DEPARTMENT
Infrastructure Division
AGENDA NO.
8 MEETING DATE
May 14, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Contract/Project Manager: Bryan Dessaure
Award Contract No. WD-2897, Sunol Valley Water Treatment Plant Ozonation
Summary of
Proposed
Commission
Action:
Award Contract No. WD-2897, Sunol Valley Water Treatment Plant Ozonation, to the responsible bidder that submitted the lowest responsive bid, J.F. Shea Construction, Inc., in the amount of $234,782,000, and with a duration of 1,612 consecutive calendar days (approximately four years and five months), to construct an ozone treatment facility to control taste and odor in the raw water supplied to the Sunol Valley Water Treatment Plant.
Background: The San Francisco Public Utilities Commission (SFPUC) Water Enterprise Regional Water System owns and operates the Sunol Valley Water Treatment Plant, which receives water from the San Antonio and Calaveras Reservoirs . In recent years, the Sunol Plant has been experiencing more frequent algae blooms with related objectionable taste and odor. The SFPUC is implementing the ozone project as a long-term solution to control taste and odor.
The primary project objective of the project is to install a raw water ozone treatment system and associated facilities and equipment at the Sunol Valley Water Treatment Plant to control taste and odor from the raw water sources . Secondary objectives are to provide additional primary disinfection with ozone as part of a multi -barrier disinfection strategy; improve treatment reliability; provide additional control of chlorinated disinfection byproducts; provide color removal ; and provide an additional barrier against potential emerging contaminants of concern.
Scope of
Contract:
The contract work location is in Sunol, Alameda County.
The contract work at the Sunol Valley Water Treatment Plant consists of construction/installation for the following major components:
• 10-inch through 96-inch diameter piping, elbows, and valves; • Ozone Generator Building;
• Loop Cooling Water Systems;
• Cryogenic Oxygen Tank and Liquid Oxygen Vaporizer Systems; • Ozone Generators;
• Ozone Injector Systems;
• Ozone Contact Basin;
• Ozone Destruct Systems;
• Pre-Chloramination Facilities;
• Instrumentation & Controls;
Agenda Title: Award WD-2897, Sunol Valley Water Treatment Plant Ozone Commission Meeting Date: May 14, 2024
• High Voltage Power Systems;
• Above and Underground Utilities; and
• Site Improvements.
Funding and
Costs:
Funding Source: Water Enterprise Capital Improvements Program Funded Project No. 10033123, Sunol Valley Water Treatment Plant Ozone Engineers Estimate: $183,000,000
Award: $234,782,000
The Water Enterprise Capital Improvement Program (WECIP) will fund the contract incrementally over the life of the contract.
The SFPUC has submitted an application to the State Water Resources Control Board for a State Revolving Fund (SRF) loan and may apply for Water Infrastructure Financing and Innovation Act (WIFIA) funding from the Environmental Protection Agency as well to provide low -interest financing for eligible project costs. If the project is selected by these funding programs, Business Services would return to the Commission to request approval to enter into any
funding agreement.
Schedule: Estimated Notice-to-Proceed Date: August 30, 2024 Estimated End Date: January 28, 2029
Contract Duration: 1,612 consecutive calendar days (1,522 consecutive calendar days to Substantial Completion and an additional 90 consecutive calendar days to Final Completion)
Bid History:
Advertised: September 29, 2023
Bids Received: On January 11, 2024, SFPUC received and publicly opened three bids as follows:
Bid Rank Bid Amount
Compensable
Delay (90-
day
Duration)
LBE Bid
Discount
SIP
Discount
Adjusted
Bid
Final
Rank
1. J.F. Shea
Construction,
Inc.
$234,782,000 $2,340,000 0% 0.58% $235,746,692 1
2. Clark
Construction
Group -
California,
LP
$249,685,911 $12,150,000 0% 3.00% $253,980,834 2
3. Kiewit
Infrastructure
West Co.
$297,785,400 $45,000,000 0% 1.16% $338,809,089 3
Application of bid preferences in accordance with the Social Impact Partnership Program did not change the final ranking of the low bidder.
Agenda Title: Award WD-2897, Sunol Valley Water Treatment Plant Ozone Commission Meeting Date: May 14, 2024
Application of LBE bid preferences do not apply to this contract because the engineer's estimate is in excess of $10,000,000.
