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 GSW Construction, Inc. for the Palo Alto Flood Basin Tide Gate Structure Seismic Retrofit and Rehabilitation Project, Project No.10394001, Contract No. C0710 in the sum of $2,782,645.00 (Palo Alto, District 7).
End
RECOMMENDATION: Recommendation
A. Ratify Addendum Nos. 1, 2 and 3 to the Contract Documents for the Palo Alto Flood Basin Tide Gate Structure Seismic Retrofit and Rehabilitation Project
B. Award the Construction Contract to GSW Construction, Inc. located in San Francisco, CA, in the sum of $2,782,645.00; and
C. Approve a contingency sum of 15% in the amount of $417,396.75 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
Body
SUMMARY:
The Palo Alto Flood Basin Tide Gate Structure Seismic Retrofit and Rehabilitation Project (Seismic Retrofit and Rehabilitation Project) will implement improvements to the Palo Alto Flood Basin Tide Gate Structure to address seismic vulnerabilities and extend the existing structure’s service life.
Project Background
The primary objective of the Palo Alto Flood Basin Tide Gate Structure (PATG) is to continue to protect residents from coastal flooding and control the downstream water levels for Matadero, Adobe and Barron Creeks, which all drain to the Palo Alto Flood Basin. Originally built in 1957, the PATG has exceeded its 50-year design life, and the surface of the concrete structure has degraded due to harsh conditions near the San Francisco Bay (Bay). The existing structure is also vulnerable to a large earthquake since seismic codes have changed significantly since 1957.
The PATG is regularly inspected and maintained by the Santa Clara Valley Water District (Valley Water), and the motorized sluice gate is regularly inspected and maintained by the City of Palo Alto. A map of the Seismic Retrofit and Rehabilitation Project (Project) location is shown on Attachment 1.
Project Scope
As part of the FY 2023-2024 Adopted Capital Improvement Program (CIP), staff conducted an evaluation to address seismic vulnerabilities and extend the existing
structure’s service life. As a result, a project scope to seismically retrofit and rehabilitate the existing structure was developed.
The seismic retrofit and rehabilitation work will include installing deep pile foundations, repairing concrete cracks, repairing the surface of the tide gate deck with the polyester concrete overlay, installing a new fence that is safe for pedestrians and bicyclists, and improving access for maintenance work. The Board approved seismic retrofit and rehabilitation activities as the Modified PATG Structure Replacement Project at the October 22, 2024, Board meeting.
In addition to the seismic retrofit work, Operations and Maintenance (O&M) has requested that the scope of the work include the replacement of 6 existing hydraulic flap gates that were found to be degraded during routine maintenance inspections of the structure. The hydraulic flap gates replacement is an approved Stream Maintenance Program (SMP) Update 2012-2022 activity and will be funded by the Watershed Asset Rehabilitation Project (WARP), Project No. 62084001. By combining these two activities, this will provide logistical efficiencies from reducing the number of work crews in the same area, minimizing potential disruption to publicly accessible recreation areas within the work area, and free up internal O&M resources for other critical work activities under one scope of work for construction. The entire scope of construction will be completed between September 2025 and October 2026.
Addenda Ratification
Three (3) addenda (Attachment 2) were issued during the bid advertisement period to clarify the Project Contract Documents and answer bidders’ questions. To formally incorporate the addenda into the Project Contract Documents, staff recommends that the Board ratify the addenda.
Contract Award
A report of bids received at the bid opening for the Project on July 16, 2025, is summarized in Table 1.
