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HomeMy WebLinkAbout03.a. Review draft position paper to authorize the General Manager to execute a professional engineering services agreement in an amount not to exceed $450,000 with HDR, Inc. to provide on-call services for the Planning and Development Division for a thr Page 1 of 4 Item 3.a. CENTRAL SAN BOARD OF DIRECTORS . , , . POSITION PAPER . , DRAFT MEETING DATE: SEPTEMBER 16, 2019 SUBJECT: REVIEW DRAFT POSITION PAPER TO AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT IN AN AMOUNT NOT TO EXCEED $450,000 WITH HDR, INC. TO PROVIDE ON-CALL SERVICES FOR THE PLANNING AND DEVELOPMENT DIVISION FOR A THREE-YEAR TERM SUBMITTED BY: INITIATING DEPARTMENT: DANEA GEMMELL, PLANNING AND ENGINEERING AND TECHNICAL SERVICES- DEVELOPMENT SERVICES DIVISION PDS-PLANNING AND APPLIED RESEARCH MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES ISSUE The Board of Directors' authorization is required for the General Manager to execute agreements in an amount greater than $100,000. BACKGROUND Optimization of Current and Past Practice Using On-call Agreements for Specialized Expertise. Until now, the Planning and Development Services Division has contracted with many consulting firms through on-call agreements, but has procured those services on a case-by-case basis as tasks and needs are identified, sometimes, with multiple agreements with the same consultant but for different types of services. The purpose of the on-call agreement process is to optimize procurement and management of on-call services through a consolidated list of pre-qualified consulting firms that can provide specialized expertise and professional experience for a number of small-to medium-sized tasks (typically over$1,000 and less than $100,000 per task order)which enables staff to address ongoing needs. These on-call agreements are for specialized expertise and are separate from the individual consulting agreements typically issued by the Capital Projects Division for evaluating and designing large capital improvement projects. As documented in the Capital Improvement Budget, capital expenditures are expected to increase from $45 million in Fiscal Year(FY) 2018-19, to $66 million in FY 2019-20, to $97 million in FY 2020-21, and to $106 million in FY 2021-22. As workload increases, need for specialty expertise and support is essential to complete these critical projects and tasks. The Board's approval of on-call agreements authorizes Central San staff to assign work to pre- qualified firms through the issuance of a task order which defines their respective scope of work, project September 16, 2019 REEP Committee Meeting Agenda Packet- Page 4 of 32 Page 2 of 4 cost, and delivery schedule. Task orders will be negotiated, approved, released, and tracked following a similar task order release process used for capital project on-call agreements. Consultant Selection: Staff prepared and posted a Request for Qualifications on PlanetBids and the Central San website. On May 24, 2019, 12 Statements of Qualifications were received and evaluated for the Planning and Applied Research section and Special Projects and Asset Management section.After evaluating the firms based on qualifications, past experience, past performance, availability, and an oral interview, staff selected HDR, I nc. (HDR)for an on-call agreement as the firm best suited for Central San's anticipated needs to support the Planning and Applied Research and Special Projects and Asset Management sections for the following example scope areas: • Treatment Plant Field Assessments, Optimization, and District Project 7363 -Treatment Plant Planning: Staff requires ongoing consultant support for optimizing and maximizing the performance and life of treatment plant facilities.As regulations emerge, consultant support is also required to evaluate the potential impact on treatment plant operations and capital improvement needs. HDR assisted Central San with evaluating optimization and upgrade opportunities to reduce nutrient loads for potential future nutrient removal regulatory requirements. HDR was also selected for the Steam &Aeration Blower Systems Renovations Project preliminary design, and is in the process of updating the calibration of Central San's BioWin process model, making them ideally suited for supporting staff with other treatment plant process optimizations. HDR is experienced in developing and implementing field studies and optimizations aimed at maximizing the performance of existing processes, evaluating the need for capital improvements, and generating useful information for the optimization and design of upcoming capital improvements. • District Project 7315—Applied Research & Innovations: Staff requires ongoing consultant support for the technical-economical evaluation of promising, innovative equipment and technologies. As staff routinely identifies promising solutions and receives requests to evaluate new technologies, it is beneficial to maintain a consultant that is able to provide technical support as-needed. Most recently, HDR helped staff to evaluate two innovative nutrient removal technologies for Central San - membrane aerated