TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Matt Loesch
SUBJECT: See Below DATE: August 10, 2026
Approved
Date:
COUNCIL DISTRICT: 3
SUBJECT: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
RECOMMENDATION
(a) Report on bids and award of a contract for the construction of 9116 – Convention Center HVAC Control Upgrades Project to the lowest responsive, responsible bidder, Mesa Energy Systems Inc., for the base bid and Bid Alternate No. 1 in the amount of $2,287,010; and
(b) Approve a 15% contingency in the amount of $343,052.
SUMMARY AND OUTCOME
This memorandum summarizes the bids received and requests award of a contract for the construction of the 9116 – Convention Center HVAC Control Upgrades Project (Project). The Project will replace the Convention Center’s aging heating, ventilation, and air conditioning control system with a modern system to improve system reliability, operational efficiency, real-time monitoring, and long-term maintainability.
Award of the contract to Mesa Energy Systems, Inc. will enable the Project to proceed into construction. Approval of a 15% contingency will provide funding for any unanticipated work necessary for the proper completion or construction of the Project.
BACKGROUND
The San José McEnery Convention Center, located at 408 South Almaden Blvd. in San José (Attachment A – Location Map for: 9116 – Convention Center HVAC Control COUNCIL AGENDA: 9/1/26
FILE: 26-892
ITEM: 2.12
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
Upgrades), is a 550,000-square-foot facility that hosts major conventions and high- profile events, including Nvidia GTC. The building management system is the central control system for the Convention Center’s heating, ventilation, and air conditioning (HVAC) equipment and is essential to maintaining occupant comfort, efficient building operations, and reliable service during major events.
The existing building management system has reached the end of its useful life and is no longer supported by the manufacturer. As a result, facility staff continue to experience system reliability issues that affect day-to-day operations and make maintenance increasingly difficult.
The Project will replace the aging system with a modern building management system that provides improved monitoring and control of the facility’s HVAC equipment. The upgrade will improve system reliability, enhance operational efficiency, support ongoing maintenance, and help reduce energy consumption, consistent with the City of San José’s (City) sustainability goals.
Project design was completed in 2020; however, the Project was placed on hold due to the COVID-19 pandemic and related funding constraints. Funding was restored in 2025, allowing the Project to resume and move forward to construction. Due to the extended delay, portions of the project design required revision and coordination to address current code standards, equipment availability, and update project requirements, resulting in a modest increase in project delivery costs.
To provide flexibility within the available budget, the Project includes one bid alternate to replace the remaining pneumatic controls serving several air distribution units with modern electronic controls. These legacy components are no longer consistent with current building control practices, and their replacement will further improve system reliability and maintainability.
Construction is anticipated to begin in November 2026 and be completed by August 2028. The extended construction schedule reflects the need to coordinate work around the Convention Center’s active event calendar and maintain continuous facility operations while minimizing disruptions to scheduled events.
ANALYSIS
Bid Results
A competitive Request for Bids was conducted in accordance with San José Municipal Code Chapter 27.10. Bids were opened on June 4, 2026, with the following results:
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
Contractor Base Bid Variance
Amount
Over/(Under)
Percent
Sunbelt Controls, Inc.
(Pasadena)
(non-responsive)
$1,900,000 ($60,000) (3)
Engineer’s Estimate $1,960,000 -- --
Therma LLC
(San José)
(non-responsive)
$1,985,800 $25,800 1
Mesa Energy Systems, Inc.
(San Leandro) $2,137,395 $177,395 9
Bid Alternates
Contractor Bid Alt. No. 1
Sunbelt Controls, Inc. (Pasadena)
(non-responsive) $140,000
Engineer’s Estimate $140,000
Therma LLC
(San José)
(non-responsive)
$135,400
Mesa Energy Systems, Inc.
(San Leandro) $149,615
Low Bid Determination
In accordance with Section 3-1.01D of the City of San José Special Provisions, the low bid was determined by adding the Base Bid to any Bid Alternates in numerical order until the established ceiling price of $2,500,000 was reached. The low bidder was the one whose total bid offered an equal number of Bid Alternates (1) for the lowest price.
