07 Staff Report - Plumbing Subcontractor on Police BuildingMEETING DATE: 9-8-2009
owN of AGENDA ITEM: 7
~as"aAos COUNCIL AGENDA REPORT
DATE: SEPTEMBER 3, 2009
TO: MAYOR AND TOWN COUNCIL
CHAIR AND AGENCY BOARD MEMBERS
FROM: GREG LARSON, TOWN MANAGER
ORRY P. KORB, TOWN ATTORNEY
SUBJECT:." APPROVE REQUEST OF PRIME CONTRACTOR TO SUBSTITUTE
PLUMBING SUBCONTRACTOR ON POLICE OPERATIONS BUILDING
PROJECT
RECOMMENDATION:
1. Hold hearing.
2. Approve request of prime contractor to substitute plumbing subcontractor.
BACKGROUND:
A contract for construction of the police operations building project was approved by Town
Council and the Redevelopment Agency Board based on the bid submitted by Swenson
Development and Construction, Inc. ("SDC"). As required by the Public Contract Code
regarding competitive bidding of public works projects, the bid identifies all subcontractors
responsible for performing work in excess of one-half of one percent of the prune contractor's
total bid, or ten thousand dollars ($10,000), whichever is greater. Robert E. Rodriquez Plumbing
& Construction ("Rodriquez") was identified as the plumbing subcontractor for the project. On
August 11, 2009, the Engineering Town received a letter from SDC (Attachment 2) requesting
authority to substitute for Rodriquez.
DISCUSSION:
Public Contracts Code section 4107 dictates the mandatory procedure for substituting a
subcontractor on a public works project. The prime contractor must first make a request based
on one or more of the circumstances described in section 4107. Prior to approval of the request
PREPARED BY: ORRY P. KORB, TOWN ATTORNEY
OPXUMBAvp
[N.\V, GR\Town Attorne3ACouncd Reports19-3-09 RPT m sub of pbunbing sub PD opsmpol
Reviewed by: Town Manager Assistant Town Manager Clerk
Finance Community Development
Rev: 9/3/09 4:04 pm
Reformatted: 7/19/99 Rd 301-05
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: APPROVE REQUEST OF PRIME CONTRACTOR TO SUBSTITUTE
PLUMBING SUBCONTRACTOR ON POLICE OPERATIONS BUILDING
PROJECT
MAYOR AND TOWN COUNCIL
SEPTEMBER 3, 2009
for substitution, the awarding authority or authorized officer, shall give notice in writing to the
subcontractor. If objections are filed, the awarding authority- in this case the Town Council and
Agency Board - must hold a hearing on the request. The awarding authority should consider all
relevant evidence, including correspondence between the parties and Town staff and oral
testimony and documents presented during the hearing.
According to SDC, Rodriquez is not in compliance with the subcontract agreement and project
schedule, has repeatedly failed to appear at the job site, and has refused to perform the work.
Rodriquez responded on August 18, 2009 (Attachment 3), essentially holding SDC responsible
for delays due to "coring, cutting and trenching of sewer piping trenches and accesibility.
Rodriquez states in essence that such delays resulted in inconvenient schedule changes, despite
his having provided "more than sufficient manpower." Rodriquez also alleges billing issues,
including fraud. The Town deemed this response as an objection to substitution. On August 18,
2009, SDC provided a response to this objection (Attachment 4). On August 25, 2009, after
several attempts to mediate a resolution, staff notified Rodriquez that a hearing on SDC's request
would occur should Rodriquez fail to complete work in accord with the mediated agreements
(Attachment 4). On September 3, 2009, Rodriquez was provided notice of a hearing before
Council and the Agency Board on September 8, 2009 (Attachment 6).
Staff has observed problems associated with the performance of Rodriquez, specifically his
irregular and uncoordinated appearances at the job site, his apparent inability to provide
sufficientworkers to perforin the required work, and his failure to complete jobs. Staff shares
SDC's concern that Rodriquez is unable to complete the plumbing work on time and in a
satisfactory manner. As a consequence, staff supports SDC's request to substitute Rodriquez.
CONCLUSION
At the close of the hearing, Council should decide whether to grant the request to substitute
Rodriquez. If Council elects to grant the request, one or more of the statutory grounds for
approving the request (Attachment 1) should be articulated in the motion.
