REPORT TO COUNCIL
SUBJECT
Title
Action on the Award of a Public Works Contract for the Northern Receiving Station to Kifer Receiving Station 115 Kilovolt Transmission Line Project to Outsource Utility Contractor, LLC, for a Not-to-Exceed Amount of $31,172,792, Inclusive of a 20% Contingency (Contract No. 2455), and Related Budget Amendment
Report
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), issued a public works bid packet for the Northern Receiving Station (NRS) to Kifer Receiving Station (KRS) 115 kV Transmission Line Project, Project No. 2455 (Project). SVP is constructing approximately 2.24 miles of new 115kV transmission line within the northeastern area of the City of Santa Clara. The proposed project was identified in SVP’s Three-Year System Growth Plan Strategy that was accepted by the City Council on September 28, 2021 (RTC #21-871), to support anticipated system growth and to replace end-of-life equipment for system reliability.
The primary objective of the new transmission line is to connect the NRS and KRS receiving stations. This connection will allow energy to be balanced and redistributed within SVP's transmission receiving stations and enable SVP to serve the projected load growth based on SVP Resource Load Forecast.
After evaluating three potential transmission routes, the City Council approved the preferred route on November 12, 2024 (RTC #24-1040), an overhead alignment along Lafayette Street, Bassett Street, and Duane Avenue. The route was selected based on its overall feasibility, permitting constraints, ability to meet the schedule, flexibility in power delivery, ease of maintaining the system, and reduced construction disruption to the public as compared to the other alternatives.
The City Council has previously taken several actions on the Project:
• March 19, 2024 - RTC #24-1614 - Informational Report
• November 12, 2024 - RTC #24-1040 - Action on a Mitigated Negative Declaration (MND) and Mitigation Monitoring and Reporting Program (MMRP) and Route Approval for the Project
o Approved the Adoption of a MND and the MMRP
o Approval of Route A, Option 1, for an entirely overhead alignment of the new 115kV transmission line
• February 25, 2025 - RTC #25-212 - Authority to Execute Purchase and Sale Agreements (PSAs) for Easement Acquisitions
• Numerous other interactions regarding easement acquisitions
Other actions taken for this Project include two virtual community meetings held on April 25, 2024, and May 23, 2024, as well as an in-person public engagement meeting held on August 22, 2024, to present and receive comments from the community on the transmission line route.
DISCUSSION
On June 15, 2026, in accordance with Section 1310 of the City of Santa Clara Charter, which governs the competitive bidding for public works, a competitive Request for Bids (RFB) for the Project, was published on the City’s e-procurement system. The RFB was viewed by various vendors, including contractors, suppliers, plan rooms, and builder exchanges, among others. Additional vendors were able to view the RFB as members of various plan rooms and builder exchanges. Staff also reached out directly to contractors and vendors who have viewed similar projects in the past.
On July 30, 2026, the bid opening for the Project was held via video conference. The City received four bid entries, as summarized in Table 1 below.
Table 1 - Bid Summary
|
Bidder |
Total Bid Amount (Rounded to the Nearest Dollar) |
|
DMZ Builders |
$1 |
|
Outsource Utility Contractor, LLC |
$25,554,827 |
|
Henkels & McCoy West, LLC |
$29,279,130 |
|
DMZ Builders |
$39,765,281 |
At the bid opening, DMZ Builders submitted a bid entry in the amount of $1. Following the bid opening, staff confirmed with DMZ Builders that the $1 bid was submitted in error. Staff rejected the $1 bid. Thereafter, Outsource Utility Contractor, LLC was identified as the lowest apparent bidder, with a submitted bid in the amount of $25,554,827 which is five percent (5%) less than the Engineer’s Estimate of $26,900,000.
