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2004-25465 ResoRESOLUTION NO. 2004-25465 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE AWARD OF A CONTRACT TO THE FIRM OF WIDELL, INC., IN THE AMOUNT OF $17,352,615, FOR COMPLETION OF THE WATER AND WASTE WATER PUMP STATION UPGRADES PROJECT (BID NO. 99-97/98), PURSUANT TO THE ACTION(S) DELEGATED BY THE CITY COMMISSION TO THE CITY MANAGER AND/OR HIS DESIGNEE PURSUANT TO RESOLUTION NO. 2002-24924; AND FURTHER RATIFYING RESOLUTION NO. 2002-24924 AND HEREIN RE-AFFIRMING THE ACTIONS TAKEN BY THE CITY MANAGER AND/OR HIS DESIGNEE, PURSUANT THERETO, AS PROPERLY WITHIN THE CITY MANAGER'S AUTHORITY, AS DELEGATED TO HIM BY THE CITY COMMISSION PURSUANT TO SAID RESOLUTION, INCLUDING, BUT NOT LIMITED TO SUBSEQUENT ACTIONS TAKEN REGARDING THE CITY'S CONTRACT WITH FEI, INCLUDING BUT NOT LIMITED TO ANY AND ALL ACTIONS RELATED TO FEI'S DEFAULT UNDER THE CONTRACT; INVOKING THE PERFORMANCE BOND UNDER THE CONTRACT; ANY AND ALL RELATED DISCUSSIONS WITH THE SURETY, UNITED STATES FIDELITY AND GUARANTY COMPANY FOR PURPOSES OF ENFORCEMENT OF THE TERMS AND CONDITIONS OF THE BOND; SELECTION OF THE REPLACEMENT CONTRACTOR, WIDELL, INC.; AND ANY OTHER SIMILAR OR RELATED ACTIONS. WHEREAS, on February 1999, Resolution No. 99-23061 awarded a contract to Felix Equities Inc. (FEI or Contractor) in the amount of $17,692,568.00, pursuant to Bid No. 99-97/98 for the Water and Waste Water Pump Station Upgrades in the City of Miami Beach (prOject) (the Contract); and WHEREAS, since the commencement of construction of the Project, several delays related to coordination of unforeseen conditions, omissions and deletions occurred; and WHEREAS, even though the above noted delays affected timing for some activities on the Project, FEI began having difficulty maintaining enough cash flow on the Project to pay its sub-contractors and suppliers within eight (8) months of Project commencement, despite full and timely payment by the City for work completed; and WHEREAS, on May 21, 2001, FEI submitted a Request for Equitable Adjustment (1st REA) to the City's consulting engineer, Camp Dresser & McKee, Inc. (CDM), for approximately $1.7 million, representing increased costs FEI attributed to delays associated with the issues referenced above; and WHEREAS, repeated City requests for FEI to submit specific documentation to support the 1st REA were not provided to allow an analysis by CDM or City staff and, without this information, the City could not evaluate the Contractor's 1st REA; and WHEREAS, CDM and City staff actively addressed alternatives to enable FEI to proceed with construction without further delays, including discussions to set out a plan to resolve outstanding issues, and to persuade FEI to immediately bring the major subcontractors back to work; produce a realistic recovery schedule to advance the Project's critical path; and to provide sufficient skilled labor and equipment to prosecute the work in a timely manner; and WHEREAS, the City's Capital Improvement Projects Office Director (Director), acting as the City Manager's designee on behalf of the Cit~, as a measure of good faith, did offer additional time and money to FEI to resolve the 1s REA for those areas that the City staff believed were supported by the information submitted by FEI, unfortunately, these discussions did not yield positive results; and WHEREAS, for several months, FEI continued to fall seriously behind schedule and did not appear to have a plan of action to correct the situation, and the ever-dwindling level of manpower assigned to the Project by FEI mirrored the lack of progress; and WHEREAS, several of FEI's subcontractors on the Project notified the City of FEI's failure to pay them, and that they had therefore stopped work and/or refused to provide FEI with release of liens; and WHEREAS, FEI's surety, United States Fidelity and Guaranty Company (USF&G) also refused to provide the consent of surety to pay FEI so it could pay certain sub- contractors; USF&G also refused to pay the sub-contractors in accordance with its payment bond, which further exacerbated the situation; and WHEREAS, the critical path ran through the electrical and mechanical subcontractors, and the electrical subcontractor for several months severely reduced the number of its employees on site to well below what was needed to make effective progress, and the mechanical contractor apparently left the Project entirely; and WHEREAS, both the electrical and mechanical subcontractors indicated that their lack of responsiveness on the Project was due to non-payment by FEI; and WHEREAS, because of the lack of progress by the electrical and mechanical subcontractors, the critical path of the Project did not advance for nearly four months, and at the reduced manpower levels, extensive additional delays were anticipated which