2003-25120 Reso
City of Miami Beach - City Clerk's Office
February 5, 2003 I REGULAR AGENDA I R7 - Resolutions
8:59:00 p.m.
Supplemental Materials: R7D - Resolution
R7D A Resolution Adopting, Respectively, The Recommendations Of The Administration And
The Finance And Citywide Projects Committee, At Its Regular Meeting On January 29, 2003,
And Authorizing The Administration To Terminate For Convenience, The Agreement For
Preconstruction Services Between The City And Jasco Construction Company For Construction
Management And Risk Services Pursuant To Request For Qualifications (RFQ) No. 117-99/00,
Dated April 18, 2001, And As Amended; Said Termination For Convenience Pursuant To
Section 6.2 Therein; Further Authorizing The Administration To Issue A Bid For Construction
Management Services For The Renovation And Expansion Of Fire Station No.2, And
Construction Of Two Water Tanks And A Water Pump Station.
(Capital Improvements Projects)
(Resolution)
R7D A ResehJtion Rejecting The Prepesee Guaronteee Maximum Prise In The /\mel:lnt Of
$4,840,933, Submitlee Pursuant Te The Agreement For Pr.e Censtruction Services Between
The City Of Miami Beach, Fleriea, And Jasee Censtruotien Cempany, Ine., Fer CenstruGtien
Management J\.t Risk Services Pl:lrsl:lant To RFQ Ne. 117 99/00, Entitled Censtrl:lction
Management J\.t Risk For The Fire Statien Ne. 2 Rene'lation Ane Expansion, /\s Previously
Amended To Aed Water Tanks, Pump Statiens, And Relatee Items, Fer The Constrl:lctien Of
Tv.'e Throe Million Water Storage Tanks, ^ '/',/{]ter Pump Station, A Tempera!)' Parking Lot Near
The Public 'Norks Yare And A Partial Site Drainage System; Ane Fl:lrther /\uthorizing Tho City
Manager, Or His Designee, To Terminate The Agreement For Convenienee Pursuant Te The
1\l:Jthority Grantee In The /\gr.eement.
(Ca~itallmpro'Jements projeets)
ACTION: Resolution No. 2003-25120 adopted as amended (see motion below). Motion
made by Commissioner Bower; seconded by Vice-Mayor Cruz; Voice vote: 5-2; Opposed:
Commissioners Gross and Smith. Tim Hemstreet and Legal Department to handle. The
contract is to be placed on the February 26 Agenda. Lilia Cardillo to place on agenda.
City Clerk's Note: 12/5/03: No resolution will be created. See Motion which is included
in this Afteraction.
Jorge Gonzalez, City Manager, stated that this is an item that has been heard at a special
meeting of the Finance and Citywide Projects Committee. This issue involves Fire Station # 2
and the water tanks project. There is a construction-manager-at-risk (CM-at-risk) contract with
Jasco Construction Company. The Administration believes it is at a point where the
recommendation is to sever the relationship and proceed with a bidding process to solicit a new
construction manager or general contractor who can do the water tanks and the fire station
projects.
Printed by the City Clerk's Office
Date Printed: 121512003 Time Printed: 11 :26:46 AM
Source Database: C:\Data\folio4.2\Clerk174.nfo
Page 1 of4
Williams, Mercedia
From: Williams, Mercedia
Sent: Wednesday, February 12, 2003 3:30 PM
To: Chartrand, Jorge
Cc: Hatfield, Liliam
Subject: Amended Resolution
Jorge,
At the 2/5/03 Commission Meeting Resolution No. 2003-25120, item R-7 -0 was amended. See below.
Supplemental Materials: R7D - Resolution
R7D A Resolution Adopting, Respectively, The Recommendations Of The Administration And The Finance And
Citywide Projects Committee, At Its Regular Meeting On January 29, 2003, And Authorizing The Administration
To Terminate For Convenience, The Agreement For Preconstruction Services Between The City And Jasco
Construction Company For Construction Management And Risk Services Pursuant To Request For Qualifications
(RFQ) No. 117-99/00, Dated April 18, 2001, And As Amended; Said Termination For Convenience Pursuant To
Section 6.2 Therein; Further Authorizing The Administration To Issue A Bid For Construction Management
Services For The Renovation And Expansion Of Fire Station No.2, And Construction Of Two Water Tanks And A
Water Pump Station.
(Capital Improvements Projects)
(Resolution)
R?];) f. R'l!~8ltfti811. Rejeeting 'Fhe Pte~8ned Q\tlllllllked Umdm_ Pfiee Ifi 'Fke f.ms\tftt Sf 1C1,819,9JJ, Sdblliitt8li
Ptwstt8ftt 'Fa The ~.~geemeftt Faf PIe C81l~ftueti61l tSeRiesa B~.eeB 'Fhe C~ Of1fitmti Besek, FIeri., hiltt JMSS
Ca113ftttt.ti3fi CSlill'Mlj, Ins., Faf C311Mfllieti8111Ian~enu~Bt fA. Rbk Sfl.ie,o PuiatlMtt 'Fa IlI'Q }Ja. 11799/99,
Elttitlea C6lliJatu~ti61l ~laftagtl1u,nt fA R1ak Far The file 8tMian lIe. 2 ~fta..atial\ kul E~aflJian, ~\[I Pfe.iaMlj
",\B..enaaa Ta .!ula v.ratet: TM1k3, P1itl~ gttt.t\aft:3, .hlui Related nama, FSI 'Fhe Ga113Httetisft Qf T.. 6 'FIHee ~lilli81l
'I:!ftter StSfase 'Foolu, fa. ,\\Tatel Pttl1ll' smeaR, 11 'Fa11paIftl) Pmkm& I.et 'tJfftl' 'Fha PHhlie '.',~a[lts Yant A1Ul A Partial
Sit~ Ill&H:1ftge ~ ~m, kid Fltrth.~1 JaHl131ifJing Tke Ci~ 11M\llgfr, 01 Ilia Be3ignee, Ta 'f~.tnit\ate The A~ecnlel\t
Far Can, erM.8fte8 PM3tltlUt 'Fa 'FIle l,,-tttharit) Cumtetllfi 'FIle J.~tlliS.:Bt.
