City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 9, 2025
Report #:2505-4612
TITLE
Approval of Construction Contract No. C25194274 with O’Grady Paving, Inc. in the Amount Not- to-Exceed $1,218,317 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders Up to a Not-to-Exceed Amount of $121,832 for the Fiscal Year 2025 Streets Preventative Maintenance Project; Capital Improvement Program Projects PE-86070 and PO-11001; CEQA Status – Exempt under CEQA Guidelines Section 15301(c)
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Construction Contract No. C25194274 with O’Grady Paving, Inc. in the amount not-to-exceed $1,218,317 for the Palo Alto Fiscal Year 2025 Streets Preventive Maintenance Project (Capital Improvement Program Projects PE-86070 and PO-11001) for street maintenance; and
2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with O’Grady Paving, Inc. for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $121,832.
BACKGROUND
Public Works Engineering Services Division manages construction contracts for concrete repair, preventive maintenance, resurfacing and reconstruction of various city streets annually. In recent years, additional Capital Improvement Program (CIP) projects are being built through the annualized resurfacing contracts due to the complexity of construction and benefit of being included in a larger project.
The City uses StreetSaver, the Metropolitan Transportation Commission’s (MTC) pavement management system which is used by almost all Bay Area jurisdictions. The Pavement Condition Index (PCI) is calculated by evaluating a sample pavement section on each block for different ratings variable from mild to severe – including weathering, potholes, trenches, and base
failures. These pavement distresses are entered into the StreetSaver program and a PCI score is calculated. All staff who evaluated the street conditions and pavement distresses have multiple years of experience and have been trained by MTC.
While the PCI score is used to prioritize streets, staff also takes into consideration additional information which includes project coordination with the Utilities Department and planned striping improvements with the Office of Transportation. Additionally, staff coordinates with the Public Works Public Services Division to refresh pavement markings that may have faded as part of the Thermoplastic Lane Marking and Striping project PO-11001.
ANALYSIS
Project Description
Staff recommends approval of Contract No. C251942741 as part of the street resurfacing program to maintain and improve the condition of Palo Alto’s streets. The $1,218,317 expenditure for this contract includes preventive maintenance of approximately 11.2 lane-miles of public streets (950,000 square feet) with PCI scores averaging 76. This will help maintain and improve the City’s PCI beyond its average of 83 and will address streets whose PCI scores are between 70-85 to slow the rate at which they deteriorate. Preventive maintenance includes base failure repair, crack sealing, slurry seal application, and new thermoplastic striping. The streets included in this contract are listed in Attachment A.
The project scope also includes the replacement of approximately 13,940 linear feet of thermoplastic striping and 215 pavement legends in coordination with Public Works Public Services.
Solicitation Process
On April 3, 2025, an invitation for bids (IFB) for the Fiscal Year 2025 Streets Preventive Maintenance Project was posted online on OpenGov, the City’s eProcurement system, and sent to 3,564 builder’s exchanges and contractors. The bidding period was 21 calendar days. The City received three bids from qualified contractors on April 24, 2025, as listed on the attached Bid Summary in Attachment B.
Table 1: Summary of invitation for Bids
Project Bid Name/Number FY25 Streets Preventive Maintenance Project IFB #194274
Proposed Length of Project 90 calendar days
Number of Bid Packages Downloaded by
Builder’s Exchanges 1
1 O’Grady Paving, Inc. Construction Contract for FY25 Streets Preventive Maintenance Project C25194274; https://cityofpaloalto.org/files/assets/public/v/1/public-works/staff-reports-all/2025/ogrady-payving-c25194274- fy25-streets-preventative-maint.pdf
Table 1: Summary of invitation for Bids
Project Bid Name/Number FY25 Streets Preventive Maintenance Project IFB #194274
Number of Bid Packages Downloaded by
Contractors 15
Total Days to Respond to Bid 21
Mandatory Pre-Bid Meeting No
Number of Bids Received 3
Base Bid Plus Bid Alternate Number 1 Price
Range
$1,218,317 to $1,416,514
Public Link to Solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/159345
The apparent low bidder was selected based upon the total of the base bid plus bid alternate number 1. Bids ranged from $1,218,317 to $1,416,514 and from 2% to 16% under the engineer’s estimate. Staff has reviewed the submitted bids and recommends the base bid and bid alternate number 1, submitted by O’Grady Paving Inc., in the amount of $1,218,317, and that O’Grady Paving, Inc. be declared the lowest responsible bidder. The construction contingency amount of $121,832, which equals approximately 10% of the total contract value, is requested for related, additional, but unforeseen work, which may develop during the project, implemented via City-approved Change Order.
Staff reviewed other similar projects performed by the lowest responsible bidder, O’Grady Paving, Inc., including projects performed for the City and did not find any significant complaints with their previous work. Staff also checked with the Contractor’s State License Board and confirmed the contractor has an active license on file.
FISCAL/RESOURCE IMPACT
Funding for this contract is available in the Fiscal Year 2025 Adopted CIP Street Maintenance (PE-86070) and Thermoplastic Lane Marking and Striping (PO-11001) projects.
Table 2: Funding Allocation
Funding Source Contract Contingency Total Funding
PE-86070 $1,128,420 $112,842 $1,241,262
PO-11001 $89,897 $8,990 $98,887
Total $1,218,317 $121,832 $1,340,149
STAKEHOLDER ENGAGEMENT
All streets have been coordinated with the City’s Utilities Department and Office of Transportation to minimize the cutting of newly resurfaced streets. Extensive public outreach will be conducted prior and during the construction phase to keep the community informed, which includes flyers sent to adjacent residences and businesses. Residents and businesses impacted by the project will be notified via mailer prior to the start of any work detailing where and what type of work is to be expected for the duration of the project. Paving notices will be distributed to impacted parties 7 days and 24 hours prior to the full street closures. The City website will be updated with the digital version of the mailer as well as the latest construction schedule for full street closures. The schedule will be updated as necessary.
ENVIRONMENTAL REVIEW
Street resurfacing projects are categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301(c) of the CEQA Guidelines as repair, maintenance, or minor alteration of existing facilities and no further environmental review is necessary.
ATTACHMENTS
Attachment A: Street List and Map
Attachment B: Bid Summary
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer