HomeMy WebLinkAbout12. Amend two existing agreements for the Solids Handling Facilities Improvements, DP 7348 Page 1 of 13
Item 12.
CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: AUGUST 20, 2020
SUBJECT: RECEIVE PROJECT UPDATE, AND AUTHORIZE THE GENERAL
MANAGER TOAMEND TWO EXISTING PROFESSIONAL ENGINEERING
SERVICES AGREEMENTS WITH: (1) BLACK & VEATCH CORPORATION IN
ANAMOUNT NOTTO EXCEED $1,050,000 FOR DESIGNAND BID PERIOD
SERVICES; AND (2) MWH CONSTRUCTORS, INC. I N AN AMOUNT NOT TO
EXCEED $450,000 FOR CONSTRUCTABILITY REVIEW, BIDAND
RECORDS VERIFICATION SUPPORT FOR THE SOLIDS HANDLING
FACILITY IMPROVEMENTS, DISTRICT PROJECT 7348
SUBMITTED BY: INITIATING DEPARTMENT:
NATHAN HODGES, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES-
CAPITAL PROJECTS
REVIEWED BY: EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER
JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL
SERVICES
Roger S. Bailey
General Manager
ISSUE
Board of Directors' (Board) authorization is required for the General Manager to execute an amendment to
a professional engineering services agreement for amounts greater than $200,000.
BACKGROUND
The Solids Handling Facility Improvements, District Project 7348 (Solids Project) design began in 2017
when the Board approved an agreement with Black& Veatch Corporation (BV)for pre-design services.
This project combined five separate capital projects from the Fiscal Year 2016-17 Capital Improvement
Budget and three additional projects due to the interdependency for each of the solids processes. The
Solids Project represents one of the largest and most complex construction projects since the treatment
plant, as we know it, was built in the 1970s.
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Since the Board approved the addition of final design services on April 26, 2018, staff and BV have made
significant design progress of the following major elements:
• Sludge blending and storage - new optimized and energy efficient mixing systems;
• Sludge dewatering -centrifuge and cake pump equipment selected and incorporated into design;
• Incinerators - burner upgrades, new center shaft drives, and combustion air blowers;
• Solids Conditioning Building (SCB) and incinerator seismic modifications;
• New air pollution control equipment-selected and incorporated into the design;
• Ash Handling Facility- new enclosed facility adjacent to the Emergency Sludge Loadout Facility
(ESLF);
•
E S L F upgrades -completed under a separate project;
• Emergency stairway-for the safety of the occupants and will start construction under a separate
project soon; and
• Electrical, Instrumentation and Controls (E I C) coordination and replacement.
Current Design Status and Items Needed for 100-Percent Completion
Staff received the 90-percent complete design submittal (drawings and specifications)from BV in late
November 2019. Since that time, staff submitted extensive comments, including feedback from the
construction management (CM)team, MW H Constructors, I nc. (MW H), regarding the constructability of
the project. Over the past six months, the major focus to complete the design has been on the El C and
constructability of the proposed work and its impact on the estimated construction schedule and cost.
Many of the existing E I C systems in the SCB are outdated and very complex. Staff and the design team
have been concerned about the accuracy of the record information related to these systems since the
project was developed. Staff recognized that the E I C was going to be a significant challenge in the design
and increased BV's proposed design budget for this effort as the final design agreement was negotiated.
A project of this magnitude and complexity, which includes replacing nearly all power and control wiring in
an operating building, requires a strong understanding of the existing systems, system limitations,
sequencing, detailed information so that a bidder is able to appropriately assign costs and that the project
can be built as identified in the contract documents.A difficult scheduling challenge of the Solids Project is
that the construction timeline is driven by building a significant portion of the EI C and a new electrical room
located on the SCB second floor within the first 18 months. The Solids Project requires this work to be
completed up front since the building will continue to be in operation 24-hours a day and it allows for safe
transitions to new equipment or starting new systems while minimizing risks of unintended equipment and
process power shutdowns. The estimated E I C for this project is currently valued at over$20 million (M),
which accounts for one-fifth of the total $107M construction estimate.
