HomeMy WebLinkAbout04. Authorize pre-purchase contract for 3 blower systems under Electric Blower Improvements, DP 10015 Page 1 of 5 Item 4. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: NOVEMBER 19, 2020 SUBJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PRE-PURCHASE CONTRACT WITH APG-NEUROS FOR THREE ELECTRIC BLOWER SYSTEMS AND SPECIAL SERVICES I N AN AMOUNT NOT TO EXCEED $2,998,000 UNDER THE ELECTRIC BLOWER IMPROVEMENTS, DISTRICT PROJECT 10015 SUBMITTED BY: INITIATING DEPARTMENT: NITIN GOEL, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES- CAPITAL PROJECTS REVIEWED BY: NANCY MOLINA, ASSOCIATE ENGINEER NATHAN HODGES, SENIOR ENGINEER EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES , ..,�1 Roger S. Bailey General Manager ISSUE The Board of Directors (Board) authorization is required for purchases or contracts above $200,000 in the Capital Program. BACKGROUND Central San's three existing aeration blowers supply air to four aeration basins, pre-aeration system (grit removal), final effluent, and mixed liquor channels. Two of the three blowers, installed in 1974, are steam- driven turbine blowers using steam produced from the heat recovery process from the furnace's waste heat boilers, cogeneration system waste heat boiler, and augmented by the auxiliary boilers. November 19, 2020 Regular Board Meeting Agenda Packet- Page 30 of 152 Page 2 of 5 The third blower is driven by an electric motor which serves as a backup when the steam system is shut down for maintenance or under emergency scenarios. However, there are several major shortcomings associated with the existing electric blower. The findings of a recent condition assessment and capacity analysis are that the existing electric blower does not provide adequate redundancy(only produces air up to 30,000 standard cubic feet per minute (scfm)) and does not meet peak aeration demand (over 70,000 scfm)). The electric blower also presents uncertain reliability with the standby power generation system due to the high in-rush current due to its 2,000-horsepower electric motor(this motor is not equipped with a soft start or variable frequency drive (VFD)). Other deficiencies include limited turndown capabilities and it cannot be operated in parallel with the larger steam blowers (controls and sync issues). Therefore, the existing electric blower does not provide a reliable backup for process air supply. As presented to the Board on July 16, 2020, the replacement of the existing electric blower and addition of new electric blowers is now of critical importance to Central San for two main reasons: 1. Because of the increased potential for PG&E Public Safety Power Shutoffs (PSPS), as a prevention to wildfires or other fire danger in northern California, it is now evident that the lack of PG&E grid power supply reliability during the summer or fall months presents many new challenges to the treatment plant and to the blower system. Under a PSPS, the plant would need to rely on its own power generation (CoGen) and diesel standby facilities. Summer and fall seasons are also the times of year when the plant requires the highest air flow rate to be available for the biological process. The existing electric blower does not produce enough air and cannot reliably start on the diesel standby generators. Therefore, staff recommends adding three new electric blowers in the existing Pump and Blower Building (PBB). With three new electric blowers, this new system will be capable of providing full backup to the existing steam-driven blowers and also be compatible with the current operating characteristics. Three blowers would provide for full capacity with one blower out of service. The new blowers have smaller electrical motors and are equipped with VFDs which will allow their use with the existing standby power generators. 2. Central San plans to perform major construction within its Solids Conditioning Building (SCB) under the Solids Handling Facility Improvements Project (Solids Project). The SCB houses many of the critical equipment and systems that are required to produce the steam necessary to power the steam-driven blowers, and elements of the Solids Project will impact the steam production. During construction of the Solids Project, several unit processes will need to be offline for short or potentially extended periods to facilitate construction sequencing, reduce risk of unplanned shutdowns, and improve safety for staff and the contractor. These shutdowns will impact the quantity of steam available to produce the air flow rate required by the treatment plant for peak air demand conditions. The Board had authorized staff at its July 16, 2020 meeting to initiate a separate project titled the Electric Blower Improvements, District Project 10015 (Project) and to complete the final design with HDR, Inc. (HDR).At that time, staff also proposed to pre-purchase the electric blowers since the equipment had very long lead times due to the design and manufacturing process and to have installed ahead of the Solids Project planned shutdowns of steam equipment. On September 18, 2020, staff advertised a formal Request for Qualifications and Bid on PlanetBids for two new electric blowers, plus an optional third, each with a capacity of 35,000 scfm and associated equipment. Requesting qualifications was needed since there were many site and project specific requirements that the vendors had to meet, including the ability to fit within the existing PBB blower area facility and connections to the electrical and mechanical systems in order to minimize overall project cost and maximize reuse of existing assets. HDR and Central San reached out to several manufacturers and were only able to confirm one vendor that could meet the project specifications,APG-Neuros. Other vendors were contacted and known to have the November 19, 2020 Regular Board Meeting Agenda Packet- Page 31 of 152 Page 3 of 5 potential to meet the qualifications; therefore, staff elected to include an "or equal" section to the qualification process to determine if the specifications could be achieved by others. The qualification and bid process allows only the qualified vendors to participate in the opening of bids. The notice to bidders was very clear and transparent that Central San qualifications included the ability to specifically use the existing building and infrastructure without having to make costly improvements to accommodate any proposed blower or other items that were significant to the specifications. On October 14, 2020, Central