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 Con-Quest Contractors, Inc., for the East Pipeline Inspection and Rehabilitation Project, Project No. 95084004, Contract No. C0718, in the Sum of $4,809,013.53 (San Jose, Districts 1, 3, and 6).
End
RECOMMENDATION: Recommendation
A. Ratify Addenda No(s). 1, 2, 3, 4, 5, and 6 to the Contract Documents for the East Pipeline Inspection and Rehabilitation Project;
B. Award the Construction Contract to Con-Quest Contractors, Inc., located in Burlingame, CA, in the sum of $4,809,013.53; and
C. Approve a contingency sum of $721,352.03 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
Body
SUMMARY:
The objective of the East Pipeline Inspection and Rehabilitation Project (Project) is to increase the reliability and useful life of the pipeline.
The Project scope includes completely draining and removing all water from the East Pipeline, partially draining Milpitas Pipeline, Penitencia Delivery Main, and Parallel East Pipeline, performing repairs on pipeline appurtenances, replacing line valves, installing a new line valve and vault, providing support for an internal pipeline inspection, procuring long-lead material, updating electrical and controls systems, and performing internal pipeline repair work as identified during the inspections.
A portion of the work related to installing a new line valve will be funded by the Safe, Clean Water and Natural Flood Protection Program A3: Pipeline Reliability, also known as the IRP2 Additional Line Valve Project, Project No. 26764001.
Project Background
The East Pipeline is included in the Santa Clara Valley Water District’s (Valley Water) Pipeline Maintenance Program (PMP) and is identified as a capital effort in the PMP. The PMP defines the activities associated with maintenance and repair of water supply conveyance systems including pipelines, appurtenances, electrical systems, control systems, and structures, throughout Valley Water’s jurisdiction.
The East Pipeline was originally constructed in 1974 and consists of approximately 6.5-mile-long bar-wrapped pipe. The pipeline diameters vary from 48-inch at the connection to the existing 60-inch line at Piedmont Valve Yard, to 33-inch at the southern terminus at Aborn Road. The East Pipeline is located in the easterly portion of San Jose and is a portion of the North County Water System. The line runs south from Piedmont Valve yard south Piedmont Road to Penitencia Creek Road, then continues south along White Road to Aborn Road. The construction of the Project is expected to be completed in May 2028.
Addenda Ratification
Six (6) addenda were issued during the bid advertisement period to clarify the Project Contract Documents and answer bidder’s questions. To formally incorporate the addenda into the Project Contract Documents, staff recommends that the Board ratify the addenda.
To protect sensitive information related to the Project, all parties interested in accessing the Plans and Specifications, and Addenda were registered as a vendor at the Valley Water Vendor Portal and submitted a completed Non-Disclosure Agreement (NDA) to access the Contract Documents.
The Project’s Plans and Specifications were provided by separate communication to the Board for their review prior to taking the recommended action to adopt the Plans and Specifications for bid advertisement. The addenda were also provided by separate communication to Valley Water’s Board of Directors for their review prior to taking the recommended action to ratify.
Contract Award
A report of bids received at the bid opening for the Project on March 11, 2026, is summarized in Table 1, including the Engineer’s Estimate for Project budgeting purposes (refer to the Financial Impact section).
The lowest responsible bid was submitted by Con-Quest Contractors, Inc., of Burlingame, CA. The bid submitted by Con-Quest Contractors, Inc. is 19.17% lower than the Engineer’s estimate of $5,949,602.00.
The bid submitted by Con-Quest Contractors, Inc. was substantially lower than the other two bids received. This can be attributed to Con-Quest Contractors, Inc.’s experience on prior Valley Water pipeline inspection and rehabilitation projects and established relationships with manufacturers for pipeline construction materials. Furthermore, Con-Quest Contractors, Inc. is currently contracted with Valley Water to work on the West Pipeline Inspection and Rehabilitation Phase 1 Project (WPL I&R Phase 1 Project), which is in Santa Clara County and in proximity to the Project. This allows Con-Quest Contractors, Inc. to efficiently transition resources from the WPL I&R Phase 1 Project to this Project and contribute to additional cost savings.
Staff reviewed the bid proposals and recommends the Board award the Construction Contract to Con-Quest Contractors, Inc., as the responsible bidder, submitting the lowest responsive bid.
Table 1: Bid Summary
|
Contractor, Location |
Bid Price |
Award Amount |
|
Con-Quest Contractors, Inc., Burlingame, CA |
$4,809,013.53 |
$4,809,013.53 |
|
Garney Pacific, Inc., Tracy CA |
$7,173,275.00 |
|
|
Ranger Pipelines Incorporated, San Francisco CA |
$8,185,475.00 |
|
|
Engineer’s Estimate: $5,949,602.00 |
Contingency Funds
The Contract award sum for the Project is $4,809,013.53. 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 a contingency amount of $721,352.03, which amounts to 15% of the contract amount for the subject Project.
