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WS WTP No. 1 HSPS FINAL
City of Winter Springs, FL WTP No. 1 HSPS Suction Pipe Replacement RFP 06-20 LR REQUEST FOR PROPOSALS City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 1 TABLE OF CONTENTS SECTION 1 BASIS OF AWARD Team Qualifications (a)(i): Capabilities (a)(ii): Similar Project Experience (a)(iii): Sub-Contractors (a)(iv): Project Manager Schedule (b)(i): Schedule Approach (c)(i): Project Approach SECTION 2 MANTATORY PROPOSAL FORMS SECTION 3 FINANCIAL INFORMATION BASIS OF AWARD SECTION 1 City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 2 SECTION (a)(i) TEAM QUALIFICATIONS | CAPABILITIES Describe the Company’s in-house capabilities to complete the project work of this type. Company Background Wharton-Smith is a privately held Florida corporation (based in Seminole County, FL) founded in 1984 and has been providing quality construction for more than 35 years. Water/wastewater construction for public sector clients is one of our core businesses and we are the #1 Environmental Contractor (ENR, 2019) headquartered in the Southeast U.S. Wharton-Smith currently has 600+ employees company-wide and 500+ based in Florida, owns a feet of heavy construction equipment, and has six offices across Florida. Types of Work Wharton-Smith understands the diverse needs of our clients and understands that all projects have different requirements based on type and complexity. Wharton-Smith performs general contracting services, preconstruction consulting services, Construction Manager at Risk (CMAR) services, Traditional Design-Build services and Progressive Design-Build services. Areas of Expertise Although Wharton-Smith has its roots in the water/wastewater market, it has evolved into a full- service construction firm serving diverse markets focused on construction that addresses the needs of the entire community. Our projects include: • Water and wastewater treatment and distribution facilities • New construction and renovations of office buildings • K-12 and higher education facilities • Public safety buildings • Community, sports and recreation centers Equipment Wharton-Smith either owns or leases all the required construction equipment to safety and efficiently complete your project. Prior to mobilization, our project team will coordinate with our Corporate Equipment Fleet Manager to identify the equipment needs of the project and they will schedule to have all the required equipment serviced and delivered to the jobsite when need. Wharton-Smith retains the services of a certified and experienced equipment mechanical to perform routine preventative maintenance and repairs as necessary. Should the need for additional equipment be necessary to compete the project outside of our current fleet, Wharton-Smith holds accounts with all the major national rental companies. A list of our owned equipment can be provided upon request. City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 3 SECTION (a)(i) TEAM QUALIFICATIONS | CAPABILITIES Describe the Company’s in-house capabilities to complete the project work of this type. Staffing Our proposed project team for the Winter Springs WTP No. 1 project was formed with purpose. The purpose being to put forth a group of professionals that are the most qualified for the project. Our staff is local, experienced, and seasoned in water treatment facility improvements projects. Should we need additional resources to support the team, we have the bench strength to support and backup staff at all levels with experience in all aspects of engineering and construction in Central Florida. Discipline Firm- wide Central Florida S. East Florida S. West Florida Gulf Coast Region Carolinas Superintendents 101 48 21 9 15 8 Foreman 51 17 14 4 8 8 Project Managers 77 35 16 5 14 7 Project Engineers 54 25 10 4 5 10 Trade/Craft 146 57 26 21 17 25 Precon./Estimating 21 13 4 0 2 2 Exec./Management 43 29 6 2 4 2 Administration 105 78 14 5 6 2 Interns 29 22 1 2 0 4 TOTALS 627 324 112 52 71 68 History of Safe Performance At Wharton-Smith, our first priority is that our employees get home safety to their families every night. Our comprehensive safety program includes a site-specific health and safety plan, OSHA competent person training, personal protective equipment, weekly inspections, meetings with all jobsite employees and random drug testing. Wharton-Smith has received 20+ jobsite inspections from OSHA within the past five years with zero warnings, fines or citations. City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 4 SECTION (a)(i) TEAM QUALIFICATIONS | CAPABILITIES Describe the Company’s in-house capabilities to complete the project work of this type. Ability to Respond Wharton-Smith has the largest water personnel resources in Florida. We are a self-performing contractor with 100+ local craft workers, capable of the following trades: • Cast-in-place concrete • Heavy civil • Site work • Underground mechanical and pipeline • Above ground mechanical and pipeline • Plumbing • Equipment installation Our corporate office is 15 miles away from the jobsite. A large amount of Wharton-Smith staff members are Winter Springs residents and use your water daily. Both Wharton-Smith and Mike are honored and excited to work on this hometown project. The benefit to the City is that Wharton-Smith can provide continuous support from the entire company throughout the project and after project turnover to support your plant’s success. City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 5 SECTION (a)(ii) TEAM QUALIFICATIONS | SIMILAR PROJECT EXPERIENCE Describe the company’s experience with similar projects in Florida. The City has clearly stated the past performance and related experience that is expected from the successful contractor as part of this bid process. The Wharton-Smith team possesses impressive experience and qualifications with municipal water rehabilitation projects, many right here in Central Florida. We’ve highlighted the three projects listed within this section, due to their high degree of similarities to the challenges and requirements anticipated for the Winter Springs WTP No. 1 project. These similarities include: • Self-Performance by Wharton-Smith of at least 50% • Completed before November 6, 2020 • Commenced after November 6, 2010 • Satisfied local, Florida municipalities • High regard for safety and OSHA regulations • Completed warranty period to client satisfaction • Underground piping of 36” or above using open cut • Limited site availability for underground operations • Potable water treatment facilities • Scope involving ground storage tanks and/or high service pump stations • Scope involving chemical feed systems • Experience with phasing and sequencing to maintain plant operations • Experience with time sensitive tie-ins and transitions Since Wharton-Smith has completed over 1,000 water facility projects, our experience in similar work is unmatched by any other contractor in Florida. Below are some of our most recent accomplishments. EAST WTP IMPROVEMENTS MIRAMAR, FL Wharton-Smith completes services to rehab a treatment plant while maintaining constant service! This 6.7MGD facility included replacing the existing lime treatment system with a reverse osmosis system. Work also included wells, concentrate pump station, high service pump station with 3 pumps, building construction modifications, 1.2MG ground storage tank, underground piping including new water main, relocated and new chemical feed and storage systems. POLK CENTRAL REGIONAL WPF POLK COUNTY, FL Wharton-Smith wins ABC Central Florida Excellence in Construction Award for 2020! This 4.0MGD facility included 3,500 LF of buried water piping, 1MG ground storage tank, ozone and GAC treatment equipment, chemical feed and storage systems, and new high service pump station. This project was complex in it’s coordination with the plant staff, other contractors, and critical tie-ins to existing pipelines City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 6 SECTION (a)(ii) TEAM QUALIFICATIONS | SIMILAR PROJECT EXPERIENCE Wharton-Smith completed upgrades to this 5.2MGD water treatment plant, that serves as the main source of potable water for the City. The work included installation of a new ionic ion exchange system, a spent regenerate wastewater system, new chemical feed system including sodium hypochlorite and corrosion inhibitor, chemical injection points into 16” piping, new 750KW generator with fuel tank and piping, new pre-engineered metal building, new high service pump station with connections into the existing suction piping and three 150HP pumps and related electrical and I&C work. This project required multiple underground piping tie-ins including a 16”x12” wet tap. The team has challenges with the ion exchange system supplier in performing their contracted services within the agreed-upon schedule, particularly during startup and commissioning. Wharton-Smith notified the supplier of their non-conformance and worked with them to develop a revised schedule that would meet the project requirements. City of Winter Springs Lena Rivera *Original Contact, Kipton Lockcuff no longer works for City 1126 East SR 434 Winter Springs, FL 32708 P: 407-327-5989 Email: lrivera@winterspringsfl.org BY UTILIZING THE OWNER DIRECT PURCHASE PROGRAM, THE CLIENT SAVED APPROXIMATELY $1.5M! TAB 1 | STATEMENT OF QUALIFICATIONS | CORPORATE RESOLUTION • OPEN CUT PIPE INSTALLATION • ACTIVE WTP REFURBISHMENT • HIGH SERVICE PUMP STATION WORK • CHEMICAL FEED SYSTEM WORK • CRITICAL TRANSITIONS • SCADA INSTALLATIONS $3.6 M | Started 6/2016 | Completed 1/2018 PROJECT RELEVANCIES DESCRIPTION OF WORK OWNER REFERENCE Winter Springs WTP No. 1 Improvements Location: Winter Springs, Florida CHALLENGES AND SOLUTIONS • PROJECT SCHEDULE WAS MET • ZERO OSHA VIOLATIONS OR INJURIES • 52% SELF-PERFORMED • ZERO OUTSTANDING WARRANTY ITEMS PROJECT STATS City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 7 SECTION (a)(ii) TEAM QUALIFICATIONS | SIMILAR PROJECT EXPERIENCE TAB 1 | STATEMENT OF QUALIFICATIONS | CORPORATE RESOLUTION $31.9 M | Started 4/2010 | Completed 3/2012 This project included two 5MG ground storage tanks, ozone treatment system, building construction, six well pumps, high service pump station with three 500 HP pumps and two 250HP pumps with a 48” suction header, two generators, chemical storage and feed systems including two sodium hypochlorite systems with injection headers into 42” and 48” pipe, 14,470 LF of buried water piping of 16” to 48” ductile iron and stainless steel, two 5MG ground storage tanks with 48” inlet and outlet piping, and related electrical, site and I&C work. Due to growth in the area, schedule was absolutely critical for this project. Wharton-Smith faced multiple challenges to the schedule including scope additions with no time extension and unforeseen site conditions, but was still able to plan our work efficiently and complete the project 3 months early. Additionally, this project required demolishment of existing ozone gas piping. This gas is toxic and flammable. It was critical that we plan the work with safety in mind to mitigate any potential dangers. Working with our safety management team and our operations staff, we were able to complete this hazardous work with no injuries or incidents. Orange County BOCC Fernando Villanueva (Owner’s Rep with PMA Consultants) 9510 Curry Ford Road Orlando, FL 32825 P: 407-509-7351 Email: fvillanueva@pmaconsultants.com Brad Vanlandingham Black & Veatch Corporation P: 407-509-7351 Email: vanlandinghamb@bv.com Southern Regional Water Supply Facility Location: Orlando, Florida DESCRIPTION OF WORK OWNER REFERENCE CHALLENGES AND SOLUTIONS • 36”+ OPEN CUT PIPE INSTALLATION • ACTIVE WTP REFURBISHMENT • HIGH SERVICE PUMP STATION WORK • CHEMICAL FEED SYSTEM WORK • CRITICAL TRANSITIONS • SCADA INSTALLATIONS PROJECT RELEVANCIES • PROJECT SCHEDULE WAS MET (EARLY BY 3 MONTHS!) • ZERO OSHA VIOLATIONS OR INJURIES • 60.1% SELF-PERFORMED • ZERO OUTSTANDING WARRANTY PROJECT STATS City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 8 SECTION (a)(ii) TEAM QUALIFICATIONS | SIMILAR PROJECT EXPERIENCE $21.2M | Started 9/2013 | Completed 9/2014 $22.7M | Started 4/2012 | Completed 3/2014 The SER and CC WTP projects included converting the existing facility