TO: HONORABLE MAYOR FROM: Matt Cano AND CITY COUNCIL John Aitken
SUBJECT: SEE BELOW DATE: October 3, 2022
Approved Date
10/13/22
SUBJECT: AWARD OF CONTRACT FOR THE 10038 - NORMAN Y. MINETA SAN JOSE INTERNATIONAL AIRPORT NEW TAXIWAY VICTOR, PHASE 1
PROJECT
RECOMMENDATION
(a) Report on bids and award of contract for the 10038 – Norman Y. Mineta San José International Airport – New Taxiway Victor Phase 1 Project to the lowest responsive bidder, Granite Construction Company, for the base bid in an amount of $9,851,018.60. (b) Approve a 10% contingency in the amount of $985,101.86.
OUTCOME
Award of the construction contract to Granite Construction Company will enable the Norman Y.
Mineta San José International Airport’s (Airport) New Taxiway Victor Phase 1 Project to proceed. Approval of a 10 percent contingency will provide funding for any unanticipated work necessary for the proper completion and construction of the project.
BACKGROUND
Airport staff periodically assembles a priority list of capital improvement projects that meet eligibility requirements for the Federal Aviation Administration’s (FAA) Airport Improvement Program (AIP) grant funding. This priority list is submitted to the FAA for review and prioritization based on 16 general requirements for project funding, as outlined in FAA’s AIP Handbook. To be justified as eligible for funding, proposed projects must pass three basic criteria:
1. Demonstrate the advancement of one of the following AIP policies: airport safety, airport security, airport capacity, meeting an FAA standard, preserving airport infrastructure through reconstruction or rehabilitation, protecting, and enhancing the environment, minimizing aircraft noise impacts, and airport planning.
COUNCIL AGENDA: 10/25/22
FILE: 22-1565
ITEM: 3.3
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
2. Be an actual need based off the criteria outlined above; and
3. Have appropriate scope that aligns with the AIP policies listed above.
This project fits the criteria for FAA AIP grant funding outlined above as it will enhance the safety of the existing runways by preserving airport infrastructure through reconstruction or rehabilitation. The new Taxiway Victor will implement airfield safety recommendations from the Runway Incursion Mitigation study by allowing unrestricted Aircraft Design Group III / Taxiway Design Group III aircraft operations on the west side of the airfield. This will also further address a previous Modification of Standards issued for the west side of the airfield related to an insufficient Taxiway Object Free Area. Additionally, the program will eliminate the Airport’s two published hotspots for runway incursions associated with the permanently closed Runway 11/29 and address airfield geometry concerns on the west side associated with direct aircraft access from the apron to runway.
The project is part of a multi-year Taxiway Victor program that replaces former Runway 11/29, which was determined to officially close as part of the recommendations from the Airport’s Runway Incursion Mitigation study completed in 2021. The program will be a full-length parallel Aircraft Design Group III / Taxiway Design Group III taxiway, constructed parallel to the existing Taxiway W. The program will have six taxiway connectors V1-V6, connecting to a future apron-edge taxiway lane and expanded apron.
The project includes a base bid and two bid alternates. The base bid includes the construction of approximately 1,100 linear feet of new portland cement concrete taxiway pavement, as well as one concrete pavement taxiway connector, installation of drainage improvements, grading improvements, and new airfield lighting and signage. The base bid will also include coordination for the protection of existing FAA navigational aids, Instrument Landing System, and the existing compass calibration pad.
The two bid alternates were identified and designed to facilitate the potential for grant award should the FAA have sufficient funds to award the full scope of the project. The scopes for each are as follows:
Bid alternate no. 1 includes the construction of approximately 835 linear feet of new concrete taxiway pavement, approximately 250 linear feet of new taxiway V5 concrete connector pavement, demolition of existing pavement, drainage improvements, and associated signage and lighting.
Bid alternate no. 2 includes the construction of approximately 805 linear feet of new concrete taxiway pavement, demolition of existing pavement, drainage improvements, and associated signage and lighting.
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
On August 31, 2022, FAA approved the grant for the base bid portion of the project only, therefore staff is recommending proceeding with just the base bid award at this time. The bid alternates will be bid out, likely next year when additional FAA AIP grant funds are available.
The project is anticipated to begin construction in January 2023 with projected completion by February 2024.
ANALYSIS
Bids were opened on March 3, 2022. Five bids were submitted with the following results:
Contractor Base Bid
Bid Alt
Total Total Bid
Variance
Amount
Over/
(Under)
Percent
Granite Construction
Company
(Santa Clara, CA)
$9,851,018.60 $11,751, 823.70 $21,602,842.30 ($697,157.70) -3% Granite Rock Company
(San José, CA) 9,329,526.40 12,634,757.90 21,964,284.30 (335,715.70) -2% DeSilva Gates
Construction,
(Dublin, CA)
10,016,539.00 12,082,648.00 22,099,187.00 (200,813.00) -1% Engineer's Estimate 9,800,000 12,500,000 22,300,000 --- --- OC Jones & Sons, Inc.
(Berkeley, CA) 10,337,275.10 13,721,883.80 24,059,158.90 1,759,158.90 8% A. Teichert & Son, Inc.
dba Teichert
Construction,
(Pleasanton, CA)
12,079,928.00 12,735,960.00 24,815,888.00 2,515,888.00 11%
Contractor Bid Alternate No. 1 Bid Alternate No. 2
Granite Construction Company $7,238,596.00 $4,513,227.70 DeSilva Gates Construction $7,453,820.50 $4,628,827.50
Engineer's Estimate $7,600,000.00 $4,900,000.00
Granite Rock Company $7,796,867.40 $4,837,890.50
A. Teichert & Son, Inc. dba Teichert
$7,910,968.00 $4,824,992.00
OC Jones & Sons, Inc. $8,560,591.10 $5,161,292.70
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
Section 3-1.01D of the City of San José Special Provisions specifies how the City will determine the low bid when bid alternates are included. The section requires the City to determine the low bid by adding the base bid to any bid alternates until a ceiling price is reached. If, for all the bidders, the addition of the base bid to the bid alternate results in a figure greater than the ceiling, the low bid is determined by the base bid alone. In this instance, the ceiling price was set at $22,000,000, and the low bid was therefore determined by adding the base bid to both bid alternates. Two bidders did not exceed the ceiling threshold, therefore based on the criteria specified in Section 3-1.01D of the Special Provisions, staff determined Granite Construction Company to be the low bidder for the project. The low bid, as determined by Section 3-1.01D of the City of San José Special Provisions, submitted by Granite Construction Company is three percent below the Engineer’s Estimate.
Section 3-1.01D of the City of San José Special Provisions further specifies that once the low bidder has been identified based on the preceding paragraph, the City may elect to award the base bid item alone or any or all bid alternate items in any sequence to that low bidder, even if the resulting contract amount no longer represents the lowest total price for the particular items chosen. In this instance, the City has chosen to award the base bid item alone to the low bidder, Granite Construction Company.
The base bid submitted by Granite Construction Company is 0.5 percent over the Engineer’s Estimate for the base bid. Staff considers this reasonable and acceptable for the work involved in the project.
The project was bid in accordance with the FAA’s AIP program requirements, and the City required all bids to be valid for a minimum of 180 days to accommodate federal grant funding award timelines. The current bids have been extended, with concurrence from the low bidder, Granite Construction Company, until October 31, 2022.
Granite Construction Company successfully completed projects substantially similar to the construction for this project involving airfield aprons, taxiway, and runway pavement, which include airfield pavement projects, for the San Diego County Airport and Los Angeles World Airports.
Bid alternates 1 and 2 are not recommended for award at this time due to the FAA AIP grant being awarded for the base bid only.
The minimum FAA AIP grant application total project cost is $13,277,593, excluding project contingency. This amount has been established based on available funds and on FAA’s grant limitations placed on reimbursement for project expenditures. The FAA AIP grant split is typically 80.59 percent federal share and 19.41 percent grantee share.
The FAA AIP grant application is summarized below:
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
AIP Grant Application
Description Amount
Federal Share $10,700,412
Grantee Share $2,577,181
Total Project Costs $13,277,593
As the AIP grant will only be applied to the base bid, the contract award and contingency amounts between the Federal share and the Grantee share are shown below.
AIP Grant Construction Award and Contingency
Description Amount
Base Bid - Federal Share $7,938,935.89
Base Bid - Grantee Share $1,912,082.71
10% Contingency - Grantee $985,101.86
Total Contract and Contingency Costs $10,836,120.46
San José Municipal Code Section 27.04.050 provides that the contingency for all public works contracts (except those involving the renovation of a building or buildings) cannot exceed 10 percent of the total contract amount. Staff recommends a 10 percent contingency, which is appropriate for this project and should be sufficient for unforeseen conditions that might arise in the construction.
Project Labor Agreement Applicability
At the time of bid, the threshold for applying the project labor agreement to Capital Improvement Projects was $3,000,000. A project labor agreement is applicable to this project as the total construction cost is over $3,000,000.
Local and Small Business Outreach
Procurement staff used Biddingo to outreach to local and small business enterprises. Chapter
4.12 of the San José Municipal Code defines a “local business enterprise” as one with a legitimate business presence in Santa Clara County and “small business enterprise” as a local business enterprise with 35 or fewer employees. Procurement staff sent bid invitations to 14,030 vendors, and documents were downloaded by 37 vendors, approximately 10 of which were located within Santa Clara County and therefore local. The recommended contractor is a local but not a small business enterprise. None of the listed subcontractors are local or small business enterprises.
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
CONCLUSION
Based on staff’s evaluation of the bids, staff recommends award of the construction contract for the base bid of the project to Granite Construction Company. The proposal from Granite Construction Company is responsive and responsible for the work specified.
EVALUATION AND FOLLOW-UP
No additional follow up action with the City Council is expected at this time.
CLIMATE SMART SAN JOSE
The recommendation in this memorandum has no effect on Climate Smart San José energy, water, or mobility goals.
