BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Report of Bids Received and Award of Construction Contract to Flatiron West, Inc. in the sum of $43,989,600 for the Upper Llagas Creek Flood Protection Project Phase 2A, Project No. 26174052, Contract No. C0665 (Morgan Hill) (District 1).
End
RECOMMENDATION:
Recommendation
A. Ratify Addenda Nos. 1, 2, 3, 4, 5, and 6 to the Contract Documents for the Upper Llagas Creek Flood Protection Project, Phase 2A;
B. Award the Contract to Flatiron West, Inc. located in Benicia, California, in the sum of $43,989,600; and
C. Approve a contingency sum of $8,797,920 and authorize the Chief Executive Officer (CEO) or designee to approve individual change orders up to the designated amount.
Body
SUMMARY:
Board approval of these recommendations will allow Phase 2A of the Upper Llagas Creek Flood Protection Project to be constructed. If the construction Contract is awarded, it will create and sustain approximately 600-1200 jobs for the community.
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Upper Llagas Creek Flood Protection Project (Project) in partnership with the U.S. Army Corps of Engineers (USACE) and the City of Morgan Hill (City) to provide 1% flood protection to approximately 1,100 homes and 500 businesses along West Little Llagas Creek, East Little Llagas Creek, and Llagas Creek. The Project is approximately 13.9 miles long and is located in the City of Morgan Hill, City of Gilroy, and various unincorporated areas of Santa Clara County, including San Martin. (Refer to Project Map, Attachment 7). The Project will be constructed in three phases and flood protection will only be realized after construction of all three phases.
Llagas Creek and its tributaries are part of the Uvas/Llagas Watershed, the area of land over which rain falls and then drains off on its journey to the ocean, or into reservoirs for storage. The Uvas-Llagas Watershed is a 104-square-mile region which is distinguished by its agricultural lands and natural areas. Part of the larger Pajaro River Watershed, the creeks within this watershed are the only waterways in Santa Clara County that flow southward.
The Project consists of channel widening and deepening, instream improvements for wildlife and habitat, and revegetation. The Project’s mitigation elements to offset environmental impacts associated with the construction work includes the following environmental elements:
• Riparian mitigation consisting of approximately 114 acres of native vegetation plantings;
• Creation of the Lake Silveira wetlands, approximately 5 acres;
• Creation of plant, fish, and wildlife habitat;
• Invasive plant removal (13.0± acres);
• In-stream complexities-woody debris (464 instream complexity features including divide logs, wing deflectors, rootwads and boulder clusters);
• Turtle basking sites within the created wetlands (10 turtle basking sites);
• Tree girdling (27 invasive trees girdled for bat/owl habitat);
• Bat boxes (14);
• Upland log piles (148 locations);
• Removal of legacy trash & hardscape debris (2.3± acres of remediation);
• In-fill native planting sites (11± acres).
Phase 2A construction (portion of Reach 8) consists of construction of approximately 2,300 linear feet of a horseshoe-shaped underground tunnel 14 ft x 10 ft and construction of approximately 1,600 linear feet of 10 ft x 9 ft twin Reinforced Concrete Box Culverts (RCBs) upstream and downstream of the proposed tunnel to carry high stormwater flows. Low flows will remain within the existing West Little Llagas Creek that winds through downtown Morgan Hill within Reach 8.
In addition, Phase 2A construction includes construction of a portion of the City of Morgan Hill’s Hale Avenue Extension Project, including the new signalized 4-way intersection at West Main Avenue and Hale Avenue. The City has agreed to reimburse Valley Water in full for the construction of a portion of the City’s Hale Avenue Extension Project. The Valley Water Phase 2A contractor needs to utilize the City’s right of way acquired for their Hale Avenue Extension Project to stage and construct Phase 2A, including staging for the underground tunnel construction. Construction is expected to take 2.5 years and will include traffic control, detours, utility coordination and relocation, and public outreach. All required permanent right of way to construct Phase 2A has been acquired.
Valley Water’s Project team has obtained the following required regulatory permits to construct the Project:
• California Department of Fish and Wildlife (CDFW) 1600 Permit, dated January 11, 2017, with an extension granted until December 31, 2025;
• Central Coast Regional Water Quality Control Board 401 Water Certification, dated July 27, 2017;
• Incidental Take Permit (ITP) from CDFW for California Tiger Salamander. Valley Water’s Board of Directors approved at its September 25, 2018 hearing the execution of the ITP and Valley Water’s purchase of mitigation credits from the Sparling Ranch Conservation Bank;
• U.S. Army Corps of Engineers Regulatory Branch 404 permit, dated March 26, 2019.
Addenda Ratification
Six addenda (Attachments 1-6) were issued during the bid 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
The results of the nine bid proposals received and opened on March 24, 2021 are summarized in Table 1.
The lowest responsive bid was submitted by Flatiron West, Inc. of Benicia, California. The bid submitted by Flatiron West, Inc. is approximately 20% lower than the Engineer’s estimate of $55,563,934. Review of the Flatiron West, Inc. bid revealed the primary reason for their bid being lower than the Engineer’s estimate was their prices bid for tunnel construction and traffic control. Flatiron West, Inc. was founded in 1947 and is a subsidiary of the German-based HOCHTIEF, one of the world’s largest international construction companies. Flatiron West, Inc. has experience delivering complex, large-scale projects, including roads, bridges, rail, airports, dams, industrial, and underground projects. Therefore, based on this experience, the Project team is less concerned with Flatiron West’s bid submitted below the Engineer’s estimate. The Engineer’s estimate was in line with the average bid ($61,588,287) for the nine bid proposals.