Constructability Review
Due to the complexity and the risks inherent in making such significant improvements while maintaining
operation of all processes, staff determined it necessary to re-evaluate the decisions made earlier in the
design, especially for the timing of the incinerator shutdowns. A workshop was held in January 2020 where
key Central San staff and consultants considered whether is was feasible to shut down the entire SCB in
order to more safely and efficiently construct the project.
While it is was determined that shutting down the SCB entirely was technically possible and would require
less construction challenges under the project, the economics and additional time that would be required to
duplicate all the systems temporarily was determined to be too costly and time consuming. Therefore, the
concept of providing system alternatives far outweighed the benefits. However, this exercise yielded
options for backing up critical power, steam, and solids processes in the event they were accidentally
impacted during construction. Three recent efforts to provide additional redundancy and resiliency to the
plant and minimize impact from unintended shutdowns were recently presented to the Board: 1) Electrical
Blower I mprovements Project as a back up to steam to continue providing aeration for the secondary
August 20, 2020 Regular Board Meeting Agenda Packet- Page 76 of 200
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treatment process; 2) ESLF upgrades to provide a reliable means to load solids into trucks for off-site
disposal; and 3) a solids maintenance and emergency agreement to haul and dispose of solids.
One main area of concern remains with the incinerators which operate at high temperatures and have
associated complex equipment and utilities (i.e., gas, power, ash, heat, steam)which all pose concerns
during the construction if they remain in service. Staff is considering a shutdown of both incinerators for a
period not to exceed 12 months.All other SCB systems will remain in operation, including the
Cogeneration System and auxiliary boilers.
Efforts continue to refine the costs and construction schedule impacts. The costs associated with
providing alternative sludge disposal will be compared to the potential construction cost and schedule
savings, as well as mitigating some of the risks working adjacent to an online incinerator.
BVAgreement Status
While the base scope of the Solids Project has not changed significantly since the final design effort
started, as the design progressed, BV's requests of additional effort increased. Each design submittal
(30-percent, 50-percent, and 90-percent) included numerous staff comments, with the 90-percent
submittal also including MW H comments. BV submitted several requests to increase their design fee to
address the effort resulting from review comments and to finalize the design to meet Central San's
standards.
Back in February of 2019, BV requested over a million dollars of extra fees associated with the project
claiming changes in scope and additional effort to complete the project design. Staff addressed that
request and, following extensive reviews and meetings, concluded that staff did not agree with BV's overall
assessment and the significant fee request. Staff did agree on three items that required additional fees
and an agreement revision was executed in the amount of$200,000, with the majority written for sub-
consultants. To date, a total of six contract revisions to the BV agreement have been executed.A summary
of the agreement and revisions history is attached.
Staff received another BV fee request in February 2020, which was significantly higher than the original
amount request in 2019, totaling over$2.4M. With this latest request, BV claims that the feedback
provided by Central San and MW H on the 90-percent submittal and the detail requested are outside their
understanding of the agreement scope of work or not within their standard practice. After numerous
correspondence and meetings, including multiple detailed technical sessions, and in consultation with
District Counsel, staff has offered a settlement in the amount of$700,000 to finalize the design. It should
be noted that BV does not have any remaining fee available to finish the design as of the end of January
2020. This settlement will be all encompassing and resolves all BV pending requests and claims made to
date. The final design deliverable will also include the level of detail Central San typically receives from
design consultants, especially in EI C. Staff has compiled a list of the items to be included in the final
design and constructability comments needed for a project of this magnitude. BV has acknowledged that
the settlement will resolve all pending requests and that the 100-percent design submittal will include the
agreed items defined in writing by Central San.Also, as part of the settlement, Central San will release,
upon design progress approximately, $1.1 M of disputed invoices that have been withheld since last year.
The terms of the settlement were included in "Revision No. 7" which was signed by BV on August 12,
2020.