Table 1 - Bid Opening Results
|
Contractor(s) |
Bid Price |
Difference from EE (-) or + % |
Deemed Responsive |
|
Gordon N. Ball, Inc. Walnut Creek, CA |
$2,660,448.00 |
7.78% |
Yes |
|
Granite Construction Company Santa Clara, CA |
$2,694,074.00 |
9.14% |
Yes |
|
GSW Construction San Francisco, CA |
$2,782,645.00 |
12.73% |
Yes |
|
Disney Construction Burlingame, CA |
$2,933,333.00 |
18.84% |
Yes |
|
Corcus Construction San Francisco, CA |
$3,640,575.00 |
47.49% |
Yes |
|
Engineer’s Estimate (EE) |
$2,468,405.00 |
|
|
Small Business Enterprise Preference Evaluation
For calculating the Small Business Enterprise (SBE) preference, only the apparent low base bid amount (which excludes Supplemental and Additive/Deductive Bid Items) is used. Valley Water received five bids for this project. Gordon N. Ball, Inc. submitted the apparent lowest base bid of $2,510,448.00. Granite Construction Company submitted the apparent second-lowest base bid of $2,544,074.00 and GSW Construction, Inc. submitted the apparent third-lowest base bid of $2,632,645.00.
GSW Construction, Inc. is certified as a small business by the California Department of General Services and is eligible for a 5% evaluation preference under the Valley Water Small Business Enterprise Outreach Program Policy (SBE Policy) and Public Contract Code Section 2002.
Because the apparent low bid (from Gordon N. Ball, Inc.) was under $3,000,000, the 5% evaluation preference applies. The SBE preference is calculated as 5% of the apparent low bid, which in this case equals $125,522.40 (i.e. 5% of $2,510,448.00).
To apply the SBE preference, this dollar amount is subtracted from GSW Construction, Inc.’s original bid of $2,632,645.00, resulting in an adjusted evaluation bid of $2,507,122.60. This adjusted figure is used solely for determining the lowest responsible bidder for award consideration and not for contract payment purposes.
Therefore, GSW Construction, Inc. is the lowest evaluated bidder under the SBE Policy. However, per the policy, the contract will be awarded at the original bid price of $2,632,645.00, not the adjusted evaluation total.
The SBE Policy does not consider Supplemental Bid Items when establishing an evaluation preference.
|
Bidder |
Base Bid Amount |
Evaluation Preference |
Adjusted Bid Total for Evaluation Purposes |
|
Gordon N. Ball, Inc. |
$2,510,448.00 (apparent low bid) |
None |
$2,510,448.00 |
|
Granite Construction Company |
$2,544,074.00 |
None |
$2,544,074.00 |
|
GSW Construction, Inc. |
$2,632,645.00 |
-$125,522.40 |
$2,507,122.60 |
Under the SBE Policy, Gordon N. Ball, Inc. and Granite Construction Company were required to submit documentation of their good-faith efforts to subcontract at least 30% of the work to small business entities. Both bidders submitted responsive documentation.
Per the SBE evaluation, staff recommends the Board award the Construction Contract to GSW Construction, Inc. as the responsible bidder submitting the lowest responsive bid.
GSW Construction, Inc.’s bid is approximately 12.73% higher than the Engineer’s estimate of $2,468,405. Staff calculated the Engineer’s Estimate using historical project data and industry publications, assuming stable economic conditions.
A review of the bids against the Engineer’s estimate reveals that the Engineer's estimate was lower than the range of the five bids received and within 19% of the average of the five bids and within 8% of the lowest bid. Staff reviewed the bid proposals and deemed the bid responsive and indicative of competition in the construction market.
Contingency Funds
The Contract award sum for the Project is $2,782,645.00. To allow staff to quickly address unforeseen or changed site conditions and other unanticipated occurrences, without causing unnecessary delays or consequential costs to the Project, staff recommends the Board approve encumbering a contingency amount of $417,396.75 (15% of the contract amount) for the subject 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 preparation of the Project Contract Documents; and
3. Coordination issues and risks associated with weather conditions and unplanned water releases that may pose construction delays.
Approval of individual change orders for the Project will be subject to approval at the following designated amounts:
Engineering Unit Manager: $75,000
Deputy Operating Officer: $150,000
Chief Executive Officer: Up to the Total Amount of the Contingency
Relevant Prior Board Actions
On January 24, 2012, the Board considered the potential environmental effects of the Stream Maintenance Program Update 2012-2022 as presented in the Final Subsequent Environmental Impact Report (SEIR), and adopted Resolution No. 12-07 certifying the Final SEIR, adopting the Mitigation, Monitoring and Report Program (MMRP), Findings of Fact and Statement of Overriding Considerations for the Seismic Retrofit and Rehabilitation Project for which the hydraulic flap gate replacement element will be covered.
