HomeMy WebLinkAboutStaff Report 2407-3222CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, February 10, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
10.Approval of Two Professional Service Agreements: Contract No. C25190944A with 4Leaf,
Inc. and Contract No. C25190944B with Park Engineering, Inc in the Aggregate Amount
Not-to-Exceed $3.75 Million for a Period of Five Years for On-Call Field Inspections and
Construction Management Services to Support Utilities Water, Gas, and Wastewater
Capital Improvement Projects; CEQA Status: Not a project.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 10, 2025
Staff Report: 2407-3222
TITLE
Approval of Two Professional Service Agreements: Contract No. C25190944A with 4Leaf, Inc.
and Contract No. C25190944B with Park Engineering, Inc in the Aggregate Amount Not-to-
Exceed $3.75 Million for a Period of Five Years for On-Call Field Inspections and Construction
Management Services to Support Utilities Water, Gas, and Wastewater Capital Improvement
Projects; CEQA Status: Not a project.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to
execute two professional service agreements with the following service providers in the
combined total amount not-to-exceed $3.75 million for a period of five years for on-call field
inspections and construction management services for Water, Gas, and Wastewater Capital
Improvement Projects:
1) Contract No. C25190944A with 4Leaf, Inc. (Attachment A), and
2) Contract No. C25190944B with Park Engineering, Inc. (Attachment B)
EXECUTIVE SUMMARY
The current total cost projections for water, gas, and wastewater (WGW) main replacement
capital improvement projects (CIPs) is $14 million per year for over the next five years, in
addition to $14 million for two water reservoir storage tank upgrade projects expected within
the next five years. These projects will require construction staffing resources with specific
utility expertise, and generally, a total of 10% of each Utilities Department CIP total project cost
is budgeted for internal or external field inspections and construction management. These on-
call services contracts will provide construction management and inspection services when
there is insufficient internal staff available. This will allow the Utilities Department to add
resources to efficiently manage workloads, uphold a high level of service to residents and
businesses, and use resources with specialized expertise on complex projects.
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The requested Council approval is for an aggregate not-to-exceed amount of $3.75 million over
five years in construction management and field inspection services needed to support the
WGW CIPs described above, to be distributed between the two on-call professional service
agreements. Staff anticipates WGW main replacement projects will use up to $750,000
annually; however, multiple WGW projects may be ongoing in the same year so these are noted
as estimates, not an annual cap. The work will be assigned based on each contracting firm’s
hourly rates, staff availability, and specialized expertise, with City staff executing a CIP-specific
Task Order under the appropriate contract. Each contract includes a five-year extension option.
Council approval is required for exercising any of these options.
BACKGROUND
The City of Palo Alto owns, operates, and maintains a full suite of utilities for its residents and
businesses. The utilities include a potable water distribution and transmission system, a natural
gas distribution system, a wastewater collection system, and electrical and fiber optic
distribution systems. The Utilities Department invests in CIPs to ensure future reliability of the
utility systems, enhance operational safety, and minimize maintenance costs.
Capital improvement construction projects require full-time inspection and construction
management to ensure work performed by contractors complies with Utility Standards,
engineered plans, and federal and state regulations. The daily responsibilities of the
engineering inspectors and construction management include ensuring safety practices are
followed and traffic controls are in place as approved, creating record drawings of the utility
improvements for Geographic Information System (GIS) updates to aid in future designs and
avoid damage during future excavations, and collaborating with utility project managers to
ensure project delivery is on time and within budget.
The Utilities Department anticipates a peak in WGW CIP workload in coming years that exceeds
engineering staffing resources for field inspection and construction management. These
projects will require contract inspectors and construction managers with utility-specific
experience when there is insufficient internal staff. Occasionally, some projects, such as the
Water Reservoir Storage Tank Upgrade and Rebuild Project or Arastradero Creek Restoration
Project, will require inspectors or construction managers with specialized expertise. Having two
on-call field inspection and construction management services contracts for WGW CIPs will
allow the Utilities Department flexibility to use external resources to provide additional
coverage for inspection, construction management, and other professional services, and to
assign work based on which firm has the appropriate expertise and availability.
When soliciting contract inspectors or construction managers for a specific CIP, staff contacts
each company and requests qualified staffing for the project. Candidate resumes are provided
by each company for available personnel with the requested experience. Staff evaluates each
resume and the candidate’s availability compared to when the project is anticipated to start. If
a candidate is not available, staff can move around internal resources or delay the project until
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a qualified candidate is available. Having two companies under contract allows flexibility to
onboard a qualified candidate and ensure the CIP starts on time with qualified staff.
The agreements with 4Leaf, Inc. and Park Engineering Inc. will replace the current five-year
agreements with 4Leaf, Inc. and Park Engineering, Inc. that are set to expire in February 2025
(Council Report ID # 108781).
ANALYSIS
Generally, a total of 10% of Utilities’ CIP total project cost is budgeted for internal or external
field inspections and construction management. Currently the WGW division has three (3) full-
time inspectors that provide oversight of construction activities performed by contractors on
WGW CIP projects. However, depending on the number of projects underway at a given time,
these on-call contracts are necessary to provide adequate project inspection and construction
management for upcoming projects that require specialized utility experience and to support
multiple concurrent CIPs.