into an ozone treatment facility, and included ozone treatment equipment, chemical feed and storage system including two sodium hypochlorite systems with injection points into 20” and 36” piping, two 1.2MG ground storage tanks with 36” and 245 piping, underground water piping of 6” to 36”, transfer pump station, high service pump station with 6 pumps and 36” suction header, and building construction. The Lynwood WTP project included this project included building construction, chemical feed and storage systems including sodium hypochlorite with injection pints in 30” piping, underground water piping of 2” to 30”, ground storage tank modifications, high service pump station refurbishments with 4 pumps and new 30” suction header, new 0.75MG ground storage tank with 30” piping and related electrical, I&C and site work. The greatest challenge was completing construction while maintaining complete functionality of the existing facility. This required careful phasing and coordination with the plant operations staff and engineers to complete this project. Wharton-Smith worked with the city to combine the purchase of related equipment shared by these projects into one purchase order to realize substantial economies of scale. This was very successful for the team in regards to cost and schedule. Seminole County Terry McCue Carol Hunter (no longer with County) 500 W. Lake Mary Blvd. 500 W. Lake Mary Blvd. Lake Mary, FL 32773 Lake Mary, FL 32773 P: 310-7238 P: 407-761-0252 Email: tmccue@seminolecountyfl.gov Email: chunter370@gmail.com Southeast Regional, Country Club, & Lynwood WTP Upgrades Location: Seminole County, FL $8.0M | Started 12/2013 | Completed 5/2015 DESCRIPTION OF WORK OWNER REFERENCE CHALLENGES AND SOLUTIONS PROJECT RELEVANCIES PROJECT STATS • 36”+ OPEN CUT PIPE INSTALLATION • ACTIVE WTP REFURBISHMENT • HIGH SERVICE PUMP STATION WORK • CHEMICAL FEED SYSTEM WORK • CRITICAL TRANSITIONS • SCADA INSTALLATIONS • ALL PROJECT SCHEDULES WERE MET • ZERO OSHA VIOLATIONS OR INJURIES • 65.8% SELF-PERFORMED • ZERO OUTSTANDING WARRANTY City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 9 SECTION (a)(iii) TEAM QUALIFICATIONS | SUB-CONTRACTORS Identify key sub-contractors to be utilized. This project will be 100% self-performed by Wharton-Smith. There are no key sub-contractors to list. City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 10 SECTION (a)(iv) TEAM QUALIFICATIONS | PROJECT MANAGER MICHAEL ALEXAKIS| PROJECT MANAGER Mike has managed a majority of Wharton-Smith’s most recent challenging projects. The company puts faith in MIke because of his energy, work ethic and ability to get projects done on time and under budget while exceeding our clients’ expectations. PROJECT EXPERIENCE Seminole County WTP Upgrades Projects, Seminole County, FL - $51.9M These three projects included work on active water treatment plants, while maintaining operations was critical. All included large diameter, open-cut piping, high service pump station work, ground storage tank modifications, chemical feed and storage systems, and related electrical, site and I&C work. Southern Regional Water Supply Facility, Orange County, FL - $31.9M This project was completed in an active water treatment facility, while maintaining all operations. Scope of work included new ground storage tanks, large diameter, open-cut piping, high service pump station work, chemical feed and storage systems, and related electrical, site and I&C work. Eastern Regional Water Supply Facility Improvements, Orange County, FL - $14.6M This project included an expansion to the active water supply facility. Scope included two new forced draft aerators and a air scrubber system, new transfer pumps station and clearwell, high service pump station extension with two new 600 HP pumps and tie-ins to existing pump cans, expansion of the sodium hydroxide air quality control feed system, underground water lines up to 48”, complex tie-ins and phasing to maintain plant operations, and related electrical and I&C work. Georgia-Pacific Foley WWT and Effluent Disposal Project, Perry, FL - >$120M This 100MGD project included converting the plant from an ASB wastewater process to an AST process, with two 250’ prestressed clarifiers, chemical treatment systems, lagoon wastewater holding basins, new concrete tooling tower with pump station and two 460HP pumps, new influent pump station, clarifier pump station, and splitter boxes. The project also included over 5,000 LF of onsite underground piping up to 96”, and a 600LF offsite disposal pipeline of 54” piping. Identify the Project Manager and Back-up Project Manager. LOCATION Sanford, FL Office EDUCATION B.S.C.E. Civil Engineering, University of Central Florida CERTIFICATIONS Registered Engineer in Training (EIT) State of Florida No. 1100013459 Design Build Institute of America (DBIA) Professional Certification Project Manager Academy - FMI NPDES Stormwater Inspector Years of Experience 14 - Wharton-Smith 16 - Total City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 11 SECTION (a)(iv) TEAM QUALIFICATIONS | PROJECT MANAGER CURTIS MATTE| BACK-UP PROJECT MANAGER Curtis, as Back-up Project Manager, is ready to take on the project if needed. He has experience with many Central Florida clients, on both small and large retrofit projects. He will manage site logistics, construction activities, scheduling, quality control, safety, cost control, start-up, close-out and warranty. PROJECT EXPERIENCE Markham Regional WTP Upgrades, Seminole County, FL - $17.9M This 10 MGD project included an ozonation system with LOX storage and feed, ion exchange treatment system, new 1.5MG ground storage tank, new building construction, chemical storage and feed systems, and high service pump station. This included 3,000LF of underground 12” to 4” ductile iron water piping. Gainesville Regional Utilities Continuing Services, Gainesville FL - $10M+ Wharton-Smith was selected to perform continuing and emergency services for the City of Gainesville and Gainesville Regional Utilities. The projects include miscellaneous and emergency work needed throughout the city, including their water and wastewater facilities. To date, Curtis has completed 10 projects with scopes that include replacement of 42” underground piping, replacement of clarifiers and inlet/outlet piping, replacement of sodium hypochlorite feed and storage systems, and new building construction. St. Augustine FEMA Pump Station Rehabilitations, Orange County, FL - $14.6M After the Hurricanes Matthew and Irma, the City’s facilities experienced severe damages. With FEMA public assistance, the City needed to rehabilitate 13 pump stations throughout the City. Many of these facilities are in public, historic, and residential spaces with very little footprint to work. Buenaventura Lakes WTP Modifications, Toho Water Authority, $0.4M This project includes modifications to the ground storage tank, open-cut piping, tank spray, and related electrical and site improvements. Identify the Project Manager and Back-up Project Manager. LOCATION Sanford, FL office EDUCATION B.S. Construction Management, Seminole State College CERTIFICATIONS OSHA 30-Hour NPDES Stormwater Inspector Years of Experience12 - Wharton-Smith 12- Total City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 12 SECTION (b)(i) PROJECT SCHEDULE Wharton-Smith, Inc. is pleased to present the Project Schedule on the following page. #Activity IDActivity NameOriginalDurationStartFinish1WTP No. 1 HSPS Suction Piping Replacement, Winter Springs, FLWTP No. 1 HSPS Suction Piping Replacement, Winter Springs, FL14905-Jan-2103-Aug-212MILESTONESMILESTONES14905-Jan-2103-Aug-213A1000LIMITED NTP105-Jan-2105-Jan-214A1010FULL NTP105-May-2105-May-215A1020SUBSTANTIAL COMPLETION121-Jul-2121-Jul-216A1030FINAL COMPLETION103-Aug-2103-Aug-217PROCUREMENTPROCUREMENT14706-Jan-2102-Aug-218A1050PSAD - PIPE, FITTINGS AND ACCESSORIES6506-Jan-2106-Apr-219A1060PSAD - VALVES8506-Jan-2104-May-2110A1070PSAD - PRECAST CHEMICAL INJECTION VAULT8506-Jan-2104-May-2111CONSTRUCTIONCONSTRUCTION6106-May-2102-Aug-2112A1040PUNCHLIST822-Jul-2102-Aug-2113PHASE 1PHASE 11006-May-2119-May-2114A1080EXCAVATE, DEWATER AND SHORE FOR GST-2 PIPING306-May-2110-May-2115A1090INSTALL 14" LINE STOP AND CUT/DRAIN EXISTING PIPE111-May-2111-May-2116A1100INSTALL NEW DUCTILE PIPE AND WET SWAB/DISINFECT312-May-2114-May-2117A1110INSTALL TEMP CHEMICAL FEED PIPE AND INJECTION POINT FOR GST-2217-May-2118-May-2118A1120BACKFILL PIPE AND PLACE IN SERVICE119-May-2119-May-2119PHASE 2PHASE 21420-May-2109-Jun-2120A1130EXCAVATE, DEWATER AND SHORE FOR GST-1 PIPING420-May-2125-May-2121A1140INSTALL NEW DUCTILE FROM EXISTING 14" WM TO NEW 20" VALVE526-May-2102-Jun-2122A1150PRESSURE TEST AND DISINFECT NEWLY INSTALLED PIPING203-Jun-2104-Jun-2123A1160ISOLATE & REMOVE 14" GST-1 EFFLUENT/BY-PASS LINES107-Jun-2107-Jun-2124A1170INSTALL NEW DUCTILE PIPE TO GST-1/BY-PASS AND WET SWAB/DISINFECT108-Jun-2108-Jun-2125A1180BACKFILL PIPE AND PLACE IN SERVICE109-Jun-2109-Jun-2126PHASE 3PHASE 31410-Jun-2129-Jun-2127A1190INSTALL NEW 30" & 42" DUCTILE SUCTION WM AND CHLORINE INJECITON VAULT1010-Jun-2123-Jun-2128A1200PRESSURE TEST AND DISINFECT NEWLY INSTALLED PIPING224-Jun-2125-Jun-2129A1210BACKFILL PIPE AND PLACE IN SERVICE228-Jun-2129-Jun-2130PHASE 4PHASE 41130-Jun-2115-Jul-2131A1220SELECTIVE DEMO OF HSPS BUILDING WALLS FOR NEW PIPE230-Jun-2101-Jul-2132A1230ISOLATE, DEMO AND INSTALL NEW PIPING FROM PUMPS TO HEADER AND WET SWAB/DISINFECT302-Jul-2107-Jul-2133A1240REMOVE TEMP CHLORINE INJECTION POINT AT GST-2 AND CONNECT TO NEW CHEMICAL INJECTION VAULT208-Jul-2109-Jul-2134A1250RELOCATE EXISTING CL17 CHLORINE RESIDUAL METER FROM GST-2 TO THE HSPS ROOM AND REMOVE OLD UNIT212-Jul-2113-Jul-2135A1260INSTALL CONDUIT, PULL AND TERMINATE WIRE FOR RELOCATED CL17 METER AND NEW INSERTION FLOW METERS214-Jul-2115-Jul-2136PHASE 5PHASE 5908-Jul-2120-Jul-2137A1270RE-BUILD HSPS WALLS AROUND NEW PIPE PENTRATIONS308-Jul-2112-Jul-2138A1280PAINT HSPS WALLS AND ABOVE GRADE HEADER PIPING413-Jul-2116-Jul-2139A1290REPAIR CONCRETE DRIVEWAY, SEED AND MULCH SITE514-Jul-2120-Jul-211320270310172431071421280714212804111825020916233006132027041118250108152229051219260310172431071421280512192602091623300613202706December 2020January 2021February 2021March 2021April 2021May 2021June 2021July 2021August 2021September 2021October 2021November 2021December 2021January 2022February 2022March 202203-Aug-21, WTP No. 1 HSPS Suction Piping Replacement, Winter Springs, FL03-Aug-21, MILESTONESLIMITED NTPFULL NTPSUBSTANTIAL COMPLETIONFINAL COMPLETION02-Aug-21, PROCUREMENTPSAD - PIPE, FITTINGS AND ACCESSORIESPSAD - VALVESPSAD - PRECAST CHEMICAL INJECTION VAULT02-Aug-21, CONSTRUCTIONPUNCHLIST19-May-21, PHASE 1EXCAVATE, DEWATER AND SHORE FOR GST-2 PIPINGINSTALL 14" LINE STOP AND CUT/DRAIN EXISTING PIPEINSTALL NEW DUCTILE PIPE AND WET SWAB/DISINFECTINSTALL TEMP CHEMICAL FEED PIPE AND INJECTION POINT FOR GST-2BACKFILL PIPE AND PLACE IN SERVICE09-Jun-21, PHASE 2EXCAVATE, DEWATER AND SHORE FOR GST-1 PIPINGINSTALL NEW DUCTILE FROM EXISTING 14" WM TO NEW 20" VALVEPRESSURE TEST AND DISINFECT NEWLY INSTALLED PIPINGISOLATE & REMOVE 14" GST-1 EFFLUENT/BY-PASS LINESINSTALL NEW DUCTILE PIPE TO GST-1/BY-PASS AND WET SWAB/DISINFECTBACKFILL PIPE AND PLACE IN SERVICE29-Jun-21, PHASE 3INSTALL NEW 30" & 42" DUCTILE SUCTION WM AND CHLORINE INJECITON VAULTPRESSURE TEST AND DISINFECT NEWLY INSTALLED PIPINGBACKFILL PIPE AND PLACE IN SERVICE15-Jul-21, PHASE 4SELECTIVE DEMO OF HSPS BUILDING WALLS FOR NEW PIPEISOLATE, DEMO AND INSTALL NEW PIPING FROM PUMPS TO HEADER AND WET SWAB/DISINFECTREMOVE TEMP CHLORINE INJECTION POINT AT GST-2 AND CONNECT TO NEW CHEMICAL INJECTION VAULTRELOCATE EXISTING CL17 CHLORINE RESIDUAL METER FROM GST-2 TO THE HSPS ROOM AND REMOVE OLD UNITINSTALL CONDUIT, PULL AND TERMINATE WIRE FOR RELOCATED CL17 METER AND NEW INSERTION FLOW METERS20-Jul-21, PHASE 5RE-BUILD HSPS WALLS AROUND NEW PIPE PENTRATIONSPAINT HSPS WALLS AND ABOVE GRADE HEADER PIPINGREPAIR CONCRETE DRIVEWAY, SEED AND MULCH SITEWharton-Smith, Inc. Bid Phase Construction Schedule: WTP NO.1 HSPS SUCTION PIPING REPLACEMENTActual WorkRemaining WorkCritical Remaining WorkMilestoneSummaryPage 1 of 1WTP NO.1 HSPS SUCTION PIPING REPLACEMENT CITY OF WINTER SPRINGS, RFP 06-20 LR© Oracle Corporation City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 13 SECTION (c)(i) APPROACH Provide a project approach to address the contractor’s approach to the overall project. Wharton-Smith strives to satisfy our clients and become the “construction group of choice” in all of our construction projects. The way we meet this goal is by careful planning and execution of our work. Wharton-Smith has developed the framework of our management approach, shown below, through each phase of your project. Emergency Planning As Florida’s leading water/wastewater contractor, we are experienced and ready for any emergency action on our job- sites, in our communities and for our clients. There are number of reasons why the City should expect Wharton-Smith to assist in an emergency: 1. We will already be onsite and mobilized with an experienced and knowledgeable crew who know the facility. 