(Capittlllml1f8, ameMs Prl1jaet'9)
ACTION: Resolution No. 2003-25120 adopted as amended (see motion below). Motion made by Commissioner
Bower; seconded by Vice-Mayor Cruz; Voice vote: 5-2; Opposed: Commissioners Gross and Smith. Tim Hemstreet
and Legal Department to handle. The contract to be placed on the February 26 Agenda. Lilia Cardillo to place on
agenda.
Jorge Gonzalez, City Manager, stated that this is an item that has been heard at a special meeting of the Finance and
Citywide Projects Committee. This issue involves Fire Station # 2 and the water tanks project. There is a
construction-manager-at-risk (CM-at-risk) contract with Jasco Construction Company. The Administration believes
it is at a point where the recommendation is to sever the relationship and proceed with a bidding process to solicit a
new construction manager or general contractor who can do the water tanks and the fife station projects.
Robert Middaugh, Assistant City Manager, stated that the water tanks and the fire station projects have been
combined into a single project because of the proximity of the two projects and the interrelationship of the projects.
There needs to be a coordinated work site. Jasco has not performed as expected under their contract. The
Administration has developed a level of discomfort with Jasco and does not have confidence moving ahead with this
contractor. History points out that those projects where there have been problems are those where a problematic
relationship existed between the contractor and the Administration. There needs to be a good working relationship
between the Administration and the contractor. The Administration is uncomfortable going into a relationship with
Jasco. The Administration does not trust Jasco and Jasco does not trust the Administration. This is not a good way
to start this very important project. Based on where we are today and given the complexity of this project, the
Administration is recommending not to proceed with Jasco because of the risks. The City's best interests are not
being served by proceeding with Jasco. There is a contract provision that allows for the separation without penalty
to either party.
Lucia A. Dougherty Esq. (Greenberg Traurig) spoke on behalf of Jasco. She gave a history of the relationship from
2/12/2003
Page 2 of 4
Jasco's perspective. She asked the City Commission to allow the water tanks portion of the contract to go forward
and to continue to do the bidding for the fire station project. Put a liquidated damages clause and retainage clause in
the contract, if necessary.
Commissioner Gross stated that the City hired Jasco to tell the City what the cost was going to be and at every step
Jasco never told the City the costs were going up. That was their job. They were hired for pre-construction services
not for construction services. Jasco was engaged to let the City know the pricing at every step of the way and they
didn't do what they were supposed to do.
Robert Middaugh, Assistant City Manager, stated to cry "foul" at this point in the process is unfair and
unreasonable. Jasco did not provide the deliverables or the information the Administration needed to get a good
design and have the design reflect whatever changes needed to be made to come within budget. The Administration
is at a point where, if the Commission wanted to proceed with the fITe station the City would have to pay an extra
cost for redesign to do the value engineering which should have been a part of the process. He stated that there is a
problematic relationship. Jasco is here with a corps of lobbyists to justify their failure before the Commission rather
than speaking with the Administration directly.
Commissioner Garcia stated that if the City has a company that has a bond, a good reputation, can do the job, and
can break ground in March on the water tanks project, he would go with them.
Commissioner Steinberg asked the City Manager if it wasn't for the Mastec allegations would the Administrations
recommendation still be the same?
Jorge Gonzalez, City Manager, stated, "yes" because that's not the primary motivation. The primary motivation is
Jasco failed in the CM process for which we hired them. They may be absolutely correct on their budget estimates,
but to bring it at the end instead of earlier in the process is where they failed. He stated that the experience has been
that when you have a good contractor and a good relationship the project moves. The point is that if there is even a
reasonable doubt with this contractor and there is an opportunity to fIx it, then fix it.
Commissioner Steinberg asked the City Manager do you feel comfortable proceeding with Jasco.
Jorge Gonzalez, City Manager, stated, "no".
Vice-Mayor Cruz stated that he is concerned about shoving this contract down the Administrations throat. If the
Administration has lost confIdence in Jasco what is this Commission going to do?
Jorge Gonzalez, City Manager, stated that this Commission, the community, and the Administration want to see this
fire station built. Allowing Jasco to do the water tanks they could perform marvelously, but the likelihood, given all
that we know, and all that this Manager has been able to observe, in the event they don't perform well the fITe station
will absolutely be delayed. If this Commission is telling the Administration the priority is to build the fITe station
then the Administration's recommendation is the best way to see the fITe station built. The most risk free approach is
sever the relationship with Jasco now, put the items out to bid, select a contractor who the Administration has more
confIdence in, and proceed. The downside is the bidding process will add about a 4 month delay. The downside of
going forward with Jasco is that if the relationship needs to be severed in the future the City will fmd itself in
litigation which is a much longer process and much more expensive.
