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Department of Transportation recommending the Board consider the following pertaining to Contract 10197 for the installation of an aboveground fuel tank and dispenser system and removal of the existing underground fuel tanks located at the South Lake Tahoe Maintenance Yard:
1) Award the Construction Contract to GEMS Environmental Management Services, Inc. the lowest responsive, responsible bidder;
2) Approve and authorize the Chair to sign the Construction Contract in the amount of $735,432.84, subject to review and approval by County Counsel and Risk Management; and
3) Authorize the Director of Transportation to sign an Escrow Agreement, if requested by the Contractor and in accordance with Public Contract Code Section 22300, for the purpose of holding Contract retention funds.
(District 5)
FUNDING: Road Fund. (100%) (No Federal Funds)
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DISCUSSION / BACKGROUND
Department of Transportation maintenance yard in South Lake Tahoe currently utilizes a 20,000 gallon underground storage tank (UST), that is split into two (2) separate compartments. One (1) compartment is 14,000 gallons and the other compartment is 6,000 gallons with an original construction date of November 1998. In 2023, the 6,000 gallon UST was determined to no longer meet environmental requirements and was closed permanently. Department of Transportation (Transportation) reviewed the age of the tanks, environmental regulations and monthly monitoring costs for the UST's and determined the upfront cost to replace the system with an aboveground fuel tank system would provide long term reliability and reduce future budget items related to tank maintenance and repairs. Transportation subsequently added the replacement project to the Fiscal Year 2023/24 budget and has since been working on the various phases of the project.
The initial phases included purchasing the fuel tanks, dispensers, and other required materials, which were formally bid under 24-0067 and brought to the Board for approval on July 30, 2024, under Legistar file 24-1246. The materials were ordered in 2024 and delivered in October 2025. Then in September 2025, construction for the concrete pad for the tanks to be set on was bid and awarded. The work was completed prior to winter 2025. The final phase, covered under contract 10197, includes removing the existing system, which encompasses the underground tanks, dispensers, and all related piping, completing soil testing, and then installing the new aboveground system prior to winter 2026 to ensure Transportation has sufficient diesel readily available for snow removal operations in the Tahoe Basin.
The Project was approved for advertisement by the Board on May 12, 2026 (Legistar file 26-0677).
Award and Sign Construction Contract with Lowest Responsive, Responsible Bidder:
On Thursday, June 4, 2026 at 2:00 p.m., the Department of Transportation (Transportation), opened bids for the Aboveground Tank Installation at the SLT Maintenance Yard (Project). One (1) bid was received totaling $735,432.84.
GEMS Environmental Management Services, Inc (GEMS) submitted the only bid at $735,432.84. Transportation issued an All Bidders Letter after the bid opening on June 4, 2026 notifying the bidders of the recommendation to the Board for award of the contract to GEMS and initiating the bid protest period. No bid protests have been received. GEMS' total bid for the project is $735,432.84.
Authorize the Director of Transportation (Director) to Sign Escrow Agreement:
Pursuant to Article 7, "Measurement and Payment" of the Agreement, Transportation will retain five percent (5%) of the value of work done from each contractor payment (excluding mobilization payments) as security for the fulfillment of the Contract. Alternatively, Public Contract Code (PCC) Section 22300 provides that the Contractor may request that payment of retentions held be made directly to an escrow agent. The Contractor will receive the interest earned on the investment.
In accordance with these provisions, the Contractor may request in writing that the County make payment of retention funds directly into an escrow account, which would necessitate an escrow agreement. To help expedite this process, if requested by the Contractor, Transportation requests that the Board authorize the Director to execute the Escrow Agreement. Upon satisfactory completion of portions of the Contract and upon written notification from the Director, the Contractor will receive incremental releases from the Escrow Agent paid into the account and any interest earned thereon. A portion of the retention and interest will be retained in the escrow account until thirty-five (35) days after the recordation of the Notice of Acceptance of the Contract, at which time, upon written notification, these funds will be released to the Contractor.
Contract Change Orders (CCOs):
In any contract, there is a need to be able to make changes, and the CCO process facilitates the ability to make necessary changes when needed within a contract.
Contingency CCOs:
With construction contracts, there is an expectation that unanticipated changes will be encountered once construction begins. To prepare for this, a 10% contingency budget is set aside. The budget for contingencies on this Contract is $73,543.28. PCC Section 20142 and Resolution 102-2012 authorize the Director to execute individual CCOs, the maximum value of $210,000 which is based on the original contract amount. This authority is also for a cumulative total of contingency CCOs not to exceed 10% of the original Contract value.
ALTERNATIVES
1) The Board could choose not to award the Contract and direct Transportation to re-advertise for construction bids. However, this would delay the project and could create fueling issues during winter operations in South Lake Tahoe.
2) The Board could choose to cancel the entire Project.
PRIOR BOARD ACTION
May 12, 2026, Legistar file 26-0677, Board approved the advertisement of bid.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel and Risk Management
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
The lowest bid for the construction phase of the Project is $808,976.12, which includes a bid of $735,432.84 and contingency of $73,543.28. Transportation has included $680,000 of funding in Fiscal Year 2025-26 and Fiscal Year 2026-27 recommended budget. During the adopted budget process, Transportation will increase the project budget by $130,000 for a new not-to-exceed total of $810,000.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) Upon approval by County Counsel and Risk Management, Department of Transportation will forward two (2) originals of the Construction Contract #10197, together with the required bonds and insurance, and the approved Contract Routing Sheet to the Clerk for the Chair's signature.
2) The Clerk will forward one (1) fully executed Construction Contract to Department of Transportation, attention of Ashley Johnson, for further processing.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Rafael Martinez, Director
Department of Transportation