On June 4, 2002, the City Council approved a conceptual downtown plaza design prepared by Amphion Environmental, Inc. (Attachment 1) and provided direction to staff on priority for design enhancements, plaza size and schedule.

At the same time, Council further directed staff to explore options that may result in a completed project in a shorter time. This report includes options for handling the construction phase of the plaza that would increase the integrity of the structure and could result in a shorter completion time.

Staff is recommending that Council make the finding that solicitation of bids is unavailing as affecting the final result and will not produce an advantage to the City since the public interest is best served by contracting directly with Devcon Construction Incorporated. The construction of the City Plaza Improvements by Devcon Construction Incorporated, the contractor presently completing the existing parking structure, would result in a superior public facility with an earlier completion date than if such Plaza Improvements were separately bid by the City and constructed by another contractor at a later date.

Staff is also requesting that Council direct staff to initiate negotiations with Devcon to develop a Guaranteed Maximum Construction Contract (GMCC) for review and action by the City Council at a future meeting.

On April 11, 2000, the City Council authorized a Disposition and Development Agreement (DDA) and a Special Development Permit for the construction of three multi-story office buildings with underground parking structures. The DDA also included conditions that authorized the Mozart Development Company to construct a parking structure at the corner of Evelyn Avenue and Frances Street. The parking structure is now in the final stages of completion and there is presently a one-time opportunity to expedite the plaza completion and fully integrate the City Plaza structural elements (columns, walls, fountains and light posts) with the underlying parking concrete structure and provide a continuous waterproofing membrane.

Policy 7.1E.1. Purchasing Practices: Maintain a purchasing system in conformance with generally accepted purchasing practices.

7.1E.1a. Provide for competitive bidding whenever possible.

7.1E.1b. Provide for the use of other processes whenever the obtaining of competitive bids is impractical, impossible, incongruous or unavailing.

(b) The following are exemptions to the competitive bidding requirements:

Under normal conditions it would take a consultant approximately six months to prepare construction documents. Bidding typically takes about three months, and construction would be six to twelve months from the start of construction. Under this schedule the plaza would be ready for public use no sooner than August 2003. Comments from Councilmembers and members of the public indicate a desire to accelerate the schedule, if possible. On June 11, 2002, the City Council directed staff to explore options that could result in a condensed schedule for design and construction. Four options are evaluated as follows:

• Allows many contractors to compete in the bid process

• Would delay completion of the Plaza by at least 3 months
• Contractor experience of Plaza specific projects might be lacking
• Potential for damage of completed parking structure

• This approach would delay completion of the Plaza and subject the Parking Structure to potential damage.

The process would require issuing a request for qualifications to evaluate the experience of the general contractor and its sub-contractors. References would be checked for performance relative to schedule and budget. This technique has not previously been used in Sunnyvale and could be challenged by contractors not accepted as pre-qualified which would delay the completion of the Plaza.

• Identify contractors with project specific experience prior to issuance of bid.
• Slightly decreased administrative costs for bidding process since bid packages would be issued to a limited number of contractors.

• Overall increase in costs due to two-phase process.
• Staff time spent on pre-qualifying contractors who may decide not to bid.
• Schedule reduction minimal.

• This approach is likely to be more expensive with minimal reduction in schedule.

The process would require issuing an Invitation for Bids prior to 100% completion of construction documents and specifications. Due to the unique construction procedures required for the construction of a plaza located on a roof deck this option of bidding might not result in a contractor with project specific qualifications.

• Assurance of Low Bidder
• Schedule reduction possibly to 2 months

• Experience of plaza specific projects might be lacking.
• Greater potential for change orders.
• Contractors may be wary of bidding, which could decrease competition and increase costs.

• This approach is likely to be more expensive for construction with minimal reduction in schedule.

Directly contracting with Devcon Construction would require Council to make the finding that solicitations of bids for the plaza construction project would for any reason be impractical, unavailing or impossible. Since it is not "impossible" the question is whether competitive bidding is "impractical" or "unavailing." To be legally impractical, it is necessary to conclude pursuing competitive bids would cause extreme and unreasonable difficulty. To be legally unavailing, it is necessary to conclude pursuing competitive bids would not be of use or advantage toward attainment of the goal or purpose of constructing the plaza. (See Legal Analysis)

• Plaza structure and waterproofing would be integrated with the completion of the existing parking garage
• Contractor familiarity with, site, garage & water- proofing materials
• Decreased damage and liability on plaza construction
• Contractor would be available to work with designer during the design phase and contribute cost saving recommendations and value engineering
• Time savings of at least 3 months
• Potential cost savings since contractors field office and communication systems are already established
• Contractor would be required to solicit three bids from each major subcontractor

• Need to make finding that exemption for "impractical, unavailing or impossible" applies.

• Staff finds that this approach has advantages beyond the time savings. In addition to the shortened schedule from eliminating the bidding process, time is saved by involvement of the contractor during the design phase. Other benefits are outlined and described above.

All four of the proposed alternatives have been determined to be legally supportable. For pre-qualifying bidders and for bidding prior to design completion, the issue is primarily one of cost. More questions are likely to arise concerning the appropriateness of invoking the exemption to competitive bidding. In the 1980 case of Graydon v. Pasadena Redevelopment Agency, 164 Cal. Rptr. 56, involving a project bearing similarities to the Sunnyvale project, the court analyzed such an exemption. The court stated:

The decision was that the Redevelopment Agency was not required to forego the obvious cost saving resulting from having one contractor build the entire interrelated project.

The fiscal impact of the construction phase will be determined depending on Council's direction. On June 18, 2002, Council approved Budget Modification #32 for the Plaza budget of $5,721,700 for design, construction and project administration, bringing the total project budget to $6,061,700. Council also directed staff to evaluate currently funded projects and provide recommendations for identifying $599,654 of this amount that could be made available from other projects. Staff will submit a report on the $599,654 reallocation at a future Council Meeting.

This report was included in the publication and posting of the Council agenda on the City’s official bulletin board, and the City’s web page. This report is also available at the Sunnyvale Public Library and the City Clerk’s Office.

1. Competitively bid the Downtown Plaza construction project with a conventional bid process.
2. Direct staff to pre-qualify bidders for the construction of the Downtown Plaza.
3. Direct staff to bid Downtown Plaza construction project prior to design completion.
4. Make the finding under Sunnyvale Municipal Code Section 2.09.070 (b)(5) that solicitation of bids is unavailing as affecting the final result and will not produce an advantage to the City since the public interest is best served by contracting directly with Devcon Construction Incorporated for the reasons previously identified as Advantages.

Adopt Alternative 4, Council finds that solicitation of bids is unavailing under Sunnyvale Municipal Code Section 2.09.070 (b)(5) because of building integrity factors, scheduling, liability, and cost considerations.

Council to also direct staff to negotiate a Guaranteed Maximum Construction Contract with Devcon Construction Incorporated for review and action by the City Council at a future meeting.

Prepared by:
John Hopkins
Assistant Public Works Director

Reviewed by:
Marvin A. Rose
Director, Public Works

Approved by:
Robert S. LaSala
City Manager

1. Conceptual Downtown Plaza Design prepared by Amphion Environmental