Lucia A. Dougherty Esq. (Greenberg Traurig), stated that on January 8, the Administration makes a
recommendation. The Administration has confIdence that Jasco can do the water tanks. Three weeks later the
Administration changes its mind. What happened? She said she asked the City Manager and he said that Jasco lied
to the Commission. She stated that there has been a mis-communication between her client and the Administration.
She requested that her client meet with the City Manager. She said that her clients would not stand in front of the
Commission and lie. Jasco wants to prove that it has performed and that there are miscommunications.
Vice-Mayor Cruz asked if Jasco has presented the cost and can it be done separately from the fITe station?
Jorge Gonzalez, City Manager, stated that the water tanks project must be completed first. Can Jasco do the water
tanks; "yes". Have they submitted a budget that is within the funding scheme; "yes". The discomfort is the
Commission is directing the Administration to proceed with all due speed on the fITe station. Given the experience
with Jasco, and it should be noted that Jasco has not built anything on Miami Beach for the City, their performance
is based on the CM-at-risk component, he has lost confIdence in them because of what they have done so far. The
City Manager stated that Jasco has no credibility with him. He is concerned that if Jasco's performance impacts the
2/12/2003
Page 3 of4
building of the fife station the City Commission will hold the Administration accountable. If the Administration is
going to be held accountable, the Administration needs to have confidence in the people doing the project. I have
never said Jasco can't do the project. I'm saying that the Administration is not comfortable with having Jasco doing
it.
Motion made by Commissioner Smith to approve the Administration's recommendation; seconded by Commissioner
Gross; discussion continued before the vote was taken.
Commissioner Steinberg asked if there was anything Jasco could do to make the Administration comfortable going
forward or is it at a point where it won't be able to happen?
Jorge Gonzalez, City Manager, stated that if it is the will of this Commission to proceed with Jasco the
recommendation would be to build into the contract certain specific requirements relative to liquidate damages,
penalties for failure to proceed, penalties for failure to complete, with significant penalties. He stated that he doesn't
want the project to stop because of litigation. If the project stops the fire station doesn't get started.
Lucia A. Dougherty Esq. (Greenberg Traurig), suggested a retainage of 10% until the project is completed or Jasco
provide monthly reports.
Commissioner Gross stated that the architect appeared at the Finance and Citywide Projects Committee meeting and
stated that he did not get the participation of the CM-at-risk that he needed to properly get a set of drawings that
were within budget.
Vote taken: voice vote: 3-4; Opposed: Mayor Denner, Vice-Mayor Cruz, and Commissioners Bower and Garcia.
[Later in the meeting after discussions continued, Mayor Denner voted "no" on the motion to accept the City
Manager's recommendation with a series of provisos (see below)].
Mayor Denner, before his vote, stated that as chair to the GO Bond Oversight Committee he wants to make sure that
the fire station is built. He asked who is the person for Jasco who will be doing the work? He asked Alfredo
Brizuela, P.E., partner with Jasco, if he was going to do this job. Ifhe votes to allow Jasco to do the project he will
have Jasco in front of the GO Bond Oversight Committee every 30 days.
Alfredo Brizuela, P.E., partner with Jasco stated that they have selected the best subcontractors for the project. He
stated that they have selected Daniel Electrical Contractors, Inc. for electrical, Fred McGily, Inc. to do the
mechanical, The Crom Corporation to do the water tanks, and MLC Construction Corporation to do the pump house.
These are all quality subcontractors.
Mayor Denner asked Mr. Brizuela ifhe even wanted this job?
Alfredo Brizuela, P.E., partner with Jasco stated that he has never avoided a challenge. This is a challenge. If it is
the will of the City Commission, he will proceed and go forward with this project. In the 20-years as a consultant,
as an engineer, and contractor he has never had a problem completing a project.
Mayor Denner stated that if Jasco is committed he doesn't want to hear about any problems. He wants the tanks
built and built on time.
Alfredo Brizuela, P.E., partner with Jasco stated "yes" he will do it.
Mayor Dermer voted "no" on the motion to accept the City Manager's recommendation with a series of provisos.
MOTION:
Motion made by Commissioner Bower to authorize the Administration to negotiate an agreement for the water tanks
portion only with Jasco; Seconded by Vice-Mayor Cruz; Mayor Denner recommended the following items be added
to the contract and instructed the Legal Department to write the strictest contract possible.
l. Report every 30 days to before the G.O. Bond Oversight Committee
2. In the contract the Legal Department to include every possible liquidated damages clause possible.
3. 20% retainage.
4. Ability to tenninate this contract at any time, for any reason.
5. Commissioner Gross' amendment is making this subject to favorable reference checks on jobs Jasco is currently
working on.
6. The contract will also contain a provision to have an assignment or assumption of the subcontractors' contracts
2/12/2003
Page 4 of 4
by the City if the Administration needs to default Jasco.
Mayor Dermer stated that if Jasco doesn't accept the contract terms than accept the Administrations
recommendation.
Commissioner Gross asked for an additional amendment that makes this subject to favorable reference checks on the
jobs Jasco is current working on.
Mayor Dermer accepted the amendment.
Raul Aguila, First Assistant City Attorney, asked for clarification on where this fits in with the existing contract? If
the existing contract is not being terminated for convenience, the existing contract has provisions that hinge on the
acceptance or rejection of the GMP.
Jorge Gonzalez, City Manager, stated that this will need to be revisited. He also requested that Jasco state now if
they agree to the 20% retainage and other liquidated damages that may be developed.
Lucia A. Dougherty Esq. (Greenberg Traurig), stated that Mr. Brizuela doesn't have a problem with it but he will
need to get his sub-contractors to agree.
Commissioner Gross asked about the contract and the fire station because it is all one contract.
