TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Matt Loesch
SUBJECT: See Below DATE: August 4, 2025
Approved
Date:
8/12/25
COUNCIL DISTRICT: 6
SUBJECT: Report on Bids and Award of Contract for the 10294 - Southwest Expressway Sanitary Sewer Improvement Project
RECOMMENDATION
(a) Report on bids and award of contract for the construction of 10294 - Southwest Expressway Sanitary Sewer Improvement Project to the lowest responsive, responsible bidder, Koios Engineering, Inc. in the amount of $4,420,145; and
(b) Approve a 10% contingency in the amount of $442,014.
SUMMARY AND OUTCOME
This memorandum summarizes the bids received and requests the award of a contract for the construction of the 10294 - Southwest Expressway Sanitary Sewer Improvement Project (Project).
Award of the contract to Koios Engineering, Inc. will enable the Project to proceed into construction to provide added capacity to the existing sewer system. Approval of a 10% contingency provides funding for any unanticipated work necessary for the proper completion or construction of the Project.
BACKGROUND
This Project was initially developed by the Public Works Department Master Plan division as part of the Sanitary Sewer Master Plan Phase III report. The Master Plan team evaluated the current capacity of the sanitary sewer system in the project area and compared it with projected future demands based on the City’s Envision San José COUNCIL AGENDA: 8/26/25
FILE: 25-891
ITEM: 2.20
HONORABLE MAYOR AND CITY COUNCIL
August 4, 2025
Subject: Report on Bids and Award of Contract for the 10294 – Southwest Expressway Sanitary Sewer Improvement Project
2040 General Plan. The analysis concluded that capacity upgrades are needed to accommodate anticipated increases in sewer flows.
This Project will upsize approximately 800 linear feet of existing eight-inch sanitary sewer main to a 15-inch main along Fruitdale Avenue, between Southwest Expressway and Meridian Avenue. In addition, approximately 4,200 linear feet of new 10-inch sanitary sewer main will be installed. Also included in the Project is the removal and replacement of six sanitary sewer manholes and the construction of 14 new sanitary sewer manholes. The Project limits are within City Council District 6, as shown in the attached Project Location Map (Attachment A).
Construction is scheduled to begin in January 2026 with substantial completion in September 2026.
ANALYSIS
Bids were opened on May 15, 2025, with the following results:
Contractor
Bid Amount Variance
Amount
Over/(Under)
Percent
Koios Engineering, Inc.
(San Francisco) $4,420,145 ($859,855) (16)
JMB Construction, Inc.
(South San Francisco) $4,565,647 ($714,353) (14)
KJ Woods Construction, Inc.
(South San Francisco)
(Non-Responsive)
$4,638,000 ($642,000) (12)
Cratus, Inc.
(San Francisco) $5,281,920 $1,920 0
Engineer’s Estimate $5,280,000 -- --
Mitchell Engineering
(San Francisco)
(Non-Responsive)
$6,099,336 $819,336 16
Procurement Issues
The bids submitted by KJ Woods Construction, Inc. and Mitchell Engineering were deemed non-responsive for failing to submit California Air Resource Board Certificates of Reported Compliance for their subcontractors’ fleets.
HONORABLE MAYOR AND CITY COUNCIL
August 4, 2025
Subject: Report on Bids and Award of Contract for the 10294 – Southwest Expressway Sanitary Sewer Improvement Project
Bid Price Analysis
The lowest bid, submitted by Koios Engineering, Inc. is 16% below the Engineer’s Estimate. The price for installing pipe, specifically the price related to the jack and bore operation, had the greatest variance from the Engineer’s Estimate. This work, though common practice, is unique to the Project and is not typical of most sanitary sewer improvement projects completed by the City in recent years. Because it falls outside the scope of what is typically delivered, the associated cost estimate was higher. Staff considers the low bid to be acceptable for the work involved.
Contractor Responsibility Analysis
Koios Engineering, Inc. has successfully completed multiple sanitary sewer projects for different municipalities including San José, Berkeley, Mill Valley and the Town of Corte Madera.
Contingency
San José Municipal Code Section 27.04.050 provides for a standard contingency of 10% on all Public Works contracts except those involving the renovation of a building or buildings. The standard 10% contingency is appropriate for this Project.
Wage Theft Prevention Policy Check
The Office of Equality Assurance reviewed bidders for compliance with the City’s Wage Theft Prevention Policy on May 15, 2025 and on July 10, 2025. No wage theft issues were identified.
Project Labor Agreement Applicability
The City’s Project Labor Agreement is applicable to this Project because the Engineer’s Estimate is over $1.2 million.
