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DISCUSSION
City of San Bernardino
Request for Council Action
Date: January 21, 2026
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Award of Construction Agreement to Spec Construction Co Inc. for Construction of Homeless Navigation Center
SB Campus Project in the amount of $15,037,000 and
Contingency of $2,255,550 for a Total Amount of
$17,292,550 (Ward 1)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California;
1. Approve the award of a Construction Agreement with Spec Construction Co Inc., in the amount of $15,037,000 for the Construction of Homeless Navigation Center SB Campus Project; and
2. Authorize the construction contingencies and administrative costs in the total amount of $2,255,550 for the Project, bringing the total Project budget for the Construction Agreement to $17,292,550; and
3. Approve Resolution No. 2026-005 authorizing the Interim Director of Finance and Management Services to amend the FY 2025-2026 Operating Budget to loan $8,768,982 from the General Fund - Fund Balance to fully fund the construction of the San Bernardino Homeless Navigation Center SB Campus Project; and
4. Authorize the City Manager or designee to execute all documents with Spec Construction Co Inc.; and
5. Authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the Project.
City Manager's Comments
Recommends approval with a 15% contingency.
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Executive Summary
Awarding the construction agreement with Spec Construction Co Inc. will allow the City to move forwards with the site preparation for the Navigation Center facility and the installation of the modular units, which are currently being manufactured off-site. This will include fully preparing the site such as performing site grading and utility construction; performing the installation and finishing of the modular units; and finalizing the site for the facility’s operation, which includes installing landscaping, paving, and site lighting, among other components.
Spec Construction Co Inc was selected through a competitive procurement process, where staff evaluated all responsive and responsible bids based on cost, experience, and demonstrated capacity to deliver the project within the required schedule and quality standards. The selected contractor was determined to be the lowest responsive and responsible bidder and possesses the qualifications necessary to successfully construct the facility in compliance with approved plans, specifications, and applicable building and safety regulations.
Existing project funding in the amount of $8,523,568 is provided through ARPA, CDBG, General Fund, HHAP-3, Home-ARP (construction), Hospital /HMO Donations and Low Mod funds as part of the City’s adopted FY 2025-26 Capital Improvement Program. As a result, a loan of $8,768,982 from the General Funds, fund balance is needed to provide the necessary funding for the awarded contract and contingency.
Background
The City of San Bernardino Navigation Center is a comprehensive, 200-bed interim housing campus designed to address the immediate and long-term needs of individuals experiencing homelessness. The facility will provide a combination of congregate and non-congregate housing options, allowing the City to accommodate a diverse population, including individuals with medical, behavioral health, or accessibility needs. In addition to safe and secure temporary shelter, the Navigation Center will offer recuperative care for individuals transitioning from hospitals or other care facilities, ensuring continuity of care in a supportive environment.
The Navigation Center is designed as a service-rich campus that combines temporary housing with the supportive programs people need to stabilize and move toward permanent housing. Core services will include case management, housing navigation and diversion, employment readiness and workforce development, and coordination with health and social service partners, all offered on-site to reduce barriers to care.
By centralizing shelter, services, and care coordination in one location, the Navigation Center will improve service delivery, strengthen collaboration with healthcare, behavioral health, nonprofit, and workforce partners, and reduce duplication of effort.
This facility will serve as a key hub in the City’s homelessness response, helping lower unsheltered homelessness, support public health and safety, and create clear pathways from crisis to stability and long-term housing. 3 1
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Development of the San Bernardino Navigation Center is funded entirely through restricted grant sources that are dedicated exclusively to this project. These funds are specifically designated for the planning, design, and construction of the facility and cannot be used for other City purposes. This grant-funded investment reflects a strategic and fiscally responsible approach to addressing homelessness, while ensuring compliance with funding requirements and advancing the City’s broader goals of public health, safety, and community well-being.
The current total amount available across all funding sources is $9,720,931.73. After allocating $1,272,363 for Amendment No. 1 to the CREDE contract, the City’s remaining available funding across all sources will be $8,448,568. To this amount the Kaiser Permanente Grant in the amount of $75,000 was added to the total funding allocation, giving the project a remaining budget of $8,523,568.
Discussion
The construction agreement with Spec Construction Co Inc. is for the site preparation and installation of the modular units for the Navigation Center facility. The scope of work associated with this contract will consist of, in general, site grading, landscaping, utility, parking lot paving, lighting, concrete foundation, fencing, ADA accessibility, and modular building installation and finishing.