2. One of our risk mitigations (see page16) is to perform site investigations and analyze available as-builts. Addition- ally, many on our team have worked on this facility previously. So there will be no learning curve during an emer- gency. 3. We own many of our own equipment, tools and materials, that are located within 15 miles of the jobsite. 4. We have strong relationships with local suppliers and subcontractors. If additional materials or subcontractors are necessary for emergency work, our staff knows who to call to get immediate responses. Our team is available and committed to not only complete the WTP No. 1 HSPS Suction Piping Replacement Project, but to also support the City before, during and after an emergency situation. PLANNING CONSTRUCTION START-UP & COMMISSIONING WARRANTY Communication Plan Safety Plan Quality Control Plan MOPO Plan Phasing and Scheduling Plan Equipment and Materials Safe Execution Maintenance of Plant Operations Self-Performing Expertise Financial Management Maintenance of Plant Operations Quality Control Safe Execution Record Drawings Execute Phasing Plan Sufficient Documentation Client Satisfaction Mfr. Coordination Spare Parts Timely Responses Emergency Plan Execute Phasing Mfr. Coordination Emergency Plan City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 14 SECTION (c)(i) APPROACH Phasing Plan Phase 1 • Locate existing GST#02 effluent line(HSP suction line) as soon as we attain NTP • Identify if there are any issues and come up with phase 1 pipe drawings for approval by EoR and Client • Order material required for the work • Receive material onsite • Excavate, dewater, and safe up the excavation for the GST#02 tie in while the plant remains in service • Prefabricate as much pipe as possible • Request Shut down of GST#02(Expected shut down to be less than 5 days) • Install 14” line stop and cut/drain existing pipe. Utilize FDEP and AWWA bacteriological cleaning methodology for disinfection of potable water piping. A 200ppm solution of chlorine will be utilized for disinfection purposes. If we are not able to isolate the suction line from the HSP side, a second line stop may be required that is not included in the scope. In addition the 14” line that connects to GST#01 will need to be isolated utilizing the existing valving. • Install new DIP pipe and disinfect by spraying a 200ppm solution of chlorine. Please note that this methodology will need to be approved by FDEP as there is the risk of having to perform 2 consecutive days of Bac-Ts prior to receiving permission to place the new header online • Once tie in is complete, tie in the chemical feed line at the temp chlorine injection point • Place system in service with FDEP and Client approval Phase 2 • Locate existing GST#01 effluent line(HSP suction line) as soon as we attain NTP • Identify if there are any issues and come up with phase 2 pipe drawings for approval by EoR and Client • Order material required for the work • Receive material onsite • Excavate, dewater, and safe up the excavation for the GST#01 tie in while the plant remains in service • Prefabricate as much pipe as possible • Request Shut down of GST#01(Expected shut down to be less than 5 days) • The existing 14” WM between the GSTs will need to be isolated during this phase. If a valve is not already installed a line stop will be required that is currently not within the scope of work • Cut existing GST#01 effluent line and install new 20” DIP • Disinfect by spraying a 200ppm solution of chlorine. Please note that this methodology will need to be approved by FDEP as there is the risk of having to perform 2 consecutive days of Bac-Ts prior to receiving permission to place the new header online • Once tie in is complete, route the line to the phase 1 new 20” butterfly valve that was previously installed • Place system in service with FDEP and Client approval City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 15 SECTION (c)(i) APPROACH Phasing Plan Phase 3 • Install phase 3 piping • Make sure that sample points are installed at the end of each pipe run for disinfection purposes • Disinfect and attain clearance by FDEP from the 30” BFV to the above ground HSP valves we are providing Phase 4 • Perform all the demo required at the HSP building during phases 1 through 3 and cover the openings with plywood so they are ready • Bring each HSP online individually by connecting the new flanged piping as required. Disinfection method will be pipe swabbing with 200ppm chlorine solution. Keys to Maintaining Facility Operations at All Times We are conscious of the potential impacts that construction activities can have on the ongoing operations of the Winter Springs WTP No. 1. Wharton-Smith understands that this facility is critical in providing potable water to the residents of Winter Springs. Our construction activities will be proactively planned and meticulously executed. We understand your communication protocol and our field management staff will develop a foundation of trust with your engineering and operations staff. There are a number of tools we use in order to facilitate communication and planning into our construction execution. One tool is our Production Planning System, which is a process of identifying critical activities and tracking them on a planning room white board. Each activity is analyzed for it’s prerequisite activities and materials and planned several weeks in advance. The goal is that critical items re completed right the first time. The City’s operations and utility staff is encouraged to attend our weekly Production Planning meetings, which facilitates communication and aids in keeping the facility operational at all times. 1 26 3 4 5 Maintenance of Plant Operations PLANNING THE WORK ON-TIME DELIVERY Collaborative planning increases efficiency and avoids plant disruptions. Timely execution gets us off site quicker. HIGHEST LEVEL OF QUALITY A project with zero rework avoids impacts. IDEAL PLANT ACCESS Limit traffic through the plant. DAILY COMMUNICATION Ensures operations staff needs are addressed. JOBSITE CLEANLINESS Keeps our footprint to an absolute minimum. City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR Page 16 SECTION (c)(i) APPROACH Managing Risks The key to risk management is in identifying, evaluating the potential cost and schedule impact, and implementing measures to mitigate the risk. This is best completed early in a project, immediately after project kickoff. We have de- veloped a risk register program to aid is in managing our risk effectively. Some of the greatest risks we have identified on this project are shown below. RISK PHASE MITIGATION EFFORT Unknown underground utilities or conflicts Construction Perform site investigation, analyze ex- isting as-builts, perform utility locates Weather impacts All Formulate inclement weather plan, install rain gauge and gather NOAA data for area, perform daily house- keeping Alignment of existing piping between the GSTs is unknown Construction Establish unit rates for piping align- ment changes, perform site investiga-tion, work with Carollo for alternate routes Line Stop failure Construction Implement production planning system for all linestops, have backup materials on site, monitor line stop during construction FDEP clearance uncertainty Start-up and Commissioning Work with Carollo and FDEP early to establish requirements and parame- ters Existing line isolations Construction If no valve are designed per our phasing plan, additional line stops required. MANDATORY PROPOSAL FORMS SECTION 2 City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR SECTION 2 MANDATORY PROPOSAL FORMS Wharton-Smith, Inc. is pleased to present The Mandatory Proposal Forms on the following pages. WTP No. 1 HSPS Suction Piping Replacement 00300-1 SECTION 00300 MANDATORY PROPOSAL FORMS (Mandatory Forms must be submitted with the proposal. Failure to submit forms may disqualify the proposer from the RFP.) Note: As specified in Section 00100 1.05 Proposal Procedure, Part C: The Proposer shall submit the Bid Pricing Documents in a SEPARATE envelope from the Proposal/Proposal forms. The Bid Pricing Documents include: Bid Tab (page 00300-4), Base Bid Price (page 00300-5), and Bid Security (Section 00410 - Bid Bond, page 00410-1 to 00410-2). PART 1 GENERAL 1.01 Description The following Bid is hereby made to the City of Winter Springs, hereafter called the OWNER. Bid is submitted by: Legal Name (indicate whether sole proprietorship, partnership, or corporation): Corporation: Wharton-Smith, Inc. Address: 750 Monroe Road, Sanford, FL 32771 Contact Name: Sean White Contact Phone Number: 407.321.8410 Contact E-Mail Address: swhite@whartonsmith.com State of Incorporation: Florida 1.02 The Undersigned; Acknowledges receipt of: 1. Project Manual for WTP NO. 1 HSPS REPLACEMENT, September 2020. 2. Drawings for WTP NO. 1 HSPS REPLACEMENT, September 2020. A. SUCTION PIPING SUCTION PIPING October 2020 Advertisement For Proposals WTP No. 1 HSPS Suction Piping Replacement 00300-2 3. Addenda: Number 1 ______, dated 09/28/20 . 2 ______.dated 10/02/20 . 2___, dated 10/07/7 n . A__, dated 10/16/20 ■ Number Number Number Has examined the site and all RFP Documents and understands that in submitting his Bid, he waives all right to plead any misunderstanding regarding the same. Agrees: B. C. To hold this Bid open for 90 calendar days after the bid opening date. To furnish the goods and/or services specified in this RFP at the prices quoted in my responsive bid and in compliance with the RFP Documents. To accept the provisions of the Instructions to Proposers regarding disposition of Bid Security. To enter into and execute a contract with the OWNER, if awarded on the basis of this Bid. 1. 2. 3. 4. To accomplish the work in accordance with the contract documents. To complete the work based on the Contractor’s proposed schedule. For purposes of the Contractor’s proposed schedule, the schedule shall be based upon the following dates: a. Limited Notice to Proceed (NTP) - For contractual purposes, this date will allow contractors to submit shop drawings and begin procurement of equipment. 4 Limited NTP: January 5th, 2021 b. Full NTP - This date is defined as the earliest date that the Contractor will begin site work/construction. 5. 6. Full NTP: Schedule) (Contractor to Propose in Certifies: 1. That all information contained in this bid/proposal is truthful to the best of my knowledge and belief. 2. That I am duly authorized to submit this bid/proposal on behalf of the vendor/contractor and that the vendor/contractor is ready, willing, and able to perform if awarded the bid/proposal. D. October 2020 Mandatory Proposal Forms May 05, 2021 5 - 10/23/20 6 - 11/02/20 WTP No. 1 HSPS Suction Piping Replacement 00300-3 E. 1.03 Bid Submittals A.Bids must be submitted in triplicate on the Bid Form. I have attached the required Bid Security to this Bid.B. C.I have attached all other Mandatory Forms in this Section. 