ITEM 6-M
Council Meeting: November 23, 1999 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Waive Competitive Bidding and Authorize the City Manager to Negotiate Purchase Prices for Selected Equipment and Materials to be Used in Construction of the Public Safety Facility as Part of an Industry Partnering Program for Procurement of Green Building Materials
Introduction
This report recommends that Council waive competitive bidding and authorize the City Manager to negotiate purchase prices for selected equipment and materials to be used in construction of the new Public Safety Facility as part of an Industry Partnering Program for cost-effective procurement of green (environmentally preferable) building materials.
Background
On December 9, 1997, City Council approved a professional services agreement with Gottfried Technology, Inc., for a sustainable building practices design and performance review of the Public Safety Facility (PSF). The purpose of the project was to ensure that the PSF
=s heating and cooling systems, lighting systems, window shading and glazing, floor and wall coverings, furniture systems, and ventilation systems work synergistically to maximize efficiency, improve indoor air quality, minimize waste, and potentially improve employee productivity. Such an approach is consistent with the City=s proposed Green Building Design and Construction Guidelines.As a result of this design review effort, the PSF will be a green building demonstration project featuring practical and cost effective energy and environmental based construction practices and will attract national attention. The design incorporates highly efficient systems which will place the PSF at approximately 35-40% better than California
=s 1998 Title 24 Building Code requirement for energy efficiency. It includes an underfloor air distribution system, an advanced construction waste management plan, recycled urban runoff for toilet and urinal flushing and landscape irrigation, and a number of materials with a high percentage of recycled content and a positive impact on indoor air quality.During the development of the green product performance specifications for the PSF it was determined that City participation in an Industry Partnering Program (described below) may present the best opportunity for the City to ensure PSF compliance with the established material and equipment performance specifications while reducing the overall costs for these high performance items.
Discussion
Experience on City building projects which have gone through a formal low bid process has shown that the performance criteria and descriptions in formal bid specifications may result in the procurement of materials and equipment that are not of the highest quality in terms of either performance or reliability. One method which can be utilized to guarantee the procurement of items which are most critical to achieving the environmental performance targets of the building is to directly negotiate an optimum purchase price for the item(s) with qualified vendors. Given the high profile of the PSF it has been determined that with an Industry Partnering Program (IPP), qualified green product vendors will offer the City significant discounts on their products in return for the enhanced product marketing opportunities of having their high-performance environmental products included in this leading demonstration project.
Gottfried Technology Inc. (GTEC) was engaged for $21,500 and 10% of estimated cost savings to conduct research into available green products and equipment, compile a list of product categories relevant to the PSF, identify all of the qualified vendors within each category, and negotiate the best possible price and terms for the use of the product in the PSF.
GTEC
=s research initially yielded 10 green product categories for possible inclusion in the IPP. Based on vendor responses to the GTEC solicitations and further evaluation by City staff, the list was winnowed down to five (5) categories: carpet/raised flooring system; acoustic ceiling tile; resilient flooring; ceramic tile; and lighting fixtures. These five categories were retained and the other five categories were rejected based on either the overall importance of the product/equipment to the functionality and environmental performance of the building, the relative lack of confidence in the City=s ability to obtain an acceptable product at a good price through the formal bid process, or the attractiveness of the vendor discounts being offered to the City for the qualified products. For four of the five final categories, at least three vendors submitted proposals for inclusion in the IPP program, and in the remaining category, only one vendor submitted an acceptable proposal. Based on the comparison of quality, reliability and price between the proposers, the following vendors were selected by a committee comprised of representatives from the Environmental and Public Works Management Department, Planning and Community Development Department, and the construction manager from The JCM Group as recommended finalists: Interface (carpet/raised floor); Armstrong (ceiling tile and resilient flooring); Terra Green (ceramic tile); and Lightolier (lighting fixtures).The recommended IPP vendors listed above offer the City the highest performance products with respect to their environmental characteristics and functionality at the best available price. The total estimated cost for all categories of selected products and equipment is $1,363,412. This represents a total cost savings of $394,367 over the estimated costs included in the project budget. Deducting for the initial $21,500 contract and the additional $39,437 in commission payments to GTEC, the net savings to the City from the Industry Partnering Program approach will be $333,430 or almost a 23% savings over the project budget estimate for these items. If approved by Council, the final negotiated prices will be assigned to the successful bidder on the overall construction contract and will be awarded by Council in January.
Budget/Fiscal Impact
It is estimated that the net fiscal impact from the adoption of the recommendations in this staff report will be a $333,430 reduction in the amount of the contract which is ultimately awarded by Council for construction of the Public Safety Facility.
Recommendation
It is recommended that Council waive competitive bidding and authorize the City Manager to negotiate purchase prices for selected equipment and materials to be used in construction of the new Public Safety Facility as part of an Industry Partnering Program for cost-effective procurement of green (environmentally preferable) building materials.
Prepared by: Craig Perkins, Director of Environmental & Public Works Management
Suzanne Frick, Director of Planning and Community Development
Andy Agle, Deputy Director of Planning and Community Development
Lauren Friedman, Senior Architect, EPWM
Susan Munves, Resource Efficiency Coordinator, EPWM