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92-42 Fencing Materials And Installation For Smokey's Metal Yarda L, ITEM NO. 12.x.1. Kodiak /s/and Borough AGENDA STATEMENT Meeting of: October 1, 1992 ITEM TITLE: Fencing Materials and Installation for Smokey's Metal Yard. SUMMARY STATEMENT Attached is a bid summary for fence materials and installation at Smokey's Metal Yard. The fence will be constructed to limit direct access to the area containing various metal componants. It is hoped this will help eliminate unauthorized access to the metal disposal yard. The installation of the fence is required by the Borough's insurance company in order to maintain liability insurance coverage. H & H Supply of Kodiak, Alaska is the low bidder. Recommend award the contract for fencing material and installation at Smokey's Metal Yard to H & H Supply in an amount not to exceed $70,000. FISCAL NOTES [ I N/A Expenditure Account Required $ 70,000 No 410-430-452-150-017-005 APPROVAL FOR AGENDA: rift Vv Ivi YICIMULU IAU I IVIV: Move to award Contract No. 92-42 Materials and Installation of Fencing for Smokey's Metal Yard to H & H Supply of Kodiak in an amoun not -to - exceed $70,000. KODIAK ISLAND BOROUGH 710 MILL BAY ROAD KODIAK, AK 99615 BID TABULATION AUGUST 18, 1992 3:00 P.M. SMOREY'S FENCE INSTALLATION FIRM LUMP SUM BID H & H Supply, Kodiak $70,000.00 Consolidated Contracting & Engineering, Anchorage $71,771.00 Standard Mechanical, Kodiak & Tacoma $79,500.00 Brechan Enterprises, Kodiak $92,800.00 SEP''W '92 08:27 SWEENEY INS INC TO rn: CITY:_ — P.1 FAX COVER SHEET SWEENEY INSUHANCE, INC. RHONE (907) 486-3101 FAX (007) 486-5545 C� �j DATE / -�- 7 SUBJECT NAME POLICY SUBJECT COMMENTS REOPRI) SHEET # 1 OF �SHEETS SEP 22 192 09:46 SWEENEY INS INC G - 93y� TO 1 �� COsS— CITYs FAX COVER SHEET SWEENEY INaUNANCEt INC - PHONE (907) 4866-33501 FAX (907) DATE 9^ ' TO FAX* SUBJECT NAME _. POLICY NUMBER��___ SUBJECTSO r% COMMENTS REGARD^u � SHEET M � DP SHEETS 1 JAMIN, EBELL, BOLGER & GENTRY A PROFESSIONAL CORPORATION JOEL H. BOLGER• ATTORNEYS AT LAW ANCHORAGE OFFICE: C. WALTER EBELL 1200 1 STREET, SUITE 704 DUNCAN S. FIELDS 323 CAROLYN STREET ANCHORAGE, ALASKA 99501 DIANNA R. GENTRY KODIAK, ALASKA 99615 TELEPHONE AND FAX MATTHEW D. LAMIN (907)27..,Do WALTER W. MASON' TELEPHONE: (907) 486-6024 JANE E. SAUER ALAN L. SCHMITT FACSIMILE: (907( 486-6112 MICHAEL C. SCIACCAX SEATTLE OFFICE: REPLY TO KODIAK OFFICE 300 MUTUAL LIFE BUILDING *ADMITTED TO ALASKA 605 FIRST AVENUE AND WASkINGTONR9 SEATTLE, WASHINGTON 98104 L OTHERS A ADMITTED i0 ALASKA BAR TELEPHONE: (208)62276363 4 FPC CSISIMIm1LE: (206) 623-7521 TO The Honorable Jerome Selby, Mayor Kodiak Island Borou h FROM Joel H. BolgIs 2 8 92 Jamin, Ebell / $olger & Gentry DATE : September 28, 1992 RE Fence Installation Bid Question Our File No. 4702-336 This memorandum is response to your telephone questions concerning the award of a bid for the Kodiak Island Borough Smokey's Fence Installation Project. A comprehensive bid solicitation, including an invitation to bid, instructions to bidders, form bid documents, general contract conditions, and a detailed scope of work were issued on July 27, 1992. There were three addenda to the bid specifications. Addendum No. 1 issued August 3, 1992 reduced the fabric height in certain circumstances from eight feet to seven feet. Addendum No. 2 issued August 12, 1992 increased the gate size from 20 feet to 30 feet and advised the prospective bidders of unconsolidated rock under certain portions of the fence construction. Addendum No. 3 issued August 14, 1992 added additional minimum specifications for the bracing and construction of the posts and gates. The bids were opened on August 18, 1992 at 3:00 o'clock p.m. The name of the bidder and the amount of each lump sum bid were as follows: H & H Supply $70,000 Consolidating Contracting $71,771 Standard Mechanical, Inc. $79,500 Brechan Enterprises, Inc. $92,800 The Honorable Jerome Selby September 28, 1992 Page - 2 There were three significant defects in the bids which were noted at the time of the bid opening or discovered