The above contingency amount was estimated due to the known and unknown risks, such as:
1. Unforeseen internal conditions and field conditions that may be different from the baseline and as-built information used in preparation of the Project Contract Documents;
2. Unanticipated variances in quantities and cost of various lump sum items estimated in the Bid Proposal;
3. Coordination issues and risks associated with weather conditions;
4. Coordination issues with operations and maintenance activities;
5. Unanticipated pumping and dechlorination requirements;
6. Unanticipated condition and alignment of the pipeline discovered after excavation;
7. Additional disinfection support; and
8. Additional support of third-party inspection activities.
Furthermore, shutdown-related work requires extensive coordination with a third-party contractor to inspect the pipeline and identify needed repairs. The full repair scope cannot be determined until inspections are completed and results analyzed.
Approval of individual change orders for the 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
CEO: Up to the Total Amount of the Contingency
Relevant Prior Board Actions
On April 8, 2025, the Board adopted Resolution 2025-22 Setting the Time and Date for a Public Hearing on the Final Program Environmental Impact Report and Engineer’s Report for the Pipeline Maintenance Program (PMP).
On April 22, 2025, the Board held a public hearing and adopted Resolution 2025-25 and Resolution 2025-26 certifying the final Program EIR for the PMP and Adopting CEQA findings of fact, statement of overriding considerations, and mitigation monitoring and reporting program and approving the Engineer’s Report for the PMP.
On January 27, 2026, the Board found the Project is substantially complex and requires a construction contract retention of ten percent (10%), designated certain components as specific brand or trade name products, adopted the Plans and Specifications, authorized advertisement for bids, and authorized the Designated Engineer to issue addenda during the bidding process.
Outreach to Bidders
The Notice to Bidders was made available to Valley Water’s registered PlanetBids vendors with the appropriate classifications to perform the Work. Chambers of Commerce, plan rooms (Builder Exchanges), and Valley Water’s website were also used to solicit interest in the Project. Broader advertising efforts also included three placements of the Invitation to Bid in the San Jose Post-Record.
Small Business Program
The Project was advertised incorporating the Small Business Enterprise (SBE) Outreach Program that establishes a small business subcontracting participation goal of at least 30 percent for non-SBE Bidders. The contractor met the goals of the program by demonstrating compliance through the Good Faith Effort process.
Right of Way
Valley Water has all the necessary right-of-way needed for the construction of the Project.
Permits
Staff received the Project’s Lake Streambed Alteration (LSA) Agreement from the California Department of Fish and Wildlife (CDFW) in May 2026.
Staff received a conditional encroachment permit from the City of San Jose. The final approved encroachment permit will be obtained after the construction contract is awarded and issued prior to construction commencement.
Public Outreach
During construction, appropriate measures will be taken to minimize impacts associated with the Project, such as traffic, noise, and dust. Residents and businesses in the Project area will be informed of potential temporary impacts through social media, informational mailers, coordination with City of San Jose. The construction Contract Documents include requirements and mitigations to minimize impacts to the public during construction.
Next Steps
If the Board approves the recommendations, staff will proceed with administering Project construction, which is anticipated to begin in May 2026 and be completed by May 2028.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with the Project. This action is unlikely to or will not result in disproportionate impacts on any specific communities relative to the general population from the implementation of this Project. However, this Project will enhance the reliability and operational flexibility of the pipeline and address existing system vulnerabilities. Upgrades to the East Pipeline will allow Valley Water to better service communities during times of emergency and future
maintenance projects.
FINANCIAL IMPACT:
The Project is being funded by the East Pipeline Inspection and Rehabilitation Project, Project No. 95084004. Also contributing to the East Pipeline Project is the IRP2 - Additional Line Valve Project, Project No. 26764001. Both contributing projects are included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2026-30 Five-Year Plan and in the FY 2025-26 Adopted Budget. Based on estimated construction contract costs, there are adequate funds in the Project’s FY 2026 Adopted Budget to encumber the construction expenditures planned for this fiscal year. The total cost for the recommended construction contract, including change order contingency of $721,352.03 is $5,530,365.56.
The East Pipeline Project, Project No. 95084004, is funded by the Water Utility Enterprise Fund (Fund 61) with 100% of the project costs allocated to Zone W2 (North County).
CEQA:
On April 22, 2025, the Board certified an Environmental Impact Report for the Pipeline Maintenance Program (PMP EIR) (accessible via <<https://fta.valleywater.org/dl/qRvvY7YPH2>>). The PMP provides for the routine inspection, rehabilitation, and maintenance of Valley Water’s raw and treated water pipelines and evaluates the environmental impacts of the PMP activities. All proposed activities for the Project, including the construction of underground valves and vaults, are adequately analyzed in the PMP EIR. During Project construction, Valley Water and its contractor will comply with all applicable BMPs and mitigation measures from the PMP EIR and permit conditions.
ATTACHMENTS:
Attachment 1: Project Delivery Process Chart
Attachment 2: Project Overview Map
UNCLASSIFIED MANAGER: Manager
Emmanuel Aryee, 408-630-3074