HomeMy WebLinkAboutStaff Report 2505-4735CITY OF PALO ALTO
CITY COUNCIL
Monday, October 20, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
14.Approval of Contract Number C25194217 with Veteran Pipeline Construction in the
Amount of $8,962,204 for the Gas Main Replacement Project 25 (GS-15000) in the
Duveneck/St. Francis, Leland Manor, Midtown, and Palo Verde neighborhoods;
Authorization for the City Manager to Negotiate and Execute Related Change Orders
Not-to-Exceed of $896,221 for a Total Not-to-Exceed Amount of $9,858,425; NEPA
status - B5.4 categorical exclusion; CEQA status — Exempt under CEQA Guidelines 15302
(Replacement or Reconstruction of Existing Facilities).
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: October 20, 2025
Report #:2505-4735
TITLE
Approval of Contract Number C25194217 with Veteran Pipeline Construction in the Amount of
$8,962,204 for the Gas Main Replacement Project 25 (GS-15000) in the Duveneck/St. Francis,
Leland Manor, Midtown, and Palo Verde neighborhoods; Authorization for the City Manager to
Negotiate and Execute Related Change Orders Not-to-Exceed of $896,221 for a Total Not-to-
Exceed Amount of $9,858,425; NEPA status - B5.4 categorical exclusion; CEQA status — Exempt
under CEQA Guidelines 15302 (Replacement or Reconstruction of Existing Facilities).
RECOMMENDATION
Staff recommends that the Council:
1. Approve and authorize the City Manager or their designee to execute contract
C251942171 with Veteran Pipeline Construction in an amount not-to-exceed
$8,962,204 for the Gas Main Replacement 25 project (GS-15000) in the
Duveneck/St. Francis, Leland Manor, Midtown, and Palo Verde neighborhoods.
2. Approve and authorize the City Manager or their designee to negotiate and
execute one or more changes to the contract with Veteran Pipeline Construction
for related additional but unforeseen work, which may develop during the project,
the total value of which shall not exceed $896,221 or 10% of the contract amount.
The total authorized not-to-exceed expenditure amount is $9,858,425 which
includes the contract base amount of $8,962,204 and a 10% contingency amount
of $896,221. This Project was selected for Federal grant funding.
EXECUTIVE SUMMARY
The Gas Main Replacement (GMR) 25 project (GS-15000) is part of the Council-approved
Capital Improvement Program (CIP) designed to ensure reliable gas service for the City of Palo
1 Veteran Pipeline Construction, Gas Main Replacement Project 25 Contract No. C25194217
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2025/october-20/veteran-pipeline-construction-gas-main-replacement-project-25-contract-no.-
c25194217.pdf
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Alto residents and customers. The project targets the replacement of polyvinyl chloride (PVC)
and black-wrapped steel pipe (BWP) distribution main and service pipes that are near or past
their operational life expectancy with polyethylene (PE) pipelines. Work will be done in the
Duveneck/St. Francis, Leland Manor, Midtown, and Palo Verde neighborhoods. The City
anticipates starting construction in January 2026 and completing construction in August 2027.
BACKGROUND
ANALYSIS
is to replace approximately 25,500
linear feet of natural gas mains and services with polyethylene (PE) pipe in the Duveneck/St.
Francis, Leland Manor, Midtown, and Palo Verde neighborhoods (see Attachment B). The main
sizes being installed are 2-inch, 4-inch, and 6-inch in diameter and the associated installation
of services and reconnects are 1-inch and 2- inch in diameter. The PVC gas facilities were
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installed in the mid 1970’s and the steel gas facilities were installed in the 1920’s through the
early 1950’s. These sections of main were prioritized to further the replacement of PVC
pipelines and address leak prone steel pipelines in the gas system. Portions of this project
replace mains installed on major streets and take a proactive approach to minimize impacts
to the community in the event of a leak.