Because the SFPUC anticipates that potential unforeseen conditions or other factors outside of the contractor’s control may impact the schedule, Staff included a requirement in the Invitation for Bids for bidders to provide a daily compensable time extension rate. At the bid opening, Staff announced that SFPUC would use the value of 90 days to calculate the Compensable Delay bid adjustment amount. Staff used the daily rate from the bids to determine the total Compensable Delay value s shown in the table above by multiplying the bidder’s daily rate times 90. The Adjusted Bid value in the table above is the sum of the Base Bid and Compensable Delay less any applicable Local Business Enterprise and Social Impact Partnership Program bid discounts. Staff used the Adjusted Bid value to compare and rank the bids to determine the lowest bidder. However, the contract award amount is the Base Bid value (not the Adjusted Bid value) and, if the Commis sion awards the Contract, the bidder’s daily compensable delay rate will become a term of the Contract.
The Engineer’s Estimate was set at $183,000,000 based on the design team’s cost estimate and a 3rd party, independent cost estimate. Both estimates ass umed receiving several responsi ve bids from responsible bidder s under a competitive
bidding environment (a fair market condition). The SFPUC estimator noted that the market conditions factor for receiving 2 -3 bids could be +10% to +20%. It is our practice in Infrastructure not to include the market condition factor, but instead conduct a more extensive outreach to try to obtain as many bids as possible.
Prior to advertising, the project team identified a list of 17 potentially qualified prime contractors and worked with the SFPUC Contract ors Assistance Center and Communications to reach out to the potential bidders. Overall, staff conducted
outreach to 301 contacts including both prime contractors and LBE subcontractors registered with the assistance center . Staff listed the project in the SFPUC Contracting Opportunities document, which was posted on the SFPUC bid website and distributed at the Small Business Construction Expo.
Staff also placed
notifications in both the print and digital publications of t he Engineering News Record.
Following advertisement, staff conducted t he pre-bid site walkthrough at the SVWTP on October 17, 2024. 35 representatives of construction firms, subcontractors, and suppliers attended the site walkthrough, including representatives from seven different prime contractors.
On January 11, 2024, SFPUC received t hree bids. Staff determined that two bids were responsive. The Apparent Low Bidder’s overall bid proposal price was $234,782,000, which is approximately 28% above the Engineer’s Estimate.
Staff evaluated the bid documents and reviewed several recent bids received for water and wastewater projects in Cali fornia during the past four years that were Agenda Title: Award WD-2897, Sunol Valley Water Treatment Plant Ozone Commission Meeting Date: May 14, 2024
similar in size, complexity, and duration. From this review, the team concluded that the increased cost in the low bid over the Engineer’s Estimate has been experienced in other similar recent projects and is lik ely due to at least the following three factors: (1) a small pool of qualified Contractors that have capacity to perform a project of this size, complexity, and duration; (2) on-going uncertainty in materials and equipment pricing and availability for lon g-duration projects resulting in increased pricing in General Contractors’ bids to cover perceived risk; and (3) complex retrofit projects for critical facilities
that must remain in operation are
inherently risky to Contractors.
Staff recommends accepting the low bid from J.F. Shea Construction, Inc., for Contract No. WD-2897, Sunol Valley Water Treatment Plant Ozon ation for the following reasons: (1) the contractor meets the minimum qualifications; (2) the bid is responsive and from a responsible bidder; (3) the cost variance between bid and Engineer’s Estimate is consistent with other projects of similar size and scope; and (4) revising scope and rebidding will likely result in increased escalation costs and may not result in more bidders or lower bid prices.
Environmental
Review:
On October 30, 2008, by Motion No. 17734, the Planning Commission certified a Final Program Environmental Impact Report (Program EIR) prepared for the Water System Improvement Program ( WSIP). On October 30, 2008, by Resolution No. 08-0200, this Commission
approved the WSIP and adopted findings and a
Mitigation Monitoring and Reporting Program, as required by the California Environmental Quality Act (CEQA).
