HomeMy WebLinkAboutStaff Report 2502-4186CITY OF PALO ALTO
CITY COUNCIL
Monday, April 14, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
5.Approval of Amendment No. 2 via Change Order No. 2 to Contract Number C22183580
with MP Nexlevel of California, Inc. in the Amount of $4,000,000 for a Total Not-to-Exceed
Amount of $15,347,390, and Extending the Three-Year Term of the Contract for an
Additional Four Months Through August 31, 2025 to Provide Substructure and Utility
Trenching Construction Services for the Foothills Rebuild Wildfire Mitigation and Grid
Modernization for Electrification Projects; CEQA Status: the Foothills Rebuild and Grid
Modernization Project are Exempt Under CEQA Guidelines Sections 15302, 15303 and
15183
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: April 14, 2025
Report #:2502-4186
TITLE
Approval of Amendment No. 2 via Change Order No. 2 to Contract Number C22183580 with MP
Nexlevel of California, Inc. in the Amount of $4,000,000 for a Total Not-to-Exceed Amount of
$15,347,390, and Extending the Three-Year Term of the Contract for an Additional Four Months
Through August 31, 2025 to Provide Substructure and Utility Trenching Construction Services
for the Foothills Rebuild Wildfire Mitigation and Grid Modernization for Electrification Projects;
CEQA Status: the Foothills Rebuild and Grid Modernization Project are Exempt Under CEQA
Guidelines Sections 15302, 15303 and 15183
RECOMMENDATION
Staff recommends that City Council approve and authorize the City Manager or their designee
to execute Change Order No. 2 to contract C22183580 with MP Nexlevel (Attachment A) for
substructure installations, utility trenching, and conduit installations in support of the Foothills
Rebuild and Grid Modernization projects, in an amount not-to-exceed $4,000,000, for a revised
total contract amount of $15,347,390 and extending the term of the contract to August 31,
2025 for a total of three years and four months.
BACKGROUND
The City contracts substructure and trenching construction services because the amount of
work varies year over year and use of contracted services allows for the most efficient and cost-
effective use of resources for this variable timing. In 2022, MP Nexlevel was deemed the lowest
responsible bidder of a competitive solicitation for utility trench and substructure installation
(Staff Report 139531). The performance and quality of work delivered by MP Nexlevel has been
satisfactory over the years. As part of the task order completion process, MP Nexlevel’s work is
inspected and signed off by internal staff. The original Task Order Construction Contract
C22183580 with MP Nexlevel of California, Inc., was approved by Council March 21, 2022 in the
amount of $8,815,809 for Trenching and Substructure Installation and Materials and a
contingency amount of $881,581, for a total not-to-exceed amount of $9,697,390 over three
1 City Council, March 21, 2022: Staff Report #13953
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81767
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years through April 30, 2025. For customer-related work, trenching and substructure work are
reimbursed by the customers through the customer connection charges. Since FY 2023, the
City has been reimbursed $4.5 million from customers for new service connections.
2). MP Nexlevel will install, lash, splice and test approximately 59,500 feet of fiber optic
cable; build underground laterals and pad mounts for fiber distribution cabinets; and build a
concrete pad to support the fiber hut and emergency generator including electric wiring,
lighting, HVAC and security fencing. The FTTP pilot will inform the City the best mix of insource
(internal staff) and outsource (contractors) staffing to construct and operate the new municipal
Palo Alto fiber internet business. Change order #1 covers the FTTP Phase 1 pilot area only. Once
the pilot area is complete and can inform the requirements for a competitive solicitation, staff
will be requesting competitive bids for construction of the remainder of the FTTP Phase 1
scope.
ANALYSIS
3 Plan, the Utilities Department is undergrounding
eleven miles of overhead electric lines in the Foothills area. This project involves installing
substructure work, including boxes for electric and fiber lines; removing electric lines and fiber
lines from overhead poles; and installing padmount equipment where possible. Given the
number of miles of undergrounding and steep terrain in the foothills, the project was divided
into five phases over three years (FY 2022 – FY 2025). As of February 2025, three of five phases
have been completed and the remaining two phases are underway with a planned project
completion of June 30, 2025.
4 map, the
Foothills region is a mix of high and very high hazard zones. The City’s goal is to complete the
Foothills Rebuild project by the end of Fiscal Year 2025 and before wildfire season begins. Over
the past three years, the City has spent approximately $6.3 million for substructure work,
trenching, and conduit installation through the MP Nexlevel contract. Staff estimates an
2 City Council, October 7, 2024: Staff Report #2408-3368
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=1136b122-5ea9-447e-8a85-48c161ef99d4
3 Wildfire Mitigation Plan https://www.cityofpaloalto.org/files/assets/public/v/1/utilities/safety-information/cpau-
wildfire-mitigation-plan-2024-update.pdf
4 Fire Hazard Severity Zone https://experience.arcgis.com/experience/6a9cb66bb1824cd98756812af41292a0
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additional $3 million is required in the contract to complete the remaining undergrounding
phases.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
5 and Grid
Modernization for Electrification webpage6.
