SFPUC approves $215.3 million Bay Tunnel contract after denying bid protest

The San Francisco Public Utilities Commission voted on Dec. 18 to award the Bay Division Pipeline No. 5 Bay Tunnel construction contract (WD2531) to a joint venture of Michaels Construction, JD, and Coluccio after rejecting a protest from the second‑place bidder.

The commission considered arguments from protest counsel and from the apparent low bidder before taking a roll‑call vote. Robert Maxwell, an attorney with Rogers Joseph O'Donnell representing Bay Tunnel Constructor (a joint venture of Obayashi and Kennedy Construction), urged the commission to delay the vote so his client could review additional qualification materials that staff provided the previous night. Maxwell argued the solicitation required a managing partner or sponsor to meet certain bidder qualifications and said the low bidder’s joint‑venture paperwork did not clearly identify a managing partner. He also contested a handwritten, un‑initialed change to the submitted price and said the absence of written authorization to the bid runner meant the low bid was not clearly binding at the time of public opening.

"I believe it sets a dangerous precedent to waive an irregularity of that sort," Maxwell said, arguing the omission could permit bidders to manipulate the process.

MJC's counsel, James Dweick of the Sedgwick Law Firm, countered that the issues had been fully vetted, that the city attorney reviewed the legal arguments, and that there was "no legal basis for this bid protest." Dweick said the joint venture is governed by a policy committee and that Michaels serves as the administrative party for the JV. He characterized the handwritten change as a deliberate revision to pricing made shortly before submission, not a typographical or arithmetic mistake eligible for withdrawal under Public Contract Code section 5103.

City attorney staff and PUC project staff described their review as thorough. John White of the city attorney's office said the solicitation allowed either a prime contractor or, for a joint venture, a managing partner/sponsor to meet the listed qualifications and that Michaels was the administrative party managing day‑to‑day contract performance. Project manager Joanna Wong told commissioners that staff had "all the information that we need" and that the responsibility determination would not change with additional time.

After questions and rebuttals, a motion to accept the Michaels/JD/Coluccio joint venture as the lowest qualified, responsible, and responsive bidder was moved and seconded and carried on an 'aye' vote. The contract award amount announced in the hearing record was $215,300,000.

Votes at a glance - Consent item (WW483R, North Georgia Channel force main improvement): approved by voice vote (ayes recorded). - WD2531 Bay Division pipeline — Bay Tunnel segment: commission voted to accept the Michaels/JD/Coluccio joint venture as the apparent low, responsible, and responsive bidder; motion carried.

What the commission decided and what happens next The commission accepted staff’s recommendation and denied the protest, enabling staff to proceed with contract award to the Michaels/JD/Coluccio joint venture. Commissioners expressed the decision was difficult given how close the bids were and commended all firms for competing on a challenging project. Staff and the city attorney’s office concluded the issues raised did not warrant delaying the award.

Context PUC staff said the Bay Tunnel is a five‑mile tunnel beneath San Francisco Bay in the vicinity of the Dumbarton Bridge and described the project as necessary for seismic and delivery reliability. Four bids were publicly opened; the record notes that bids were received Nov. 12. The protest raised issues of responsiveness, bidder qualifications, and procedural compliance with the solicitation and applicable public contracting rules. Staff, the city attorney, and the design reviewer (Jacobs Engineering) participated in the determination that the winning bid was responsive and responsible.

By the close of the special meeting, the commission adjourned at 10:49 a.m.