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HomeMy WebLinkAbout04.b. Sole-source purchase order contract to Eaton for DP 7324Central Contra Costa Sanitary District BOARD OF DIRECTORS - POSITION PAPER Board Meeting Date: January 28, 2016 subject. ADOPT A RESOLUTION MAKING FINDINGS AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE A SOLE -SOURCE PURCHASE ORDER CONTRACT WITH EATON CORPORATION FOR THE SUB 16 SWITCHGEAR REPLACEMENT PROJECT, DISTRICT PROJECT NO. 7324 Submitted By. Initiating Dept/Div.: Brad Leidecker, Associate Engineer Engineering and Technical Services/Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: C. Mizutani, Senior Engineer E. Lopez, Capital Projects Division Manager JM. Petit, Director of Engineering and Technical Services 1—on I w K. Alm Roger S. Bailey! Counsel for the District General Manager ISSUE: Board approval is requested to enter into a sole -source contract for equipment manufactured by Eaton Corporation (Eaton) for the purchase of 480 -volt electrical switchgear at the District's Headworks facility. Board authorization is required for purchase orders or contracts above $100,000. BACKGROUND: The Capital Improvement Budget (CIB) Priority Ranking for this project is critical and the work aligns with the District's Strategic Plan, specifically Goal No. 6, which is "Maintain a Reliable Wastewater Infrastructure." The existing Headworks Substation (Sub) 16 Switchgear was installed in 1993 under the Headworks Facilities Improvement Project and feeds the Headworks and influent pumps. The existing electrical switchgear was manufactured by ABB and the model which was installed had a short production run. The switchgear is now obsolete and replacement parts are difficult to source. Recent issues with the circuit breakers have revealed that they will only become more difficult to service. The 2011 Switchgear Refurbishment report by CDM Smith recommends replacing the switchgear in its entirety to ensure reliable service from the Headworks and the influent pumps for the treatment plant. This project will replace the Sub 16 electrical switchgear. Work includes removal of the existing switchgear and modifications of the building and support facilities as necessary for the installation. Staff recommends issuing a sole -source, pre -purchase agreement for the new Sub 16 electrical switchgear with Eaton. The District is in the process of standardizing its electrical equipment using Eaton electrical products. The majority of the electrical equipment at the treatment plant is Eaton. Therefore, the new switchgear would match Page 1 of 4 POSITION PAPER Board Meeting Date: January 28, 2016 Subject: ADOPT A RESOLUTION MAKING FINDINGS AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE A SOLE -SOURCE PURCHASE ORDER CONTRACT WITH EATON CORPORATION FOR THE SUB 16 SWITCHGEAR REPLACEMENT PROJECT, DISTRICT PROJECT NO. 7324 existing Eaton electrical equipment, increase safety and familiarity for staff, improve interchangeability of spare parts, increase reliability, meet the critical replacement schedule, and ensure site-specific constraints of the retrofit project are achieved. Using a pre -purchase approach, shop drawing approval and fabrication of the equipment will have a parallel schedule with the final design documents. The equipment will be owner -furnished equipment to the low -bid installing contractor with an anticipated construction award date of May 2016. The justification for sole -sourcing the switchgear equipment is as follows: Compatibility with Existing Equipment: The treatment plant has Eaton 480 -volt breakers in all of its 18 switchgear units (excluding the filter plant), which includes hundreds of Eaton Model DS and DS II model breakers. All of the 12 -kilovolt switchgear breakers are manufactured by Eaton, and approximately 70 percent of the 2,400 -volt switchgear is manufactured by Eaton. Treatment plant staff will eventually be installing new Eaton Magnum DS model breakers to replace the existing Eaton DS and DS II model breakers. Magnum DS breakers are proposed to be supplied with the new switchgear and can be installed directly in both DS II breaker frames and DS breaker frames (with some modifications). Repair and Maintenance: Staff is familiar with Eaton 480 -volt breakers, which increase efficiency and safety. Eaton has supported and continued to make replacement parts for older equipment, where other manufacturers have discontinued product lines. For example, the existing Sub 16 switchgear manufactured by ABB no longer offers manufacturer support, thus, replacement parts are difficult to source and technical support is difficult to obtain in a timely manner. Having manufacturer support and readily available replacement parts reduces the risk of failure of this critical facility. Safety: Staff is familiar with Eaton's products and design, receives exceptional product support from Eaton, and has historically been able to obtain replacement parts from Eaton for decades after a product is installed. These factors increase safety when working on high-voltage electrical equipment, which staff is familiar with and has received training. Minimization of Supplies of Spare Parts: The interchangeability of breakers with the new switchgear to be purchased for the Sub 16 Switchgear Replacement Project allows for fewer spare parts and more flexibility. Page 2 of 4 POSITION PAPER Board Meeting Date: January 28, 2016 subject: ADOPT A RESOLUTION MAKING FINDINGS AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE A SOLE -SOURCE PURCHASE ORDER CONTRACT WITH EATON CORPORATION FOR THE SUB 16 SWITCHGEAR REPLACEMENT PROJECT, DISTRICT PROJECT NO. 7324 Training-: The amount of staff training is reduced because staff is already familiar with and has extensive knowledge about Eaton breakers. Productivity: Staff is familiar with Eaton parts and breakers, which increases efficiency of preventative maintenance and repairs. Constraints: This project has strict physical constraints due to the retrofit nature of the installation in an existing building with strict spatial constraints. Working with one manufacturer improves the coordination of the project and will reduce the chance of construction conflicts and change orders. Two other manufacturers contacted by the design consultant, Brown and Caldwell, during this design project have stated they cannot meet the constraints and specifications