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 the Construction Contract Contingency Fund Increase for the Anderson Dam Seismic Retrofit Project, Federal Energy Regulatory Commission Order Compliance Project, Coyote Creek Stream Augmentation Fish Protection Measure: Chillers Plant Project, Project No. 91864008, Contract No. C0701.
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RECOMMENDATION: Recommendation
Receive information on the Construction Contract Contingency Fund Increase for the Anderson Dam Seismic Retrofit Project, Federal Energy Regulatory Commission Order Compliance Project, Coyote Creek Stream Augmentation Fish Protection Measure: Chillers Plant Project (Project).
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SUMMARY:
The objective of the Coyote Creek Stream Augmentation Fish Protection Measure: Chillers Plant Project, Project No. 91864008 (Project) is to decrease the temperature of imported water and deliver the chilled water to the Coyote Creek functional cold-water zone. Construction contract C0701 was awarded to AES Industrial on September 12, 2023. Design revisions resulting in delays have led to an extended schedule and necessitated additional change orders. In order to progress construction of this federally mandated project, staff will recommend the Board of Directors increase the contingency fund for this contract number C0701 at the February 10, 2026 Board meeting.
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Federal Energy Regulatory Commission (FERC) Order Compliance Project (FOCP) as a result of the February 20, 2020, directive from the FERC to implement interim risk reduction measures at Anderson Dam. In addition to lowering the reservoir at Anderson Dam to its lowest point, Valley Water collaborated with environmental regulatory agencies to develop additional measures to mitigate the impacts of the lowered reservoir. One of those measures is the Coyote Creek Stream Augmentation Fish Protection Measure: Chillers Plant Project, which is intended to maintain suitable aquatic habitat for native species and to provide habitat sufficient for rainbow trout (Oncorhynchus mykiss) survival within the Creek’s functional cold-water zone during the implementation of this FOCP measure.
The Project entails installing a Modular Chillers Plant (MCP), at the southwest corner of the existing Coyote Pumping Plant, which consists of three 1,500-ton capacity water-cooler packaged chillers, with one of the three being used as a redundant chiller unit. The Coyote Pumping Plant is located at 18300 Peet Road, Morgan Hill, as shown in the Project Map (Attachment 1). A new 24-inch pipe will be installed to connect to an existing 36-inch nozzle on the Cross Valley Pipeline, to allow the chillers to receive imported water. The imported water would be chilled by the chiller system to the required temperature before being released into the creek to maintain a suitable aquatic habitat.
Project Design Revisions
At the time of bid advertisement and contract award in September 2023, final product specifications for the owner-furnished Modular Chiller Plant (MCP) units and associated electrical substation were not fully complete. As a result, continued coordination between the equipment suppliers and the design team was required during procurement to finalize technical details.
Due to the unique and complex nature of the Project, a comprehensive electrical system study was not completed during the initial design phase. Once the system study was performed during switchgear procurement in late 2024, it identified the need to modify the electrical bus length connecting to the Western Area Power Administration (WAPA) substation. This requirement resulted in additional electrical design revisions, coordination with the supplier, and further schedule impacts.
The original construction contract established a June 2024 completion date for the project. As procurement challenges related to the owner-furnished equipment and subsequent design revisions emerged, the contract completion date was extended through change orders and Time Impact Analysis (TIA) No. 1 to April 2025, allowing continued progress while critical equipment and revised design details were finalized.
The MCP units were delivered to the site in August 2025, and installation activities were completed shortly thereafter. While the major equipment is now installed, additional electrical modifications, system integration, testing, and commissioning activities remain outstanding and are contingent upon the completion of the revised electrical scope.
These evolving design requirements, combined with coordination of interfaces with other concurrent projects and existing infrastructure, resulted in additional design revisions and schedule impacts addressed under TIA No. 2. Based on the current status of the remaining work, the Contractor is forecasting Project completion in late August 2026, representing an approximate 16-month extension beyond the TIA No. 1 contract completion date.
The Contractor has submitted an estimated $2,500,000 for extended overhead and schedule-related costs associated with the project’s extended duration. The project team has completed an initial review of the submission and determined that further detailed analysis of the updated schedule, critical path impacts, and supporting cost documentation is required. This evaluation is currently underway, and any contract time or cost adjustments will be subject to further review, negotiation, and formal execution of a change order in accordance with the Contract.
Contract Change Orders
A total of eighteen (18) Contract Change Orders, totaling a net increase of $5,062,361, have been executed to date for this contract to address various issues, including unforeseen site conditions, Valley Water requested changes, and post-design clarifications.
Table 1 presents a summary of the current construction contract and contingency amounts.
TABLE 1
SUMMARY OF CONSTRUCTION CONTRACT
AND CONTINGENCY AMOUNTS
Increased Construction Contingency Recommendation
The remaining contract contingency of $242,231 is insufficient to complete the Project. To compensate the Contractor for extended performance, address known and anticipated change order work, accommodate future unknown changes that may arise during construction, and cover estimated delay-related cost impacts, staff recommends increasing the Project contingency to a total amount of $7,804,592.This increase will allow staff to continue advancing the work without administrative delays and to complete and close out the Project in time for operation in fall 2026.
ENVIRONMENTAL JUSTICE IMPACT:
Ther are no environmental justice impacts associated with this item.
ATTACHMENTS:
Attachment 1: PowerPoint
UNCLASSIFIED MANAGER:
Manager
Ryan McCarter, 408-630-2983