TITLE
Recommendation to approve and authorize City Manager, or designee, to execute a Takeover Agreement with Nationwide Mutual Insurance Company, to complete construction of the Alamitos Beach Concession Building Project. (District 2)
DISCUSSION
On March 5, 2019, the City Council awarded a contract to Klassic Engineering and Construction, Inc. (KEC), for the construction of the Alamitos Beach Concession Building Project (Project) at 780 East Shoreline Drive, in the amount of $5,681,000, with a 15 percent contingency in the amount of $852,150, for a total contract amount not to exceed $6,533,150.
The City issued a Notice to Proceed (NTP) to KEC on June 13, 2019. The initial deadline for completion of the project, was April 7, 2020, 300 calendar days after the NTP. Over the course of construction, the contract was amended to extend the Project completion date to October 13, 2020. However, despite the extended time and assistance from the City, KEC continued to have difficulties addressing the outstanding project submittals, submitting schedule documents in compliance with the Project specifications, mobilizing the necessary resources, resolving numerous deficiencies, and obtaining critical Project inspections and approvals.
On June 21, 2021, a notice to cure default was issued to KEC. The notice to cure default stipulated that KEC substantially complete the Project on or before July 25, 2021. On July 27, 2021, the City issued an extension to cure default thereby extending the time to cure to August 9, 2021. On August 9, 2021, the City issued a final extension to cure default by August 27, 2021.
KEC was unable to cure the default by the final extension date. The standard specifications of City contracts require both performance bonds and payment bonds and include provisions to terminate a contract when a contractor fails to perform the obligations of the contract fully and correctly. On August 27, 2021, the City declared KEC in default of the contract, term...
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