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Item No: 7C Meeting Date: April 9, 2012 Type of Business: Council Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Nick DeBar, Public Works Director Item Title/Subject: Resolution 7921, Awarding a Construction Contract to Northwest Asphalt, Inc. for 2012 Street and Utility Improvement Project – Area E Background: Detailed background information for the Street and Utility Program and the Area E project is included as a reference at the end of this report. Much of this information was presented to the Council in previous Staff Reports associated with prior approvals for the Area E project. Discussion: The City Council approved bidding documents (plans/specs) and authorized advertisement for bids for Area E of the Street and Utility Improvement Program on February 27, 2012 (Res. 7905). The advertisement was published in the March 8 and 15 editions of the Sun-Focus, as well as the March 3 and 9 editions of the Finance & Commerce (regional trade publication). Eight bid proposals were received and publicly read aloud on March 29, 2012. The bids have been tabulated, checked for mathematical errors, and corrected in accordance with the contract requirements by the City’s consulting engineer, Stantec. Bid amounts ranged from $3,392,175.18 to $3,979,383.20 for the 4.0 mile project. The low bid was submitted by Northwest Asphalt, Inc. of Shakopee, Minnesota – the same general contractor that performed construction for the Area B/C and Area D projects the past two years. The bidding environment continues to be excellent for this type of work, and the 5% range between the four lowest bids (11.7% overall) confirms this. The low bid is only $34,208.99, or 1%, below that of the next lowest bid. Attached to this report is a recommendation letter from Stantec summarizing the bids. Given the satisfactory performance on the past two construction projects, Public Works Engineering and Stantec recommend awarding the construction contract to Northwest Asphalt for $3,392,175.18. This amount is an estimated construction cost and actual construction costs will vary due to variations in quantities of the 119 individual unit price bid items in the contract. Although most work will fit into one of these 119 bid items, there is always a possibility of addition costs related to unknown conditions that might not fit into a bid item. For this reason, a construction contingency of 2.5%, or $85,000, is recommended to deal with these unknowns in a timely manner without delaying construction operations. Stantec has provided a fee estimate to provide engineering services for the construction phase of the project, which includes administration, engineering, inspection, surveying, and closeout for the project. Compensation will be actual hours worked plus reimbursable expenses for a maximum estimated fee of $315,000. This is the same compensation structure with Stantec during the design phase of the project. Stantec’s total billings for the design phase (through March 2, 2012) are $152,307 - significantly lower than their maximum estimated fee of $275,000.