Staff Report. Guardrail Replacement_Increase Change Order Authority
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: 06/01/2021
ITEM NO: 7
DATE: May 25, 2021
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Approve Increasing Construction Contingency to $308,000 for the Guardrail
Replacement Project (CIP No. 812-0120/Federal No. HSIPL-5067-022) and
Authorize Staff to Execute Future Change Orders up to the Approved Amount
to Expend the Federal Grant Funds
RECOMMENDATION:
Staff recommends that the Town Council approve increasing construction contingency to
$308,000 for the Guardrail Replacement Project (CIP No. 812-0120 / Federal No. HSIPL-5067-
022) and authorize staff to execute future change orders up to the approved amount to expend
the federal grant funds.
BACKGROUND:
The adopted Fiscal Year (FY) 2020/21-2024/25 Capital Improvement Program (CIP) Budget
designates funding for the Guardrail Replacement Project (CIP No. 812-0120).
On February 16, 2021, the Town Council approved the plans and specifications for the Guardrail
Replacement Project; and authorized the Town Manager to advertise the project for public bid
and award a construction contract to the lowest responsible bidder not to exceed $800,000,
including construction contingencies for future change orders (up to ten percent of the contract
amount). The project replaces approximately a half-mile of Town guardrails located on
Blossom Hill Road, Cleland Avenue, Los Gatos Boulevard, Miles Avenue, More Avenue,
Reservoir Road, and three segments on Santa Rosa Drive. The design, construction, and project
delivery of the project is largely funded through a $980,100 Highway Safety Improvement
Program (HSIP) grant secured from the Federal Highway Administration (FHWA).
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SUBJECT: Approve Increasing Construction Contingency to $308,000 for the Guardrail
Replacement Project (CIP No. 812-0120/Federal No. HSIPL-5067-022) and
Authorize Staff to Execute Future Change Orders up to the Approved Amount to
Expend the Federal Grant Funds.
DATE: May 25, 2021
DISCUSSION:
On March 18, 2021, the Town received three bids as summarized below, with the lowest bid
being $458,241 from Coral Construction Company:
Project No. of
Bids Bid Range Bid
Average
Engineer’s
Estimate
(without
Contingency)
Council Authorized Not
to Exceed Award
Amount (includes 10%
for Change Orders)
Guardrail
Replacement
Project
3 $458,241-
$496,114 $482,559 $678,610 $800,000
All bids received were lower than the Engineer’s Estimate and well below the construction
award amount of $800,000 approved by Council on February 16. The bid from Coral
Construction Company was deemed the lowest responsible, and staff has executed a
construction agreement for $458,241. Construction is anticipated to start in July.
As approved by Council, staff currently has the authority to issue up to $45,824 (10% of project
award amount) for future change orders. Staff typically requests the construction authorization
amount to include ten percent of the initial contract amount for future change orders for
unanticipated or anticipated additional work. In extenuating circumstances, staff can request
Council to increase the contingency amount and staff’s change order authority.
The total HSIP grant awarded to the Town is $980,100. FHWA has authorized up to $145,200 of
the grant funds for the design phase. HSIP funds remaining for the construction phase is
$834,900, which includes up to 15% of the construction amount for construction engineering or
management. With the current construction contract amount of $458,241, maximum HSIP
allowance for construction management is $68,736. Hence, a balance of approximately
$308,000 of the HSIP reimbursable grant fund is unprogrammed.
HSIP Grant Total - $980,100
Design - $145,200
Construction - $458,241
Construction Management - $ 68,736
HSIP Balance - $307,923
FHWA, through Caltrans (the lead agency), has indicated that change order work can be added
to the project to complete additional needed work utilizing the remaining grant fund balance
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SUBJECT: Approve Increasing Construction Contingency to $308,000 for the Guardrail
Replacement Project (CIP No. 812-0120/Federal No. HSIPL-5067-022) and
Authorize Staff to Execute Future Change Orders up to the Approved Amount to
Expend the Federal Grant Funds.
DATE: May 25, 2021
DISCUSSION (continued):
on the Guardrail Replacement Project. Staff prioritized and identified additional Town locations
where guardrails could be upgraded or added along Cypress Way, College Avenue, Teresita
Way, Buena Vista Avenue, Quito Road, and Kennedy Road. Staff submitted the scope and
locations for the additional guardrail work to Caltrans, which Caltrans reviewed to recertify the
environmental and right-of-way approvals. The Town is now authorized to utilize the remaining
HSIP funds for the additional guardrail upgrades.
Staff is requesting the Council’s authorization to increase the contingency amount and future
change order authority up to $308,000 to take advantage of the low prices from Coral
Construction in order to proceed with the additional work. This authorization would result in a
total construction contract spending not to exceed $766,241, which remains below the original
Council authorized amount of $800,000 for the construction contract.
CONCLUSION:
Approval of the recommendation allows staff to work with the low bid contractor to add new
guardrails and upgrade additional guardrails, meeting the latest guardrail standards, at more
locations throughout the Town all within the budgeted funds for the Guardrail Replacement
Project (CIP No. 812-0120).
ALTERNATIVES:
The Council could direct staff to bid the additional work as a separate project. Staff has not
recommended this option as the unit pricing from the original bid is very competitive and
completing the additional work within the original project provides increased efficiencies in
design, bidding, project management, and construction.
COORDINATION:
This project has been coordinated with the Finance Department.
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SUBJECT: Approve Increasing Construction Contingency to $308,000 for the Guardrail
Replacement Project (CIP No. 812-0120/Federal No. HSIPL-5067-022) and
Authorize Staff to Execute Future Change Orders up to the Approved Amount to
Expend the Federal Grant Funds.
DATE: May 25, 2021
FISCAL IMPACT:
Funds for the increased costs are available in the Guardrail Replacement Project. Remaining
GFAR fund balances shall be carried forward to the next fiscal year.
Guardrail Replacement Project
Project 812-0120
Budget Costs
GFAR $ 93,015
HSIP Grant $ 980,100
Total Project Budget $ 1,073,115
Engineering Consultant $ 130,000
Staff Cost – Design Phase (Temporary) $ 23,115
Construction (Low Bid) $ 458,241
Construction Management (15%) $ 68,736
Construction Contingency $ 308,000
Total Project Costs $ 988,092
Available Balance (GFAR) $ 85,023
ENVIRONMENTAL ASSESSMENT:
This is a project defined under CEQA as being categorically exempt [Section 15301(c) Existing
streets, sidewalks, trails and similar facilities]. A Notice of Exemption has been filed. Under the
National Environmental Policy Act (NEPA), the project is determined to be categorically
excluded from detailed environmental analysis.
For the additional work proposed, CEQA Categorical Exception/NEPA Categorical Exclusion
document has been approved and recertified by Caltrans.