County supervisors Tuesday awarded a $20 million jail expansion construction contract to Montana-based Sletten Construction.
In May, San Benito County gave close to $1 million to construction management firm Vanir Construction. According to Vanir’s proposal, the project is expected to begin construction in late August. The contract is not to exceed $954,040.
The county advertised the expansion project on May 16. Bids were received June 20.
According to county documents, five construction firms submitted bids. While Halbert Construction issued a base bid of $17,206,000, they later indicated an error and withdrew their bid. This left Sletten Construction, with headquarters in Great Falls, MT, at the next lowest bid of $20,139,852.
County documents describe the project as a medium-security jail facility with around 72 beds with space for housing, medical, program, custody and administrative duties.
Total project costs for the jail expansion are expected to be $25,016,394. According to the county staff report, California is funding $20,053,000 of the project. Of that, $15 million was awarded in 2007 to expand the jail and address both overcrowding and the lack of program space.
Prior to the contract award, supervisors held a bid protest hearing filed by Hal Hays Construction Inc. Of the four qualified bidders, Hal Hays was the second lowest bidder.
The bid protest claimed one of Sletten Construction’s subcontractors, the Grazak Corporation, was not registered in the California Department of Industrial Relations website required by the Labor Code.
While the claim sought to nullify Sletten’s bid, County Counsel Barbara Thompson said she received an email from Hal Hays Construction Tuesday morning.
“We read the agenda package and see that Sletten has already been permitted to replace the HVAC subcontractor,” she read from the letter. “We do understand the law as written permits that the basis of our protest is essentially stripped away, since Sletten remains in place by being allowed to replace Grazak. We are not attending today.”
Board Chairman Jaime De La Cruz asked staff about a limit on change orders – monetary decisions that don’t require board approval and which cap extra expenditures at $210,000.
“If they exceed, they have to come back to the board for approval?” De La Cruz asked. “Doesn’t that circumvent the process of ‘who’s the lowest bidder and the second lowest bidder?’”
Capital Program Manager Adam Goldstone explained.
“The public contract code does allow for a certain amount of change order authority to be granted from the board to a designee just to keep small things moving,” Goldstone said. “In the case of this contract amount, the maximum amount allowed is $210,000. Anything exceeding that would have to come to the board.”
De La Cruz asked if a change order could be used for a contractor hiring a worker.
“No, that’s my job and the construction manager’s job to make sure that all requests are valid and they are for unforeseen issues – not things that should’ve been covered,” Goldstone said.
Supervisor Jerry Muenzer was the only no vote.
“I have a hard time awarding a $20 million contract to someone who did not fill out the bid properly,” Muenzer said during board discussions. “I think our Chair brings up a lot of good points. If we’re $10 million into this project and all of a sudden they come back and go, ‘Wow we need another $5 million. Can we do a change order?’ At that point we’re going to have to award it. We’re not going to be able to do anything else. That’s very concerning to me.”
Goldstone responded that Sletten’s bid was in line with the other three qualified bids.
That gives us some high confidence that this is an accurate price for this project,” he said. “The grouping was very good. Among those, this is not an outlier.”
