SUBJECT: ACTIONS RELATED TO THE MINETA SAN JOSE INTERNATIONAL AIRPORT - PERIMETER SECURITY TECHNOLOGY INFRASTRUCTURE

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1 COUNCIL AGENDA: 08/02/16 ITEM: 6.4 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL Memorandum FROM: Barry Ng Kimberly J. Becker Jennifer A. Maguire SUBJECT: SEE BELOW DATE: Approvec LOSF- SUBJECT: ACTIONS RELATED TO THE MINETA SAN JOSE INTERNATIONAL AIRPORT - PERIMETER SECURITY TECHNOLOGY INFRASTRUCTURE REASON FOR ADDENDUM In order to meet the schedule commitments for the reimbursable Federal Aviation Administration grant deadline, staff requests Council approval at its August 2, 2016, meeting. RECOMMENDATION (a) Reject all bids opened on July 14, 2016 for Norman Y. Mineta San Jose International Airport - Perimeter Security Technology Infrastructure. (b) Adopt a resolution authorizing the Director of Public Works to: (1) Determine the lowest responsive and responsible bidder, decide any bid protests, and award the construction contract for the Norman Y. Mineta San Jose International Airport - Perimeter Security Technology Infrastructure Re-Bid project in an amount not to exceed $8,110,000, contingent on the award and execution of an Airport Improvement Program (AIP) grant from the Federal Aviation Administration (FAA) of a minimum amount of at least $6,000,000 and the appropriation of sufficient funds; (2) Establish a construction contingency of fifteen percent (15%) of the amount of the construction contract for the project if the Director awards a contract; and

2 Page 2 (3) Issue any change orders up to the amount of the contingency if the Director awards a construction contract for the project. (c) Adopt a resolution making findings that identify specific companies and product by brand or trade name in the bid specifications for this Project is necessary for the following specific elements of this project to match other products in use at the Airport: Security Access Controls and Security Camera Services. (d) Adopt the following Appropriations Ordinance and Funding Sources Resolution Amendments in the Airport Capital Improvement Fund: (1) Increase the Perimeter Security Technology Infrastructure appropriation to the Airport Department in the amount of $6,450,000; and (2) Increase the estimate for Earned Revenue from Federal Government to the Airport Department in the amount of $6,450,000. (e) Adopt the following Appropriations Ordinance Amendments in the Airport Renewal and Replacement Fund: (1) Establish the Perimeter Security Technology Infrastructure appropriation to the Airport Department in the amount of $1,549,000; and (2) Decrease the Unrestricted Ending Fund Balance by $1,549,000. OUTCOME The recommendation provides the most efficient means of awarding and executing a construction contract for the Project given the tight time constraints. The 15 percent contingency will provide funding for any unanticipated work necessary for the proper completion of the project. BACKGROUND Airport staff periodically assembles a priority list of capital improvement projects that meet eligibility requirements for the FAA's AIP grant funding. This priority list is submitted to the FAA for review and prioritization based on the 15 general requirements for project funding, as outlined in the FAA's Airport Improvement Program Handbook. To be eligible for funding, proposed projects must demonstrate the advancement of one of the following AIP objectives: airport safety, airport security, airport capacity, meeting FAA standards, preservation of airport infrastructure through reconstruction or rehabilitation, protection and enhancing the environment, minimization of aircraft noise impacts, and airport planning. The Perimeter Security Technology Infrastructure fits the necessary security criteria for FAA - AIP grant funding.