thereafter. First, the bid for H & H Supply did not include a current contractor's license and business license. Second, the bid for H & H Supply failed to expressly acknowledge receipt of addenda Nos. 2 and 3. Third, the bid for Consolidated Contracting failed to provide copies of the contractor's license and business license. RECOMMENDATION. I recommend that the bid for H & H Supply bid be rejected as non-responsive. I recommend that the Assembly accept the bid for Consolidated Contracting, the second highest bidder, or reject all bids. DISCUSSION. Borough contracts for public construction are required to be awarded to the lowest responsible bidder. KIBC 3.16.040. In the processing of bids the Borough is allowed to: (a) Reject defective or non-responsive bids; (b) Waive any irregularities in any and all bids; or (c) Reject all bids. KIBC 3.16.050. The standard for determination of whether a bid is responsive has been described as follows: According to the prevailing view, proposals for public contracts must substantially comply with all requirements contained in the invitation for proposals . Consistent with this well-established principle, courts hold that while a "material" variance from the invitation requires rejection of the proposal, a "minor" variance does not require rejection of the proposal. A variance is said to be material "if it gives the bidder a substantial advantage over other bidders and thereby restricts or stifles competition."1 In resolving written discrepancies in bids the courts have established three principles: (1) That the lowest bid price is preferred; 1 King v. Alaska state Housing Authority, 512 P.2d 887, 892 (Alaska 1973). The Honorable Jerome Selby September 28, 1992 Page - 3 (2) That rules of construction which are expressed in specifications should be followed in order to resolve discrepancies; and (3) That the intent of the bidder when it is evident from the face of the bid is significant .2 A. H & H Contractors Registration. The bidders checklist contained in the bid documents required each bidder to attach a photostatic copy of his Alaska Contractors Certificate of Registration and his Alaska Business License. General Condition 703.E.1 requires contractor to comply with AS 08.18.011. AS 08.18.011 provides: It is unlawful for a person to submit a bid or work as a contractor until he has been issued a Certificate of Registration by the Department of Commerce. A partnership or joint venture shall be considered registered if one of the general partners or venturers whose name appears in the name under which the partnership or venture does business is registered. An Alaska Business License is required for the privilege of engaging in business in this state. AS 43.70.020. H & H Supply submitted copies of a Contractors Registration and business license which had expired. Subsequently, H & H submitted a current business license issued January 8, 1991. H & H has also submitted a copy of an application to the State of Alaska for renewal of its Contractors Registration which confirms that H & H does not presently have a current Contractors Registration. Nonetheless, H & H has clearly made a good faith attempt to answer the questions raised by the state for the renewal of its Contractors Registration. The lack of a Contractors Registration in the H & H bid could be considered a material defect solely because of the fact that the bid is in violation of the licensing statute. In addition, the defect in the bid is material for more practical reasons. One test is whether the defect in the bid would allow H & H to withdraw its bid. The Kodiak Island Borough cannot require H & H to perform the fence installation contract because it would be illegal to do so at this time without a Contractors Registration. Consequently, H & H can probably withdraw its bid without a penalty if it finds that is to its advantage. The Kodiak 2 Jensen & Reynolds v. State Department of Transportation, 717 P.2d 844, 848 (Alaska 1986). The Honorable Jerome Selby September 28, 1992 Page - 4 Island Borough's inability to require a