Mesa Energy Systems, Inc. was the only bidder determined to be responsive and, therefore, was identified as the low bidder. The bid submitted by Sunbelt Controls, Inc. was determined to be non-responsive because it did not meet the City's experience requirements and the Proposal form was not properly signed. Additionally, the bid submitted by Therma LLC was determined to be non-responsive for failing to submit the required List of Subcontractors and California Air Resources Board Regulation Compliance forms.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
Protest
On June 8, 2026, the City issued a Notice of Intent to Award informing Sunbelt Controls, Inc. and Therma LLC that their bids were non-responsive and stating the City’s intent to award the contract to the lowest responsive, responsible bidder, Mesa Energy Systems, Inc. On June 11, 2026, Sunbelt Controls, Inc. submitted a timely written protest to the City (Attachment B – Protest Submitted by Sunbelt Controls, Inc.) requesting that the City waive the contractor’s failure to submit proof of experience at the time of bid and award the contract to Sunbelt Controls, Inc. The protest letter did not address the issue of the Proposal form signature.
On June 22, 2026, the Public Works Department responded to Sunbelt Controls, Inc. by declining its request and stating that the department will continue to recommend award to Mesa Energy Systems, Inc. (Attachment C – City’s Response to Sunbelt Controls, Inc.’s Bid Protest).
Bid Price Analysis
The low bid submitted by Mesa Energy Systems, Inc. was 9% above the Engineer’s Estimate for the base bid and Bid Alternate No. 1. The bid is considered acceptable for the work involved.
Contractor Prior Experience
Mesa Energy Systems, Inc. has successfully completed project 10450 – Seven Trees Community Center Chiller Replacement for the City and has completed several projects of similar scope for other municipal agencies. Additionally, Mesa Energy Systems, Inc. is also the contractor on City project 10087 – Center for the Performing Arts Chiller, Cooling Tower, and Boilers Replacement which was awarded in September 2025.
Contingency
San José Municipal Code Section 27.04.050 provides for a standard contingency of 15% on all public works contracts involving the renovation of a building or buildings. The standard 15% 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 June 4, 2026, and again on July 15, 2026. No wage theft issues were identified.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
Project Labor Agreement Applicability
The Citywide Project Labor Agreement between the City of San José and the Santa Clara and San Benito Counties Building and Construction Trades Council is applicable to this contract because the Engineer’s Estimate exceeded $730,000.
Local and Small Business Analysis
Mesa Energy Systems, Inc., is not a Local Business Enterprise or a Small Business Enterprise. No subcontractors were listed for this Project.
EVALUATION AND FOLLOW-UP
No additional follow-up action with the City Council is expected at this time.
FISCAL IMPACTS
This Project supports the Strategic Support City Service Area goal to strategically invest in people, technology, and assets. The upgrade to the Convention Center’s building management system will support and maintain reliable operations at the facility, enhance real-time monitoring and control, and improve energy efficiency in alignment with the City’s sustainability goals. The source of funding for this project is through the Convention Center Facility District Capital Fund under the Convention Center HVAC Upgrades Appropriation. This Project will have no net operation and maintenance costs for the City of San José as the on-site management team, Team San Jose, will be responsible for the costs once construction is complete.
1. TOTAL COST OF PROJECT:
Project Delivery* $1,020,690
Construction 2,287,010
Contingency 343,052
TOTAL PROJECT COSTS $3,650,752
Prior Years’ Expenditures and Encumbrances 587,242
TOTAL REMAINING PROJECT COSTS $3,063,510
*Project delivery includes $502,860 for design services and bidding and $517,830 for construction management and inspection services.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
2. COST ELEMENTS OF CONTRACT AS RECOMMENDED AS PART OF THE MEMORANDUM:
Mobilization and General Requirements $268,700
Building Automation System Equipment, Software, and
Installation 1,174,100
VAV Reheat Valve Controls Upgrade (Bid Alternate #1) 149,600 Electrical and Communications Infrastructure 555,900
Testing and Commissioning 138,710
TOTAL CONTRACT AMOUNT $2,287,010
BUDGET REFERENCE
The table below identifies the fund and appropriation 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
2026-2027
Proposed Mid-
Biennial
Capital Budget
Page*
Last Budget
Action (Date,
Ord. No.)
798 408X CONVENTION
CENTER HVAC
UPGRADES
$2,700,000**
$2,287,010 317 6/16/2026
31336
* The 2026-2027 Proposed Mid-Biennial Capital Budget was approved on June 9, 2026, and adopted on June 16, 2026 by the City Council.