3 Page 3 The Airport has been very diligent in enhancing the safety and security within the Air Operations Area (AOA). Among the recent projects the Airport has undertaken is the new perimeter security fence project. The fence project implements a much improved fencing standard which makes it significantly more difficult to gain access to the AOA. The next step in this process is implementing a new Perimeter Security Technology Infrastructure project that will further address security enhancements around the perimeter of the Airport into the AOA. The award of the Project is contingent upon the execution of the grant from the FAA. Project Description The Airport participated in a study conducted by the National Safe Skies Alliance (Safe Skies), that researched and tested various technologies and their reliability at several sites to deter unauthorized access to the AOA. The analysis performed by Safe Skies indicated that installation of a security camera based detection system along the AOA fence would provide an alert and tracking system to notify the Airport's operations center of a potential unauthorized entry of several intrusion types, -including human and animals. The City has applied for a FAA AIP grant and the application has been looked favorably by the FAA. In addition to the base bid scope of work, there are six add alternate bid items as follows: Add Alternative 1: Add Alternative 2: Add Alternative 3: Add Alternative 4: Add Alternative 5: Add Alternative 6: Adds the installation of biometric access control at vehicle and pedestrian gates. Adds camera installations around the North at Ewert road area. Adds camera installations adjacent to the CNG vicinity. Adds camera installation adjacent to the belly freight area. Adds camera installations to the West side adjacent to tower areas. Adds camera installations adjacent to the Parking Lot 5/6 (south of Terminal B) vicinity. Pending the receipt of the FAA grant, construction is scheduled to begin in September 2016 and is projected to be completed by April 2017.

4 Page 4 ANALYSIS This memorandum is being submitted for the August 2, 2016, City Council meeting. Staff originally opened bids for this Project on July 14, Staff recommends that the City Council reject these bids due to a technical irregularity in the bidding process based on sole sourcing certain vendors in the project specifications without first receiving City Council approval to do so. The City intends to rebid the project and open bids on August 11, Staff is recommending that the City Council delegate authority to the Director of Public Works to determine the lowest responsive and responsible bidder, decide any bid protests, and award the construction contract for the Project. The Director's authority to award the construction contract would be contingent on the Airport executing an FAA AIP grant in the minimum amount of $6,000,000 and the appropriation of sufficient funds. The FAA has given notice that the Perimeter Security Technology Infrastructure project has favorable potential to receive federal funding (AIP grants) in the upcoming fiscal year, which is anticipated to be awarded in August but no later than September 30, The FAA awards AIP grants based on actual bid results, as well as the availability of grant funds, therefore the award of the contract will be contingent upon the award of the AIP grant from the FAA. The maximum project costs of $13,000,000 and the maximum contract award of $8,110,000 have been established based on available funds and on FAA's grant limitations placed on reimbursement for project expenditures. Project Funding Source: Description Amount FAA Grant $10,480,000 Airport Local Match Funds $2,520,000 Total Project Funding $13,000,000 Staff recommends a 15 percent contingency that is consistent with Council Capital Project Contingency Policy, Resolution No , for building renovation work. Additionally, staff recommends the delegation of authority to the Director of Public Works for the issuance of change orders up to the amount of the contingency, in order to keep the critical construction timeline.

5 My 26, 2016 Page 5 Sole Source Requirements for Certain Project Elements State law generally prohibits public entities from "sole sourcing" materials, products and services. However, an exception is when the awarding authority makes a finding, which is described in the request for bids, that "sole sourcing" is necessary to match other products in use on a particular public improvement. Staff is requesting that the City Council adopt a resolution finding that the following companies and products must be "sole sourced" on this Project to match other products in use at the Airport. Staff would include the finding in the re-bid documents. Security Access Controls: Additions to the Door Access Control system must be able to integrate with the current access control system and be able to communicate with the existing security control and monitoring system to preserve uninterrupted coverage and reporting for Airport security staff. Stanley Security is the current holder of the contract to provide maintenance of the access control system for the airport. The local representatives for Stanley have been performing work at the Airport for several years. Security Cameras: The Airport's security cameras are controlled by, and provide information through, one integrated system that operates campus-wide. Continuity with the existing camera system must be maintained to ensure uninterrupted coverage and operability for Airport security staff. G4S is the current holder of the contract to provide security camera services for the Airport. Disadvantaged Business Enterprise Participation This project is funded in part with a federal US Department of Transportation/FAA AIP grant, the federal Disadvantaged Business Enterprise (DBE) Program regulations found in 49 CFR Part 26 apply. The City's current DBE participation goal for its US Department of Transportationfunded Airport Improvement Program in Federal Fiscal Years is 14.5% annually. City staff did extensive outreach to encourage DBE participation. Outreach efforts included: Identification of potential/possible subcontracting opportunities - four work areas identified; Identification of 214-certified DBEs in those four subcontracting work areas; blast sent to 214-certified DBEs, ethnic chambers, San Jose Chamber, and other interested organizations including Minority Business Consortium - blast included project information, subcontracting opportunities (NAICS Codes and Caltrans Work

