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Home My WebLink AboutNBIL(537) GFE 08-NBIL(537)_Ortiz Enterprises_GNM_GF_20221122State of California California State Transportation Agency DEPARTMENT OF TRANSPORTATION “Provide a safe and reliable transportation network that serves all people and respects the environment” Memorandum To: HAU DOAN Date: November 22, 2022 Senior Transportation Engineer Division of Local Assistance File: 08-NBIL(537) From: LAN NGUYEN Transportation Engineer Engineering Support Branch Office of Civil Rights Subject: CITY OF LA QUINTA GOOD FAITH EFFORT EVALUATION The City of La Quinta determined that the Disadvantaged Business Enterprise (DBE) contract goal for this project is 21%. According to the documentation provided by City of LA Quinta, the DBE commitment listed the apparent lowest bidder, Ortiz Enterprises, Inc. (Ortiz Enterprises), at 17.19% or $ 3,720,228.00 of the total bid for Dune Palms Road Spanning Coachella Valley Stormwater Channel project. Engineering Support Branch (ESB) has reviewed the submitted Disadvantaged Business Enterprises (DBE) forms from Ortiz Enterprises. ESB determined that Ortiz Enterprises‘ DBE commitment of 17.19% or $ 3,720,228.00, did not meet the 21% contract goal. ESB concurs with City of La Quinta’s determination that Ortiz Enterprises did demonstrate adequate Good Faith Effort (GFE) to meet the contract goal. According to the DBE Program, when a bidder has not committed to meet the contract goal, ESB evaluates the bidder’s good faith efforts using Appendix A of 49 CFR Part 26. EVALUATION OF GOOD FAITH EFFORT DOCUMENTATION The Good Faith Efforts (GFE) are all necessary and reasonable steps to achieve a DBE goal or other requirement of this part which, by their scope, intensity, and appropriateness to the objective, could reasonably be expected to obtain sufficient DBE participation. Contract No. 08-NBIL(537) November 22, 2022 Page 2 “Provide a safe and reliable transportation network that serves all people and respects the environment” A. Outreach Efforts In Part A of the “DBE Good Faith Efforts Documentation” form, the Contractor was asked to describe their outreach efforts, list the dates, location and results. Ortiz Enterprises reached out to three publications and started their advertisements 27 days before bid opening for solicitation of DBE subcontractors and suppliers. This allowed the DBE firms time to respond to the solicitation as well as provided adequate information about the contract. The following table indicates a summary of Ortiz Enterprises’ advertisements. Publications Advertisement Date Bid Opening Date Number of Days Published Supporting Documents Provided Construction Update 9/15/2022, 9/22/2022 October 5, 2022 2 Yes Minority Bidders Bulletin 9/12, 9/19, 9/26/22 October 5, 2022 3 Yes Contractors Estimate Focus 9/8/22 – Bid Opening October 5, 2022 27 Yes Ortiz Enterprises provided a copy of the advertisements in the GFE supporting documentation. B. Documentation of Solicitation Efforts and Follow Up In Part B of the “DBE Good Faith Efforts Documentation” form, Ortiz Enterprises was to list the name of DBEs, the date of initial solicitation, items of work offered, and the follow up methods. Ortiz Enterprises stated, “Please see Solicitation Tab.” ESB performed an independent search of the CUCP and B2GNow database using the criteria of Caltrans District 8, counties of San Bernardino and Riverside, and the services needed for this contract: Work Code Category C1201 Traffic Control System C1601 Clearing & Grubbing C1532 Remove Concrete C1901 Roadway Excavation C3901 Asphalt Concrete C2602 Aggregate Base (AB) Contract No. 08-NBIL(537) November 22, 2022 Page 3 “Provide a safe and reliable transportation network that serves all people and respects the environment” C3940 Place Asphalt Concrete Dike & Misc. C7301 Concrete Curb & Sidewalk- Misc. C7215 Concreted-Rock Slope Protection C8000 Fencing C8001 Temporary Fencing C5620 Roadside Sign C8405 Thermoplastic Traffic Striping & Marking C8501 Pavement Marker C2065 Irrigation System C2000 Highway Planting C1920 Structure Excavation C1930 Structure Backfill C4906 Cast-In-Drilled-Hole Concrete Piling C5000 Prestressing Concrete Cast-In-Place C5100 Concrete Structure C5105 Minor Concrete Structure C5190 Joint Seal – Water Stop C5201 Reinforcing Steel C8331 Concrete Barrier C8330 Metal Railing ESB