City of Del Mar to change construction bid policy

DEL MAR — In an effort to simplify the building process and save time and money, City Council introduced an ordinance at the April 2 meeting to establish alternative bidding procedures for construction of public facilities.In 1982 the state enacted a law requiring cities to formally solicit bids for any public works project valued at more than $5,000.This severely limited using city staff to perform these projects, and the bid limit was viewed as favorable to the construction industry at the expense of local agencies, Public Works Director Eric Minicilli said.

“For Del Mar, back then, it wasn’t that big of a deal,” he said. “We don’t have the manpower, then or now, to do much public contract work.”

Minicilli said it would be an issue for a larger city that, for example, has its own paving department.

Currently in Del Mar, after any project greater than $5,000 is designed and approved by council it goes to bid for 21 days. Staff then presents the bids, usually with a recommendation, during a public meeting and council members authorize an award contract.

Minicilli said it takes a project about two months to go from design completion to contract award. Multiple staff reports costing between $2,000 and $5,000 are required. In this process the selected contractor retains certain advantages if and when change orders are required, he said.

Although the 1982 law had little impact on Del Mar, other small cities complained it was costing them $2,000 to bid a $10,000 job. “That’s kind of an issue,” Minicilli said.

In 1983, after local agencies pushed for legislation to restore some flexibility to construction projects, the state passed the Uniform Public Construction Cost Accounting Act.

The law allows cities to complete their own projects at higher limits, up to about $45,000.

“For us, that’s not that critical,” Minicilli said. “We don’t have the staff to take on a $40,000 project. But if something’s in the ($6,000) to $15,000 range that’s something we potentially can do.”

But another component of the act permits alternative bidding for projects valued at less than $175,000. It requires cities to establish a list of qualified contractors it can go to for jobs lower than that amount.

“If we have a small project … we’d like to get bid relatively quickly we can issue a bid request simply to those listed contractors,” Minicilli said. The law also allows the city manager to award contracts less than $175,000 to the lowest responsive bidder.

Minicilli said adopting the new procedures could reduce project schedules by five to seven weeks, decrease the amount of staff time required because the approval process would be easier and lower bidding costs by about 2 percent to 3 percent.

By acting as its own general contractor, the city could also avoid the typical contractor and subcontractor markup of about 10 percent, he said.

The city can also competitively address change orders on ongoing large projects.

“If there’s a large change order on a project, we’re pretty much forced to negotiate with the contractor,” Minicilli said. “Due to the bidding times (and) approval processes there’s really no opportunity to go to someone else and see if they can get something done cheaper or more effectively.”

Minicilli said the greatest benefit could be seen on smaller-scale jobs such as drain projects.

They are usually a “mishmash of small projects joined together in an effort to avoid going to formal bid for four different projects — paving, striping, curb and gutter (and) sidewalk, ” he said, adding that the new process will allow the city to address smaller jobs quicker.

Previous projects that would have been more effective using this process are the original chicane installation on Crest Road, traffic striping, sidewalk repairs and sewer inspection, he said.

More than 180 cities in state have adopted the procedures, including Carlsbad, Vista, La Mesa, Imperial Beach and Coronado in San Diego County.

“I’ve worked with this for quite a while,” said City Manager Scott Huth, who came to Del Mar from Coronado. “You generally use your contract bid list all the time, regardless of that limit because it just makes good sense.

“From a practical standpoint, to get the best deal for the city, we would generally send … our spec to all the ones on the list because our goal is to get the most competitive price.”

Councilman Mark Filanc, a contractor, agreed. He said for increased transparency the city should solicit bids from at least two or three contractors on the list.

“There needs to be a minimum in the city policy … except for maybe a (cost) lower threshold,” he said, adding that he would eventually like to see Del Mar adopt a design-build policy as well.

“Sometimes the design and bidding process costs more than construction,” Filanc said.

Minicilli said it will take about three months before the procedures become operational. The city will solicit qualified contractors once a year but contactors can ask to be added to the list at any time, Huth said.

Minicilli said his department will track the benefits once the new policy is implemented.

“I think this sounds like a cost-saving, more efficient operation,” Councilman Don Mosier said.

 

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