San Jose City Council
August 23, 2022

Napp Fukuda, Assistant Director, Environmental Services Department Mathew Nguyen, Deputy Director, Public Works Department Digester and Thickener Facilities
Upgrade Project
Fourth Construction Contingency Increase
CITY COUNCIL ITEM 6.1: August 23, 2022
Project Site and Scope
Modifications to existing
digesters
5 6
7 8
New Primary Sludge Screening Building
Polymer Storage & Blending
Odor Control
Modifications to existing
DAFT Tanks
New Elevated Pipe Rack
2 Contract Substantial Completion Achieved in April
3 Summary of Contingency Increases
4 Description Council Date Contingency
Amount Total
Original Contract – Walsh Construction
@107,925,000 May 2016 $13,490,625 $121,415,625
First Contingency Increase
deteriorated pipes, regulatory
requirement, utility conflicts
November 2017 $15,000,000 $136,415,625
Second Contingency Increase
seismic design upgrades, hazardous
material remediation, and other
changes and delay costs
June 2018 $25,000,000 $161,415,625
Third Contingency Increase
additional civil work, changes and re-
sequencing of activities, addressing
digester leakage, and additional costs
and delays associated with the new
COVID-19 mandatory compliance
requirements
April 2021 $14,000,000 $175,415,625
Fourth Contingency Increase
loss of productivity, change in process August 2022 $3,107,049 $178,522,674 Fourth Contingency Increase
-
Loss of Productivity Claim
5 ▪ Walsh Claim
– Loss of Productivity - $5.1M
– Two methods: Ibbs’ Curve and Modified Total Cost
▪ City Review and Analysis
– Led by PMA Consulting in coordination with City staff ▪ Findings
– Large number of changes
– Claim has some merit, supported by various studies &
court cases
– Light on documentation & data to accurately define loss – Valid for only certain set of data and projects
– Claim included loss of productivity due to Covid
6 Fourth Contingency Increase
-
Loss of Productivity Claim
▪ Settlement and Contingency Increase
– Discussed findings with Walsh and negotiated cost
on May 27, 2022
– Loss of Productivity Settlement - $2.55M
– Contingency Increase by $3.1M
» Loss of Productivity – $2.55M
» Changes to Control Systems $0.56K
– Council date: August 23, 2022
7 Fourth Contingency Increase
-
Loss of Productivity Claim
Recommendation
▪ Approve a $3,107,049 increase to the construction
contingency amount of $67,490,625 for a revised total
contingency amount of $70,597,674, increasing the not-to- exceed amount from $175,415,625 to a total revised
contract amount not-to-exceed $178,522,674 for the 7382 – Digester and Thickener Facilities Upgrade Project
▪ Funding in the Project appropriation in 2021-2022 is
sufficient to increase the contingency.
8