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♦ LONEROCK, INC. <br />California Contractor's License # A - 834112 <br />TO: City of Santa Ana, Public Works Agency M-22 <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br />Project: Warner Ave. Improvements Project No.14-6802 <br />Date: December 20, 2023 <br />Subject: Request for Water Main Material Escalation <br />Attn: Mr. Sean Thomas <br />Dear Mr. Sean Thomas, <br />P.O. Box 54503, Irvine, CA 92619 <br />Tel: 949-310-0804 <br />Fax: 949-387-6102 <br />dragan@lonerockinc.com <br />The City has been aware of unprecedented material price increases since bid time and has instructed us <br />to order materials needed for the project. Once the materials have been procured or ordered, we can <br />submit the price escalation to the City with the original bid price to be compensated for the difference. We <br />submitted the unprecedented price increases to the City at the beginning of the year and have since <br />updated the increases with additional requested back-up. <br />Attached, please find the original bid quote for waterline materials and the escalated cost for the material. <br />We attempted to secure the material at the quoted prices once the project started, but the price difference <br />is still significant. In addition, there was a long delay in receiving the ordered material due to shortages in <br />the industry which increased prices. <br />The bid price for waterline materials for the project was $311,850.58. The wetland units are taken out of <br />the price because we purchased them directly from the manufacturer (Bid item 33 and 34). Our cost from <br />the supplier from 12/02/2023 is in the amount of $528,637.51. The difference between the bid price and <br />increased material cost is $216,786.93. Please process this escalation cost increase and remit payment <br />to Lonerock in the amount with mark-up of $251,798.02 as soon as possible. <br />The $528,637.51 cost consists of the attached invoices for material received in the amount of $442,508.63 <br />and material remaining to be delivered in the amount of $86,128.88 per the attached pre -shipment <br />notifications. <br />If you have any questions, please do not hesitate to contact me at (949) 310-9280. <br />Regards, <br />1% r r <br />LJ <br />Nikola Marjanovic <br />Vice President <br />