TITLE
Recommendation to authorize the termination of Contract No. 31981 for Construction of Phase I Improvements to the Terminal Area at the Long Beach Airport, with Edge Development, Inc. (Edge); and
Approve and authorize City Manager to execute any and all necessary documents to enter into a Takeover Agreement with Safeco Insurance Company of America and Liberty Mutual Insurance Company (Surety) to complete Contract No. 31981 for the Construction of Phase I Improvements to the Terminal Area at the Long Beach Airport.
(District 5)
DISCUSSION
On December 14, 2010, the City Council awarded Contract No. 31981 (Contract) to Edge Development, Inc. (Edge) for the Construction of Phase I Improvements to the Terminal Area at the Long Beach Airport (Project) in an estimated amount of $24,757,741, plus a 15 percent contingency. After construction commenced, Edge faced financial hardship and the Surety company for Edge voluntarily stepped in under the terms of the surety bonds provided for the Project, working closely with the City and Edge, in order to meet Project schedules and without interruption to work progress to date.
Despite those efforts, Edge has declared its voluntary default of the Contract. As a result thereof, Surety desires to enter into a Takeover Agreement with the City in order to complete or procure the completion of the remaining work in accordance with the Contract documents and the surety bond obligations for the Project. Surety intends to have the remaining work completed by a competent and qualified contractor, subject to the City’s qualification requirements imposed by the original Contract. Surety has arranged for the completion of the remaining work to be performed by Soltek Pacific Construction (Soltek), who is a competent, qualified, and properly licensed contractor. Surety intends to execute a completion agreement with Soltek to complete the Project and provide the necessary indemnifications and insurance policies. Surety’s bonds...
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