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HomeMy WebLinkAbout09.a. Adopt Resolution to amend Carollo Engineers Agreement re cogeneration unitCentral Contra Costa Sanitary District Q. ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: May 17, 2012 subject: RESOLUTION AUTHORIZING THE GENERAL MANAGER TO AMEND AN EXISTING AGREEMENT WITH CAROLLO ENGINEERS FOR PROFESSIONAL ENGINEERING SERVICES FOR THE DESIGN AND REPAIR OF THE COGENERATION UNIT Submitted By. Initiating Dept /Div.: Craig Mizutani, Senior Engineer Plant Operations Department REVIEWED AND RECOMMENDED FOR BOARD ACTION. I B. Than M. Orr 44�- K. Alm Ann E, Far II, General Manager ISSUE: Board authorization is required for the General Manager to amend an existing professional services agreement beyond staff authority limits. In addition, while under normal circumstances some of the work to be performed under the agreement would need to be competitively bid, where competitive bidding is not in the public interest, the District may authorize construction work without going through a formal competitive bidding process. RECOMMENDATION: Adopt the attached resolution making findings and authorizing the General Manager to amend an existing professional services agreement with Carollo Engineers to increase the cost ceiling from $98,000 to $500,000 and to allow for the design and repair of the cogeneration unit. FINANCIAL IMPACTS: Preliminary investigative work completed to date indicates that repair of the cogeneration unit and related equipment will cost approximately $400,000 including engineering, equipment repair and installation. This is in addition to the $98,000 agreement resulting in a total cost of approximately $500,000. ALTERNATIVES /CONSIDERATIONS: The District could elect to engineer, bid and award contracts to repair the equipment. This is not recommended because of the time required to go through this process. Delaying repair of the cogeneration system would be costly. Each day the cogeneration system is off -line, the District stands to lose $5,000 to $10,000 in utility costs (the net cost of imported electrical power, natural gas use to make steam, reduction in landfill gas use, and related factors). Carollo Engineers is the original design engineer for the cogeneration system. They have the specialized expertise and experience to coordinate the repair of the various components of the cogeneration system and have targeted mid -June for completion of the repairs. Q \Documents and Settings \cmizutani \Desktop \Cogen Data \Board \Carollo PP re cogen for 5 -17 -12 (4).DOC Page 1 of 3 POSITION PAPER Board Meeting Date: MAY 17, 2012 subject. AUTHORIZE THE GENERAL MANAGER TO AMEND AN EXISTING AGREEMENT WITH CAROLLO ENGINEERS FOR PROFESSIONAL ENGINEERING SERVICES FOR THE DESIGN AND REPAIR OF THE COGENERATION UNIT BACKGROUND: As reported at the Board meeting on April 5, 2012, there was an explosion in the exhaust system of the cogeneration unit on March 29, 2012. The District hired Carollo Engineers to perform investigation of the cogeneration system components to determine what repairs are required to place the system back in operating condition. This investigation occurred concurrently and in conjunction with the root -cause analyses performed by Exponent, ArcSine Engineering, and others during the week of April 30, 2012. The root -cause investigation is currently being completed by the District's insurance carrier's technical consultant, Engineering Design & Testing Corp. The work by Carollo was performed on a professional services agreement entered into on April 16, 2012 in the amount of $98,000. The investigative work has been completed and it appears that all components are repairable. As part of the repair process, the following work is anticipated: 1. Repair of the turbine. Components that were damaged during the explosion and components removed during the root -cause failure analysis will be replaced with new or remanufactured units. 2. Repair of the. damaged ducting connecting the turbine, including new structural supports upgraded to meet current seismic code. 3. Repair of the diverter valve. 4. Repair of the waste heat steam generator and economizer. This includes sheet metal work, repairing internal piping /tubes, and new supports. 5. Repair of the exhaust silencer. 6. Verification by Solar Turbines that the system (including control system) is fit for service prior to startup. 7. Assisting the District in upgrading the cogeneration system programmable logic controller (PLC) to a newer version. Carollo Engineers has hired RF McDonald, EFFOX, and Solar Turbines. Solar Turbines is the manufacturer of the cogeneration unit. RF McDonald is the factory- authorized installer for the heat recovery equipment. EFFOX is the manufacturer of the CADocuments and Settings \cmizutanlDesktop \Cogen Data \Board \Carollo PP re cogen for 5 -17 -12 (4).DOC Page 2 of 3 POSITION PAPER Board Meeting Date: MAY 17, 2012 subject AUTHORIZE THE GENERAL MANAGER TO AMEND AN EXISTING AGREEMENT WITH CAROLLO ENGINEERS FOR PROFESSIONAL ENGINEERING SERVICES FOR THE DESIGN AND REPAIR OF THE COGENERATION UNIT diverter valve. These companies have access to the detailed engineering specifications for the equipment. Repair work is scheduled to begin May 15. Due to the complex nature of the equipment, staff recommends performing the repair work and replacing the parts using suppliers who already have the necessary proprietary engineering skills, knowledge and parts to expedite the repairs and to restore the system so that it can operate safely. Under normal circumstances, the District would use a competitive bid