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, Waive Minor Irregularity, Approve the Contingency Fund, and Award the Construction Contract to Shimmick Construction Company, Inc., for the Coyote Creek Flood Protection Project, Project No. 26174043, Contract No. C0724 in the Sum of $124,378,309 (San Jose, Districts 2, 3, and 6).
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RECOMMENDATION: Recommendation
A. Ratify Addenda Nos. 1 through 7 to the Contract Documents for the Coyote Creek Flood Protection Project;
B. Waive Minor Irregularities in Shimmick Construction Company, Inc., Bid;
C. Award the Construction Contract to Shimmick Construction Company, Inc., located in Suisun City, California, in the sum of $124,378,309; and
D. Approve a contingency sum of $18,656,746 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
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SUMMARY:
The Santa Clara Valley Water District (Valley Water) is undertaking the Coyote Creek Flood Protection Project (CCFPP or Project) to provide flood risk reduction measures against a flood event equivalent to the February 2017 flood event or approximately a 20-year flood event. The CCFPP is approximately nine (9) miles long and located within the city of San Jose. The Project is part of the Safe, Clean Water Program that voters renewed in November 2020.
Project Background
The CCFPP’s primary objective is to provide protection from floods up to the level that occurred on February 21, 2017, equivalent to a flood level with a 5% risk of occurring in any given year (also referred to as a 20-year event), along Coyote Creek, between Montague Expressway and Tully Road, in San Jose. The CCFPP involves construction of multiple floodwalls, passive barriers and earthen berms along a nine (9) mile stretch of Coyote Creek.
Following a February 2020 order from the Federal Energy Regulatory Commission (FERC) regarding Anderson Dam, the original Coyote Creek Flood Protection Project was split into two projects to accommodate construction of a new outlet tunnel at Anderson Dam. As a result, Valley Water accelerated the design and construction of an initial project, the Coyote Creek Flood Management Measures Project (CCFMMP), representing 40% of the original Coyote Creek Flood Protection Project, so the creek can handle the potential release of higher flows from the larger outlet tunnel from the Anderson Dam Tunnel Project. The Board awarded the CCFMMP construction contract in May 2023 and accepted the work as completed in June 2025.
The remaining components of the original CCFPP are scheduled for completion before the Anderson Dam Seismic Retrofit Project Stage 2 Diversion becomes operational, which is estimated to be in 2028. In total, the Project includes constructing approximately 17,000 feet of improvements along the 9-mile stretch of Coyote Creek from Montague Expressway to Tully Road. The Project will result in flood risk reduction benefits to homes, businesses, schools, and transportation infrastructure, including disadvantaged communities along Coyote Creek.
Addenda Ratification
Seven (7) addenda (Attachment 1) 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.
Bid Protest
On June 29, 2026, Gordon N. Ball, Inc., (GNB), the second-lowest bidder, submitted a bid protest objecting to award of the construction contract to Shimmick Construction Company, Inc. (Shimmick). GNB’s bid protest is included as Attachment 4. Shimmick submitted a written response to the bid protest on July 2, 2026, which is included as Attachment 5.
GNB’s protest contends that Shimmick’s bid must be rejected on the following four grounds: (1) Shimmick is not a responsible bidder; (2) Shimmick’s bid is materially unbalanced; (3) Shimmick’s improperly listed subcontractors; and (4) the deficiencies in Shimmick’s bid cannot be cured.
Per Article 20. Bid Protest, of the Instructions to Bidders, Valley Water’s CCFPP Designated Engineer (Deputy Operating Officer, Bhavani Yerrapotu) reviewed GNB’s bid protest, Shimmick’s response, the Bid Documents, the prequalification record, and the procurement requirements applicable to the Project. As set forth in the Final Decisions by Designed Engineer, dated July 9, 2026, (Attachment 6), the Designated Engineer determined the protest was without merit and denied the protest
Waiver of Minor Irregularity
Bidders must identify subcontractors who will perform work for an amount in excess of one-half (1/2) of one percent (1%) of the prime contractor’s total bid or ten thousand dollars ($10,000), whichever is greater. The lowest bidder, Shimmick, made an erroneous reference to fencing subcontractor Oliveira Fencing as a rebar subcontractor, even though they had already identified the rebar subcontractor, C&N Reinforcing Inc., in their bid.
Staff is recommending that the Board of Directors waive this error as a minor irregularity since it does not affect bid responsiveness, provide Shimmick with a competitive advantage, or impair the integrity of the competitive bidding process.
