SAN JOSE CAPITAL OF SILICON VALLEY

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1 COUNCIL AGENDA: ITEM: 6.1 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL Memorandum FROM: Barry Ng Kimberly J. Becker Jennifer A. Maguire SUBJECT: SEE BELOW DATE: Approved Date 7 SUPPLEMENTAL / I SUBJECT: MINETA SAN JOSE INTERNATIONAL AIRPORT JETBRIDGES AT GATE 29 AND GATE 30 REASON FOR SUPPLEMENTAL MEMO To provide additional information obtained after bid opening on February 16, RECOMMENDATION (a) Report on bids and award of a construction contract to the low bidder Hensel Phelps Construction Co., for the base bid and Bid Alternate No. 1 in the amount of $8,801,000 for the Mineta San Jose International Airport - Jetbridges at Gate 29 & Gate 30 Project, and approval of a 10 percent contingency in the amount of $880,100. (b) Adopt a resolution authorizing the Director of Public Works to issue any and all change orders up to the amount of the contingency. (c) Adopt the following Appropriations Ordinance Amendments in the Airport Renewal and Replacement Fund: (1) Establish an appropriation to the Airport Department for Terminal B Gates 29 & 30 in the amount of $4,000,000; and (2) Decrease the Unrestricted Ending Fund Balance by $4,000,000. OUTCOME Approval of the recommendation will allow the execution of the construction contract for the project immediately upon Council approval. The 10 percent contingency will provide funding

2 Page 2 for unanticipated work that may be necessary for the proper completion or construction of the project. Adoption of the appropriation ordinance amendments will provide additional funding needed to construct this project. BACKGROUND A memorandum dated February 6, 2017 was forwarded to City Council for the February 28, 2017 City Council meeting. The purpose of this supplemental memorandum is to provide additional information obtained after the February 16, 2017 bid opening. ANALYSIS Bids were opened on February 16, 2017 with the following results: Add Alt Total Variance Contractor Base Bid Total Bid Amount Hensel Phelps Construction Co. $8,372,000 $1,101,000 $9,473,000 ($2,948,000) (San Jose, CA) (Burirngam^CA) 10 9,114,000 1,226,000 10,340,000 (2,081,000) Over/(Under) Percent (24) (17) Engineer's Estimate $10,420,000 $2,002,000 $12,421,000 Bid Alt Bid Alt Bid Alt Bid Alt Contractor No. 1 No. 2 No. 3 No. 4 Hensel Phelps Construction Co. $429,000 $192,000 $64,000 $82,000 (San Jose, CA) Rodan Builders, Inc 450, ,000 70, ,000 (Burhngame, CA) Bid Alt No. 5* $334, ,000 Engineer's Estimate $256,000 $590,000 $56,000 $100,000 $ >1,000,000 The Engineer's Estimate for Add Alt #5 is an 'up-to' amount Mineta San Jose International Airport (SJC) would pay to expedite the project. The project specifications state that the lowest bid shall be determined by the total of the base bid plus Bid Alternates not to exceed $10,420,000. The bid submitted by Hensel Phelps Construction Co. had the lowest combination of base bid plus Bid Alternates and did not exceed $10,420,000. The bid amount to be awarded is the base bid plus Bid Alternate No. 1 in the amount of $8,801,000, which is 18 percent under the Engineer's Estimate. After reviewing bid results and Bid Alternates, SJC selected only Bid Alt. No.l, the hold room, to provide additional seating capacity for passengers. Staff considers this bid reasonable for the work involved. The remaining four add alternates were not chosen to keep the project budget closer to the original project budget of $10,500,000. It should be noted that the initial project budget of $10,500,000