The BV 100-percent final draft design is now scheduled to be submitted by September 18, 2020 and will
include the latest E I C submittal, with the goal to complete the bid package by the end of October 2020.
The project is expected to be presented to the Board for award in early 2021. The schedule is critical to
have this project ready to construct in the first half of 2021 and remain eligible for State Revolving Fund
(SRF)funding.
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1 n addition, staff is proposing to include bid support services to be performed by BV for answering
questions from bidders on plans and specifications, issuing clarifications or changes that would be
included in the construction contract by addenda. Staff is proposing a cost ceiling of$350,000 for these
services. Bid services were not included in the initial design agreement and were deferred by staff until the
project was ready to be advertised. BV will be paid on an as-needed basis and managed by Central San
staff during the two-to three-month bidding duration. BV has signed Revision No. 8 which contains the
engineering services during bidding on August 12, 2020.
Contractor Pre-qualification
Pre-qualification of general contractors and electrical subcontractors have been identified as an important
tool to ensure qualified bids are submitted and that contractors are sufficiently aware of the complexity of
the Solids Project improvements. Subsequent discussion has resulted in the decision to potentially include
seismic as part of the evaluation.
Staff is in the process of preparing the contractor pre-qualification documents. This process will be very
similar to that used for the Pump Station Upgrades, Phase 1 Project. Pre-qualified contractors will be
determined prior to the project being advertised for bids.
M WH Agreement Status for Construction Management
MWH was hired to provide constructability review and assist with pre-bid services for the Solids Project.
MWH reviewed BV's 90-percent submittal, conducted constructability reviews, performed schedule
analysis, and provided detailed cost estimates for the project and for alternative SCB shutdown scenarios.
MWH also participated in the January 2020 workshop to discuss the feasibility of a SCB shutdown. To
date, MWH has provided invaluable support and expertise to the project.
This effort has been critical in confirming the construction cost estimate and providing comments to
improve the construction documents for contractor bidding and constructability. MW H has estimated the
construction cost to be $107M based on the 90-percent submittal. One challenge has been estimating the
EIC since this discipline, in staff's opinion, has not made the design progress as compared to the other
major project elements. MWH and BV have taken different approaches in estimating this scope of the
project and, depending on the bidders understanding and details on the plans, it could have a significant
cost impact to the project.
Additional authorization is needed for MWH to continue their pre-bid support services. The identified
services needed at this time are for:
1. Review of pre-qualification documents from general contractors and E I C subcontractors;
2. Review of intermediate and 100-percent design submittal for constructability and to update the cost
estimate, especially for E I C;
3. Review front-end contract documents;
4. Finalize schedule analysis and project sequencing for potential incinerator shutdowns;
5. SRF support services. This support is needed both during the pre-bid and bid phases to ensure bid
documents are properly prepared. Support will also include review of submitted bids for
conformance to SRF requirements; and
6. Assignment of start-up support staff to assist in verifying record drawings for control wiring on
existing process systems that will connect to new instrumentation and control components. The
completion of this work is critical prior to start of construction so that valuable construction time is not
spent while existing systems are confirmed. This effort will also prepare staff to respond quickly and
August 20, 2020 Regular Board Meeting Agenda Packet- Page 78 of 200
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accurately in the event equipment or processes are inadvertently impacted during construction.
Existing electrical systems that are to remain under the project will also be verified.
California Environmental Quality Act(CEQA):
At its December 6, 2018 meeting, the Central San Board of Directors independently found this project is
exempt from CEQA under Central San's CEQA Guidelines Section 15301, since it involves minor
alterations to existing public facilities involving no expansion of use, and CEQA Guidelines Section 15302,
since it involves replacement of existing public facilities at the same location and with the same purpose.
ALTERNATIVES/CONSIDERATIONS
The Board could consider the following alternatives, or provide other direction. However, since BV has
now agreed to the terms and signed the settlement agreement, these alternatives are not recommended
by staff.