1.04 Submittal RESPECTFULLY SUBMITTED, signed and sealed this 06 day of November, 2020. Proposer By:r Title President/CEO Ronald F. Davoli, Presiderif/CEO ATTEST: SECRETARY SEAL Stephanie Pompeo, Corporate Secretary October 2020 Mandatory Proposal Forms 00300-6WTP No. 1 HSPS Suction Piping Replacement SCRUTINIZED COMPANY CERTIFICATION Florida Statutes, Sections 287.135 and 215.473 Pursuant to Section 287.135, Florida Statutes (2017), a company is ineligible to, and may not, bid on, submit a proposal for, or enter into or renew a contract with the City for goods or services of: (a) Any amount if, at the time of bidding on, submitting a proposal for, or entering into or renewing such contract, the company is on the Scrutinized Companies that Boycott Israel List, created pursuant to s. 215.4725, or is engaged in a boycott of Israel; or (b) One million dollars or more if, at the time of bidding on, submitting a proposal for, or entering into or renewing such contract, the company: 1. Is on the Scrutinized Companies with Activities in Sudan List or the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List, created pursuant to s. 215.473; or 2. Is engaged in business operations in Cuba or Syria. Subject to limited exceptions provided in state law, the City will not contract for the provision of goods or services with any scrutinized company referred to above. The Contractor must submit this required certification form attesting that it is not a scrutinized company and is not engaging in prohibited business operations. The following shall be grounds for termination of the contract at the option of the awarding body: The company is found to have submitted a false certification; been placed on the Scrutinized Companies with Activities in Sudan List or the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List; been placed on the Scrutinized Companies that Boycott Israel List or is engaged in a boycott of Israel; or been engaged in business operations in Cuba or Syria. The City shall provide notice, in writing, to the Contractor of any determination concerning a false certification. The Contractor shall have five (5) days from receipt of notice to refute the false certification allegation. If such false certification is discovered during the active contract term, the Contractor shall have ninety (90) days following receipt of the notice to respond in writing and demonstrate that the determination of false certification was made in error. If the Contractor does not demonstrate that the City’s determination of false certification was made in error then the City shall have the right to terminate the contract and seek civil remedies pursuant to Section 287.135, Florida Statutes. THIS CERTIFICATION FORM MUST BE COMPLETED AND INCLUDED IN YOUR BID RESPONSE. FAILURE TO SUBMIT THIS FORM AS INSTRUCTED SHALL RENDER YOUR BID SUBMITTAL NON-RESPONSTVE. a. The Vendor, owners, or principals are aware of the requirements of Section 287.135, Florida Statutes; and October 2020 Mandatory Proposal Forms WTP No. 1 HSPS Suction Piping Replacement 00300-7 b. The Vendor, owners, or principals are eligible to participate in this solicitation and not listed on the Scrutinized Companies that Boycott Israel List or engaged in a boycott of Israel; and c. For contracts of one million dollars or more, the Vendor, owners, or principals are eligible to participate in this solicitation and not listed on the Scrutinized Companies with Activities in Sudan List or the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector List and, further, are not engaged in business operations in Cuba or Syria; and d. If awarded the Contract, the Vendor, owners, or principals will immediately notify the City in writing if any of its company, owners, or principals: are placed on the Scrutinized Companies that Boycott Israel List, the Scrutinized Companies with Activities in Sudan List, or the Scrutinized Companies with Activities in the Iran Petroleum Energy Sector Lipt; engage in a boycott of Israel; or engage in business operatfgaiSTrrCub^jar SyfiaX iV (Authorized Signature) Ronald F. Davoli, President/CEO (Printed Name and Title) Wharton-Smith, Inc. (Name of Vendor) STATE OF Florida COUNTY OF Seminole The foregoing instrument was acknowledged before me by means of ( X ) day of November President/CEO physical presence or (N/A) online notarization, this 2020, 06 Ronald F. Davoliby the of Wharton-Smith, Inc.a Florida Corporation (X) who is personally known to me or (_____) who produced as identification.N/A ■o*-, ALtXIA TAYLOR Notary Public • State of Florida Commission t GG 920147 My Comir. Exoires Oct 7. 2023 Boncec through vaciore. Notary Assn. Notary Public Print Name: Alexia Taylor_____________ My Commission expires: October 07, 2023 i 3 £ or sv£ I October 2020 Mandatory Proposal Forms WTP No. 1 HSPS Suction Piping Replacement 003Q0-8 NON-COLLUSION AND CONTINGENT FEES AFFADAVIT State of Florida County of _____ first duly sworn, deposes and says that: Seminole being He / She is President/CEO Proposer that has submitted the attached Bid/Proposal; of Wharton-Smith, Inc., the He / She is fully informed respecting the preparation and contents of the attached Bid/Proposal and of all pertinent circumstances respecting such Bid/Proposal; Such Bid/Proposal is genuine and is not a collusive or sham Bid/Proposal; Neither the said proposer nor any of its officers, partners, owners, agents, representatives, employees or parties in interest, including this affiant, has in any way colluded, conspired, connived or agreed, directly or indirectly with any other proposer, firm or person to submit a collusive or sham Bid/Proposal in connection with the contract for which the attached Bid/Proposal has been submitted or to refrain from bid/proposing in connection with such Contract, or has in any manner, directly or indirectly, sought by agreement or collusion or communication or conference with any other Proposer, firm or person to fix the price or prices in the attached Bid/Proposal or of any other Proposer, or to fix any overhead, profit or cost element of the Bid/Proposal price or the Bid/Proposal price of any other Proposers, or to secure through any collusion, conspiracy, connivance or unlawful agreement any advantage against the City of Winter Springs or any person interested in the proposed Contract; The price or prices quoted in the attached Bid/Proposal are fair and proper and are not tainted by any collusion, conspiracy, connivance or unlawful agreement on the part of the Proposer or any of its agents, representatives, owner’s employees, or parties in interest, including this affiant; and The proposer nor any of its officers, partners, owners, agents, representatives, employees or parties in interest, including this affiant, have not employed or retained any company or person, other than a bona fide employee working solely for the proposer to solicit or secure this agreement and that proposer has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee working solely for the proposer any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this agreement. For the breach or violation of this provision, the City shall have the right to terminate the agreement without liability and, at its discretion, to deduct from the contract price, or otherwise recover, the full amount of such fee/commission, percentage, gi consideration. {/ jfj | \ J' or it (Authorized Signature) Ronald F. Davoli, President/CEO (Printed Name and Title) Wharton-Smith, Inc. (Name of Vendor) October 2020 Mandatory Proposal Forms WTP No. 1 HSPS Suction Piping Replacement 00300-9 STATE OF Florida COUNTY OF Seminole The foregoing instrument was acknowledged before me by means of ( X ) physical presence or (N/A) online notarization, this 06 Ronald F. Davoli Wharton-Smith, Inc. day of November President/CEO , 2020, by the of a Florida Corporation (X) who is personally known to me or (n/a) who produced ______ as identification.WA ALEXIA TAYLOR Notary Public - State of Florida Commission # GG 920147 My Comm. Expires Oct 7, 2023 Bonded through National Notary Assn. &Notary publicaga?of fvY. I Print Name: Alexia Tavlor My Commission expires: October 07, 2023 October 2020 Mandatory Proposal Forms 00300-10WTP No. 1 HSPS Suction Piping Replacement DRUG-FREE WORKPLACE CERTIFICATION In accordance with Florida Statues 287.087, preference shall be given to businesses with drug-free workplace programs. Whenever two or more bid/proposals which are equal with respect to price, quality, and service are received by the State or by any political subdivision for the procurement of commodities or contractual services, a bid/proposal received from a business that certifies that it has implemented a drug-free workplace program shall be given preference in the award process. Established procedure for processing the bid/proposals will be followed if none of the tied vendors have a drug-free work place program. In order to have a drug-free workplace program, a business shall: Publish a statement notifying employees that the unlawful manufacture, distribution, Dispensing, possession, or use of a controlled substance is prohibited in the workplace and specifying the actions that will be taken against employees for violations of such prohibition. Inform employees about the danger of drug abuse in the workplace, the business's policy maintaining a drug-free workplace, any available drug counseling, rehabilitation, and employee assistance programs, and the penalties that may be imposed upon employees for drug abuse violations. Give each employee engaged in providing the commodities or contractual services that are under bid/proposal a copy of the statement specified in subsection (a). In the statement specified in subsection (a), notify the employees that, as a condition of working on the commodities or contractual services that are under bid/proposal, the employee will abide by the terms of the statement and will notify the employer of any conviction of, or plea of guilty or nolo contender to, any violation of Chapter 893 or of any controlled substance law of the United States or any state, for a violation occurring in the workplace no later than five (5) days after such conviction. Impose a sanction on, or require the satisfactory participation in a drug abuse assistance or rehabilitation program if such is available in the employee's community, by any employee who is so convicted. Make a good faith effort to continue to maintain a drug-free workplace through implementation of this section. a. b. c. d. e. f. As the person authorized to sign the statement, I certify that this firm complies fully with the above requirements. Wharton-Smith, Inc. (Company) President/CEO (Signature & Title) Ronald FTlJavoli, President/CEO Mandatory Proposal FormsOctober 2020 WTP No. 1 HSPS Suction Piping Replacement 00300-11 CONFLICT OF INTEREST CERTIFICATION Before me, the undersigned authority, personally appeared, who was duly sworn, deposes, and states: I am the President/CEO of Wharton-Smith, Inc. and principal office in_ with a local office in Sanford. FL City and State Sanford. FL City and State The above-named entity is submitting an RFP for the City of Winter Springs described as: City of Winter Springs RFP #06-20 LR WTP NO. 1 HSPS SUCTION PIPING REPLACEMENT The Affiant has made diligent inquiry and provides the information contained in this Affidavit based upon his own knowledge and thereof the following; The Affiant states that only one submittal for the above bid/proposal is being submitted and that the above-named entity has no financial interest in other entities submitting bids for the same project. a. b.Neither the Affiant nor the above-named entity has directly or indirectly entered into any agreement, participated in any collusion, or otherwise taken any action in restraints of free competitive pricing in connection with the entity's submittal for the above bid/proposal. This statement restricts the discussion of pricing data until the completion of negotiations if necessary and execution of the Contract for this project. Neither the entity nor its affiliates, nor anyone associated with them, is presently suspended or otherwise ineligible from participation in contract letting by any local, State, or Federal Agency. c. d.Neither the entity, nor its affiliates, nor anyone associated with them have any potential conflict of interest due to any other clients, contracts, or property interests for this project. I certify that no member of the entity's ownership or management is presently applying for an employee position or actively seeking an elected position with the City of Winter Springs. e. October 2020 Mandatory Proposal Forms 00300-12WTP No. 1 HSPS Suction Piping Replacement f. I certify that no member of the entity's ownership or management, or staff has a vested interest in any aspect of the City