December 20, 2024
By Brian Hews
Los Cerritos Community News has obtained a letter (below) from the Sacramento-based law firm of Weinberg, Roger, and Rosenfield [WRR] alleging that the city of Montebello violated the Public Contract Code and Montebello Municipal Code in awarding a Transportation Facility, Restroom Renovation Project [Project] contract to KYA Services, LLC.
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WRR represents the Construction Industry Force Account Council, a non-profit organization that monitors state and local government agencies for competitive bidding compliance in order to promote fair and open bidding on all public construction projects.
Secretary of State Documents show that KYA Services is located at 1800 E McFadden Ave. in Santa Ana, the agent of service is Collin McArthy, and the LLC document is signed by Jim Millane.
On July 25, 2024, the city issued a Request for Proposals for the Project, indicating that the scope of work is to “renovate the restrooms in the Transportation Administration and Maintenance Division.”
One month later, in an addendum, the city strangely indicated that all bidders would be required to provide plans similar to a design-build project while also writing that it was not a design-build project.
A design-build public project is a construction delivery method used in public works or government projects. In this method, a single entity, the design-build team, is responsible for both the design and construction of the Project.
In addition, the city did not provide an estimated cost for the Project.
At the November 13 City Council meeting, City Manager Raul Alvarez issued a report to the Mayor and Council recommending that KYA Services, LLC be awarded the contract for the Project. Alvarez’s report indicated that the city received four “responsible” bids.
One was from Bridgerock Construction, Inc., at a cost of $963,585; a second was from Asad Holdings, LLC, at a cost of $1,190,000; a third was from KYA Services, LLC, at a cost of $1,499,182; and a fourth was from Global Builders, Inc., at a cost of $1,998,888.
Despite Bridgerock Construction’s lowest responsible bid, nearly $536,000 less than KYA Services, LLC, Alvarez recommended KYA Services, LLC, and the City Council unanimously approved Alvarez’s recommendation.
WRR wrote, “The city has violated the Public Contract Code by failing to procure this Project via formal competitive bidding. We further apprise the city that its conclusions in the August 27, 2024 Addendum are incorrect and that the city must comply with the design-build requirements outlined in the Public Contract Code where it procures both the design and construction of a project from a single entity, accordingly, the city must rescind its contract with KYA Services for the Project, reject all bids, and procure the Project via formal competitive bidding or the traditional design-build model.”
Under the Code, any public contract over $200,000 must be disseminated under a formal competitive bidding procedure and contain several requirements, such as being published in a newspaper of general circulation at least 14 calendar days before the date of bid opening.
The Code also requires that the City Council must award any contracts to the lowest responsible bidder. In addition, the city may only award a contract for public works without plans where repair or replacement of city facilities is necessary due to emergency and pursuant to a four-fifths vote of the City Council.
Further, the city failed to prequalify bidders as required by the Code. No section of the RFP required the contractor to use a skilled and trained workforce for the Project; a great majority of public agency contracts are urged to use a Project Labor Agreement (PLA), which guarantees the contractor will hire locally and pay prevailing wages.
WRR stated, “The City’s procurement of this Project thus violates the formal bidding requirements of the Code and the Montebello Municipal Code. Consequently, any contract the city executes for the Project with KYA Services, LLC will be void and unenforceable. Thus, the city must abandon its void procurement of the Project, rescind any contract it has entered into with KYA Services, LLC, and procure the Project via the formal competitive bidding process required by the Code and the Montebello Municipal Code.”
“We would prefer to avoid legal action. However, if the city insists on procuring the Project without formal competitive bidding, we will consider legal action, including litigation remedies. We will also seek to recover all attorney fees and expenses incurred, as permitted by law.”
