Title
Adopt a Resolution to Approve and Authorize the City Manager to Award a Construction Contract to VSS International, Inc. in the amount of $6,643,120 for the Base Bid Plus Additive Alternates A and B for the Annual Street Sealing 2021-2024, Project No. 2024.0070; to Authorize the City Manager to Negotiate and Approve Individual Change Orders Up to 5% (or $332,156) of the Original Contract Amount; to Authorize the City Manager to Negotiate and Approve Cumulative Change Orders Up to 10% (or $664,312) of the Original Contract Amount; and to Appropriate an additional $1,100,000 from the FY2026-2027 CIP Reserve Fund to the Project.
Staffreport
COUNCIL PRIORITY
• Infrastructure
SUMMARY
This contract will facilitate the resurfacing of about 35 lane miles of City roadway through the application of slurry seal and cape seal treatments. A total of two bids were received, and the lowest responsive and responsible bid, in the amount of $6,643,120 was submitted by VSS International, Inc. In addition, $1,100,000 from the FY2026-2027 CIP Reserve Fund is recommended for appropriation to the project.
RECOMMENDATIONS
Staff recommend the following:
• Award a construction contract to VSS International, Inc. in the amount of $6,643,120; and
• Authorize the City Manager to negotiate and approve individual change orders up to 5% (or $332,156) of the original contract amount; and
• Authorize the City Manager to negotiate and approve change orders up to a cumulative value not to exceed 10% (or $664,312) of the original contract amount; and
• Appropriate an additional $1,100,000 from the FY2026-2027 CIP Reserve Fund to the project.
BACKGROUND
Preventative street maintenance treatments, such as slurry seal, cape seal, and micro-surfacing protect pavement from water intrusion and extend the useful life of roadway pavement at a relatively low cost. The appropriate treatment type for each street is selected based on the street’s current Pavement Condition Index (PCI), which is verified through visual inspections. Preventative maintenance treatments are most effective on streets rated in “Fair” to “Good” condition, generally with PCIs between 50 and 80, and that have not exhibited extensive base failure. Without such preventative maintenance, the condition of roadway pavement would deteriorate more rapidly, resulting in significantly higher long-term maintenance and rehabilitation costs.
For maintenance planning purposes, the City is divided into four asphalt maintenance zones illustrated in Attachment D. Each year, maintenance activities are typically concentrated within one zone to improve efficiency and reduce overall costs. Street sealing was not performed during the past three seasons due to staffing shortages and bid prices that exceeded available funding. As a result, this project proposes to apply street sealing treatments in three of the four maintenance zones, comprising Asphalt Maintenance Zones 1, 3 and 4. The Annual Street Sealing 2021-2024 Project would perform preventative maintenance on approximately 35 lane miles, or 18 centerline miles of pavement on street segments located throughout the City. Lists of project streets are provided in Attachments A and E. The project will also perform localized base repairs, or digouts, to remove and replace the full-depth pavement sections where isolated failures have occurred prior to applying the surface treatment. The work includes restriping pavement markings following completion of the surface treatments as well.
To maximize the use of available funding, staff have structured the project bidding to include a base bid with additive alternatives A, B and C, providing flexibility in the number of streets that can be included in the project. This approach ensures that at least a portion of the Project can be constructed within the existing budget.
Curb ramp upgrades associated with micro surfacing and cape seal treated streets were completed as part of an earlier phase of the Project.
ANALYSIS
Bids for the project were opened on February 5, 2026. A total of two bids were received, with amounts ranging from $6,643,120 to $7,105,386 for the base bid plus additive alternate bids A and B. The engineer’s pre-bid estimate for construction was $6,813,056 for the Base Bid plus Additive Alternates A and B. The lowest responsible bidder was determined by base bid without consideration of Bid Alternates. VSS International, Inc. was identified as the apparent low bidder with a base bid of $4,645,120. VSS’s bid for Bid Alternates A and B were given as $1,142,000 and $856,000, respectively. After evaluations, staff recommend awarding the contract to VSS International, Inc. in the amount of $6,643,120 for base bid plus additive alternates A and B for the Contract.
Staff verified that VSS International has a valid license from the Contractor’s State License Board and is properly registered with the California Department of Industrial Relations. In addition, the recommended contractor submitted documents demonstrating completion of the required Good Faith Efforts to meet the City’s local business participation goals.
The bidder does not have an office in San Leandro that would qualify it as a local business per the Local Inclusion Policy Ordinance. Also, the bidder does not meet the Local Business Participation Goal by subcontracting with San Leandro businesses for 25% of the contract value. However, the bidder provided documentation that demonstrated good faith efforts to outreach and engage local business participation.
Consistent with standard construction industry practices, staff balanced the level of site investigation with the risk of encountering unforeseen conditions during construction, as well as the level of design detail provided on the plans. As a result, unforeseen conditions may be encountered during construction and certain plan details may require adjustments or clarifications.
