REPORT TO COUNCIL
SUBJECT
Title
Action on an Award of Contract for the Northern Receiving Station Upgrades and Expansion Project Contract No. 2454 to Henkels and McCoy West, LLC and Related Budget Amendment
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure.
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), issued a public works bid packet for the Northern Receiving Station Upgrades and Expansion Project, Project No. 2454 (Project). The proposed Project was identified in SVP’s Three-Year System Growth Plan Strategy that was accepted by City Council on September 28, 2021 (RTC #21-871), to support anticipated system growth, increase capacity, and replace end-of life equipment for system reliability.
The Northern Receiving Station (NRS) was constructed over 20 years ago in 2002. The Project will be located on available space within the existing station site and involve the (1) installation of additional transformers three 115kV/60kV, 336MVA and two 230kV/115kV, 560MVA power transformers); (2) installation of 115kV and 230kV bus; and (3) improvements to air insulted switchgear (AIS) Double-Bus-Double-Breaker (DBDB) configurations. Other work includes affected protection and control relay panels within existing control enclosure(s) and improvements or infrastructure necessary to facilitate the connection of future 60kV, 115kV, and 230kV transmission lines. The current 372MVA capacity of NRS will be increased to over 900MVA upon the completion of this Project.
DISCUSSION
On March 11, 2025, a competitive Request for Bid (RFB) was published on the City’s bid notification system, BidNet Direct, for the Project. On May 15, 2025, the Project bids were opened at the City Clerk’s office. The City received two (2) bids that were both deemed non-responsive. On May 21, 2025, the City re-bid the project.
On June 12, 2025, the Project re-bid was opened at the City Clerk’s office. The City received two (2) bids from PAR Western Line Contractors, LLC (PAR West) and Henkels & McCoy West, LLC (H&M) in the amounts of $45,700,982.00 and $47,783,784.64, respectively.
After staff evaluation, PAR West’s total base bid was adjusted to $49,763,888.61 which was more than H&M’s listed bid. Staff then reviewed H&M’s bid documents and their total base bid also required adjustment to $47,788,603.86 which made H&M the apparent low bidder. H&M’s corrected bid of $47,788,603.86 is 32% less than the Engineer’s Estimate of $70,300,000. Both PAR and H&M acknowledged and agreed to the adjustments. The final Re-Bid Summary is included as Attachment 1.
SVP staff included scope additives in the form of bid alternates to provide flexibility to accommodate additional work identified to prepare the NRS site to support a new third 230kV source which the California Independent System Operator (CAISO) approved as part of its Transmission Planning Process (TPP) 24/25 on May 22, 2025 which will bring more power to the City. Per Section 9. Additive and Deductive Alternates of the Instructions to Bidders, “the City reserves the right…to add [to] the Contract any of the additive…alternates included in the Bid Proposal…” The alternate work requested includes modification of existing caisson foundations, replacement of steel structures, demolition of existing main bus, and installation of a new main and transfer bus at various voltage levels throughout NRS. Staff requests the approval of Bid Alternates #1-9 for a total amount not-to-exceed $12,068,489.28.
H&M’s bid was reviewed by SVP staff for compliance with the terms and conditions of the bid documents and has determined H&M to be the lowest responsive and responsible bid. Staff recommends awarding the contract to H&M.
Award of the contract will allow construction to commence in order to complete the Project. The contract includes prevailing wage requirements.
ENVIRONMENTAL REVIEW
The proposed Project is a ministerial project and is therefore exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15268 of Title 14 of the California Code of Regulations based on the existing zoning of the Project site and under the applicable laws and ordinances.
FISCAL IMPACT
The cost of the base contract is $47,788,603.86, plus an additional $12,068,489.28 for Bid Alternates #1-9 for an adjusted contract price $59,857,093.14, plus a 15% contingency, or $8,978,563.97, for any potential change orders for a total not-to-exceed contract amount of $68,835,657.11. Funding for the contract is included in the NRS Upgrades and Expansion Project in the FY 2025/26 Adopted Budget. On September 10, 2024, the City Council approved the issuance of electric revenue bonds which fund the design and materials purchases associated with these projects. The FY 2025/26 Adopted Budget assumes additional debt will be issued to support the construction costs funded in the budget. Staff will present a recommendation in the future to initiate the debt-funding for FY 2025/26, either a short-term credit facility or long-term debt will be necessary to fund this Project.
Staff recommends the appropriation of additional funds for Project management services, construction management services, testing and commissioning support services, special testing services, and additional equipment and materials costs (e.g., transformers). Due to long lead times, SVP is purchasing many of these associated equipment and materials directly and so those costs are not included in this construction contract. Staff have estimated these costs and have added a 5% contingency in case of any additional unanticipated needs. Contracts and authorizations associated with these activities have been authorized under separate City Council actions where applicable.
Staff recommends the budget amendment below in the Electric Utility Capital Fund to allocate $16 million for the NRS Upgrades and Expansion Project No. 2454 to cover the costs outlined above. This increase is offset by an increase to the Unrestricted Beginning Fund Balance which reflects anticipated Project savings in FY 2024/25 from updating the timeline for the South Loop Reconductor project. The FY 2024/25 savings will result in additional fund balance that will carry over to FY 2025/26.
Budget Amendment
FY 2025/26
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Utility Capital Fund (591) |
|
|
|
|
Beginning Fund Balance |
|
|
|
|
Unrestricted Beginning Fund Balance |
$124,493,014 |
$16,000,000 |
$140,493,014 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
NRS Upgrades and Expansion Project |
$115,439,070 |
$16,000,000 |
$131,439,070 |
COORDINATION
The report has been coordinated with the Finance Department and the City Attorney’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. Award the Public Works Contract for the Northern Receiving Station Upgrades and Expansion Projects, No. 2454, to the lowest responsive and responsible bidder, Henkels & McCoy West, LLC in the amount of $47,788,603.86 (Base Contract Price) and approve Bid Alternates #1-9, in the amount of $12,068,489.28, for a revised Base Contract Price not to exceed $59,857,093.14 and authorize the City Manager or designee to execute the Contract (Contract), subject to the review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to take any actions necessary to implement and administer the Contract including executing any and all documents in furtherance of the award, completion, and acceptance of the Project and approval of any necessary change orders not to exceed 15 percent of the revised Base Contract Price, or $8,978,563.97, for a total contract amount not to exceed $68,835,657.11; and,
3. Approve the FY 2025/26 budget amendment in the Electric Utility Capital Fund to increase the Unrestricted Beginning Fund Balance and increase the Northern Receiving Station Upgrades and Expansion Project in the amount of $16 million (five affirmative Council votes are required for the use of unused balances).
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Re-Bid Summary