COMMITTEE AGENDA MEMORANDUM
Capital Improvement Program Committee
Government Code § 84308 Applies: Yes ☒ No ☐
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: title
Receive Information on Change Orders to Anderson Dam Tunnel Project Construction Contract.
End
RECOMMENDATION: Recommendation
Receive information on change orders to Anderson Dam Tunnel Project Construction Contract.
Body
SUMMARY:
During the May 17, 2021, Capital Improvement Program (CIP) Committee meeting, staff provided an update on the Anderson Dam Tunnel Project (ADTP) No. 91864006. The Committee requested staff provide monthly change order status updates after construction of the ADTP commences on July 7, 2021.
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Anderson Dam Federal Energy Regulatory Commission Order Compliance Project (FOCP) as a result of the February 20, 2020, directive from the Federal Energy Regulatory Commission (FERC) to implement interim risk reduction measures at Anderson Dam. One of those measures is the ADTP.
On April 27, 2021, Valley Water’s Board of Directors awarded the construction contract for the ADTP to the top-ranked, best-value proposer, Flatiron Dragados West, Inc. (FDW), in the sum of $161,140,321 and approved a contingency amount of $40,000,000 (25% of the contract price). The Board directed staff to discuss delegating authority for contingency expenditures with the CIP Committee. On January 28, 2025, the Board of Directors approved an increase of $40,000,000 to the construction contract contingency sum, bringing the total construction contract contingency to $80,000,000.
By unanimous roll call vote at its May 17, 2021, meeting, the Committee approved recommending to the full Board that it consider delegating authority to staff to approve change orders for the ADTP at the amounts stated below and that the CIP Committee receive regular monthly reports with information regarding approved change orders, pending change orders, and the cumulative amounts. Valley Water’s Board of Directors accepted the CIP Committee recommendations at its regular meeting on May 25, 2021.
Delegated Approval Authority
Unit Manager: Up to $100,000
Assistant Operating Officer: Up to $250,000
Deputy Operating Officer: Up to $500,000
Assistant Chief Executive Officer: Up to $2.5 million
Chief Executive Officer: Up to $5 million
Board of Directors: $5 million and above
Construction Contract Change Orders Status
There is one new Contract Change Order (CCO No. 62) to present to the CIP Committee. The amount of CCO No. 62 is estimated at $4,539,803. Two attachments providing information on construction contract change orders (Attachment 1) and construction contract financials (Attachment 2) are included for reference.
Contract Change Order No. 62
1. Installation of Large Diameter Pipe Outside of the Tunnel
This change reconciles the adjustments per Contract Document Clarification (CDC) 041 for the installation of large-diameter piping (132-inch and 156-inch) from outside the tunnel to the Diversion Outlet Structure (DOS).
CDC 041 replaces the original Special Seismic Steel Pipe (SSSP) with an alternative concept utilizing conventional steel pipes and a blowoff valve to satisfy the emergency drawdown requirements of the reservoir in a seismic or landslide event. The SSSP is replaced with 1.5-inch-thick steel pipe and increases the remaining steel pipe thickness outside of the tunnel to the DOS, from 1 inch to 1.5 inches, representing a 50% increase in thickness.
This increase in pipe thickness requires additional effort to complete the large diameter pipe installation, including welding, inspection, and handling. The heavier pipe sections reduce construction efficiency, as alignment and fit-up will be more labor intensive and time consuming. The increased weight also requires higher-capacity lifting and support systems, including a larger crane, additional temporary supports, and additional field joints, further increasing the installation effort.
A substantial portion of this change is attributable to the increased pipe wall thickness at the bifurcation of the 156-inch diameter pipe into two 132-inch-diameter steel pipe sections. This bifurcation assembly is field-welded, and the increased thickness significantly increases welding efforts including preheating requirements, the number of weld passes, welding duration, and associated inspection time.
Previous CCO No. 037 credited the original SSSP Bid Item 8M material cost, resulting in a credit of <$11,560,859.00> for the removal of this work. There is approximately $2,000,000 remaining in the original SSSP scope of work Bid Item 8m, reserved for installation, overhead, and profit that will be addressed separately in a future contract change order. The total cost of this change, which replaces the SSSP with 1.5-inch steel pipe and increases the remaining large diameter pipe outside the tunnel from 1 to 1.5-inches, is estimated at $4,500,000.00. The estimated net savings for replacement of SSSP and increasing steel pipe thickness outside the tunnel is approximately <-$3.4M>, see breakdown shown below for further details.
2. Ultrasonic Testing of Microtunneling Pipe Welds
This change addresses a negotiated cost share for additional factory testing costs related to ultrasonic testing of the welds on the 8-foot diameter steel microtunneling pipe between Flatiron Dragados West (FDW) and Valley Water.
Ultrasonic factory testing was performed at a total cost of $79,606, which FDW contends is above original contract requirements for the microtunneling pipe. Valley Water maintains that hydrostatic testing was required by the original contract, and no formal modification to the specified testing requirement was made to perform other nondestructive testing methods in lieu of hydrostatic testing.
After multiple rounds of meetings and negotiations, a settlement was reached to split the ultrasonic testing cost. It was agreed that Valley Water would share the cost of ultrasonic testing, inclusive of all markups. This portion of the change is valued at $39,803.00.
Other Changes from Previous Month Contract Change Order Status
1. CCO No. 59 was presented at the December 2025 CIP meeting for an estimated value of $13,529.00, which included three items: Bid Item No. 5p Waterproofing Membrane and Drainage Collection Changes, Overhead Conduit to Control Room Building No. 1, and Stop Log Expedited Delivery. CCO No. 59 is being finalized and now includes one item, Bid Item No. 5p Waterproofing Membrane and Drainage Collection Changes, which results in a net credit of <$36,867.00>. This represents a decrease of $50,396 from the amount originally presented for CCO No 59. The other two items (Overhead Conduit to Control Room Building No. 1 and Stop Log Expedited Delivery) estimated to be valued at $6,900 and $22,600 respectively, will be addressed separately and are now being tracked under CCO No. 61.
2. CCO No. 60 was originally presented at the January 2026 CIP meeting for an estimated value of $1,700,000.00 for the Transition Zone Pipe Extension and Contraction Zone scope of work. CCO No. 60 is still being finalized but the revised estimate has been further negotiated and lowered by $400,000 which results in a revised total estimate of $1,300,000.00.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with this item.
ATTACHMENTS:
Attachment A: Gov. Code § 84308: Flatiron Dragados West
Attachment 1: Construction Contract Change Orders Status
Attachment 2: Construction Contract Financial Status
UNCLASSIFIED MANAGER:
Manager
Ryan McCarter, 408-630-2983