City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: October 28, 2024
Report #:2408-3389
TITLE
Approval of Construction Contract Number C25192135 with Anderson Pacific Engineering Construction, Inc. in the Amount Not-to-Exceed $6,215,000; Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders up to a Not-to-Exceed Amount of $621,500 for Related, Additional but Unforeseen Work Which May Develop During the Project; Approval of Amendment Number 5 to Contract C21176592C with Carollo Engineers, Inc. in the Amount of $1,314,192 for a New Compensation Not-to-Exceed Amount of $14,695,384 for the Wastewater Treatment Fund for the 12kV Electrical Power Distribution Loop Rehabilitation Bid Package 2 Project at the Regional Water Quality Control Plant, Funded by the Plant Repair, Retrofit, and Equipment Replacement Project (WQ-19002); CEQA Status – Exempt Under Section 15301
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute construction contract C25192135 with Anderson Pacific Engineering Construction, Inc., (APEC), in the amount of $6,215,000 for the 12kV Electrical Power Distribution Loop Rehabilitation Bid Package 2 Construction Contract, funded in the Plant Repair, Retrofit, and Equipment Replacement Project (WQ-19002) at the Regional Water Quality Control Plant (RWQCP);
2. Authorize the City Manager or their designee to execute one or more change orders to the contract with APEC, for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $621,500; and
3. Approve and authorize the City Manager or their designee to execute Amendment No. 5 to contract C21176592C with Carollo Engineers, Inc. to provide construction management and inspection services during construction for the 12kV Electrical Power Distribution Loop Rehabilitation Bid Package 2 Construction Project funded in the Plant Repair, Retrofit, and Equipment Replacement project (WQ-19002) in an amount not-to- exceed $1,314,192. The revised total contract amount is not to exceed $14,695,384 including $1,194,720 for basic services and $119,472 for additional services.
EXECUTIVE SUMMARY
The Regional Water Quality Control Plant (RWQCP) capital program includes the rehabilitation of the 12-kV Electrical Power Distribution Loop. In addition to the construction contract, specialized services to manage the construction and inspection of the construction contract work are required. These services are an extension of staff and essential for providing quality assurance that the City is receiving the as-designed infrastructure in a transparent, efficient, and coordinated manner.
BACKGROUND
The RWQCP obtains electrical power from the City of Palo Alto Utilities (CPAU) Department.
Onsite distribution of the medium voltage power is through a radial 12,470-volt (12kV) underground distribution system, which feeds ten power distribution load centers where the voltage is transformed from 12kV down to 480 volts. The 480-volt power is the key power supply for the RWQCP’s industrial treatment equipment. The 12kV distribution system has feeder distribution cables installed around 1980. The 12kV cables, the existing load centers, and 12kV electrical switches are at the end of their useful life and in need of replacement.
In July 2012, the City adopted the Long Range Facilities Plan (LRFP), which provided a roadmap for future improvements at the RWQCP.1 This project is one of the projects recommended by the LRFP. Based on consultation with CPAU, replacement of the aging electrical infrastructure at the RWQCP is needed to maintain reliably safe operation. The design of the 12kV Electrical Power Distribution Loop Rehabilitation Project (Project) was completed in April 2022 under a separate contract (C19170648) with Salas O’Brien Engineers approved by Council in October 2018.2 The Project includes replacement of aging electrical cables, pad-mounted switches, and load centers. Work includes construction of elevated equipment pads to protect electrical equipment in compliance with the City’s Sea Level Rise policy. The Project design includes plant-wide electrical system harmonic assessments and arc-flash hazard risk assessments.
Contract documents include a sequence of work that allows the construction work to be commenced in seven phases to allow for coordination with other RWQCP ongoing and upcoming capital program projects. The construction work completed under Bid Package 1 included construction of the critical Phases 1 and 5 of the project, both of which began in 1 City Council, July 2, 2012; SR #2914
https://www.cityofpaloalto.org//files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2012/id-2914.pdf
2 City Council, October 15, 2018; SR #9274
https://www.cityofpaloalto.org//files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2018/id-9274-design-services-for-wqcp-medium-voltage-electrical-distribution-network- rehabilitation.pdf
January 2023 and are now substantially complete. The new construction package, known as Construction Bid Package 2, covers work under the remaining Phases 2, 3, 4, 6, and 7.
