TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Scott Agajanian, Economic Development Director
PREPARED BY: Martha Samaniego, Management Analyst
SUBJECT:
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Approve a Contract for the Murrieta Innovation Center Tenant Improvements General Contractor and a Purchase Order for Construction Management Services
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RECOMMENDATION
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Approve the award of a construction contract to Optima RPM, Inc., as the lowest, most responsive bidder for construction of the Murrieta Innovation Center (MIC) tenant improvements in the amount not to exceed $3,189,616.84, plus a 15% contingency of $478,442.53, for a grand total of $3,668,059.37;
Approve a purchase order for $155,000 for RWBID Construction Management, LLC, for construction management services, including labor compliance for the MIC tenant improvements;
Amend the Fiscal Year 2024/25 Capital Improvement Budget for Capital Improvement Project No. 21029 by increasing the expenditure budget by $500,000; and
Authorize the City Manager to execute all related contracts.
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PRIOR ACTION/VOTE
On October 20, 2020, the City Council adopted Resolution No. 20-4321, authorizing submittal of a grant funding application to the U.S. Economic Development Agency for the purpose of constructing a wet lab, dry lab, and additional tenant improvements in the Murrieta Innovation Center; and authorized the Mayor to execute a commitment letter as part of the grant application package (Vote: 5-0).
On February 15, 2022, the City Council adopted Resolution No. 22-4520, authorizing the Mayor to sign a Lien Acknowledgement Letter to the United States Economic Development Administration for the Murrieta Innovation Center (Vote: 5-0).
On May 17, 2022, City Council adopted Resolution No. 22-4568, entitled: A Resolution of the City Council of the City of Murrieta, California, Accepting the U.S. Department of Commerce’s Economic Development Agency’s Grant for $2,429,910 to Support Extensive Real Estate Improvements to the Murrieta Innovation Center; Authorizing City Manager to Execute All Grant Related Documents, and Amending the Capital Improvement Plan Budget to Allocate and Appropriate the Grant Funds (Vote: 5-0).
CITY COUNCIL GOAL
Aggressively pursue economic development.
BACKGROUND
On April 20, 2022, the City of Murrieta and the Murrieta Partnership received an award letter in the amount of $2,429,910 from the U.S. Department of Commerce Economic Development Agency (EDA) for the purpose of renovating the Murrieta Innovation Center into a best-in-class life science start-up incubator and a driver for job creation in the Southwest Riverside County region. Improvements will include the renovation of approximately 12,470 square feet of tenant improvements, including utilities for a wet lab, dry lab, and clean room.
The design phase of the project was completed at the end of 2024, and the construction bidding process began on November 4, 2024. As part of the federal requirements through the EDA, a public notice inviting bids was released and closed on January 7, 2025. A mandatory pre-bid meeting was conducted on November 21, 2024, which over forty (40) general contractors attended. There were seven (7) bids submitted, of which six (6) qualified for review. Of the bids submitted, all were reviewed, and the lowest, most responsive bidder was Optima RPM. The table below summarizes the submitted bids, identifying the firms that submitted bids and the bid amount.
After the bid opening, Tovey/Shultz submitted a bid protest against the bid submitted by Optima RPM, claiming that Optima RPM did not possess the proper licensing to complete the Project. After consulting with legal counsel and reviewing documentation regarding licensing, it was determined that the Optima is properly licensed to complete the work. On February 3, 2025, a response was submitted to Tovey/Shultz denying the bid protest. Attachment 5 includes all documentation related to the protest.
Independent from the construction contract bid process, an informal Request for Proposals was requested from all construction management companies with active on-call agreements with the City. The table below summarizes the firms and the proposal amounts for construction management for the MIC tenant improvement project. Construction management services are necessary to oversee the work of the contractor, review materials’ submittals, manage the schedule and project budget, review any potential change orders, and complete the EDA’s labor compliance reporting requirements. Staff recommends using RWBID for the necessary construction management services for this project. Since the City has an on-call agreement in place with RWBID, staff recommends approving a purchase order for a not-to-exceed amount of $155,000.
FISCAL IMPACT
Approval of the recommended actions modifies the existing capital improvement plan project 21029 to appropriate an additional $500,000 from General Fund Unassigned Fund Balance and allocate the remaining $175,111.16 needed to complete the project and a contingency for unanticipated expenditures of $324,888.84, bringing the total project budget to $4,383,203. The table below outlines the existing budget, the funding sources , and the additional funding needed.
The EDA grant is reimbursable in nature, requiring the City to expend funds prior to requesting reimbursement. The costs related to Construction, Construction Management, and Labor Compliance are eligible expenses to be funded with the EDA Grant. Additionally, Impact Southwest Riverside County has agreed to fund fifty percent (50%) of the grant’s required match.
ATTACHMENTS
1. Optima Contract
2. RWBID Construction Management, LLC. Proposal