Meeting_Body
CONSTRUCTION COMMITTEE
JULY 15, 2026
Subject
SUBJECT: CONSTRUCTION MANAGEMENT SUPPORT SERVICES - CAPITAL PROJECTS
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a contract modification to Contract No. AE76301MC081000 with Zephyr Rail to increase the total authorized contract funding by $328,417, increasing the total Not-To-Exceed (NTE) amount from $9,269,211.94 to $9,597,628.94, for final contract closeout.
Issue
ISSUE
Contract No. AE76301MC081000 is a cost-plus fixed fee contract with Zephyr Rail to provide construction management support services for projects, such as Link US, Transportation Communication Network, Division 9 and El Monte Transit Center Charger Installation, and NoHo to Pasadena BRT Program. Under this contract structure, task orders are issued using established labor classifications and provisional indirect cost/overhead rates. Indirect cost rates are subject to reconciliation because final overhead rates may differ from the allowed provisional rates used at the time of invoicing. Metro has completed an overhead reconciliation for work performed from 2022 through 2025, which identified a total underbilling across Task Orders 01 through 17.
The requested contract modification does not authorize new scope, new services, or additional level of effort. The action provides sufficient contract authority to reconcile overhead costs for work already performed, invoiced, reviewed, and accepted under existing task orders. The reconciliation is necessary to complete contract administration and support closeout of the applicable task order adjustments.
Background
BACKGROUND
The primary role of Zephyr Rail under Contract No. AE76301MC081000 was to provide skilled and qualified staff to augment Metro staff in the performance of construction management services for Metro capital projects, adjacent projects, joint development, and related work. Zephyr Rail staff worked side-by-side with Metro staff in Integrated Project Management Offices and provided specialized technical and administrative expertise to support project delivery, implementation, project reporting, construction oversight, field inspection, constructability reviews, cost and schedule analysis, and related construction management functions.
The contract was originally awarded in October 2021 for a three-year base period, plus two one-year options to support design reviews, construction management, contract administration, and closeout for various Metro capital projects, smaller construction projects at bus and rail facilities, work within Metro right-of-way, and adjacent/joint development projects.
In September 2023, the Board approved an increase to the total authorized funding for Contract No. AE76301MC081 to support additional task orders for adjacent development, joint development, state of good repair inspections, and other construction management support needs. That action increased the total contract value to $9,269,211.00.
Discussion
DISCUSSION
Metro has completed a reconciliation of Zephyr Rail’s overhead rates for work performed under Contract No. AE76301MC081000 from 2022 through 2025. The reconciliation compares the amounts invoiced using provisional indirect cost/overhead rates with the amounts due after applying the applicable final rates for each year of the contract. The reconciliation identified a total underbilling across the task orders issued under the contract.
A summary of the current and requested contract funding can be found below, and additional contract authority information can be found in Attachment B.
• Total Authorized Funding to Date $9,269,211.94
• Task Orders Issued to Date $9,205,628.03
• Remaining Balance to Date $ 63,583.91
• Total Underbilling amount $ 392,000.91
• Current Board Action for Additional Funding $ 328,417.00
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
This action will have no detrimental impact on safety. The action is administrative in nature and provides contract authority to complete overhead reconciliation for previously performed Construction Management Support Services.
Financial_Impact
FINANCIAL IMPACT
The requested action will increase the total authorized contract funding for Contract No. AE76301MC081000 from $9,269,211.94 to $9,597,628.94. The additional contract authority, together with the remaining authorized contract value, will be used to fund the total overhead reconciliation amount. Task order adjustments will be funded from the associated project budgets.
Impact to Budget
Task order adjustments will be funded from the associated project budgets. The funding source differs depending on the individual projects from adjacent projects, joint development and other capital projects listed in the Task Order Log in Attachment B.
Equity_Platform
EQUITY PLATFORM
This action supports fair and timely payment for work performed under a contract awarded to a firm that qualifies as a Small Business Enterprise. The action does not add new scope or change the services to be performed under the contract. Zephyr Rail made an overall 69% SBE goal and 5% DVBE commitment on this contract. The current participation levels are 69.22% SBE and 3.94% DVBE. Zephyr is exceeding its SBE commitment by 0.22% and has a 1.06% DVBE shortfall. Information regarding the DVBE shortfall can be found in Attachment C.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit. Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
While this item does not directly encourage taking transit, sharing a ride, or using active transportation, it is a vital part of Metro operations. Because the Metro Board has adopted an agency-wide VMT Reduction Target, and this item supports the overall function of the agency, this item is consistent with the goals of reducing VMT.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendation supports:
• Strategic Plan Goal 1: Provide high-quality mobility options that enable people to spend less time traveling.
• Strategic Plan Goal 3: Enhance communities and lives through mobility and access to opportunity.
• Strategic Plan Goal 4: Transform LA County through regional collaboration and national leadership.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board may elect not to approve the requested contract modification. Staff does not recommend this alternative because the overhead reconciliation is associated with work already performed under approved task orders. Without the requested contract authority, Metro would not have sufficient contract value to complete the reconciliation and close out the applicable task order adjustments.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute a contract modification to increase the total authorized contract funding and process the applicable task order modifications necessary to complete the overhead reconciliation.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Contract Modification/Task Order Log
Attachment C - DEOD Summary
Prepared_by
Prepared by: Michelle Quinn, Executive Officer, Program Management, (213) 922-3026
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer, (213) 922-4471
Reviewed_By
Reviewed by: Timothy Lindholm, Chief Program Management Officer, (213) 922-7297
