HomeMy WebLinkAbout10.a. Award cogeneration package maintenance contract to Wood Group GTSCentral Contra Costa Sanitary District '/� . a
' BOARD OF DIRECTORS v
POSITION PAPER
Board Meeting Date: June 2, 2011
Subject: AUTHORIZE AWARD OF A COGENERATION PACKAGE MAINTENANCE
CONTRACT TO WOOD GROUP GTS (GAS TURBINE SERVICES) FOR
$1,250,000 FOR A TERM OF FIVE YEARS
Submitted By: Initiating Dept✓Div.:
David J. Reindl, Senior Engineer Plant Operations /Maintenance
REVIEWED AND RECOMMENDED FOR BOARD ACTION:
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D. Reindl rieb S. Kkfa M. Orr
ISSUE: Board authorization is requested for the General Manager to execute a five
year contract with Wood Group GTS for a total amount of $1,250,000.
RECOMMENDATION: Award the maintenance contract to Wood Group GTS for five
years at $208,800 for year one, plus an adjustment for inflation annually and a 15%
contingency and authorize the General Manager to execute the contract.
FINANCIAL IMPACTS: The five -year value of the contract is approximately
$1,250,000, including an annual inflation adjustment and a 15% contingency.
ALTERNATIVES /CONSIDERATIONS: Alternatives to this contract would be to
contract on an as- needed basis or have District staff maintain equipment. By not
having a maintenance agreement, the District would not expect to maintain 95 percent
uptime availability. Furthermore, emergency service response time would be increased.
In the event of a catastrophic failure (outside of the normal warranty period), the District
would be responsible for turbine repair and replacement costs.
BACKGROUND: The installation of the cogeneration system for the Treatment Plant
was completed mid -1995 and commissioned for full -time operation in November 1995.
The cogeneration system provides between 85 and 90 percent of the Treatment Plant's
electrical energy and 30 percent of the steam needed for the Treatment Plant aeration
process. By utilizing natural gas (NG) to produce both electrical power and steam, the
District saves between $800,000 and $1 million per year over the cost of utility - provided
power. For each of the last five years, the cogeneration system has exceeded the
on -line availability goal of 95 percent, due in part to the comprehensive maintenance
program with Solar Turbines. A maintenance contract with the original equipment
manufacturer was included in the original bid for the turbine generator equipment when
it was purchased in 1994. Solar Turbines, the manufacturer, was awarded the contract
to supply our turbine and provide five years of maintenance, and continued to provide
maintenance support for the last 15 years.
NAPOSUP \Board of Directors \Board - Position Papers\2011 \Wood Group Cogen Contract 06- 2011.doc
POSITION PAPER
Board Meeting Date: June 2, 2011
subject: AUTHORIZE AWARD OF A COGENERATION PACKAGE MAINTENANCE
CONTRACT TO WOOD GROUP GTS (GAS TURBINE SERVICES) FOR
$1,250,000 FOR A TERM OF FIVE YEARS
The maintenance agreement covers the entire power generating package for all parts
and labor and any emergency service calls. The agreement also contains provisions
for full replacement of the combustion turbine between 30,000 and 40,000 hours of
service, a value of $360,000. For the past 15 years, this type of agreement has
provided greater than 95% availability for the unit 13 out of the last 15 years, providing
an excellent cost benefit to the District. As part of the last agreement, the turbine was
replaced in January 2010; the replacement turbine is meeting all emissions criteria and
availability criteria. Reliability to date has been good, except for an extended nine -day
outage in March 2011, caused by a faulty oil pressure transmitter which required District
support to successfully troubleshoot to bring the system back online.
The term of the existing maintenance agreement ended in November 2010. The
District has negotiated an extension of the original agreement with Solar Turbines for an
additional six months to allow an evaluation of proposals received from three vendors
who perform gas turbine maintenance.
A Request for Proposals (RFP) process was initiated on January 14, 2011, and
proposals received on February 18, 2011. As part of the RFP process, a committee
consisting of Purchasing and Plant Operations Department Engineers was formed to
identify needs, develop scope, and to evaluate the proposals. The committee used the
following criteria to evaluate the proposals:
1) Contractor Experience, Qualifications, References, Safety Record, and Scope of
Work Exceptions
2) Emergency Response and Technical Support
3) Cost to District
4) Conformance to Standard Contract Terms and Conditions
5) Merit, Quality and Completeness of Proposal
Three proposals were submitted. The following two met the minimum District proposal
requirements and were evaluated:
Solar Turbines Inc. $208,392 / year
Wood Group GTS $208,800 / year
NAPOSUP \Board of Directors \Board - Position Papers\2011 \Wood Group Cogen Contract 06- 2011.doc
POSITION PAPER
Board Meeting Date: June 2, 2011
Subject: AUTHORIZE AWARD OF A COGENERATION PACKAGE MAINTENANCE
CONTRACT TO WOOD GROUP GTS (GAS TURBINE SERVICES) FOR
$1,250,000 FOR A TERM OF FIVE YEARS
After extensive review of these proposals and several weeks of follow -up inquiries, the
Evaluation Committee scored Wood Group GTS as the highest ranked proposal, equal
to or better in many categories than Solar; and therefore, the most suitable vendor for
the maintenance services required. Although both proposals were acceptable and both
vendors can satisfactorily provide the District's maintenance support needs, Wood
Group GTS's conformance to District scope of work and contract terms make them the
best fit for the District. The cost for the renewed agreement is $17,400 per month, or a
total of $208,800 the first year, and includes an allowance for inflation in future years
and a 15% contingency for unanticipated issues. It is expected that the contract will run
its full five -year term at an estimated total value of $1,250,000 including inflation and
the contingency.
RECOMMENDED BOARD ACTION: Authorize award of a cogeneration package
maintenance contract to Wood Group GTS for $1,250,000 for a term of five years.
NAPOSUP \Board of Directors \Board - Position Papers\2011 \Wood Group Cogen Contract 06- 2011.doc