AGENDA MEMORANDUM

 

 

Meeting Date:           June 27, 2011

 

From:                          Mike Thornton

 

Subject:                      Resolution authorizing execution of a Termination for Convenience agreement with Encore Construction Company

 

 

Staff Recommendation:

Staff recommends execution of the Termination for Convenience agreement with Encore Construction Company terminating a previously executed agreement for construction services.

 

Analysis:

On May 29, 2011 the Leesburg City Commission approved Resolution 8848 authorizing an agreement with Encore Construction Company for construction services related to improvements at the Highland Lakes water treatment plant.

 

Following the initial pre-construction meeting with Encore and City staff, the City was informed through our Engineer of record, AECOM, that Encore may have omitted a significant cost element from their bid amount, which means this cost element, was not included in the contracted price of $2,020,000.00.

 

The omitted cost was for the purchase of and providing the Variable Frequency Drives (VFDs) as specified in the Invitation to Bid document.  The estimated cost to the Contractor for this equipment is $218,000.00.

 

Upon becoming aware of this information and prior to issuing a Notice to Proceed, Purchasing staff prepared a confirmation letter, attached as Exhibit ‘A’, requesting Encore to either confirm they could perform the full scope of work for the contracted price or they could not perform the work for the contracted price.

 

Encore construction responded to the Pricing Confirmation with the letter attached here as Exhibit “B”.  In summary Encore requested a termination for convenience and a payment by the City of $25,000.00.

 

The City responded to Encore, attached as Exhibit “C”, with an offer of Termination for Convenience and no payment or compensation of any kind.  The City noted this was a one-time, non-negotiable offer.  Should Encore refuse this offer, the City would proceed with termination and may choose to file a claim with their surety for non-performance.

 

Encore responded with the letter attached here as Exhibit “D” accepting the City’s offer of Termination for Convenience with no compensation.

 

Given the small difference in overall price ($9,000.00) between Encore and the next lowest bidder, Beach Construction, staff recommends approval of this resolution.  Attempting to file a claim against Encore’s surety would surely result in legal fees exceeding the $9,000.00 difference.  It is in the City’s best interest, monetarily, to terminate the agreement for convenience.

 

Options:

1.  Authorize execution of the Termination for Convenience agreement with Encore Construction

    Company; or

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact: 

The fiscal impact of approving the resolution terminating this agreement will be an additional $9,000.00 to contract with the next lowest responsive bidder in response to ITB 110161.

 

Submission Date and Time:    6/22/2011 5:58 PM____

 

Department: _Finance/Purchasing Division

Prepared by:  _Mike Thornton_________                     

Attachments:         Yes_X__   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. ________JB________                                     

                              

Deputy C.M. _________DD_________                                                                         

Submitted by:

City Manager ___________________

 

Account No. ____NA___________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ________NA____________

 

Available _______NA____________

 

RESOLUTION NO._______________

 

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A TERMINATION FOR CONVENIENCE AGREEMENT WITH ENCORE CONSTRUCTION TERMINATING AN EXISTING AGREEMENT FOR CONSTRUCTION SERVICES RELATED TO THE HIGHLAND LAKES WATER TREATMENT PLANT IMPROVEMENTS; AND PROVIDING FOR AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute a Termination for Convenience agreement  with ENCORE CONSTRUCTION COMPANY whose address is 370 East Crown Point Road, Winter Garden, Florida 34787 terminating an existing agreement for construction services related to the Highland Lakes water treatment plant improvements previously executed by Resolution Number 8848 pursuant to ITB 110161.

 

             THAT this resolution shall become effective immediately upon adoption.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _27th _ day of _June__ 2011.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

____________________________________

City Clerk