Sacramento officials move to suspend bid requirements on arena

Hoping to streamline the project for the Kings, Sacramento officials want to suspend the city’s competitive-bidding requirements for building the proposed downtown NBA arena. At the same time, the Kings say they will award bids on a competitive basis and will give area businesses and small businesses a shot at participating.

In a memo to the City Council, city staffers said competitive-bid procedures must be suspended “to ensure timely completion” of the arena. The facility at Downtown Plaza is supposed to open in 2016; if the timetable slips by more than one year, the NBA reserves the right to move the Kings out of town.

The council will be asked to vote on the proposal Tuesday. A two-thirds supermajority is needed to suspend the bid rules.

Contracting for the proposed project is already controversial. The Kings signed a “project labor agreement” that essentially commits the team to using mostly unionized contractors on the $448 million project. The agreement angered nonunion firms, and an association of electrical contractors has contributed $29,500 to a citizens group circulating petitions to force a public vote next June on the city’s proposed subsidy.

Because the city has tentatively agreed to contribute $258 million toward the project, and the city would own the arena, the facility would be a public project normally subjected to the competitive bid rules. But in the memo, city officials said the new Kings owners should be given leeway to award contracts as they see fit because the team is “responsible for all phases of the planning, design, development and construction.”

City officials say the Kings will swallow any cost overruns, too.

Kings executives said suspending the city’s rules wouldn’t stifle competition for work on the project, but would provide greater freedom to award contracts to companies that would offer the best fit for the project. That includes contractors from the Sacramento area.

If the city’s rules were in place, contracts would have to be awarded to the lowest bidders, “and that may be a guy in Nevada or Tennessee,” said Kunal Merchant, the team’s vice president for strategic initiatives.

In choosing firms, the Kings have “established a ‘best value’ basis rather than low-bid as a key criterion,” city officials said in a memo to the council.

The Kings are committed to hiring area firms and small contractors, said Merchant, former chief of staff to Mayor Kevin Johnson.

The team has submitted a “local and small-business involvement plan” to the city. Its goals: To award 60 percent of the work to firms from the seven-county metro region. About 20 percent of the work would go to small businesses, defined as fewer than 100 employees and less than $14 million in annual sales.

The Kings have already chosen arena developer ICON Venue Group to manage the project, Turner Construction to handle preconstruction work and sports architect AECOM to handle design and engineering. Turner and AECOM were picked “through a competitive process with city involvement,” according to the city staff memo.