REPORT TO THE CITY COUNCIL July 24, 2014 FROM: SCOTT L. MOZIER, PE, Director Public Works Department THROUGH: ROBERT N. ANDERSEN, PE, Assistant Director Public Works Department, Construction Management Division BY: PHILLIP TARVIN, Construction Manager Public Works Department, Construction Management Division SUBJECT ..Title Approve a substitution of a listed subcontractor Halopoff & Sons, Inc., for the Van Ness Avenue Pavement Overlay from Inyo Street to Railroad Avenue (Council District 3) ..Body RECOMMENDATION It is recommended that the City Council approve the request from A. Teichert & Son Inc., dba Teichert Construction to substitute Halopoff & Sons, Inc., and self-perform the concrete ramps, detectable warning devices, and adjusting manholes work on Van Ness Avenue between Inyo Street and Railroad Avenue. EXECUTIVE SUMMARY Teichert & Son Inc., dba Teichert Construction, the General Contractor for the referenced project, has requested to substitute Halopoff & Sons, Inc., who is listed in the bid documents as the concrete subcontractor. Teichert Construction notified the City by a letter dated February 6, 2014, that their concrete ramps, detectable warning devices and adjusting manholes subcontractor, Halopoff & Sons, Inc., has become insolvent and is unable to perform their portion of work. Teichert Construction is asking that they be allowed to self-perform the Concrete Ramps, Detectable Warning Devices and Adjusting Manholes portion of the project. 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 October 24, 2013, a contract was issued in the amount of $1,252,853 to Teichert & Son Inc., for the Van Ness Avenue Pavement Overlay from Inyo Street to Railroad Avenue project. The Notice to Proceed was issued on January 9, 2014. In the original proposal Halopoff & Sons, Inc., of Porterville, California, was listed as the subcontractor for the concrete portion of the contract. On February 6, 2014, Teichert provided the City a written request to substitute the listed subcontractor, since the listed subcontractor has become insolvent under Public Contract Code Section 4107(a) (2). 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 has refused to perform his or her subcontract as set forth in Section 4107. Teichert has requested they be allowed to self-perform the concrete improvements subcontract work in place of Halopoff & Sons, Inc., by letter dated February 6, 2014. 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 has notified Halopoff & Sons, Inc., of the proposed substitution by certified mail delivered February 11, 2014. Halopoff & Sons, Inc., did not provide written objections to the substitution. In accordance with Section 4107 the failure to file these written objections within five working days of receipt of that notification ended at 5 p.m. on February 17, 2014, which constitutes the listed Subcontractor's consent to the substitution. The City has not received an objection in accordance with Public Contract Code 4107. The City Attorney's Office finds the proposed substitution of subcontractor to be legal and proper if Council consents to the substitution. The replacement of the subcontractor for the concrete improvements portion of the contract will not increase the cost of the project. This substitution does not affect the Disadvantaged Business Enterprise (DBE) goal because the listed subcontractor, Halopoff and Sons, is not a certified DBE. ENVIRONMENTAL FINDINGS This is not a "Project" for the purposes of CEQA pursuant to CEQA Guidelines section 15378(b)(5), as it is an administrative action that will not result in direct or indirect physical changes to the environment. LOCAL PREFERENCE Local Preference was not considered because this action does not include a bid or an award of a City construction contract. FISCAL IMPACT There will be no impact to the General Fund or the project budget by this substitution.