REPORT TO THE CITY COUNCIL August 20, 2015 FROM: SCOTT L. MOZIER, PE, Director Public Works Department THROUGH: ROBERT N. ANDERSEN, PE, Assistant Director Public Works Department, Construction Management Division PHILLIP TARVIN, Construction Manager Public Works Department, Construction Management Division BY: BILL HERR, Assistant Construction Manager Public Works Department, Construction Management Division SUBJECT ..Title Approve a substitution of a listed subcontractor A-1 Expert Tree Service, Inc. of Fresno, CA (A-1) for the First Avenue Wireless ITS Project PW00618 (Council Districts 3, 4, 5, 6, 7) ..Body RECOMMENDATION It is recommended that the City Council approve the request from Kertel Communications, Inc. dba Sebastian (Sebastian) to substitute A-1 and utilize Providence Horticulture, Inc. (Providence) for the tree trimming work located at First Avenue Wireless ITS Project. EXECUTIVE SUMMARY Sebastian, the General Contractor who was awarded the referenced project, has requested to substitute A-1, who is listed in the bid documents as the tree trimming subcontractor. In accordance with the bid documents, Sebastian listed A-1 for the tree trimming portion of the project because the work exceeds one-half of one percent of the total contract amount. Sebastian notified the City by letter dated June 3, 2015, that their tree trimming subcontractor A-1 fails or refuses to execute a written contract. Sebastian is requesting to be allowed to use Providence to perform the tree trimming portion of the project. This action requires Council approval because Public Contract Code Section 4107 requires consent of the awarding authority to be request by a prime contractor for a substation of a subcontractor. BACKGROUND On May 15, 2014, a contract was issued in the amount of $1,197,058 to Sebastian for the construction of the First Avenue Wireless ITS Project; the Notice to Proceed was issued August 5, 2014. In the original proposal A-1 was listed as the subcontractor for the tree trimming with the contract, on June 3, 2015, Sebastian provided the City a written request to substitute the listed subcontractor, since the listed subcontractor would not execute a contract under Public Contract Code 4107 (a) (1). In accordance with Section 4107 of the Public Contracts Code, a Prime Contractor may substitute a listed Subcontractor, with the consent of the awarding authority, when the listed subcontractor has refused to execute a written contract. 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 Sebastian has requested that they be allowed to utilize Providence to perform the tree trimming work in place of A-1, by letter dated June 3, 2015. Section 4107 of the Public Contract Code allows the prime contractor to substitute listed subcontractor with prior consent from the awarding authority. In accordance with provisions of the Public Contract Code, the City has notified A-1 of the proposed substitution by USPS certified mail which was available for pickup June 18, 2015. A-1 did not timely provide written objections to the City within five working days of receipt of the notification ending at 5:00 pm on June 24, 2015, and in accordance with Public Contract Code 4107 this constitutes the listed subcontractor's consent to the substitution. 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 tree trimming portion of the contract will not increase the cost of the project. This project does contain an Underutilized Disadvantaged Business Enterprise (UDBE) requirement however this substitution does not impact the UBDE commitments and will not affect the UDBE status of the contract. 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 changes in 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. Attachment: Sebastian Request for Substitution