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in the attached Bid Summary (see Attachment A). The contingency amount of $896,221, which
equals 10% of the total contract, is requested for additional unforeseen work that may
develop during the project. Additional work is common with construction projects because
during construction there may be previously unknown obstructions and ground conditions
that require changes in how construction will proceed, leading to change orders that may
create additional costs.
FISCAL/RESOURCE IMPACT
Summary of Project Costs for GMR 25 Project (GS-15000)
nd, 2024)
nd, 2024) to signed
Grant award (July 31st, 2025)
Total Project Cost
3
3 PHMSA Approved Grant Funding https://www.usaspending.gov/award/ASST_NON_693JK32540006NGDI_6957
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The size of this project significantly exceeds the City's in-house construction resources,
making it necessary to contract out the work.
nd, 2025 for staff time dedicated for work related to the
National Environmental Policy Act (NEPA) application. This amount was authorized to be
charged against the grant prior to the execution of the grant agreement between the City and
PHMSA. The grant agreement5 was executed on April 30, 2025 and all costs incurred from this
date forward will be charged against the grant.
$12,661,372 has been allotted from the NGDISM grant fund to Gas Main
Replacement 25, reflecting the City’s engineering estimate. The difference of $3,699,168
between Veteran Pipeline Construction’s bid and the City’s engineering estimate reflects
VPC’s accelerated schedule of project completion and the efficient approach to construction
compared to the past Gas Main Replacement Projects. The anticipated remaining $3,699,168
in grant funding cannot be used to increase the project size, as the GMR25 project has
already been processed through a NEPA categorical exclusion. Therefore, these funds are
not available for additional pipeline replacement projects.
STAKEHOLDER ENGAGEMENT
5 PHMSA Grant Agreement https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-
minutes/city-council-agendas-minutes/2025/october-20/phmsa-grant.pdf
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Nextdoor. The construction is expected to commence in January 2026 and be completed by
August 2027.
ENVIRONMENTAL REVIEW
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for repair or replacement of pipelines and is categorically exempt from the California
Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15302, replacement
or reconstruction of existing utility systems or facilities.
ATTACHMENTS
APPROVED BY:
7 NEPA Categorial Exclusion B5.4 https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2024-12/PHMSA-Final-CE-
Palo-Alto-Ver4-approved.pdf
Duveneck/St. Francis
Leland Manor
Midtown and
LEGEND:
- Existing Gas Main Pipeline
Bid Date: 07/31/2025 Project Title: Gas Main Replacement Project 25
Base Bid Summary
Veteran Pipeline ConstructionBASE BID SUMMARY ENGINEER'S ESTIMATE
Unit Price Extended Price
Daleo Inc.
Extended Price
Ranger Pipeline
Unit Price Extended Price
ARB Inc.
