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$10,000 limit or 0.5 percent of the total bid amount requirement ($1,785,700 x 0.5=$8,928.50) threshold for listing subcontractors and thus was not included in JMB's subcontractor listing. The City is also in receipt of a letter from the President of Emerald Plumbing and Fire Protection confirming that they have a C16 license and that the contract amount being paid to them by JMB is under the $10,000 or .5% threshold amount that would require them to be listed on the bid form. City staff and the City Attorney's office have reviewed the documentation submitted and concur that JMB has met the bidding requirements. We therefore recommend award of the Booster Pump Station contract to the lowest responsible bidder, JMB Construction, Inc. DIRECT PURCHASE OF EQUIPMENT The following provides an explanation as to why staff has recommended that the City procure and supply electrical and control equipment for the Vineyard Corridor Water Booster Pump Station, which will be installed by the pump station contractor. On December 19, 2006, Council rejected bids for the City's Sewer Pump Station S-5 construction project. The project was formally bid, but only three bids were received. The three .bids ranged from $1,763,000 to $2,096,000, compared to the consulting engineer's estimate of $1,000,000. Following a detailed review of these bids and a subsequent meeting with the apparent low bidder, staff became aware that there was a premium being paid on the supply and installation for electrical switchgear and controls in the current construction market. This was partially due to the demand for these products in comparison to the current supply. This became apparent in the S-5 pump station bid whereby the electrical and control portion of the work (materials and installation) was estimated at approximately $300,000 and the actual bids for this portion of the work was closer to $700,000. As a result of this bid for the S-5 Pump Station and the information regarding the electrical and control instrumentation bidding market climate, staff began working with the City's prime design consultant and electrical sub-consultant for the VCSP Water Booster Pump Station to determine ways to limit paying this premium on this new pump station. The conclusion to this effort was the recommendation by the electrical sub- consultant, that the City directly purchase and supply the electrical, control and water testing components for this new pump station from known manufacturers of this equipment and then provide this equipment to the successful low bidder on the pump station project for installation. While this recommendation does add some minor complexity and risk back to the City, from all indications and estimates City staff received prior and at the pump station bid, packaging the bid proposal for the pump station with the City supplying the aforementioned equipment appears to have saved the City a minimum of $100,000. These savings are due in part to minimizing the dual markup on this equipment by the pump station's electrical subcontractor and the prime contractor for this portion of the work. Hence, staff is recommending that Council authorize the direct purchase of this equipment based upon the City's purchasing guidelines from reputable manufacturers, for a total amount not-to-exceed $220,000. Page 4 of 6