Costs Through The Roof

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sweeneybuilding.jpg
Image: Google Street View of 1500 Humboldt Road.

Do you ever wonder why government costs so much money? Of course unionized employees negotiating their own pay and benefits has something to do with it. But I ran across a city bid document for a new roof. The roof to be replaced is at 1500 Humboldt Road.

Google names this the Sweeney and Sweeney Insurance building. From Google Maps and Google Street View, it appears to be a good sized building. Just eyeballing the roof puts it at about 5 times the size of nearby residences. So it could be a pretty big project. However, the bid also references the project as the "garage roof" so maybe it's not that massive (note: I'm not sure if the city owns this building, leases it, or why it comes up as an insurance company on Google).

The sealed bid process, which begins February 18th, is described in this pdf file. The document is 37 pages long. Like I said, it's a big building, but 37 pages? The requirements specified in the document so far exceed the act of placing a roof on a building, that the city must be paying for infrastructure it really doesn't need.

What do I mean by that? The city needs a competent roofer. They're going to pay for a front office in a contractor's business that can manage the boilerplate legal requirements in the 37 page bid contract. Prospective bidders must provide cash just to place the bid...

(d) Bidder's Guaranty. All bids shall be presented under sealed cover and shall be accompanied by cash, cashier's check, certified check, or bidder's bond, made payable to the City of Chico, for an amount equal to at least ten percent (10%) of the amount of said bid, and no bid shall be considered, unless such cash, cashier's check, certified check, or bidder's bond is enclosed therewith.

And that cash will not be returned to anyone that bids until a contract is signed for the project. So you provide 10% of the money to the city, and they sit on it for a period of time while they negotiate with you and all of the other bidders. That costs money.

You've got to adhere to the all important apprenticeship standards, whatever those may be...

APPRENTICESHIP STANDARDS - In accordance with the provisions of Part 7, Chapter 1, Article 2, Section 1777.5 of the Labor Code of the State of California, the prime contractor shall be responsible for fully complying with the provisions of this Section, as well as any regulations adopted by the Director of Industrial Relations, for all apprenticeable crafts of trades, and shall also assure compliance by his/her subcontractors with respect to such apprenticeable crafts or trades.

I'm just glad all of my apprentice bloggers don't know about Part 7 Chapter 1 Article 2 Section 1777.5. I guess it could be worse. Section 1777.6 says you have to take apprentices to a Martini hour twice daily, so at least that's not in there.

The good thing is that the roofing company will have professional help with all of the details the city requires for the project. The engineer will specify all details.

(a) Authority of the Engineer. The Engineer shall decide all questions which may arise as to the quality or acceptability of materials furnished and work performed, and as to the manner of performance and rate of progress of the work; all questions which arise as to the interpretation of the plans and specifications; all questions as to the acceptable fulfillment of the contract on the part of the Contractor; and all questions as to claims and compensation.

And...

(d) Interpretation of Plans and Specifications. Should it appear that the work to be done, or any matter relative thereto, is not sufficiently detailed or explained in these specifications, plans, and the special provisions, the Contractor shall apply to the Engineer for such further explanations as may be necessary, and shall conform to such explanation or interpretation as part of the contract, so far as may be consistent with the intent to the original specifications. In the event of doubt or question relative to the true meaning of the specifications, reference shall be made to the Engineer, whose decision thereon shall be final.


It's great to see the City take a leadership role in defining and completing the project. Uh-oh, what's this...

(h) Responsibility for Damage. The City of Chico, the City Council, or the Engineer shall not be answerable or accountable in any manner for any loss or damage that may happen to the work or any part thereof; or for any material or equipment used in performing the work; or for injury or damage to any person or persons, either workmen or the public; for damage to adjoining property from any cause whatsoever during the progress of the work or at any time before final acceptance.

(i) Indemnification Clause. The Contractor shall indemnify City, its officers, boards and commissions, and members thereof; its employees and agents from any and all liabilities which might arise out of or relating to this contract. Should City or any of its officers, boards and commissions, and members thereof, its employees or agents, be named in any suit, or should any claim be made against it or any of them by suit or otherwise, whether the same may be groundless or not, arising out of or relating to this contract, Contractor shall defend City and said officers, boards and commissions and members thereof, its employees and agents, and shall indemnify them for any judgment rendered against them or any sums paid out in settlement or otherwise.


And...

(k) No Personal Liability. Neither the City of Chico, the City Council, the Engineer, nor any other officer or authorized assistant or agent, shall be personally responsible for any liability arising under the contract.

So you have to do exactly what the City/Engineer tells you... but if the roof falls down because of that it's your fault. Hmmm... that's going to cost some more money.

But a hard working roofing company could still get all this figured out. They could get in, work hard, and get out with a profit. They just have to work their guys a little harder than usual.

(b) Hours of Labor. The Contractor shall forfeit, as penalty to the City of Chico Twenty-five Dollars ($25) for each laborer, workman or mechanic employed in the execution of the contract by him, or by any subcontractor under him, upon any of the work herein mentioned, for each calendar day during which said laborer, workman, or mechanic is required or permitted to labor more than eight (8) hours in violation of the provisions of the Labor Code, and in particular, Sections 1810 to 1816 thereof, inclusive.

In addition to working too hard, you'll have to be sure you don't work too soft.

(b) Character of Workmen. If any subcontractor or person employed by the Contractor shall fail or refuse to carry out the directions of the Engineer or shall appear to the Engineer to be incompetent or to act in a disorderly or improper manner, he shall be discharged immediately on the requisition of the Engineer, and such person shall not again be employed on the work.

So what's the big deal? The city is just protecting us and our taxpayer money right? Yes and no. The bid requirements go so far in removing any responsibility from city officials, and requiring so much from bidders, that it must be driving up the cost of the project.

It seems to me that the main purpose of this bid document is to remove responsibility from city decision makers, no matter what the cost to the project. I can tell you that I've been involved with business-to-business projects that exceed the dollar amount of what this roof job will be. They were completed with minimal contractual requirements. Why? Because the creation of, and adherence to, contracts like this degrade efficient business relationships.

This 37 page bid is essentially an insurance policy on a project entered into by two fully-insured entities. It just seems wasteful, and perhaps a bit paranoid, to me.

2 Comments

Any 50 caliber holes in that roof? Which direction did they come from?

Funny...

Lon

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Lon

About Me: Fasten your seatbelts for an exhilarating trip through Chico's public policy; I guarantee it's marginally better than public access TV.

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This page contains a single entry by Lon published on February 4, 2010 7:13 AM.

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