REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Agreements with ACCO Engineered Systems, Inc., Mesa Energy Systems, Inc., and Silicon Valley Mechanical, Inc. for Mechanical and Plumbing Maintenance and Repair Services at Levi’s Stadium, Limiting Authorization to Spend to a Total Not-To-Exceed Amount of $1,506,408, Inclusive of All Contract and Option Years and Contingency, Across All Three Agreements, and Delegated Authority for Future Amendments
Report
BACKGROUND
Pursuant to Section 2.9 of the Stadium Management Agreement between the Santa Clara Stadium Authority (Stadium Authority), Forty Niners SC Stadium Company LLC (StadCo), and Forty Niners Stadium Management Company LLC (Stadium Manager), the Stadium Manager is responsible for maintaining Levi’s Stadium (Stadium) “in the Required Condition and operate it as a high-quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility…”
Due to the size, age, and complexity of Levi’s Stadium and its mechanical and plumbing systems, the Stadium Manager has identified the need to maintain a pool of qualified mechanical and plumbing contractors to provide repair and maintenance services on an on-call, as-needed basis.
The Stadium Manager has identified the services to be performed include working on all aspects of the HVAC systems including resolving problems with air handling, cooling towers, refrigeration, supply and return fans, and exhaust fans. Service will be provided for maintenance and repairs of various boiler systems as well as work on various plumbing systems ranging from repairing pipes to addressing sewer and storm drainage system issues.
The Stadium Manager has regularly used on-call mechanical and plumbing vendors for mechanical and plumbing repairs, and anticipate a continued need, as Levi’s Stadium is a complex, aging facility. The Stadium Manager previously contracted with two on-call mechanical and plumbing vendors under a three-year agreement beginning September 7, 2021, and ending September 6, 2024, with an option to extend the term for two additional one-year periods. Total expenses for the first three-year term, in the aggregate, were $767,080.78, and total expenses in the aggregate for the five-year term through March 2026 are $998,074.78. The current agreements will term out on September 6, 2026.
On August 11, 2025, the Stadium Manager issued a Request for Proposals (RFP) to solicit qualified firms for mechanical and plumbing maintenance and repair services at Levi’s Stadium. Five proposals were received from the following firms on or before the RFP due date and time.
1. ACCO Engineered Systems, Inc. (ACCO)
2. DLI Mechanical (DLI)
3. Mesa Energy Systems, Inc. DBA EMCOR Services Mesa Energy (Mesa)
4. RMI Mechanical Contractors (RMI)
5. Silicon Valley Mechanical, Inc. (SVM)
An Evaluation Committee reviewed the proposals based on the criteria outlined in the RFP. Three firms were determined to be within the competitive range and each satisfied the requirements set forth in the RFP: ACCO Engineered Systems, Inc., Mesa Energy Systems, Inc., and Silicon Valley Mechanical, Inc. (each, a “vendor,” and collectively, the “Vendors”). The Stadium Manager negotiated various rates and costs, as applicable, with each Vendor based on their specific cost proposals. This process included securing competitive billable labor rates, as well as percentage markups for materials, equipment rentals, and subcontractors, and Vendor start-up costs. The Stadium Manager would establish a pool of pre-qualified mechanical and plumbing maintenance contractors, enabling the Stadium Manager to issue task orders on an as-needed basis to ensure timely and efficient delivery of services.
As such, the Stadium Manager is requesting Stadium Authority Board (Board) approval of the following actions for three master service agreements for on-call mechanical and plumbing maintenance and repair services:
1. Approve and authorize the Stadium Manager to enter into agreements with ACCO Engineered Systems, Inc., Mesa Energy Systems, Inc., and Silicon Valley Mechanical, Inc., (Attachments 1, 2, and 3) to provide on-call as-needed mechanical and plumbing maintenance and repair services at Levi’s Stadium for an initial term of three (3) years commencing upon execution of the Agreements, and expiring March 31, 2029, with two (2) optional one-year extensions through March 31, 2031. The total aggregate amount payable under all agreements shall not exceed $250,000 per contract year, $750,000 over the initial three-year period, and $1,250,000 over the maximum five (5) year term unless modified pursuant to Recommendation 3 below. The term for each fiscal year is contingent on the Santa Clara Stadium Authority Board approving the applicable fiscal year's budget, including amounts due under the Agreements.
2. Approve a contingency in the amount of $125,000, which is equal to ten percent (10%) of the aggregate total not-to-exceed value of the baseline amount payable under all Agreements over the maximum five (5) year term of the Agreements (i.e., $250,000 per year x 5 years). The contingency may be used to increase the not-to-exceed amount of any Agreement during any contract year, as needed to cover unforeseen services, subject to budget appropriations.
