TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Matt Loesch
Mukesh (Mookie) Patel
SUBJECT: See Below DATE: September 8, 2026
Approved Date:
9/15/26
CO
UNCIL DISTRICT: Citywide
SUBJ
ECT: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
RECO
MMENDATION
A
dopt a resolution authorizing the Director of Public Works or his designee to:
(
a) Award and execute a contract for the construction of the 10693 – SJC Terminal Elevator Replacement Project to the lowest responsive, responsible bidder, in an amount not to exceed $9,415,000;
(
b) Decide any timely bid protest(s) and make the City’s final determination as to the lowest responsive bidder that is responsible as needed to award the contract; and
(
c) Approve a 15% contingency amount of the contract for the construction of the project.
SUM
MARY AND OUTCOME
The 10693 – S
JC Terminal Elevator Replacement Project (Project) is one of the several projects that the San José Mineta International Airport (Airport) staff submitted to the Federal Aviation Administration (FAA) for potential award of an Infrastructure Investment and Jobs Act Airport Terminals Program (ATP) grant. The FAA conditionally approved $3,000,000 in ATP funds for the Project. The FAA will review the City’s application for the remaining Project funds once bids are in hand. Appropriation of the award will come as part of a future budgetary action, and the project award is contingent upon the execution of the FAA grant.
COUNCIL AGENDA: 9/29/26
FILE: 26-1003
ITEM: 5.1
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
Delegating authority to the Director of Public Works to award the contract provides the most efficient means of awarding and executing a contract for the Project and will provide the City with the best opportunity to take advantage of potential FAA grant funds that have tight time constraints for grant acceptance. Approval of a 15% contingency will provide funding for any unanticipated work necessary for the proper completion or construction of the Project.
BACKGROUND
The Airport relies on a network of elevators to support passenger circulation, Airport operations, and freight and service functions within the terminal and support facilities (Attachment – Site Location Map -SJC Terminal Elevator Replacement). These elevators serve both public and non-public areas of the Airport and are essential to maintaining safe, accessible, and efficient operations in a high-use, continuously active environment.
The Project will improve system reliability and code compliance while supporting the Airport's operational and long-term maintenance needs. In May 2026, the City conducted a comprehensive field survey and condition assessment of all six elevators.
Findings indicate that most of the existing elevator equipment has reached or exceeded its useful service life of approximately 25 to 30 years. As part of an ongoing effort to enhance asset reliability, operational efficiency, and long-term infrastructure performance, select elevator systems are in need of comprehensive modernization.
The Project includes a base bid and two bid alternates. The base bid includes the replacement and upgrade of one freight elevator in Terminal A, two passenger elevators in Terminal A Garage, and one passenger elevator in the Terminal Federal Inspection Services area.
Bid alternate No. 1 consists of the replacement and upgrade of one passenger elevator in Terminal B.
Bid alternate No. 2 consists of the replacement and upgrade of one freight elevator in Terminal B.
Pending the award of the FAA Grant, the Public Works Department anticipates awarding the contract in February 2027. The decision to award the base bid alone or any or all bid alternates will depend on the bid pricing and available funding.
Construction is estimated to begin in April 2027 with projected completion by early October 2028.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
ANALYSIS
The Project is currently in design. A competitive Request for Bids will be conducted in accordance with San José Municipal Code Chapter 27.10 and federal procurement regulations, with advertisement expected on October 7, 2026, and bid opening on November 19, 2026. As required for all federally funded procurements, federal solicitation provisions will be included in the Request for Bids.
Authorizing the Director of Public Works to award and execute the contract will put the City in the best position possible to utilize FAA grant funds, reduce the overall project schedule by approximately six to eight weeks, and facilitate an earlier and timely start of construction. This delegation will also include the authority for the Director of Public Works to hear and decide any bid protests and determine the lowest responsive, responsible bidder.
Shortly after bids are received and a low bid is determined, the Airport will submit the final grant application documentation. Staff anticipate receiving notification of the FAA ATP grant by February 2027. If the City receives sufficient funding from the FAA, a budget adjustment will be submitted to align the project budget with the total anticipated costs, and the Director of Public Works will award the contract shortly thereafter.
If the City is not awarded the FAA grant funding to support the Project, the Director of Public Works will reject all bids in accordance with Section 27.10.530 of the San José Municipal Code and re-advertise the Project without federal solicitation provisions. A budget adjustment will still need to be made to ensure sufficient funds will be available to proceed with the Project.
Contingency
San Jos
é Municipal Code Section 27.04.050 provides for a standard contingency of 15% on all public works contracts involving the renovation of building or buildings. The standard 15% contingency is appropriate for this Project.
Wage Theft Prevention Policy Check
The Office of Equality Assurance will review bidders for compliance with the City’s Wage Theft Prevention Policy.