Attachments:
1. Grounds for Approving Request for Substitution of Subcontractor.
2. Letter from Swenson Development and Construction, Inc. dated August 11, 2009.
3. Letter from Robert Rodriquez received August 18, 2009.
4. Letter from Swenson Development and Construction, Inc. dated August 18, 2009.
5. E-mail from Kevin Rohani to Robert Rodriquez dated August 25, 2009.
6. Notice of hearing to Robert Rodriquez dated September 2, 2009.
GROUNDS FOR APPROVING SUBSTITUTION OF SUBCONTRACTOR
[PUBLIC CONTRACTS CODE SECTION 41071
(1) When the subcontractor listed in the bid, after having had a reasonable opportunity to do so,
fails or refuses to execute a written contract for the scope of work specified in the subcontractor's
bid and at the price specified in the subcontractor's bid, when that written contract, based upon
the general terms, conditions, plans, and specifications for the project involved or the terms of
that subcontractor's written bid, is presented to the subcontractor by the prime contractor.
(2) When the listed subcontractor becomes bantrupt or insolvent.
(3) When the listed subcontractor fails or refuses to perform his or her subcontract.
(4) When the listed subcontractor fails or refuses to meet the bond requirements of the prime
contractor as set forth in Section 4108.
(S) When the prime contractor demonstrates to the awarding authority, or its duly authorized
officer, subject to the further provisions set forth in Section 4107.5, that the name of the
subcontractor was listed as the result of an inadvertent clerical error.
(6) Wlien the listed subcontractor is not licensed pursuant to the Contractors License Law.
(7) When the awarding authority, or its duly authorized officer, determines that the work
performed by the listed subcontractor is substantially unsatisfactory and not in substantial
accordance with the plans and specifications, or that the subcontractor is substantially delaying or
disrupting the progress of the work.
(S) When the listed subcontractor is ineligible to work on a public works project pursuant to
Section 1777.1 or 1777.7 of the Labor Code.
(9) When the awarding authority determines that a listed subcontractor is not a responsible contractor.
ATTACHMENT I
SWENSON DEVELOPMENT & CONSTRUCTION
August 11, 2009
Kevin Rohani, P.E.
Town Engineer
Town of Los Gatos
41 Miles Avenue
Los Gatos, CA 95031
RE: Los Gatos / Monte Sereno Police Department Operations Building Project
Dear Mr. Rohani,
Swenson Development & Construction is hereby requesting approval to substitute and
replace Robert E. Rodriguez Plumbing who is listed as plumbing subcontractor for the
above project for the following reasons;
1) Subcontractor is not in compliance with our Subcontract Agreement and project
schedule by continuously failing to show up at the jobsite and refusing to perform
their work and honor their bid
2) Subcontractor failed to properly staff the jobsite with qualified workers
We have notified Robert E. Rodriguez on numerous occasions of their negligence and
provided them with a Notice of Default on April 3, 2009, June 9, 2009 and August 3,
2009. Copies of these notice is attached for your reference.
These facts constitute grounds for substitution under public contract code section
4107(a)(3) and SDC hereby requests authorization to procure a substitute subcontractor.
Thank you for your prompt consideration of this regaest.
Case Swenson
President
SWENSON DEVELOPMENT & CONSTRUC3loN
777 N. First St. 7th Floor San Jose CA 95112 1 Phone 408 947 1100 1 Fax 408 947 7432 1 www.swi ATTACHMENT 2
Robert E. Rodriguez Plumb. & Const.
LIC## 898817
`
1863 Encina Dr
Santa Cruz CA. 95062
SUBJECT; PPW Job No. 07-22 Los Gatos /Monte 5orentoPolice Operations
Building Facility Project
The agreement was breached by SDC when scheduled progression was
slowed by coring,cutting and trenching of sewer piping trenches and accesibility,
My contract was for a predetermined schedule,which has changed several
times making it imposible to schedule work. I have provided more than sufficient
man power to complete this job,provided the general could find it's way to make
and execute a schedule. Relevant to completion of the job instead of trying to find
a fall guy for their short comings
There issues which need to be resolved with progression payments and
excessive demands and back charges. With no material break downs and
fraudulent billable time, in regards to overtime, and back charges to subs and
customer..
Thankyou
Robert E. Rodriguez
OFFICE & FAX-831-479-9474
CELL = 831-295-5557
Plumbbobi@comcast,net
ATTACHMENT 3
SWENSON DEVELOPMENT & CONSTRUCTION
August 18, 2009
Kevin Rohani, P.E.
Town Engineer
Town of Los Gatos
41 Miles Ave.
Los Gatos, CA 95031
RE: LGPD Operations Building Proj ect
Dear Mr. Rohani,
This letter is in response the entail received on August 17, 2009, in reference to the
substitution of the plumbing contractor, Robert E. Rodriguez, on the above-referred
proj ect.