3. Authorize the Stadium Authority Executive Director to approve future amendments as needed to: (a) exercise the option to extend the Agreements by two (2) one-year extension periods through March 31, 2031, and to establish the not-to-exceed amount for each extension period of $250,000 to cover services during each extension; (b) increase the rates in contract years two through five (April 1, 2027 - March 31, 2031) by up to five percent (5%) over the previous year’s rates in accordance with the terms and conditions associated with rate increases in Exhibit G of the Agreements; (c) increase the not-to-exceed amount payable under each Agreement by up to five percent (5%) over the previous year's amount to account for rate increases, subject to budget appropriations; and (d) increase the not-to-exceed amount of any Agreement during any contract year using contingency funds as needed to cover unforeseen services, subject to budget appropriations. The aggregate total not-to-exceed value of amounts payable under all Agreements over the five (5) year term, inclusive of all contract years and contingency, shall not exceed $1,506,408 - see Table 1 below for details.
4. Authorize the Stadium Manager to issue and execute task orders to the three contracting firms, up to the aggregate not-to-exceed amount for each contract year, subject to budget appropriations.
A Recommendation for Award Memo was submitted by the Stadium Manager describing the services, solicitation process, and the request in more detail (Attachment 4).
DISCUSSION
Stadium Authority staff reviewed the Stadium Manager’s Recommendation for Award memo and supporting documents for consistency with the Stadium Authority Procurement Policy and Santa Clara City Code Chapter 2.105.140(c) (Competitive requirements for purchases - Formal requests for proposals for agreements with an amount over $250,000). As described above and in the Stadium Manager’s Recommendation for Award memo, the Stadium Manager implemented an RFP process and received five (5) proposals, and through the evaluation and subsequent negotiations process is recommending award of agreements to three vendors (ACCO Engineered Systems, Inc., Mesa Energy Systems, Inc., and Silicon Valley Mechanical, Inc.) for on-call services.
While there will be three agreements, the Stadium Manager is proposing an annual not-to-exceed amount of $250,000 for contract year one, applied on an aggregate basis, which will increase annually by 5% if the Stadium Authority Board approves the Stadium Manager’s request. Exhibit G in the Agreements include provisions allowing for annual rate adjustments by up to 3%; however, rate adjustments may increase by up to 5% in contract years two through five (April 1, 2027 through March 31, 2031), if applicable prevailing wage rate increases exceed 3%. The rate adjustment provisions reflect anticipated increases in labor costs, including union wage and benefit adjustments established through collective bargaining agreements. The Agreements include hourly rates for straight-time weekday, daily overtime, Saturday, and Sundays and holidays and additional costs.
The Stadium Manager is also requesting for a contingency in the amount of $125,000, equivalent to ten percent (10%) of the aggregate total not-to-exceed value of the baseline amount payable under all Agreements over the maximum five (5) year term, for additional unanticipated services which may be utilized in any contract year.
The chart below summarizes the projected costs over the five-year term of the Agreements, assuming a five percent (5%) rate increase for contract years two through five.
Table 1 - Cost Summary
|
Description |
“Combined” NTE |
|
Year 1 (4/1/26-3/31/27) |
$250,000 |
|
Year 2 (4/1/27-3/31/28) + 5% increase |
$262,500 |
|
Year 3 (4/1/28-3/31/29) + 5% increase |
$275,625 |
|
Year 4 (4/1/29-3/31/30) + 5% increase |
$289,406 |
|
Year 5 (4/1/30-3/31/31) + 5% increase |
$303,877 |
|
Contingency (10% of Total Agreement Amount) |
$125,000 |
|
Total Not-to-Exceed Maximum Compensation |
$1,506,408 |
These Agreements do not guarantee a minimum amount of work. Services will be authorized on an as-needed basis through task orders issued by the Stadium Manager within the approved budget.
After reviewing the request and supporting documents, staff discussed the following topics with the Stadium Manager and was provided further clarification on the process for awarding work between the three vendors, performance and payment bonds, and geographical requirements in the RFP, and labor and service rates.
Based on the documentation provided, staff recommends approval of the Stadium Manager’s requests and additional delegation to the Stadium Manager to execute amendments to the Agreements as approved by the Stadium Authority Executive Director.
The Stadium Authority Counsel’s Office has reviewed the Agreements for comparison to the Stadium Authority’s customary language. Nothing in the Agreements change the Stadium Authority’s rights under the Management Agreement and specifically with respect to any dispute that may arise from the Stadium Manager’s obligations under the Management Agreement.