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.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
Issues related to Federal Funding
Certain conditions in the FAA grant relating to cooperation with immigration enforcement, and not promoting diversity, equity, and inclusion, gender ideology, or abortion, have been challenged in several lawsuits and are enjoined while preliminary injunctions are in effect. The FAA has accepted deletions of the grant conditions pursuant to the various preliminary injunctions. If the conditions are no longer restrained, the FAA will require the City to comply with these conditions to continue to receive funding. To address this potential loss of federal funding, staff have identified strategies to potentially utilize other funding sources for the completion of this Project, including using Airport cash on hand, commercial paper, or other available funding sources. The Project team will continue coordinating with the City Attorney’s Office regarding the likelihood and timing of the conditions no longer being restrained.
EVALUATION AND FOLLOW-UP
No additional follow-up action with the City Council is expected at this time.
FISCAL IMPACTS
A total of $5.7 million for the Terminal Elevator Replacements Project is included in the Adopted Mid-Biennial Capital Budget Update for 2026-2027. Contingent upon receiving the FAA ATP grant, the Project will be funded through the Airport Capital Improvement Fund (Fund 520) and the Airport Renewal and Replacement Fund (Fund 527).
Although the Project is not yet fully funded in the budget, the Airport has initiated efforts to secure an FAA ATP grant and plans to identify the remaining funds needed for the Project. Budget actions to fully fund the Project and potentially recognize the FAA ATP grant will be included in the development of a future budget process. The grant, if awarded to the Airport, will cover $3,000,000 of the Project cost, and the remaining amount necessary will be funded through an adjustment to the Airport Renewal and Replacement Fund (Fund 527). If the Project does not receive the FAA ATP funding, the full cost of the Project will be funded by the Airport Renewal and Replacement Fund (Fund 527) to ensure full Project funding and avoid any delay in Project completion.
This Project has been reviewed, and it was determined that the ongoing maintenance and operating costs are minimal and will have no significant adverse impact on the Airport's operating budget.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
1. TOTAL COST OF PROJECT:
Project Delivery* $ 4,935,707
Construction 9,415,000
Contingency (15%) 1,412,250
TOTAL PROJECT COSTS $ 15,762,957
Prior Years’ Expenditures/Encumbrances $ 889,717
TOTAL REMAINING PROJECT COSTS $ 14,873,240
*Project delivery includes $1,145,572 for design and bidding and $3,790,135 for construction management and inspection services.
2. CO
ST ELEMENTS OF CONTRACT AS RECOMMENDED AS PART OF THE
MEMORANDUM:
Mobilization $1,015,000
Project Site and Demolition 430,000
Electrical, Metal Work, and HVAC 920,000
Elevator Finishes and Elements 6,940,000
Drainage and Water Systems 110,000
TOTAL CONTRACT AMOUNT $9,415,000
The S
an José Municipal Code requires that capital projects at the Airport be consistent with the adopted Airport Master Plan. The proposed project would be a minor alteration of existing Airport facilities and is therefore consistent with the adopted Airport Master Plan pursuant to San José Municipal Code Section 25.04.210(B)(4).
BUDG
ET REFERENCE
The t
able below identifies the funds and appropriations to partly fund the actions recommended in this memorandum.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Amount
For
Contract
2026-2027
Proposed Mid-
Biennial
Capital Budget
Page*
Last Budget
Action (Date,
Ord. No.)
527 442R Terminal Elevator
Replacements $1,284,000 $9,415,000 265 06/16/2026,
31336
*The 2026-2027 Proposed Mid-Biennial Capital Budget was approved on June 9, 2026, and adopted on J
une 16, 2026, by the City Council.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 29, 2026 City Council meeting.
Since the Project is funded in part by the FAA under the ATP program, which follows the ATP criteria, federal Disadvantaged Business Enterprise (DBE) Program regulations found in 49 Code of Federal Regulations Part 26 apply. The City currently does not have a DBE participation goal for its ATP grant funded Airport capital projects, as the recertification process is still ongoing. The Airport’s DBE Program for ATP grant funded Airport capital projects is a race-neutral program that does not include project-specific DBE participation goals.
Airport staff performed extensive outreach to encourage DBE participation. Outreach efforts included:
• I
dentification of potential/possible subcontracting opportunities; • Email blast to ethnic chambers, San José Chamber, and other interested organizations, including Minority Business Consortium, identifying Project information, subcontracting opportunities;
• Posted contracting opportunity on FAA Opportunities, Airport Minority Advisory Council, National Air Transportation Association, Airports Council International – North America, Minority Business Development Agency; and • Shared contact opportunity on Airport’s requests for information/ proposal/qualification and bid notices web page.
C
OMMISSION RECOMMENDATION AND INPUT
N
o commission recommendation or input is associated with this action.
CEQ
A
D
etermination of Consistency with the Norman Y. Mineta San José International Airport Master Plan Amendment Environmental Impact Report, File No. ER22-279.
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: Actions Related to the 10693-SJC Terminal Elevator Replacement Project
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/ /s/
MATT LOESCH MUKESH (MOOKIE) PATEL Director of Public Works Director of Aviation
For questions, please contact Richard Chiu, Deputy Director, Public Works Department, at [email protected].
ATTACHMENT:
Site Location Map – 10693 – SJC Terminal Elevator Replacement Project
SITE L
OCATION MAP
San José Mineta International Airport
10693-SJC Terminal Elevator Replacement
Attachment