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CC - CONSENT ITEM: Approval of an Amendment to the Existing General Services Agreement with Southland Industries to Increase the Not-to-Exceed Amount from $1,150,367 to $1,335,381 to Perform Additional Work for the City Yard HVAC Replacement Project.
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Meeting Date: June 23, 2025
Contact Person/Dept: Gary Wansley/Public Works-Maintenance/Operations
Joe Susca/Public Works-Administration
Phone Number: 310-253-6444
310-253-5636
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (06/19/2025); E-Mail: (05/21/2025) Southland Industries
Department Approval: Yanni Demitri, Public Works Director/City Engineer (06/2/2025)
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RECOMMENDATION
Staff recommends the City Council approve an amendment to the general services agreement with Southland Industries to increase the not-to-exceed amount by $185,014 (from $1,150,367 to $1,335,381) to perform additional work on the Heating, Ventilation and Air Conditioning Replacement Project located at the City Yard, CIP No. PF-041 Public Works City Yard HVAC Replacement.
BACKGROUND
The City Yard is home to the City’s Park Maintenance, Environmental Programs and Operations, and Maintenance and Operations staff. The facility contains many offices and shops and houses equipment, materials, tools and supplies that support the traffic signal, sewer, traffic sign, parking meter, graffiti abatement, pavement painting, facility maintenance, storm drain, park maintenance, streetlight, asphalt and concrete crews.
The useful life of a Heating, Ventilation and Air Conditioning (HVAC) package unit is 15 to 20 years. The City Yard’s existing HVAC package units, exhaust fans, and natural gas Make Up Air (MUA) furnaces are over 25 years old, have become unreliable, break down frequently, and require replacing. The scope of work includes removing nine existing HVAC natural gas heating/electric cooling package units, five MUA furnaces, and 23 exhaust fans located inside the various shops and replacing them with 14 new HVAC all-electric heat pump package units and 23 new exhaust fans (collectively; the “Project”).
On June 24, 2024, the City Council approved the plans and specifications and authorized staff to release a Request for Proposals (RFP) to competing firms to complete the Project. On September 23, 2024 the City Council approved a $1,150,367 agreement with Southland Industries to implement the Project and authorized the City Manager to approve amendments in an amount not-to-exceed $115,037.
Southland Industries began work on the project on November 12, 2024, after which it was discovered that there is additional work needed that is outside of the scope of the original agreement. After reviewing the work needed and the associated costs, staff determined that the costs for the additional work would exceed the $115,037 contingency the City Council approved and additional City Council approval was needed.
DISCUSSION
Rooftop:
The RFP included copies of all available as-built construction documents and building systems, including the existing HVAC system configuration. However, missing from the City’s records was a copy of a mechanical drawing depicting rooftop construction details and most importantly, its per square foot weight limit. As a result, Southland included a $75,000 line item in their original proposal as an estimate to perform the roof support work required to support the additional weight of the replacement package units. Now that the project is underway, Southland hired a structural engineer to explore a few options to structurally support the roof, prior to selecting the least costly alternative to pursue. The least costly option involves relocating the platforms where the package units now sit, to center them on the roof’s support beams. Although this solution involves additional conduit, electrical, and wiring work, it avoids more costly structural work by distributing the weight over the existing beams, which are the strongest part of the roof. Although the portions of the additional work will be performed by Southland’s in-house crew, staff requested Southland obtain three competing subcontractor bids to complete the rooftop structural work with the following results:
• S.M. Nelson Construction: $ 52,300
• Kindness General Contractors: $ 99,923
• Tri-Tower Inc. $125,503
Unfortunately, S.M. Nelson Construction was non-responsive to Southland’s repeated attempts to obtain evidence that per State law, they intend to pay their crew prevailing wages; to confirm they are registered as a contractor with the Department of Industrial Relations; and to provide a copy of their active license to operate in California. As a result, Southland intends to hire Kindness General Contractors as the second lowest subcontractor to perform the rooftop structural work and perform the additional related electrical work.
Fire Alarm Panel Connection:
The agreement with Southland requires them to 1) replace the smoke detection devices contained on the roof and inside the ductwork at Southland expense; and 2) connect them to the existing fire alarm panel at City expense. After the project began, staff determined that it was in the City’s interest for Southland to subcontract directly with SSD Fire Alarm, the City’s fire alarm system firm, to handle the connections to the existing fire alarm panel. Southland obtained a $8,318 proposal from SSD Fire Alarm, to terminate and test the new devices. Southland will proceed to hire SSD as a subcontractor to connect the new devices to the fire alarm panel and to test their operation.
In combination, the costs of the additional roof and fire alarm work total $173,864. Staff also recommends Council authorize an additional $11,150 to address any other unforeseen issues that may arise. This would increase the Southland agreement contract from $1,150,367 to $1,335,381, approximately $60,000 more than the City Council initially approved.
Southland has prepared detailed installation plans, submitted them to Building Safety for review, and successfully obtained all their building permits. If the contract amendment is approved, Southland estimates it will take up to four months to receive and install the new Trane package units.
FISCAL ANALYSIS
The Adopted Budget for Fiscal Year 2024-2025 includes sufficient funding in the amount of $185,014 for this amendment in Account No. 42080000.730100.PZ-132 (Building Repairs) which can be found on page 480 in the budget book. .
ATTACHMENTS
None.
MOTIONS
That the City Council:
1. Approve an amendment to the general services agreement with Southland Industries, Inc. to increase the amount from $1,150,367 to $1,335,381to perform additional work to replace the City Yard HVAC system; and,
2. Authorize the City Attorney to review/prepare the necessary documents; and
3. Authorize the City Manager to execute such documents on behalf of the City.