Local and Small Business Analysis
The recommended contractor is not a local business or a small business enterprise.
Two local business enterprises were listed as subcontractors. McKim Corporation (Gilroy) will be performing asphalt work valued at approximately $221,000 and Bear Electrical Solutions (Alviso) will be installing loop detectors valued at approximately $15,000.
HONORABLE MAYOR AND CITY COUNCIL
August 4, 2025
Subject: Report on Bids and Award of Contract for the 10294 – Southwest Expressway Sanitary Sewer Improvement Project
EVALUATION AND FOLLOW-UP
No additional follow up action with the City Council is expected at this time.
COST SUMMARY/IMPLICATIONS
This Project is consistent with the City Council-approved Budget Strategy Economic Recovery section in that it will spur construction spending in our local economy. The source of funding for this Project is through the 545 Sewer Service and Use Charge Capital Improvement Fund and the 540 Sanitary Sewer Connection Fee Fund. The Project will have no significant adverse impact on the Sewer Service and Use Charge Fund or General Fund operating budgets.
1. TOTAL COST OF PROJECT:
Project Delivery* $ 1,183,820
Construction 4,420,145
Contingency 442,014
TOTAL PROJECT COSTS $ 6,045,979
Prior Years’ Expenditures and Encumbrances 291,269 TOTAL REMAINING PROJECT COSTS $ 5,754,710
*Project Delivery includes $278,422 for design services and $905,398 for construction management, survey, and inspection services.
2. COST ELEMENTS OF CONTRACT AS RECOMMENDED AS PART OF THE MEMORANDUM:
Mobilization $ 200,000
Traffic Control 72,720
Pipe Installation and Diversion 3,692,425
Manhole Installation 405,000
Traffic Stripes and Pavement markings 50,000
TOTAL AGREEMENT/CONTRACT AMOUNT $ 4,420,145
HONORABLE MAYOR AND CITY COUNCIL
August 4, 2025
Subject: Report on Bids and Award of Contract for the 10294 – Southwest Expressway Sanitary Sewer Improvement Project
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.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Amount for
Contract
2025-2027
Proposed
Biennial
Capital
Budget
Page*
Last Budget
Action (Date,
Ord. No.)
545 433A
Southwest
Expressway
Sanitary Sewer
Improvement
$8,150,000 $3,920,145 173 06/17/2025,
31230
540 433A
Southwest
Expressway
Sanitary Sewer
Improvement
$500,000 $500,000 173 06/17/2025,
31230
* The 2025-2027 Adopted Biennial Capital Budget was approved on June 10, 2025 and adopted on June 17, 2025 by the City Council.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office, the City Manager’s Budget Office, and the Planning, Building and Code Enforcement Department.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the August 26, 2025 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
HONORABLE MAYOR AND CITY COUNCIL
August 4, 2025
Subject: Report on Bids and Award of Contract for the 10294 – Southwest Expressway Sanitary Sewer Improvement Project
CEQA
Addendum to the Envision San José 2040 General Plan Final Program Environmental Impact Report (Resolution No. 76041) and Supplemental Environmental Impact Report (Resolution No. 77617), File No. ER22-287. Attachment B.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
MATT LOESCH
Director of Public Works
For questions, please contact Mathew Nguyen, Deputy Director of Public Works, at [email protected] or (408)535-8300.
