Construction Industry Force Account Council

Promoting Transparency Through Public Agency Compliance

Monthly Archives: January 2019

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Millions Lost In LA banner image

Millions Lost Due To L.A. Force Account

Category:Around The State News

A series of recent expensive failures by the City of Los Angeles public works force account workers highlights one of the main reasons CIFAC exists—to save taxpayers a fortune spent fixing issues caused by incompetence. We believe that public works should be built by private at-risk contractors—under the banner of the California Public Contract Code (PCC) and other applicable laws.Michelle Tucker, Executive Director

The most recent examples of these pricey failures come to us courtesy of the Los Angeles Department of Water and Power (LADWP) and the Street Services division of the City of L.A. Public Works Department. Within the past year, these two agencies demonstrated a level of incompetence that will end up costing citizens more than $6 million.

While it makes no difference, these tales of two massive agency foul-ups beg for an explanation of the cause—we know about the cost.

In September, the U.S. Environmental Protection Agency (EPA) stuck LADWP with mandatory purchase of millions in “mitigation credits” and an additional fine for violations of the Federal Clean Water Act (CWA). These penalties stem from findings of a 2016 inspection of the Van Norman Complex in the San Fernando Detention Basin. The EPA, the Army Corps of Engineers and the California Department of Fish and Wildlife inquiry found “extensive vegetation clearing and soil displacement on the property.” In 2013 and 2016, almost eight acres of open water and adjacent wetlands in the basin had been graded, filled and channelized without a permit from the U.S. Army Corps of Engineers.

Under the terms of an EPA order, LADWP will purchase $5.3 million in “mitigation credits” at the Peterson Ranch Mitigation Bank for damaging wetlands on its Granada Hills property and pay a $94,000 “administrative” penalty. Mitigation credit “banking” is used by environmental agencies “to preserve, enhance, restore or create a wetland to compensate for adverse impacts to similar nearby ecosystems.” This imaginary currency, paid for with real money, this time supplied by the ratepayers who get water, gas and electric power from LADWP.

While CIFAC repeatedly challenges LADWP’s force account work, we haven’t been able to get the Agency, with 9,400 workers, to hear reason on this issue...but, we keep trying. Mistakes like failing to get an Army Corps 404 permit for what they called “maintenance” work is the latest example of why the work should go to private contractors. If they make mistakes like this, the cost of making things right fall on the companies—not the four million customers of LADWP—which is why they do not.

Sidewalk Tricks

The L. A. Bureau of Street Services bills itself as the “Custodian of the City’s Street System,” but last year city workers made such a mess of simple sidewalk replacement projects that they will have to be torn out and replaced—paying double for the same work.

This snafu was reported on by a local television station in January 2018 when they ran an expose regarding problems city workers were having to perform the work needed to comply with a settlement of a class action lawsuit (Willits v City of Los Angeles) to make sidewalks compliant with the provisions of the Americans with Disabilities Act.

The settlement which is the largest ADA payout in the city’s history, requires the City to spend at least $1.367 billion over the next 30 years to make its public sidewalk and crosswalk system accessible to persons with mobility disabilities.

It will require the City to install, repair, and upgrade curb ramps; repair sidewalks and walkways damaged by tree roots; repair broken or uneven pavement; correct non-compliant cross-slopes in sidewalks; install tree gates and missing utility covers, and remediate other inaccessible conditions among the main conditions.

As the TV report discovered, the force account employees had significant difficulties meeting the federal standards required to make a sidewalk. They even hired their investigators to measure things like wheelchair ramp sidewalk slope and whether ramps were built across from each other to facilitate disabled travelers getting where they needed to go.

The experts, certified ADA professionals and private civil engineers, all said that much of the work would have to be redone. Again, if a private contractor had failed on a project at such a massive scale they would have to pay for necessary repairs themselves and probably be barred from doing similar projects for the City in the future.

CIFAC is actively trying to get the City of Los Angeles Public Works Department to recognize their inefficiencies and we will continue to advocate the work going to bid.