Contract Award
A report of bid proposals received at the bid opening for the Project on June 24, 2026, is summarized in Table 1.
The lowest responsible bid was submitted by Shimmick. The bid submitted by Shimmick Construction Company, Inc., is approximately 18% lower than the Engineer’s estimate of $151,729,776. The three lowest bids were all within 6% range, indicating tight competition and reflecting local market prices. Staff reviewed the bid proposals and recommends the Board award the construction contract to Shimmick Construction Company, Inc., as the responsible bidder submitting the lowest responsive bid.
Contingency Funds
The Contract award sum for the Project is $124,378,309. 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 $18,656,746 (15% of the contract amount) for the subject Project.
The above-contingency amount was estimated due to known and unknown risks, such as:
1. Unforeseen or differing site conditions, field conditions that may be different from the baseline and as-built information used in the 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 related to right-of-way acquisitions and any changes needed as a result; and
4. Risks associated with weather conditions.
Approval of individual change orders for the Project will be subject to approval at the following designated amounts:
Engineering Unit Manager: $250,000
Deputy Operating Officer: $500,000
Chief Operating Officer: $750,000
Assistant Chief Executive Officer: $1,000,000
Chief Executive Officer: Up to $5,000,000
Relevant Prior Board Actions
On March 11, 2025, the Board adopted a resolution certifying the Final Environmental Impact Report (EIR) for the Project, adopted the California Environmental Quality Act (CEQA) Findings of Fact, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program for the Project, and approved the Project.
On April 14, 2026, the Board adopted the Project plans and specifications, authorized the advertisement for construction bids, and authorized the Designated Engineer to issue addenda during the bidding process. The Board also considered the First Addendum to the Final EIR for the CCFPP.
Contractor Pre-Qualification Process & Outreach to Bidders
Because of the size and complexity of the CCFPP, staff prequalified contractors wishing to bid on this Project. The prequalification questionnaire required contractors to demonstrate they have successfully completed projects of a similar size and scope to the Project.
Prior to the pre-qualification process, Valley Water did extensive industry outreach through PlanetBids to ensure broad awareness and participation, with the Request for Prequalification Application (RFPA) outreach going out to local and regional firms that have the appropriate license for this type of work, and the Santa Clara and San Benito Counties Building and Construction Trades Council, which maintains contacts with at least 100 union representatives, for distribution to their members.
The RFPA notice was published on Valley Water’s vendor portal at PlanetBids on July 22, 2025, and an optional prequalification conference for contractors was held via Zoom on August 12, 2025. Six (6) contractors submitted the prequalification application by the October 8, 2025, deadline.
Prequalification applications were reviewed by staff, and a list of final prequalified contractors was posted on Valley Water’s website on November 26, 2025. The following six (6) contractors met the prequalification requirements and were the only contractors eligible to bid on the Project.
• Anvil Builders, Inc.
• Gordon N. Ball, Inc.
• Granite Construction Company
• Granite Rock Company
• Mountain Cascade, Inc.
• Shimmick Construction Company, Inc.
As part of Valley Water’s customary outreach, the Notice to Bidders was sent to certified Small Business Contractors, Chambers of Commerce, Plan Rooms/Builder Exchanges, the Building Construction & Trade Council, and Valley Water’s Master Contractor Database. Valley Water also placed an ad in the San Jose Post Record and utilized Valley Water’s PlanetBids vendor portal to solicit interest in the Project.
Small Business Program
This 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 apparent low Bidder, Shimmick Construction Company, Inc., is not a small business. However, its Bid subcontracts out the project scope in the amount of $6,582,458 to the Department of General Services Certified Small Businesses, which is equivalent to 5 percent of the total Bid amount.
Rights-Of-Way
A. Phased Notices to Proceed. Right-of-way transactions are still pending, which will impact the contractor’s access to certain geographic areas of the Project. Consequently, to commence Project construction with minimal delay, staff will utilize phased Notice to Proceed (NTP) approvals to authorize the contractor to proceed with building the Project in a certain sequence, as real property rights are secured. The planned phased NTP dates and required construction milestone dates are stated in the Contract Documents.
B. Right-of-Way Status. CCFPP will be built in five reaches of Coyote Creek, Reaches 4, 5, 6, 7, and 8. The first phase of NTP approval (first phase) is to authorize the Contractor to proceed with construction in portions of Reaches 4, 6, 7, and 8, which consist of approximately two-thirds of the proposed CCFPP improvements. All rights-of-way necessary for issuing approval to proceed with construction of the first phase have been secured or will be secured prior to the issuance of the applicable NTP.
