REPORT TO THE CITY COUNCIL March 18, 2021 FROM: SCOTT L. MOZIER, PE, Director Public Works Department THROUGH: WILLIAM C. HERR, Assistant Director Public Works Department, Facilities and Construction Management Divisions BY: KELLY L. YOST, Construction Manager Public Works Department, Construction Management Division SUBJECT ..Title Approve a substitution of a listed Subcontractor All State Roofing, Inc., and utilize Golden State Roofing for Fresno Fire Station No. 18 (no cost increase) (Council District 1) ..Body RECOMMENDATION It is recommended that the City Council approve the request from Klassen Corporation (Klassen), to substitute All State Roofing, Inc. (All State) and utilize Golden State Roofing, for the thermoplastic polyolefin (TPO) roofing portion, and for Klassen Corporation to self-perform the standing seam roofing portion of the project. EXECUTIVE SUMMARY Klassen, the General Contractor who was awarded the referenced project, has requested to substitute All State, who is listed in the bid documents as performing the two types of roofing systems required for the project, one being a metal system otherwise identified as a standing seam system, and the other being a thermoplastic polyolefin (TPO) system. In accordance with the bid documents, Klassen listed All State for roofing of the project because the work exceeds one-half of one percent of the total contract amount. Klassen notified the City by letters dated January 26, 2021, that their Subcontractor, All State, after having a reasonable opportunity to do so, has failed or refused to execute a written subcontract. Klassen also forwarded the letter they sent to All State providing notice that they will be replaced for the roofing portion of work as they were not able to reach an agreement on the terms of a Contract between Klassen and All State. Staff recommends approval of the Contractor's request that they be allowed to use Golden State Roofing, to perform the TPO roofing portion of the contract, and that Klassen be allowed to self-perform the standing seam roofing portion of the contract. 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 November 14, 2019, a contract was awarded in the amount of $6,260,000 to Klassen, for the Fresno Fire Station No. 18 Project; the Notice to Proceed was issued with a start date of February 18, 2020. In the original proposal, All State was listed as the subcontractor for the roofing portion of the contract. On January 26, 2021, Klassen provided the City a written request to substitute the listed Subcontractor, since the listed Subcontractor has refused to perform his or her subcontract under Public Contract Code section 4107(a)(1). 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. 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) Klassen has requested that they be allowed to substitute Golden State Roofing to perform the TPO roofing portion of the contract in place of All State by letter dated January 26, 2021, which included an attached letter from the TPO roofing materials supplier, Carlisle Syntec Systems indicating that Golden State Roofing is a Carlisle "Approved Applicator," and is certified to install Carlisle Warranted roof systems. Klassen has also requested that they be allowed to self-perform the standing seam roofing portion of the contract in place of All State by letter dated January 26, 2021, which included an attached letter from the standing seam roofing materials manufacturer, Metal Sales Manufacturing Corporation, indicating that Klassen has met the requirements for becoming an "Approved Installer" for Weather Tightness Warranty for the project specified Metal Sales roofing systems. 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 All State, at its last known address, of the proposed substitution by Ontrac shipping, which was delivered to the front door of All State's place of business on January 27, 2021, at 1:48 p.m.. 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 February 4, 2021, 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 roofing of the contract will not increase the cost of the project. There is not a Disadvantaged Business Enterprise goal in this project. ENVIRONMENTAL FINDINGS This project was previously found to be categorically exempt based on Class 32 Section 15332 of the CEQA Guidelines. No substantial changes to the project are being made as this is a substitution of a contractor to perform work already included in the project's scope and contemplated in the categorical exemption. LOCAL PREFERENCE Local preference was not utilized in the prior award as the apparent second low bid was over 5% higher than the apparent low bid. The current substitution does not change the amount of the cost of the project. FISCAL IMPACT There will be no impact to the General Fund or the project budget by this substitution. Attachment: Fire Station 18 Contractor Letter 1 Fire Station 18 Contractor Letter 2