On April 27, 2021, the Board considered the environmental effects of the PATG Structure Replacement Project as discussed in the Final Mitigated Negative Declaration (MND), adopted Resolution No. 21-16 adopting the Final MND and MMRP for the PATG Structure Replacement Project and approved the Project.
On October 22, 2024, the Board considered the First Addendum to the Final MND for the PATG Structure Replacement Project and approved the Modified PATG Structure Replacement Project to address seismic retrofit and rehabilitation needs.
On May 27, 2025, the Board adopted the plans and specifications and authorized advertisement for bids for the construction of the Palo Alto Flood Basin Tide Gate Seismic Retrofit and Rehabilitation Project per the Notice to Bidders and authorized the Designated Engineer to issue addenda, as necessary, during the bidding process.
Outreach to Bidders
Per Public Contract Code Section 21161(2), the Project advertisement was published on May 30, 2025, and June 3, 2025, in the San Jose Post and the Palo Alto Post for a total of four newspaper publications.
In addition, the Notice to Bidders was sent to certified Small Business Contractors that have the appropriate license. Chambers of Commerce and plan rooms (Builder Exchanges) and Valley Water’s own website was used to solicit interest in the Project work from prospective Contractors. Contractors were contacted through the Building Construction & Trades Council and using Valley Water’s own Master Contractor Database.
Rights-of-Way
This Seismic Retrofit and Rehabilitation Project will be constructed within Valley Water’s existing easement. For construction access, encroachment permits from the City of Mountain View and City of Palo Alto have been obtained in March and April 2025.
Regulatory Permits
The seismic retrofit and rehabilitation portion of work will be covered under the regulatory permits obtained from the California Department of Fish and Wildlife, the San Francisco Bay Regional Water Quality Control Board, and the San Francisco Bay Conservation and Development Commission.
The hydraulic flap gates replacement work will be covered under the Stream Maintenance Program 2 (SMP-2) Permits. To comply with the SMP-2 permit requirements and non-bird nesting season for the Ridgeways’ Rail, the hydraulic flap gate replacement work will be conducted between September and October 15, 2026.
Public Outreach
Staff has coordinated with the City of Mountain View and the City of Palo Alto for the planned implementation of the Project.
Valley Water will inform the surrounding neighborhood by conducting a pre-construction meeting on August 21, 2025, to inform residents about the Project and potential construction impacts. A mailer and social media will be used to reach out to neighbors, and construction signs will be installed at the Project site.
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 Project, which is anticipated to begin in September 2025 and be completed by October 2026 followed by a three-year plant establishment period. 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 Seismic Retrofit and Rehabilitation 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:
CEQA:
Valley Water is the lead agency under the California Environmental Quality Act for implementation of the Project. The hydraulic flap gate replacement element of the Project is covered under the Stream Maintenance Program Update (SMP-2), 2014-2026 and the Supplemental Environmental Impact Report for the Stream Maintenance Program was certified by the Board on January 24, 2012.
On April 27, 2021, the Board adopted the Final MND and Mitigation Monitoring and Reporting Program (MMRP) for the PATG Structure Replacement Project (Resolution No. 21-16). A Notice of Determination was filed with the State Clearinghouse on April 29, 2021.
On October 22, 2024, the Board considered the First Addendum to the Final MND for the Palo Alto Flood Basin Tide Gate Structure Replacement Project and approved the Modified Palo Alto Tide Gate Structure Replacement Project. Copies of the environmental documents for the modified seismic retrofit project may be accessed at:
https://www.valleywater.org/project-updates/palo-alto-flood-basin-tide-gate-structure-replacement-project.
ATTACHMENTS:
Attachment 1: Map
Attachment 2: Addenda 1, 2 and 3
Attachment 3: Project Delivery Chart
UNCLASSIFIED MANAGER: Manager
Bhavani Yerrapotu, 408-630-2735