BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Accept the Work as Complete and Direct the Clerk to File the Notice of Completion of Contract and Acceptance of Work for the Snell Pipeline Inspection and Rehabilitation Project, as part of the 10-Year Pipeline Inspection and Rehabilitation Project, Con-Quest Contractors Inc., Contractor, Project No. 95084002, Contract No. C0698 (San Jose, Districts 1, 4, 6, 7).
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RECOMMENDATION: Recommendation
A. Accept the work on Snell Pipeline Inspection and Rehabilitation Project, as part of the 10-Year Pipeline Inspection and Rehabilitation Project, Project No. 95084002, Contract No. C0698 as complete; and
B. Direct the Clerk of the Board to sign the Notice of Completion of Contract and Acceptance of Work and submit for recording to the Santa Clara County Clerk-Recorder.
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SUMMARY:
The construction contractor, Con-Quest Contractors Inc. (Contractor), has completed the Snell Pipeline Inspection and Rehabilitation Project (Project), as part of the 10-Year Pipeline Inspection and Rehabilitation Project.
Project Background
Snell Pipeline is included in Santa Clara Valley Water District’s (Valley Water) Pipeline Maintenance Program (PMP) and is an identified capital effort under the 10-Year Pipeline Inspection and Rehabilitation Program. 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 purpose of the 10-Year Pipeline Inspection and Rehabilitation Project is to maintain the integrity of the approximately 150 miles of large diameter raw and treated water transmission pipelines, extend their useful life, and address infrastructure reliability concerns. Other projects completed as part of the 10-year Inspection and Rehabilitation Project include: Almaden Valley Pipeline, Pacheco Conduit, Cross Valley and Calero Pipelines, Central and Parallel East Pipelines, and Santa Clara Conduit Rehabilitation & Pacheco Sectionalizing Vault Replacement Project.
Snell Pipeline consists of approximately 8.5 miles of 60-inch to 72-inch prestressed concrete cylinder pipe (PCCP), reinforced concrete cylinder pipe (RCCP), embedded cylinder pipe (ECP), and welded steel pipe (WSP). It conveys treated water from Santa Teresa Water Treatment Plant (STWTP) to Evergreen and Parallel East Pipelines. Snell Pipeline was constructed in two phases and was completed in 1990. It begins at the end of the Santa Teresa Outlet Tunnel which connects to the Santa Teresa Water Treatment Plant in South San Jose, runs northeast through the urban streets of San Jose, and connects to Evergreen and Parallel East Pipelines in East San Jose.
A portion of the Scope of Work related to installing new line valves (Ober Line Valve) totaling $5,132,600, was planned to be funded by the Safe, Clean Water and Natural Flood Protection Program Project A3: Pipeline Reliability Project, also known as the Infrastructure Reliability Program Portfolio 2 (IRP2) Additional Line Valve Project (Project No. 26764001). Staff planned to encumber the funds in phases, with the first two phased encumbrances totaling $3,496,250. In January 2024, prior to the third phased encumbrance, the Contractor provided schedules reflecting that the installation of the Ober Line Valve included in the Project’s scope of work was unable to proceed because of material delays. As a result, Valley Water staff directed the Contractor to remove the new line valve scope of work from the contract through a deductive change order (part of Change Order No.5). Approximately $465,600 was spent on site preparation and material procurement prior to the decision to remove the scope from the contract. As a result, the remaining $3,030,650 in encumbered funds under Project No. 26764001 will be returned to the Project reserves.
The Project scope of work completed included dewatering and inspecting the Snell Pipeline, repairing and rehabilitating miscellaneous pipeline appurtenances, replacing line valves and flowmeters, installing an Acoustic Fiber Optic (AFO) monitoring system, installing supervisory control and data acquisition (SCADA) components, installing corrosion protection systems, providing support of internal pipeline inspections, and performing internal pipeline repair work as identified by the internal inspections.
Relevant Prior Board Actions
On November 13, 2007, the Board certified the Pipeline Maintenance Program Environmental Impact Report (PMP EIR) and adopted the Mitigation Monitoring Plan.
On March 9, 2010, the Board adopted Resolution 10-24 specifying intent to consider undertaking the Project and setting the time and date for a public hearing on the Engineer’s Report for the subject Project.
On April 13, 2010, the Board held a public hearing and adopted Resolution 10-29 approving the PMP Engineer’s Report and approving the PMP.
On January 8, 2019, the Board approved a sole source purchase of equipment and services from Pure Technologies U.S. Inc. to provide electromagnetic inspection, acoustic fiber optic (AFO) monitoring system, and AFO system services for the 10-Year Pipeline Inspection and Rehabilitation Program. The construction contract scope provides for the contractor to support and provide physical access to Pure Technologies U.S. to install the monitoring system. The purchase order with Pure Technologies U.S., Inc. was extended to January 17, 2027, and includes the Snell Pipeline in its scope of work.
On April 11, 2023, the Board considered Addendum No. 1 to the Pipeline Maintenance Program Final EIR, adopted Plans and Specifications, and authorized advertisement for bids for Construction of the Snell Pipeline Inspection and Rehabilitation Project per the Notice to Bidders; authorized the Designated Engineer to issue addenda, as necessary, during the bidding process; and found that the Snell Pipeline Inspection and Rehabilitation Project is substantially complex and requires a construction contract retention of 10 percent.
On August 8, 2023, the Board ratified Addenda No. 1, 2, and 3 to the Contract Documents for the Snell Pipeline Inspection and Rehabilitation Project, awarded the Construction Contract to Con-Quest Contractors Inc., located in San Francisco, in the sum of $14,988,500, and approved a contingency of 10% in the amount of $1,498,850 and authorized the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
Contract Change Orders
A total of five (5) contract change orders totaling a net decrease of $6,501,567.00 were executed for this contract to address various issues, including unforeseen site conditions, unforeseen utility conflicts, post-design clarifications, Valley Water requested changes, and credits back to the contract for deleted items of work.