Raul Aguila, First Assistant City Attorney, stated that the contract is divided into two parts. Part I is the delivery of
the GMP; Part II is the actual CM-at-risk.
Jorge Gonzalez, City Manager, stated that he wants to clarify the discussion. The Administration is to negotiate a
GMP and a contract with the provisions needed relative to the water tanks. The issue of the fire station will be dealt
with separately. The contract can be terminated for convenience and will be placed on the February 26 Commission
Agenda.
On the motion to authorize the Administration to negotiate an agreement for the water tank portion only with Jasco
and the conditions; Voice vote: 5-2; opposed: Commissioners Gross and Smith.
The contract to be placed on the February 26 Agenda. Lilia Cardillo to place on agenda.
Thanks,
Mercy
2/12/2003
AFTERACTION
February 5, 2003 . DRAFT
City of Miami Beach
R7D A Resolution Adopting, Respectively, The Recommendations Of The Administration And The Finance
And Citywide Projects Committee, At Its Regular Meeting On January 29,2003, And Authorizing The
Administration To Terminate For Convenience, The Agreement For Preconstruction Services
Between The City And Jasco Construction Company For Construction Management And Risk
Services Pursuant To Request For Qualifications (RFQ) No. 117-99/00, Dated April 18, 2001, And As
Amended; Said Termination For Convenience Pursuant To Section 6.2 Therein; Further Authorizing
The Administration To Issue A Bid For Construction Management Services For The Renovation And
Expansion Of Fire Station No.2, And Construction Of Two Water Tanks And A Water Pump Station.
(Capital Improvements Projects)
(Resolution)
R70 A Resall:ltian RejeetiRg The Pr=al'lasee Gl:lar-anteeEl MaxiFRl:lm PRse In ne Amal:lRt Of $<1,849,933,
Sl:lsmitteEl Pl:lFSl:lant Ta The .I\6r=aemeRt Far Pr=a ConstFl:letien Ser:vises BeweeR The City Of Miami
Beash, FlaFiEla, ARe Jassa Constr:ustian CompaRY, Ins., Far CaRstruetiaR ManagemeRt At Risk
Serl/iaes Pl:lFSl:lant To RFQ Na. 117 99,lQO, ERtitleEl CanstFl:letiaR MaRa6emeRt At Risk Fer The Fire
StatiaR No.2 ReRavation .I\REI ExpaRsien, I'.s Pr-e'Jiausly /\FRenEleEl Ta AElEl ':Vater Tanks, Pl:lFRI'l
Statiens, /\nEl RelateEllteFRs, Far The Constrl:lstian Of T'l.'a Thr=ae MUliaR Water Ster-a6e TaRks, A
Water Pl:lml'l Statian, .^. Temporary ParkiRg Let ~lear ne Pl:lslis '!.!arks Yard .I\REI ^ Partial Site
Drainage SysteFR; AREl Fl:lrther J\l:ltheR2!iRg ne City MaRager, Or His OesigRee, To TermiRate The
Agr=aement Fer CaR'JenieR6e PUFSl:lant Ta The .^.l:ltheFity GmnteElln The Agr-eement.
(Cal'litallml'lraVemeRts Pr-ejeets)
ACTION: Resolution No. 2003-25120 adopted as amended. Motion made by Commissioner
Bower; seconded by Vice-Mayor Cruz; Voice vote: 5 2; Opposed Commissioners Gross and Smith.
Tim Hemstreet to handle.
Lucia Doherty spoke.
Commissioner Garcia stated that he is favor of going with this company and get this project started.
Jorge Gonzalez, City Manager, stated that this company has not performed for what they were hired
for. If there is reasonable doubt and there is a problem to fix it, we should fix it.
Commissioner Steinberg asked the City Manager if he felt comfortable going forward with this
company and the City Manager stated no. He also stated that he has a great deal of respect for
Lucia.
Mayor Dermer asked the contractor to come up to the podium and state his name and to answer if he
is going to do the job. He also stated that he will be looking at him and will have him come to every G.
O. Bond Committee meeting to explain what he is doing.
Alfredo Brizuela, P.E., partner with Jasco spoke. He stated that they are hiring the best
subcontractors for the project. He stated that in twenty years he has never had a problem completing
a project.
Mayor Dermer emphasized that he wants this project built and built on time and he stated that he will.
Commissioner Smith stated that the Inspector General decided that Jasco could not contract with
Miami-Dade County. He stated that he thought the relationship was ended because Jasco did not
want to produce documents requested by the Inspector General.
Mayor Dermer recommended the following items added to the contract and instructed the Legal
Department to write the most strict contract possible.
1. Reporting period every 30 days to coincide with the G.O. Bond Committee
2. 20% retainage
3. ability to terminate this contract at any time for any reason.
Commissioner Gross further amended this contract subject to favorable recommendations from
people they are working for at the time.
Mayor Dermer requested a report back on the Commission Meeting of February 26, 2003.
New motion made with the amendments by Commissioner Bower; Seconded by
Commissioner Cruz; Voice Vote: 5-2: Opposed Commissioner Gross and Smith.
Prepared by the City Clerk's Office Page No. 22
F:\CLER\COMMON\2003\20030205\030205d4.doc
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
m
Condensed Title:
A Resolution by the Mayor and City Commission rejecting the proposed Guaranteed Maximum price
submitted by Jasco Construction Co., Inc. (Jasco) for the Fire Station No. 2/Water Tanks and Pump
Station Proiect; terminatina the AQreement with Jasco.
