insurance. A reviewed or audited financial statement also must be provided. Under the proposed appeal process, appeals would be heard by the Town Manager (or his designee) in an informal hearing process. CONCLUSION: The proposed pre-qualification process will help minimize financial risk to the Town faced by general contractors who lack the quality, fitness and capacity to undertake the project. The procedures will help ensure that the Police Operations Building is constructed by a reputable and qualified contractor at the best possible price. FISCAL IMPACT: None. Attachment: Joint Resolution Establishing Pre-Qualification Process and Appeals Procedures RESOLUTION RESOLUTION OF THE TOWN COUNCIL/REDEVELOPMENT AGENCY OF THE TOWN OF LOS GATOS PURSUANT TO PUBLIC CONTRACT CODE SECTION 20101 ADOPTING A UNIFORM SYSTEM OF RATING BIDDERS AND AN APPEAL PROCESS FOR THE PRE-QUALIFICATION OF PROSPECTIVE BIDDERS FOR PUBLIC WORKS PROJECTS WHEREAS: A. The Town is subject to competitive bidding requirements for all public works projects valued at or in excess of $5,000. B. Section 20101 of the California Public Contracts Code authorizes the Town to engage in a process of pre-qualifying prospective bidders for public works construction projects. C. Section 20101 of the California Public Contracts Code requires that any agency requiring prospective bidders to complete and submit questionnaires and financial statements as part of a pre-qualification process must also adopt and apply a uniform system based on objective criteria for rating bidders on the basis of the completed questionnaires and financial statements, in order to determine both the minimum requirements permitted for qualification to bid, and the type and size of the contracts upon which each bidder shall be deemed qualified to bid. D. Section 20101 of the California Public Contracts Code further requires that any agency employing procedures for pre-qualification of prospective bidders also establish a process that will allow prospective bidders to dispute their proposed pre-qualification rating prior to the closing time for receipt of bids. E. The Town had embarked on a project to remodel an existing commercial structure at 15900 Los Gatos Boulevard for use as a new Police Operations Building, a specialty public works project demanding the skills, knowledge and financial soundness of a public works contractor experienced in constructing similar projects. F. The Town Council/Redevelopment Agency desires to adopt a uniform rating system and appeals process in order to use the pre-qualification process authorized by Section 20101 of the California Public Contracts Code for the Police Operations Building public works construction project. Page 1 of 2 NOW, THEREFORE, BE IT RESOLVED THAT the Town Council/Redevelopment Agency hereby: I. Approves and adopts the uniform system based on objective criteria for rating bidders on the basis of the completed questionnaires and financial statements, attached hereto, and by this reference, incorporated herein as Exhibit "A" to this resolution. 2. Approves and adopts the process to allow prospective bidders to dispute their proposed pre-qualification rating prior to the closing time for receipt of bids, attached hereto, and by this reference, incorporated herein as Exhibit "B" to this resolution. PASSED AND ADOPTED at a regular meeting of the Town Council/Redevelopment Agency of the Town of Los Gatos held on the day of , 2008 by the following vote: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR/CHAIR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR/SECRETARY OF THE REDEVELOPMENT AGENCY OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA N:AMGR\AdminWorkFiles\Town Attorney\Council Reports\3-3-08 Bidder Pre-Qualification Resolution.doc Page 2 of 2 EXHIBIT A PROCEDURES FOR RATING PROSPECTIVE BIDDERS FOR PUBLIC WORKS PROJECTS A LIST OF THE SCORABLE QUESTIONS AND THE SCORING INSTRUCTIONS The scorable questions arise in three different areas: (I) History of the business and organizational performance; (II) Compliance with occupational safety and health laws, workers' compensation and other labor legislation; and (III) Completion of recent projects and quality of performance. The interview questions (interviews by the public agency of project managers on projects completed recently by the contractor) are included in group III. In a pre-qualification procedure for a she project, this last category would also include a scoring of the number of recently completed projects that are similar to the project on which pre- qualification is at issue. However, scoring linked to the similarity of past projects would probably not be possible or useful if the public agency as part of a procedure to pre- qualify contractors for an extended period. Note: Not all questions in the questionnaire are scorable; some questions simply ask for information about the