contributed to inexcusable delays in the time to complete the Contract; and WHEREAS, after the Bankruptcy Filing, FEI and USF&G, requested a meeting with the City to discuss potential settlement options, but these initial discussions did not produce a settlement that met the interests of all parties; and WHEREAS, as a result of FEI's default under the Contract, the City, through the delegation of powers granted the City Manager pursuant to Resolution No. 2002-24924, properly invoked the Performance Bond on the Project (provided by USF&G in August 2002), but USF&G declined to honor said Performance Bond, based on the Bankruptcy Filing; and WHEREAS, subsequent demands and settlement discussions continued throughout the balance of 2002 and into 2003; and WHEREAS, to date, the City has been unable to negotiate an acceptable settlement with FEI and USF&G, and many of these issues have become a source of current litigation; and WHEREAS, due to the continued deterioration of the pump stations, the Director, acting as the City Manager's designee, determined in late 2002 that it was not in the City's best interest to continue to wait for the conclusion of the FEI/USF&G issues noted above before continuing the Project, and therefore, decided to complete the previously approved informal bid process to secure a replacement contractor; and WHEREAS, on June 10, 2003, (the deadline for bids pursuant to the modified bid process for a replacement contractor), bids were received by the City's Procurement Division; and WHEREAS, on July 2, 2003, the Bankruptcy Court presiding over FEI's bankruptcy case, granted the City relief from the automatic stay imposed by 11 U.S.C. Section 362, to take the necessary steps to complete the Project and to the extent relief was necessary, relief to exercise any and all of its rights against USF&G; and WHEREAS, only one contractor was deemed qualified and responsive; City staff decided to proceed with negotiations with Widell, Inc., whose initial bid was in the amount of $20,970,000; and WHEREAS, City staff entered into long and very detailed negotiations with Widell, Inc., wherein City staff and CDM, as well as personnel from Widell, evaluated every item in the bid proposal; reviewed carefully the established scope; and reviewed the documents submitted for bid, etc.; in the end, the parties agreed upon a final cost to complete the Project of $17,352,615; and WHEREAS, work will include furnishing and installing all necessary materials, equipment, supplies and associated work including labor, excavation, etc. to complete the major renovation of twelve (12) dry pit waste water pump stations; four (4) water pump stations; six (6) electrical/generator buildings; a new system-wide process instrumentation and control system; and the replacement of eleven (11) submersible waste water pump stations; and WHEREAS, at this time, the conditions of some of the pump stations are in emergency status; the equipment installation that FEI was providing was never completed and the pump stations are still working with extremely outdated and damaged equipment installed almost 30 years ago; and WHEREAS, immediate action is required to proceed with the upgrades to provide the City's citizens, including residents and visitors, with a system comparable with the progress of the City; and WHEREAS, the City has provided due notice to the surety, USF & G, of all actions taken to complete the Project including, but not limited to, giving the surety ample opportunity to hire a replacement contractor to complete the Project or allow the surety to complete the Project itself and the surety has failed and refused to do so; and WHEREAS, funding, in the amount of $13,659,893,83, from Water and Sewer Bond - Series I, is appropriated and available for use on the Project; a portion of which is the balance of FEI's Contract amount; and WHEREAS, additional funding, in the amounts of $1,173,063.00 and $15,393.71, are available for use on the Project from City Center and South Pointe Redevelopment Area tax increment funds, respectively, and shall be appropriated by separate action; and WHEREAS, funding, in the amount of $4,862,562.00, from the Water & Sewer Bond - Series I (Fund 426), has been appropriated for use on the South Pointe Wastewater Master Booster Pump Station Project, which is in the design phase, but can be replaced by South Pointe Redevelopment Area tax increment funds; and WHEREAS, with the adoption of this Resolution, $4,862,562.00 from the Water & Sewer Bond - Series I (Fund 426), that had been appropriated for use on the South Pointe Wastewater Master Booster Pump Station Project, will be reallocated to the Water and Wastewater Pump Station Upgrades Project; the South Pointe Wastewater Master Booster Pump Station Project will be funded by South Pointe Redevelopment Area tax increment funds; and