Issue:
Approve the Resolution to terminate the Agreement with Jasco Construction Co., Inc.
Item Summary/Recommendation:
On July, 17, 1996, the Mayor and City Commission adopted a Resolution authorizing an Agreement with
the firm of STA Architectural Group (STA) for architectural and engineering services for the Renovation
and Expansion of Fire Station NO.2. On April 18, 2001, the City entered into an Agreement with Jasco to
act as a Construction Manager at Risk on the Project and provide the City a Guaranteed Maximum Price
(GMP)based on the construction documents prepared by STA. Later, it was determined that in order to
construct the expansion to the Fire Station, the two new water tanks and a pump station would have to be
constructed first at the site. To maintain continuity and consistency, the additional scope of work was added
to the CM (Construction Manager) @ Risk Agreement with Jasco. The firm of Camp Dresser & McKee,
Inc. (COM) was retained to prepare the design and construction documents for the additional scope on May
8, 2002. On September 16, 2002, Jasco submitted a draft estimate of the GMP which was found to be
significantly in excess of the established budgets and not in compliance with some of the requirements of
the Agreement. In addition, the City and the consultants evaluated Jasco's performance in regard to their
obligations during the design process and identified several deficiencies which needed to be addressed.
Also, in October, 2002, the City was notified that Jasco was being investigated by the Miami-Dade County
Office of the Inspector General for alleged improprieties in a contract submittal to the County. On January
8, 2003, the Mayor and City Commission directed the Administration to continue working with Jasco to
obtain a GMP for the water tanks portion of the Project, to place the GMP proposal for the Fire Station on
hold and to bring the proposal for the water tanks to the Finance and Citywide Committee at a special
meeting in late January 2003. Jasco complied with the requirements of providing a GMP for the water
tanks portion and this was presented to the Finance Committee at a January 29, 2003 meeting. The City
Attorney also presented an assessment of the legal issues on the Project and verbally opined that even
though Jasco was legally an independent entity at the time the response to the CM @ Risk proposal on the
Fire Station was submitted there were other improprieties which made the response to the proposal
suspect as to its accuracy. Because of this assessment and the performance inconsistencies by Jasco,
the Administration recommended to the Finance Committee that Jasco's Agreement be terminated under
the available provisions and that the complete Project be competitively bid to procure a replacement
Construction Manager (CM). The recommendation is to procure a new CM which will be responsible for
the complete Project but would commit to pricing the portions of the Project separately and to a similar
timeline as that established with Jasco. The Administration intends to bring a recommendation to award to
the replacement Construction ManaQer at the May 2003 Commission meetinQ.
Advisorv Board Recommendation:
The Finance and Citywide Committee accepted the Administration's recommendation and voted by a 4 to
1 vote to recommend that the Mayor and City Commission reject the GMP for the Water tanks and Pump
Station and to terminate the Agreement with Jasco.
Financial Information:
I Source of
Funds:
I 1J
Amount
Accoul1t
. . j . Appn;ived
Assistarit Clty Manager
RC
AGENDA ITEM
DATE
1771)
z.-~-~
C I T Y 0 F M I A M I BE AC H
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
http:\\ci.miami-beach.fl.us
COMMISSION MEMORANDUM
TO:
Mayor David Dermer and
Members of the City Commission
DATE: February 5,2003
FROM: Jorge M. Gonzalez
City Manager
SUBJECT: A RESOLUTION OF THE MAYOR AN ITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, REJECTING THE PROPOSED
GUARANTEED MAXIMUM PRICE IN THE AMOUNT OF $4,840,933,
SUBMITTED PURSUANT TO THE AGREEMENT FOR PRE-
CONSTRUCTION SERVICES BETWEEN THE CITY OF MIAMI BEACH,
FLORIDA, AND JASCO CONSTRUCTION COMPANY, INC., FOR
CONSTRUCTION MANAGEMENT AT RISK SERVICES PURSUANT TO
RFQ. NO. 117-99/00, ENTITLED CONSTRUCTION MANAGEMENT AT
RISK FOR THE FIRE STATION NO.2 RENOVATION AND EXPANSION, AS
PREVIOUSLY AMENDED TO ADD WATER TANKS, PUMP STATIONS,
AND RELATED ITEMS, FOR THE CONSTRUCTION OF TWO THREE
MILLION GALLON WATER STORAGE TANKS, A WATER PUMP STATION,
A TEMPORARY PARKING LOT NEAR THE PUBLIC WORKS YARD AND A
PARTIAL SITE DRAINAGE SYSTEM; AND FURTHER AUTHORIZING THE
CITY MANAGER, OR HIS DESIGNEE, TO TERMINATE THE AGREEMENT
FOR CONVENIENCE PURSUANT TO THE AUTHORITY GRANTED IN THE
AGREEMENT.
ADMINISTRATION RECOMMENDATION:
Adopt the Resolution
FUNDING:
Although the recommendation is to reject the proposed Guaranteed Maximum Price, funds
are available from Funds 504 and 424 previously appropriated for the Water Tanks, the
Pump Station and the Public Works Yard.
ANALYSIS
On July 17, 1996, the Mayor and City Commission adopted a resolution authorizing the
Mayor and City Clerk to execute an Agreement with the firm of STA Architectural Group
(ST A), pursuant to RFLI No. 133-94/95 for architectural and engineering services for the
renovation and expansion of Fire Station NO.2 and a Master Plan for the site at 451 Dade
Boulevard.
