May 4, 2004

SUBJECT: Rejection of Bids for the Removal and Replacement of Heating, Ventilating and Air Conditioning Equipment at the Sunnyvale SMaRT Station (F0302-47)

REPORT IN BRIEF
Request is made that Council reject the one responsive bid received in response to Invitation for Bids No. F0302-47 for heating, ventilating and air conditioning (HVAC) equipment removal and replacement at the Sunnyvale SMaRT Station for the Department of Public Works Solid Waste Division.

BACKGROUND
The scope of this project is to remove and replace four heat pump units (two 7.5-ton, one 3-ton and one 2-ton) located on the roof above the sorting rooms at the Sunnyvale SMaRT Station. The project also includes cleaning existing ductwork prior to installation of the new units. City-provided services include crane services required for removal of the existing units and rooftop placement of the new units.

DISCUSSION
Bid specifications were developed by Solid Waste and Purchasing staff. The bid package was distributed to Bay Area Builders Exchanges and broadcast to potential contractors through the DemandStar by Onvia procurement network. Sixteen contractors requested bid documents. A mandatory pre-bid conference and tour was held March 25, 2004, with eight contractors attending.

Sealed bids were received and publicly opened on April 7, 2004. Two bids were received.

Bidder Total Bid
Engineer’s Estimate $50,000

Atlas-Trillo, Inc., of Sunnyvale $30,025

American Air Conditioning, Plumbing and Heating Company of San Leandro $59,878

The bid from Atlas-Trillo was unsigned and did not include the required bid bond, rendering it non-responsive. Although the bid submitted by American Air Conditioning was responsive, line item bid prices were of concern to SMaRT Station staff. The bid for removing and replacing the equipment ($28,000) was approximately one-third more than the cost of the equipment itself (19,425), even with the City providing crane services. In addition, the duct cleaning bid ($10,500) was approximately five times higher than a bid from another firm prior to issuance of Invitation for Bids No. 0302-47.

Because of the high bids on these items and the lack of competition, staff recommends that Council reject the sole responsive bid and direct staff to review bid specifications and consider re-bidding the project at a later date.

FISCAL IMPACT
The action of rejecting the sole bid will have no immediate direct fiscal impact. It is possible that re-bidding the project at a later date will result in additional bids and better pricing. Staff contacted several local contractors to inquire why they did not bid on this project and were told that they were too busy to schedule the work at this time. Re-bidding the project at some future date could result in more competition and better pricing, thereby resulting in cost savings to the City.

RECOMMENDATION
It is recommended that Council reject the one responsive bid received in response to Invitation for Bids No. F0302-47 for the removal and replacement of heating, ventilating and air conditioning equipment at the Sunnyvale SMaRT Station and direct staff to review bid specifications and consider re-bidding the project at a later date.

Prepared by:

Elaine Wesely
Purchasing Officer

Reviewed by:

Mary J. Bradley
Director, Finance

Reviewed by:


Marvin Rose
Director, Public Works

Approved by:

Amy Chan
City Manager