WHEREAS, these funds will be used to fund the construction costs for Widell, Inc.; a new contingency on the Project; additional services for CDM to complete the construction administration and field oversight (which is sought to be awarded in an accompanying resolution); and additional Project management fees for the CIP Office; and 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 herein approve the award of a contract to the firm of Widell, Inc., in the amount of $17,352,615, for completion of the Water and Waste/VVater Pump Station Upgrades Project (Bid No. 99-97/98), pursuant to the action(s) delegated by the City Commission to the City Manager and/or his designee pursuant to Resolution No. 2002- 24924; and further ratifying Resolution No. 2002-24924, and herein re-affirming the actions taken by the City Manager and/or his designee pursuant thereto as properlywithin the City Manager's authority, as delegated pursuant to said Resolution No. 2002-24924, including, but not limited to subsequent actions taken regarding the City's Contract with FEI, and the Surety, United States Fidelity and Guaranty Company, including, but not limited to default actions; invoking of performance bonds; selection of the replacement contractor, Widell, Inc.; and any other similar or related actions. PASSED AND ADOPTED this 14th~da of ~04. T:~AGENDA~2004~Jan1404\Regular~Purnp Stations Upgrades Reso - Widell.doc APPROVED A~ TO FORM & LANGUAGE & FOR EXECUTION oF .EAc. COMMISSION ITEM SUMMARY Condensed Title: Award the contract to Widell Inc. for re-procurement of Water and Waste Water Pump Stations Upgrades in the Amount of $17,352,615; authorize additional services to CDM for related Construction Administration services; and further re-affirming all previous authority granted by the City Commission to the City Manager, or designee, in taking appropriate actions regarding administration of both the Felix Equities, Inc. and United States Fidelity and Guaranty Company contracts with the Issue: IShould the City Commission Award the Contract to Widell, Inc. and Additional Services to CDM? Item Summary/Recommendation: On February 1999, Resolution 99-23061 awarded a $17,692,568.00 contract to Felix Equities, Inc. (FEI) pursuant to Invitation to Bid No. 99-97/98 for the Water and Waste Water Pump Station Upgrades. On June 18, 2002, the Administration certified FEI in Default. On July 10, 2002, the Mayor and City Commission adopted Resolution 2002-24924, which declared an emergency situation and waived the formal competitive bidding requirements for the project. Linc Net, the parent company of FEI, filed for bankruptcy and an automatic stay was placed on the FEI contract. This action precluded the City from implementing any action regarding FEI and FEI's contract without Bankruptcy Court approval. At approximately the same time, FEI and its surety company, United States Fidelity and Guaranty Company (USF&G), requested a meeting with the City to discuss potential settlement options. These initial discussions did not produce a settlement that met the interests of all parties. Therefore, the City invoked the Performance Bond on the project provided by USF&G in August 2002. USF&G declined to honor its Performance Bond based on the bankruptcy of FEI. Subsequent demands and settlement discussions continued throughout the balance of 2002 and into 2003. To date, the City Administration and City Attorney have been unable to negotiate an acceptable settlement and many of these issues have become a source of current litigation. Due to the continued deterioration of the pump stations, the City Administration decided in late 2002 that it was not in the City's interest to continue to wait for the conclusion of the FEI/Surety issues noted above before continuing the project. Therefore, the Administration decided to complete the previously approved informal bid process to secure a replacement contractor. The CIP Office, together with the Procurement Department, conducted a selective re-bid for the project in 2003 with a deadline of June 10, 2003, to receive bid proposals for the re-procurement. Widell, Inc. was the only respondent deemed qualified and responsive and presented an initial bid proposal in the amount of $20,970,000, which was later negotiated, with the assistance of Camp Dresser and McKee, the City's consultant on the project, and which resulted in a final bid proposal in the amount of $17,352,615. The work includes the completion of a major renovation to twelve (12) dry pit waste water pump stations, four (4) water pump stations, six (6) electrical/generator Buildings, a new system-wide process instrumentation and control system, and the replacement of eleven (11) submersible waste water pump stations. At this time the conditions of some of the Pump Stations are in emergency status; the equipment installations that FEI was providing was never completed and the Pump Stations are still working with extremely outdated and damaged equipment installed almost 30 },ears a~lo. Advisory Board Recommendation: ] N/A Financial Information: Finance Dept. Total City Clerk's Office Legislative Tracking: I JECh Si n-Offs: AGENDA ITEM DATE To: From: Subject: COMMISSION MEMORANDUM Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez ~'~ .,.,~.