6 July 26,2016 Page 6 Codes) bid date and time, Pre-Bid meeting date, time and location and DBE certification requirements; Posting project on Airport's and FAA's Opportunities website: Mineta San Jose International Airport; Follow-up phone calls to 123-certified DBEs to remind them about the project and encourage attendance at June 24 Pre-Bid Meeting; Held a Pre-Bid meeting with 25 company attendees, which included a networking opportunity at conclusion of the meeting (for primes and subcontractors to meet); and Based on demand, held a second Pre-Bid Meeting to tour the project location. EVALUATION AND FOLLOW-UP Staff will submit an Information Memorandum to Council after bids are opened which will summarize DBE outreach and participation on the project. PUBLIC OUTREACH To solicit contractors, this project will be listed on BidSync for 10 days and advertised on one day in the San Jose Post Record to meet the Federal Economic Development Administration (EDA) Grant Criteria. The complete bid package and project information for all Department of Public Works construction projects are available on BidSync for interested contractors, contractor organizations and builders' exchanges. This memo will be posted on the City's website for the August 2, 2016 Council agenda. FISCAL/POLICY ALIGNMENT The San Jose Municipal Code requires that capital projects at the Airport be consistent with the adopted Airport Master Plan. The proposed improvement project would be a minor alteration of existing Airport facilities and is therefore consistent with the adopted Airport Master Plan. pursuant to San Jose Municipal Code Section (B)(4).. COORDINATION The project and memorandum have been coordinated with the City Attorney's Office.

7 Page 7 COST SUMMARY/IMPLICATIONS 1. ESTIMATED COST OF PROJECT Project Delivery $ 3,673,000 Construction (Engineer's Estimate) $ 8,110,000 Contingency $ TOTAL ESTIMATED PROJECT COSTS $ 13,000,000 Prior year expenditures REMAINING PROJECT COSTS $325,000 $ 12,675, COST ELEMENTS OF AGREEMENT/CONTRACT: 3. SOURCE OF FUNDING: Airport Capital Improvement Fund Airport Revenue Bond Improvement Fund Airport Renewal and Replacement Fund 4. FISCAL IMPACT: The project has been reviewed and was determined that it will have no significant adverse impact on the Airport operating budget. BUDGET REFERENCE The table below identifies the fund and appropriations to fund the project recommended as part of this memorandum. Fund # Appn # Appn. Name Current Appn. Amount 520 R110 Revenue from Federal Government Rec. Budget Action Total Proposed Capital Budget Page Last Budget Action (Date, Ord. No.) $20,125,000 $6,450,000 $26,575,000 V-615 6/21/16, Perimeter Security Technology Infrastructure 527 NEW Perimeter Security Technology Infrastructure $3,769,000 $6,450,000 $10,219,000 V-619 6/21/16, N/A $1,549,000 $1,549,000 V-619 N/A

8 Subject: San Jos6 Airport Perimeter Security Technology Infrastructure Page Ending Fund Balance - Unrestricted Perimeter Security Technology Infrastructure $11,681,812 ($1,549,000) $10,132,812 V-619 6/21/16, $907,000 N/A $907,000 V-619 6/21/16, CEOA Resolution Nos and 71451, PP /s/ BARRY NG Director of Public Works /s/ KIMBERLY J. BECKER Director of Aviation //^y k i JENNIFER A. MAGUIRE Senior Deputy City Manager/ Budget Director I hereby certify that there will be available for appropriation in the Airport Capital Improvement Fund in , monies in excess of those heretofore appropriated therefrom, said excess being at least $6,450,000. /, /a / --.Ac*, JENNIFER A. MAGUIRE Senior Deputy City Manager/ Budget Director For questions please contact Michael O'Connell, Deputy Director, Public Works Department, at