identified a total of 240 certified DBE firms, not including trucking. Ortiz Enterprise solicited approximately 250 DBE firms via email on September 8, 2022. Ortiz Enterprise followed up with the DBE firms via email on September 20, 2022. An addendum 3 was sent to the DBE firms on September 22, 2022. From their email logs, three DBE firms responded to their email efforts indicating that they will not be bidding on the contract. Ortiz Enterprise also followed up through telephone calls on September 20, 2022, September 30, 2022, and October 3, 2022. As a result of their telephone efforts, 41 DBE firms indicated they will not bid, 31 DBE firms were left a voice message, 3 DBE firms indicated they will bid, eight DBE firms were unable to be contacted due to a full voice message, and six DBE firms were undecided on whether they would like to bid. At bid time, Ortiz Enterprises had confirmations for eight DBE firms as a result of their solicitation efforts. C. Work Made Available to DBEs In Part C of the “DBE Good Faith Efforts Documentation” form, the Contractor was asked to select portions of the work to be performed by DBEs in order to increase Contract No. 08-NBIL(537) November 22, 2022 Page 4 “Provide a safe and reliable transportation network that serves all people and respects the environment” the likelihood that the DBE goals will be achieved, including breaking out contract work items into economically feasible units to facilitate DBE participation. Ortiz Enterprises provided a list of items of work offered, services offered, or materials supplied, including the following: traffic control, construction monitoring camera, sawcut and remove AC pavement, remove concrete pavement, cut off wall, sawcut and remove concrete slope protection, clearing and grubbing, unclassified excavation, unclassified fill, construct and remove bypass road, asphalt concrete, class II aggregate base, crushed miscellaneous base, AC dike, curb and gutter, sidewalk, driveway approach, colored stamped concrete median, concrete cross gutter, concrete pavement, retaining wall, concrete slope protection, curb ramp, masonry block wall, catch basin, storm drain manhole, storm drain outlet, fencing, date, conduit, pull box, signing, striping, pavement markers, landscaping, crushed rock, structure excavation, structure backfill, cast-in-drilled hole piling, prestressing cast-in-place concrete, structural concrete, joint seal assembly, bar reinforcing steel, concrete barrier, metal railing, bridge lighting and pull boxes, and pipe removal. According to the list of items of work provided, Ortiz Enterprises indicated that they made approximately $18,878,743.00 or 87.26% of work available to DBE firms. D. Rejected DBEs In Part D of the “DBE Good Faith Efforts Documentation” form, the Contractor was asked to list the items of work, names of firms that were selected over the rejected DBE firm, and the quote amount. If a non-DBE firm was selected over a DBE firm, provide the price difference, reasons for selection and evidence as to why additional agreements could not be reached for DBEs to perform the work. Ortiz Enterprises stated, “Please see DBE Quotes tab.” Ortiz Enterprises provided accepted and rejected DBE quotes. Ortiz Enterprises also provided the reasons why a non-DBE firm was selected over a DBE firm. Work Description Accepted Firm & Quote Amount DBE or Non- DBE DBE Rejected & Quote Amount Reason Landscape Griffith Company Non- DBE Diversified Landscape Price Difference Ortiz Enterprises rejected the DBE firm, Diversified Landscape, and accepted non- DBE firm, Griffith Company, for landscaping work due to a price difference. Per the Appendix A to Part 26, "Prime contractors are not, however, required to Contract No. 08-NBIL(537) November 22, 2022 Page 5 “Provide a safe and reliable transportation network that serves all people and respects the environment” accept higher quotes from DBEs if the price difference is excessive or unreasonable." E. Assistance Given on Plans, Specifications, and Contract Requirements In Part E of the “DBE Good Faith Efforts Documentation” form, Ortiz Enterprises stated, “Our solicitations letter and advertisements state we will provide information for assistance with bonding, lines of credit, et. We will help with bond premium, our letters and ads provided information obtaining plans and specs and recommendations speaking