BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Approve a Sole Source Designation, Adopt Plans and Specifications, and Authorize Advertisement for Bids for the East Pipeline Inspection and Rehabilitation Project, Project No. 95084004, Contract No. C0718, (San Jose, Districts 1, 3, and 6).
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RECOMMENDATION: Recommendation
A. Find that the East Pipeline Inspection and Rehabilitation Project is substantially complex and, therefore, requires construction contract retention of ten percent (10%);
B. Find that certain Supervisory Control and Data Acquisition (SCADA) instrumentation components, as specified in the Plans and Specifications, should be designated as specific brand or trade name products. Public Contract Code Section 3400(c)(2);
C. Adopt the Plans and Specifications and Authorize Advertisement for Bids for Construction of the East Pipeline Inspection and Rehabilitation Project, per the Notice to Bidders; and
D. Authorize the Designated Engineer to issue addenda, as necessary, during the bidding process.
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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.
Staff is recommending that the Board approve the Project’s Plans and Specifications and authorize advertisement for construction bids per the Notice to Bidders (Attachment 1).
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.
Construction Contract Retention
Public Contract Code (PCC) Section 7201 limits retention amounts for public works construction contracts to five percent (5%) of the total contract price. PCC section 7201(b)(4) provides that retention proceeds on a project may exceed 5% where the Board makes a finding that the proposed project is “substantially complex” and, therefore, requires a retention amount greater than 5%.
To comply with the PCC regarding increasing the retention to 10%, staff recommends that the Board find that the Project is substantially complex. Substantially complex Project challenges, in this case, pertain to the complexity and precision required to conduct critical work within a constrained shutdown schedule. The pipeline shutdown durations are negotiated up to years in advance and require the cooperation of other water agencies to minimize unplanned disruption in the delivery of treated water from Penitencia Water Treatment Plant throughout Santa Clara County. A disruption in delivery of treated water in Santa Clara County could result in water shortages and disruption to water retailers.
Specific Brand of Trade Name Justification
For a specific brand or trade name product to be mandated by a public entity for a construction project, at least one of four criteria must be met as stated in PCC 3400(c). For this Project, PCC Section 3400(c)(2) allows the awarding authority to make a finding that such designations are justified to obtain necessary items to match other products in use on a particular public improvement, either completed or in the course of completion.
To comply with the PCC regarding the use of specific brand or trade name products for Project construction, staff recommends the Board find certain items as specified in the Plans and Specifications are necessary to match the existing equipment already in use at other Valley Water facilities using the District’s SCADA system.
Releasing certain information in the Plans and Specifications, including identification of the specific brand or trade name products and details of the integration of the products into the existing information technology systems, to the public, may increase the potential for an attack on a Valley Water information technology system. To protect Valley Water’s information technology systems, all parties interested in accessing the Project Plans, Specifications, and addenda, must register as a vendor at the Valley Water Vendor Portal and submit a completed Non-Disclosure Agreement (NDA) to access the Contract Documents.
Board Adoption of Plans and Specifications and Addenda Authorization
Board adoption of plans and specifications and Board authorization to advertise is recommended in order to proceed to bid the Project for construction. Authorizing the Designated Engineer to issue addenda during the bidding period allows for modifications to the construction Contract Documents, if necessary, during the bidding period and before the contract is awarded.
The Project Plans and Specifications were provided by separate communication to Valley Water’s Board of Directors for their review, prior to taking the recommended action to adopt the Plans and Specifications for bid advertisement. Addenda will be provided to the Board pursuant to the same communication protocols. The Notice to Bidders informs interested parties that they must execute an NDA in order to access the Plans, Specifications, and addenda.
Relevant Prior Board Actions
On April 8, 2025, the Board adopted Resolution 2025-22 Setting the Time and Date of 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.
Rights of Way
Valley Water has all the necessary right-of-way needed for the construction of the Project.
Public Outreach
Residents, commercial businesses, and visitors will be informed of potential temporary impacts, as appropriate. Construction contract documents include requirements and measures to minimize impacts during the construction.
Permits
Staff is working to obtain the Project’s Lake Streambed Alteration (LSA) Agreement with the California Department of Fish and Wildlife (CDFW). The construction contract will not be awarded by Valley Water until the LSA Agreement is signed which is anticipated by early spring 2026.
Staff received conditional encroachment permits from the City of San Jose. The final approved encroachment permits will be obtained after the construction contract is awarded and issued prior to construction commencement.
Next Steps
If the Board approves the recommendations, staff will proceed to advertise the Project for construction bids. Staff anticipates recommending the Board award a construction contract in March 2026.
ENVIRONMENTAL JUSTICE IMPACT:
There is 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:
There is no financial impact associated with the recommendation to Adopt Plans and Specifications and Authorize Advertisement for Bids.
The East Pipeline Inspection and Rehabilitation Project (East Pipeline Project) is being funded through 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 upon estimated construction contract costs, there are adequate funds in the Project’s FY 2026 Adopted Budget to encumber the planned expenditures for construction to be incurred during this fiscal year. The estimated cost of the Project is $5 to $6 million.
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 East Pipeline Inspection and Rehabilitation 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: Notice to Bidders
Attachment 2: Project Delivery Process Chart
Attachment 3: Map
UNCLASSIFIED MANAGER: Manager
Emmanuel Aryee, 408-630-3074