** An additional $365,000 in unspent 2025-2026 appropriations will be proposed for rebudget as part of the Annual Report that will be presented to the City Council in October 2026.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office, City Manager’s Budget Office, and the Planning, Building, and Code Enforcement Department.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 1, 2026 City Council meeting.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Actions Related to the 9116 – Convention Center HVAC Control Upgrades Project
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action.
CEQA
Categorically Exempt, File No. ER20-023, CEQA Guidelines Section 15301 – Existing Facilities.
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 Richard Chiu, Deputy Director, Public Works Department, at [email protected]
ATTACHMENTS:
Attachment A – Location Map for: 9116 - Convention Center HVAC Control Upgrades Attachment B – Protest Submitted by Sunbelt Controls, Inc.
Attachment C – City’s Response to Sunbelt Controls, Inc.’s Bid Protest
Attachment A – Location Map for:
9116 – Convention Center HVAC Control Upgrades
Not to Scale
2026-03-11
To: Director, Department of Public Works City of San José CIP Procurement 200 East Santa Clara Street, 5th Floor San José, CA 95113-1905 RE: FORMAL BID PROTEST Project Name: 9116 - Convention Center HVAC Control Upgrades Bidder/Protestor: Sunbelt Controls, Inc. Intended Action Being Protested: "Determination of Sunbelt Bid as Non-Responsive" Dear Director,
Pursuant to Section 3-1.01C of the Special Provisions for the above-referenced project, Sunbelt Controls, Inc. ("Sunbelt")
hereby
submits
this
formal
bid
protest
regarding
the
City’s
notice
of
intended
determination.
Sunbelt is a licensed Class B and C20 contractor in the State of California (License #800423) and is fully registered with
the
Department
of
Industrial
Relations
(DIR
#1000000551).
Sunbelt
Controls
submitted
a
timely,
competitive
bid
package
on
June
4,
2026,
featuring
a
Base
Bid
of
$1,900,000,
which
sits
safely
below
the
Engineer’s
Estimate
of
$1,960,000.
Further,
Sunbelt
Controls’
bid
is
$237,395
(11%)
lower
than
the
bid
provided
by
Mesa
Energy
Systems,
Inc.
What
is
worth
noting
is
that
Mesa
Energy
Systems,
Inc.’s
bid
is
$177,395
(9%)
higher
than
the
Engineer’s
Estimate;
Sunbelt
Controls
is
the
only
responding
contractor
to
be
within
the
established
Engineer’s
Estimate.
As
a
fully
qualified,
cost-effective
local
business,
Sunbelt
maintains
a
direct
financial
interest
and
a
distinct,
reasonable
possibility
of
being
awarded
this
contract,
thereby
establishing
clear
standing
to
protest
under
Section
3-1.01C(3)(b)
Sunbelt understands the City may consider or has considered our proposal non-responsive due to an assessment of the
"Statement
of
Bidder's
Experience"
form.
Specifically,
while
our
premier
reference
(San
Jose
City
Hall)
vastly
exceeds
the
project
parameters
at
$5,290,000,
the
other
listed
references
appear
to
be
lower
than
the
$1,000,000
threshold. However, the purpose of the reference requirement is to ensure the contractor can handle a project of this scale.
Seeing
that
Sunbelt
Controls’
primary
reference
project
is
more
than
two
times
the
proposed
contract
size
of
the
Convention
Center
HVAC
Control
Upgrades,
it
is
clear
that
Sunbelt
Controls
can
execute
a
project
of
the
size
and
complexity
of
the
Convention
HVAC
Control
Upgrades.
While
two
references
fell
short
of
$1,000,000,
they
were
in
the
city
of
San
Jose
and
demonstrated
identical
technical
complexity
and
significance.
Disqualifying
Sunbelt
Controls,
the
lowest
bidder
on
this
project,
over
this
minor
clerical
nuance
deprives
the
agency
of
significant
cost
savings
without
providing
any
extra
risk
protection.
Sunbelt's bid represents a significant cost savings to the City of San Jose and demonstrates unparalleled institutional expertise
within
municipal
facilities.