With regard to BV consultant agreement amendment:
1. Alternatives to complete the Solids Project EI C design would include retaining BV but request that
the E I C be designed by another consultant, which would not settle the disputed invoices, or possibly
terminate the BV agreement and find another consultant to finish the design. Central San has
obtained from BV the project 3D model, computer-aided design files, specifications, and other
critical project information. This would likely result in arbitration from a third-party to determine the
amount due to BV. However, both design options are not recommended as this introduces new
consultants that would cost Central San more than the current revision amount and would extend the
completion of the project up to a year.
2. Another alternative to complete the Solids Project would be change the project delivery course. BV's
agreement could be suspended or terminated, and staff would issue a design-build (DB) bid
proposal using the current 90-percent design submittal as the basis for a Guaranteed Maximum
Price construction contract. The designer would be working for the contractor under a DB effort.
Staff has been evaluating this option extensively as it presents advantages that could be extremely
beneficial for this project, especially for its complexity, E I C, and construction sequencing since the
contractor would be involved in development of those major components. While this alternative may
not save engineering cost or reduce construction cost, it would reduce and shift some of the risks to
the DB team and may shorten the construction timeline significantly. The main elements of the
design of the project that have been developed to date would be maintained. The DB team would
review the design, complete the E I C design and evaluate the most cost-effective construction
sequencing, including incinerator shutdowns and minimize sludge hauling cost. Having the contractor
under contract and part of the design team would lower the construction risk, schedule, and changes
during construction. Staff is currently comparing potential pros and cons with cost impacts to
adequately evaluate this alternative. MWH would continue as the Owner's Adviser and construction
management.
In regards to the MWH agreement amendment:
1. There are not many alternatives for the services that would be provided by MWH under the proposed
revision.Although staff has the qualifications and experience to verify the existing E I C systems, the
time required to do so is substantial and would drastically take away from their current projects and
normal operational duties. Staff will be involved to lead and coordinate the efforts.As for the other
services, like SRF support and model/schedule analysis, staff does not have the specialized
expertise required for the work; therefore, this alternative is not recommended.
August 20, 2020 Regular Board Meeting Agenda Packet- Page 79 of 200
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FINANCIAL IMPACTS
The $1,050,000 BV revision amount includes $700,000 for resolution of all disputed design items and
100-percent design completion, and up to $350,000 for bid support services.
As shown in the attached agreement summary, BV's current agreement is valued at$8,604,636. The
proposed $700,000 revision, not including the bid support services, represents an eight-percent increase
to the overall agreement and a 12-percent increase to the final design costs. Including the requested
$1,050,000 revision, it will increase the total BV agreement value or cost ceiling to $9,654,636.
MW H's current agreement is valued at$500,000. The proposed $450,000 revision will increase the cost
ceiling to $950,000. Staff will request a subsequent revision to the MWH agreement when the project is
presented for award of the construction contract. The revision has not been finalized for construction
management services but is expected to cost up to $7M depending on the services selected by Central
San.
Both subject agreements were solicited under Central San's policies and procedures for professional
engineering services and include the scope of work represented in the agreement revisions and costs
anticipated for the project.
COMMITTEE RECOMMENDATION
The Engineering and Operations Committee reviewed this subject at its meetings on August 4, 2020, and
again on August 12, 2020 and recommended Board approval.
RECOMMENDED BOARD ACTION
Authorize the General Manager to amend two existing professional engineering services agreements
under the Solids Handling Facility Improvements, District Project 7348, as follows:
1. Black& Veatch Corporation for design and bid services in an amount not to exceed $1,050,000,
increasing the agreement cost ceiling to $9,654,636; and
2. MW H Constructors, Inc. for constructability review, bid, and records certification support in an
amount not to exceed $450,000, increasing the agreement cost ceiling to $950,000.