These changes included:
A. $40,778.06 for additional work required to address unforeseen site conditions. This includes work such as addressing pipeline misalignment and modification of a vault hatch.
B. $345,454.94 for additional Valley Water-requested changes, of which $196,059.37 was included in Change Order No. 5. This includes work such as supporting Valley Water staff in additional internal inspections, procuring additional valve and pipe coupling hardware, pipeline appurtenance modifications and installation and removal of pipeline disinfection appurtenances.
C. <$6,887,800.00> credit for deletion of contract work and Valley Water-furnished materials under Change Order No. 5. This amount includes $4,212,400 in credit for deletion of the installation of a new line valve (Ober Line Valve) from the Scope of Work that was planned to be funded by the IRP2 Additional Line Valve Project. In addition, Change Order No. 5 included the deletion of base bid items associated with the encroachment permit (Bid Item 7), utility investigation (Bid Item 10), pavement restoration (Bid Item 12), and relocation of valve actuator modifications (Bid Items 21, 27, 32, 37, 47-48, 58-61, 79, 91, and 93) which were not performed as a part of this contract There are also credits associated with supplemental bid items for internal pipeline repairs (Bid Items 107, 109, 111), investigation of existing utilities and installation of ventilation pipes (Bid Items 116-120). The internal pipeline repairs and investigation of existing utilities are dependent on the findings of the internal pipeline inspection and field markings through an Underground Service Alert (USA). Ventilation pipe installation scope of work was deleted as a result of a City of San Jose pavement moratorium.
The final total contract amount is $8,486,933.00.
Table 1 presents a summary of the construction contract and contingency amounts.
TABLE 1
SUMMARY OF CONSTRUCTION CONTRACT
AND CONTINGENCY AMOUNTS
Acceptance of the Work and Recording Notice of Completion of Contract
The California Civil Code allows an owner or agent to execute a Notice of Completion of Contract after acceptance of the work by the Board. The Notice of Completion of Contract and Acceptance of Work is included in Attachment 1. The Designated Engineer has determined that the work has been completed, to the best of his knowledge, in accordance with the plans and specifications, and recommends acceptance. The Designated Engineer’s recommendation of construction acceptance is included in Attachment 2. The Project Completion Letter is included as Attachment 3. Photos of the completed Project are included in Attachment 4. The Project Delivery Process Chart is included in Attachment 5.
Construction Contract Retention
California law requires Valley Water to release contract retention in accordance with certain time frames, which will commence once the Notice of Completion is recorded. Interest payment on retention due to the contractor may be avoided by meeting the requisite deadlines.
Valley Water is currently withholding retention funds totaling ten percent (10%) of the contract items ($848,693.30) in accordance with the Public Contract Code. Per the construction Contract Documents, Valley Water is required to release retention funds associated with the contract 35 days after recording the Notice of Completion of Contract and Acceptance of Work, subject to any withholds required by law or the contract.
Recording a Notice of Completion is recommended. Retention withheld will be released as a result of the Board’s acceptance and recording of the Notice of Completion.
Total Project Expenditures
As indicated in the Summary of Construction Contract and Contingency Amounts (Table 1), after Change Orders 1-5 were processed, the original contract amount of $14,988,500.00 was decreased to $8,486,933.00, which is a decrease of approximately 43.4 percent.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no environmental justice impacts associated with this item. This action is unlikely to or will not result in adverse impacts and is not associated with an equity opportunity.
FINANCIAL IMPACT:
The Snell Pipeline Inspection and Rehabilitation Project (Snell Pipeline Project) is part of the 10-Year Pipeline Inspection and Rehabilitation Project, Project No. 95084002. Also contributing to the Snell Pipeline Project is the Infrastructure Reliability Program Portfolio 2 (IRP2) Additional Line Valve Project, Project No. 26764001. Both contributing projects are included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2025-29 Five-Year Plan and in the FY 2024-25 Adopted budget. The Project is funded by Water Utility Enterprise (Fund 61) with 96.3% of the costs allocated to Zone W-2 (North County), 2.9% to South County Zone W-5, 0.8% to South County Zone W-7, and 0.1% to South County Zone W-8.
Transfer of Remaining Balances
The original contract amount of $14,988,500, combined with the Board-approved contingency encumbrance of $1,498,850, totals $16,487,350 for construction of the Project. The original contract amount ($14,988,500) was reduced by $6,691,740.63 with Change Order No. 5’s contract net credit, which includes the deletion of the unused bid items and addition of Valley Water requested items of work identified in the Contract Change Order Section, resulting in a reduced contract amount of $8,296,759.37. When combined with the contingency amount spent on Change Orders Nos. 1-4 (Totaling $190,173.63), the final contract amount with all of the change orders credit is $8,486,933.00.
The total approved for construction of the Project of $16,487,350.00 less $8,486,933.00 (the final contract amount with all change orders and credit) results in a balance of $8,000,417.00. Upon completion of the construction contract (C0698 Snell Pipeline Inspection and Rehabilitation Project) the remaining amount will be released to project reserves for the 10-Year Pipeline Inspection and Rehabilitation Project (95084002) and the IRP2 Additional Line Valve Project (26764001).
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Notice of Completion and Acceptance of Work
Attachment 2: Construction Contract Acceptance
Attachment 3: Project Completion Letter
Attachment 4: Construction Photos
Attachment 5: Project Delivery Process Chart
UNCLASSIFIED MANAGER: Manager
Emmanuel Aryee, 408-630-3074