ANALYSIS
The 12kV Electrical Power Distribution Loop Rehabilitation Project design included seven phases of work that were planned and sequenced to coordinate with other RWQCP ongoing capital projects. Under Bid Package 2, the contractor will construct Phases 2, 3, 4, 6, and 7, including:
•the replacement of electrical switchgear, replacement of CPAU Service Entrance Cabinet No. 2, and replacement of associated conductors;
•installation of temporary conductors and conduits during shutdown and switchover; •demolition of existing equipment (switchgear, electrical switches, CPAU Service Entrance Cabinet);
•site preparation work such as vegetation, pavement, and curb removal; •site civil grading;
•installation of elevated equipment pads in conformance with the City’s Sea Level Rise Policy;
•installation of 40-feet deep foundation piers; and
•other miscellaneous work as specified in the contract documents.
Construction Bid Process
On July 16, 2024, the City solicited formal bids from qualified contractors for the 12kV Electrical Power Distribution Loop Bid Package 2 Project. The bid solicitation requested base bids for Phases 2 and 3, with Phases 4, 6, and 7 as add alternate bid items (see Table 1). The bidding period was 24 calendar days. Two bids were received on August 9, 2024, with bid prices ranging from $6,215,000 to $6,450,000 as listed in the Bid Summary (Attachment B).
These bid prices are inclusive of the base bid items as well as all add alternative bid items.
Both bids are about $2.2 million below the Engineer’s cost estimate of $8.42 million.
Table #1: Summary of Construction Bid Process
Bid Name / Number
12kV Electrical Power Distribution
Loop Rehabilitation Bid Package 2
Project (IFB No. 192135)
Length of Project 27 months after Notice to Proceed
# of Bid Packages downloaded by Contractors 41
# of Bid Packages downloaded by Builder’s Exchanges 2
Total Days to Respond to Bid 24
Pre-Bid Meeting Yes
Staff has reviewed all bids submitted and recommends the bid of $6,215,000 submitted by APEC be accepted, and APEC be declared the lowest responsible bidder. A notice of Intent to Award was issued to APEC and a construction contract (C25192135) with APEC, in the amount of $6,215,000 has been prepared.3 The bid is 26% below the engineer’s estimate of $8,420,000.
The engineer’s estimate overestimated the costs of electrical gear based on experience with previous high pricing and long lead times, typical during COVID and post-COVID timeframe.
Electrical gear supply chain and pricing issues have improved in recent years. Also, the low bid contractor received a very good price on the new CPAU Service Entrance Cabinet, and a volume discount for the project’s five electrical switches.
A contingency amount of $621,500 (10% of the bid price) is recommended for related, additional but unforeseen work that may develop during the project. Staff confirmed with the Contractor’s State License Board that the contractor has an active license on file.
Selection of a Construction Management Firm
On June 2, 2021, Council approved five separate contracts (Contract C21179265 – with MNS Engineers, Inc.; CDM Smith; Carollo Engineers, Inc.; MCK Americas, Inc.; and Tanner Pacific, Inc.) for construction management and inspection services.4 They were initially set at a not-to- exceed amount of $1 per contract to allow the City to select the firm that will provide qualified consultants for on-call services during construction of individual capital projects recommended by the LRFP. Services to be used are on a per-project basis, at the City’s discretion.
