Contractor cries foul over Calexico road project
CALEXICO — Despite allegations of foul play, the Calexico City Council moved forward this week with awarding a $6,022,219 contract to Pyramid Construction and Aggregates Inc., of Heber, for upgrades to Cesar Chavez Boulevard intended to improve connectivity with the Calexico-West Port of Entry.
The City Council initially had leaned in favor of awarding a construction contract for the project to Granite Construction Co., of Watsonville, Calif., having considered approval of $6,159,335 in funding during its regular meetings on June 6 and June 20. On both occasions, the item was tabled and continued to a future meeting.
Then, during Wednesday’s City Council meeting, council members voted 4 to 0 — Councilman Armando G. Real was absent — to reject the bid submitted by Granite Construction as non-responsive for failure to demonstrate good faith efforts to comply with federal disadvantaged business enterprise regulations. The council also rejected a bid protest submitted by Granite on July 19.
“It is important to note that the city initially accepted our good faith effort as it was a portion of our responsive bid package,” Joe Richardson, Granite Construction’s regional chief estimator, told the council before Wednesday’s vote.
“I believe … we have been excluded unfairly,” added Ralph Pipkin, estimator and project manager for Granite Construction.
Also Wednesday, the council — despite protests from Granite officials — approved a waiver for minor deviations in the bid submitted by Pyramid, awarded the contract to Pyramid and authorized the city manager to sign the contract between the City of Calexico and Pyramid.
Federal project
The City of Calexico Public Works Department earlier this year received a multi-million dollar grant from the U.S. Department of Transportation — as part of Federal Project No. HPLUL-5168(017) — for road improvements to Cesar Chavez Boulevard and the Calexico-West Port of Entry between Highway 98 and Second Street. The federal government is providing $5.5 million, with a local matching grant of $522,219.
The project involves roadway improvements and street widening throughout to provide two through lanes in the northbound direction and three lanes in the southbound.
During Wednesday’s meeting, the council also awarded a contract for $132,625 to The Holt Group Inc., to provide construction management and field inspection services for the project. The Holt Group was one of three bidders who submitted proposals to the city of Calexico, according to city documents. The Holt Group, which submitted the lowest bid, was selected by an independent evaluation committee that considered the three proposals.
Construction bids sought
On April 29, the city of Calexico requested bids for the Cesar Chavez Boulevard Improvement Project.
On May 24, the city received four bids. Granite Construction submitted a base bid of $5,957,460, Pyramid Construction submitted a base bid of $5,984,593, Hazard Construction submitted a base bid of $6,694,830, and Sully-Miller Contracting submitted a base bid of $7,830,000.
“We are the low bid. We turned in a good faith effort,” Pipkin noted during the meeting.
When additive bids are added to the base bids, Pyramid actually is the lowest bidder. Pyramid Construction submitted a combined bid of $6,022,218, Granite Construction submitted a combined bid of $6,159,335, Hazard Construction submitted a combined bid of $6,936,580, and Sully-Miller Contracting submitted a combined bid of $8,063,000.
Disadvantaged business enterprise
Because the project is federally funded, all bidders were required to comply with federal disadvantaged business enterprise regulations, codified by Title 49, Code of Federal Regulations, Part 26. DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51 percent interest and also control management and daily business operations, according to the U.S. Department of Transportation.
To comply with federal regulations, bidders are required to provide at least 15 percent of any grant amount awarded by the federal government to certified DBE companies, or to demonstrate good faith efforts to do so, according to city documents.
City officials contend Granite Construction Co. did not meet the contract DBE goal of 15 percent, leading the city to engage in a determination of whether the company made good faith efforts to do so via a review of documentation submitted with the bid.
Circa June 18, city officials received a memorandum regarding Granite’s good faith efforts documentation from Caltrans. Following review of the good faith efforts documentation, Caltrans determined Granite did not adequately demonstrate good faith efforts to meet the contract DBE goal. After carefully reviewing all bid documentation from Granite, city officials determined Granite did not meet the 15 percent DBE goal, nor did it make adequate good faith efforts to do so in accordance with federal regulations.
Granite officials dispute this claim.
“Granite complied with all the regulations in Title 49, part 26,” Richardson said. “It was only after Cal-Trans sent a memo asking the city to obtain more information did they reverse their decision” to award the contract to Granite.
On July 12, city staffers provided verbal notice to Granite that it intended to reject the Granite bid, and Granite representatives requested administrative reconsideration of the city’s determination.
City staffers then engaged an administrative reconsideration process in accordance with federal regulations, according to city documents.
On July 16, a reconsideration hearing was held to provide Granite an opportunity to appeal the finding of non-responsiveness based on its failure to meet federal DBE regulations. On July 17, a written decision on reconsideration was provided to Granite explaining the basis for the finding that Granite did not meet the contract DBE goal and failed to make adequate good faith efforts to do so.
“Granite answered all the questions posed by the city and never received any feedback as to where our submittal was deficient,” Richardson said. “Without specific feedback as to where we were lacking, we can logically assume we complied with all the requirements and answered all the questions to the satisfaction of the city.”
On July 19, city staffers received a bid protest from Granite asserting the bid submitted by Pyramid Construction and Aggregates Inc. was non-responsive because the bid failed to include contractor’s license numbers for the subcontractors.
According to city documents citing Pub. Contract Code 20103.5, for projects subject to federal funding, no bid submitted shall be invalidated by the failure of the bidder to be licensed, which renders the protest meritless.
Granite’s protest also alleged Pyramid’s bid did not contain the Equal Employment Opportunity Certification for any of the proposed subcontractors, nor did Pyramid submit a responsive DBE commitment form. In response, city officials said the city may exercise discretion and waive these irregularities because these issues would not have allowed Pyramid to withdraw its bid, nor would they have given Pyramid an unfair advantage.
Inconsistent process
During the meeting, Richardson claimed the city was not adhering to its own policies for contract bidding.
“This looks to be inconsistent administration of the process,” Richardson said. “It has the appearance of a situation in which the competitive low bid process is no longer being applied. There is only $30,000 between the base bid of the two contracts … so it has the appearance the city has turned this into a best-value procurement process, which, if this is the case, is a violation of public contract code.”
Best value, Richardson continued, “is not the procurement process specified here. I would ask that if the price difference was significant between the bids, would the city still reject our bid? Would you reject all bids, or would you make a different determination? There is a lot of work involved in preparing estimates. We are happy to do it, but in return we expected to be treated fairly.”
Richardson called on councilmembers to scrap the whole process and start over to ensure a fair playing field.
“If the city is not going to award our fully responsive bid, and knowing there are problems with the second bid [from Pyramid], then the only … prudent course of action would be to reject all bids and rebid the project,” he said.