SVP staff included scope additives in the form of bid alternates to provide flexibility to accommodate additional work that may occur as the transmission pole procurement is finalized (foundation diameter changes) and coordination with the Federal Aviation Administration (FAA) due to proximity to the San Jose International Airport. The bid documents include a reservation for the City “…to add to…the Contract any of the additive…alternates included in the Bid Proposal…” The alternate work requested includes unit pricing for differing diameter foundations, installation of FAA lights, and/or conductor marker balls. Staff requests the approval of Bid Alternates #1-4 for a total amount not-to-exceed $422,500.
Staff reviewed the bid for compliance with the terms and conditions of the bid documents and determined that Outsource Utility Contractor, LLC is the lowest responsive and responsible bidder. Accordingly, staff recommend awarding the contract to Outsource Utility Contractor, LLC.
The recommended contract includes a maximum compensation of $25,977,327 (inclusive of Bid Alternates #1-4), plus a 20% contingency for any potential change orders. The total not-to-exceed contract amount, including contingency, is $31,172,792.
Approval of the contract award will authorize the City Manager to execute the public works contract for the Project in substantially the same form as attached to this Report to Council (Attachment 1). Upon City Council approval, Outsource Utility Contractor, LLC will be required to provide performance and payment bonds. Applicable Mitigation, Monitoring and Reporting Program requirements were incorporated into the Contract.
Construction of the Project is anticipated to begin in September 2026 with completion in 2028 in order to meet SVP’s load growth and regional projects. The contract includes prevailing wage requirements.
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 cost of the base construction contract (inclusive of bid alternates) is $25,977,327, plus a 20% contingency, or $5,195,465, for any potential change orders for a total not-to-exceed contract amount of $31,172,792. Partial funding for the contract is included in the 115 kV NRS - KRS Transmission Line Project in the Electric Utility Capital Fund in the FY 2026/27 Adopted Budget. A budget action is recommended below to appropriate an additional $3.5 million to fully fund the construction contract and contingencies as well as other project-related costs.
Budget Amendment
FY 2026/27
|
|
Current |
Increase/ (Decrease) |
Revised |
|
|
|
|
|
|
Electric Utility Fund (091) |
|
|
|
|
Transfers To |
|
|
|
|
Electric Utility Capital Fund |
$156,967,000 |
$3,500,000 |
$160,467,000 |
|
|
|
|
|
|
Ending Fund Balance |
|
|
|
|
Unrestricted Ending Fund Balance |
$89,187,646 |
($3,500,000) |
$85,687,646 |
|
|
|
|
|
|
Electric Utility Capital Fund (591) |
|
|
|
|
Transfers From |
|
|
|
|
Electric Utility Fund |
$156,967,000 |
$3,500,000 |
$160,467,000 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
NRS - KRS 115kV Line Project |
$41,632,501 |
$3,500,000 |
$45,132,501 |
COORDINATION
This 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 to Kifer Receiving Station 115 Kilovolt Transmission Line Project (No. 2455) to the lowest responsive and responsible bidder, Outsource Utility Contractor, LLC in the amount of $25,977,327, and authorize the City Manager or designee to execute a public works contract (Contract) in substantially the form attached to this Report to Council, subject to the review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to (a) take any necessary actions to implement and administer the Contract including executing any and all documents in furtherance of the award, completion, and acceptance of the Project and (b) approval of any necessary change orders not to exceed 20 percent (20%) of the Contract price inclusive of Bid Alternates, or $5,195,465, for a total Contract amount not to exceed $31,172,792; and
3. Approve the following FY 2026/27 budget amendments:
a. In the Electric Utility Fund, increase the Transfer to the Electric Utility Capital Fund and decrease the Unrestricted Ending Fund Balance in the amount of $3.5 million (five affirmative Council votes are required for the use of unused balances), and
b. In the Electric Utility Capital Fund, increase the Transfer from the Electric Utility Fund and the NRS-KRS 115kV Line project in the amount of $3.5 million (five affirmative Council votes are required to appropriate additional revenue).
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Public Works Contract for the Northern Receiving Station to Kifer Receiving Station 115 Kilovolt Transmission Line Project