BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Approve a Sole Source Designation for the Shoreblock EPEC SD-900 OCT Product; Adopt Plans and Specifications and Authorize Advertisement for Bids for Construction of the Anderson Dam Seismic Retrofit Project Project No. 91864005, Contract No. C0702 (Morgan Hill, District 1).
End
RECOMMENDATION: Recommendation
A. Find that the following item should be specified by brand name and designated as a sole source product;
i. A necessary item only available from one source. Public Contract Code Section 3400(c)(3): Extreme Performance Erosion Control revetment systems for temporary spillway construction;
B. Adopt the Plans and Specifications and Authorize Advertisement for Bids, exclusively to the list of Santa Clara Valley Water District Pre-Qualified bidders, for construction of the Anderson Dam Seismic Retrofit Project, per the Notice to Bidders; and
C. Authorize the Designated Engineer to issue addenda, as necessary, during bidding process.
Body
SUMMARY:
The Anderson Dam Seismic Retrofit Project (Project or ADSRP) will address dam safety concerns related to the performance of Anderson Dam. Anderson Reservoir has been operated under restriction since December 2008. Upon completion of the ADSRP, Anderson Reservoir will return to its original storage capacity.
Staff recommends the Board adopt the Project Plans and Specifications and authorize staff to advertise for construction bids, per the Notice to Bidders (Attachment 1), exclusively to the list of Santa Clara Valley Water District (Valley Water) Pre-Qualified Bidders. Staff also recommends that the Board find that certain specialized Extreme Performance Erosion Control (EPEC) revetment systems for temporary spillway construction be designated as sole source products.
Project Background
Anderson Reservoir has been operated under restriction and the Anderson Dam Seismic Retrofit Project (ADSRP) was initiated based on preliminary findings from a seismic stability evaluation. Planning for the ADSRP commenced in 2012 and was completed in 2013. On August 27, 2013, the Board approved Agreement No. A3676A with URS Corporation for design services for the ADSRP. The Planning Study Report was provided to the Board in a Non-Agenda Memo dated August 29, 2013.
Numerous factors, primarily driven by new geological discoveries, heightened regulatory standards, and environmental requirements, have resulted in a significant increase in the ADSRP scope since the Planning Study Report was completed in 2013. Initially, ADSRP aimed for seismic stabilization of Anderson Dam by adding materials to the existing dam embankment. However, during the design phase in 2016, additional geotechnical studies and investigations revealed active faulting directly under the dam's foundation. This discovery was significant because it indicated that the existing dam embankment could liquify and potentially fail during a large earthquake. This fundamentally changed staff’s understanding of the dam's stability and led to a complete redesign from simply retrofitting the existing dam to fully removing and replacing it with a new dam.
As modified, the ADSRP will remove and replace most of the existing dam with a well-compacted, zoned embankment dam; construct a new low-level outlet and a new high-level outlet to meet DSOD requirements for emergency drawdown of the reservoir; remove, replace, and extend the existing concrete spillway to safely pass the probable maximum flood; and make other improvements to Anderson Dam. Upon completion of the ADSRP, Anderson Reservoir will return to its original storage capacity.
On February 20, 2020, the Federal Energy Regulatory Commission (FERC) directed Valley Water to: (i) immediately maintain Anderson Reservoir below elevation 565 feet; (ii) begin to further lower Anderson Reservoir to dead pool (elevation 490 feet) no later than October 1, 2020, and maintain Anderson Reservoir at dead pool (elevation 490 feet) thereafter; and (iii) design and construct a new low-level outlet as soon as possible. The Anderson Dam Tunnel Project (ADTP) was initiated in 2020, and design of the ADTP was completed in 2021. Construction for the ADTP is ongoing and currently scheduled to be completed in November 2026.
Contractor Pre-Qualification Process
Because of the size and complexity of the ADSRP, contractors were prequalified in alignment with Valley Water’s procurement authority under California Public Contract Code Section 21163, and the Board’s October 8, 2024 approval of the Best Value Procurement method. Accordingly, the ADSRP construction contractor will be selected on the basis of Best Value. This provision specifically authorizes Valley Water to evaluate construction bids for ADSRP using both price and non-price factors such as contractor qualifications, technical capabilities, and past performance, rather than awarding solely based on the lowest bid.
The Request for Prequalification Application (RFPA) was published on Valley Water’s vendor portal at PlanetBids, and three applications were received on February 19, 2025.