~ City Manager Water and Waste Water Pump Stations Upgrades Project. Date: January 14, 2004 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE AWARD OF A CONTRACT TO THE FIRM OF WIDELL, INC., IN THE AMOUNT OF $17,352,615, FOR COMPLETION OF THE WATER AND WASTE WATER PUMP STATION UPGRADES PROJECT (BID NO. 99-97~98), PURSUANT TO THE ACTION(S) DELEGATED TO THE CITY MANAGER AND/OR HIS DESIGNEE PURSUANT TO RESOLUTION NO. 2002-24924; AND FURTHER RATIFYING RESOLUTION NO. 2002-24924, AND HEREIN REAFFIRMING THE ACTIONS TAKEN BY THE CITY MANAGER AND/OR HIS DESIGNEE PURSUANT THERETO AS PROPERLY WITHIN THE CITY MANAGER'S AUTHORITY, AS DELEGATED PURSUANT SAID RESOLUTION NO. 2002-24924, INCLUDING BUT NOT LIMITED TO SUBSEQUENT ACTIONS TAKEN REGARDING THE CITY'S CONTRACT WITH FEI AND THE SURETY, UNITED STATES FIDELITY AND GUARANTY COMPANY, INCLUDING, BUT NOT LIMITED TO DEFAULT ACTIONS; INVOKING OF PERFORMANCE BONDS; SELECTION OF THE REPLACEMENT CONTRACTOR, WIDELL, INC.; AND ANY OTHER SIMILAR OR RELATED ACTIONS. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA APPROVING AN AMENDMENT TO THE AGREEMENT WITH CAMP, DRESSER AND MCKEE (CDM) TO PROVIDE ENGINEERING SERVICES FOR UPGRADING WATER AND SEWER PUMPING STATIONS; SAID AMENDMENT PROVIDING FOR CONSTRUCTION ADMINISTRATION AND FIELD OVERSIGHT SERVICES FOR THE WATER AND WASTE WATER PUMP STATIONS UPGRADES PROJECT IN AN AMOUNT NOT TO EXCEED $500,000. ADMINISTRATION RECOMMENDATION Adopt the Resolutions. FUNDING Funding has been appropriated and is available from the existing Standing Order for Felix Equities, Inc. (FEI), in the amount of $11,107,245.95. Additional funds from Water & City Commission Memorandum Water and Wastewater Pump Station Upgrade Contractor Re-Procurement January 14, 2004 Page 2 of 6 Sewer Bond - Series I (Fund 426) allocated to the Water and Wastewater Pump Station Upgrades Project in the amount of $2,552,647.88 have also previously been appropriated and are available for use on the project. Funding in the amount of $4,862,562.00 has been appropriated for use on the South Pointe Wastewater Master Booster Pump Station project, which is in the design phase. With the approval of this item, this funding will be reallocated to the Water and Wastewater Pump Station Upgrades Project. The South Pointe Wastewater Master Booster Pump Station project will be funded by South Pointe Redevelopment Agency (RDA) Tax Increment Funds (TIF). Additional funding in the amounts of $1,203,063.00 and $15,893.71 are available from the City Center and South Pointe RDA TIF and are being appropriated through the adoption of a resolution of the Redevelopment Agency elsewhere on this agenda. The sum of these amounts, $19,741,412.54, will fully fund the Construction contract with Widell ($17,352,615.00), Additional Services for Construction Administration and Field Observation for CDM (not to exceed $500,000.00), additional ClP Office project management fees ($158,455.11 ), and a project contingency ($1,730,342.43). ANALYSIS On February 1999, Resolution 99-23061 awarded a $17,692,568.00 contract to Felix Equities, Inc. (FEI) pursuant to Bid No.99-97/98 for the Water and Waste Water Pump Station Upgrades in the City of Miami Beach. Since the commencement of construction, several delays related to coordination of unforeseen conditions, omissions and deletions occurred. On May 21, 2001, the Contractor (FEI) submitted a Request for Equitable Adjustment (REA) to the City's consulting engineer Camp Dresser & McKee, Inc. (CDM) for approximately $1.7 million, representing increased costs the Contractor attributed to delays associated with the issues referenced above. Repeated City requests for FEI to submit specific documentation to support the REA were not provided in sufficient detail to allow a thorough analysis by CDM or City staff. Without this information, the City could not evaluate the Contractor's REA. On November 28, 2001, as a result of staff concerns, a Letter to Commission (LTC) was provided to the City Commission advising that the conditions described above had contributed to time delays and additional costs. The City's Project team actively addressed alternatives to encourage FEI to proceed with construction without further delays, including discussions to set out a plan to resolve outstanding claims issues, and to persuade FEI to immediately bring the major subcontractors back to work, produce a realistic recovery schedule to advance the