REPORT TO THE CITY COUNCIL June 16, 2016 FROM: BRIAN R. MARSHALL, Director Department of Transportation BY: JIM SCHAAD, Assistant Director Department of Transportation SUBJECT ..Title RESOLUTION - Authorizing the addition of subcontractors to a construction contract of $1,266,048.61 between the City of Fresno and Clean Energy, Inc. due to public necessity ..Body RECOMMENDATION Staff recommends Council adopt the attached resolution authorizing the addition of subcontractors to a construction contract between the City of Fresno and Clean Energy, Inc. due to public necessity in compliance with Public Contract Code 4100. EXECUTIVE SUMMARY Clean Energy Inc., the design/build contractor for the Department of Transportation CNG bus fueling expansion project, has requested to add subcontractors for work previously indicated to be self-performed in the bid proposal. Pursuant to Section 4104 of the Public Contract Code, Council may authorize this request provided it is either an emergency or necessity. The existing CNG compressors are near the end of their useful life and require significant ongoing maintenance to continue operating at full capacity, resulting in the station being non-operational for extended periods of time. In the past 12 months, the station has been partially operational for 3 months due unplanned failures. Fresno Area Express's current bus fleet consists of 87 CNG buses and will gradually increase to 110 by February 2017. The completion of the CNG bus fueling expansion is a public necessity to support the current and planned CNG bus fleet and provide public transportation services to the City and County of Fresno. BACKGROUND On June 6, 2013, the Council of the City of Fresno approved a design/build contract agreement between the City of Fresno and Clean Energy, Inc. to provide additional CNG fueling capacity at the existing CNG bus fueling station located 2223 G Street in Fresno. The increased capacity is required to accommodate deployment of additional buses using CNG fuel, as well as reduce the potential for service disruptions due to breakdowns of the equipment. During the design phase of the contract, it was determined that the electrical service was insufficient to support an expansion of the CNG bus fueling station. Design of electrical modifications were outside the scope of work of the design build contract, therefore the Department of Transportation was required to separately procure professional services of an electrical engineer to design the necessary electrical modifications and subsequently bid the construction contract. This unforeseen activity delayed the completion of CNG bus fueling expansion design and the start of construction. The electrical modifications were approved by Council on December 3, 2015, and are anticipated to be substantially complete by July 2016. This will allow construction for CNG bus fueling expansion to immediately begin. On April 28, 2016, Clean Energy, Inc. notified the City of their intention to subcontract work previously indicated to be self-performed. From time of contract award to present, Clean Energy, Inc.'s business model has changed from self-performing work to subcontracting work. Furthermore, Clean Energy, Inc. no longer possesses the labor and capability to self-perform several elements of the scope. California Public Contract Code Section 4104 of the Subletting and Subcontracting Fair Practices Act, requires prime contractors to disclose subcontracted work in excess of one-half of 1 percent of the prime contractor's total bid. Subletting or subcontracting of any portion of the work in excess of one-half of 1 percent of the prime contractor's total bid as to which no subcontractor was designated in the original bid shall only be permitted in cases of public emergency or necessity, and then only after a finding reduced to writing as a public record of the awarding authority setting forth the facts constituting the emergency or necessity. City Staff has verified that all contractors specified by Clean Energy possess the applicable licenses and experience to perform the required work. Further staff has physically verified work and qualifications of the contractor EFS West and has determined that comparable CNG stations designed by EFS West and constructed by EFS West are of satisfactory quality levels. Lastly, four of the proposed subcontractors are local to the Fresno area. ENVIRONMENTAL FINDINGS Not a project for the purposes of the California Environmental Quality Act. 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 is no impact to the General Fund. Funding for this project is provided through a combination of Federal and State grants allocated specifically for public transportation projects. Attachments: CNG Resolution FAX Subcontractors