bioreactors and aerobic granular sludge.As Central San decides to test and/or demonstrate some of these technologies prior to full-scale implementation, consultant support is needed for assisting staff with evaluating holistic process impacts, treatment plant integration, regulatory considerations, and to ensure that the tests and demonstrations maximize value and staff resources, and help staff to meet the test objectives and make meaningful recommendations. In general, the expertise that HDR offers will be utilized for supporting treatment plant planning efforts, assessments of treatment plant assets, optimization, and applied research projects. HDR has been on time and budget with previous requests, projects, and on-call agreements with Central San staff. Staff have been very satisfied with the experience, performance, and reliability of HDR's services and recommends a three-year on-call agreement with HDR. ALTERNATIVES/CONSIDERATIONS Staff evaluated several alternatives for the Board to consider: Alternative 1: Execute Two-year On-call Agreement. This alternative reduces the agreement limits to cover the next two years of anticipated projects and tasks. Staff could return to the Board for approval to amend the agreement for a third year of support. This alternative is not recommended because it requires more administration than the recommended action and could limit the flexibility to assign task orders in Year 2 that are anticipated to continue into Year 3. September 16, 2019 REEP Committee Meeting Agenda Packet- Page 5 of 32 Page 3 of 4 Alternative 2: Do Not Approve the Agreement. This alternative would be for the Board to direct staff not to execute the agreement as proposed. Instead, staff could continue current and past practice to administer multiple agreements as-needed within staff authority limits. This is not recommended because it requires more administration time to solicit, execute, and manage multiple agreements. Additionally, this alternative would result in multiple agreements with the same consulting firm as tasks arise in order to keep projects on track and maintain the current high level of service. Alternative 3: Hire Additional Staff. This alternative would be to direct staff to hire additional temporary and/or permanent employees to augment staff's ability to complete the anticipated projects and tasks. This is not recommended because the work requires specialty expertise that is provided from industry leaders that perform similar tasks on a daily basis and have extensive experience across multiple projects and customers, where Central San benefits from that wide-spread experience. Due to the complex, as- needed, and temporary nature of these projects and tasks, it is recommended that these needs be met through consulting support instead of temporary or permanent employees. The on-call agreements also enable Central San to access the consultant's wide range of industry experts (e.g. liquid process, varying solids processes, energy, mechanical, regulatory, etc.)tailored to the needs of the specific project or task. Because the specific expertise varies by person, it is likely that several additional employees would be required to meet all of the anticipated project and task needs. FINANCIAL IMPACTS The amount for this on-call agreement is $150,000 per year for a three-year total contract amount of $450,000. HDR, I nc. have been informed and understand that this on-call agreement is not a guarantee of work. This selection process and award of an agreement provides a go-to firm when support is required. This allows Central San staff to expedite the process of completing work and addressing tasks as needed, and to respond to needs in an efficient and responsive manner. Ongoing and additional specialty support needs are anticipated to address upcoming projects and tasks. The services provided are paid for and included in the Board-approved Budget. No additional funding for this on-call agreement is required. COMMITTEE RECOMMENDATION The Real Estate, Environmental & Planning Committee reviewed this matter at the meeting on September 16, 2019, and recommended RECOMMENDED BOARD ACTION Staff recommends authorizing the General Manager to execute an agreement with HDR, Inc. with a cost ceiling of$450,000 for a three-year term, to provide on-call services for the Planning and Development Services Division. Strategic Plan Tie-In GOAL TWO: Strive to Meet Regulatory Requirements Strategy 1 - Strive to achieve 100%permit compliance in air, water, land, and other regulations GOAL THREE:Be a Fiscally Sound and Effective Water Sector Utility Strategy 2- Manage costs September 16, 2019 REEP Committee Meeting Agenda Packet- Page 6 of 32 Page 4 of 4 GOAL FIVE: Maintain a Reliable Infrastructure Strategy 1 - Manage assets optimally throughout their lifecycle, Strategy 2- Facilitate long-term capital renewal and replacement GOAL SIX:Embrace Technology, Innovation and Environmental Sustainability Strategy 2- Reduce reliance on non-renewable energy, Strategy 3- Encourage the review and testing of technology to optimize and modernize business operations September 16, 2019 REEP Committee Meeting Agenda Packet- Page 7 of 32