BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive Report of Bids, Ratify Addenda, Approve the Contingency Fund, and Award the Construction Contract to Hanford Applied Restoration & Conservation, for the Berryessa Creek Flood Protection Project, Calaveras Boulevard to Interstate 680, Upper Berryessa Creek Off-Site Mitigation Project, Project No. 26174041, Contract No. C0717 in the Sum of $5,963,750.00 (Milpitas and San Jose, Districts 3 and 6).
End
RECOMMENDATION: Recommendation
A. Ratify Addenda Nos. 1 and 2 to the Contract Documents for the Berryessa Creek Flood Protection Project, Calaveras Boulevard to Interstate 680, Upper Berryessa Creek Off-Site Mitigation Project;
B. Award the Construction Contract to Hanford Applied Restoration & Conservation, located in Petaluma, CA, in the sum of $5,963,750.00; and
C. Approve a contingency sum of $298,100.00 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
Body
SUMMARY:
The Upper Berryessa Creek Off-Site Mitigation Project (Mitigation Project) will provide mitigation planting enhancement in connection with the Upper Berryessa Creek Flood Risk Management Project (FRMP), a joint project between the U.S. Army Corps of Engineers (USACE) and the Santa Clara Valley Water District (Valley Water). The proposed Mitigation Project includes 15 acres or 15,000 linear feet of mitigation planting containing three types of enhancement areas within the cities of Milpitas and San Jose: (1) native herbaceous seeding sites across approximately 60% of the area (i.e., 9 acres or 9,000 linear feet), (2) native woody planting sites across approximately 27% of the area (i.e., 4 acres or 4,000 linear feet), and (3) road decommissioning sites across approximately 13% of the area (i.e., 2 acres or 2,000 linear feet).
Project Background
The FRMP completed construction in December 2018 and provides flood protection for residents, businesses, and infrastructure along Upper Berryessa Creek. The FRMP was permitted under the Waste Discharge and Water Quality Certification on March 14, 2016, by the California Regional Water Quality Control Board San Francisco Region (Water Board), which facilitated the contracting and construction schedule later in 2016. The Water Board also stated that subsequent to the issuance of this Certification, they would consider the adoption of Waste Discharge Requirements with Valley Water named as permittee for the Project. On April 17, 2017, the Water Board issued a revised Waste Discharge Requirements and Water Quality Certification that rescinded and superseded the March 2016 Certification. The revised Certification included a condition that Valley Water provide compensatory mitigation enhancement for 15 acres or 15,000 linear feet to Waters of the State. To comply with this requirement, Valley Water drafted the Off-Site Mitigation Monitoring Plan for the FRMP-which activities therein necessitated the Mitigation Project.
Addenda Ratification
Two (2) addenda (Attachment 2) were issued during the bid advertisement period to clarify the Mitigation Project Contract Documents and answer bidders’ questions. To formally incorporate the addenda into the Mitigation Project Contract Documents, staff recommend that the Board ratify the addenda.
Contract Award
A report of bids received at the bid opening for the Mitigation Project on July 8, 2026, is summarized in Table 1.
The only responsive bid was submitted by Hanford Applied Restoration & Conservation of Petaluma, California. The bid submitted by Hanford Applied Restoration & Conservation is approximately $2.5 million over the Engineer’s Estimate of $3,397,900. The contractor’s bid items for the planting, maintenance and irrigation were much higher than staff estimated.
The scope of work spans twelve (12) sites to secure enough acreage required for the Mitigation Project. In further review of the Engineer’s Estimate developed by the consultant, the level of effort and costs estimated for planting and maintenance at each location seemed to have been underestimated, in comparison to Valley Water’s own internal O&M efforts.
Additionally, the project has an unusually long duration of eight years. The approximately eight-year performance and payment bond requirement corresponds to the full contract duration, including the plant establishment and maintenance period, to ensure continuous protection of Valley Water and to secure the contractor's performance and payment obligations throughout the entire contract term. It is likely that the length of the bond requirements and uncertainty of inflation over the eight-year project duration contributed to the bid coming in significantly higher than the Engineer’s Estimate.