Staff recommends the Board award the Construction Contract to Flatiron West, Inc. in the sum of $43,989,600.
Table 1 - Bid Opening Results
|
Company, Location |
Bid Amount |
Award Amount |
|
Flatiron West, Inc., Benicia, CA |
$43,989,600 |
$43,989,600 |
|
Ranger Pipelines, Inc., San Francisco, CA |
$49,819,645 |
|
|
A & B Construction, Berkeley, CA |
$58,004,586 |
|
|
Granite Rock Company, San Jose, CA |
$61,669,300 |
|
|
Mountain Cascade, Inc., Livermore, CA |
$61,939,600 |
|
|
Granite Construction, Watsonville, CA |
$67,079,990 |
|
|
Obayashi Corp., Burlingame, CA |
$68,294,870 |
|
|
Kiewit Infrastructure West Co., Fairfield, CA |
$71,558,250 |
|
|
Walsh Construction Co. Concord, CA |
$71,938,745 |
|
|
Engineer’s Estimate: $55,563,934 |
Staff has reviewed the bid proposals and, for reasons stated below, recommends the Board award the Contract to Flatiron West, Inc., as the responsible bidder submitting the lowest responsive bid:
1. All bid entries and requirements in the proposal submitted by Flatiron West, Inc. are in order;
2. Flatiron West, Inc.’s license is current, active and in good standing; and
3. Flatiron West, Inc. is in compliance with the requirements of California Labor Code section 1771.1. Flatiron West, Inc. and its subcontractors are registered with the California Department of Industrial Relations and qualified to perform public works pursuant to Section 1725.5 of the Labor Code.
Contingency Funds
The Contract award sum for the Project is $43,989,600. Because of the complexity of the Project and 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 $8,797,920 (20% of the contract price) for the subject Project.
The above-contingency amounts were 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. Differing site conditions;
3. Concealed conditions and/or field conditions that may be different from the baseline or as-built information used in preparation of Project Contract Documents; and
4. Coordination issues with utility owners with existing facilities within the Project limits.
Approval of individual change orders for the Project will be subject to approval at the following designated amounts:
Unit Manager: $100,000
Deputy Operating Officer: $200,000
Chief Executive Officer: up to the total amount of the contingency
Relevant Previous Board Actions
On September 22, 2009, the Board approved a cost sharing agreement with the City of Morgan Hill for preparing the environmental document and the design plans and specifications for the Project.
On June 10, 2014, the Board certified the Environmental Impact Report for the Upper Llagas Creek Project and adopted Resolution No. 14-67.
On May 12, 2020, the Board approved the Standard Consultant Agreement (A4372A) between Valley Water and Mott MacDonald Group, Inc. to provide construction administration and management for Phase 2A construction.
On January 12, 2021, the Board adopted plans and specifications and authorized advertisement for bids for the Project.
Public Outreach
During construction, steps will be taken to minimize impacts associated with the Project, such as noise and construction traffic. Outreach will target the surrounding neighborhoods and include pre-construction public meetings, as well as public meetings during the construction period. Outreach strategies will include updates on the Project website, Project fact sheets, media relations, and regular email updates and construction site signage. Neighbors will be informed of potential issues, as appropriate. Public Outreach will be coordinated with the City of Morgan Hill.
Outreach to Bidders
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 the Valley Water’s own web site were used to solicit interest in the Project work from prospective Contractors. Contractors were contacted through the Building Construction & Trades Council and using the Valley Water’s own Master Contractor Database.
Next Steps
If the Board approves the recommendations, staff will proceed with Contract administration managed by Valley Water and Mott MacDonald Group, Inc. staff to facilitate the Phase 2A construction of the Project.
FINANCIAL IMPACT:
The Project is included in the Draft Five-Year 2022-26 Capital Improvement Program (CIP) and in the Board-adopted FY 2020-21 Budget. The total cost for the recommended construction contract and the approved contingency is $52,787,520, which falls within, and does not change the overall total project cost reflected in the Draft Five-Year 2022-26 CIP. This Project is funded by a combination of Safe Clean Water (Fund 26) and Watershed and Stream Stewardship (Fund 12) Funds. There are sufficient funds in the Board-approved FY 2020-21 Budget to encumber $3M for the work to be performed in the remainder of FY21. Future fiscal year funding will be included in future year budget requests.
CEQA:
Certification of the EIR
On June 10, 2014, the Board certified the Environmental Impact Report for the Upper Llagas Creek Project and adopted Resolution No. 14-67.
Certification of the Final EIS
USACE San Francisco Regulatory Division released the Project’s Final Environmental Impact Statement (EIS) for Public Review on December 7, 2018. The Public Review period ended on January 11, 2019. The USACE San Francisco Regulatory Division issued a Record of Decision on March 26, 2019.
ATTACHMENTS:
Attachment 1: Addendum No. 1
Attachment 2: Addendum No. 2
Attachment 3: Addendum No. 3
Attachment 4: Addendum No. 4
Attachment 5: Addendum No. 5
Attachment 6: Addendum No. 6
Attachment 7: Location Map
Attachment 8: Project Delivery Process Chart
UNCLASSIFIED MANAGER:
Manager
Rechelle Blank, 408-630-2615