San received interest or qualification packages from two electric blower vendors (APG-Neuros and Howden Roots LLC).APG-Neuros was the specified blower and Howden Roots LLC is the original vendor of the existing steam and electric blower. Howden Roots LLC proposed Turblex blowers. Limited participation was anticipated for this procurement. Each bid submittal package contained two parts: Part 1 - Qualifications and Part 2 - Bid. Qualifications included technical requirements, ability to fit and operate the equipment within the existing building and infrastructure, successful installation(s), availability and location of service centers for future maintenance and spare parts, power requirements and efficiency, and ability to meet the allowable noise levels. Central San staff and HDR conducted an extensive evaluation of the qualifications and determined that the Howden Roots LLC Turblex blower was unable to meet the qualifications. This determination came after a detailed review and several clarifications and meetings with the vendor.Although many of the criteria was determined to be comparable to the specifications, ultimately the decision was made not to qualify due to two significant reasons, the proposed equipment did not fit within the existing infrastructure and the heat generated by the system with the sound enclosure could not be satisfactorily addressed as part of the technical specifications for the Project. Bids included special services to coordinate the shop drawings with the installation design, costs for two blowers and associated equipment, major electrical components such as VFDs, electrical control panels including programmable logic controllers (PLCs), electrical transformers, cost for an optional third blower, optional services such as an extended warranty, additional controls integration with the existing blowers, training, and future annual maintenance costs. Staff opened the bid for APG-Neuros on October 28, 2020 and received a cost of$1,972,300. The Engineer's estimate was $2,600,000. The electric blowers submitted are powered by a 1,500-horsepower motor. The Bid also required pricing to be provided for additional scope and services.After a detailed evaluation of the optional services and consulting with the Operations Division, staff is recommending to include the following: • Third blower system to replace the existing electric blower. This will allow for all the electric blowers to operate in sync and provide the best long-term solution for redundancy and capacity at a cost of $750,000. • Additional three-year correction warranty at a cost of$70,000. • Routine spare parts for$92,000. • PLCs to operate the new blowers in combination with the steam blowers for$9,000. Maintenance costs and scope were received and will be forwarded to the Operations Division. The costs for a five-year maintenance service agreement totaled $182,470 with an optional $10,000 for additional staff training. The costs for maintenance are not included in the Project and will be addressed by staff at a future date once the equipment is installed as part of the Operating budget. ALTERNATIVES/CONSIDERATIONS The Board could consider the following alternatives or provide other direction: 1. Postpone or delay the installation of the third blower, which is not recommended.Adding a third November 19, 2020 Regular Board Meeting Agenda Packet- Page 32 of 152 Page 4 of 5 blower is the most cost-effective alternative compared to retrofitting the existing electric blower or providing additional blowers for the secondary process, which has been evaluated by the project team.Also, it is not recommended to have three different types of blowers with different operating curves. It is highly unlikely that the blowers will all be able to operate together due to the complexity of the programming needed for this to happen. In addition, these new electric blowers have been considered as part of the long-term improvements to the Steam and Aeration Blower Systems Renovations Project and thus will not become stranded assets. 2. Do not award a pre-purchase contract and include the equipment for procurement under a general contractor and a Central San construction contract. Central San received a low bid from a qualified blower vendor and due to the lead times for the equipment, complexity, and specialized nature of the installation design, it is recommended to enter into a contract with the vendor to complete shop drawings and finalize the design with Central San prior to bidding for an installation or a general contractor ahead of the Solids Project. Both alternatives are not recommended. FINANCIAL IMPACTS The total anticipated cost for the pre-purchase contract is $2,998,000, which includes the following: • Item 1: $1,972,300 for special services, two blower systems, programming, startup, commissioning, and training; • Item 2: $750,000 for a third blower system; • Item 3: $171,000 for an extended warranty, spare parts, and additional programming; and • Item 4: $104,700 in contingency(approximately five percent of Item 1)for potential changes during design. The total estimated project cost for the Project is $12.5 million. There are adequate funds within the current project budget for the pre-purchase contract costs, which was anticipated in the estimated construction budget; therefore, no additional funds are needed or being requested. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this item at the November 3, 2020 meeting and recommended Board approval. RECOMMENDED BOARD ACTION Authorize the General Manager to execute a pre-purchase contract with APG-Neuros for three electric blower systems and special services in an amount not to exceed $2,998,000 under the Electric Blower Improvements, District Project 10015. Strategic Plan Tie-In GOAL TWO:Environmental Stewardship Strategy 1—Achieve 100%compliance in all regulations, Strategy 2—Anticipate and prepare for potential regulatory changes GOAL FOUR: Workforce Development Strategy 4—Meet or exceed industry safety standards November 19, 2020 Regular Board Meeting Agenda Packet- Page 33 of 152 Page 5 of 5 GOAL FIVE:Infrastructure Reliability Strategy 1—Manage assets optimally to prolong their useful life, Strategy 2—Execute long-term capital renewal and replacement program, Strategy 3—Protect personnel and assets from threats and emergencies GOAL SIX:Innovation and Optimization Strategy 2—Improve and modernize operations through technology and efficiency measures November 19, 2020 Regular Board Meeting Agenda Packet- Page 34 of 152