We
respectfully
request
that
the
Director
waive
any
minor
technical
informality
regarding
the
listed
experience
values,
find
Sunbelt's
bid
fully
responsive,
and
award
the
contract
to
Sunbelt
Controls,
Inc.
In support of this protest, Sunbelt attaches the revised “Statement of Bidder's Experience” documentation below.
Sincerely, Grant Paedon Project Executive, Sunbelt Controls, Inc. [email protected] (408) 605-7868 5700 Stoneridge Dr #250 • Pleasanton, CA 94588 • 94588 • 1.888.786.2332 • License #800423 • www.SunbeltControls.com
06-11-26
Rev. 03/14/24
STATEMENT OF BIDDER’S EXPERIENCE
The bidder must provide a minimum of two (2) completed projects as references. The completed projects must demonstrate the bidder’s experience and ability to complete the construction work as required under the terms of the Contract by meeting the following requirements:
Requirement No. 1: Each reference project must have involved construction substantially similar to the construction for this Project. “Substantially similar” means the following:
a) The original contract amount was at least $1,000,000; and
b) The projects must have involved the installation or upgrade of a Heating, Ventilation, and Air Conditioning (HVAC) control system.
Requirement No. 2: The substantial completion date for each reference project must have been after January 1st, 2018.
Requirement No. 3: Each reference project must have been performed by the bidder or its predecessor in interest. Reference projects completed by a subcontractor or key personnel will not meet these requirements.
Project
Name/Location
Owner Name and
Contact Information
Installation or
upgrade of a Heating,
Ventilation, and Air
Conditioning (HVAC)
control system.
Y/N?
Initial Contract
Amount
Substantial
Completion Date
Yes
No
San Jose City Hall
City of San Jose
$5,290,000
04/08/2022
Rev. 03/14/24
Yes
No
Yes
No
UCSF Block 34
UCSF
$1,795,690
07/10/2020
Stanford Neukom Hall
Stanford University
$2,002,837
06/22/2024
June 22, 2026
Grant Paedon
Sunbelt Controls, Inc.
5700 Stoneridge Dr #250
Pleasanton, CA 94588
[email protected]
SUBJECT: PROTEST OF INTENT TO AWARD PW 9116 CONVENTION CENTER HVAC
CONTROL UPGRADES
Dear Mr. Paedon,
This letter is to inform you that City staff has evaluated your letter dated June 11, 2026, and entitled “Formal Bid Protest Project Name 9116 Convention Center HVAC Control Upgrades,” and will be making the following recommendation to the City Council. Pursuant to the San Jose Municipal Code, the City Council has the authority to resolve bid protests made during this procurement.
RECOMMENDATION:
City staff will recommend upholding the intent to award the construction contract to Mesa Energy Systems, Inc.
BACKGROUND:
On June 4, 2026, bids were opened for the PW 9116: Convention Center HVAC Control Upgrades Project. Three bids were submitted:
1. Sunbelt Controls, Inc.: $1,900,000 (base bid), $140,000 (bid alts);
2. Therma LLC: $1,985,800 (base bid), $135,400 (bid alts);
3. Mesa Energy Systems, Inc.: $2,137,395 (base bid), $149,615 (bid alts) After reviewing the bids for responsiveness, the City determined that the bid from Sunbelt Controls, Inc. was non-responsive for failing to meet the City’s experience requirements and for failing to properly execute the proposal form. The City also determined that the bid from Therma LLC was non-responsive for failing to submit a Subcontractor Listing form and a California Air Resources Board Regulation Compliance form.
SUBJECT: PW 9116: Convention Center HVAC Control Upgrades
On June 8, 2026, the City issued a Notice of Intent to Award the contract to Mesa Energy Systems, Inc., the bidder who submitted the lowest responsive and responsible bid.
PROTEST:
On Jue 11, 2026, the City received a timely written protest from Sunbelt Controls, Inc. The protest asserted that the City should waive as a minor irregularity Sunbelt Controls, Inc.’s failure to meet the City’s experience requirements and award the contract to Sunbelt Controls, Inc. The protest does not mention the second deficiency in Sunbelt Controls, Inc.’s bid, the improperly executed proposal form.