Summary of Solicitation Process
A Request for Proposal (RFP #1909442) for on-call field inspection and construction
management services across WGW, electric, and fiber divisions, was issued via OpenGov on
June 4, 2024. A total of 3,258 providers were notified in the City’s electronic procurement
system. At the end of the advertisement period, two proposals for WGW CIPs were received
from 4Leaf, Inc. and Park Engineering, Inc. The criteria in selecting the firms include experience
in working on WGW projects, sufficient staffing, cost to the City, quality of the proposal, and
prior record of performance with the City or other agencies. Staff verified the criteria and
proposals of the firms to be satisfactory. A third firm, CMI Contractors, Inc., responded for the
electric and fiber services, which will come before Council separately.
4Leaf, Inc. and Park Engineering, Inc. have established performance records working on City
WGW CIP and non-CIP projects under existing On-Call Inspection contracts, which expire on
February 28, 2025 (Council Report ID # 10878).
Staff recommends the contracts be awarded to 4Leaf, Inc. and Park Engineering, Inc to ensure
the availability of experienced staff when needed. On-call services will be assigned on a Task
Order basis depending on which contractor has the staffing availability and relevant expertise
for an upcoming City WGW CIP. When services are needed, the City will contact the firms
regarding their availability to perform the necessary work and request project-specific
proposals and resumes for proposed staff. Individual Utilities project managers will be
responsible for evaluating the adequacy of each Task Order’s proposed scope of work,
reviewing the experience and billing rates of proposed staff with a project team, ensuring
1 Council Report ID # 10878 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/reports/city-manager-reports-cmrs/year-archive/2020/id-10878-mini-packet-02.10.20.pdf?t=40116.21
2 RFP #190944 https://procurement.opengov.com/portal/palo-alto-ca/projects/98927
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appropriately qualified staff are assigned to each Task Order, and managing each Task Order
budget. To provide checks and balances, the Utilities’ Strategic Business Manager and their
team will assist in overall contract management ensuring activities remain withing authorized
levels.
Table 1: Summary of Request for Proposal
Proposal Title
On-Call Field Inspection and Construction
Management Services for Utilities
Proposal Number 190944
Proposed Length of Project 10 Years
# of Notices sent to Providers via City’s
eProcurement System (OpenGov)3,258
# of RFP Packages Downloaded by Firms 52
Total Days to Respond to Proposal 15 Calendar Days
Pre-Proposal Teleconference June 13, 2024
# of Company Attendees at Pre-proposal Meeting 9
# of Proposals Received 3
Range of Cost Proposals
Field Inspector:
$151.82/hour to
$184.51/hour
Construction Manager:
$170.89/hour to
$256.91/hour
Company Name Location (City, State)
Park Engineering, Inc.372 Village Square, Orinda, CA 94563
4Leaf, Inc. 2126 Rheem Drive, Pleasanton, CA 94588
Public Link to Solicitation OpenGov System-Solicitation Information
A total not to exceed amount of $3.75 million is being requested for a five-year contract term
to support the upcoming utility capital improvement projects. When the City plans WGW CIP
construction, a task order with a specific dollar amount for that project will be issued to one of
the two firms with the most available and qualified individuals at the time of request. In the
event specialized experience or knowledge is required, Park Engineering has included pricing to
subcontract work to ensure the City receives the required experience on specialized projects,
which results in a larger range in hourly costs in the table above.
FISCAL/RESOURCE IMPACT
Funding for these contracts will be allocated as needed up to a not-to-exceed amount of $3.75
million to be distributed between the two professional service agreements for WGW inspection
and construction management services over the initial term of five years. Staff anticipates
WGW replacement projects will use up to $750,000 annually. There is sufficient funding
budgeted in FY 2025 in the WGW capital improvement projects, examples are listed in the table
below. Funding for future years of these contracts and capital projects is subject to the annual
budget process and Council appropriation of funds.
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Utility
Project
Number Project Title
Adopted FY25
Budget
Electric EL-19002 Colorado Substation Site Improvements $1,138,394
Water WS-09000 Water Tank Seismic Upgrade and Rehabilitation $1,037,832
STAKEHOLDER ENGAGEMENT
The evaluation committee formed by staff in water, gas, wastewater, electric and fiber
engineering reviewed the submitted proposals. This staff report addresses only the WGW
services contracts. The evaluation of upcoming projects and future needs of on-call inspection
and construction management personnel was coordinated.
ENVIRONMENTAL REVIEW
City Council approval of these on-call professional services contracts is not a project under
CEQA, as an administrative and organizational activity of government that will not result in
direct or indirect physical changes in the environment (14 CCR 15378(b)(5)). CEQA evaluations
will be performed prior to Council approval of any specific CIP construction contract for which
these professional construction management and field inspection services would be assigned.
ATTACHMENTS
Attachment A: Contract with 4Leaf; Contract C25190944A
Attachment B: Contract with Park Eng; Contract C25190944B
APPROVED BY:
Kiely Nose, Interim Director of Utilities
Staff: Matt Zucca, Assistant Director of WGW Utilities