with and estimator.” A copy of their advertisements state that plans and specifications are available to view on their website. F. Assistance or Services Offered for Bonding, Lines of Credit, Insurance, Equipment, Supplies, Materials In Part F of the “DBE Good Faith Efforts Documentation” form, Ortiz Enterprises stated, “See “E.” A copy of their advertisements state, “Ortiz Enterprises Inc. estimating staff is available to assist subcontractors in obtaining bonding, lines of credit, insurance, necessary equipment, supplies, material, or related assistance or services when requested.” G. Contacting Recruitment Agencies In Part G of the “DBE Good Faith Efforts Documentation” form, Ortiz Enterprises listed the organizations and agencies they contacted. Ortiz Enterprises provided supporting documentation indicating that they contacted the following minority or women’s community organizations, minority or women’s contractors’ groups, local, state, and federal minority or women’s business assistance offices, and other organizations: • Asian Business Association • American Indian Chamber of Commerce of CA • Chinese American Construction Professionals • Filipino American Society of Architects and Engineers • Greater Los Angeles African American Chamber of Commerce • Hispanic Chamber of Commerce of Orange County • Korean Chamber of Commerce Orange County • National Association of Minority Contractors H. Additional Good Faith Efforts In Part H of the “DBE Good Faith Efforts Documentation” form, Ortiz Enterprises stated, “We have purchased and maintained an FTP site where subs are able to Contract No. 08-NBIL(537) November 22, 2022 Page 6 “Provide a safe and reliable transportation network that serves all people and respects the environment” upload/view plans at their convenience. They can also reach out to us by message or phone. Ortiz also made the efforts to go to good faith trainings where good faith is discuss. Please see attached.” I. Bidder Comparison of DBE Commitment The lowest bidder, Ortiz Enterprises’, apparent DBE participation is 17.19% of the total bid. Ortiz Enterprises did not meet the contract goal of 21%. The second lowest bidder, MCM Construction’s, apparent DBE participation is 21.36% of the total bid. MCM Construction appears to meet the 21% DBE goal. The third lowest bidder, Griffith Company’s, apparent DBE participation is 11.40% of the total bid. Griffith Company did not meet the 21% DBE goal. The bids were as follows: Bid Rank Bidder Bid Amount Claimed DBE Commitment Confirmed DBE Commitment 1 Ortiz Enterprises $21,635,759.60 $3,720,228.00 or 17.19% $3,720,228.00 or 17.19% 2 MCM Construction $22,069,640.00 $4,688,700.24 or 21.36% - 3 Griffith Company $23,450,459.50 $2,782,236.00 or 11.40% - State of California California State Transportation Agency DEPARTMENT OF TRANSPORTATION “Provide a safe and reliable transportation network that serves all people and respects the environment” CONCLUSION ESB has determined that Ortiz Enterprises did not meet the contract goal but did demonstrate adequate good faith efforts through soliciting by indirect and direct methods. ESB considers the quantity, quality, and intensity of the different kinds of efforts that Ortiz Enterprises has made. Based on the following facts: • Ortiz Enterprises indicated that they made approximately $18,878,743.00 or 87.26% of work available to DBE firms. • Ortiz Enterprises reached out to three publications and started their advertisements 27 days before bid opening for solicitation of DBE subcontractors and suppliers. This allowed the DBE firms time to respond to the solicitation as well as provided adequate information about the contract. • ESB identified a total of 240 certified DBE firms, not including trucking, utilizing the CUCP and B2GNow databases for DBE participation. • Ortiz Enterprise began their solicitation efforts on September 8, 2022 and emailed approximately 250 DBE firms. • Ortiz Enterprise followed up with the DBE firms via email on September 20, 2022. • An addendum 3 was sent to the DBE firms on September 22, 2022. • Ortiz Enterprise also followed up through telephone calls on September 20, 2022, September 30, 2022, and October 3, 2022. • Ortiz Enterprise provided results of their telephone call efforts. • A copy of their advertisements stated that plans and specifications were available to view on their website. • Ortiz