Title
Adopt a Resolution to Approve and Authorize the City Manager or her Designee to Take All Necessary Actions to Reject All Bids for the Annual Street Sealing 2021-2023 Project, Project No. 2023.0070
Staffreport
COUNCIL PRIORITY
• Infrastructure
• Public Safety
SUMMARY
This contract would provide for the maintenance of various public roadways throughout the City through the application of slurry seal and cape seal treatments. Two bids were received; however, the lowest responsive and responsible bid exceeded the Engineer’s Estimate by 40%. Based on the bids received, Staff recommend rejecting all bids, combining the scope of this project with the Annual Street Sealing 2024 Project, which is currently in the design phase, and rebidding the project in the Fall of 2025.
RECOMMENDATIONS
Staff recommend the following:
• Reject all bids received at the May 7, 2025 bid opening; and
• Re-bid the project, which is projected to be in Fall 2025.
BACKGROUND
Preventative street maintenance treatments such as slurry seal, cape seal, and micro-surfacing, involve the application of a sand, aggregate and asphalt emulsion mixture to prevent water intrusion and extend the useful life of roadway pavement at a relatively low cost. The specific type of seal treatment is selected based on the street’s current Pavement Condition Index (PCI), verified through visual inspections. Pavement seals are most effective on streets that have not exhibited extensive base failure and have been rated in ‘Fair’ or ‘Good’ condition (PCI between 40-80). Without such preventative maintenance, the condition of roadway pavement would quickly decline and cost more to maintain in the future.
The Annual Street Sealing 2021-2023 Project would perform preventative maintenance on approximately 25 lane miles or 11 centerline miles of pavement on street segments located throughout the City. A complete list of Project streets is included as Attachment A. The project would include base repairs, or digouts, that would remove and replace the full depth of an isolated base failure before surface treatment is applied. The work would also include restriping pavement markings after surface treatment is completed.
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 May 7, 2025. Two (2) bids were received, ranging from $5,098,856.00 to $6,582,000.00. The lowest bid, submitted at $5,098,856, exceeded the pre-bid Engineer’s Estimate of $3,635,110.04 by approximately 40%. Post-bid analysis and communications with both bidders identified multiple factors that contributed to the higher-than-expected bid prices:
• Anticipated permitting requirements related to CalTrans and Union Pacific Railroad (UPRR) encroachment permits and crossings requirements
• Increased material costs, particularly for pavement striping and traffic control, possibly driven by expected tariffs and ongoing supply chain disruptions
• Costs associated with satisfying contractor safety requirements
Staff estimate that an additional $1.8 million would be required to award the construction contract based on the lowest responsible bid received and project budget available. Staff therefore recommend rejecting all bids. Staff plan to combine the subject project with the Annual Street Sealing 2024 Project, currently in the design phase and scheduled for construction in the Summer of 2026. Staff plan to advertise the combined Project for bid as early as Fall of 2025 with anticipated contract award in the Spring of 2026 to attract a larger number of bidders and encourage more competitive bids. In addition, combining the two projects into one larger project could further encourage more competitive bid prices by generating economies of scale and creating redundancies in common bid items such as mobilization.
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.
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 April 17th and 22nd, 2025, with potential bidders.
Prior to any construction which would 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 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 $10,000.00
Design and Bid $123,607.00
Construction Contract per Bid Opening of 5/7/2025 $5,098,856.00
Construction Management & Inspection $139,856.64
Construction Contract for Curb Ramp Phase $752,527.42
Construction Contingencies (15% of contract amount) $764,828.40
Total Cost: $6,888,675.46
Budget Authority
The project is funded as follows:
Account No. Reso. Appropriation Dates & Source Amount
144-38-525 FY 21-22 Budget, Measure B Funds $1,447,480
141-38-525 FY 21-22 Budget, Measure BB Funds $242,222
143-38-525 FY 21-22 Budget, Vehicle Reg Fees $292,950
141-38-526 FY 22-23 Budget, Measure BB Funds $2,548,905
143-38-526 FY 22-23 Budget, Vehicle Reg Fees $547,987
Total Current Appropriation: $5,079,544
ATTACHMENTS
• A - Draft Resolution to Reject All Bids
• B - Street List
• C - Bid Summary Annual Street Sealing 21-23
PREPARED BY: Bennett Sanderson, Assistant Engineer, Public Works Department, Engineering Division