The Project was publicly advertised for competitive bidding through PlanetBids on November 07, 2025, and bids were opened on January 13, 2026. A total of one sealed bid was received. The total base bid is as follows:
SN NAME OF BIDDER CITY TOTAL BID
1 Spec Construction Co Inc. Ontario, CA 15,037,000.00
After review, staff determined that Spec Construction Co Inc., of Ontario, California, submitted the lowest responsive and responsible bid in the amount of $15,037,000.
Staff have reviewed Spec’s bid documents, CSLB license, and DIR registration, and confirmed that all requirements were met. Staff recommend awarding the construction agreement to Spec Construction Co Inc.
The total Project cost, including contingencies, construction, quantity variations, field adjustments, unforeseen work and administrative expenses, is estimated at $17,292,550.
Project Cost
Construction Bid Amount $15,037,000
Contingency & Administrative Cost $2,255,550
Total Construction Cost $17,292,550
Current Project Budget and Proposed General Fund Loan
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A total of $22,045,382 in funding has been committed to the Navigation Center from federal, state, and private sources. Of this amount, $13,521,813.27 has been obligated, leaving $8,523,568 available.
Total Amount
Source Funding
Spent or
Encumbered Available
ARPA $11,344,785.00 $11,344,785.00 $0.00
CDBG $3,397,541.00 $524,181.50 $2,873,359.50
Dignity Health $250,000.00 $0.00 $250,000.00
HHAP-3 $808,385.00 $689,839.13 $118,545.87
HOME-ARP $4,299,671.00 $524,181.50 $3,775,489.50
Kaiser Permanente $75,000.00 $0.00 $75,000.00
Inland Empire Health $1,500,000.00 $224,406.14 $1,275,593.86 Loma Linda University $70,000.00 $0.00 $70,000.00
Molina Healthcare $300,000.00 $214,420.00 $85,580.00
TOTAL $22,045,382.00 $13,521,813.27 $8,523,568.73
With the total construction and contingency cost totaling $17,292,550, a loan of $8,768,982 from the General Fund is needed to close the financial gap and advance construction. This amount will be repaid to the General Fund as the City explores and secures additional funding commitments for the Navigation Center’s development.
Available Funding $8,523,568.73
Total Construction Cost ($17,292,550.00)
Total Funding Gap ($8,768,981.27)
General Fund Loan $8,768,982.00
Environmental Impact
The Project is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15269 Emergency Shelter and Supportive Housing) Projects involving the provision of emergency shelters, transitional housing, supportive housing, or services for individuals experiencing homelessness are commonly found exempt when they are developed to address an urgent public health and safety need. Navigation Centers are generally recognized as essential public facilities that address homelessness, which the State has identified as an ongoing emergency. If the project meets the criteria under this section, it may qualify as a statutory exemption.
2021-2025 Strategic Targets and Goals
Authorizing this construction contract aligns with Key Target No. 3: Improved Quality of Life. Completion of the Navigation Center will expand access to shelter, care, and supportive services for the City’s unhoused residents, directly supporting community 3 1
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health, safety, and neighborhood stability.
Fiscal Impact
This project will be supported by the funds originally allocated and the $8,768,982 loan from the General Fund – Fund Balance.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California;
1. Approve the award of a Construction Agreement with Spec Construction Co Inc., in the amount of $15,037,000 for the Construction of Homeless Navigation Center SB Campus Project; and
2. Authorize the construction contingencies and administrative costs in the total amount of $2,255,550 for the Project, bringing the total Project budget for the Construction Agreement to $17,292,550; and
3. Approve Resolution No. 2026-005 authorizing the Interim Director of Finance and Management Services to amend the FY 2025-2026 Operating Budget to loan $8,768,982 from the General Fund - Fund Balance to fully fund the construction of the San Bernardino Homeless Navigation Center SB Campus Project:
4. Authorize the City Manager or designee to execute all documents with Spec Construction Co Inc.; and
5. Authorize the City Manager or designee to expend the contingency fund, if necessary, to complete the Project.
Attachments
Attachment 1 Resolution No. 2026-005
Attachment 2 Construction Agreement with Spec Construction Co, Inc.
Attachment 3 Bid Tabulation
Attachment 4 Bid Proposal
Attachment 5 Location Map
Ward:
Ward 1
Synopsis of Previous Council Actions:
June 04, 2025, FY 2025/2026 Budget Presentation (All Wards) CC
Eric Levitt, City Manager