A major sewer project set to begin this summer has been delayed by a dismal response to bid requests and a clerical error by one of the bidders.

The Crescent City Council on Monday unanimously accepted a request from Cal Electro of Redding to withdraw its bid for the Second Street sewer replacement project. It also rejected the only other bid the city received.

Council members also approved a change in the project's plans and specifications and authorized staff to restart the bidding process.

At about $1.162 million, Cal Electro was the lowest bidder for the project, Public Works Director Eric Wier said at the Council meeting. But the day after it submitted its bid, the firm notified the city that due to a clerical error the bid proposal would have to increase by about $300,000, he said.

The second contractor, JF Shea, submitted a proposal of just over $2 million, Wier said. City officials had planned to pay for the project using a $1.28 million Community Development Block Grant.

"We thought we were going to be reporting to the Council with a recommendation to award to Cal Electro," Wier said, adding that Cal Electro's initial bid was within the amount budgeted for the project. "(We) stated that they had two options from our opinion: They could formally withdraw their bid or they could agree to do it for what their bid amount was. They chose to formally withdraw their bid."

Accepting JF Shea's bid would put the project over budget by about $750,000, Wier said.

"We don't have that kind of money in the sewer reserve," he said.

The city plans to replace an existing 18-inch clay pipe on Second Street with a 24-inch pipe made of high-density polyethylene and polyvinyl chloride. The project was divided into four components, which included a base project and three alternatives, according to city staff.

City staff began seeking contractors after the Council approved the project on May 6, but only two responded as of July 15, Wier said.

"This was a little bit unfortunate as we had received a lot of requests from contractors as to information about the project and thought we were going to receive at least four," he said. "There were several other projects in Humboldt County as well as up in Brookings that took some of the bidders' resources, so they were working on those projects instead of bidding on ours."

The updated project is divided into five components, with a base project to replace the sewer mainline and laterals from B to F streets, according to the city's staff reports. An addition to the base project extends the sewer lines to G Street. According to Wier, shortening the project should keep it within the city's funding limits.

"We feel that the project should have received more bids, possibly bids from closer contractors such as Humboldt County or maybe even Curry County, which would help drive the cost down a little bit," Wier said. "The closer you are to home the better the bids, theoretically, should be."

The deadline for contractors to submit proposals to the city is Sept. 9, Wier said, adding that he's hopeful more local bidders will respond. Construction for the project will start in October and will take approximately two months, he said.

The city has added a winter stop clause that would allow the contractor to suspend work if there has been 10 inches of rain recorded at the wastewater treatment plant since the first day of work on the project, according to the staff report. The contractor could also suspend work if there has been at least 10 consecutive work days of rain or other inclement weather conditions for at least half the day.

Wier said the city must spend half of the $2 million 2012 CDBG funds it received by March 2014 to be able to apply for 2014 CDBG funds.

The project includes three alternatives. The first extends the project to H Street. The second extends it further to I Street, and the third extends the project to K Street. The second and third alternatives involve repairing the line under the old Tsunami Landing area.

The city's CDBG funds wouldn't pay for installing lateral lines to private property, Wier said. There are roughly $24,000 of existing laterals that are in the base project and an additional $54,000 of new laterals to vacant properties that would be completed with the project.

Wier said the city could work out a stipulation to recover that money from the developers of those properties.

"Once it's developed they would have to pay us for putting in the lateral just like anybody else would when they build a house," he said. "This line they would be connecting to is 12 to 14 feet deep in the ground, so the expense to put it in at any other time is going to be a lot more than what it is for us to put it in now. So it's prudent to put it in."

The project will involve tearing up the street to install the pipes and then covering it up, Wier said.

The Council approved the project in May, but the funds weren't released until a month later, said City Manager Eugene Palazzo.

City Councilwoman Kelly Schellong asked if the Community Development Block Grant Program would be willing to grant the city an extension for using those funds due to the agency's delay in releasing the money.

Councilwoman Kathryn Murray asked Palazzo to check with the city's grant administrator, Lorie Adams.

Reach Jessica Cejnar at jcejnar@triplicate.com.