Enterprises offered assistance in obtaining bonding, lines of credit, insurance, necessary equipment, supplies, material, or related assistance or services when requested. • Ortiz Enterprises provided supporting documentation indicating that they contacted minority or women’s community organizations, minority or women’s contractors’ groups, local, state, and federal minority or women’s business assistance offices, and other organizations. • Ortiz Enterprises did demonstrate that they took all necessary and reasonable steps and available means to obtain sufficient DBE participation for this contract. MEMORANDUM To: PROJECT FILE Dune Palms Road Bridge Date: 10/11/2022 Federal-Aid Project #:BR-NBIL(537) Bid Opening Date:October 5, 2022 Bidder:Ortiz Enterprises, Inc. (hereinafter called “Low Bidder”) Type of Work:New four-lane bridge (replace low-water crossing) Bid Amount:$21,635,759.60 From: City of La Quinta EVALUATION OF GOOD FAITH EFFORTS The City of La Quinta established a Disadvantaged Business Enterprise (DBE) goal of 21 %for this construction contract. The Low Bidder commits 17.19 %DBE participation. The City of La Quinta’s evaluation of the apparent low bidder’s Good Faith Efforts is based on Section 9.9 of the Local Assistance Procedures Manual and Appendix A in Part 26 of Title 49 of the Code of Federal Regulations. The efforts of the Low Bidder were reviewed by the City of la Quinta Public Works Department from the information provided in Exhibit 15-H: Proposer/Contractor Good Faith Efforts signed and submitted by Jeff Ortiz, Secretary of Ortiz Enterprises, Inc.. The City of La Quinta determined that the Low Bidder did demonstrate Good Faith Efforts to meet the DBE participation goal of this project for the reasons cited in this evaluation. EVALUATION A. Items of work the bidder made available to DBE firms The Low Bidder did make 100 % of the total scope of work available for DBE’s to participate in the bidding. 46.7 % were tasks which the Low Bidder usually subcontracts, but 53.3 % were tasks which the Low Bidder usually performs by himself (Exhibit ‘C’ from Low Bidder’s Good Faith Efforts documentation). The tasks were offered per bid item to the DBE’s (152 units) to facilitate a wide range of DBE participation and to even enable smaller DBE’s to participate. B. Solicitation effort documentation The Low Bidder contacted initially more than 250 DBE’s and followed up with emails and phone calls to check if they are planning to bid or if they would need assistance in any sort in respect to providing a bid (Exhibit ‘B’ – contact log, from Low Bidder’s Good Faith Efforts documentation). The Low Bidder solicited through electronic media and direct phone contact. The Low Bidder searched for qualified DBE’s according to specific work codes within but not limited to southern California (https://ucp.dot.ca.gov/querySubmmit.htm)and made the appropriate work items for the respective DBE’s available. The search in the CUCP database returned 259 DBE records for the respective work codes. The RFQ was publicly advertised 9/8/2022. All of the DBE’s received the initial solicitation email on 9/8/2022. The Low Bidder followed up by phone and / or email in between 9/20 and 10/3/2022 with 115 of the DBE’s. He reached 64 directly, left voice messages or got a busy signal with 43 of them, and he sent 8 follow up emails. As a result to this reminder 21 DBE’s said that they would bid and 5 answered “maybe”. C. Rejected DBE documentation The Low Bidder received fifteen (15) quotes whereof he accepted eight (8) DBS’s as a subcontractors and as service and / or material supplier (see table below). A total of seven (7) DBE’s were rejected due to significant price differences (from 20 to 60% higher) compared to the respective non-DBE subcontractors or suppliers (Exhibit ‘D’ from Low Bidder’s Good Faith Efforts documentation). In relation to the total bid amount selecting these DBE’s would have increased the construction costs by $1,116,417.00 (5.2%) to a total of $22,754,176.60. Bid item Name of Firm DBE Total Difference to low 1, 77-90 SRK Engineering YES $1,121,227.00 25, 26, 28, 3, 34, 68, 71, 72, 73 Integrity Steel LA Steel* DRS Marvela Steel NO YES YES YES $1,943,250.00 $2,288,515.00* $2,323,461.00 $2,596,975.00 $345,265.00 $380,211.00 $653,725.00 *Ortiz decided to spend $1,000,000.00 to utilize partial DBE through 2nd tier sub LA