Applications were evaluated through a pass/fail process that considered both financial capacity and three core technical qualifications:
• Dam construction experience on projects exceeding $150 million, with at least one embankment dam over 50 feet (since 2000);
• Tunnel construction experience in weak rock or mixed ground using drill-and-blast methods; and
• Demonstrated management of public infrastructure projects valued at $500 million or more.
The nine-member (internal and external) evaluation committee included scoring members and non-scoring technical experts in engineering, finance, and risk/insurance. Following technical and financial review, reference checks, and internal approvals, Valley Water finalized and published the list of prequalified contractors on May 29, 2025. The applicants meeting the established criteria are the following three firms, which are invited to proceed to the next stage of procurement:
• Barnard Construction Company (Bozeman, MT)
• Flatiron West Inc. - Sukut Construction, LLC Joint Venture (Concord, CA)
• Kiewit Infrastructure West Company (Fairfield, CA)
Best Value Evaluation and Selection Criteria
To support a balanced contractor selection process for ADSRP and comply with statutory requirements, the procurement process implements an evaluation model that integrates both technical and cost considerations. Given the project's complexity and public safety significance, the evaluation criteria are structured to prioritize contractor qualifications, technical approach, and risk management capabilities, while maintaining price competitiveness.
The weight of the bid price in the total evaluation score will be determined with the intention of prioritizing the selection of a highly qualified contractor capable of managing the size and complexity of the ADSRP construction. The Best Value evaluation model for ADSRP uses a 60% weighting for the Technical Submittal and 40% for the Price Submittal.
Technical Submittal Evaluation (60 pts):
• Covers approaches to management, scheduling risk, dam construction, outlet works (tunneling), and spillway construction.
• Management also includes safety, environmental, and quality aspects.
These elements are scored using adjectival ratings (Exceptional to Unsatisfactory), which are then converted to numeric scores that are summed up, ensuring that a perfect score cannot exceed 60 points.
Price Submittal Evaluation (40 pts):
• The lowest price proposal receives the full 40 points.
• Other price proposals receive proportionally reduced scores based on deviation from the lowest bid.
The Contractor receiving the combined highest score will be awarded the project. This weighting aligns with practices used by other major California public agencies for large-scale infrastructure projects.
Construction Contract Retention
In accordance with California Public Contract Code Section 7201, Valley Water’s standard construction contracts include a 5% retention from each payment to the contractor. This amount is withheld until the project is completed and accepted, and it serves as a financial incentive for the contractor to satisfactorily complete all work, including punch list items and closeout documentation.
Section 7201 sets the default retention cap at 5% for public entities but allows for a higher retention amount if the agency makes a finding during a properly noticed public meeting that the project is “substantially complex” and requires additional retention to ensure performance.
Although the ADSRP is a highly complex and large-scale public safety project, staff proposes to maintain the standard 5% retention on all progress payments made to the contractor. This retention approach aligns with industry norms for projects of similar scale and complexity and is considered sufficient to protect Valley Water’s interests while ensuring continued contractor performance through project completion.
Liquidated Damages and Incentive Structure
To promote on-time completion of critical construction milestones and minimize flood risk associated with schedule delays, the contract documents include a structured liquidated damages and incentive framework for ADSRP.
Failure to achieve the two key milestones, Completion of the Upstream Diversion Tunnel and Completion of Stage 1B Interim Dam, will be subject to liquidated damages of $25 million. These milestones are highly schedule-sensitive, and failure to meet the deadline would result in a one-year delay due to seasonal constraints. The $25 million figure reflects anticipated environmental mitigation and monitoring costs incurred during an additional year of dewatering and site impacts.
Staff is also proposing a $25 million incentive for the early completion of the Stage 2B Interim Dam. The purpose of this incentive is to encourage early and timely completion of this critical milestone for public safety and flood risk reduction. The incentive is structured to drive contractor performance and ensure this milestone is prioritized without triggering adversarial claims.
Sole Source Justification
Public Contract Code (PCC) Section 3400 imposes limitations on public entities requiring sole source products for public works projects. Unless Valley Water “makes a finding that is described in the invitation for bids or requests for proposals that a particular material, product, thing, or service is designated by a specific brand or trade name,” then Valley Water is prohibited from letting a contract “(1) in a manner that limits the bidding, directly or indirectly, to any one specific concern, or (2) calling for a designated material, product, thing, or service by specific brand or trade name unless the specification is followed by the words ‘or equal’ so that bidders may furnish any equal material, product, thing, or service.”
For a sole source product to be mandated by a public entity for a construction project, at least one of the four criteria must be met as stated in PCC Section 3400(c). For this Project, PCC Section 3400(c)(3) allows the awarding authority to make a finding that such designations are justified to obtain necessary items that are only available from one source.