Staff also recommend that the City Council appropriate $1,100,000 from the FY2026-2027 CIP Reserve Fund to the subject project.
To minimize potential project delays and to allow adjustments to the scope of work as needed to deliver the high-quality project for the City, staff request authorization to negotiate and approve change orders up to 5% ($332,156) of the original contract amount and cumulative change orders up to 10% ($664,312) of the original contract amount. This authorization will help ensure efficient project completion on budget and on schedule.
Current Agency Policies
• Maintain and enhance the City’s infrastructure
Previous Actions
• On June 5, 2023, by Resolution No. 2023-060, the City Council Approved a Construction Contract with Sposeto Engineering, Inc. in an amount of $893,000 for Curb Ramp Upgrades for the Annual Street Sealing 21-23, Project No. 2022.0070, and authorized the City Manager to Negotiate and Approve Individual Change Orders Up to 5% of the Original Contract Amount ($44,670) and Cumulative Change Orders up to 25% of the Original Contract Amount ($223,350) for the Project in Fiscal Year 2022-2023.
• On July 16, 2025, by Resolution No. 2025-076, the City Council Approved a Resolution to Reject all bids for the Annual Street Sealing 21-23 Project, Project No. 2023.0070.
• On October 20, 2025, by Resolution No. 2025-134, the City Council Approved a Construction Contract with Spencon Construction, Inc. in the amount of $1,434,191 for the base bid plus additive alternate A for the Annual Curb Ramp Program 2025-2026, Project No. 2025.0020, which includes curb ramp upgrades for the Annual Street Sealing 2024 project, and authorized the City Manager to Negotiate and Approve Individual Change Orders Up to 5% of the Original Contract Amount ($71,709) and Cumulative Change Orders up to 10% of the Original Contract Amount ($143,419)
Applicable General Plan Policies
• Policy T-2.1: Complete Streets Serving All Users and Modes. Create and maintain “complete” streets that provide safe, comfortable, and convenient travel through a comprehensive, integrated transportation network that serves all users
• Policy T-5.3 - Maintenance. Regularly maintain City streets and traffic control devices to ensure that streets operate safely and efficiently. The City will strive for an overall Pavement Condition Index of 76, which is the lower limit of industry best practices
• Policy T-7.2: Capital Improvements. Identify capital improvements and other measures which improve the safety of bicyclists, pedestrians, and motor vehicles on San Leandro Streets
Environmental Review
This project is Categorically Exempt per California Environmental Quality Act (CEQA) Section 15301(c) of the CEQA guidelines. A Notice of Exemption was filed with the Alameda County Recorder’s Office on February 14th, 2023.
Summary of Public Outreach Efforts
The Notice to Bidders was published in the Daily Review, Visión Hispana and World Journal. Staff also notified local builders’ exchanges and construction data firms, as well as a list of contractors that asked to be notified of bidding opportunities via email.
Two mandatory pre-bid meetings were held on January 14 and 15, 2026, with potential bidders.
Prior to any construction that will affect access to private businesses or residences, the contractor will provide notifications in the form of door hangers.
Financial Impacts
The estimated cost of this multi-phased project is detailed below. The budget authority section has details on funding types, accounts, and authorizations. CIP accounts are carried forward for five years or until the work is complete, whichever occurs first.
Permit Fees, Utility Costs, Misc. Fees $10,000
Design and Bid $200,000
Construction Contract per Bid Opening of 2/19/2026 $6,643,120
Construction Management & Inspection $300,000
Construction Contracts for Curb Ramp Phases $2,826,010
Construction Contingencies (10% of contract amount) $664,312
Total Cost: $10,643,442
Budget Authority
Funding for all phases of the project is provided as follows:
Account No. Reso. Appropriation Dates & Source Amount
141-38-540 FY 25-26 Budget, Measure BB Funds $3,000,000
141-38-525 FY 21-22 Budget, Measure BB Funds $1,000,000
143-38-525 FY 21-22 Budget, Vehicle Reg Fees $1,000,000
141-38-526 FY 22-23 Budget, Measure BB Funds $2,670,000
143-38-526 FY 22-23 Budget, Vehicle Reg Fees $550,000
141-38-527 FY 24-25 Budget, Measure BB Funds $900,000
141-38-528 Measure BB - Street Sealing 2025 $167,032
210-XX-XXX FY26-27 CIP Reserve Fund $1,100,000
165-43-259 FY 25-26 Budget, CDBG Funds $861,414
Total Current Appropriation: $11,248,446
ATTACHMENTS
• A - Draft Resolution
• B - Base Bid Street List
• C - Bid Summary Annual Street Sealing 21-24
• D - Street Maintenance Map
• E - Bid Alternates Street List
PREPARED BY: Bennett Sanderson, Assistant Engineer, Public Works Department, Engineering Division