project's City Commission Memorandum Water and Wastewater Pump Station Upgrade Contractor Re-Procurement January 14, 2004 Page 3 of 6 critical path, and to provide sufficient skilled labor and equipment to prosecute the work in a timely manner. The City Administration, as a measure of good faith, did offer additional time and money to resolve the outstanding REA for those areas that it felt could be supported by the information it had. Unfortunately, these discussions did not yield positive results. For several months FEI continued to fall seriously behind schedule and did not appear to have a plan of action to correct the situation. The ever-dwindling level of manpower assigned to the project mirrored the lack of progress. Several of FEI's subcontractors on the project notified the City of FEI's failure to pay them and that they had therefore stopped work and/or refused to provide FEI with release of lien letters. In this phase of the contract the critical path ran through the electrical and mechanical subcontractors. The electrical subcontractor for several months severely reduced the number of their employees on site to well below what was needed to make effective progress. The mechanical contractor apparently left the project entirely. Both the electrical and mechanical subcontractors indicated that their lack of responsiveness on the project was due to non-payment by FEI. Because of the lack of progress of the two major subcontractors the critical path did not advance for neady four months. At that manpower level, extensive additional delays were anticipated which contributed to inexcusable delays in the contract time. The lack of adequate manpower to advance the project resulted in the effective abandonment of the project by FEI. FEI did, however, file a second Request for Equitable Adjustment in the amount of $1.4 million in May 2002. The second REA brought the total REA claim by FEI to $3.1 million. Similar to the first REA, this second REA did not include sufficient detail to support the Contractor's request for additional dollars. As FEI continued in its failure to properly staff the job, the City Administration, on June 7, 2002, sent Felix Equities a Notice of Default due to the lack of progress in the project and provided FEI 10 days to correct the lack of progress issues. Upon FEI's failure to propedy remedy its lack of progress, the City Administration certified FEI in default on June 18, 2002. Subsequently, on July 10, 2002, and pursuant to Article 8.8 of the City's contract with FEI, the Administration recommended that the City Commission remove the prosecution of work from the hands of FEI and authorize the City Manager, or designee, to prosecute the remainder of the work. Pursuant to Article 8.8, any remaining funds in the contract would be returned to the contractor, or if the remaining funds are insufficient, the contractor, after completion of the work, would be required to pay the City the cost overrun. This action was consistent with the contract requirements. The City Commission approved this request on that date through Resolution 2002-24924. Resolution 2002-24924 declared an emergency situation and waived formal competitive bidding requirements for the project, providing the City Manager the necessary tools to procure a new Contractor which could successfully complete the project. Although, for the above reasons, the Administration recommended a waiver of competitive bid requirements, the Administration did follow a modified bid process in choosing a replacement contractor. City Commission Memorandum Water and Wastewater Pump Station Upgrade Contractor Re-Procurement January 14, 2004 Page 4 of 6 The City requested proposals from three replacement contractors, some who had done business with the City previously and some who were recommended by the designer as providing superior work on previous projects. The emphasis on the selection of a replacement contractor was on qualifications. The City wanted to contract with a contractor who specializes in this type of work and one that could demonstrate a track record of success. It was also preferable to have a contractor that has stepped in and completed contracts as a replacement contractor in the past. On July 9, 2002, the day before the City Commission action noted above, Linc Net, the parent company of FEI, filed for bankruptcy and an automatic stay was placed on the FEI contract. This action precluded the City from implementing any action regarding FEI and FEI's contract without Bankruptcy Court approval. At approximately the same time, FEI and its surety company, United States Fidelity and Guaranty Company (USF&G), requested a meeting with the City to discuss potential settlement options. These initial discussions did not produce a settlement that met the interests of all parties. Therefore, the City invoked the