The false claims being made by Mr. Rodriguez in his letter to the Town of Los Gatos are
without merit and have no bearing on the issue at hand. Mr. Rodriguez is in default of
the Subcontract Agreement he entered into between SDC and Robert E. Rodriguez on
1/22/09, as follows:
Failure to maintain an adequate number of properly skilled workers,
proper materials, or conform to schedules of work, or to make prompt
payment to any workers, sub-subcontractors, or suppliers.
Failure to abide by any laws, ordinances, rules, regulations or orders of
any public authority having jurisdiction,
.Subcontractor's vacation or abandonment of the job site for a period of
more than 10 days.
Mr. Rodriguez was issued Letters of Default on April 3, 2009; Jurne 9, 2009; and August
3, 2009 for failure to staff the project and meet the deadlines set forth by the Town of Los
Gatos and SDC. Attached you will find copies of the Building Inspection Record noting
four (4) gas pressure inspections were required, which ultimately resulted in a delay on
the project.
Mr. Rodriguez has also faded to properly pay his employees the Certified Wages he
reported on his Payroll Forms, )_frequested, 1 am able to provide documentation to the
Town of Los Gatos showing Mr. Rodriguez failed to properly pay his craployees the
Certified Wages he reported on these Payroll Forms. As called out in the Master
Contract between Owner and General Contractor, the Subcontract Agreement, and as
required by law; SDC would hold payments to Mr. Rodriguez until proof was made that
777 N. First St. 7th floor San Jose CA. 95112 Phone 408 947 1100 Fax 408 947 7432 i www.swensondcv.com
ATTACHMENT4
SWENSON DEVELOPMENT & CONSTRUCTION
he fulfilled his payment obligations to his employees and the appropriate training funds.
Once all documentation was obtained, his payments were released.
As a result of Mr. Rodriguez not staffing the project, SDC has incurred labor and material
costs on the project. As called out in the Subcontract Agrecinctit, any and all costs
incurred by SDC, as result of Mr. Rodriguez's default of the Agreement, would result in a
backcharge to Mr. Rodriguez. If requested, SDC will provide the back up documentation
to the Town of Los Gatos.
W. Rodrig fez's failure to invoice in a timely manner, has resulted in SDC issuing joint
checks to his suppliers to avoid any misallocation of fiends on N1r. Rodriguez's part and
to avoid any potential Stop Notice Claims. At no time has SDC acted fraudulent or
imposed excessive demands. It is oiu7 goal to complete this project on time and without
any claims imposed by any Subcontractor and Suppliers.
If there is any additional information the Town of Los Gatos may need to substantiate our
request for substitution, please feel free to contact me at 408-947-3223.
T~iaiik you
Ileathet' Solis
Asst. Project Manager
enclosures
777 N_ First St. 7th FlooL' San .Jose OR 95112 ; Phone 408 9 -7 1100 Fax 40894-17432 1 www.swensoiidov.com
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fnspectiw! !quests sr;h> d,ciled by FAX will. b,- accepted up to 3:00 P.M the bul anoss clay before lle data
req,m, ieci, lie Town business talffices are open .Monday_rrlch~y 8:00 q.a-:l- to 5-00 -D.its., exc t pt holidays.
?l ow-n or Los Gatos inspection. houxs are lvlonday-?'richly 8:00 am, to 4-.00 p.,rn.
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BUILDING DIVISION 110 E. 10,AN 'rarer
Fr r~r.ft s tio~ea.~atdbuil.di~as P.O. Box 519
w L€as Gnres, C,~ 95031
FAX Inspection Request
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;spcction regw-,sts schic dmlcd by FIt X vYill be accepted ;m to 3.00 P.M, the brisincss day be fore the date:
i t,queszed. °l."lie "Iovvil, business Offices are Dpe.n Monday-Friday 9:00 am. to 5:00 p.m., except holidays.
TgWr: orL.oS Gates inspec,,; oa !tours are Mlotiday-€ fiday 3:00 a.t 1. to 4:00 pa-fl,
fA the rp-qu=red inforination is not left. your i ispection will not be sch duled! The Town will o call,
YOU [e COUTIMI yarr[ MSpection mquest.
Tl e c~llaa i . ; itria~r ati.rn is ~ c ~a ed whey) reqiu; iug .m.. inspection,
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Project Address
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vise:los irivs~a.~ov?buildiri Roo "R:rx949
Los GAIr.+, CA 955031
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(408) 354-7593
jn,,zpectio rcclue,sts scliecllulecl by FAX viill be ac(,q)tr:;El up to 3:0€ P.M. the business day before th(( date
requesteo. T.he Town business ofliccs are opexr'Moncl y-Tricki); 8:00 a.l,l. to 5:00 paxt,, except holidays.
Town of Los Gatos inspection hours are Monday-F iclav 8:00 a.m, to 4:00 p.m.