3 Page 3 that was included in the Adopted Capital Budget accounted for two prefabricated passenger boarding corridors for these new gates. As the permitting process began, the Fire Department identified to staff that the passenger boarding corridors originally planned to be used were incompatible and not up to the fire resistive standard as the rest of Terminal B. Because of this change, staff went forward with this new bid that met the requirements set by the Fire Department. As a result, although the bid plus Bid Alt. No. 1 recommended for award is lower than the Engineer's Estimate, additional funding of $4,000,000 is required for the project to move forward. The additional funding is available from unallocated ending fund balance in the Airport Renewal and Replacement Fund, with no impact to other planned projects. The lower than estimated bids can be attributed to the fact that both bidders are very familiar with at S JC and the work involved, whether they are the original contractor who constructed the facility or have been working at the site for numerous years. Additionally, during the design phase, SJC acquired two different professional cost estimates. The final estimate provided by Hill International was used to establish the Engineer's Estimate. Hensel Phelps Construction Co. is very familiar with airport security requirements, as they have completed over approximately $950 million of work at the San Jose and San Francisco International Airports including the SJC Terminal B Remodel, the SJC Consolidated Rental Car Facility, the SFO Airport Traffic Control Tower, and the SFO Terminal 3 Remodel. Given their familiarity with the project site and the reasonable bid provided, staff recommends awarding to Hensel Phelps Construction Co. Council Policy provides for a standard contingency of 10 percent on public works building projects. The funds currently budgeted in combination with the funds to be reallocated for this project are sufficient to provide for the recommended contingency. San Jose Municipal Code Section authorizes the Director of Public Works to issue change orders up to the amount of the contingency, provided that no single change order can be over $100,000. Staff recommends the delegation of authority to the Director of Public Works for the issuance of change orders up to the amount of the contingency without the single change order limit, in order to keep the critical construction timeline. This project will be funded, in part, using Terminal Area Improvement Program (TAIP) bond proceeds, therefore the City's Disadvantaged Business Enterprise (DBE) Program for Federal Aviation Administration grant funded capital projects is not applicable. However, staff encouraged local and small business participation through the advertisement of the project, at the pre-bid meeting, and notifying the small and local business community through and phone outreach. Hensel Phelps Construction and the following subcontractors were identified as Local Business Enterprises: Granite Rock Construction Co. (San Jose) Omni Sheet Metal, Inc. (San Jose) BT Mancini Company, Inc. (Milpitas)

4 February 24,2017 Page 4 Platinum Roofing, Inc. (San Jose) Critchfield Mechanical, Inc. (San Jose) Ciari Plumbing & Heating, Inc. (San Jose) Additionally, Hensel Phelps Construction listed the following DBE-certified subcontractor: All Bay Area Glass (Oakland) COMMISSION RECOMMENDATION/INPUT The Airport Commission was briefed on August 8, 2016 and were supportive of the project. COST SUMMARY/IMPLICATIONS 1. AMOUNT OF RECOMMENDATION/COST OF PROJECT Project Delivery $ 4,818,900 Construction (including base bid and Add Alternate 1) 8,801,000 Contingency (10 percent) TOTAL PROJECT COSTS $14,500, SOURCE OF FUNDING: Airport Revenue Bond Improvement Fund Airport Renewal and Replacement Fund 3. OPERATING COST: The project has been reviewed and was determined that it will have no significant adverse impact on the Airport operating budget. BUDGET REFERENCE Funding for the Terminal B Gates 29 and 30 project is included in the Adopted Capital Budget and Capital Improvement Program (CIP) for The table below identifies the appropriations proposed to fund the contract recommended as part of this memo and remaining project costs, including project delivery, construction, and contingency costs. Fund # Appn # Appn. Name Terminal B Gates & NEW Terminal B Gates 29 & Ending Fund Balance Total Appn Rec. Budget Action Amount For Contract Adopted Capital Budget $10,500,000 $4,801,000 V-722 Last Budget Action (Date, Ord. No.) 6/21/16, N/A $4,000,000 $4,000,000 N/A N/A $5,278,404 ($4,000,000) V-680 2/14/17, 29880

5 Page 5 CEOA Resolution Nos and 71451, PP /s/ BARRY NG Director of Public Works /s/ KIMBERLY J. BECKER Director of Aviation Senior Deputy City Manager/ Budget Director For questions please contact Michael O'Connell, Deputy Director, Public Works Department, at