contractor firm's structure, officers and history. This document includes only those questions that are "scorable." The question numbers in this document are the numbers used in the questionnaire. Thus, the questions included here begin with question number 6, and there are a few breaks in the numerical sequence. The Scores Needed for Prequalification To prequalify, a contractor would be required to have a passing grade within each of the three large categories referred to above. For Section I, "History of the business and organizational performance," DIR recommends use of a passing score of 57 on this portion of the questionnaire (of a maximum score of 76 on this portion of the questionnaire). For Section II, Compliance with occupational safety and health laws workers' compensation and other labor legislation DIR recommends use of a passing score of 38 on this portion of the questionnaire (of a maximum score of 53 points on this portion of the questionnaire). Section III, Completion of recent projects and quality of performance, includes a series of interview questions, and may also include questions about recently completed (public or private) construction projects. For the interview questions, DIR recommends that a public agency interview project managers for the. owners of two completed projects. DIR recommends a scoring system that would allow a maximum score of 120 points for each interview. For these questions, DIR recommends qualification for a contractor whose score on each of two interviews is 72 points or more; a denial of pre-qualification for a contractor whose score on either interview is less than 55 points; and an additional interview with another reference if the score resulting from one interview is between 55 points and 72 points. DIR makes no recommendation about how to score a contractor's answers about recently completed past projects. Because of the wide range of projects that a public agency may be planning, and the similarly wide range in the skills, abilities, and experience that a public agency will consider most it i ortant for a pending project, it is impossible to propose a useful model scoring system to apply to the answers given about a contractor's completed projects. Questions about History of the Business and OrLyanizational Performance (16 questions) 1. How many years has your organization been in business in California as a contractor under your present business name and license number? years 3 years or more = 2 points 4 years = 3 points 5 years = 4 pts. 6 years or more = 5 points 2. Is your firm currently the debtor in a bankruptcy case? ❑ Yes ❑ No "No" = 3 points" "Yes" = 0 points 3. Was your firm in bankruptcy any time during the last five years? (This question refers only to a bankruptcy action that was not described in answer to question 7, above). ❑ Yes ❑ No "No" = 3 points" "Yes" = 0 points 4. Has any CSLB license held by your firm or its Responsible Managing Employee (RME) or Responsible Managing Officer (RMO) been suspended within the last five years? ❑ Yes ❑ No No = 5 points Yes = 0 points 5. At any time in the last five years, has your firm been assessed and paid liquidated damages after completion of a project, under a construction contract with either a public or private owner? ❑ Yes ❑ No No projects with liquidated damages of more than-$50,000, or one project with liquidated damages = 5 points. Two projects with liquidated damages of more than $50, 000 = 3 points Any other answer: no points 6. In the last five years has your firm, or any firm with which any of your company's owners, officers or partners was associated, been debarred, disqualified, removed or otherwise prevented from bidding on, or completing, any government agency or public works project for any reason? NOTE: "Associated with" refers to another construction firm in which an owner, partner or officer of your firm held a similar position, and which is listed in response to question 1c or Id on this form. ❑ Yes ❑ No No = 5 points Yes = 0 points 7. In the last five years, has your firm been denied an award of a public works contract based on a finding by a public agency that your company was not a responsible bidder? ❑ Yes ❑ No No = 5 points Yes = 0 points NOTE: The following two questions refer only to disputes between your firm and the owner of a project. You need not include information about disputes between your firm and a supplier, another contractor, or subcontractor. You need not include information about "pass-through" disputes in which the actual dispute is between a sub-contractor and a project owner. Also, you may omit reference to all disputes about amounts of less than $50,000. 8. In the past five years, has any claim against your firm concerning your firm's work on a construction project, been filed in court or arbitration? ❑ Yes ❑ No If the firm's average gross revenue for the last three years was less than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1 such instance. 