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The following information is reaviverl When vtyquesting an inspection,
Daie r equeste€i for iv&peds.nn ((exa pfe: Pars: ay, March 22) e'%
Alyl / ?N1 or No Preference
Froject Address
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lnspc~ctiolj requests schedulod by FAX will be accepted. up to 3:00 NM. the businet s day before the date
-:;quested. T ~,e 'T-q'w-n business offices are open Monday-Friday R:00 a.m. to 5:00 p.m., except holidays,
Tm-n of Los O tos inspection 1 ow-s are N on- dav••.F ridgy 8:00 as , to 4:00 p.rn.
If the required i_rli t°2 tticlrl is not l rt, your irsprectio will y (}t b, scheduled! Tbc Town will not call
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ITi! your inspection reque-A.
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0 Building
(P.Temy-fie: BuIldIng it 8171-11I11)
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(ax ample: Electrical IIE0 J- 222)
Type of lnspi'c lou(*)
(nxrar~r{rie: booth Fleeff etil)
N-I"Ilnnicai pe' ialit Number(s) Type of Tnspecfion{s)
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Pll inbialm Permit -Ifti axber(s)
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Page I of I
Robert,
This email is a follow up to our meeting and discussion this morning about your plumbing work for the Los
Gatos Police Operations Building project (the "Project"), This meeting occurred as a consequence of your
continuing failure to perform as required by construction contract.
As you know, on August 11, 2009 Swenson Development Corporation (the "General Contractor") on the Project
formally asked that the Town approve your replacement as the plumbing subcontractor for the Project due to
your failure to perform. On August 17, 2009, you objected to that request, thus necessitating a hearing before
the contracting authority, in this case, the Los Gatos Town Council. A meeting was held thereafter on August 19,
2009, attended by you, Jon Holmes, Sill Little, and me. During the meeting you assured the Town and the
General Contractor that you would be on the job full time to finish all your plumbing related tasks.
Unfortunately, thereafter you did not appear to work at the Projectjob site on a full time basis, despite your prior
assurances to the Town and General Contractor. You are well aware of Project schedule and, as referred to
above, have received detailed notice of your failure to perform.
This morning you and I spoke further about this matter. I informed you that the Town was now prepared to hold
a hearing on the General Contractor's request to replace you. You responded by committing to, return to the
Projectjob site on August 26, 2009 and committing to work full time on the Project without further delays in
order to complete all of the plumbing work.
PLEASE NOTE that you must honor your commitment to start work on August 26, 2009, and work full time
without further delays to complete all plumbing work on the Project in a timely manner. Should you fail to do
so; the Town will hold a public hearing before the Town Council as soon as possible in order to act on the
General Contractor's request to replace you as the plumbing subcontractor on the Project. Town staff will
recommend that the Council grant the General Contractor's request.
I trust that you will work full time according to your commitment to complete all the plumbing work on the
Project in a timely manner.
Kevin
file:HC:\UserslokorblAppDatalLocal\Temp\XPgrpwise14A940GBATO) N DOTOVtrNP( ATTACHMENT 5
TOWN OF Los GATOS
OFFICE OFT HE TOWN ATTORNEY CIVIC CENTER
(408) 354-6801 110 E..1VtALN STRFFT
P.O. Box 949
FAX: (408) 354-8431 Los GATOS, CA 95031
September 3, 2009
Robert E. Rodriquez Plumbing & Construction
1863 Eneina Drive
Santa Cruz, California 95062
Subject: PPW Job No. 07-22 Los Gatos/Monte Sereno Police Operations Building Facility Project
NOTICE OF HEARING
Dear Mr. Rodriquez:
On or about August 18, 2009, the Town of Los Gatos/Los Gatos Redevelopment Agency received your
letter objecting to a request to substitute your firm as the plumbing subcontractor on the above
referenced job, said request dated August 1 t, 2009, made by Swenson Development & Construction,
Inc., the prime contractor on the job.
PLEASE TAKE NOTICE that on September 8, 2009, at 7:00 p.m., or as soon thereafter as is
appropriate, the Town Council/Redevelopment Agency Board of Directors shall hold a hearing on the
request to substitute your firm as the plumbing subcontractor on the above referenced project. The
hearing will be held in the Town Council Chambers located at 110 E. Main Street, Los Gatos, CA
95031.
Should you have any questions, please contact Jackie Rose, the Town Clerk Administrator, at 408-354-
6834.
Very truly yours,
ORRY P. KORB
Town Attorney
OPK:pg
v: r1YiGWTowa Attomeydetters`,Rodiiguez.doc
Cc: Todd Capurso, Director of Parks & Public Works
INTcor.PORATFI) AucusT 10, 1887 ATTACHMENT 6