Given the circumstances, a rebid may not necessarily mean lower bids or more competition. In addition, rebidding will also delay the work beyond the scheduled planting period in the winter rainy season, increasing construction costs and delaying permit timeline requirements.
Therefore, staff recommends the Board award the Construction Contract to Hanford Applied Restoration & Conservation as the responsible bidder submitting the sole responsive bid.
Table 1 - Bid Opening Results
|
Contractor(s) |
Bid Price |
Difference from EE (-) or + % |
Deemed Responsive |
|
Hanford Applied Restoration & Conservation |
$5,963,750.00 |
+ 75.5% |
Yes |
|
Engineer’s Estimate |
$3,397,900 |
|
|
Contingency Funds
The Contract award sum for the Mitigation Project is $5,963,750.00. To allow staff to quickly address unforeseen or changed site conditions and other unanticipated occurrences, without causing unnecessary delays or consequential costs to the Mitigation Project, staff recommends that the Board approve encumbering a contingency amount of $298,188 (5% of the contract amount) for the Mitigation Project.
The above contingency amount was estimated due to known and unknown risks, such as:
1. Unanticipated variances in quantities and cost of various lump sum items estimated in the Bid Proposal;
2. Unforeseen or differing site/field conditions that may be significantly different from the baseline or as-built information used in the preparation of Mitigation Project Contract Documents;
3. Coordination issues and risks associated with weather conditions; and
4. Coordination issues with operations and maintenance activities.
Approval of individual change orders for the Mitigation Project will be subject to approval at the following designated amounts:
Engineering Unit Manager: $100,000
Deputy Operating Officer: $300,000
Chief Operating Officer: $400,000
Assistant CEO: $500,000
Chief Executive Officer: Up to the Total Amount of Contingency
Relevant Previous Board Actions
On February 9, 2016, the Board considered the environmental effects of the FRMP as presented in the Final Environmental Impact Report (EIR), adopted Resolution No. 16-04 certifying the Final EIR, adopted a Mitigation Monitoring and Reporting Program, Findings of Fact, and Statement of Overriding Considerations, and approved the FRMP. Additional information pertaining to the California Environmental Quality Act process is included below in this memorandum.
On May 26, 2026, the Board considered the First Addendum to the Final Environmental Impact Report, approved the Upper Berryessa Creek Off-Site Mitigation Project, adopted the plans and specifications, authorized advertisement for bids for construction of the Upper Berryessa Creek Off-Site Mitigation Project, and authorized the Designated Engineer to issue addenda, as necessary, during the bidding process.
Outreach to Bidders
The Notice to Bidders was sent to the following recipients: 26 plan rooms, 83 minority businesses, 44 Chambers of Commerce, as well as small business groups, certified small business contractors, and local and regional firms that have the appropriate license for this type of work, and the Santa Clara and San Benito Counties Building & Construction Trades Council, which maintains contacts with at least 1048 contractors and 70 union representatives. The total number of entities notified in PlanetBids was 1322.
Contractors were contacted using Valley Water’s PlanetBids Vendor Portal. Broader advertising efforts also included two placements of the Invitation to Bid in the San Jose Post-Record.
Small Business Program
This Mitigation Project was advertised under Valley Water’s Small Business Enterprise (SBE) Outreach Program. The SBE Program Policy requires non-SBE bidders who have not achieved a 30 per cent subcontracting goal and have submitted one of three apparent low bids to demonstrate Good Faith Efforts (GFE) made to solicit SBE participation. The only bidder, Hanford Applied Restoration & Conservation (Hanford), complied with the SBE Outreach Program Policy by submitting the required GFE documentation. Hanford is not an SBE and did not meet the minimum 30 percent SBE subcontracting participation goal. Therefore, Hanford does not qualify for an evaluation preference, but Hanford did provide GFE documentation that satisfied the GFE requirement.
Rights of Way
This Mitigation Project will be constructed within Valley Water’s existing rights-of-way.
Permits
The Mitigation Project is a covered activity under the Santa Clara Valley Habitat Plan. Staff also received a confirmation letter from the California Department of Fish and Wildlife stating that a Lake or Streambed Alteration Agreement is not required for the Mitigation Project.