The Stadium Authority reserves all rights to confirm and dispute charges by and payments to the Stadium Manager during a fiscal year-end reconciliation/true-up, including but not limited to changes based on improper allocation, calculation, lack of support, or failure to comply with the Parties’ contracts or California law. The Stadium Authority may raise related questions before the fiscal year-end reconciliation/true-up, which the Stadium Manager agrees to assess and respond to in good faith.
ENVIRONMENTAL REVIEW
The action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 “Existing Facilities” as the activity consists of mechanical and plumbing maintenance and repair of an existing public facility involving negligible or no expansion of use beyond that existing at the time of the lead agencies determination.
FISCAL IMPACT
The total aggregate amount payable under all three agreements will not exceed $1,506,408 over the entire agreement term, inclusive of the two option years and the contingency.
The Stadium Authority Fiscal Year (FY) 2026/27 Budget includes Shared Stadium Expenses, such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. In accordance with the Stadium Lease, most Shared Stadium Expenses are allocated 50/50 between the Stadium Authority and StadCo.
There are sufficient funds in the FY 2026/27 Shared Stadium Expenses Engineering line item to cover the Stadium Authority’s fifty percent (50%) share of contract year one’s total aggregate not-to-exceed amount of $250,000 and the $125,000 contingency (up to $125,000 plus an additional $62,500 for contingency).
The term for subsequent fiscal years is conditioned upon approval of the Stadium Authority budget for the applicable fiscal year that includes the amounts due under the agreement as required under Santa Clara City Code Section 17.30.100. The Stadium Authority's cost allocation for the remaining contract years are as follows: up to $131,250 plus 50% of the remaining contingency for contract year two, up to $137,813 plus 50% of the remaining contingency for contract year three, up to $144,703 plus 50% of the remaining contingency for contract year four, and up to $151,939 plus 50% of the remaining contingency for contract year five.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the Stadium Manager to enter into agreements with ACCO Engineered Systems, Inc., Mesa Energy Systems, Inc., and Silicon Valley Mechanical, Inc., to provide on-call as-needed mechanical and plumbing maintenance and repair services at Levi’s Stadium for an initial term of three (3) years commencing upon execution of the Agreements, and expiring March 31, 2029, with two (2) optional one-year extensions through March 31, 2031. Stadium Manager’s authority to spend under all agreements is limited to a total aggregate amount that shall not exceed $250,000 per contract year, $750,000 over the initial three-year period, and $1,250,000 over the maximum five (5) year term unless modified pursuant to Recommendation 3 below. The term for each fiscal year is contingent on the Santa Clara Stadium Authority Board approving the applicable fiscal year's budget, including amounts due under the Agreements;
2. Approve a contingency in the amount of $125,000, which is equal to ten percent (10%) of the aggregate total not-to-exceed value of the baseline amount payable under all Agreements over the maximum five (5) year term of the Agreements (i.e., $250,000 per year x 5 years). The contingency may be used to increase the not-to-exceed amount of any Agreement during any contract year, as needed to cover unforeseen services, subject to budget appropriations;
3. Authorize the Stadium Authority Executive Director to approve future amendments as needed to: (a) exercise the option to extend the Agreements by two (2) one-year extension periods through March 31, 2031, and to establish the not-to-exceed amount for each extension period as $250,000 to cover services during each extension; (b) increase the rates in contract years two through five (April 1, 2027 - March 31, 2031) by up to five percent (5%) over the previous year’s rates in accordance with the terms and conditions associated with rate increases in Exhibit G of the Agreements; (c) increase the not-to-exceed amount payable under each Agreement by up to five percent (5%) over the previous year's amount to account for rate increases, subject to budget appropriations; and (d) increase the not-to-exceed amount of any Agreement during any contract year using contingency funds as needed to cover unforeseen services, subject to budget appropriations. The aggregate total not-to-exceed value of amounts payable under all Agreements over the five (5) year term, inclusive of all contract years and contingency, shall not exceed $1,506,408; and
4. Authorize the Stadium Manager to execute amendments to the Agreements as approved by the Stadium Authority Executive Director, and issue and execute task orders to the three contracting firms, up to the aggregate not-to-exceed amount for each contract year, subject to budget appropriations.
Staff
Reviewed by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Draft Agreement with ACCO Engineered Systems, Inc.
2. Draft Agreement with Mesa Energy Systems, Inc.
3. Draft Agreement with Silicon Valley Mechanical, Inc.
4. Stadium Manager’s Recommendation Memo