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BACKGROUND The subject project was authorized in the 2008/2009 Capital Improvement Program. The project consists of replacing approximately 600 linear feet of failing water main along East Angela Street and approximately 3,000 linear feet along Commerce Drive and Commerce Circle (see Attachment 1 for location map). It also involves the installation of various appurtenances including a new fire hydrant on East Angela and a potentially missing backflow prevention device along Commerce Circle. The City will be reimbursed for the installation cost of the backflow prevention device by the property owner, if field potholing determines that it is indeed missing. DISCUSSION Bids An engineer's estimate for the project was calculated at $650,000. Sealed bids for this project were opened on June 10, 2009, with a total of twelve (12) bids received that ranged between $231,650 and $736,420 (see Attachment 2 for bid summary). The apparent low bidder, BonaTech Engineering, contacted the City concerning errors in its bid proposal (Attachment 3). Staff reviewed the bid and backup information submitted by the contractor and agreed that valid mathematical calculation errors were made. The State of California Public Contract Code Section 5102 allows a contractor to be relieved of its bid if valid bid errors are discovered during bid reviews. Staff concurs that valid bid errors were made and therefore is recommending that Bonatech Engineering be relieved of its submitted bid for the subject project. Staff reviewed the bid submitted by the second apparent low bidder, Knife River Construction, and found it to be in order. Past work performed by Knife River Construction was also verified to be satisfactory and staff is recommending award of the construction contract to the second low bidder, Knife River Construction. Budget Project funding and estimated project expenditures are presented in Attachment 4 to this report. Staff is recommending a 20% project contingency ($82,350) in order to accommodate necessary project adjustments due to existing underground utilities that may conflict with the water main installation and water main tie -ins. In the past, when performing similar work, underground utilities that required removal or relocation have been encountered. Other potential obstacles include underground abandoned utilities, rock, abandoned foundations or soil conditions not favorable to restoration efforts of the trench backfill. Page 2 of 3