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low bid amount of $5,300,625.90 to $5,654,938, as compared to the engineer's estimate of $3.6 million for the project (see Attachment 1 for Bid Summary). The engineer's estimate was prepared by the design consultant two years ago. With the improvement in the economy, the number of construction projects has increased which has led to higher construction cost. The design consultant and construction manager reviewed the bids submitted and concluded that the bids were reflective of current construction costs. Even though the lowest bid is significantly higher than the engineer's estimate, staff recommends that the construction contract be awarded to the lowest responsible bidder. Four bids were accepted, and the difference between the lowest and highest bid was not significant. If the bids are rejected and the project is re-bid, it is unlikely that the new bids will be significantly lower than the bids opened on June 26th. Also, there is a possibility that if the project is re-bid, the bids could be higher if construction costs continue to rise. Rejecting the bids and delaying the completion of the project could also jeopardize the $709,000 CMAQ grant funds that the project has been awarded. The project was designed based on the 2006 Caltrans Stancard Plans and Specification. If the project is re-bid, Caltrans may require a redesign of the project to meet the current 2010 Caltrans Standard Plans and Specifications. A redesign of the project will increase the design cost significantly. The low bid of $5,300,625.90 was received from Ghilotti Construction Company, Inc. of Santa Rosa, California. Past work performed by Ghilotti Construction Company, Inc. was verified to be satisfactory. Therefore, staff recommends award of the construction contract to the lowest responsible bidder, Ghilotti Construction Company, Inc. Budget A summary of the project budget is presented in Attachment 2 tc this report. As indicated in this attachment, a total of $4,715,530 in funding has been approved for this project to date. Expenses and encumbrances to date total $608,994, resulting in current available funding of $4,106,536. With a construction budget estimated at $6,990,853, there are insufficient funds for the subject construction and related construction support services. As summarized in Attachment 2, staff recommends transferring funds from the following Capital Improvement Projects to meet the budget shortfall: Intersection Improvements - Various Locations (CIP 105024), Biannual Traffic Signal Installations (CIP 115032 & 135032), Intersection Improvements (CIP 115041, 125041 & 35041), Intersection Improvements - Stoneridge Drive & Stoneridge Mall Road (CIP 105026). Staff also recommends the appropriation of funds from the Traffic Improvement Fund and the Stoneridge Business Center Fund to meet the budget shortfall. The Capital Improvement Projects recommended for the fund transfer, with the exception of CIP 105206, are appropriated from the Traffic Impact Fee ro fund safety improvements at various intersections. The use of funding for this interchange project meets the intended goal of improving roadway safety. CIP 105206 was funded through the Stoneridge Business Center Improvement fund which was established to construct transportation improvements around Stoneridge Mall. Page 3 of 5