On March 9, 1998, the final scheme developed by STA was presented for approval and
recommendation, which called for the addition of a new, three apparatus bay fire station, the
historic restoration of the existing fire station building as well as a reconfiguration of the
Comm~sronMemomndum
February 5, 2003
Fire Station No.2 GMP
Page 2
Public Works Yard. This new recommendation represented a departure from the original
scope of work initially requested in RFLI No. 133-94/95.
As part of the General Obligation Bond Program (GO) and the Capital Improvements
Program (CIP), the Administration revisited the original recommendations for the Master
Plan, pursuant to RFLI No. 133-94/95, and negotiated an amendment to the original
Agreement with ST A for the design and construction administration services for the Fire
Station No.2 Project, to include the recommendations approved on March 9, 1998.
On June 28, 2000, the Mayor and City Commission approved Amendment No. 1 to the
Agreement with ST A for the restoration of the existing Fire Station No.2, the addition of a
new three apparatus bay Fire Station and the reconfiguration of the site.
An Agreement with Jasco Construction Co. (Jasco) was signed and executed on April 18,
2001. Jasco was retained by the City to act as Construction Manager at Risk on the Project
and to provide a Guaranteed Maximum Price based on the construction documents
prepared by ST A.
Earlier in the last calendar year, it was determined that it was necessary to construct two
new water tanks and demolish the existing water tank located within the Public Works Yard
before the construction on the Fire Station could begin. Camp Dresser & McKee, Inc.
(COM) was asked to provide a schematic design of two new water tanks and a new pump
station within the Public Works Yard site. As a result, the water tanks and related pump
station were added to the Jasco Construction Manager at Risk Agreement.
The City approved the schematic design submitted by COM and the locations and size of
the water storage tanks. The Administration requested that Jasco provide a separate GMP
forthe Fire Station project, for the EOC, and for the Water Tanks and Pump Station in order
to facilitate the evaluation of all costs.
The additional services for the complete construction documents and specifications of the
water tanks and pump station where approved by the City Commission on May 8, 2002.
COM was given Notice to Proceed with the completion of the project design on May 20,
2002. STA and COM were directed to provide sufficient information to Jasco to establish
the Guaranteed Maximum Price (GMP).
STA completed 100% documents for both the new station and the existing building and
completed the related City Building Department permit review. The entire permit review
process will be complete pending final approvals from the County's Department of
Environmental Resource Management. Camp Dresser & McKee, Inc. (COM) has submitted
to the City 100% documents for review and approval as well as the initial cost estimate on
the water tanks and pump station component.
On September 16, 2002 Jasco submitted to the City a document titled Addition and
Renovation of Fire Station No.2, 25th Street Water Tanks and Pump Station Estimate
Summary, leading City staff and the two AlE firms to believe that Jasco was submitting its
GMP proposal to the City for its acceptance, negotiation, or rejection. Upon its receipt, staff
Commission Memorandum
February 5, 2003
Fire Station No.2 GMP
Page 3
began to review the document and also transmitted the document to the respective AlE
firms for their comments.
Almost immediately it became apparent that the document submitted by Jasco was woefully
deficient as a GMP submittal and staff, and the respective AlE consultants, put together
comments to respond to the submittal. As the project is complex and the proposed pricing
within the GMP draft document is in excess of $2 million over the budget for just the Fire
Station component (not to mention some of the other components of the project, which are
also over-budget), the review and detailed responses were recently completed.
Staff, as well as the respective City consultant's, analyzed both the contents as well as the
form ofthe submittal and concluded that Jasco did not comply properly with the Agreement
and that its obligations were not fully met. The CIP Office also believes that Jasco has not
complied with the Agreement requirement to provide a project within budget for the new
Fire Station and the Renovation of the existing building.
Essentially, the staff and consultant review concluded that in addition to being significantly
over budget in the pricing of some components of the project, Jasco did not follow its
Construction Manager at Risk Contract with the City and did not provide the level of input
and review required by the contract. Very briefly, the budget issues and confirmed funding
are as follows:
Proiect Comnonent BudoetlFundino Jasco Price
Fire Station and Renovation $3,775,000 $6,313,338
Water Tanks/Pumo Station $4,448,608 $3,829,305
Site Work $525,000 $545,196
Temo Parkinq, PW Site $500,000 $1,228,530
Staff met with Jasco officials on Monday, December 23,2002 to discuss the status of the
Project. Jasco officials indicated that they did not intend for the document submitted to be
its GMP proposal and suggested that the purpose of the document was to provide a
"snapshot" of the ''worse case scenario" on the project after the documents for all the
components were sufficiently complete to price. At the meeting, Jasco officials stated that
the Water Tank/Pump Station components would be priced by the end of January 2003 and
a GMP proposal for that component provided to the City by early February. Jasco officials
also stated they recommended submitting the GMP proposal for the Fire Station portion of
the Project to the City about six months from now to obtain better pricing for those
components.
The reasoning stated by Jasco for the split GMP submittal is thatthe sub-contractors for the
various disciplines will provide better pricing for a project that will begin relatively quickly, as
opposed to a project that will begin in about 10 months, which is the expected construction
timeline on the Water Tank/Pump Station components. The Fire Station components
cannot begin construction any earlier due to site conflicts between the existing water tank
and the new Fire Station building.
Also, in October 2002, the City received notification of an action by the Miami-Dade
Commission Memorandum
February 5, 2003
Fire Station No.2 GMP
Page 4
County Office of the Inspector General regarding Jasco. Based on the information
received, the City Administration asked the City Attorney for an opinion on whether the OIG
action impacted the Agreement between the City and Jasco.
