REPORT TO THE CITY COUNCIL FROM: RANDALL W. MORRISON, PE, Director Capital Projects Department SCOTT L. MOZIER, PE, Director Public Works Department BY: WILLIAM C. HERR, Assistant Director Capital Projects Department, Construction Management Division BRADLEY OBERG, Chief Engineering Inspector Capital Projects Department, Construction Management Division SUBJECT ..Title Approve a substitution of a listed subcontractor Avila Traffic Safety, for the Midtown Trail Segment 1 (Phase I) Project (Council District 7) ..Body RECOMMENDATION It is recommended that the City Council approve the request from Bush Engineering Inc. (Bush), to substitute Avila Traffic Safety (Avila) and utilize KRC Safety Co. (KRC), for the traffic control portion of project Midtown Trail Segment 1 (Phase I) Project. EXECUTIVE SUMMARY The Midtown Trail Segment 1 (Phase I) Project general contractor, Bush, has requested to substitute Avila, who is listed in the bid documents as performing the traffic control portion of the project. In accordance with the bid documents, Bush listed Avila for traffic control because the work exceeds one-half of one percent of the total contract amount. Bush notified the City, by letter dated August 31, 2023, that their subcontractor, Avila, is unable or unwilling to further perform the traffic control portion of this project. Bush is asking that they be allowed to use KRC, to perform traffic control. This action requires Council approval because Public Contract Code section 4107 requires consent of the awarding authority to a request by a prime contractor for a substitution of a subcontractor. BACKGROUND On July 21, 2022, a contract was awarded in the amount of $1,342,148 to Bush, for the Midtown Trail Segment 1 (Phase I) Project; the Notice to Proceed was issued with a start date of January 3, 2023. In the original proposal, Avila was listed as the subcontractor for the traffic control portion of the contract. On August 31, 2023, Bush provided the City with a written request to substitute the listed subcontractor, since the listed subcontractor fails or refuses to perform his or her subcontract under Public Contract Code section 4107(a)(3). In accordance with section 4107 of the Public Contract Code, a Prime Contractor may substitute a listed subcontractor, with the consent of the awarding authority, when the listed subcontractor fails or refuses to perform his or her subcontract as set forth in section 4107. The Subletting and Subcontracting Fair Practice Act requires the Prime Contractor to secure the permission of the awarding agency before substituting a non-listed subcontractor for a listed subcontractor in order to protect the public and subcontractors from bid shopping and bid peddling. (Southern California Acoustics Co., Inc. v. C.V. Holder, Inc. (1969), 71 Cal.2d 719,726) Bush has requested that they be allowed to substitute KRC to perform the traffic control portion of the contract, in place of Avila, by letter dated August 31, 2023. Section 4107 of the Public Contract Code allows the prime contractor to substitute listed subcontractors with prior consent from the awarding authority. In accordance with provisions of the Public Contract Code, the City notified Avila, at its last known address, of the proposed substitution by certified mail on September 26, 2023, which was delivered to and signed for by an agent for Avila on September 29, 2023. The City Attorney's Office finds the proposed substitution of subcontractor to be legal and proper if Council consents to the substitution. In accordance with section 4107, the failure to file these written objections within five working days of receipt of that notification ending at 5 p.m. on October 6, 2023, constitutes the listed subcontractor's consent to the substitution. The City has not received an objection in accordance with Public Contract Code 4107. The replacement of the subcontractor for the traffic control on the contract will not increase the cost of the project. There is a Disadvantaged Business Enterprise goal in this project. KRC is a certified DBE contractor and this substitution will not affect that goal. ENVIRONMENTAL FINDINGS This is an administrative action, and no changes are being made to the original scope. LOCAL PREFERENCE Local preference does not apply as this is an administrative action and not an award. FISCAL IMPACT There will be no impact to the General Fund or the project budget by this substitution. The project is located within Council District 7. Attachment: Contractor's Request for Substitution Letter Vicinity Map