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Item C08BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY MEETING DATE: 8/17/05 DIVISION: COUNTY ADMINISTRATOR BULK ITEM: YES DEPARTMENT: AIRPORTS STAFF CONTACT PERSON: Peter Horton AGENDA ITEM WORDING: Award of bid to Koch Corporation, as the most responsive bidder, for the Noise Insulation Program (NIP) Ph 4 Construction, for the Key West International Airport. ITEM BACKGROUND: Per attached documents, Koch Corporation was the most responsive bidder for this project. The low bidder, HIPP Industries, was not the most responsive bidder due to irregularities in their bid. PREVIOUS RELEVANT BOCC ACTION: Approval to submit Passenger Facility Charge Application # 8, October 15, 2003. CONTRACT/AGREEMENT CHANGES: n/a STAFF RECOMMENDATION: Approval to award bid to the most responsive bidder, Koch Corporation. TOTAL COST: $2,876,958.00 COST TO AIRPORT: None COST TO PFC: $71,923.95 COST TO COUNTY: None REVENUE PRODUCING: No BUDGETED: Yes SOURCE OF FUNDS: FAA, FDOT, PFC Revenue AMOUNT PER MONTH /YEAR: APPROVED BY: County Attorney n/a OMB/Purchasing n/a Risk Management n/a AIRPORT DIRECTOR APPROVAL Peter J. Horton DOCUMENTATION: Included X DISPOSITION: Ibev APB Not Required AGENDA ITEM # TIE Miller dunwriddie Improving Your Community 1W9 16 June 2005 Deborah Murphy Lagos U RS Corporation 7650 West Courtney Campbell Causeway Tampa, FL 33607-1462 RE: Key West Noise Insulation Program (NIP) — Phase 4 Bid Dear Mrs. Murphy Lagos: Under the direction of THC, Inc. (THC), Miller Dunwiddie Architects (MDA) forwarded the Key West International Airport copies of the construction bids for the Key West Noise Insulation Program (NIP) — Phase 4. The bids were opened at the Monroe County purchasing office on 1 June 2005. The following two bids were received: H.I.P.P. Industries, Inc. - $2,756,916.00 Koch Corporation - $2,876,958.00 After review of the bids and conversations with the Monroe County DBE Liaison Director Jerome Fain, THC and MDA have identified the following two (2) concerns with the bid received from H.I.P.P Industries: 1. Incomplete Unit Price Costs H.I.P.P. Industries neglected to include the required unit price cost for item #1 and #2 on the lower portion of page 00410-3 of the bid form. This unit price item, although included in the total bid, provided information to the sponsor regarding the amount of funds that have been allocated for duct leakage testing and duct sealing. 2. Failure to meet the established Phase 4 DBE participation goal of 15.5% The successful NIP Phase 4 bidder is required to meet the Disadvantaged Business Enterprises (DBE) provisions and shall utilize not less than the prescribed goal of 15.5% DBE participation. In the event the bidder does not meet or exceed the established DBE goal, the bidder is required to demonstrate and document to the Sponsor that it made a "good faith effort" in identifying DBE participation. Although the H.I.P.P. Industries bid documents indicated a 15.9% DBE participation level ($440,000 of their total bid), a closer examination reveals that their DBE participation was actually only 11.9% ($327,980 of their total bid), due to incorrect DBE participation calculations that are inconsistent with federal regulations (see attachment), THC has concluded that H.I.P.P. Industry's bid has failed to meet the Phase 4 DBE participation goal of 15.5% due to the following facts: Monroe County Board of County Commissioners Key West Noise Insulation Program — Phrase 4 Key west International Airport page a. At the direction of THC, MDA contacted H.I.P.P Industries on 7 June 2005 t. review their bid and confirm how their DBE participation percentage wa obtained. H.I.P.P Industries subcontracted the electrical scope of the work t, Florida Keys Electric (FKE), who is a certified DBE. This work alone was nc sufficient to obtain the required DBE percentage. To obtain the required 15.50 DBE participation goal, FKE then subcontracted a portion of the mechanical wor to Sub -Zero, who is not a certified DBE. b. The Key West and Marathon Airport DBE language states the following: "Key West International Airport will count toward its DBE goal only expenditure to DBE's who perform a commercially useful function in the work of a contract. " The Key West and Marathon Airport DBE language further states: "A DBE is considered to perform a commercially useful function when it r responsible for execution of a distinct element of work of a contract and carryin. out its responsibilities by actually performing, managing, and supervising th work involved." Since FKE is not actually performing the mechanical work, it is not (by the abov, definition) providing a commercially useful function. c. The DBE portion of specification section 00210 — Supplementary Instructions to Bidders requires the contractor to ensure that DBE as defined in 49 CFR Part 26 have the maximum opportunity to participate in the performance of this contract. 