process to contract for least a portion of the repair work described above. However, because of the unusually high daily costs of delaying the completion of the work and the need for specialized knowledge, skills, and equipment, staff believes that the public interest would not be served by using a competitive bidding process in this situation. Under California common law, a public agency is not required to employ a competitive bid process where the public interest would not be served by the competitive process. Staff has concluded that this action is exempt from the California Environmental Quality Act (CEQA) under District CEQA Guidelines Section 15301 since it involves repairs to an existing public facility involving no expansion of use. Approval of this action will establish the Board of Directors' independent finding that this project is exempt from CEQA. RECOMMENDED BOARD ACTION: Adopt the attached resolution making findings and authorizing the General Manager to execute an amendment to the existing professional services agreement with Carollo Engineers for the design and repair of the cogeneration unit, to increase the cost ceiling to $500,000. CADocuments and Settings \cmizutani\Desktop \Cogen Data \Board \Carollo PP re cogen for 5 -17 -12 (4).DOC Page 3 of 3 RESOLUTION NO. 2012 -037 A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT DELEGATING AUTHORITY TO GENERAL MANAGER TO AMEND THE EXISTING AGREEMENT WITH CAROLLO ENGINEERS TO INCREASE THE COST CEILING TO ALLOW FOR THE DESIGN AND REPAIR OF THE COGENERATION UNIT WITHOUT THE SOLICITATION OF COMPETITIVE BIDS WHEREAS, on March 29, 2012, there was an explosion in the exhaust system of the Central Contra Costa Sanitary District's (the District) cogeneration unit that has rendered the unit inoperable until repairs can be made; and WHEREAS, each day that the cogeneration unit does not operate, the District must spend up to $5,000- $10,000 purchasing power from PG &E to replace the power that is not being generated; and WHEREAS, pursuant to a professional services agreement, the District retained Carollo Engineers to investigate the damage caused to the District's facilities and equipment from the explosion in conjunction with the root -cause analyses currently being performed; and WHEREAS, Carollo Engineers has completed its initial investigation and determined that affected components of the cogeneration unit are repairable or replaceable; and WHEREAS, to complete the needed repair work, the entities repairing the equipment and facilities must have unique or highly specialized skills which are not generally available to most licensed construction contractors; and WHEREAS, the repairs are to be made to existing proprietary equipment and the components required for completion of the repairs may need to be purchased on a sole source basis from the original equipment suppliers or other specialty companies; and WHEREAS, the District would, under normal circumstances, competitively bid some of the repair work using a traditional design- bid -build process to ensure that it benefitted from any opportunity for competitive advantage and to comply with the Public Contract Code; and WHEREAS, conducting a competitive bid process under these circumstances would extend the timeline for completing the needed repairs by months; and WHEREAS, under the current factual setting, any financial benefit that might theoretically be realized from a publicly advertised design- bid -build process is substantially outweighed by the high additional costs of each day of delay in getting the cogeneration unit up and operating and using selected highly experienced and qualified vendors; and Resolution 2012 -037 Page 2 of 3 WHEREAS, Carollo Engineers was the original design engineer of the cogeneration system and therefore has substantial institutional knowledge of the cogeneration system and supporting structure; and WHEREAS, the investigation of the root -cause of the cogeneration unit failure is ongoing and, during the remainder of the investigation, new information may be obtained that will require integration into the full repair project which can best be facilitated by the design engineer managing the repair project; and WHEREAS, California courts have determined that in certain limited circumstances, competitive bidding is not required when it would be impossible or not in the public interest, such that no competitive advantage can be gained by soliciting bids (Graydon v. Pasadena Redev. Agency (1980) 104 Cal.App.3d 631). NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District (the Board) as follows: THAT the Board hereby adopts the recitals set forth above as the basis of its findings. 2. THAT the Board finds there is substantial evidence that it is not in the public interest to proceed with the repairs on the cogeneration unit using a formal design- bid -build process and to do so would produce no competitive advantage. 3. THAT the Board authorizes the General Manager to amend the professional services agreement with Carollo Engineers to provide for the design and management of the repair of the cogeneration unit, including the design, engineering, repair of the damaged facilities, engagement of subcontractors, and management of the project as required. PASSED AND ADOPTED this 17th day of May, 2012 by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: James A. Nejedly, President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California Resolution 2012 -037 Page 3 of 3 COUNTERSIGNED: Elaine R. Boehme, CIVIC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to form: Kenton L. Alm, Esq. Counsel for the District