Steel 47, 49, 51-54, 56, 109, 111-114, 132 Griffith Landscaping Diversified Landscape NO YES $140,786.00 $226,727.00 $85,941.00 29-31, 33-35, 118 R. Dugan YES $119,513.00 18-24, 27, 69,101-106, 122, 133 Universal Construction YES $392,272.00 1, 42, 44, 45, 50, 75, 76, 125, 129-131, 138-145 Mendoza Business Enterprise YES $1,045,777.00 67 partial Bridge Rubber Bearing YES $20,000.00 Fence Supplies Triumph Geo-Synthetics YES $18,612.00 SWPP Reporting SWPP Queen YES $10,275.00 37-40, 43, 74, 123, 124 Trinity Fence Alcorn Fence NO YES $986,713.00 $1,248,274.00 $261,561.00 1, 61, 62 Foundation Pile Geo-Structural Mahaffey NO YES YES $1,295,830.00 $1,719,480.00 $1,905,420.00 $423,650.00 $609,590.00 No quotes were rejected for being only marginally higher. D. Publication effort made to advertise the projects to include DBE participation The Low Bidder used the following publications for his request for DBE participation for this (Exhibit ‘A’ from Low Bidder’s Good Faith Efforts documentation): Publications Dates of Advertisement Construction Update 9/15/2022; 9/22/2022 Minority Bidders Bulletin 9/12/2022; 9/19/2022; 9/26/2022 Contractors Estimate Focus 9/8/2022 to bid date Copies of the publications were provided in Low Bidder’s Good Faith Efforts documentation. E. Agencies, organizations, or groups contacted to provide assistance in contacting, recruiting and using DBEs The Low Bidder contacted twelve (12) minority organizations by email per below table (Exhibit ‘G’ from Low Bidder’s Good Faith Efforts documentation). Name of Agency / Organization Method / Date of Contact 1 American Indian Chamber of Commerce of California Email 9/8/2022 2 Asian Business Association Email 9/8/2022 3 Asian Business Association of Orange County Email 9/8/2022 4 Chinese American Construction Professionals Email 9/8/2022 5 Filipino American Society of Architects and Engineers Email 9/8/2022 6 Greater Los Angeles African American Chamber of Commerce Email 9/8/2022 7 Hispanic Chamber of Commerce of Orange County Email 9/8/2022 8 Korean Chamber of Commerce of Orange County Email 9/8/2022 9 National Association of Minority Contractors Email 9/8/2022 10 Associated General Contractors of California Email 9/8/2022 11 American Indian Chamber of Commerce Email 9/8/2022 F. Efforts to provide information about the plans, specifications, and contract requirements The Low Bidder did offer to provide information, plans and contract requirements upon request in his advertisements. A sample from his information distributed on 9/8/2022: “Plans/Specifications and Standard Subcontract Agreement are available for viewing at Ortiz – please call to arrange. You may also view and/or download plans/specifications/ Invitation to bid/Standard Subcontract Agreement at our FTP site: www.ortizplans.com username: 22-025, password: ORTIZ. Please check the site for updates. …” G. Assistance with bonding, lines of credit, insurance, equipment, supplies, materials, and/or services The Low Bidder did offer assistance with bonding, lines of credit, insurance, equipment, supplies, materials, and/or services. A sample from his information distributed on 9/8/2022: “Ortiz Enterprises Inc. estimating staff is available to assist subcontractors in obtaining bonding, Lines of credit, Insurance, necessary Equipment, Supplies, Material, or related assistance or services requested. …” H. Additional data to support a demonstration of Good Faith Effort The Low Bidder has submitted very detailed documentation of his effort towards DBE’s (communication, outreach and offer for assistance). Below summary shows that neither the 3rd nor the 4th lowest bidder reached the DBE Goal, their goals were even lower than the one from the Low Bidder. Engineer’s Estimate $16,496,244.50 DBE Goal 21.00 % #1 Ortiz Enterprises (Low Bidder) $21,635,759.60 DBE Goal 17.19 % #2 MCM Construction $22,069,640.00 DBE Goal 21.36 % #3 Griffith Company $23,450,459.50 DBE Goal 11.4 % #3 Riverside Construction $23,489,250.50 DBE Goal 9.0 % FINDING OF THE CITY OF LA QUINTA The City of La Quinta finds that the Low Bidder did demonstrate Good Faith Efforts to meet the DBE contract goal for the reasons cited in this evaluation. He achieved a reasonable balance between project cost and trying to meet the DBE goal. Submitted by:Approved by: Lorissa Gruehl, PE Bryan McKinney, P.E. (Senior Engineer) (Public Works Director / City Engineer)