ATTACHMENTS:
Attachment A – Project Location Map
Attachment B – CEQA Resolution
Sources: Esri, HERE, Garmin, USGS, Intermap, INCREMENT P, NRCan, Esri Japan, METI, Esri China (Hong Kong), Esri Korea, Esri (Thailand), NGCC, (c) OpenStreetMap contributors, and the GIS User Community
Attachment A - 10294 - Southwest Expressway Sanitary Sewer Improvement General Location Map
Not To Scale
- 1 -
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Council Agenda:
Item No.:
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Attachment B
RESOLUTION NO._______
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN
JOSE ADOPTING THE PHASE III SANITARY SEWER
MASTER PLAN ADDENDUM (FILE NO. ER22-287) TO THE
ENVISION SAN JOSE 2040 GENERAL PLAN FINAL
PROGRAM ENVIRONMENTAL IMPACT REPORT AND
SUPPLEMENTAL ENVIRONMENTAL IMPACT REPORT,
ALL IN ACCORDANCE WITH THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT, AS AMENDED
WHEREAS, the City of San José (“City”) acting as lead agency under the California Environmental Quality Act of 1970, together with state and local guidelines implementing said Act, all as amended to date (collectively “CEQA”), prepared the Final Program Environmental I mpact Report for t he Envision San José 2040 General Plan (“2040 General Plan FPEIR”) which analyzed the environmental impacts set forth from the land use and development assumptions of the Envision San José 2040 General Plan; and
WHEREAS, the Planning Commission of the City certified said 2040 General Plan FPEIR on November 1, 2011, which certification was not appealed; and
WHEREAS, in connection with the adoption of a resolution approving said Envision San José 2040 General Plan (Planning File No. PP09- 011), the City Council adopted Resolution No. 76041 on November 1, 2011, setting forth certain findings pertaining to the 2040 General Plan FPEIR and adopting a mitigation monitoring and reporting program, all pursuant to the provisions of CEQA; and
WHEREAS, subsequent to said actions on the 2040 General Plan FPEIR, the City prepared, completed, and adopted in accordance with CEQA the Supplemental Environmental Impact Report (“SEIR”) for the Envision San José 2040 General Plan, Greenhouse Gas Reduction Strategy (Planning File No. PP15-060); and
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Item No.:
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
WHEREAS, the Planning Commission of the City certified said S EIR on December 2, 2015 which certification was not appealed; and
WHEREAS, the City Council adopted Resolution No. 77617 on December 15, 2015, setting forth certain findings pertaining to the S EIR, all pursuant to the provisions of CEQA; and
WHEREAS, prior to the adoption of this Resolution, the Planning Director of the City of San José prepared an Addendum to the 2040 General Plan FPEIR and SEIR for the Phase III Sanitary Sewer Master Plan Project under Planning File No. ER22- 287 (the “Addendum”), all in accordance with CEQA; and
WHEREAS, the Phase III Sanitary Sewer Master Plan Project (the “Project”) analyzed under the Addendum consists of identification of 76 individual capital improvement projects, and four alternative projects, to address existing sewer system capacity improvement needs per the San José City Council Sewer Level of Service Policy 8-7, and to provide for planned future growth as outlined in the adopted Envision San José 2040 General Plan, in San José, California; and
WHEREAS, as further described in the Addendum, the implementation of the Project would not result in new significant effects on the environment beyond those already identified in the previously approved 2040 General Plan FPEIR, and SEIR, nor will the Project result in an increase in the severity of significant effects identified in the 2040 General Plan FPEIR, and SEIR; and
WHEREAS, the City of San José is the lead agency on the Project, and the City Council is the decision-making body for the proposed approval to undertake the Project; and
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Item No.:
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
WHEREAS, the City Council has reviewed and considered the 2040 General Plan FPEIR, SEIR and the Addendum, and intends to take actions on the Project in compliance with CEQA and state and local guidelines implementing CEQA; and
WHEREAS, the 2040 General Plan FPEIR, SEIR and the Addendum thereto are on file in the Office of the Director of Planning, Building and Code Enforcement , located at 200 East Santa Clara Street, 3
rd Floor Tower, San José California, 95113, are available for inspection by any interested person at that location and on the Department of Planning, Building and Code Enforcement website, and are, by this reference, incorporated into this Resolution as if fully set forth herein;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN JOSE:
THAT THE CITY COUNCIL incorporates the foregoing recitals into this Resolution.
THAT THE CITY COUNCIL does hereby make the following findings: (1) it has independently reviewed and analyzed the 2040 General Plan FPEIR, and SEIR, as all modified by the Addendum, as well as other information in the record and has considered the information contained therei n, prior to acting upon or approving the Project, (2) the Addendum modifying the 2040 General Plan FPEIR, and SEIR prepared for the Project has been completed in compliance with CEQA and is consistent with state and local guidelines implementing CEQA, and (3) the Addendum modifying the 2040 General Plan FPEIR, and SEIR represents the independent judgment and analysis of the City of San José, as lead agency for the Project. The City Council designates the Director of Planning, Building and Code Enforcement at the Director’s Office at 200 East Santa Clara Street, 3
rd Floor Tower, San José, California, 95113, as the custodian of documents and records of proceedings on which this decision is based.
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Council Agenda:
Item No.:
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
THAT THE CITY COUNCIL does hereby find that based upon the entire record of proceedings before it and all information received that there is no substantial evidence that the Project will have a significant effect on the environment and does hereby adopt the Addendum prepared for the Project (Planning File No. ER22-287). The 2040 General Plan FPEIR, SEIR and the Addendum are: (1) on file in the Office of the Director of Planning, Building and Code Enforcement , located at 200 East Santa Clara Street, 3 rd
Floor Tower, San José, California, 95113, and on the Department of Planning, Building and Code Enforcement website, and (2) available for inspection by any interested person.
ADOPTED this ______day of ___________, 2025, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
MATT MAHAN
Mayor
ATTEST:
TONI J. TABER, MMC
City Clerk