REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Execute Purchase Orders with Anixter Inc. for Materials and Equipment for the Northern Receiving Station - Kifer Receiving Station 115 kV Transmission Line Project, for a Total Maximum Compensation Not to Exceed $847,496, Funded by the Electric Utility Capital Fund
Report
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), is constructing the Northern Receiving Station (NRS) - Kifer Receiving Station (KRS) 115 kV Transmission Line Project, Project No. 2455 (Project). The Project consists of approximately 2.24 miles of new 115 kV transmission line in the northeastern area of the City of Santa Clara.
The Project was identified in SVP’s Three-Year System Growth Plan Strategy, which City Council accepted on September 28, 2021 (RTC #21-871). The primary objective of the Project is to connect the NRS and KRS. This connection will allow energy to be balanced and redistributed among SVP's transmission receiving stations and enable SVP to serve the projected load growth based on SVP’s Resource Load Forecast.
City Council has previously taken the following actions related to the Project:
• March 19, 2024: Received an informational report on the Project (RTC #24-1614).
• November 12, 2024: Adopted a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program and approved Route A, Option 1, an entirely overhead alignment along Lafayette Street, Bassett Street, and Duane Avenue (RTC #24-1040).
• February 25, 2025: Authorized the execution of Purchase and Sale Agreements for easement acquisitions (RTC #25-212).
• August 18, 2026: Awarded the public works construction contract for the NRS-KRS 115 kV Transmission Line Project to Outsource Utility Contractor, LLC (RTC #26-805).
To support the Project schedule, SVP requires the timely procurement of specified transmission-line materials and equipment. Due to manufacturing lead times, staff issued a competitive solicitation to obtain the materials and equipment in advance of their required delivery dates.
DISCUSSION
Pursuant to Section 2.105.140(d) of the Santa Clara City Code (City Code), staff issued a formal Request for Bids (RFB) on August 3, 2026, for various materials and equipment for the NRS-KRS 115 kV Transmission Line Project. The procurement includes high-voltage insulators that electrically isolate and support conductors; clamps, connectors, and suspension/dead-end assemblies that secure, join, and terminate conductors; fiberglass crossarms and brackets that support line hardware; optical ground wire that provides lightning shielding and communications capability; and associated conductor support materials.
The RFB was published on the City’s e-procurement system. Staff also notified several firms of the RFB and directed them to the e-procurement system for participation. A total of 51 companies viewed the RFB, and the City received two bids by the deadline of September 1, 2026, from the following firms:
• Anixter Inc. (Anixter)
• OneSource Supply Solutions (OneSource)
Following evaluation, staff determined that neither bidder was responsive because neither could meet the City’s required delivery schedule for all materials and equipment identified in the RFB. Timely delivery is necessary to support the Project construction schedule. The notice to proceed for Project construction was issued on October 14, 2026, and construction activities are anticipated to begin this year, and Project completion is currently scheduled for March 2028.
Accordingly, the Purchasing Division Manager rejected both bids pursuant to Section 2.105.200 of the City Code. Under Section 2.105.200 of the City Code, following rejection of all bids or proposals, the Purchasing Division Manager or designee may re-solicit or proceed with an award without further compliance with Chapter 2.105 when re-advertising is determined to be an idle act.
The City’s Purchasing Division Manager has determined that re-advertising would be an idle act pursuant to Section 2.105.290(c). The original RFB was publicly posted, viewed by 51 firms, and resulted in two bids. Both bidders advised that prevailing manufacturer constraints prevented full compliance with the City’s original delivery schedule. These constraints reflect current market conditions and are not unique to these bidders. These manufacturing and market constraints are beyond the City’s control and are not unique to either bidder.
Direct negotiation is a better path and appropriate given that issuing a new solicitation would require additional time for advertisement, bid receipt, evaluation, City Council or administrative approval, award, and purchase order issuance. That additional procurement time would further delay the City’s ability to place orders for long-lead materials and considering the issue at hand is the two bidders were unable to meet the delivery timelines for key materials, staff considers it extremely unlikely that the situation would improve with further postponement due to a new solicitation.
The materials and equipment are necessary for critical-path construction activities associated with the Project. In particular, the optical ground wire, 115kV insulators, and double trunnion bracket assemblies are among the most time-sensitive items because they are necessary to support sequencing of transmission-line installation activities including conductor installation. Delayed procurement of these items would risk disruption of construction sequencing and could delay project completion. Based on these circumstances, the Purchasing Division Manager determined that readvertising would be an idle act and that proceeding with direct negotiations was necessary to minimize further delays of this critical electric-transmission infrastructure project.
Following rejection of the bids, staff directly negotiated with both original bidders, within the scope of the RFB, to obtain their best available delivery commitments, pricing, warranty terms, and final quantities. Because prevailing manufacturer lead times prevented either bidder from meeting the original delivery schedule, staff evaluated the negotiated offers based on their ability to meet the Project’s most time-sensitive material and equipment needs.