In order to continue the process, pending resolution ofthe legal opinion, the Administration
recommended that the City continue to work with Jasco in completing submittal of a final
GMP for the Water Tanks and Pump Station portion of the Project only. On January 8,
2003, the City Commission directed the Administration to continue the process with Jasco
for the GMP on the water tanks portion and to submit it to the Finance and Citywide
Committee at a special meeting.
Jasco has submitted a GMP proposal which is within budget parameters and is complete as
agreed. They have complied with the requirements of the Agreement for the Water Tanks
and Pump Station portion of the Project and have also agreed to certain modifications to the
Agreement requested by the City. These additional conditions are briefly, that Jasco would
agree that acceptance of a partial GMP does not obligate the City any further; that the GMP
for this portion will be provided independently of the Fire Station GMP; and that the sub-
contractor Agreements for this portion will be stated in such a way that they could be
assigned to the City in the event Jasco and the City terminate the Agreement at any time.
The GMP was presented to the Finance and Citywide Committee on January 29,2003 and
the Administration recommended to the Committee that the City not accept the GMP for
the Water Tanks and Pump Station p6rtion of the Project and that the relationship with
Jasco be severed under the available provisions of the Agreement. The options available
in the Agreement are to direct the consultant and the CM to redesign, value engineer, and
develop other cost savings measures at no cost to the City; to reject the GMP and take
possession of all documents to bid the work to a General Contractor; or to negotiate with
the CM in order to reach an acceptable agreement on the Project's scope and costs.
At the Committee meeting, a representative from the City Attorney's office gave a verbal
presentation on the findings by his office. The City Attorney representative stated that
Jasco was legally incorporated as a separate entity on the same day that the bid proposals
for the subject RFP were due and therefore complied with the RFP requirements. However,
it was also stated that Jasco noted in the written responses to the RFP, that Jasco was
incorporated in 1999, when in fact they were still an entity affiliated with Mastec and
Church & Tower at that time. It was also stated that to comply with the reference
requirements of the RFP for projects performed within a period of five years, Jasco
presented projects performed while still an affiliate of Mastec and not by Jasco as a
separate entity.
It can be argued that the above inconsistencies would have made Jasco non-responsive
and probably non-responsible if they had been known at the time of selection for the
Project. It is because of these and other newly identified facts that the Administration has
lost confidence in the relationship with Jasco and thus is recommending that the
Agreement be terminated in accordance with the provisions available and that the Project
be placed out to bid for a replacement Construction Manager. The City intends to provide
a bid proposal which will require the bidders to assume responsibility for the
management of all components of the Project and to provide a similar timeline as that
Commission Memorandum
February 5, 2003
Fire Station No.2 GMP
Page 5
discussed with Jasco. The bid proposal also will require that both portions of the Project
be priced separately in order to expedite the start of construction for the W ater Tanks and
Pump Station portion of the Project while all funding, value engineering and scope issues
for the Fire Station portion are resolved.
The Administration expects to present to the Mayor and City Commission a
recommendation on the replacement Construction Manager at the May 2003 Commission
meeting for a possible start of construction on the Water Tanks and Pump Station portion
of the Project in June 2003.
The Committee agreed with the recommendations presented at the meeting. Therefore,
the Administration is recommending to the Mayor and City Commission that the Agreement
with Jasco be terminated and that a process of competitive bidding for a replacement
Construction Manager be initiated in order to expedite the award of a contract and the start
of construction of the Water Tanks and Pump Station portion of the Project as quickly as
possible.
The fire station portion will proceed at a later date. Because the water tanks must be
constructed in advance of the fire station, there is a window of approximately six to eight
months to complete the value engineering process on the fire station and be ready with a
cost by the replacement Construction Manager for that portion of the Project
Attachment
T:\AGENDA\2003\fi:b0503\reguIa<\GMP Como Memo.doc
~
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ADOPTING, RESPECTIVELY, THE
RECOMMENDATIONS OF THE ADMINISTRATION AND THE FINANCE
AND CITYWIDE PROJECTS COMMITTEE, AT ITS REGULAR MEETING
ON JANUARY 29,2003, AND AUTHORIZING THE ADMINISTRATION TO
TERMINATE FOR CONVENIENCE, THE AGREEMENT FOR PRE-
CONSTRUCTION SERVICES BETWEEN THE CITY AND JASCO
CONSTRUCTION COMPANY FOR CONSTRUCTION MANAGEMENT
AND RISK SERVICES PURSUANT TO REQUEST FOR QUALIFICATIONS
(RFQ) NO. 117-99/00, DATED APRIL 18, 2001, AND AS AMENDED; SAID
TERMINATION FOR CONVENIENCE PURSUANT TO SECTION 6.2
THEREIN; FURTHER AUTHORIZING THE ADMINISTRATION TO ISSUE
A BID FOR CONSTRUCTION MANAGEMENT SERVICES FOR THE
RENOVATION AND EXPANSION OF FIRE STATION NO.2, AND
CONSTRUCTION OF TWO WATER TANKS AND A WATER PUMP
STATION.