Through the phasing of the NTP dates staff has additional time to acquire the necessary rights of way. Where the necessary rights of way have not successfully been granted or voluntarily obtained, Valley Water has initiated litigation and that litigation remains in progress. Should continued efforts to legally obtain the necessary rights of way be obstructed, Project schedule may be delayed. Staff will seek input and direction from the Board in such cases, as needed.
Regulatory Permits and Jurisdictional Approvals
All necessary regulatory permits have been obtained for the Project's construction. The Project requires approval of the plans by the City of San Jose (City) for improvement in the City’s public right-of-way, and staff continues to work with City staff to complete the review and approval of the plans and expects that routing to be completed in the next few weeks. The Project also requires approval of Division of State Architect (DSA) for improvements within the school property. Staff has already met with DSA staff and expects these reviews and approvals to be secured prior to construction of these elements. Staff intends to give an administrative NTP to the Contractor as soon as Valley Water secures the property rights, so that the Contractor has sufficient time to procure the passive barriers that have a long lead time. Should DSA review need modifications to the design, staff will evaluate those modifications and impact to the Project and update the Board, as needed.
Public Outreach
Valley Water will use a variety of outreach strategies to keep the community informed of the Project’s progress and important milestones. During the Project’s design phase, numerous public meetings were held, both virtual and in-person, within the adjacent neighborhoods. Valley Water also utilized physical mailers and Nextdoor social media posts to inform the community.
During construction, public outreach will be targeted to the surrounding neighborhoods and include pre-construction and construction update public meetings. In addition to the outreach tactics used during the design phase, construction phase outreach will include regular email updates and construction site signage.
Next Steps
If the Board approves the recommendations, staff will proceed with administering construction of the Project, which is anticipated to begin in August 2026 and be completed by October 2028, followed by a three (3) year plant establishment period, in compliance with the regulatory permits.
ENVIRONMENTAL JUSTICE IMPACT:
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. However, CCFPP will have beneficial Environmental Justice impacts. The intent of the CCFPP is to protect the public, including disadvantaged communities from dangers associated with flooding similar to the flooding event that occurred in February 2017. Construction of the Project does not disproportionately impact undeserved or disadvantaged communities.
FINANCIAL IMPACT:
The CCFPP is included in the Capital Improvement Program (CIP) Fiscal Year (FY) 2027-31 Five-Year Plan and in the FY 2026-27 Adopted Budget. The total cost for the recommended construction contract, including the change order contingency sum of $18,656,746 is $143,035,055, which does not change the overall total Project cost reflected in the CIP FY 2027-31 Five-Year Plan.
Based upon current estimates, there are adequate funds in the Project’s Board -adopted FY 2026-27 budget to encumber the planned expenditures for construction to be incurred during this fiscal year. Funds to cover the remaining anticipated construction costs will be included in the biennial budget process and recommended by staff during the annual fiscal year budget process or through budget adjustment(s), if needed.
The Project is funded through the Safe, Clean Water Program Fund (Fund 26).
The Department of Water Resources (DWR) has awarded Valley Water $3.8 million in Integrated Regional Water Management Program (IRWMP) grant funding for a portion of CCFPP construction work.
On February 14, 2023, Valley Water and the U.S. Environmental Protection Agency (EPA) entered into a master loan agreement pursuant to EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) loan program to fund CCFFP and the Sunnyvale East and West Channels flood control project. The agreement provides for the execution of loans totaling $146.6 million to partially fund the projects. An initial loan for $41.3 million, which provides funding for CCFPP design and planning costs, was entered into on February 14, 2023. Staff is working on executing a second loan for $105.3 million, with $93.7 million identified for CCFPP construction costs.
CEQA:
Valley Water is the lead agency under the CEQA for the implementation of the Project. On March 11, 2025, the Board adopted a Resolution (Resolution No. 2025-16) certifying the Final Environmental Impact Report (EIR), adopting the Mitigation Monitoring and Reporting Program and approved the CCFPP.
On April 14, 2026, the Board Considered the First Addendum to the Final EIR.
ATTACHMENTS:
Attachment 1: Addenda Nos. 1, 2, 3, 4, 5, 6, and 7
Attachment 2: Project Delivery Process Chart
Attachment 3: Location Map
Attachment 4: Gordon N. Ball Bid Protest
Attachment 5: Shimmick Response Letter to Gordon N. Ball Bid Protest
Attachment 6: Final Decision by Designated Engineer
UNCLASSIFIED MANAGER: Manager
Bhavani Yerrapotu, 408-630-2735