To comply with the PCC regarding the use of sole source products for this Project, staff recommends the Board find that the following item is necessary for the Project and only available from one source:
• Shoreblock EPEC SD-900 OCT - Shoreblock EPEC SD-900 OCT is the only known product available that can meet the Project requirements, and the only product that can be used for the temporary spillways, as designed. The Shoreblock EPEC SD-900 OCT has no equivalent alternatives due to the specific design and performance and must be specified in the Project Contract Documents to meet spillway design, constructability, schedule, and regulatory requirements.
Board Adoption of Plans and Specifications and Addenda Authorization
Board adoption of plans and specifications and authorization to advertise is recommended in order to procure a construction contractor for the Project. Authorizing the Designated Engineer to issue addenda during the bidding allows for modifications to the construction contract documents, if necessary, during the bidding period and before the contract is awarded.
The Project Plans, Specifications, and justification for the recommended sole source products were provided by separate communication to Valley Water’s Board of Directors for their review, prior to adopting them for bid advertisement. Addenda will be provided to the Board pursuant to the same communication protocols. The Notice to Bidders informs interested parties they must register as a vendor at the Valley Water Vendor Portal and submit a completed Non-Disclosure Agreement in order to access the Plans, Specifications, and Addenda.
Design of the ADSRP is now at 100 percent completion, except for the intake tower design which is at 90 percent design. The 100 percent design drawings for the intake tower will be released as a planned addendum in fall 2025. The advertisement for bids will include the current Project Plans and Specifications while FERC and DSOD complete their review for final approval. Staff anticipate agencies’ approval of the design documents during the advertisement period, including approval of the intake tower and plan to issue an addendum if any modification is required to address agency comments.
Relevant Prior Board Action(s)
On January 25, 2011, the Board approved a budget adjustment to fund staff labor to begin ADSRP.
On January 24, 2012, the Board approved Agreement No. A3555A with Black & Veatch for project management services.
On August 27, 2013, the Board approved Agreement No. A3676A with URS Corporation for Design Services.
On June 23, 2020, the Board approved the Engineer’s Report for the FOCP and ADSRP and declared an emergency for permitting purposes for the project.
On October 8, 2024, the Board approved the use of the Best Value Selection Method to award the ADSRP construction contract.
On February 11, 2025, the Board adopted a resolution setting the time and date for the Public Hearing on the Final EIR and Engineer’s Report to take place on February 25, 2025, for the Project.
On February 25, 2025, the Board certified the Final Environmental Impact Report and adopted the Mitigation Monitoring and Reporting Program, Findings of Fact and Statement of Overriding Considerations, approved the Engineer’s Report for the ADSRP and approved ADSRP as described in the Final Environmental Impact Report’s Fish and Aquatic Habitat Collaborative Effort-plus modified Alternative as the Project for Implementation.
Public Outreach
Valley Water will utilize a variety of outreach strategies to keep the community informed of the Project's progress and important milestones. During the Project’s design phase, outreach strategies included numerous public meetings and mailed notices to collect input, a Project website (https://www.valleywater.org/project-updates/c1-anderson-dam-seismic-retrofit), Project fact sheets, Nextdoor posts, social media updates, public tours, and media relations. Valley Water coordinated and engaged with numerous agencies and stakeholders as outlined below:
• Technical Working Group (TWG) which includes federal, state, and local agencies
• Board of Consultants (BOC) Meetings, which includes FERC, DSOD, consultants, and subject matter experts
• Meetings with community members
• Meetings with tribal representatives
During construction, outreach will be targeted to the surrounding neighborhoods and include pre-construction and post-construction public meetings. In addition to the outreach tactics used during the design phase, construction phase outreach will include dedicated Valley Water communications staff supporting neighborhood outreach, signage, email, and social media updates.
Outreach to Bidders
Prior to the pre-qualification process, Valley Water did extensive industry outreach through PlanetBids to ensure broad awareness and participation, with the RFPA outreach going out to 2,014 entities, including the following:
• 822 small and disadvantaged businesses
• 271 local and regional firms
• 26 plan rooms and chambers of commerce
The RFPA was also distributed to the Santa Clara and San Benito Counties Building and Construction Trades Council, reaching an additional 500 contractors and 70 union representatives. The Industry Day, a pre-advertisement event hosted by Valley Water for contractors to learn about the project, was published in the American Society of Civil Engineers, the American Water Works Association, and the Beavers - an organization managed by heavy engineering construction companies. Sixty contractors attended the Industry Day on October 18, 2024, and fifty attended the Prequalification Conference on December 18, 2024. By the close of the RFPA period, 91 firms had registered as planholders in PlanetBids.