49 CFR Part 26.55 states the following: "When a DBE subcontracts part of the work of its contract to another firm, th value of the subcontracted work may be counted toward DBE goals only if th DBE's subcontractor is itself a DBE. Work that a DBE subcontracts to a nor DBE firm does not count toward DBE goals. " d. 49 CFR Part 26 Appendix A — Guidance Concerning Good Faith Efforts states the following: "When, as a recipient, you establish a contract goal on a DOT assigned contrac a bidder must, in order to be responsible and/ or responsive, make good fait efforts to meet the goal. The bidder can meet this requirement in either of tw ways. First, the bidder can meet the goal, documenting commitments fc participation by DBE firms sufficient for this purpose. Second, even if it doesn meet the goal, the bidder can document adequate good faith efforts. This mean that the bidder must show that it took all necessary and reasonable steps t achieve a DBE goal or other requirements of this part, which, by their scopE intensity, and appropriateness to the objective, could reasonable be expected t obtain sufficient DBE participation, even if they were not fully successful. " e. On 11 May 2005, THC and MDA conducted a Phase 4 Pre -Bid Meeting at whit time all attendants received a "Key West International & Florida Keys Maratho Airports DBE Directory". This directory contained ten (10) potential Key We= area DBE Contractors, clearly enough potential contractors to meet the 15.50., participation goal. During the NIP Phase 4 bid process, H.I.P.P. Industries di. not represent or communicate to THC or MDA that they were having difficult obtaining DBE sub -contractor bids. Monroe County Board of County Commissioners page 3 Key West Noise Insulation Program — Phase 4 Key West International Airport In summary, the intent of the NIP Phase 4 contract is to obtain a 15.511/o DBE participation level. In the event this percentage is unattainable, the bidder has the responsibility to provide a "good faith effort" documenting how they obtained the most possible DBE participation. Based on the above information, THC has reached the following conclusions. First, FKE is not performing a commercially useful function as outlined in the Key West and Marathon Airport DBE plan. Second, H.I.P.P. Industries did not meet the DBE goal as outlined in 49 CFR Part 26.55. Finally, it does not appear that H.I.P.P. Industries demonstrated nor documented a "good faith effort" in their proposed DBE participation. In summary of the above information, H.I.P.P. Industries NIP Phase 4 bid clearly does not meet the established 15.5% DBE goal and, as a result of their lack to document and establish a good faith effort, H.I.P.P. does not appear to be a responsible and/or responsive bidder. Review of second low bidder f Koch Corporation) At the direction of THC, MDA also contacted Koch Corporation on 7 June 2005 and reviewed their bid on this project. Koch Corporation did include the required unit price cost for item #1 and #2 on the lower portion of page 00410-3 of the bid form which provides information to the sponsor regarding the amount of funds that have been allocated for duct leakage testing and duct sealing. In addition, Koch Corporation's bid exceeded the established 15.5% DBE goal (16.6% DBE participation, $477,281 of their total bid). After a detailed review of their bid proposal (see attachment), MDA has concluded that Koch Corporations 16.6% DBE participation calculation is consistent with 49 CFR Part 26.55 regulations, 49 CFR Part 26 Appendix A — Guidance Concerning Good Faith Efforts regulations and Phase 4 NIP Construction Specifications Section 00210. Although Koch Corporation's bid ($2,876,958) is $120,042 higher than the low bidder, it is still lower than the engineer's estimate ($3,309,798 - $58,067 per home) and represents a construction average of $50,472 per home. NIP Phase 4 Award Recommendation After review of the above information, THC recommends that the contract for Key West Noise Insulation Program (NIP) — Phase 4 