Extended PriceBid No. Quantity Unit
Linear Feet
Description Unit Price Extended Price Unit Price
117.51 1,860,888.36
Unit Price
001 15836 $$$$$$177.49 2,810,748.42 $$$159.40$2,524,258.40 285.00 4,513,260.00 200.27 3,171,475.72directional drilling
_______________________________________
Linear Feet Install 2" gas MDPE pipe by open trench $$$$$339.42 959,546.86 $ 133.78$378,196.06 365.00 1,031,855.00
_______________________________________
Linear Feet Install 4" gas MDPE pipe by horizontal $
directional drilling
$$$$268.61 1,339,028.37 $$230.16 1,147,347.60
_______________________________________
Linear Feet Install 4" gas MDPE pipe by open trench$
excavation
$$$$731.58 1,079,818.26 194.40$$286,934.40 $695.151,026,041.40$505.00 745,380.00
_______________________________________
Linear Feet Install 6" gas MDPE pipe by horizontal $$$$$$$183,140.49 262.50 $$174,037.50
113,112.00
_______________________________________
Linear Feet Install 6" gas MDPE pipe by open trench $
excavation
160 $$$706.95 $94,400.00 1,258.40 201,344.00
_______________________________________
37 Each Install anode box / test station $$$$$$529.58 19,594.45913.27 $$33,790.99 500.00 $$18,500.00 500 00
_______________________________________
320 Install 1" PE gas service line including E F$V and 1$"
OR without a bypass at the EXISTING
OR open trench excavation
$$$$11,328.64 3,625,163.44 9,020.62 $$2,886,598.40 11,250.00 $$3,600,000.00 5,750.00 1,840,000.00 7,311.40 2,339,648.00
_______________________________________
009 246 Each Install 1" PE gas service stub and EFV fo$r the city$
EXISTING 1" PE gas service to
OR
$$$$5,186.60 1,275,904.66 5,833.17 $$1,434,959.82 5,300.00 $1,303,800.00 4,750.00 6,190.62 1,522,892.52
_______________________________________
EXISTING gas meter location by
OR open trench
3 $$$12,966.78 $21,226.06 $38,900.35 $63,678.18 35,975.00 $107,925.00 $6,000.00 18,000.0032,231.08 96,693.24
_______________________________________
011 2 Each Install 2" PE gas service stub with 2" PE ba$ll
EXISTING 2" PE gas service to new main by
OR open trench
$$$$7,097.46 $8,686.25 $14,194.92 $17,372.50 $6,700.00 $13,400.00 5,000.00 10,000.0015,584.44 31,168.88
_______________________________________
012 95 Excavate and expose existing non-standar$d (1/2" $
EXISTING riser with new 1" anodeless
$$$4,149.28 $394,181.93$331.31 $31,474.45 2,530.00 $$240,350.00 2,000.00 190,000.00 2,494.81 237,006.95
_______________________________________
Each $$$$$709.75 58,199.16719.88 $$59,030.16 750.00 $$61,500.00 500 00 41,000.00 457.74 37,534.68
_______________________________________
014 9 Install a 4" commercial steel pipe bollard, fil$led $$$$$928.13 1,074.22 $8,353.16 $9,667.98 950.00$$8,550.00 600.00 5,400.00 469.76 4,227.84
_______________________________________
015 45 Each Excavate tie-in/abandonment pits for gas$
≤5-ft in depth, up to 25 S.F.)
$$$$7,425.03 $$4,286.34 334,126.51 $192,885.30 $7,000.00 $315,000.00 15,000.00 675,000.00 31,170.93 1,402,691.85
_______________________________________
Excavate tie-in/abandonment pits for gas$
≤5-ft in depth, up to 50 S.F.)
$$$11,028.36 $64,291.80 10,500.00 $$360,000.00 32,557.90 488,368.50
_______________________________________
Abandon existing anode/valve box $$$$$$436.77 32,757.50711.45 $$53,358.75 450.00 $$33,750.00 500 00 37,500.00 535.70
_______________________________________
018 5 Each Abandon existing anode/valve box $$$$$6,005.54 $6,295.72 30,027.71 $31,478.60 $5,500.00 $$27,500.00 800 00
22,500.00 6,000.00
8,164.994,000.00 40,824.95
_______________________________________
Investigation and removal/relocation of se$wer $$$3,333.02 $24,568.13 $16,665.10 4,500.00 $$30,000.00 7,756.78
_______________________________________
020 1 Each Perform GPS survey $$$$148,500.67 $109,354.90 $148,500.67 $109,354.90210,000.00 $$210,000.00 25,000.00 585,865.89 25,000.00 585,865.89
_______________________________________
Veteran RangerBase Bid Total (items 001 through 020)Engineering Daleo Inc.
12,274,266.85
Total Base Bid:
Pipeline ARB Inc.$$12,661,371.96 $8,962,203.44 $13,151,590.00 $Estimate:Construction Total Base Total Base Bid:
Total Base Bid:
Supplemental Unit Pricing Summary
Veteran Pipeline ConstructionSupplemental Unit Pricing ENGINEER'S ESTIMATE Daleo Inc.