On December 3, 2009, the Planning Commission, by Motion No. 17992, certified the Final Environmental Impact Report (Final EIR) for the Sunol Valley Water
Treatment Plant Expansion and Treated Water Reservoir Project (Case Number 2006.0137E), which is tiered from the 2008 Program EIR.
On December 08, 2009, by Resolution No. 09-0203, this Commission approved the Sunol Valley Water Treatment Plant Expansion and Treated Water Reservoir Project and adopted findings (CEQA F indings) and a Mitigation Monitoring and Reporting Program required by the CEQA.
On July 13, 2023, the San Francisco Planning Department issued an Addendum to the Final EIR to construct a new ozonation facility and a new polymer feed facility at the plant, and to conduct repairs and improvements to existing treatment facilities at the plant. No public comments on the addendum were received. The work under Contract No.
WD-2897, Sunol Valley Water Treatment Plant Ozonation is within the scope of the project authorized under the Final EIR and Addendum. On March 13, 2024, the Addendum was circulated to the State Clearinghouse ( SCH Number 2007082014) for public review and no comments were received.
Agenda Title: Award WD-2897, Sunol Valley Water Treatment Plant Ozone Commission Meeting Date: May 14, 2024
The Program EIR , CEQA findings and Mitigation Monitoring and Reporting Program can be found here: https://sfpuc.sharefile.com/public/share/web- sc700700e116449f881c511c8079aaa3e
The Final Sunol Valley Water Treatment Plant Expansion and Treated Water Reservoir Project EIR and Addendum, Resolution No. 14- 0127, CEQA Findings, and Mitigation Monitoring and Reporting Program can be found here:
https://sfpuc.sharefile.com/public/share/web-
s819430c6f134493fa0aff4976e9a4080
Local Business
Enterprise
Participation
and Non-
Discrimination
in Contracting:
The Contract Monitoring Division established an 8% Local Business Enterprise (LBE) subcontracting requirement for this contract. The contractor committed to
8.65% LBE participation with its bid submittal.
Attachment: 1. Contract Monitoring Division Memorandum
Agenda Title: Award WD-2897, Sunol Valley Water Treatment Plant Ozone Commission Meeting Date: May 14, 2024
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________________
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) Sunol Valley Water Treatment Plant Ozone project is necessary to control taste and odor in the raw water supplied to the Sunol Valley Water Treatment Plant; and
WHEREAS, On September 29, 2023, the SFPUC advertised Contract No. WD-2897, Sunol Valley Water Treatment Plant Ozonation; and
WHEREAS, The Engineer’s Estimate is $183,000,000 for this construction work to install a raw water ozone treatment system and associated facilities and equipment at the Sunol Valley Water Treatment Plant to control taste and odor in the raw water supplied from San Antonio and Calaveras Reservoirs; and
WHEREAS, The contract duration is 1,612 consecutive calendar days; and WHEREAS, On January 11, 2024, SFPUC received and publicly opened three bids; and WHEREAS, Staff and Contract Monitoring Division (CMD) review ed the bids and the application of bid preferences and determined that J.F. Shea Construction, Inc., is the responsible bidder with the lowest responsive bid; and
WHEREAS, CMD established an 8% Local Business Enterp rise (LBE) subcontracting requirement for this contract, and J.F. Shea Construction, Inc., committed to 8.65% LBE subcontractor participation in its bid submittal; and
WHEREAS, SFPUC has submitted an application to the State Water Resources Control Board for a State Revolving Fund (SRF) loan and may apply for Water Infrastructure Financing and Innovation Act (WIFIA) funding from the Environmental Protection Agency as well to provide low-interest financing for eligible project costs. If the project is selected by these funding programs, Business Services would return to the Commission to request approval to enter into any funding agreement; and
WHEREAS, On October 30, 2008, by Motion No. 17734, the Planning Commission certified a Final Program Environmental Impact Report (Program EIR) prepared for the Water System Improvement Program (WSIP) and on October 30, 2008, by Resolution No. 08-0200, this Commission approved the WSIP and adopted findings and a Mitigation Monitoring and Reporting Program, as required by the California Environmental Quality Act (CEQA); and WHEREAS, On December 3, 2009, the Planning Commission, by Motion No. 17992, certified the Final Environmental Impact Report (Final EIR) for the Sunol Valley Water Treatment Plant Expansion and Treated Water Reservoir Project (Case Number 2006.0137E), which is tiered from the 2008 Program EIR and on December 08, 2009, by Resolution No. 09- 0203, this Commission approved the Sunol Valley Water Treatment Plant Expansion and Treated Water Reservoir Project and adopted CEQA findings and a Mitigation Monitoring and Reporting Program required by the CEQA; and