Strategic Plan re-In
GOAL TWO: Environmental Stewardship
Strategy 1—Achieve 100% compliance in all regulations
GOAL THREE: Fiscal Responsibility
Strategy 1—Maintain financial stability and sustainability
GOAL FIVE: Infrastructure Reliability
Strategy 1—Manage assets optimally to prolong their useful life
GOAL SIX: Innovation and Optimization
Strategy 2—Improve and modernize operations through technology and efficiency measures
August 20, 2020 Regular Board Meeting Agenda Packet- Page 80 of 200
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ATTACHMENTS:
1. Summary of BV Agreement and Revisions History
2. Presentation
August 20, 2020 Regular Board Meeting Agenda Packet- Page 81 of 200
Pae8of13
Attacrment 1
Agreement and Revisions Summary with Black & Veatch Corporation
Solids Handling Facility Improvements Project (Solids Project), District Project 7348
Agreement History: During the Solids Project, which started in January 2017, several revisions in
scope and fee have been negotiated and resulted in the agreement being amended. Staff
understands that changes do occur on large complex projects and, at times, revisions in scope will
require amendments in either fees, schedule, or both. Central San has issued six contract revisions.
Of the six revisions, three were issued after the final design was executed in May 2018. These
include Revision No. 4 (Emergency Support), Revision No. 5 for Engineering Services During
Construction (ESDC) for the Emergency Sludge Loadout Facility (ESLF) improvements, and Revision
No. 6 for additional fees as stated above. In total, the current agreement is valued at $8,604,636. The
table below summarizes the agreement history under the Solids Project.
Contract and Date Awarded Contractual
Type of Action Revision Amounts or Amended End Date
Original Agreement Contract Amount $ 1,959,903 January 13, 2017 November 3, 2017
for Preliminary Design
Revision No. 1 (1) $ 0 December 15, 2017 June 29, 2018
Revision No. 2 $ 240,097 March 7, 2018 --
Revision No. 3 (Final Design) (1) $ 5,900,000 May 7, 2018 November 2, 2019
Revision No. 4 $ 84,636 February 20, 2019 --
Revision No. 5 (2) $ 220,000 August 5, 2019 November 30, 2020
Revision No. 6 3 $ 200,000 October 23, 2019 --
Current Cost Ceiling: $ 8,604,636
(1)Includes Time Extension.
(2)Time Extension and fees for ESDC associated with the ESLF only.
(3)Based on District review of the February 2019 B&V Additional Scope Request.
August 20, 2020 Regular Board Meeting Agenda Packet- Page 82 of 200
Page 9 of 13
Attachment 2
�.
SOLIDS HANDLING FACILITY IMPROVEMENTS
DISTRICT PROJECT 7345 UPDATE
-- Board Meeting
August 20, 2020
Jean-Marc Petit, PE
Director of Engineering and Technical Services
Edgar J. Lopez, PE
Capital Projects Division Manager `
I
PROJECT STATUS
• Key equipment pre-selected KEY EauIPMENT PRE-SELECTED
• Completed 90%design
submittal review
•
Design includes
g -Centrifuges{4)
approximately 700 drawings hwnAndFitZ
and over 1,700 pages of Sopamt'°n
p g Technologies,
technical specifications Inc.