ANALYSIS: SUNBELT CONTROLS, INC.’s PROTEST IS BASELESS
A. Sunbelt Controls, Inc. was required to submit two reference projects that met the City’s experience requirements and failed to do so
During each public works procurement, bidders are required to complete a Statement of Bidder’s Experience form providing information that demonstrates the bidder’s experience and ability to complete the project in question. The Statement of Bidder’s Experience form provides a list of experience requirements that each bidder must meet. For PW 9116: Convention Center HVAC Control Upgrades, bidders were required to submit two completed projects that met the following requirements:
1. The original contract amount was at least $1,000,000;
2. The projects must have involved the installation or upgrade of a Heating, Ventilation, and Air Conditioning (HVAC) control system; and
3. The substantial completion date for each project must have been after January 1, 2018.
Sunbelt Controls, Inc. provided three potential reference projects for consideration, of which only one met the $1,000,000 contract value threshold. As such, Sunbelt Controls, Inc. provided only one reference project that met the City’s requirements:
1. San Jose City Hall ($5,290,000): This project meets all of the City’s experience requirements.
2. San Jose Tech Interactive ($947,750): This project does not meet the $1,000,000 contract value threshold and cannot be counted as a reference project.
3. San Jose Tech Museum Chiller ($259,879): This project does not meet the $1,000,000 contract value threshold and cannot be counted as a reference project
SUBJECT: PW 9116: Convention Center HVAC Control Upgrades
Their bid is therefore non-responsive, a fact that is not mitigated by Sunbelt Controls, Inc.’s assertion that the first project (San Jose City Hall) “vastly exceeds” the $1,000,000 contract requirement, nor by their assertion that the second two projects (San Jose Tech Interactive and San Jose Tech Museum Chiller) are located in San Jose. If the City had wanted to allow bidders to submit smaller projects, provided that the location of those projects was within city limits, it would have clearly specified that fact on the Statement of Bidder’s Experience so that all bidders were afforded the same opportunity.
In its protest letter, Sunbelt Controls, Inc. provides two substitute projects (UCSF Block 34 ($1,795,690) and Stanford Neukom Hall ($2,002,837)) for the City’s review. However, accepting substitute projects that were not submitted to us at the time of bid would be inconsistent with the City’s practice and contrary to commitment to ensuring a fair, transparent and competitive procurement process.
B. Sunbelt Controls, Inc. was required to properly execute the proposal form and failed to do so
Sunbelt Controls, Inc.’s protest letter does not address the second deficiency in their bid, namely their failure to properly execute the proposal form.
It is critical that bids be properly completed and signed. Bids contain a number of representations that – by signing the proposal form – bidders agree to under penalty of perjury. Such representations include a non-collusion affidavit, anti-discrimination declaration, acknowledgement that addenda were reviewed and included in the pricing, and statement that the signer is a duly authorized representative of the bidder. A signed bid is a legally binding offer.
Without a signature, the bidder is not bound to the proposed terms of the project or required to honor the price and scope if awarded the contract. What is more, the bidder would have an undue advantage over other bidders because – by claiming that the proposal wasn’t signed properly – it could walk away from its bid without forfeiting its bond.
To that end, the procurement documents include clear instruction as to signing the proposal form.
The Submittal Checklist for Bidders states that the proposal form must be signed and dated. The proposal form itself also states that bidders are to “[sign] this proposal on the signature portion thereof.” As is common practice, the City accepts manually drawn signatures or digital signatures that comply with Government Code Section 16.5.
Sunbelt Controls, Inc.’s proposal does not contain a signature. Instead, the name of the company’s project executive, Grant Paedon, is typed using commonly available font, which does not comply with Government Code Section 16.5. This is in contrast to another document within the same bid package, the Bidder’s Bond, which contains the signature of Jose Rivera, Assistant Secretary. Without a signature on the proposal page, Sunbelt Controls, Inc.’s bid is non- responsive.
As stated above, the City Council has the authority to resolve bid protests made during this procurement. Sunbelt Controls, Inc. will be afforded the opportunity to formally present its case SUBJECT: PW 9116: Convention Center HVAC Control Upgrades
to the City Council when this item is agendized for City Council action. Alternatively, Sunbelt Controls, Inc. may withdraw its protest.
Thank you,
Lauren Profeit
Lauren Profeit
CIP Procurement Manager
San José City Hall, 5th Floor
200 E. Santa Clara Street
San José, CA 95112
[email protected]