WHEREAS, On July 13, 2023, the San Francisco Planning Department issued an Addendum to the Final EIR to construct a new ozonation facility and a new polymer feed facility at the plant, and to conduct repairs and improvements to existing treatment facilities at the plant and no public comments on the addendum were received; and t he work under Contract No. WD-
2897, Sunol Valley Water Treatment Plant Ozonation is within the scope of the project authorized under the Final EIR and Addendum; and
WHEREAS, On March 13, 2024, the Addendum was circulated to the State Clearinghouse (SCH Number 2007082014) for public review and no comments were received; and WHEREAS, The San Francisco Planning Department is the custodian of records, located in File No. 2006.0137E , at 49 South Van Ness Avenue, Suite 1400, San Francisco, California, 94103, which have been made available for review by this Commission and the public, and those files are part of the record before this Commission; and WHEREAS, The Project files, including the Program EIR, Final EIR, Addendum to the Final EIR, Resolution No. 09-0203, CEQA Findings and the Mitigation Monitoring and Reporting Program have been made available for review by this Commission and the public, and those files are part of the record before this Commission; and
WHEREAS, This Commission has reviewed and considered the information contained in the Program EIR, Final EIR, the findings contained in SFPUC Resolution N o. 09-0203, the Addendum to the Final EIR and all written and oral information provided by the Planning Department, the public, relevant public agencies, SFPUC and other experts and the administrative files for the Project; and
WHEREAS, Funding from Project No. 10033123, Sunol Valley Water Treatment Plant Ozone, will be available incrementally over the life of the contract through the Water Enterprise Capital Improvement Program; now, therefore, be it
RESOLVED, This Commission has reviewed and considered the Program EIR, Final EIR and the Addendum and the record as a whole, finds that the Final EIR and Addendum is adequate for its use as the decision –making body for the Project and incorporates the CEQA findings contained in Resolution N o. 09-0203 by this reference thereto as though set forth in this Resolution; and be it
FURTHER RESOLVED, This Commission further finds that since the Program EIR and Final EIR as modified by the Addendum were finalized, there have been no substantial project changes and no substantial changes in project circumstances that would require major revisions to them due to the involvement of new significant environmental effects or an increase in the severity of previously identified significant impacts, and there is no new information of substantial importance that would change the conclusions set forth in them; and be it FURTHER RESOLVED, That this Commission hereby awards Contract No. WD-2897, Sunol Valley Water Treatment Plant Ozonation, to the responsible bidder that submitted the lowest responsive bid, J.F. Shea Construction, Inc., in the amount of $234,782,000, and for a duration of 1,612 consecutive calendar days.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of May 14, 2024.
Secretary, Public Utilities Commission
MEMORANDUM
Date: February 7, 2024
To: Colin Patton, SFPUC
Bryan Dessaure, SFPUC
Frank Gennaccaro, SFPUC
From: Jovi Cuntapay-Vitin, CMD
Subject: CMD Award Memo for WW-2897 Sunol Valley Water Treatment Plant Ozonation
The Contract Monitoring Division (“CMD”) has reviewed the bids submitted for the above referenced project, applied the appropriate bid discounts, and determined responsiveness to the Chapter 14B pre -award requirements. The Micro/Small -LBE subcontracting pa rticipation requirement is 8% for this project. The LBE subcontracting participation requirement is less than 20% because the scope requires highly skilled and/or specialty niche trades with limited LBE availability: installation of large diameter pipes (u p to 8 feet in diameter) valves and appurtenances; installation of liquid oxygen and liquid nitrogen storage and conveyance facilities, ozonation generation equipment, ozone destruct equipment, and instrumentation and control systems; and installation of large and complex structures, reinforced drilled piers for structural slope stability and a microwave radio tower. Below is a summary of CMD’s review.