required for this retrofit project. Schedule: The existing switchgear is scheduled to be replaced during the 2016 dry season due to reliability concerns and risk of failure. These concerns were elevated due to conditions discovered during recent preventative maintenance of the breakers. The lead time for purchasing this equipment is approximately five to six months. Working with one manufacturer in a sole -source, pre -purchase approach provides a better opportunity to meet the accelerated schedule. Traditional procurement with the contractor purchasing the switchgear during construction will require installation to be deferred until the 2017 dry season. One typical concern about a sole -source purchase approach is whether it will provide good value and competitive pricing. Staff and our consultant, Brown and Caldwell, worked with the following manufacturers to evaluate alternatives to assure the District would receive a competitive price on the equipment: Eaton, GE, Square D/Schneider, and IEM. Eaton and IEM confirmed they can meet the technical specifications, constraints, and existing footprint requirements. Eaton's quote was comparable with recent and similar projects completed by Brown and Caldwell. IEM's quote was substantially higher than Eaton's. GE took exception to several critical specification requirements, provided substitutions and, therefore, was determined to be nonresponsive. Staff does not recommend GE's substitutions as their equipment adds complexity and reduces reliability. Square D/Schneider withdrew their name for consideration as they were not able to meet the switchgear footprint requirements for this project. CEQA: Staff has concluded that this project is exempt from the California Environmental Quality Act (CEQA) under District CEQA Guidelines Section 15302, since it involves replacement of existing public facilities at the same location and with the same purpose. Approval of this project will establish the Board of Directors' independent finding that this project is exempt from CEQA. Page 3 of 4 POSITION PAPER Board Meeting Date: January 28, 2016 subject: ADOPT A RESOLUTION MAKING FINDINGS AND AUTHORIZING THE GENERAL MANAGER TO EXECUTE A SOLE -SOURCE PURCHASE ORDER CONTRACT WITH EATON CORPORATION FOR THE SUB 16 SWITCHGEAR REPLACEMENT PROJECT, DISTRICT PROJECT NO. 7324 ALTERNATIVES/CONSIDERATIONS: Sole -source requests bypass the conventional competitive bidding process, which provides for use of "or equal" products. Bidding this equipment would not guarantee equipment standardization and would likely extend the construction schedule to 2017. FINANCIAL IMPACTS: The total cost under this purchase contract is estimated at $1,150,000. This project is included in the Fiscal Year 2015-16 Capital Improvement Budget on page TP -20, with a total estimated project budget of $2,100,000. Staff has conducted a budget analysis of the Treatment Plant Program budget and concluded that adequate funds will be available and the Fiscal Year 2016-17 Capital Improvement Budget will be adjusted to reflect any increase in the total project cost. COMMITTEE RECOMMENDATION: The Engineering and Operations Committee reviewed this project at the meeting on January 12, 2016, and recommended approval of the purchase order contract. RECOMMENDED BOARD ACTION: Staff recommends the following: Adopt a resolution authorizing the following action and making the following findings in connection with the Sub 16 Switchgear Replacement Project, District Project 7324: A. Authorize the General Manager to enter into a sole -source contract with Eaton in an amount estimated at $1,150,000 with Eaton for the purchase of 480 -volt electrical switchgear at the District's Headworks facility. B. Find that: a. The public interest is best served by standardization of Eaton electrical switchgear equipment; b. The project is exempt from CEQA. Attached Supporting Documents: 1. Proposed Resolution Page 4 of 4 ATTACHMENT 1 RESOLUTION NO. 2016-00(c A RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT APPROVING A SOLE -SOURCE CONTRACT WITH EATON CORPORATION FOR ELECTRICAL SWITCHGEAR AT THE DISTRICT'S HEADWORKS FACILITY WHEREAS, the Central Contra Costa Sanitary District's (District) Purchasing Procedures Manual Section 5.3.16 provides that, in those cases involving standardization of equipment, a governmental entity may specify such equipment as an appropriate sole source; and WHEREAS, Eaton Corporation's (Eaton) electrical switchgear equipment can be used at the District's Substation 16 to be with compatible with and standardize District switchgear equipment, thereby increasing safety and reliability and improving interchangeability; and WHEREAS, Section 3400(c) of the California Public Contract Code sets forth certain conditions under which a particular material or product or service may be purchased without the necessity of competitive bidding. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District ("District") as follows: THAT the Board hereby adopts the recitals set forth above as the basis of its findings; and THAT the Board independently finds this project is exempt from the California Environmental Quality Act (CEQA) under District CEQA Guidelines Section 15302, since it involves replacement of existing public facilities at the same location and with the same purpose; and THAT the Board finds the public interest is best served by standardization of Eaton electrical switchgear equipment; and THAT, in accordance with Section 3400(c) of the California Public Contract Code, the Board finds that the equipment manufactured by Eaton shall be utilized in the District's treatment plant to replace the District's Substation 16 switchgear, and that a sole -source contract with Eaton meets the matching of other products criteria set forth in that section; and THAT the Board authorizes the General Manager to enter into a sole -source contract with Eaton in an amount estimated at $1,150,000 for the purchase of electrical switchgear for the Substation 16 Switchgear Replacement Project, District Project 7324. PASSED AND ADOPTED this 28th day of January, 2016, by the Board of Directors of the Central Contra Costa Sanitary District by the following vote: AYES: Members: NOES: Members: ABSENT: Members: Tad J. Pilecki President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R. Boehme, CMC 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