Based on this evaluation, Anixter offered the most favorable combination of delivery commitments and other negotiated terms to support the Project’s construction schedule, including the earliest achievable delivery of critical-path materials and equipment. Although Anixter’s evaluated price was approximately $2,140 higher than OneSource’s for the same scope and quantities, Anixter offered earlier delivery commitments for the critical-path materials needed to support the Project schedule. These delivery commitments were a key factor in selecting Anixter. Staff determined that the incremental cost is reasonable and justified by the reduced risk of construction delay and associated schedule impacts.
Accordingly, staff is seeking authorization for the City Manager or designee to execute purchase orders with Anixter for various materials and equipment for the Project in an amount not to exceed $651,920, including estimated sales tax, plus a contingency of $195,576 for potential tariff impacts, quantity adjustments within the original procurement scope, and other unforeseen but in-scope requirements, for a total maximum compensation not to exceed $847,496. Any use of contingency will be documented through an appropriate purchase order amendment and will remain subject to the total maximum compensation limit. Table 1 summarizes the maximum compensation.
Table 1: Maximum Compensation
|
Description |
Amount |
|
Various materials and equipment, including insulators, clamps, connectors, optical ground wire, and brackets, and other specified materials |
$594,005 |
|
Estimated Taxes (9.75%) |
$57,915 |
|
Total Purchase Order Amount |
$651,920 |
|
Contingency (30%) |
$195,576 |
|
Maximum Total Compensation |
$847,496 |
Delivery of the materials and equipment is anticipated between January and September 2027. The delivery schedule reflects the phased nature of the Project construction work. Materials and equipment will be delivered as needed to support construction sequencing, with the longest-lead item currently anticipated for delivery by September 2027. Payment will be based on successful completion of applicable purchase order milestones, with 10% of the applicable purchase order value retained until final acceptance. The purchase orders will include a one-year warranty covering the materials and equipment, commencing upon delivery.
Additional Quantities
SVP may need to purchase additional quantities of materials and equipment within scope and within the $847,496 maximum compensation authorized by City Council. If such purchases are necessary, they will be made pursuant to Section 2.105.130 City Code, which states “at the discretion of the Purchasing Division Manager, additional quantities may be purchased after the initial award of a contract or purchase order for general services or products. If the purchase of additional quantities or services increases the maximum compensation that exceeds the City Manager’s signature authority set forth in this chapter, or an amount previously approved by the City Council, then City Council approval is required.”
ENVIRONMENTAL REVIEW
The Mitigated Negative Declaration (MND) and Mitigation, Monitoring and Reporting Program (MMRP) were prepared for the Project in conformance with California Environmental Quality Act. These documents and Notice of Availability were posted on the City’s website at <http://www.santaclaraca.gov/ceqa> and circulated for 30-day review from July 31, 2024, to August 30, 2024.
The MND examined environmental impacts associated with the Project. The MND identified potentially significant impacts to air quality, biological, cultural resources, geology and soils, hazards and hazardous materials, hydrology and water, noise, and traffic/transportation. However, the MND and MMRP incorporates mitigation measures to reduce the potentially significant impacts to less-than-significant.
The MND and MMRP were adopted by the City Council on November 12, 2024, by Resolution No. 24-9386. Applicable MMRP requirements were incorporated into the Contract.
FISCAL IMPACT
The requested authorization is for purchase orders with Anixter Inc. in an amount not to exceed $651,920, including $594,005 for various materials and equipment and estimated sales tax of $57,915. An additional contingency of $195,576 is requested for potential tariff impacts, quantity adjustments within the original procurement scope, and other unforeseen but in-scope requirements, for a total maximum compensation not to exceed $847,496. Sufficient appropriations are available in the Electric Utility Capital Fund for the NRS-KRS 115 kV Transmission Line Project.
COORDINATION
This report has been coordinated with the Finance Department and 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. Subject to compliance with Chapter 2.105 of the City Code, review and approval as to form by the City Attorney, and appropriation of funds, authorize the City Manager or designee to execute purchase orders with Anixter Inc. for various materials and equipment for the Northern Receiving Station - Kifer Receiving Station 115 kV Transmission Line Project, Project No. 2455 in an amount not to exceed $651,920, including estimated sales tax, plus a contingency of $195,576 for potential tariff impacts, quantity adjustments within the original procurement scope, and other unforeseen but in-scope requirements, for a total maximum compensation not to exceed $847,496; and
2. Authorize the City Manager or designee to (a) take any actions as necessary to implement and administer purchase orders, and (b) negotiate and execute amendments for (i) design changes, (ii) any unanticipated issues, (iii) tariff increases, (iv) term extensions, (v) de minimis revisions, or (vi) the purchase of additional materials and equipment, subject to the above maximum compensation limit, appropriation of funds, and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan Grogan, City Manager