FPUD awards waterline replacement contract, rejects bid protest

Joe Naiman

Village News Reporter

The Fallbrook Public Utility District awarded Palm Engineering the contract to replace multiple FPUD waterlines during fiscal year 2022‑23.

The FPUD board voted 4-0 Sept. 2, with Ken Endter not able to participate, to award Palm Engineering a $3,574,950 contract for the work and to reject the bid protest submitted by PK Mechanical Systems, which was the second-lowest bidder.

“It looks like we’re legally covered, so I think we should go forward,” said FPUD board member Jennifer DeMeo.

FPUD’s pipeline and valve replacement program includes identifying a priority list of replacement projects based on high rates of past failures and age of the facilities. “We’re going to be awarding a waterline replacement project for fiscal year 22-23,” said FPUD senior engineer Aaron Cook.

The project will replace 9,200 linear feet of water main within Elder Street, Hawthorne Street, Potter Street, Lillian Avenue, Orange Avenue, and Minnesota Avenue. Approximately 7,450 linear feet of six-inch pipeline and 1,750 linear feet of 10-inch cement mortar lined and coated steel pipe will be replaced along with associated appurtenances.

“This pipeline is old,” Cook said. “It has had multiple main line breaks.”

FPUD staff prepared a design package and solicited construction bids from contractors. Seven bids were received by the Aug. 16 deadline. Palm Engineering, which is based in San Diego, had the low bid at $3,574,950. The second-lowest amount of $3,725,000 was submitted by PK Mechanical Systems, Inc., whose office is in Wildomar.

The contract award was docketed for FPUD’s Aug. 22 board meeting, but PK Mechanical Systems filed a bid protest. The item was withdrawn from the Aug. 22 agenda and a special meeting was called for Sept. 2 to award the contract while FPUD staff and legal counsel reviewed the bid protest.

“We found the bid protest to be meritless,” Cook said.

PK Mechanical filed the bid protest on two grounds. One of those was that Palm Engineering did not list any subcontractors. A bid must list subcontractors if the amount of money the subcontractors would receive is equal to or more than 5% of the total contract amount.

Palm Engineering will self-perform rather than subcontract the paving and welding work. A subcontractor will be used for striping the road after the pipeline work is completed and the road is repaved, but that cost is less than 0.5% of the total amount.

The definition of a subcontractor for purposes of the bidding only applies to construction-related work. Surveying and inspection service providers are not considered subcontractors. Palm Engineering did not list the surveying and soil testing companies which will be used. FPUD staff and legal counsel determined that the omission of the surveying and testing companies did not equate to a failure to list subcontractors as required in the bid package.

PK Mechanical also claimed that Palm Engineering was not qualified to perform the work. “I think it’s very unusual for a protest, especially on that criteria,” said FPUD board member Charley Wolk. “To challenge the competency of the low bidder is to me unusual.”

That part of the bid protest centered on the type of work Palm Engineering performs. “There is criteria that they have to have relevant experience within the last five years,” Cook said.

PK Mechanical claimed that Palm Engineering had experience with street surfaces but not with pipelines. Cook noted that Palm Engineering has some recent pipeline experience. “They did list pipeline projects and we did follow up with their references,” Cook said.

“They did list their experience on their bid properly,” Cook said. “They did meet the requirements of experience.”

Palm Engineering has been in business for 18 years. The waterline replacement project will be the company’s first work for FPUD.

FPUD’s 2022-23 potable water capital budget allocates $4,543,350 for pipeline replacement projects by contractors. “This is within the amount budgeted for pipeline replacement,” Cook said.