REPORT TO COUNCIL
SUBJECT
Title
Approve a $90,000 Increase in the Construction Contingency for the Construction Contract with Vellutini Corporation DBA Royal Electric Company for the SMaRT Station NexGen Electrical Upgrade Project (F26-321)
Report
REPORT IN BRIEF
Approval is requested to modify the existing purchase order with Vellutini Corporation DBA Royal Electric Company, increasing the amount from $795,708 to $885,708. The project has encountered unforeseen site conditions identified during construction that require additional work.
EXISTING POLICY
Pursuant to Chapter 2.09 - construction of the Sunnyvale Municipal Code, City Council approval is required for construction contracts exceeding $250,000.
ENVIRONMENTAL REVIEW
This project is exempt under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301(a), which applies to the operation, repair, maintenance, or minor alteration of existing interior partitions, plumbing, and electrical conveyances, involving negligible or no expansion of existing or former use.
BACKGROUND AND DISCUSSION
On July 23, 2024, Council approved the award of a construction contract to Vellutini Corporation DBA Royal Electric Company for the SMaRT Station NexGen Electrical Upgrade Project (PW24-20) with a contract amount of $691,920, and approved a contingency of $103,788 to implement critical electrical infrastructure improvements at the Sunnyvale Materials Recovery and Transfer Station (SMaRT Station®) to support future equipment upgrades and enhance operational reliability (RTC No. 24-0777). The original contract scope included repurposing an existing office into a new electrical room and installing a new electrical service consisting of a new switchboard, concrete equipment pad, conduit and trenching, and all associated architectural, structural, and electrical work. The project also improves accessibility in the existing parking lot. Construction began in late 2024 and is scheduled for completion by the end of 2026.
Staff is requesting to increase the construction contingency by $90,000 to cover additional costs for completing SMaRT Station NexGen Electrical Upgrade Project. This new work is anticipated to cost $90,000 over the existing contingency, which is anticipated to be exhausted. While this action increases the contingency amount, the overall purchase order amount will remain within the original project budget of $1,389,334. The requested increase in the construction contingency will allow staff to address remaining construction issues without delaying project completion or requiring additional Council action.
The need for the increase in construction contingency arises from unforeseen site conditions and additional work that were not in the original contract scope but have been identified during construction. The project is located near the Sunnyvale Water Pollution Control Plant, an area with numerous unknown underground utilities that significantly complicated the installation of the PG&E conduit required to supply electrical power to the SMaRT Station. These field conditions required design modifications to meet PG&E’s standards and led to change orders to resolve utility conflicts. These circumstances require additional funding to ensure the project is completed and the site is ready for upcoming equipment upgrades.
Additionally, a significant portion of the conduit installation required hydrovac trenching instead of conventional excavation. This approach was required to avoid damaging existing critical infrastructure, and contributed to increased construction complexity and cost.
These unanticipated developments have led to more change orders and the identification of additional work not included in the original contract. To control project costs, the City has negotiated with the contractor to reduce the original proposed change order costs.
FISCAL IMPACT
Funding for the increase in construction contingency for the SMaRT Station Nexgen Project is available in Fund 6143 - SMaRT Station Equipment Replacement Fund under Project 828260 - SMaRT Post-2021 Rebuild.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Approve a $90,000 increase in the construction contingency for the construction contract with Vellutini Corporation DBA Royal Electric Company for the SMaRT Station NexGen Electrical Upgrade project, for a not to exceed contract amount of $885,708.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
_X_ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Dennis Ng, Acting Director of Public Works
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Project Budget Summary Sheet