ENVIRONMENTAL REVIEW
5Utilities Wildfire Mitigation webpage https://www.cityofpaloalto.org/Departments/Utilities/Utilities-Services-
Safety/Safety/Utilities-Wildfire-Mitigation
6Grid Modernization for Electrification webpage https://www.cityofpaloalto.org/Departments/Utilities/Utilities-
Services-Safety/Utilities-Projects/Grid-Modernization-for-Electrification
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modernization project, section 15183 (projects consistent with a general plan, community plan,
or zoning) since it is consistent with the Environmental Impact Report (EIR) Addendum to the
City of Palo Alto Comprehensive Plan Final Environmental Impact Report Council approved on
June 5, 2023.
ATTACHMENTS
APPROVED BY:
CONTRACT CHANGE ORDER
CITY OF PALO ALTO
DEPARTMENT: ELECTRIC UTILITIES OPERATIONS
_____________________________ Project
Contract Change Order #
Project Title: Foothills Rebuild Project No.: EL-21001
Contract Number: C22183580 Date: 2/20/25
Contractor: MP Nexlevel of California, Inc. Change Order No.: 2
Description of Change Order
Background Information: The original contract C22183580 was approved by Council on March 21, 2022 under staff report
ID 13953. The original term of the contract was an annual not-to-exceed amount of $9,697,390
for a total three-year not-to-exceed amount from June 15, 2022 through April 30, 2025. https://
recordsportal.paloalto.gov/WebLink/DocView.aspx?id=81767&dbid=0&repo=PaloAlto
Change order #1 was approved by Council on October 7, 2024 under staff report ID 2408-3368.
$1.65 million was added to the MP Nexlevel (MPNL) contract to perform substructure work for
the new fiber hut and fiber construction for the fiber-to-the-premises (FTTP) pilot. With the
FTTP amendment, the revised not-to-exceed amount is $11,347,390. Staff Report 2408-3368
As of Feb 19, 2025, there is approximately $1,400,000 remaining in the contract. Utilities will be
issuing a new RFP for substructure work in March 2025. It will take approximately 4-6 months to
award the new contract including Council’s approval. A change order is required for MPNL to
maintain business continuity and accelerate the Foothills Undergrounding project until a new
contract is in place. The average monthly MPNL billing rate is approximately $450,000 for up to
three crews. Staff may request for a fourth crew at times depending on the number of projects
that are occurring concurrently.
Change Order Justification: The City does not possess the staffing resources to provide substructure, trenching services and
fiber installation because the amount of work varies year over year. These services have been
contracted out for approximately 30 years and are required to complete CIP and customer
connections in a timely and cost-effective manner. The City has been contracting with MP
Nexlevel for over the past 10 years for substructure installations, utility trenching, and fiber
conduit installations
Staff recommends increasing the task order construction contract by $4,000,000 to accelerate
undergrounding of critical areas deemed as high fire threat in the foothills before fire season
begins (2024 Wildfire Mitigation Plan). In addition, staff needs additional funding to complete
the pilot for electric gird modernization and new customer connection projects (i.e. Hoover
School). Staff also recommends extending the duration of the contract by four months from April
2025 to August 2025 until a new contract is in place.
Staff will be issuing a new competitive bid for substructure and trenching construction in March
2025 with anticipation of a new contract award in August 2025 (post-Council break). This change
order will bridge the gap between April through August 2025. When the new contract is
awarded, all remaining funds in the existing contract will be disencumbered and returned to
reserves.
Docusign Envelope ID: 23AB0BDA-C1C4-45E2-9520-72E52BEEAF18
Description of Work to be Performed:
Contractor will provide ongoing and scheduled substructure construction work for the following
CIP projects:
Foothills Undergrounding (EL-21001) ~ $3.1M
Grid Modernization (EL-24000) ~$0.6M
Customer Connections (EL-89038) ~0.3M
Incorporates Field Order Number(s): Bid items 1 – 34
Cost Time
This Change Order will:
No cost change: N/A
X Increase cost by $ 4,000,000
Decrease cost by $ N/A
This Change Order will:
X Increase time by __123__ days
o _0_ days Excusable Delay
o _0_ days Compensable Delay
Decrease time by ____ days
The date of completion as of this Change Order is:
August 31, 2025_______________________________
G/L account number (s): 40030200 / 31650
Basis for change in cost:
Unit price(s)
Lump sum
X Time and Materials
Compensation for Compensable Delay
Other:
Docusign Envelope ID: 23AB0BDA-C1C4-45E2-9520-72E52BEEAF18
Contract Change Order – continued
CONTRACTOR CERTIFICATION: By signing below, Contractor agrees that this Change Order constitutes full resolution, settlement, accord and
satisfaction with respect to any and all pending or future Claims for cost and extensions of time that were asserted, or that could have been
asserted, in connection with the Work covered by this Change Order, as more fully set forth in Article 7 of the Contract General Conditions.