Extended Price
Ranger Pipeline
Unit Price Extended Price
ARB Inc.
Unit Price Extended PriceBid No. Quantity Unit Description Unit Price Extended Price Unit Price Extended Price Unit Price
6,005.540211EachInstallation of sewer lateral cleanout by op$en-$$$$$$6,500.004,353.70$$2,000.00 6,500.00 8,716.722,000.00 8,716.72
_______________________________________
022 1 Each Installation of sewer lateral cleanout by op$en-$$$4,913.63 $3,589.89 $4,913.63 $5,500.003,589.89$$1,500.00 5,500.00
_______________________________________
023 10 Cubic Yard Recycle asphalt containing petro mat $$$$$436.77 $$325.74 4,367.67 $3,257.40 30.00 $$100.00 300.00
_______________________________________
1,500 Inch/SF Install additional base (concrete base)$$$$$4.91 7 370.44 2.45$$3,675.00 $3.00 4,500.00 2 00 3,000.00 19.52 29,280.00$
_______________________________________
Install additional base (Class II aggregate bas$e)$6,620.00$2.00$4,000.00 $ 0.15 300.00 0.10 200.00
_______________________________________
Install additional finished pavement (concr$ete $$$$2.18 10,919.17 30.73 153,650.00$$$2.00 $10,000.00 4.00 20,000.00 17.08 85,400.00
_______________________________________
$2.00 $$
_______________________________________
028 500
250
250
500
10,000
1
Linear Feet Perform additional saw cutting $$$$$$4.64 2 320.32 8.00$$4,000.00 3.50$1,750.00 3.00
7,500.00 125 00
7,500.00 125 00
1,500.00 4.58 2,290.00$
_______________________________________
Linear Feet Install additional curb $$$$$$32.76 $80.75 8,189.38 $20,187.50 $30.00 $31,250.00 176.91 44,227.50
_______________________________________
Linear Feet Install additional gutter $$
_______________________________________
Square Foot Install additional sidewalk $$$$$$30.57 15,286.83 58.19 $$27.00 $$13,500.00 25.00 12,500.00 34.16 17,080.00
1.22 12,200.00
_______________________________________
Inch/LF Sawcut additional pavement (thickness)$$$$$$49,500.00$1.25$$0.50
_______________________________________
Remove meter box $$$$$545.96 $728.42$545.96 $$728.42500.00 $500.00 500.00 1,924.17 500.00 1,924.17
_______________________________________
10 Ton Disposal of excavated soils at Class 1 landfill$$$$$$764.34 $208.89 7,643.42 $2,088.90 500.00 $5,000.00 $250.00
_______________________________________
035 10 Ton
Each
Each
Disposal of excavated soils at Class 2 landfill$$$$$$655.15 $36.33 6,551.50 $$363.30700.00 $7,000.00 150 00
13,000.00 2,000.00
5,000.00 1,500.00
1,622.731,500.00
40,000.00 4,512.27
3,848.335,000.00
16,227.30
_______________________________________
Additional pothole $$$$$$709.75 $14,194.92729.24 $14,584.80 $650.00 $
_______________________________________
Install/Replace existing gas meter box and$lid $$$$6,005.54 $$985.64 6,005.54 $1,500.00$985.64 $
_______________________________________
038 45 Each Relocation of customer gas houseline (>2$ft to
≤5 ft) for gas meter relocation on the same side
$$$$4,913.63 $1,255.56 221,113.13 $$56,500.20 3,500.00 $$157,500.00 3,000.00 135,000.00 3,996.23 179,830.35
_______________________________________
≤10 ft) for gas meter relocation on the same
$$$$$1,255.56 $49,682.21 $$
_______________________________________
Relocation of customer gas houseline (>10$ft to $
≤15 ft) for gas meter relocation on the same
$25,114.08
_______________________________________
1 Install/Replace existing gas meter box and$lid $$$$5,241.20 $$339.60 5,241.20 $1,400.00$339.60 $2,000.00 1,400.00
_______________________________________
Veteran Ranger
336,825P.0i$p0eline
Total SUP Bid:
Engineering Pipeline Daleo Inc.ARB Inc.Supplemental Unit Pricing Total (items 022 through 041)$430,952.22$503 889.85$415 800.00$637 807.68Estimate:Total SUP Bid:Total SUP Bid:
Total SUP Bid:
Bid Summary Engineer's Estimate Veteran Pipeline Construction Daleo Inc.Ranger Pipeline ARB Inc.