Bid Discount
Bidder LBE Status,
Type and Size Base Bid
Compensable
Delay
(90 days)
LBE Bid
Discount
Adjusted Bid +
Compensable
Delay
with LBE
Bid Discount
J.F. Shea Construction,
Inc.
Non-LBE $234,782,000 $2,340,000 Not
Applicable
$237,122,000
Clark Construction
Group – California, LP
Non-LBE $249,685,911 $12,150,000 Not
Applicable
$261,835,911
Kiewit Infrastructure
West Co.
Non-LBE $297,785,400 $45,000,000 Not
Applicable
$342,785,400
Per Chapter 14B.7 of the San Francisco Administrative Code, the LBE bid discount does not apply to Contracts estimated to exceed $20,000,000.
LBE Subcontracting Participation Requirement
City & County of San Francisco
London N. Breed, Mayor
Office of the City Administrator
Carmen Chu, City Administrator
Contract Monitoring Division
Stephanie Tang, Director
J.F. Shea Construction, Inc. (“JF Shea”) is the lowest responsive bidder. JF Shea committed to meet 8% Micro/Small LBE subcontracting requirement by listing the following Micro/Small LBE firms on Section 00 43 36 (Subcontractor List):
1155 Market Street, 4th Floor, San Francisco, CA 94103
Telephone (415) 581-2310 General Email [email protected]
Subcontractor Scope of
Work
LBE Status,
Type and Size
Listed
Amount
Credited
Amount
Credited
Participation
Value Fire
Protection
(Partial) Fire
Suppression -
Sprinklers
SF LBE-MBE
(Micro) $24,500 $24,500 0.01%
San Francisco
Roofing
Services, Inc.
Roofing SF LBE-MBE
(Micro) $752,100 $752,100 0.32%
Ranch Fence
Inc. Fencing PUC LBE-OBE
(Micro) $1,035,000 $1,035,000 0.44%
R & W Concrete
Contractors Concrete PUC LBE-MBE
(Micro) $17,816,480 $17,816,480 7.59%
R & S
Construction
Management
Site Concrete SF LBE-MBE
(Micro) $674,300 $674,300 0.29%
TOTAL $20,302,380 $20,302,380 8.65%
JF Shea also listed the following non-LBE subcontractors on Section 00 43 36.
Subcontractor Scope of Work Listed Amount Participation Cosco Fire Protection Fire Suppression $1,418,2001 0.60% James Long Construction Services,
Inc. HVAC Systems $1,554,200 0.66%
Shimmick Construction Company,
Inc. Electrical $27,583,595 11.75%
ACCO Engineered Systems Plumbing $1,816,060 0.77%
Inplant Sales LLC Ductile Iron Pipe, Couplings $1,218,583 0.52% B&K Valves & Equipment, Inc. Valves $2,014,325 0.86%
Techno Coatings, Inc. Painting $1,899,667 0.81%
G.T.E. Metal Erectors, Inc. Metals $3,700,942 1.58%
Quality Erectors & Construction,
Inc.
Calcium Canopy/ Roofing/
Fabricated Canopy $366,381 0.16%
Marina Landscaping Landscape $1,200,000 0.51%
Associated Rebar, Inc. Rebar $3,667,535 1.56%
Malcolm Drilling Company, Inc. Piles $4,126,740 1.76%
TOTAL $50,566,228 21.54%
1 Cosco Fire Protection’s listed amount in Section 00 43 36 is $1,442,700 but will further sub out to an LBE firm, Value Fire Protection, for $24,500. Value Fire Protection is a CMD Certified Micro LBE for Fire Protection (C-16). According to the Advertisement for Bids and Section 00 43 36, the LBE subcontracting requirement can only be met with CMD certified San Francisco Micro and Small-LBEs and SFPUC Micro & Small-LBEs. Hence, Value Fire Protection can get LBE credit.
Good Faith Efforts Requirements
JF Shea utilized Approach C: Good Faith Negotiations on CMD Form 2B to meet the Good Faith Efforts (“GFE”) Requirements. JF Shea demonstrated that it met the GFE requirements under Approach C by achieving at least 50 points.
Based on the foregoing, CMD has determined that JF Shea has complied with the pre -award Chapter 14B requirements. Should you have any questions, or if I can be of further assistance, please do not hesitate to contact me at [email protected].