FAILURE TO EXECUTE: If Contractor fails to promptly execute this Change Order after it has been submitted for Contractor’s signature, the City
may unilaterally approve this Change Order as set forth in Article 7 of the Contract General Conditions. Contractor may dispute the terms of a
unilaterally-approved Change Order, in whole or in part, by submitting a Claim in accordance with the Dispute Resolution Procedures set forth
herein within fourteen (14) days after the Change Order is approved by the City. If Contractor fails to submit a Claim within that 14-day period,
with respect to all or part of the unilaterally-approved Change Order, those portions of the Change Order which have not been disputed by timely
submission of a Claim shall be deemed to have the same effect as if the Change Order was fully executed by both parties as set forth above.
Accepted for Contractor: Accepted for City of Palo Alto:
By: By:
Title: Title:
Date: Date:
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Description Amount Reason for Change
1 Foreman $795,302
Foothills Underground/Grid Mod
2 Laborer
$1,526,280
Foothills Underground/Grid Mod
3 Equipment Operator
$66,989
Foothills Underground/Grid Mod
4 Truck Driver Class A
$44,520
Foothills Underground/Grid Mod
5 Qualified journeyman worker to perform conduit
intercepts in an energized duct bank $10,501
Foothills Underground/Grid Mod
6 Concrete Finisher
$47,461
Foothills Underground/Grid Mod
7
Core Driller with operator
$7,805
Foothills Underground/Grid Mod
8
Concrete Saw with operator
$7,141
Foothills Underground/Grid Mod
9
Foreman’s Truck
$68,880
Foothills Underground/Grid Mod
10
Crew truck, with Hand Tools, and Gas-Powered
Cutoff Saw $103,320
Foothills Underground/Grid Mod
11
Compressor and Jackhammer
$2,115
Foothills Underground/Grid Mod
12
Backhoe
$19,389
Foothills Underground/Grid Mod
13
Ramhoe
$7,939
Foothills Underground/Grid Mod
14
Bobtail Truck
$179,760
Foothills Underground/Grid Mod
15
End-Dump Truck
$242,549
Foothills Underground/Grid Mod
Scope of Work
Docusign Envelope ID: 23AB0BDA-C1C4-45E2-9520-72E52BEEAF18
3/31/2025
Robbi Pribyl
President
16
10-wheel Dump Truck $35,280 Foothills Underground/Grid Mod
17
Boom Truck with Flatbed $3,528 Foothills Underground/Grid Mod
18
Directional Boring Rig $9,869 Foothills Underground/Grid Mod
19
Arrow Board $355 Foothills Underground/Grid Mod
20
Vac Trailer – 800 Gallons $28,224 Foothills Underground/Grid Mod
21
Mini Excavator $61,600 Foothills Underground/Grid Mod
22
Bobcat Skid-Steer $2,829 Foothills Underground/Grid Mod
23
Equipment Trailer $15,960 Foothills Underground/Grid Mod
24
A/C Roller $2,296 Foothills Underground/Grid Mod
25
Estimator $14,981 Foothills Underground/Grid Mod
26
3-5 Yard Dump Truck $3,877 Foothills Underground/Grid Mod
29
Box Shoring $5,733 Foothills Underground/Grid Mod
30
Message Board $3,613 Foothills Underground/Grid Mod
31
Pipe Fusing (100') $14,280 Foothills Underground/Grid Mod
32
Pipe Grouting $111,301 Foothills Underground/Grid Mod
33
2200 Gallon Vacuum Truck $397,419 Foothills Underground/Grid Mod
34
Large Bore Rig $158,901 Foothills Underground/Grid Mod
Total for this Change Order $4,000,000
Docusign Envelope ID: 23AB0BDA-C1C4-45E2-9520-72E52BEEAF18
Document Preparation
By: Dave Yuan
Title: Utilities Strategic Business Manager
Date: March 27, 2025
City Approval – Division Head
Signature required on all Change Orders
By :
Title : Jorge Silva
Interim Assistant Director, Electric Engineering and Operations
Date:
City Approval – Department Head
Signature required when any individual Change Order exceeds $10,000.
By:
Title: Kiely Nose
Interim Director of Utilities
Date:
Contract Change Order – continued
Summary of Amounts Payable Under Contract (For Internal Purposes Only)
Original Contract Sum: $ 9,697,390.00
Previous Change Orders $ 1,650,000.00
This Change Order $ 4,000,000.00
Revised Contract Sum: $ 15,347,390.00
Compare to:
Original Contract
Authorization: $ 8,815,809.00 Contingency: 881,581.00
Contract Amendment
Authorizations $ 1,500,000.00 Contingency added: 150,000.00
Contingency Authorizations: $ 1,031,581.00 Used to date (0.00)
Total Authorized Funding: $ 11,347,390.00 Balance remaining 1,408,953.00
Change Orders shall not be initiated for Council-approved contracts if the revised Contract Sum exceeds the
total authorized funding amount.
Docusign Envelope ID: 23AB0BDA-C1C4-45E2-9520-72E52BEEAF18