Report Prepared by: Paul Flores P.E., Senior Engineer, Engineering Department
Title
SUBJECT: Approval of a Progressive Design Build Contract with F & H Construction, Inc. for the Phase 1 Design of Fire Station 56, Project CP090007, in a Not-to-Exceed Amount of $554,000.00
REPORT IN BRIEF
Considers approving the progressive design build contract for Phase 1 design of Fire Station 56, CP090007, for an amount not to exceed $554,000.00 with F & H Construction, Inc.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving a Progressive Design Build Contract with F & H Construction, Inc. for the Phase 1 Design of Fire Station 56, Project CP090007, in a not-to-exceed amount of $554,000.00; and,
B. Authorizing the City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to modifications as conditioned by City Council; or,
3. Refer to staff for reconsideration of specific items; or,
4. Continue to a future meeting; or,
5. Deny.
AUTHORITY
Charter of the City of Merced, Section 200 et seq.
Charter of the City of Merced, Article XI, Section 1111-Competitive bidding, and Merced Municipal Code Chapter 3.04, Article III - the purchase of materials, supplies, equipment, and contractual services of an estimated value greater than thirty-eight thousand dollars ($38,000.00), the "contract threshold," shall be made by the purchasing supervisor by written contract with the lowest responsible bidder.
California Government Code Section 4526 - Selection of a firm to perform engineering services shall be on the basis of demonstrated competence and the professional qualifications necessary for satisfactory performance.
CITY COUNCIL PRIORITIES
As provided for in the 2026-2027 Adopted Budget and City Council Priority for Public Safety.
DISCUSSION
Project Delivery Method
The City is pursuing a Progressive Design Build (PDB) delivery method for Fire Station 56. Under this approach, a single PDB team is selected through a qualifications-based process at an early stage of the project. The PDB team consists of both construction and architectural professionals, collaborating with City staff throughout the design and construction process. The PDB process is divided into two distinct phases.
During Phase 1, the City contracts with the selected PDB team and directs them to perform design and preconstruction services, including the collaborative development of project requirements, design documents, constructability reviews, cost estimating, and establishment of the Guaranteed Maximum Price (GMP) for the project. Upon agreement on the GMP, the City, at its sole and absolute discretion, may amend the contract (Phase 2) to authorize the PDB team to complete the remaining design, preconstruction, and construction activities necessary to deliver the finished project. If the parties are unable to reach agreement on a Guaranteed Maximum Price, the City retains the right to solicit proposals from other qualified firms to complete the project.
Selection of F & H Construction, Inc.
Staff issued a Request for Qualifications (RFQ) for a qualified PDB entity on September 8, 2026. The RFQ was publicly advertised, with a submission deadline of October 2, 2026, which produced five (5) responsive proposals from qualified PDB teams.
Staff evaluated all five submitted proposals against the qualifications criteria established in the RFQ, including relevant project experience, team composition, demonstrated understanding of fire station design, constructability, City’s needs and capacity to deliver the project within the established timeline and budget parameters. Following evaluation, three firms were selected for the interview phase. Staff conducted structured interviews with each of the three selected firms, during which the teams were assessed on their approach to the PDB process, their understanding of the project's programmatic requirements, and their proposed Phase 1 fee.
Following the interview process, staff determined that F & H Construction, Inc. working with RRM Design Group represented the most qualified PDB entity for the project. Listed below are the three firms that were interviewed:
1. F & H Construction with RRM Design Group
2. Swinerton with Shah Kawasaki Architects
3. Zumalt Construction with Teter Inc.
Staff determined that F & H Construction, Inc. represented the most qualified PDB entity for Fire Station 56 based on its competitive Phase 1 fee proposal, demonstrated understanding of the project’s operational and facility requirements, and extensive experience delivering fire station projects. The firm's proposal aligned with the City’s budget objectives while exhibiting a clear understanding of the design, functionality, and public safety needs associated with the facility requirements, including fire apparatus accommodations and the planned Emergency Operations Center.
In addition, F & H Construction’s has an established track record in fire station design and construction which provides confidence in the team's ability to successfully guide the project through design and preconstruction.
Funding and Financial Considerations
The total estimated cost of Fire Station 56 is expected to reach approximately $14 million, funded through a combination of developer impact fees, state grants, and a HUD Section 108 loan. A funding gap of $4,619,878 was identified, with staff pursuing a HUD Section 108 loan as a potential source, which is an eligible Community Development Block Grant activity under 24 CFR 570.703(i) for construction of a public facility.
The Phase 1 Design contract amount of $554,000.00 falls within the project's current available funds. If the Guaranteed Maximum Price exceeds available funding or is otherwise unsatisfactory, the City retains full discretion to decline to proceed with the PDB entity and to solicit alternative proposals.
Approval of this Phase 1 contract, together with the previously considered Kitchell Corporation construction management agreement, establishes the project team necessary to advance Fire Station 56 through design, preconstruction, and construction.
Timeline Considerations
The City has indicated a target completion date for Fire Station 56 of late 2028. Approval of the Phase 1 Design contract is a necessary step to maintain this schedule. The PDB method is intended to compress the overall project timeline by allowing design and preconstruction activities to proceed under a single contract, rather than sequentially procuring design services and then separately bidding construction.
IMPACT ON CITY RESOURCES
Project CP090007 - Fire Station 56 was established as a Capital Improvement Project and contains sufficient funding to execute this agreement.
ATTACHMENTS
1. Resolution 2024-64
2. PDB Contract with F & H Construction, Inc.
3. Fire Station 56 Site Plan
4. Presentation