binding contract makes the lack of a Contractors Registration a material defect in this bid. B. The H & H Addendum Acknowledgment. Section 5(c) of the instructions to bidders requires acknowledgment individually of all addenda to the drawings and/or specifications. The H & H bid acknowledges receipt of Addendum No. 1 dated August 3, 1992. The acknowledgment for receipt of Addenda No. 2 and 3 are blank. On the other three bids submitted, the bidders acknowledge receipt of each of the three addenda dated August 3, 1992, August 12, 1992 and August 14, 1992. Minor defects which do not grant a competitive advantage may be resolved if the intent of the bidder is apparent from the face of the bid. The intent of H & H is not apparent from the face of the bid; the bid is ambiguous. One could suppose that H & H could have overlooked Addenda No. 2 and 3, especially if they were stapled or attached to Addendum No. 1. On the other hand, the failure to acknowledge Addenda No. 2 and 3 could mean that the bidder had not received or reviewed them in submitting his bid. A bidder could gain a competitive advantage based on this ambiguity. He could claim that consideration of Addenda 2 and 3 would require a higher bid. He could argue that the lack of notice of Addenda No. 2 and 3 should allow him to withdraw his bid. This defect is probably a material one which requires rejection of the H & H bid. C. Consolidated Contracting Contractors Registration. As noted above, the bidder's checklist required the bidder to attach a copy of his Alaska Contractors Certificate of Registration and his Alaska Business License. Consolidated Contracting did not attach a copy of either license. Subsequently, on September 24, 1992, Consolidated Contracting submitted a copy of its Alaska Business License for 1991 and 1992 and a current Contractors Certificate of Registration issued November 30, 1990. This defect would be material if it granted to Consolidated Contracting a competitive advantage. Unlike H & H Supply, however, the failure to attach the contractors license would not allow Consolidated to later withdraw its bid. The Contractors Registration was issued on November 30, 1990 long before the bid was submitted. The registration can be easily verified with the Department of Commerce, Division of Occupational Licensing. There should be no question that the Kodiak Island Borough can hold Consolidated Contracting to a binding agreement in spite of the failure to submit a copy of the Contractors Registration. If the failure to attach a copy of the Contractors Registration would not allow Consolidated Contracting to withdraw The Honorable Jerome Selby September 28, 1992 Page - 5 its bid, then it should not be regarded as a material defect requiring rejection. Feel free to call if you have any questions. JHB:cat cc: Jack McFarland, Presiding Officer Kodiak Island Borough Assembly Steven Hobgood, Director Engineering & Facilities Department Robert Trousil, Environmental Engineer 4702\336M.001 C 9a-L/a KodiaklslandBorough MEMORANDUM OCTOBER 1, 1992 TO: Jerome Selby, Mayor FROM: Bob Trousil, Engineering/Facilities )� RE: Smokey's Fence Installation Project The Kodiak Island Borough Engineering/Facilities Dept (EFD) received four sealed bids from qualified contractors for the installation of a chain link fence surrounding Smokey's Metal Yard. EFD's initial recommendation to the Assembly was to award the work to the lowest bidder. Based on further review, it is EFD's suggestion that the initial recommendation be dismissed. This is based on the following: 1. Fence design requirements, for insurance purposes, have been determined to be different than those specified in the original bid documents. Actual fencing requirements represent a substantial change in the project scope. 3. Irregularities in three of the four bids. 4. It is in the best interest of the public not to award the contract to the fourth bidder in consideration of the cost of the bid. The EFD recommends: 1. that all bids be rejected and 2. the fence installation project be re -bid to include the new scope of work.