Rights of Way
Valley Water is still negotiating four property rights on two parcels: two temporary easements, an easement, and a fee acquisition. Rights of Way are not needed until January 2028. The contract may be awarded prior to securing final rights of way.
On August 26, 2025, the Santa Clara County Board of Supervisors approved Valley Water’s fee title acquisition of a small parcel to be used in the development of the Basalt Hill Borrow Area. The County is required to post and publish a Notice of Intent and will hold a Public Hearing on November 4, 2025, before the deed transfer can be finalized, which is anticipated to occur prior to award of the construction contract.
Permits
Valley Water has obtained the following necessary regulatory permits for the construction of ADSRP:
• U.S. Fish and Wildlife Service Final Biological Opinion
• National Marine Fisheries Service Final Biological Opinion
• State Water Resources Control Board 401 Water Quality Certification/Waste Discharge Requirements
• State Water Resources Control Board NPDES General Permit
• California Division of Occupational Safety and Health Underground Classification.
Valley Water is currently in the process of obtaining the remaining regulatory permits, as listed below, prior to the start of ADSRP construction. It is anticipated that these permits will be received in time for construction and should not impact the ADSRP scope. All permits will be acquired prior to awarding the construction contract. Staff will update the Board on these permit approvals during the award of the construction contract.
• U.S. Army Corps of Engineers 404 Permit
• Section 106 National Historic Preservation Act Compliance
• California Department of Fish and Wildlife (CDFW) Lake and Streambed Alteration Agreement (LSAA)
• Valley Habitat Plan Certificate of Compliance
• San Francisco Bay Conservation and Development Commission (BCDC) Consistency Certification
• Bay Area Air Quality Management District (BAAQMD) Asbestos Dust Mitigation Plan (ADMP) Permit
• Encroachment permits from County of Santa Clara Department of Roads and Airport and City of Morgan Hill
Next Steps
If the Board approves the recommendations, staff will proceed to advertise for bids for Project construction. Staff anticipates recommending the Board award the construction contract in June 2026. The Project Delivery Process Chart (Attachment 2) highlights the current Project phase and the staff recommendations before the Board.
ENVIRONMENTAL JUSTICE IMPACT:
The recommended Board actions are not subject to Environmental Justice analysis as adverse impacts are unlikely. However, Valley Water understands and acknowledges that some communities have less access to resources and are more vulnerable to disasters and therefore are likely to face longer recovery time. Flood preparedness information is distributed by mail to those in the Federal Emergency Management Agency flood plain, which is provided in multiple languages. The Valley Water website also offers translation into the top 20 languages spoken in the County.
FINANCIAL IMPACT:
There are no financial impacts associated with the recommendation to Adopt Plans and Specifications and Authorize Advertisement for Bids.
The Anderson Dam Seismic Retrofit Project (Project No. 91864005) is included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2026-30 Five-Year Plan and in the FY 2025-26 (FY 26) Adjusted Budget. The estimated construction cost for this Project is between $1.2 billion and $2.0 billion. Construction contract costs are anticipated to begin in FY 2027 and will be included in the biennial budget process and development of the CIP FY 2027-31 Five-Year Plan.
The Project is forecasted to receive up to $54.1 million from the renewed Safe, Clean Water & Natural Flood Protection Program (Fund 26), with the remainder of the total project cost funded by the Water Utility Enterprise Fund (Fund 61), with 81.7% of the costs allocated to North County Zone W-2, 7.5% to South County Zone W-5 and 10.8% to South County Zone W-7.
The project will be partially financed by the $580 million Water Infrastructure Finance and Innovation Act (WIFIA) Master Agreement, executed on February 14, 2023. Under this agreement, multiple loans may be executed to finance the planning, design, and construction of the project. The ADSRP Plans and Specifications, and RFP have incorporated the federal compliance requirements pursuant to the WIFIA program requirements.
CEQA:
The Board of Directors certified the Final Environmental Impact Report (EIR) for ADSRP on February 25, 2025. The Final EIR can be found on Valley Water’s website at www.valleywater.org <http://www.valleywater.org>.
ATTACHMENTS:
Attachment 1: Notice to Bidders
Attachment 2: Project Delivery Process Chart
Attachment 3: Map
UNCLASSIFIED MANAGER: Manager
Ryan McCarter, 408-630-2983