of Winter Springs. g. In the event that a conflict of interest is identified in the provision of services, I, on behalf of the above-named entity, will immediately notify the City of Winter Springs. Wharton-Smith, Inc.407.321.8410 & 407.330.1092 Name of Business(Authorized Signature)Phone & Fax Number Ronald F. Davoli. President/CEO (Printed Name and Title) 750 Monroe Road Sanford. FL 32771 Business Mailing Address City, State, Zip October 2020 Mandatory Proposal Forms WTP No. 1 HSPS Suction Piping Replacement 00300-13 FLORIDA TRENCH SAFETY ACT CERTIFICATION Proposer acknowledges that the Proposer must comply with the Florida Trench Safety Act and applicable trench safety standards. Included in the various items of the proposal and in the Total Bid Price are costs for complying with the Florida Trench Safety Act (90-96, Laws of Florida) effective October 1, 1990. The Proposer further identifies the costs to be summarized below. The separate item identifying the cost of compliance with trench safety standards shall be based on the linear feet of trench to be excavated. The separate item for special shoring requirements, if any, shall be based on the square feet of shoring used. Every separate item shall indicate the specific method of compliance as well as the cost of that method. Item Trench Safety Measure Description Unit of Measure Unit Unit Cost Extended Cost A $2.00 $2,1401Open-cut LF 1,070 B $2,500 $2,500Trench box2 EA 1 C D This amount disclosed as the cost of compliance with the applicable trench safety requirement does not constitute the extent of the Contractor's obligation to comply with said standards. Contractor shall expend additional sums, at no additional cost to the OWNER (except as may otherwise be provided), which are necessary to so comply. Acceptance of the bid to which this certification and disclosure applies in no way represents that the OWNER or its representatives have evaluated and thereby determined that the above costs are adequate to comply with the applicable trench safety requirements nor does it in any way relieve the Proposer, as Contractor, of its sole responsibility to comply with the applicable trench safety requirements. Wharton-Smith, Inc. Name of Firm Authorized Signature Ronald F. Davoli, President/CEO Date: November 06, 2020 This document shall be submitted with the Proposal packet. Failure to complete the above may result in the bid being declared non-responsive. October 2020 Mandatory Proposal Forms 00300-14WTP No. 1 HSPS Suction Piping Replacement CERTIFICATION A: (Debarment, Suspension and other responsibility matters - Primary Covered Transactions) The prospective primary participant certifies to the best of its knowledge and belief that its principals: Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal debarment or agency; a. Have not within a three-year period preceding this proposal, been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification, or destruction of records, making false statements, or receiving stolen property; b. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1) (b) of this certification; and c. Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default. d. Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation of this proposal. Instructions for Certification (At By signing and submitting this proposal, the prospective primary participant is providing the certification set out below; The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency’s determination whether to enter into this transaction. However, failure of the prospective primary participant to furnish a certification or any explanation shall disqualify such person from participation in this transaction. a. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary participant knowingly rendered an erroneous b. October 2020 Mandatory Proposal Forms 00300-15WTP No. 1HSPS Suction Piping Replacement certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. The prospective primary participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. c. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meanings set out in the Definitions and Coverage sections of the rules implementing Executive Order 12549. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of these regulations. d. The prospective primary participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. e. The prospective primary participant further agrees by submitting this proposal that it will include the clause titled “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transaction,” provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. f. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines this eligibility of its principals. Each participant may, but is not required to, check the Non procurement List. g- h.Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. Except for transactions authorized under paragraph (6) of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this l. October 2020 Mandatory Proposal Forms 00300-16WTP No. 1 HSPS Suction Piping Replacement transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause of default. Certification B: (Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transactions) The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. a. b. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. Instructions for Certification (B) By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. a. b. The prospective lower tier participant shall provide immediate written notice to the person to whom this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meanings set out in the Definitions and Coverage .. sections of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of these regulations. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. c. d. October 2020 Mandatory Proposal Forms WTP No. 1 HSPS Suction Piping Replacement 00300-17 The prospective lower tier participant further agrees by submitting this proposal that it will include this clause title “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion - Lower Tier Covered Transaction,” without modification, in all lower tier covered transactions and in all solicitation for lower tier covered transactions. e. f.A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principles. Each participant may but is not required to, check the Non procurement List. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. Except for transactions authorized under paragraph (5) of these instructions, if a participant in a lower covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies including suspension and/or debarment. g- h. Applicant:Date: November 06, 2020Wharton-Smith, Inc. Si iLAuthorized Cerfjfyjftg Official:Title:President/CEO Ronald F. Davoli, President/CEO END OF SECTION October 2020 Mandatory Proposal Forms FINANCIAL INFORMATION SECTION 3 City of Winter Springs | WTP No. 1 HSPS Suction Piping Replacement | RFP #06-20LR SECTION 3 FINANCIAL INFORMATION Wharton-Smith, Inc. is pleased to present our Financial Information on the following pages. 750 Monroe Road, Sanford, FL 32771 I Phone: (407) 321-8410 I Fax: (407) 330-1092 FL – CGC1511243 I AL – 45684 I LA – 52227 I MS – 18232MC I GA – GCCO 001333 I NC – 38755 I SC – G97817 I TN – 62419 I VA – 2705121584A November 6, 2020 To whom it may Concern: I, Stephanie Pompeo, Vice President of Finance of Wharton-Smith Inc., can hereby confirm that the financial status of the company has not changed since the March 31, 2020 audit. Please do not hesitate to call me at 407-321-8410 if you have further questions. Best Regards, Stephanie Pompeo VP of Finance Wharton-Smith, Inc. WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES CONTENTS Independent Auditors’ Report.................................................................................................. 1-2 Financial Statements Consolidated Balance Sheet ...................................................................................................... 3-4 Consolidated Statement of Income ...............................................................................................5 Consolidated Statement of Changes in Stockholders’ Equity ......................................................6 Consolidated Statement of Cash Flows .................................................................................... 7-8 Notes to Consolidated Financial Statements ......................................................................... 9-28 CONFIDENTIAL Marcum LLP n 401 Commerce Street n Suite 1250 n Nashville, Tennessee 37219 n Phone 615.245.4000 n Fax 615.245.4001 n www.marcumllp.com 1 INDEPENDENT AUDITORS’ REPORT To the Board of Directors of Wharton-Smith, Inc. and Subsidiaries Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Wharton-Smith, Inc. and Subsidiaries (the “Company”), which comprise the consolidated balance sheet as of March 31, 2020, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. CONFIDENTIAL 2 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wharton-Smith, Inc. and Subsidiaries as of March 31, 2020, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Nashville, TN July 8, 2020 CONFIDENTIAL Assets Current Assets Cash and cash equivalents 26,636,679$ Marketable securities 30,047,335 Contracts receivable: Current receivables 76,021,326 Retainage receivable 26,843,747 Accounts receivable - other 242,108 Prepaid expenses and other current assets 388,052 Costs and estimated earnings in excess of billings on uncompleted contracts 3,552,219 Total Current Assets 163,731,466$ Property and Equipment Land 400,000 Building and improvements 874,953 Office computers and equipment 3,212,551 Leasehold improvements 3,491,004 Construction equipment 4,440,554 Vehicles 317,511 Construction-in-progress 998,788 13,735,361 Less: Accumulated depreciation and amortization (7,268,433) Total Property and Equipment, Net 6,466,928 Other Assets Goodwill 3,115,203 Deferred compensation plan investments - life insurance 6,463,266 Cash surrender value of life insurance policies 288,573 Security deposits 112,925 Investment in equity method joint ventures 725,955 Total Other Assets 10,705,922 Total Assets 180,904,316$ WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 2020 The accompanying notes are an integral part of these consolidated financial statements. 3CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 2020 Liabilities and Stockholders' Equity Current Liabilities Long-term debt 39,606$ Accounts payable - trade 4,416,988 Amounts currently due subcontractors 47,450,461 Subcontractor retainage payable 26,893,302 Accrued expenses 2,955,153 Accrued loss on uncompleted contracts 69,658 Billings in excess of costs and estimated earnings on uncompleted contracts 46,784,201 Total Current Liabilities 128,609,369$ Long-Term Liabilities Deferred tax liability 157,869 Deferred compensation 6,264,589 Total Long-Term Liabilities 6,422,458 Total Liabilities 135,031,827 Stockholders' Equity Common stock, $.01 par value, 1,000,000 shares authorized, 800,000 shares issued and 161,292 shares outstanding 8,000 Treasury stock, 638,708 shares at cost (23,654,578) Additional paid-in capital 7,841,621 Retained earnings 61,677,446 Total Stockholders' Equity 45,872,489 Total Liabilities and Stockholders' Equity 180,904,316$ The accompanying notes are an integral part of these consolidated financial statements. 4CONFIDENTIAL Construction Revenue 459,916,385$ Cost of Revenue 412,582,403 Gross Profit 47,333,982 Gain on Sale of Property and Equipment 266,545 General and Administrative Expenses 33,171,763 Income From Operations 14,428,764 Other Income (Expenses) Gain on equity method investments 338,193$ Net unrealized loss on marketable securities (1,687,804) Net realized loss on the sale of marketable securities (184,819) Interest and dividend income 1,501,924 Investment fees (377,327) Other income 540,796 Other expenses (9,128) Total Other Income, Net 121,835 Income Before Income Taxes 14,550,599 Income Tax Expense Current income tax expense 3,245,304 Deferred income tax expense 254,078 Total Income Tax Expense 3,499,382 Net Income 11,051,217$ FOR THE YEAR ENDED MARCH 31, 2020 WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME The accompanying notes are an integral part of these consolidated financial statements. 