3 points for "Yes" indicating 2 such instances. 0 points for "Yes" if more than 2 such instances. If your firm's average gross revenue for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances. 3 points for "Yes" indicating either 4 or 5 such instances. 0 points for "Yes" if more than 5 such instances. In the past five years, has your firm made any claim against a project owner concerning work on a project or payment for a contract, and filed that claim in court or arbitration? ❑ Yes ❑ No If your firm's average gross revenues for the last three years was less than $50 million scoring is as follows: 5 points for either "No" or "Yes" indicating I such instance. 3 points for "Yes" indicating 2 such instances. 0 points far "Yes" if more than 2 such instances. If your firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances. 3 points for "Yes" indicating either 4 or 5 such instances. 0 points for "Yes" if more than 5 such instances. 10. At any time during the past five years, has any surety company made any payments on your firm's behalf as a result of a default, to satisfy any claims made against a performance or payment bond issued on your firm's behalf in connection with a construction project, either public or private? ❑ Yes ❑ No 5 points for either "No" or "Yes" indicating 1 such claim. 3 points for "Yes" indicating no more than 2 such claims Subtract f ve points for "Yes" if more than 2 such claims 11. In the last five years, has any insurance carrier, for any form of insurance, refused to renew the insurance policy for your firm? ❑ Yes ❑ No 5 points for either "No" or "Yes" indicating 1 such instance- 3 points for "Yes" indicating 2 such instances. O points for "Yes" or if more than 2 such instances. 12. Has your firm, or any of its owners, officers, or partners ever been found liable in a civil, suit, or found guilty in a criminal action, for making any false claim or material misrepresentation to any public agency or entity? ❑ Yes ❑ No No = 5 points Yes= subtract 5 points 13. Has your firm, or any of its owners, officers or partners ever been convicted of a crime involving any federal, state, or local law related to construction? ❑ Yes ❑ No No = 5 points Yes= subtract 5 points 14. Has your firm or any of its owners, officers or partners ever been convicted of a federal or state crime of fraud, theft, or any other act of dishonesty? ❑ Yes ❑ No No = 5 points Yes = subtract 5 points 15. If your firm was required to pay a premium of more than one per cent for a performance and payment bond on any project(s) on which your firm worked at any time during the last three years, state the percentage that your firm was required to pay. You may provide an explanation for a percentage rate higher than one per cent, if you wish to do so. '5 points if the rate is no more than one per cent 3 points if the rate was no higher than 1.10 per cent 0 points for any other answer: 16. During the last five years, has your firm ever been denied bond credit by a surety company, or has there ever been a period of time when your firm had no surety bond in place during a public construction project when one was required? ❑ Yes ❑ No No = 5 points Yes = O points Questions about compliance with safety, workers compensation, prevailing waLre and apprenticeship laws. (11 questions) Has CAL OSHA cited and assessed penalties against your firm for any "serious," "willful" or "repeat' 'violations of its safety orhealth regulations in the past five years? Note: If you have fled an appeal of a citation and the Occupational Safety and Health Appeals Board has not yet ruled on your appeal, you need not include information about it. ❑ Yes ❑ No If the firm's average gross revenues for the last three years was less than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1 such instance. 3 points for "Yes" indicating 2such instances. 0 points for "Yes" if more than 2 such instances. If the firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances. 3 points for "Yes" indicating either 4 or 5 such instances. 0 points for "Yes" if more than 5 such instances. Has the federal Occupational Safety and Health Administration cited and assessed penalties against your firm in the past five years? Note: If you have filed an appeal of a citation and the appropriate appeals Board has not yet ruled on your appeal, you need not include information about it. ❑ Yes ❑ No If yes, attach a separate signed page describing each citation. If the firm's average gross revenues for the last three years was less than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1 such instance. 3 points for "Yes" indicating 2 such instances. 0 points for "Yes" or if more than 2 such instances. If the firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances. 3 points for "Yes" indicating either 4 or 5 such instances. 