PUBLIC OUTREACH
This memorandum will be posted on the City’s website for the October 25, 2022 City Council meeting.
Since the project is funded in part with a United States Department of Transportation/FAA AIP grant, the federal Disadvantaged Business Enterprise (DBE) Program regulations found in 49 CFR Part 26 will apply. The City’s current DBE participation goal for AIP grant funded Airport capital projects in federal fiscal years 2020-2022 is 4.1 percent annually. The City’s DBE Program for AIP grant funded Airport capital projects is a race neutral program that does not include project specific DBE participation goals.
Staff performed extensive outreach to encourage DBE participation. Outreach efforts included:
• Identification of potential/ possible subcontracting opportunities – one work area identified.
• Identification of 389 certified DBEs in that one subcontracting work area. • Emails sent to the 389 certified DBEs.
• Emails sent to ethnic chambers, San José Chamber, and other interested organizations including Minority Business Consortium - providing project information, subcontracting opportunities (North American Industry Classification System Codes and Caltrans Work Codes), bid date and time, and DBE certification requirements. • Posting of contracting opportunity on: Biddingo, FAA Opportunities, Airport Minority Advisory Council, National Air Transportation Association, Airports Council International – North America, and the Minority Business Development Agency.
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
• Sharing of contract opportunity on Airport’s Requests for Information/ Proposal/ Qualification and Bid Notices.
Granite Construction Company has listed the following DBE subcontractors in its bid, which contributes to 2.41 percent of the overall contract:
Contractor Description of Work to be
performed
Cost of Work % Of overall
contract
Austin Enterprises Joint Sealing & Saw Cutting $414,601.00 1.92 Super Seal and Strip Striping $105,338.00 0.49
COORDINATION
The project and memorandum have been coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
COMMISSION RECOMMENDATION/INPUT
No commission recommendation or input is associated with this action.
FISCAL/POLICY ALIGNMENT
The San José Municipal Code requires that capital projects at the Airport be consistent with the adopted Airport Master Plan. Per San José Municipal Code Section 25.04.210(B)(1), this project is consistent with the Airport Master Plan, expressly identified as projects A-26 and A-38.
COST SUMMARY/IMPLICATIONS
1. AMOUNT OF RECOMMENDATION/COST OF PROJECT:
Project Delivery* $ 3,426,574.05
Construction $ 9,851,018.60
Contingency $ 985,101.86
TOTAL PROJECT COSTS $ 14,262,694.51
*Project delivery includes $2,460,242.25 for Design Services and $966,331.80 for Construction Management and Inspection Services.
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
2. COST ELEMENTS OF AGREEMENT/CONTRACT:
Mobilization $ 980,000.60
Safety and Security $ 400,000.00
Demolition and Removal $ 2,955,485.00
Excavation $ 128,340.00
Lime Treatment $ 296,286.00
Subgrade and Base Course $ 374,680.00
Concrete $ 1,759,560.00
Bituminous Coating $ 859,988.00
Pavement Marking $ 46,009.00
Electrical $ 911,608.00
Drainage Facilities $ 645,220.00
Other $ 493,842.00
TOTAL AGREEMENT/CONTRACT AMOUNT $ 9,851,018.60
3. SOURCE OF FUNDING:
• Airport Capital Improvement Fund (520): $7.9 million for the Federal grant- funded portion of the capital project
• Airport Renewal and Replacement Fund (527): $6.4 million for the Grantee share of the capital project, including project delivery and contingency.
4. FISCAL IMPACT: This project has been reviewed and was determined that it will have no significant impact on the Airport operating budget.
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the contract recommended as part of this memorandum and remaining project costs, including project delivery, construction, and contingency costs. The FAA AIP grant funding was assumed in the 2022-2023 Adopted Capital Budget, and no further budget action is required to recognize the grant revenue.
Fund
#
Appn
# Appn Name Total
Appn Amt. for Contract
2022-2023
Proposed
Capital
Budget
Page*
Last
Budget
Action
(Date, Ord.
No.)
520 401F Airfield Configuration
Updates
$21,220,000 $7,938,936 618 6/21/2022,
Ord. No.
30790
HONORABLE MAYOR AND CITY COUNCIL
October 3, 2022
Subject: 10038 – Mineta San José International Airport – New Taxiway Victor Phase 1
527 401F Airfield Configuration
Updates
$5,374,000 $1,912,083 618 6/21/2022,
Ord. No.
30790
Total Current Funding Available $26,594,000 $9,851,019
*The 2022-2023 Proposed Capital Budget was approved by the City Council on June 14, 2022 and adopted on June 21, 2022.
CEQA
Determination of Consistency with the Norman Y. Mineta San José International Airport Master Plan Amendment Environmental Impact Report, File No. ER22 021, New Taxiway Victor Project at the Norman Y. Mineta San José International Airport.
/s/ /s/
MATT CANO JOHN AITKEN, A.A.E.
Director of Public Works Director of Aviation
For questions, please contact Katherine Brown, Deputy Director, Public Works Department, at (408) 795-1679.