5CONFIDENTIAL AccumulatedAdditional OtherPaid-in Comprehensive Retained Total Shares Amount Shares Cost Capital Income Earnings EquityBalance - April 1, 2019167,795 8,000$ 632,205 (20,638,600)$ 6,378,857$ 1,519,617$ 49,106,612$ 36,374,486 Adoption of new accountingstandard (Note 2) -- -- -- -- -- (1,519,617) 1,519,617 -- Adjusted Balance - April 1, 2019167,795 8,000 632,205 (20,638,600) 6,378,857 -- 50,626,229 36,374,486 Treasury stock reissued 7,008 -- (7,008) 56,210 1,462,764 -- -- 1,518,974 Treasury stock purchased (13,511) -- 13,511 (3,072,188) -- -- -- (3,072,188) Net income-- -- -- -- -- -- 11,051,217 11,051,217 Balance - March 31, 2020161,292 8,000$ 638,708 (23,654,578)$ 7,841,621$ --$ 61,677,446$ 45,872,489$ Common Stock Treasury StockWHARTON-SMITH, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITYFOR THE YEAR ENDED MARCH 31, 2020The accompanying notes are an integral part of these consolidated financial statements.6CONFIDENTIAL Cash Flows From Operating Activities Net income 11,051,217$ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,005,972 Net unrealized loss on marketable securities 1,519,617 Net realized loss on the sale of marketable securities 184,819 Gain on sale of property and equipment (266,545) Gain on equity method investments (338,193) Deferred income taxes 254,078 Deferred compensation plan (1,174,332) Changes in operating assets and liabilities: Accounts receivable (18,135,164) Prepaid expenses and other current assets (292,500) Costs and estimated earnings in excess of billings on uncompleted contracts (1,632,172) Security deposits (56,704) Cash surrender value of life insurance policies and deferred compensation plan investment 967,915 Accounts and subcontractors payable 15,137,215 Accrued expenses (261,551) Billings in excess of costs and estimated earnings on uncompleted contracts 4,663,796 Net Cash Provided by Operating Activities 12,627,468$ Cash Flows From Investing Activities Purchase of property and equipment (2,715,093) Proceeds from sale of property and equipment 294,986 Purchases of marketable securities, net (8,640,090) Investments in equity method joint ventures (1,620,000) Distributions from equity method joint ventures 4,655,000 Net Cash Used in Investing Activities (8,025,197) WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020 The accompanying notes are an integral part of these consolidated financial statements. 7CONFIDENTIAL Cash Flows From Financing Activities Payments on long-term debt (201,063) Purchase of treasury stock (3,072,188) Proceeds from treasury stock sales 1,518,974 Net Cash Used in Financing Activities (1,754,277) Net Increase in Cash and Cash Equivalents 2,847,994 Cash and Cash Equivalents Balance - Beginning 23,788,685 Cash and Cash Equivalents Balance - Ending 26,636,679$ Supplemental Disclosures of Cash Flow Information Cash paid during the year for: Interest --$ Income taxes 1,923,160$ FOR THE YEAR ENDED MARCH 31, 2020 WHARTON-SMITH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) The accompanying notes are an integral part of these consolidated financial statements. 8CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 9 NOTE 1 - NATURE OF OPERATIONS Wharton-Smith, Inc. (“Wharton-Smith”), a Florida corporation, is a general contractor specializing in commercial, industrial and environmental construction. Construction work is performed primarily under fixed-price contracts. The length of the construction contracts varies but is typically one to two years in duration. The Company provides these construction services in Florida, Georgia, South Carolina, North Carolina, Virginia, Louisiana, Alabama, Tennessee, Mississippi, Texas and the Caribbean. Wharton-Smith operates from four offices throughout Florida with its corporate headquarters located in Sanford, Florida. Wharton- Smith also has offices in Charlotte, North Carolina; Gulfport, Mississippi; Houston, Texas; and Baton Rouge, Louisiana; which are the managing locations for the operations in these states. Wharton-Smith International, LLC (“Wharton-Smith International”) provides contractor services for contracts in the U.S. Virgin Islands. Wharton-Smith Cayman, Ltd (“Wharton-Smith Cayman”) provides subcontract services related to the installation of underground utilities. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements included the consolidated accounts of Wharton-Smith, Wharton-Smith International and Wharton-Smith Cayman (collectively, the “Company”). All significant intercompany transactions have been eliminated in the consolidated financial statements. Wharton-Smith Cayman had no assets, liabilities or equity at March 31, 2020, and did not have any activity during the year ended March 31, 2020. USE OF ESTIMATES Management uses estimates and assumptions in preparing the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities, and the reported revenues and expenses. Although management believes the estimates that have been used are reasonable, actual results could vary from the estimates that were used. Management periodically evaluates for continued reasonableness. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 10 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES (CONTINUED) Appropriate adjustments, if any, to the estimates used are adjusted prospectively based upon periodic evaluation. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to the revenue recognition on uncompleted contracts and estimates of costs to complete. BALANCE SHEET CLASSIFICATIONS The Company includes in current assets and liabilities, retainage receivable and payable under construction contracts which may extend beyond one year. A one-year time period is used as the basis for classifying all other current assets and liabilities. CASH AND CASH EQUIVALENTS AND CREDIT RISK For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties and have a maturity of three months or less at the time of purchase as cash and cash equivalents in the accompanying consolidated balance sheet. The Company had deposits in financial institutions that maintained Federal Deposit Insurance Corporation (“FDIC”) deposit insurance limiting coverage to $250,000 per financial institution. At times, balances held at a financial institution may exceed $250,000, which represents a credit risk to the Company. The Company believes that its cash accounts are held with high quality financial institutions which limits its risks. MARKETABLE SECURITIES The Company has adopted Accounting Standards Update (ASU) 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) with a date of initial application of April 1, 2019. As a result, the Company has updated its accounting policy for investments to recognize the cumulative effect adjustment to the consolidated balance sheet as of April 1, 2019, reclassifying the accumulated other comprehensive income of $1,519,617 into retained earnings. Under ASU 2016-01, realized and unrealized gains and losses are included in earnings on the accompanying consolidated statement of income. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 11 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) MARKETABLE SECURITIES (CONTINUED) Marketable securities consist of mutual funds - fixed income, equities - other and debt securities - fixed income. Purchases and sales of securities are recorded on a trade-date basis. Realized and unrealized gains and losses from security transactions are reported on the average cost method. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. The Company employs a systematic methodology that considers available quantitative and qualitative evidence in evaluating potential impairment of their investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and their intent and ability to hold the investment. The Company considers specific adverse conditions related to the financial health of and business outlook for the investee, including industry and sector performance, changes in technology, operational and financing cash flow factors and rating agency actions. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded in the current earnings and a new cost basis in the investment is established. There were no other- than-temporary impairments of investments for the year ended March 31, 2020. CONTRACTS RECEIVABLE Contract receivables are recorded when invoices are issued and are presented in the consolidated balance sheet based on contracted prices reduced by an allowance for doubtful accounts, if an allowance is determined necessary by management. The allowance for doubtful accounts is estimated based on the Company's historical losses, the existing economic conditions in the industry and the financial stability of its customers. Contract receivables are written off against the allowance when they are determined to be uncollectible. At March 31, 2020, management has determined that all contract receivables are fully collectible and there have been no amounts recorded for bad debt expense for the year ended March 31, 2020. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 5 to 39 years. Leasehold improvements are amortized over the shorter of the improvements’ useful life or the remaining term of the lease. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts, and any related gain or loss is reflected in income for the period. Depreciation and amortization expense for the year ended March 31, 2020, amounted to approximately $1,006,000. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 12 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) GOODWILL Goodwill represents the excess of consideration paid over the fair value of net assets acquired in business acquisitions. The Company evaluates goodwill for impairment on an annual basis and when a triggering event occurs that indicates that the fair value of the entity may be below its carrying amount. When the Company evaluates for impairment, the Company first assesses qualitative factors to determine whether the quantitative impairment test is necessary. If that qualitative assessment indicates that it is more likely than not that goodwill is impaired, the Company performs the quantitative test to compare the entity’s fair value with its carrying amount, including goodwill. If the qualitative assessment indicates that it is not more likely than not that goodwill is impaired, further testing is unnecessary. The goodwill impairment loss, if any, represents the excess of the carrying amount of the entity over its fair value. There were no impairment during the year ended March 31, 2020. CASH SURRENDER VALUE OF LIFE INSURANCE POLICIES The Company maintains life insurance policies on key executives, which are recorded at their cash surrender value as determined by the insurance carrier, offset by any loans taken against the policies. There were no loans taken out against the policies as of March 31, 2020. As of March 31, 2020, the cash surrender value of life insurance policies was approximately $289,000. EQUITY METHOD INVESTMENTS Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheet and consolidated statement of income. However, the Company’s share of the earnings or losses of the investee company is reflected in the caption “gain on equity method investments” in the consolidated statement of income. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s financial statements unless the Company has guaranteed the obligations of the investee company or has committed additional funding to finance the investee company. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 13 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) EQUITY METHOD INVESTMENTS (CONTINUED) The Company regularly monitors and evaluates the fair value of its equity method investments. If events and circumstances indicate that a decline in the fair value of these investments has occurred and is other than temporary, the Company will record a related charge in equity in earnings of investees in its consolidated statement of income. The Company has not experienced a decline in the fair value of its equity method investments during the year ended March 31, 2020. FAIR VALUE MEASUREMENTS The carrying amounts of cash and cash equivalents, contracts receivable, accounts payable, accrued expenses and notes payable approximate their fair values due to their short term nature, they are receivable or payable upon demand, or the interest rates paid approximate current market rates. However, considerable judgment is involved in making fair value determinations, and current estimates of fair value may differ significantly from the amounts presented herein. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 14 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FAIR VALUE MEASUREMENTS (CONTINUED) Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Disclosure about fair values is based on pertinent information available to management as of March 31, 2020. Although management is not aware of any factors that would significantly affect the fair value amounts, current estimates of fair value presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The following tables set forth by level, within the fair value hierarchy, the Company’s assets at fair value as of March 31, 2020: Level 1 Level 2 Level 3 Total Cash surrender value of life insurance policies --$ 288,573$ --$ 288,573$ Marketable securities: Mutual funds-fixed income 9,080,920 -- -- 9,080,920 Equities-other 12,556,735 -- -- 12,556,735 Debt securities-fixed income 8,409,680 -- -- 8,409,680 Deferred compensation plan investments-life insurance -- 6,463,266 -- 6,463,266 Total 30,047,335$ 6,751,839$ --$ 36,799,174$ Cash surrender value of life insurance policies are based on current cash surrender values as quoted by insurance carriers. Marketable securities are valued at quoted prices reported on the active market on which the individual securities are traded. Deferred compensation plan investments - life insurance are based on the life insurance company separate accounts. Each separate account invests in an underlying mutual fund. The fair value of the mutual fund is publicly quoted and is used in determining the daily unit value of the investment, which is not publicly quoted. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 15 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FAIR VALUE MEASUREMENTS (CONTINUED) The Company had no significant measurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are held and used, an impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisal, as applicable. Assets to be disposed are carried at the lower of carrying value or estimated net realizable value. No impairment losses have been recognized for the year ended March 31, 2020. TREASURY STOCK Treasury stock is recorded using the cost method, in which the reacquisition cost of any outstanding shares not retired at the end of an accounting period is reflected as an unallocated reduction of stockholders’ equity. Issuance of treasury stock is recorded on the first-in, first- out method in which the cost of the treasury stock longest held by the Company are issued first, and any excess proceeds from the issuance are recorded as additional paid-in capital. ADVERTISING COSTS Advertising costs are expensed as incurred. Total advertising costs for the year ended March 31, 2020, totaled approximately $302,000 and are included in general and administrative expenses in the accompanying consolidated statement of income. RISK MANAGEMENT PROGRAMS The Company maintains a partially self-insured health insurance program and a partially self- insured workers compensation program which both have a maximum claim amount per each enrolled employee and a total claims aggregate cap. No claims were accrued for as of March 31, 2020, under either program. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 16 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAXES The Company recognizes revenues from long-term construction contracts over time for financial statement purposes and under the tax percentage-of-completion method for income tax purposes. The Company has adopted the accounting standard for uncertainty in income taxes. The standard clarifies the accounting, presentation and disclosure of uncertain tax positions in an entity’s financial statements. It prescribes a threshold that a tax position is required to meet before being recognized in the consolidated financial statements. Management has evaluated the Company’s tax positions and concluded that no uncertain tax positions that require adjustment to the consolidated financial statements have been taken. Therefore, no provision or liability for income taxes related to uncertain tax positions has been included in the consolidated financial statements. It is the policy of the Company to recognize potential interest and penalties related to unrecognized tax benefits, if any, in current income tax expense. REVENUE AND COST RECOGNITION The Company has adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606) with a date of initial application of April 1, 2019. As a result, the Company has updated its accounting policy for revenue recognition to reflect the new standard. The Company applied ASC 606 using the modified retrospective method, applying the guidance to contracts with customers that were not substantially complete as of April 1, 2019. The results for reporting periods beginning after April 1, 2019 are presented under ASC 606. For contracts which were modified before the adoption date, the Company has not restated the contract for those modifications. Instead, the Company reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price, if necessary. The cumulative effect of initially applying the new revenue standard would be applied as an adjustment to the opening balance of stockholders’ equity. The Company has analyzed this effect and found the adoption of the new guidance did not have a material impact on its financial statements and its recognition is consistent with the historical accounting policies. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 17 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE AND COST RECOGNITION (CONTINUED) Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only continues with the five-step model when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company does not collect sales, value-add and other taxes collected on behalf of third parties. Contract revenues are primarily derived from fixed-price construction contracts. The Company has determined that these construction contracts each provide a distinct service and, therefore, qualify as one performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. Revenue is recognized over time, because of the continuous transfer of control to the customer as work is performed at the customer’s site, and, therefore, the customer controls the asset as it is being constructed. The cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as costs are incurred. Revenues from time-and-material contracts, if any, are billed to customers as work is performed. The Company determined that time and material contracts cover a single performance obligation, with transfer of control continuously as the customer simultaneously receives and consumes the benefits. Therefore, revenue for time and material contracts is also considered to be recognized over time. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 18 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE AND COST RECOGNITION (CONTINUED) Cost of revenues earned include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. The cost of uninstalled materials or equipment are generally excluded from the recognition of gross profit as such costs are not considered to be a measure of progress. Costs to fulfill a contract that are incurred prior to substantive work beginning are capitalized as incurred and amortized over the expected duration of the contract. As of March 31, 2020, the Company mobilization and bond costs were not material to these financial statements. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Certain construction contracts include retention provisions to provide customers assurance that the Company will perform in accordance with the contract terms and, therefore, are not considered a financing benefit. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project by the customer. The Company has determined that there are no financing components included in construction contracts as of March 31, 2020. CONTRACT ASSETS AND LIABILITIES The timing of revenue recognition, billings, and cash collections results in billed contracts receivable, retainage receivable, and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) and accrued loss on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities) on the accompanying consolidated balance sheet. The contract asset, “costs and estimated earnings in excess of billings on uncompleted contracts” represents revenues recognized in excess of amounts billed. The contract liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers as of March 31, 2020: Contracts retainage receivable, conditional (contract asset)26,833,951$ Costs and estimated earnings in excess of billings on uncomplete contracts (contract asset)3,552,219$ Accrued loss on uncompleted contracts (contract liability)69,658$ Billings in excess of costs and estimated earnings on uncomplete contracts (contract liability)46,784,201$ CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 19 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CONTRACT ESTIMATES Accounting for long-term contracts involves the use of techniques to estimate total contract revenues and costs. Transaction price for contracts may include variable consideration, which includes increases and decreases to transaction price for approved change orders, claims, and other contract provisions. The Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of the anticipated performance and all information (historic, current and forecasted) that is reasonably available to the Company. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price are not resolved in the Company’s favor, or to the extent other contract provisions reflected in the transaction price are not earned, there could be reductions in or reversals of previously recognized revenue. No adjustment on any one contract was material to the consolidated financial statements for the year ended March 31, 2020. TRANSACTION PRICE ALLOCATED TO THE REMAINING PERFORMANCE OBLIGATIONS As of March 31, 2020, the Company had approximately $1,144,000,000 of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied). QUALIFIED EMPLOYEE BENEFIT PLANS The Company sponsors a defined contribution employee benefit plan (the “Plan”) under section 401(k) of the Internal Revenue Code for employees meeting certain age and service requirements. The Plan allows eligible employees to contribute up to 100% of their compensation up to statutory limits and allows for Company matching contributions determined at the Company’s discretion for each Plan year. For the year ended March 31, 2020, the Company contributed approximately $2,456,000 to the Plan which is included in general and administrative expenses in the accompanying consolidated statement of income. The Company also sponsors a Section 125 employee benefit plan (the “Section 125 Plan”) which provides certain health insurance and dental benefits. Employees meeting the Section 125 Plan’s eligibility requirements may elect coverage pursuant to a salary reduction agreement. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 20 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) NON-QUALIFIED EMPLOYEE BENEFIT PLAN The Company sponsors a non-qualified deferred compensation plan (the “Non-Qualified Plan”) offered to a select group of management employees and stockholder employees to provide these employees with the opportunity to defer up to 100% of their compensation, which includes base salary and service bonuses, into the Non-Qualified Plan. The Company contributed approximately $480,000 to the Non-Qualified Plan for the year ended March 31, 2020, which is included in general and administrative expenses in the accompanying consolidated statement of income. A portion of the deferrals are invested in Company-owned cash value life insurance policies to provide for the Company’s future obligations under the Plan. NEW ACCOUNTING STANDARDS Except as described below, the Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. In January 2016, the FASB has issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016- 02) requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In June 2020, the FASB issued ASU 2020-05, Deferral of the Effective Date, which amended the effective date to reporting periods beginning after December 15, 2021 for nonpublic reporting entities. Management is currently evaluating the impact ASU 2016-02 will have on the consolidated financial statements. SUBSEQUENT EVENTS These consolidated financial statements have been updated for subsequent events occurring through July 8, 2020, which is the date these consolidated financial statements were available to be issued. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 21 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) SUBSEQUENT EVENTS (CONTINUED) In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce the spread, and its impact on operations, financial position, and cash flows, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance, the impact could not be determined. NOTE 3 - MARKETABLE SECURITIES The aggregate cost and fair value of marketable securities are as follows at March 31, 2020: Unrealized Unrealized Fair Cost Gains Losses Value Mutual funds - fixed income 9,923,148$ 48,588$ (890,817)$ 9,080,919$ Equities - other 11,644,728 1,792,833 (880,826) 12,556,735 Debt securities - fixed income 8,064,231 353,360 (7,910) 8,409,681 Total 29,632,107$ 2,194,781$ (1,779,553)$ 30,047,335$ The maturities of debt securities - fixed income are as follows for March 31, 2020: Due within one year 732,101$ Due from one to five years 1,541,969 Due from five to ten years 2,134,573 Due after ten years 4,001,038 Total 8,409,681$ CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 22 NOTE 4 - CONTRACTS RECEIVABLE Contracts receivable consist of the following as of March 31, 2020: Contracts Receivable Completed contracts: Outstanding less than 90 days 89,230$ Outstanding more than 90 days 16,945 Uncompleted contracts: Outstanding less than 90 days 75,026,593 Outstanding more than 90 days 888,558 76,021,326 Retainage Completed contracts (unconditional) 9,797 Uncompleted contracts (conditional)26,833,950 26,843,747 Total 102,865,073$ Unconditional retainage receivable is subject only to passage of time. Conditional retainage receivable is subject to restrictive conditions such as future performance and will become unconditional once the respective project is completed and accepted by the owner/prime contractor. NOTE 5 - UNCOMPLETED CONTRACTS As explained in Note 2, the Company recognizes revenue on long-term construction contracts over time. Information concerning uncompleted contracts is as follows at March 31, 2020: Costs incurred on uncompleted contracts 655,806,767$ Estimated earnings thereon 50,231,231 706,037,998 Less: Billings to date (749,269,980) Net Overbilling (43,231,982)$ CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 23 NOTE 5 - UNCOMPLETED CONTRACTS (CONTINUED) This amount is included in the accompanying consolidated balance sheet under the following captions at March 31, 2020: Costs and estimated earnings in excess of billings on uncompleted contracts 3,552,219$ Billings in excess of costs and estimated earnings on uncompleted contracts (46,784,201) Net Overbilling (43,231,982)$ NOTE 6 - JOINT VENTURES GARNEY WHARTON-SMITH JV#1 The Company and Garney Companies, Inc. (“Garney”) have formed a joint venture and entered into an agreement for the exclusive purpose of constructing the Northwest Regional Water Reclamation Facility project located in Winter Garden, Florida, owned by Hillsborough County, Florida. The Company is a 49% partner and accounts for the joint venture under the equity method. The Company’s proportionate share in the earnings of the joint venture was $1,749,924 for the year ended March 31, 2020. During the year ended March 31, 2020, the Company’s proportionate share in the earnings of the JV included approximately $362,000 in investment income. During the year ended March 31, 2020, the Company also received cash distributions of $4,655,000 from the joint venture. During the year ended March 31, 2020, the Company also recognized revenues of approximately $371,000, respectively, for services provided to the joint venture which is included in construction revenue in the accompanying consolidated statement of income. Condensed financial information of the joint venture is as follows as of and for the year ended March 31, 2020: (Unaudited) Assets 20,703,105$ Liabilities 20,159,458 Partners' capital 543,657 Net income 3,431,027 CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 24 NOTE 6 - JOINT VENTURES (CONTINUED) DEMARIA/WHARTON-SMITH JOINT VENTURE 1 The Company and DeMaria Building Company, Inc. (“DeMaria”) have formed a joint venture and entered into an agreement for the exclusive purpose of constructing the Polk Penguin Conservation project located in Detroit, Michigan, owned by the Detroit Zoological Society. The Company is a 40% partner and accounts for the joint venture under the equity method. The Company’s proportionate share in the losses of the joint venture was $1,220,432 for the year ended March 31, 2020. During the year ended March 31, 2020, the Company also made cash contributions of $1,620,000 to the joint venture. During the year ended March 31, 2020, the Company also recognized revenues of approximately $534,000 for services provided to the joint venture which is included in construction revenue in the accompanying consolidated statement of income. Condensed financial information of the joint venture is as follows as of and for the year ended March 31, 2020: (Unaudited) Assets 4,294,000$ Liabilities 3,145,081 Partners' capital 1,148,949 Net loss (2,034,053) NOTE 7 - INCOME TAXES Income tax expense from continuing operations consists of the following for the year ended March 31, 2020: Current 3,245,304$ Deferred 700,857 Total Income Tax Expense 3,946,161$ CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 25 NOTE 7 - INCOME TAXES (CONTINUED) A reconciliation of income taxes from continuing operations to income tax expense computed by applying the statutory United States federal tax rate to income before taxes is as follows for the year ended March 31, 2020: Income tax computed at 21% of pretax profit 3,410,065$ Effect of nontaxable earnings and deductions 399,184 Effect of adjustment of prior year estimates, state taxes and other 136,912 Total Income Tax Expense 3,946,161$ The net deferred tax amounts included in the consolidated balance sheet consist of the following at March 31, 2020: Deferred tax asset 1,330,197$ Deferred tax liability (1,488,066) Net Deferred Income Tax Liability (157,869)$ At March 31, 2020, the deferred tax asset consists primarily of differences in deferred compensation, and the deferred tax liability consists primarily of differences in revenue recognition, depreciation and amortization, investment income and prepaid expenses. NOTE 8 - LINE OF CREDIT The Company has a line of credit with UBS with no expiration date and a maximum available credit on the line determined from time to time based, in part, on the value of the securities pledged as collateral for the line of credit. At March 31, 2020, the amount available to draw on the line is the lesser of $11,500,000 or the fair value of securities pledged as collateral. At March 31, 2020, the amount available to draw on the line of credit totaled $11,142,308. Interest is charged monthly and principal is due on demand. The interest rate on the line of credit is set at LIBOR plus 1.00% (1.99% at March 31, 2020). Additionally, the Company has the ability to take out a fixed rate advance on the line. The fixed rate advance must exceed $100,000 and the Company must specifically apply for a certain amount and a specific interest period between one month and five years. At March 31, 2020, no draws were outstanding on the line of credit, and no fixed rate advances were outstanding. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 26 NOTE 9 - INSTALLMENT NOTES PAYABLE At March 31, 2020, the Company has two interest free loan agreements with principal balances of $39,606. Monthly payments on the two installment notes are $9,138 and $7,617, respectively. The installment notes mature on May 11, 2020 and August 17, 2020, respectively. Each installment note is collateralized by the equipment purchased under the respective agreements. NOTE 10 - STOCK TRANSACTIONS During the year ended March 31, 2020, the Company purchased 13,511 shares of common stock for approximately $3,072,000, which was paid in cash to the selling stockholders. The Company has recorded the purchase of the common stock as treasury stock. During the year ended March 31, 2020, the Company reissued 7,008 shares of common stock from the treasury to certain of its existing shareholders and employees for total proceeds of approximately $1,519,000. NOTE 11 - COMMITMENTS AND CONTINGENCIES UNUSED LETTER OF CREDIT The Company had an irrevocable $400,000 letter of credit with UBS which was available at March 31, 2020, to Amerisure Mutual Insurance Company as required under the Company’s insurance policies as collateral for health insurance and workers compensation insurance deductibles. The letter of credit is separate from the Company’s line of credit and is collateralized by certain securities held with UBS. There were no draws against the letter of credit at March 31, 2020. Subsequent to year end, the amount available under this letter of credit was increased to $500,000. OPERATING LEASES The Company leases its offices, office equipment, construction equipment and a fleet of vehicles under agreements accounted for as operating leases. The office leases for the Sanford and Tampa, Florida, locations are with related parties and are leased on a month-to- month basis. The remaining leases have terms that expire through 2023. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 27 NOTE 11 - COMMITMENTS AND CONTINGENCIES (CONTINUED) OPERATING LEASES (CONTINUED) At March 31, 2020, future minimum lease payments under the operating lease agreements are as follows: For the Year Ending March 31, Amount 2021 309,208$ 2022 143,748 2023 29,132 482,088$ For the year ended March 31, 2020, lease expense for related party leases and non-related party leases totaled approximately $673,000 and $1,148,000, respectively. SELF-INSURED INSURANCE PLANS The Company maintains a partially self-insured health insurance program, with a maximum claim amount of $125,000 per each enrolled employee and a total claims aggregate cap of approximately $3,900,000 for the plan year ending March 31, 2020. The aggregate stop-loss insurance policy covers a maximum of $1,000,000 of claims in excess of the aggregate cap. Premiums are paid based on participating employees. No claims were accrued as of March 31, 2020. The Company maintains a partially self-insured workers compensation insurance program, with a maximum claim amount of $300,000 per each employee per accident and $100,000 per employee per incident for general liability and a total claims aggregate cap equal to the greater of 85.9% of the audited standard premium, as defined, or $1,200,000, for the plan year ending March 31, 2020. No claims were accrued as of March 31, 2020. LEGAL The Company is subject to various legal procedures and claims which arise in the ordinary course of business. In the opinion of management and legal counsel, the ultimate liability with respect to these claims and proceedings will not materially affect the financial position or the results of the operations of the Company. CONFIDENTIAL WHARTON-SMITH, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020 28 NOTE 12 - MAJOR CUSTOMERS During the year ended March 31, 2020, two non-related customers accounted for approximately 21% of the Company’s revenues. At March 31, 2020, receivables from these customers accounted for approximately 25% of the Company’s current receivables and approximately 30% of the Company’s retainage receivable. NOTE 13 - BACKLOG The following is a reconciliation of backlog representing the amount of revenue the Company expects to be realized in future periods from signed contracts at March 31, 2020: Backlog - April 1, 2019 908,475,035$ New contracts, change orders and adjustments 695,204,448 Subtotal 1,603,679,483 Less: Contract revenue earned for the year ended March 31, 2020 (459,916,385) Backlog - March 31, 2020 1,143,763,098$ CONFIDENTIAL