Performance Bond on the project provided by USF&G in August 2002. USF&G declined to honor its Performance Bond based on the bankruptcy of FEI. Subsequent demands and settlement discussions continued throughout the balance of 2002 and into 2003. To date, the City Administration and City Attorney have been unable to negotiate an acceptable settlement and many of these issues have become a source of current litigation. As a side note, and due to one of the issues raised by FEI and USF&G, the Commission Resolution accompanying this Commission Memo requests that the City Commission re-affirm that the City Manager and/or designee had authority to act regarding all provisions of the City's contracts with both entities, including default actions, invoking of performance bonds, and any similar or related actions. Due to the continued deterioration of the pump stations, the City Administration decided in late 2002 that it was not in the City's interest to continue to wait for the conclusion of the FEI/Surety issues noted above before continuing the project. Therefore, the Administration decided to complete the previously approved informal bid process to secure a replacement contractor. On June 10th, 2003, the deadline for bids pursuant to Invitation to Bid No. 10-02/03, were received at the Procurement Department. Only one contractor, who was deemed qualified and responsive, submitted an initial bid proposal and the City decided to proceed with negotiations. The initial bid by Widell, Inc. was in the amount of $20,970,000. The City entered into long and very detailed negotiations with Widell. CIP staff and CDM as well as personnel from Widell evaluated every item in the bid proposal, reviewed carefully the established scope, and reviewed the documents submitted for bid, etc., and in the end agreed upon a final cost to complete the project of $17,352,615. Work will include furnishing and installing all necessary materials, equipment, supplies and associated work including labor, excavation, etc. to complete the major renovation of twelve (12) dry pit waste water pump stations, four (4) water pump stations, six (6) electrical/generator City Commission Memorandum Water and Wastewater Pump Station Upgrade Contractor Re-Procurement January 14, 2004 Page 5 of 6 buildings, a new system-wide process instrumentation and control system, replacement of eleven (11) submersible waste water pump stations. and the The City and CDM feel that Widell's price is reasonable at this time. Not only has the price gone up since 1999 when the project was originally bid, due to time and escalation, but also that original price from FEI has now been determined to be, bythe Program Manager and the City, most probably lower than what it should have been at that time. The original Engineer's estimate of probable cost was $20,992,900, but after discussions with FEI and evaluation of FEI's qualifications and references, they assured the City and CDM that their price was accurate and that they could perform the work for the amount quoted. Based on FEI's ultimate financial disposition, this assertion by FEI appears to have been proven wrong. There will also be additional services for CDM to complete the Construction Administration and Field Oversight, in an estimated amount of $500,000. The proposal the City received from CDM is higher than this amount, but the City and CDM have not yet begun negotiations regarding the scope and amount of the fee. If the City cannot negotiate a fee of $500,000 or less, an item may be brought to the Commission at a later date for additional funds. By amending the contract amount now, continuity of services is guaranteed so construction can begin without having fully negotiated the final amount. Similarly, the City must provide a new contingency on the project, in the amount of $1,730,342.43. Finally, there will be additional project management fees for the CIP Office in the amount of $158,455.11. A total of $19,741,412.54 is needed to complete the project. Item Amount Widel Negotiated Bid Amount Contingency for Project Construction Administration and Field Oversight CIP Office Management Fees $17,352,615.00 1,730,342.43 500,000.00 158,455.11 Total Project Costs $19,741,412.54 The original contract value with FEI was $17,692,568.00. Payments were made to FEI for the work performed prior to the abandonment of the project. The City had to maintain the project site and materials once FEI was removed from the project until a new contractor could assume responsibility for the site and materials. A balance of $11,107,245.95 remains from the original FEI contract value for use to procure a new contractor. Additional funds from Water & Sewer Bond - Series I (Fund 426) allocated to the Water and Wastewater Pump Station Upgrades Project in the amount of $2,552,647.88 have also previously been appropriated