06 Staff Report. Increase Change Order Authorities
PREPARED BY: WooJae Kim
Town Engineer
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Parks and
Public Works Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 3/16/2021 ITEM NO: 6
DATE: March 11, 2021
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts
and Authorize Staff to Execute Future Change Orders for the FY2020/21
Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter,
and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart
Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization)
RECOMMENDATION:
Staff recommends that the Town Council increase project contingency to 30 percent of the
contract award amounts and authorize staff to execute future change orders for the FY2020/21
Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk
Maintenance (CIP No. 813-9921), and 24 percent for the Smart Signals Field Improvements (CIP
No. 813-0227, Traffic Signal Modernization).
BACKGROUND:
The adopted Fiscal Year (FY) 2020/21-2024/25 Capital Improvement Program (CIP) Budget
designates funding for the annual Street Repair and Resurfacing (CIP No. 811-9901), annual
Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and Smart Signals Field
Improvements (CIP No. 813-0227, Traffic Signal Modernization).
On February 2, 2021, the Town Council approved the plans and specifications for the FY2020/21
Street Repair and Resurfacing; and authorized the Town Manager to advertised the project for
public bid and award a construction contract not to exceed $4,763,000, including contingencies
and change orders (ten percent of the contract amount). Council also approved the plans and
specifications for the FY2020/21 Curb, Gutter, and Sidewalk Maintenance; and authorized the
Town Manager to advertise the project for public bid and award a construction contract not to
exceed $771,000, including contingencies (ten percent of the contract amount).
PAGE 2 OF 6 SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts and Authorize Staff to Execute Future Change Orders for the FY2020/21 Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization) DATE: March 11, 2021
BACKGROUND (continued):
On January 19, 2021, the Town Council approved the plans and specifications for the Smart
Signals Field Improvements; and authorized the Town Manager to advertised the project for
public bid and award a construction contract not to exceed $750,000, including contingencies
(ten percent of the contract amount). The Traffic Signal Modernization project is largely funded
through grants from the Metropolitan Transportation Commission (MTC) and Santa Clara Valley
Transportation Authority (VTA), with local match funds from the Traffic Impact Mitigation Fund.
The field improvements portion of the Traffic Signal Modernization is funded through the
Traffic Impact Mitigation Fund.
Staff typically requests construction agreement amounts with authority to staff to issue up to
ten percent of the contract amount for future change orders for unanticipated or anticipated
additional work. Where extenuating circumstances exist, staff may request higher
contingencies.
DISCUSSION:
On February 18, 2021, the Town received six bids for the Smart Signals Field
Improvements. Below is the bid summary:
Project No. of
Bids Bid Range Bid
Average
Engineer’s
Estimate
without
Contingency
Council Authorized
Award Amount,
including 10% for
Change Orders
Smart Signals
Field
Improvements
6 $603,975-
$976,583 $791,834 $655,000 $750,000
The lowest responsible bid was from St. Francis Electric, who is also the Town’s vendor for
streetlights and signals maintenance. St. Francis Electric is closely familiar with the Town’s
existing traffic signal infrastructure. The second lowest bidder had a price of $694,807.
Staff recommends that Council authorize staff to issue future change orders up to 24% of the
contract amount for this project to take advantage of low prices from St. Francis Electric, while
adhering strictly to the construction agreement amount not to exceed $750,000 as authorized
PAGE 3 OF 6 SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts and Authorize Staff to Execute Future Change Orders for the FY2020/21 Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization) DATE: March 11, 2021
DISCUSSION (continued):
by Council. The additional improvements, especially associated with the traffic signal video
detection system at intersections, would allow for a more robust and comprehensive Smart
Signals network.
On February 25, 2021, the Town received bids from eight contractors for the FY2020/21 Curb,
Gutter, and Sidewalk Maintenance project. The Town also received four bids for the FY2020/21
Street Repair and Resurfacing on March 2, 2021 project. The bid pricing was very
competitive. Below is a bid summary with the lowest bids in bold:
FY2020/21
Projects
No. of
Bids Bid Range Bid
Average
Engineer’s
Estimate
without
Contingency
Council Authorized
Award Amount,
including 10% for
Change Orders
Curb, Gutter,
& Sidewalk
Maintenance
8 $417,130-
$634,318 $495,291 $625,000 $771,000
Street Repair
and
Resurfacing
4 $3,134,344 -
$3,481,481 $3,306,916 $3,750,000 $4,763,000
This year’s lowest responsible bid for the Curb, Gutter, and Sidewalk Maintenance project is
from Villalobos and Associates, and Pavement Coatings for the Street Repair and Resurfacing
project. The Town has satisfactorily completed past projects with both contractors. The
average bid prices this year for both projects are noticeably lower compared to past years.