Public Outreach
Prior to construction, Valley Water will inform the surrounding neighborhood of the Mitigation Project and potential construction impacts. A mailer and social media will be used to reach out to neighbors, and construction site signage will be installed once the contractor has begun the work.
Next Steps
If the Board approves the recommendations, staff will proceed with contract administration managed by Valley Water staff to facilitate the construction of the Mitigation Project, which is anticipated to begin in November 2026 and be completed by March 2034. The Project Delivery Process Chart (Attachment 3) highlights the current Project phase and the staff recommendation before the Board.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with the Mitigation Project. This action is unlikely to or will not result in disproportionate impacts on any specific community(ies) relative to the general population from the implementation of this project.
FINANCIAL IMPACT:
The Berryessa Creek Flood Protection Project, Calaveras Boulevard to Interstate 680 - Upper Berryessa Creek Off-Site Mitigation Project, Project No. 26174041 is included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2027-31 Five-Year Plan and in the FY 2026-27 (FY27) Adopted Budget. The total cost for the recommended construction contract, including contingency sum of $298,188, is $6,261,938. Award of this construction contract would increase the total Project cost reflected in the CIP’s Adopted FY 2027-31 Five-Year Plan by approximately $3,000,000. The increase in the total Project cost will be incorporated into the CIP’s Draft FY 2028-32 Five-Year Plan. The Mitigation Project is funded by the Safe, Clean Water & Natural Flood Protection Program (Safe, Clean Water Program) Fund (Fund 26); however, the funds were allocated under the 2012 Safe, Clean Water Program, which are held in project reserves or encumbrances. Any TPC increase that exceeds the remaining project funds, beyond the amount encumbered under the 2012 Program, will be provided by the Watershed and Stream Stewardship Fund (Fund 12). At this time, it is estimated that Fund 12 will provide approximately $1M in funding.
The Berryessa Creek Flood Protection Project was originally included in the Clean, Safe Creeks and Natural Flood Protection Plan approved by voters in 2000 and was subsequently transitioned into the voter-approved 2012 Safe, Clean Water Program (2012 Program), under which the Berryessa Creek Flood Protection Project was constructed, and the remaining required associated funds were encumbered. However, the Upper Berryessa Creek Flood Protection Project, which includes the Mitigation Project, was not included in the renewed Safe, Clean Water Program, approved by voters in 2020 and is, therefore, not eligible for additional funding from the 2020 Program.
CEQA:
On October 27, 2001, Valley Water issued a Notice of Preparation (NOP) for the FRMP Environmental Impact Report (EIR). The 30-day scoping period for the project occurred between October 27 and November 27, 2001. A public scoping meeting was held on November 7, 2001, at the City of Milpitas Police Department.
Valley Water released the Draft EIR (DEIR) for review and comment by the public for a 49-day period beginning September 25, 2015, and ending November 12, 2015. The DEIR and Notice of Completion (NOC) were transmitted to the State Clearinghouse on September 24, 2015, and notice of the DEIR's availability was sent to interested parties. Valley Water received five comment letters on the Draft EIR during the comment period. All public comments were responded to as part of the Final EIR that was published on January 29, 2016. Valley Water’s Board considered and certified the Final EIR on February 9, 2016, and a Notice of Determination (NOD) was filed on February 16, 2016. The Final EIR can be viewed from here: [<https://fta.valleywater.org/dl/3cVKhhJwVYpG>].
On May 26, 2026, the Board considered the First Addendum to the Final EIR and approved the Upper Berryessa Creek Off-Site Mitigation Project. The addendum demonstrates that the implementation of the Off-Site Mitigation Plan would not result in significant new environmental effects and would not substantially increase the severity of any significant environmental effects identified in the EIR.
ATTACHMENTS:
Attachment 1: Project Map
Attachment 2: Addenda No. 1 and 2
Attachment 3: Project Delivery Process Chart
UNCLASSIFIED MANAGER: Manager
Bhavani Yerrapotu, 408-630-2735