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Yuba City awards $5.3M contract for aquifer storage and recovery well; staff identifies $1.9M shortfall
Summary
Council awarded Phase 2 of the Aquifer Storage and Recovery project to W.M. Lyles Co. after declaring the low bidder nonresponsive for failing to meet prime‑contractor self‑performance requirements; staff proposed funding transfers to cover an estimated $1.9 million gap.
The Yuba City Council awarded the construction contract for Phase 2 of the Aquifer Storage and Recovery (ASR) project to W.M. Lyles Company after staff determined the apparent low bidder did not meet required bid specifications.
Public works staff explained the DWR‑funded project will allow the city to inject water into an aquifer beneath the water treatment plant and recover it in drought years. Seven bids were received; the low bidder (Sibley and Reed) submitted a proposal in which a subcontractor would perform more than 50% of the work, in conflict with bid special provisions that required the prime contractor to perform at least half the work. Staff therefore deemed that bid nonresponsive and recommended awarding to the next lowest responsive, responsible bidder, W.M. Lyles, whose base bid staff reported at $5,304,500.
The total project budget requests included the base contract, a 10% construction contingency, construction management and inspection services (ICM Group) and labor‑compliance services (Solis Group). Staff summarized available capital and grant funds and reported approximately $4.3 million currently available in project accounts, leaving an estimated $1.9 million shortfall. Staff proposed drawing $325,000 from the unallocated water reserve fund, $575,000 from the capitalization fund and $1,000,000 from the water treatment plant instrumentation and electrical improvements account to cover the deficit.
Council voted to reject the nonresponsive bid, award the contract to W.M. Lyles, and authorize the city manager to execute the contract along with related professional services and budget transfers for the stated funding gap.
The project’s CEQA action was posted as an initial study/mitigated negative declaration; staff reported no substantive regional board revisions were required. The city also emphasized labor‑compliance obligations tied to the grant and the need for detailed construction management oversight.
Next steps: staff will finalize contract documents, process the recommended fund transfers, and mobilize construction oversight and labor‑compliance work required under the state grant.