(Base Bid + Supplemental)
)02 0ghuor ht10 0semital (toeB Bas Tid
Supplemental Unit Pricing Total (items 022 through 041)
GRAND TOTAL
$$12,661,371.96
430,952.22
13,092,324.18
$8,962,203.44 $12,274,266.85
336,825.00
12,611,091.85
$13,151,590.00
415,800.00
13,567,390.00
15,165,184.39
637,807.68
15,802,992.07
$$$$$
$$9,466,093.29
U.S. Department
of Transportation
Pipeline and Hazardous
Materials Safety
Administration
July 2, 2024
Via E-mail: edmar.david@cityofpaloalto.org
Edmar David, Engineer
City of Palo Alto Utilities Department
1007 Elwell Court
Palo Alto, CA 94301
RE: Request for NGDISM Grant Pre-Award Materials Costs
Dear City of Palo Alto:
This letter serves as official notification that the pre-award costs requested have been approved
for the costs listed below that are associated with the FY 2023 Natural Gas Distribution
Infrastructure Safety and Modernization (NGDISM) grant program. Please note that,
notwithstanding this approval, the Pipeline and Hazardous Materials Safety Administration
(PHMSA) cannot reimburse costs prior to the full execution of the grant agreement; if, for any
reason, a grant agreement is not executed, then the provisional awardee will be liable for all pre-
award costs incurred. Reimbursement of costs as a Recipient of federal funds is contingent upon
your compliance with the cost principles in 2 CFR Part 200, Subpart E (including allocability
and documentation requirements) and any funding restrictions in the FY 2023 Notice of Funding
Opportunity (NOFO).
When requesting reimbursement of actual costs incurred, the Recipient shall include a breakout
of all costs incurred, including direct labor, indirect costs, and other direct costs. If PHMSA
determines that the reimbursement request does not include or is not supported by sufficient
detail, PHMSA may deny the request or withhold processing the request until the Recipient
provides sufficient detail. You may not incur any costs that were not identified in your
application unless you have received prior approval to amend your scope of work.
1200 New Jersey Avenue, SE
Washington, DC 20590
Edmar David
City of Palo Alto
Page 2 of 2
The approved pre-award costs are outlined below and may not include costs for expenses that
were not included in your submitted and/or updated budget and project narratives.
Item Cost ($)
Total $240,768.00
Please note the Recipient’s requests for materials must provide specific details and the request
must address whether it complies with the Build America, Buy America (BABA) requirements.
These requests will be reviewed on a case-by-case basis by the grant program’s Environmental
Protection Specialist (EPS) to ensure that the materials will not impact any Tier 2 mitigation
efforts.
The pre-award authority extended in this letter is limited to costs incurred after PHMSA’s FY
2023 announcement on April 3, 2024.
If you have any questions or concerns, please contact your grant management specialist, Jasmine
Carr, via email at Jasmine.Carr2@dot.gov and cc: PHMSAPipelineBILGrant@dot.gov.
Sincerely,
Shakira N. Mack
Director, NGDISM Grant Program
Pipeline and Hazardous Materials Safety Administration
U.S. Department of Transportation
1200 New Jersey Avenue SE
Washington, DC 20590