Engineer’s Estimates are based on past year averages with escalation added. Staff took a
conservative approach in creating the Engineer’s Estimate due to uncertain market conditions
from the continuing COVID-19 pandemic. Also, low bid costs can be attributed to advertising
bids early in the year.
Staff is recommending that Council authorize the increase of the change order authority from
ten percent to 30 percent for staff to take full advantage of the lower unit costs this year and
increase the amount of work that can be done within the budgeted funds.
Staff will conduct project outreach via social media platforms and distribute project
notifications to inform the affected communities of the upcoming projects throughout the
Town.
PAGE 4 OF 6 SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts and Authorize Staff to Execute Future Change Orders for the FY2020/21 Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization) DATE: March 11, 2021
CONCLUSION:
Approval of the recommendation allows staff to work with this year’s low bid contractors to do
more work throughout the Town within the budgeted fund for the FY2020/21 Street Repair and
Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No.
813-9921), and Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal
Modernization).
COORDINATION:
This project has been coordinated with the Finance Department.
FISCAL IMPACT:
Funds for the increased costs are available in the respective project budgets. Remaining project
fund balances shall be carried forward to the next fiscal year.
Street Repair and Resurfacing (CIP No. 811-9901)
Budget Costs
GFAR $ 2,303,024
Gas Tax $ 1,242,352
Winchester Class IV Bikeway $ 842,917
Proposed Cost Share – City of Monte Sereno $ 334,000
Reduction for Prior Cost Share Agreements $ (78,339)
Total Project Budget $ 4,643,954
Construction (Base and Alternate Bid Items) $3,134,344
Contingency (30%) $940,303
Material Testing $30,000
Pavement Condition Survey $30,000
Temporary Staff Costs $15,000
Other Project Related Costs $6,000
Project Costs $4,155,647
Available Balance $ 488,307
PAGE 5 OF 6 SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts and Authorize Staff to Execute Future Change Orders for the FY2020/21 Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization) DATE: March 11, 2021
FISCAL IMPACT (continued):
Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921)
Budget Costs
GFAR $745,992
Cost Share Agreement – Monte Sereno $66,000
Total Project Budget $811,992
Construction (Base and Alternate Bid Items) $417,130
Contingency (30%) $125,139
Material Testing $30,000
Temporary Staff Costs $7,000
Other Project Related Costs $4,000
Project Costs Committed $583,269
Available Balance $228,723
Traffic Signal Modernization (CIP No. 813-0227)
Budget Costs
Grant Fund $1,826,400
Traffic Mitigation $1,103,289
Total Project Budget $2,929,689
Construction (Base and Alternate Bid
Items) $603,975
Contingency (24%) $144,954
ATCS-ATMS Vendor (Econolite) $581,649
Project Management (W-Trans) $200,000
Design of Field Element (Iteris) $135,390
Staff Costs $200,000
Misc. Prior Year Expenditures $ 76,523
Project Costs Committed $1,942,491
Available Balance $ 987,198
PAGE 6 OF 6 SUBJECT: Increase Project Contingency to 30 Percent of the Contract Award Amounts and Authorize Staff to Execute Future Change Orders for the FY2020/21 Street Repair and Resurfacing (CIP No. 811-9901), FY2020/21 Curb, Gutter, and Sidewalk Maintenance (CIP No. 813-9921), and 24 Percent for the Smart Signals Field Improvements (CIP No. 813-0227, Traffic Signal Modernization) DATE: March 11, 2021
ENVIRONMENTAL ASSESSMENT:
These are projects defined under CEQA as being Categorically Exempt [Section 15301(c) Existing
streets, sidewalks, trails and similar facilities]. Notice of Exemptions have been recorded with
the County.