• Selected MWH Constructors, f�mms�w 9mg
f���
Inc. (MWH)for third-party Bisset
constructability review and for Am Poilulion
construction management �'pm' _-
(CM)services iL:i
• MWH reviewed 90%design submittal and analyzed the
construction schedule oeeemner an,tole enxre rnec ing I
• Preparing for general and nommommmam
electrical contractors pre-
qualifications next month
z
CENTRALSAN
1
August 20, 2020 Regular Board Meeting Agenda Packet- Page 83 of 200
Page 10 of 13
PROJECT PROGRESS & SCHEDULE
• Updated final State of California
Revolving Fund Program(SRF) I•, . I ��
submittal application on August 11,
2020
• Will conduct a third-party I
electrical,instrumentation and e
controls(EIC)in mid-September
2020 of the 100%design draft
submittal 1
• Select pre-qualification of
contractors by end of October
2020 '
i
Complete final bid documents no iiaater than mid-November 2020
Update Board and request —
authorization to advertise at _
October 15,2020 Board Meeting — — --
3
*As presented at August 4,2020 Board Meeting
PROPOSED SRF REQUESTED UP TO $173.1 MILLION*
ACTUAL TOTAL DEPENDS ON PROJECT BID
A Facilities Planning $2,040,000 Impillillill, $0 $2,040,000
B Facilities Design $3,000,000 $5,605,000 $350,000 $8,955,000
C1 Construction Management = $12,400,000 $12,400,000
C2 Construction Management-
ESDC $5,200,000 $5,200,000
D Value Engineering $500,000 $0 $500,000
E Administration-Central San $2,700,000 $1,500,000 $5,800,000 $10,000,000
F Facilities Construction** $107,000,000 $107,000,000
G Contingency $16,050,000 $16,050,000
H Pre-Purchase Materials
I Land and Right-of-Way
J1 Other Costs-Shop Drawings $460,000 $460,000
J2 Other Costs-Sludge Hauling $10,000,000 $10,000,000
J3 Other Costs-Air Permit
Testing $500,000 $500,000
-Prior Expenditures "Based on MWH Analysis
14
2
August 20, 2020 Regular Board Meeting Agenda Packet- Page 84 of 200
Page 11 of 13
ANTICIPATED DESIGN AND CONSTRUCTION
SCHEDULE
Final Design
General Contractors
and Electrical
Subcontractors Pre-
Qualifications
Constructability _
Review by CM
Bid and Award Phase -
Construction
SRF Application and
Funding
CENTRALSAN
` 5
*As presented at August 4,2020 Board Meeting
PROJECT FINANCING
SCHEDULE FOR SOLIDS PROJECT SRF
Construction
expected to last up
Year 2020 Year 2021 to four years;Debt
Service starts one
year after
July Aug Oct Jan Feb-May June July
2020 2020 2020 2021 2021 2021 2021
• ♦ • •
Updated State Start Bidding SRF Initial Bid/Award Notice To Submit SRF
SRF Reviews Pre- Agreement Proceed to Final
Application Legal/ Qualifications Signed Contractors Agreement
Financial for Documents to
Documents Construction Reimburse
PROPOSED SRF REQUESTED UP TO $173.1 MILLION
ACTUAL TOTAL DEPENDS ON PROJECT BID I
6
3
August 20, 2020 Regular Board Meeting Agenda Packet- Page 85 of 200
Page 12 of 13
BLACK & VEATCH CORPORATION (BV)
AGREEMENT STATUS
• A total of six revisions have been
executed to the BV agreement to
date including Revision (Rev.)3
detailed design for$5,900,000 Iwo ,1yk `','
• Current agreement value:
$8,604,636
r
• Pending Board authorization for:
• Settlement and to complete final
design for a lump sum of
$700,000; and
• Rev. 8, Bidding services not to
exceed $350,000.
_ Il
�i
Assist in pre-qualification of contractors.
Review of 100%design submittal and to update the cost estimate,especially for EIC.
• Review front-end contract documents.
Finalize schedule analysis and project sequencing for potential incinerator shutdowns.
• SRF support services.
• Support staff in verifying record drawings for electrical and controls on existing process systems to
remain or modified during the Solids Handling Facility Improvements Project.
s
4
August 20, 2020 Regular Board Meeting Agenda Packet- Page 86 of 200
Page 13 of 13
RECOMMENDED BOARD ACTION
Authorize the General Manager to amend two existing
professional engineering services agreements under the
Solids Handling Facility Improvements, District Project
7348, as follows:
• Black &Veatch Corporation for design and bid services in
an amount not to exceed $1,050,000, increasing the
agreement cost ceiling to $9,654,636; and
• MWH Constructors, Inc. for constructability review, bid,
and verification support in an amount not to exceed
$450,000, increasing the cost ceiling to $950,000.
Alai
A
QUESTIONS?
F`, r
y
�4
r io
CENTRAL SAN
-3- -
5
August 20, 2020 Regular Board Meeting Agenda Packet- Page 87 of 200