WHEREAS, on AprillSTH, 2001 the City entered into a contract with Jasco Construction
Company, Inc. (Jasco), as the top ranked proposer pursuant to Request for Qualifications No. 117-
99/00 (RFQ), for Construction Management at Risk Services for the Fire Station No.2 Renovation
and Expansion Project (the Agreement); and
WHEREAS, pursuant to the Agreement, J asco was required to provide a guaranteed
maximum price (GMP) for the project, based on construction documents prepared by STA
Architectural Group (STA); and
WHEREAS, on or around May 20th, 2002, Jasco was additionally asked to include in its
GMP, the construction ciftwo new water tanks and a new pump station within the public works yard
site, adjacent to the fire station project; and
WHEREAS, on September 16th, 2002, Jasco submitted to the City a document entitled
"Addition and Renovation of Fire Station No.2, 25th Street Water Tanks and Pump Station Estimate
Summary", which lead the City to believe that J asco was submitting its GMP proposal to the City for
its acceptance, negotiations, or rejection under the Agreement; and
WHEREAS, Jasco's submittal, upon review by City staff, was determined deficient as a
GMP submittal; the proposed pricing submitted therein was in excess of two million dollars over the
budget for justthe Fire Station component of the project; and
WHEREAS, J asco has since submitted a GMP proposal to the City, as required by the terms
of the Agreement; and
WHEREAS, notwithstanding Jasco's submittal of the GMP, Section 6.2 ofthe Agreement
provides for a termination for convenience, wherein the City, at its sole option, at any time, for
convenience, without cause and without penalty, may terminate the Agreement upon 14 days prior
written notice to J asco when, in its sole discretion, the City determines such termination to be in the
best interest of the City; and
WHEREAS, Jasco's GMP submittal was presented to the Finance and Citywide Projects
Committee at its regular meeting on January 29th, 2003, with an administrative recommendation that
the City sever its relationship with the firm pursuant to the aforestated provision; and
WHEREAS, concurrent with the Administration's review and receipt of the GMP under the
Agreement, the City Manager, by written memorandum to the City Attorney's Office, dated
December 23rd, 2002, requested a legal opinion from that office relating to the legal relationship, if
any, between Jasco and MasTec/Church and Tower existing on November 17th, 2000 (November
17th, 2000 being the deadline for submittals of proposals pursuant to the RFQ, that Jasco was as the
successful proposer on); and
WHEREAS, the Manager's concerns relating to a potential legal relationship between J asoo
and MasTec/Church and Tower stemmed from several issues, including, but not limited to,
questions addressed by the RFQ Selection Committee to Jasco with regard to such a relationship
(J asco denied any relationship on that date), and the fact that the City had been subsequently made
aware of a Final Report by the Office ofthe Inspector General of Miami-Dade County (OIG), dated
January 14th, 2002, wherein the Report concluded that, among other things, Jasco did not disclose its
relationship to MasTec/Church and Tower in documents that it submitted to the County with respect
to a County contract award process; and
WHEREAS, the City Attorney's Office reviewed the subject OIG Report; all information
compiled by City staff and submitted with the City Manager's request for a legal opinion; the RFQ
and J asco' s proposal in response thereto; and, additionally, met with J asco' s counsel for the purpose
of inspecting original Jasco stock certificates evidencing ownership of the company, as well as
(following such meeting)requesting and reviewing a sworn affidavit submitted by Jasco's counsel
attesting to that corporation's creation, and composition of officers and shareholders; and
WHEREAS, based upon the totality of information presented, the City Attorney's Office
gave an oral presentation at the Finance and Citywide Projects Committee meeting on January 29th,
2003, and concluded that at the time of submission of its proposal in response to the RFQ, (or
November 17th, 2000), Jasco was indeed a separate Florida corporation, whose officers and
shareholders were neither principals, officers, nor employees ofMasTec/Church and Tower, and
that there was no evidence to establish that J asco either intentionally omitted or misrepresented its
relationship to MasTec/Church and Tower on the date of the proposal submittal; and
WHEREAS, notwithstanding its finding with respect to the legal relationship (or non-
relationship) between Jasco and MasTec/Church and Tower, the City Attorney's Office did concur
with the OIG Report, in that there appeared to be a continuing relationship between Jasco and
MasTec/Church and Tower; particularly with regard to Jasco's submittal ofMasTec/Church and
Tower projects as references for Jasco bid submittals to the County, the Miami-Dade Public School
system, and in the City's own RFQ; and
WHEREAS, following the City Attorney's presentation, further discussion took place at the
meeting regarding Jasco's GMP submittal, as well as the Administration's decision to not proceed
with the execution of Phase IT of the Agreement wherein, following the acceptance of the GMP,
Jasco and the City were to contract for construction of the project; and
WHEREAS, the City Manager and City Attorney's Office correctly noted that Section 6.2 of
the Agreement contains the aforestated Termination for Convenience clause, where, in effect, the
City can terminate the Agreement without cause; and
WHEREAS, the Administration made such a recommendation at the Finance and Citywide
Projects Committee; said recommendation was accepted by the Committee; and
WHEREAS, the Administration would further recommend that the project be placed out to
bid for a replacement construction manager.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission adopt the respective recommendations of the Administration, and the Finance and
Citywide Projects Committee, at its regular meeting on January 29th, 2003, and authorize the
Administration to terminate for convenience, the Agreement for Pre-Construction Services between
the City and J asco Construction Company for Construction Management at Risk Services, pursuant
to Request for Qualifications (RFQ) No.2 117-99100, dated April1Sth, 2001, and as amended; said
termination for convenience pursuant to Section 6.2 therein; further authorizing the Administration
to issue a bid for Construction Management Services for the renovation and expansion of Fire
Station No.2, and construction of two water tanks and a water pump station.
PASSED and ADOPTED this
day of February, 2003.
ATTEST:
MAYOR
CITY CLERK
IWRO/ED N!J1O
FORM al.ANGUAGl!
&FORE)(ECU11ON
JKO\ed
F:\atloIAGURIRESOS\Jasco.Reso.doc
1c-'-~ 03
OMI