On July 9, 2024, staff provided each of the five (5) construction management consultants a scope of services with a list of tasks needed for Bid Package 2 (i.e., Work Order #2B). One proposal was received from Carollo Engineers, Inc. with a price of $1,194,720 as listed in the Work Order Proposal Summary (see Table #2). Some of the construction management consultants previously indicated they would not be submitting a proposal because they were not well-positioned for the work at the time or were nonresponsive to the request. 3 Anderson Pacific Construction Contract for the 12kV Electrical Power Distribution Loop Rehabilitation Bid Package 2 Project C25192135
https://www.cityofpaloalto.org//files/assets/public/v/1/public-works/staff-reports-all/2024/anderson- pacific_cc.pdf
4 City Council, June 21, 2021; SR #12324
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2021/id-12324.pdf
# of Companies Attending Pre-Bid Meeting 7
# of Bids Received 2
Base Bid & Add Alternate B is Items Price Range $6,215,000 – $6,450,000 Table #2: Summary of Construction Management Work Order 2B Proposals Request for Work Order Proposal Issued July 9, 2024
Deadline for Questions, Clarifications July 23, 2024
Proposals Due July 30, 2024
Proposals Received 1
Finalist Identified 1
Proposal Price $1,194,720
APEC and Carollo Engineers, Inc. were the low bid and selected construction manager, respectively, for the construction of Bid Package 1, as approved by Council in November 2022.5 As noted previously, Bid Package 1 is substantially complete.
Staff reviewed the proposal and discussed the scope of work with Carollo Engineers, Inc. Carollo Engineers, Inc. has performed well in managing the Bid Package 1 construction. Carollo Engineers, Inc. has qualified staff and a thorough understanding of the scope and complexity of the work and therefore, staff recommends awarding Bid Package 2 construction management to Carollo Engineers, Inc. (Attachment A). Bid package 2 work includes construction coordination of the electrical project and other onsite capital improvements during the term of the work, requiring specialists to support the coordination of complex shutdowns and commissioning ensuring alignment with Public Works staff and the construction contractor.
Learning from the contract management and complexity during bid package 1, staff recognizes more operations support is required for the project; the electrical shutdowns are time consuming and require significant pre-planning and coordination, interfering with day-to-day operations preventative maintenance tasks. Therefore, this scope of work reflects increased support from the construction management contract team to assist Operations staff and Carollo. The construction work for the Bid Package 2 project is anticipated to be complete by December 31, 2026.
FISCAL/RESOURCE IMPACT
Funding required for this construction contract and contract amendment is available in the Fiscal Year 2025 Adopted Wastewater Treatment Fund Capital Improvement Program Plant Repair, Retrofit, and Equipment Replacement Project (WQ-19002). Palo Alto treats the combined wastewater from Palo Alto, Los Altos, Los Altos Hills, Mountain View, Stanford University, and East Palo Alto Sanitary District. Palo Alto’s share of this project is approximately 37% and the other five agencies’ share is approximately 63%, based on volume and strength of wastewater contribution of each partner. The $6,836,500 for the construction contract and the 5 City Council, November 14, 2022; SR #14602
https://www.cityofpaloalto.org//files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/2022/id.-14602.pdf
$1,320,396 for the construction management contract amendment is the combined cost for all the partners, a total of $8,156,896 (Palo Alto’s share is $3,018,051). The Palo Alto Wastewater Collection Fund’s share of this project’s expense is already in that fund’s budget and this project will receive reimbursement by Valley Water for Palo Alto’s share of the project per the GP5 Agreement6.
STAKEHOLDER ENGAGEMENT
This project is part of the RWQCP’s minor capital improvement program funded by Palo Alto and its five additional partner agencies. The five partner agencies are regularly updated about both the need for and the progress on wastewater treatment capital work. Updates are provided each year at an annual meeting and at other periodic meetings established to inform partner agency staff about the minor capital improvement program. This project has been part of that process. Additionally, RWQCP staff has routinely coordinated feedback from Utilities Department electrical staff via project reviews.
ENVIRONMENTAL REVIEW
The project is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301, subsections (b) and (e)(1), Existing Facilities, as it involves the repair and maintenance of an existing publicly owned utility used to provide sewerage treatment services with a minor addition to an existing building and no or negligible expansion of use.
ATTACHMENTS
Attachment A: Amendment No. 5 to Contract No. C21179265C with Carollo Engineers, Inc.
Attachment B: Bid Summary for IFB No. 192135
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
6 City Council, June 3, 2024; Agenda Item #6; SR #2404-2877 https://portal.laserfiche.com/Portal/DocView.aspx?id=72164&repo=r-704298fc&searchid=976ab985-af0b-4b24- 97aa-149fe444fc8e