0 points for "Yes" if more than 5 such instances. Has the EPA or any Air Quality Management District or any Regional Water Quality Control Board cited and assessed penalties against either your firm or the owner of a project bn which your firm was the contractor, in the past five years? NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet ruled on your appeal, or if there is a court appeal pending, you need not include information about the citation. ❑ Yes ❑ No If the firm's average gross revenues for the last three years was less than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1 such instance. 3 points for "Yes" indicating 2 such instances. 0 points for "Yes" or if more than 2 such instances. If the firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances. 3 points for "Yes" indicating either 4 or 5 such instances. 0 points for "Yes" if more than 5 such instances. 4. How often do you require documented safety meetings to be held for construction employees and field supervisors during the course of a project? 3 points for an answer of once each week or more often. 0 points for any other answer 5. List your firm's Experience Modification Rate (EMR) (California workers' compensation insurance) for each of the past three premium years: NOTE: An Experience Modification Rate is issued to your firm annually by your workers' compensation insurance carrier. Current year: Previous year: Year prior to previous year: If your EMR for any of these three years is or was 1.00 or higher, you may, if you wish, attach a letter of explanation. NOTE: An Experience Modification Rate is issued to your firm annually by your workers' compensation insurance carrier. 5 points for three-year average EMR of. 95 or less 3 points for three-year average of EMR of more than .95 but no more than 1.00 0 points for any other EMI? 6. Within the last five years, has there ever been a period when your firm had employees but was without workers' compensation insurance or state-approved self-insurance? ❑ Yes ❑ No. 5 points for either "No" or "Yes" indicating 1 such instance. 0 points for any other answer. Has there been more than one occasion during the last five years on which your firm was required to pay either back wages or penalties for your own firm's failure to comply with the state's prevailing wage laws? ❑ Yes ❑ No NOTE: This question refers only to your own firm's violation of prevailing wage laws, not to violations of the prevailing wage laws by a subcontractor. If your firrri's average gross revenues for the last three years was less than $50 million, scoring is as follows: 5 points for either "No,"or "Yes" indicating either I or 2 such instance. 3 points for "Yes" indicating 3 such instances. 0 points for "Yes" and more than 3 such instances. If your firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating no more than 4 such instances. 3 points for "Yes" indicating either 5 or 6 such. instances. 0 points for "Yes" and more than 6 such instances. During the last five years, has there been more than one occasion on which your own firm has been penalized or required to pay back wages for failure to comply with the federal Davis-Bacon prevailing wage requirements? ❑ Yes ❑ No If your firm's average gross revenues for the last three years was less than $50 million, scoring is as follows: 5 points for either "No," or "Yes" indicating either I or 2 such instance. 3 points for "Yes" indicating 3 such instances. 0 points for "Yes" and more than 3 such instances. If your firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating no more than 4 such instances. 3 points for "Yes" indicating either 5 or 6 such instances. 0 points for "Yes" and more than 6 such instances. Provide the name, address and telephone number, of the apprenticeship program sponsor(s) (approved by the California Division of Apprenticeship Standards) that will provide apprentices to your company for use on any public work project for which you. are awarded a contract by [Public Entity]. 5 points if at least one approved apprenticeship program is listed. 0 points for any other answer. 10. If your firm operates its own State-approved apprenticeship program: (a) Identify. the craft or crafts in which your firm provided apprenticeship training in the past year. (b) State the year in which each such apprenticeship program was approved, and attach evidence of the most recent California Apprenticeship Council approval(s) of your apprenticeship program(s). (c) State the number of individuals who were employed by your firm as apprentices at any time during the past three years in each apprenticeship and the number of persons who, during the past three years, completed apprenticeships in each craft while employed by your firm. 5 points if one or more persons completed an approved apprenticeship while employed by your firm. 0 points if no persons completed an approved