be awarded to lowest responsible / responsive bidder, Koch Corporation, as they have met all the requirements for bidding as outlined in the construction documents. Please call with any questions that you may have regarding this information. Sincerely, Steve Vecchi THC Director of Sound Insulation Services C' Tom Brown, MDA Ben Newlin, MDA Richard Sure, The Sun Group Florida Keys Electric (FKE) DBE Contractor Electrical WorK=$327-980 0 N 0 vs Sub -Zero Non-DBF. Contractor Mechanical Work = $112.020 S�pabj FEonda Keys Electric (FKE) DBE Contractor Electrical work - $248.625 H.I.P.P. Industries Non -DBE Contractor Total Bid = $2,755.916_n0 Sub -Zero Non -DBE Contractor Mechanical Work $376,218 Koch Corporation Nan -DBE Contractor I Total Bid - $2,976,958.00 Southern Metal Products Non -DBE Contractor Hurricane Shutters = 5247,877 Sub -Zero KENMAR Non-DBH Contractor DBE Contractor Mechanical Work = $481.300 Hurricane Shutters = 5228,656 Bid Breakdown Florida Keys Electric $ 327.980 06 Sub -Zero $ 112,020.00 Sub -Zero $ 376,218-00 Southern Metal Products $ 247,877.00 Remainder of Work $1,692,621,00 TOTAL H.I.P-P BID $2,756,916.00 DBE Breakdown Indiratec DBE in H. i.P. P. Bid $327,980 (FKE) + Si 12,C20 (Sub -Zero) = S44U00 $440,C00 r $2.756,916 - 15.9 % Actual DBE $327,980 (FKE) $327,980 i $2,756.D16 = 11 9% Bid Breakdown Florida Keys Electric $ 248.625-00 Sub -Zero 3 481 .300.00I KENMAR S 228.656.00 Remainder o` Work $1,918.377-00 TOTAL KOCH BID $2,876,958,00 DBE Breakdown Indlcated DBE in Koch Bid $248,625 (FKEj + $228,656 (KENMAR) - 5477,281 $477,281 ! $2,876,958 = 16.6% $248.625 (FKE) + 5228.656 (KENMAR) _ $477,281 $477,281 ! $2,876,958 - 16.6% rnilier dunwiddie Key West International Airport co"Isl-uctinn ser";c s Phase 4 - Bid DBE Analysis � � � | k 0 I oc § e \ CC Z 0 02 � / 2 I k � @ } / LU D w , 0 � , z §: LLJk I LU z a a n \ _ � 0 \ a # - a & c ■ / _ \ & - @ \ a % � ƒ LO � R [ - 0 k m 2 CD S N a k B © E z 0 to § 2 = 0 ] 7 o I k R c / E § a % 2 6 � 7 / z k § d _ % G f \ E - I 0 Q $ 0 \ a § m w �2 I@ & .� - � � k z � 7 [ m o - $ / ® § & q _ § k a _ c c \ _ S _ f - - o % k _ 0 7 0 ct 7 0 k # :% » 7 & � 2 LU 2 \ g ® 2 n § 2 2 § § 2 ) 8 IL § g 0 ° & z 0 \ g § � @ § � \ in° § ■ § ( § 2 k g & 2 A \ E k m 2 R £ ) ■ @ b # -i f 0 R Cl) s } } �n rn L1J d U 47 CL Q =in Q6) w QJ � O O Q s i Q� CL p m C7 O U jo a } d Z -j Cif m _ a w s Z H Ln � 3 Z w Q �— O r- 00 CD �— p N N �Pr w _0 W Q Z a CL W +- q W u T t d ❑�W~ LL Q LU } W Q CDZ o rn > U p Z O Ln Ln _ = o LLJ Lu o mLn CL y <LU � _ > 0 CO -� — ry d Z p v� 7 yj y Ln° L 0 a ~ ~ a .'^ W G � V O rn p Q W �s D > 0 4 Q LL } L L L Z LU } V�1 } In N LU U') LU `u y LE } O } U J W Q 41 s 0 } V %i U) CL } Lco p O t G -o U L y p m U E 6 O = O Y -ra w m: s } H v7 -4 m 07/29/2005 11:15 FAX U 003/008 SubJect FW: KWiA Noise insulation Program - Phase 4 -----Original Message ----- From: Hutton -Suzanne Sent: Thursday, July 14, 2005 3:15 PM To: Horton -Peter Cc: Cherry -Lisa Subject: KWIA Noise Insulation Program - Phase 4 Peter: I know you're thinking, "Why is Suzanne e-mailing me? She's not my airport attorney." However, the general public and most of County staff usually treat me like Mikey (as in "Let Mikey try it," only here it's "Call Suzanne - she handles everything"). Besides, I do deal with a lot of purchasing issues. I received a call today with a request to look into the DBE aspect of the bids. The very face of the submitted documents indicates that HIPP has made a misrepresentation as to their DBE participation. The rules say that if there is a subcontract to a non -DBE by a DBE, the value of that sub -contract is not to be included in the computation for the DBE participation. Nevertheless, HIPP has submitted a document: asserting that 15.95% of the bid is DBE, but only the electrical contractor is a DBE. The A/C company is not. Therefore, their sub -contract amount should not be included in the DBE percentage calculation. Even if the electrical contractor had a license which would allow him to sub -contract the a/c work to a mechanical contractor, which I don't believe it does, the rules are pretty clear about the exclusion of the value of the non -DBE sub -contract. Accordingly, the documents which I saw (pages 00431-1. 00454-4, and 00454-5) seem to me to render the HIPP proposal non -responsive, at best. I will probably discuss this finding with Pedro whenever his schedule & mine coincides, but I would like to know why this proposal is still being treated as a responsive bid. Suzanne A. Hutton