and are available for use on the project. ; City Commission Memorandum Water and Wastewater Pump Station Upgrade Contractor Re-Procurement January 14, 2004 Page 6 of 6 Funding in the amount of $4,862,562.00 from the Water & Sewer Bond - Series I (Fund 426) has been appropriated for use on the South Pointe Wastewater Master Booster Pump Station project, which is in the design phase. With the approval of this item, this funding will be reallocated to the Water and Wastewater Pump Station Upgrades Project. The South Pointe Wastewater Master Booster Pump Station project will be funded by South Pointe Redevelopment Agency (RDA) Tax Increment Funds (TIF). Additional funding in the amounts of $1,173,063.00 and $15,393.71 are available from the City Center and South Pointe RD^ TIF and are being appropriated through the adoption of a resolution of the Redevelopment Agency elsewhere on this agenda. The following table demonstrates the funds being recoh3mended for use to fully fund this project. Funding Source Balance from FEI Contract Water & Sewer Bond - Series I (Fund 426) Water & Sewer Bond - Series I (Fund 426) (from South Pointe Wastewater Master Booster Pump Station) City Center RDA TIF South Pointe RDA TIF Amount $11,107,245.95 2,552,647.88 4,862,562.00 1,203,063.00 15,893.71 Total Funding $19,741,412.54 CONCLUSION At this time the conditions of some of the Pump Stations are in emergency status; the equipment installations that FEI was providing was never completed and the Pump Stations are still working with extremely outdated and damaged equipment installed almost 30 years ago. The City is required to act at once and proceed with the upgrades to provide the citizens with a system comparable with the progress of the City of Miami Beach. Therefore, the Administration recommends approval of the Widell, Inc. final negotiated bid proposal, in the amount of $17,352,615; the award of a construction contract to Widell, Inc. for the Water and Waste Water Pump Stations Upgrade project; awarding additional services to CDM in an amount not to exceed $500,000 for Construction Administration and Field Oversight services, and the requisite appropriation of funds to fully fund the project. T:~AGENDA~004~Jan1404\Regular~pump stations memo.doc WHEREAS, the lack of adequate manpower to advance the Project resulted in the effective abandonment of the Project by FEI; and WHEREAS, FEI filed a second Request for Equitable Adjustment (2nd REA), in the amount of $1.4 million, in May 2002, bringing the total REA claims submitted by FEI to $3.1 million; and WHEREAS, similar to the 1st REA, the 2nd REA did not include the documentation to support the Contractor's 2nd REA; and WHEREAS, as FEI continued to fail in proceeding properly, the Director, acting as the "City Engineer", pursuant to Article 8.8 of the Contract, on June 7, 2002, sent FEI a Notice of Default, and provided FEI ten (10) days to correct the default; and WHEREAS, subsequently, on July 10, 2002, and pursuant to Article 8.8 of the City's Contract, the Director, prepared or caused to be prepared a Commission Memorandum and Resolution No. 2002-24924, providing written certification of FEI's default and recommending that the City Commission remove the prosecution of work from FEI, and further authorizing the City Manager, or his designee, to prosecute the remainder of the work; the City Commission approved this request on that date, through Resolution No. 2002-24924; and WHEREAS, Resolution No. 2002-24924, also declared an emergency situation and waived formal competitive bidding requirements for the Project, providing the City Manager or his designee with the necessary authority to procure a new contractor, who could successfully complete the Project; and WHEREAS, notwithstanding the authority granted to it pursuant to Resolution No. 2002-24924, the City Manager, through staff, initiated a modified bid process in choosing a replacement contractor by requesting proposals from three replacement contractors, some who had done business with the City previously, and others who were recommended by CDM as providing superior work on previous projects; and WHEREAS, the emphasis on the selection of a replacement contractor was on qualifications, so that the City could contract with a contractor who specialized in the type of work contemplated in the Project, and who could demonstrate a track record of success; it was also deemed preferable to have a contractor that had stepped in and completed contracts as a replacement contractor in the past; and WHEREAS, on July 9, 2002, Linc Net and its affiliates, including FEI, filed a bankruptcy petition under Chapter 11 Bankruptcy Code (the "Bankruptcy Filing") and an automatic stay was placed on the Contract; and WHEREAS, the Bankruptcy Filing limited what action the City could take regarding FEI, and the Contract; and