apprenticeship while employer by your firm. 11. At any time during the last five years, has your firm been found to have violated any provision of California apprenticeship laws or regulations, or the laws pertaining to use of apprentices on public works? NOTE: You may omit reference to any incident that occurred prior to January 1, 1998 if the violation was by a subcontractor and your firm, as general contractor on a project, had no knowledge of the subcontractor's violation at the time they occurred. ❑ Yes ❑ No. If yes, provide the date(s) of,such findings, and attach copies of the Department's final decision(s). If your firm's average gross revenues for the last three years was less than $50 million, scoring is as follows: S points for either "No,"or "Yes" indicating either I or 2 such instance. 3 points for "Yes" indicating 3 such instances. 0 points for "Yes" and more than 3 such instances. If your firm's average gross revenues for the last three years was more than $50 million, scoring is as follows: 5 points for either "No" or "Yes" indicating no more than 4 such instances. 3 points for "Yes" indicating either S or 6 such instances. 0 points for "Yes" and more than 6 such instances. Questions concerning recent construction projects completed: (one question, plus 11 interview questions) The following question to be scored only where a public agency is undertaking a pre- qualification procedure valid for a single project only. Contractor shall provide information about its six most recently completed public works projects and its three largest completed private projects within the last three years. 10 Names and references must be current and verifiable. Use separate sheets of paper that contain all of the following information: Project Name: Location: Owner: Owner Contact (name and current phone number): Architect or Engineer: Architect or Engineer Contact (name and current phone number): Construction Manager (name and current phone number): Description of Project, Scope of Work Performed: Total Value of Construction (including change orders): Original Scheduled Completion Date: Time Extensions Granted (number of days): Actual.Date of Completion: 10 If you wish, you may, using the same format, also provide information about other projects that you have completed that are similar to the project(s) for which you expect to bid. Scoring of previous projects completed: For pre-qualification for a single project that may require specific skills and capabilities, public agencies may choose to score contractors for the number of similar projects completed, and the degree of similarity between past projects and the planned project. DIR has not suggested any scoring for this aspect of the pre-qualification process, because of the numerous possible variations in both the type of project to be built and the points of similarity between the pending project and past projects that may be significant to the public agency. EXHIBIT B APPEALS OF PRE-QUALIFICATION RATINGS The Town of Los Gatos may refuse to grant pre-qualification where the requested information and materials are not provided in accordance with the submission deadline. There is no appeal from a refusal due to for an incomplete or late application, but re-application for a later project is permitted. The closing time for bids will not be changed in order to accommodate supplementation of incomplete submissions, or late submissions. Where a timely and completed application results in a rating below that necessary to pre- qualify, an appeal can be made. An appeal is begun by the contractor delivering notice to the Town of Los Gatos of its appeal of the decision with respect to its pre-qualification rating, no later than ten (10) business days prior to the closing time for the receipt of bids for this public works project. Without a timely appeal, the contractor waives any and all rights to challenge the decision of the Town of Los Gatos, whether by administrative process, judicial process or any other legal process or proceeding. If the contractor gives the required notice of appeal and requests a hearing, the hearing shall be conducted so that it is concluded no later than five (5) business days prior to the last date for the receipt of bids on the project. The hearing shall be an informal process conducted by the Town Manager, or the Town Manager's designee. At or prior to the hearing, the contractor will be advised of the basis for the Town of Los Gatos' pre-qualification determination. The contractor will be given the opportunity to present information and present reasons in opposition to the rating. Within one (1) day after the conclusion of the hearing, the Town Manager or designee will render a decision. It is the intention of the Town of Los Gatos that the date for the submission and opening of bids will not be delayed or postponed to allow for completion of an appeal process.