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Job Order Contracts And Joint Powers Agreements. What Are They, Are They Legal And Do They Really Save Public Agencies Money?

Category:Around The State News
By Anthony (Tony) Morelli, Southwestern Regional Compliance Manager. -

These are legitimate questions that CIFAC is continually asked, so hopefully after this explanation you will have a better understanding of these two procurement processes.

Job Order Contracting (JOC) JOC’s are an undefined quantity contract used by Universities, Colleges and Counties. School Districts may use JOC’s if they have also entered into a formal project labor agreement. (PLA) Each task is assigned a quantity of units and the bidder develops a price for a single unit. The bidder is then on-call for the length of the contract (Usually 1 year or less) and performs the work the agency is requesting to be performed at that time or as needed. Some JOC’s stipulate that a minimum amount of work will be performed. In some cases, agencies might establish a maximum individual amount of work for a specific task (i.e. $175k for a specific task out of the entire $1 million JOC awarded to the bidder) regardless, the law stipulates that the maximum dollar amount of work that can be performed as $5 million the first year of the agreement. The annual contracts may be awarded for repair, remodeling, or other repetitive work to be done according to unit prices and shall not include design or contract drawings. Specific to Counties, annual contracts may not be awarded for any new construction. Recently, I observed the County of Ventura’s General Services Agency (GSA) award two JOC contracts to a successful bidding contractor for about $4 million each. I contacted the County with my concerns that the individual projects (that make up the JOC) are not to be used for any new construction per the PCC’s definition. The GSA Director assured me that the projects will comply with those provisions. At this point, we are monitoring the agency’s projects to ensure compliance.

Joint Powers Agreement (JPA) JPA's also known as; Joint Powers Authorities or Joint Cooperative Purchasing Agreements, have been around for a long time and are a formal, legal agreement created when two or more public agencies jointly exercise common powers. The purpose is to share a common power and jointly implement programs, deliver services, or in our industry, for contract procurement. It should be noted that while the California Public Contract Code (PCC) provides a definition pertaining to multiple state agencies JPA-cooperative agreements, the PCC does not govern such agreements. Out of state JPA's are now a current trend used by agencies for contract procurement.

National Joint Powers Agreements (NJPA) were designed to streamline the procurement process for participating agencies by developing Request For Proposals (RFP’s) or Invitation For Bids (IFB’s) for agencies with the intent of their competitive solicitations meeting or exceeding local requirements. The RFP solicitation process usually includes public notice/advertising, a pre-proposal conference, RFP official opening and evaluation based upon established scoring criteria. Award of the contract is to the most responsive/responsible vendor/bidder, all handled by the lead agency, which has an established board who oversee the process. These lead agencies are located out of state as are the public agency officials who sit on their board

Agencies utilize the NJPA process because they believe that it saves them time and money over the traditional method. While that can be debated, frankly… the process is just easier for the agency!

A few months back, the City of Port Hueneme had utilized a NJPA for a grouping of several projects. We contacted the City with our concerns about transparency and proper bidding per the PCC, as their staff report didn’t indicate who the bidders were and we wanted to see who actually bid on this contract. By the end of the day, we received a letter from the City’s legal counsel, advising that; they were a Charter City; that they had followed the legal requirements and that the City was totally comfortable in moving forward with the project, despite our objections. The City did provide proof a few days later that there were in fact several southern California bidders for Port Hueneme’s JPA however this is not always the case.

CIFAC has several concerns about both JOC’s and JPA’s. For starters, that they lack transparency, limit the ability of local contractors to bid and both of these methods do not appear to comply with the States standards and statutes per the PCC.   What is CIFAC doing about it? Currently we are gathering information, doing research and looking at legal opinions to determine if these methods and their usage are circumventing the California Public Contract Code and if so, is a way to legally challenge this procurement process.

Bottom line… As of now, both of these procurement methods are legal in California. In regards to whether or not the JOC or JPA actually saves the agency money, well that’s a discussion that I think will be debated for some time.