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HomeMy WebLinkAbout04.a. Review draft to award a construction contract for Solids Handling Facility Improvements, DP 7348 and authorize various agreements and amendments Page 1 of 26 Item 4.a. Algi CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER DRAFT MEETING DATE: AUGUST 17, 2021 SUBJECT: REVIEW DRAFT POSITION PAPER TO AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $179,841,000 TO KIEWIT INFRASTRUCTURE WEST CO., THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER FOR THE SOLIDS HANDLING FACILITY IMPROVEMENTS, DISTRICT PROJECT 7348;AND AUTHORIZE THE GENERAL MANAGER TO: • AMEND FOUR EXISTING PROFESSIONAL SERVICES AGREEMENTS TO INCREASE THE OVERALL COST CEILING THRESHOLD WITH: 1) BLACK & VEATCH CORPORATION; 2) MWH CONSTRUCTORS, INC.; 3)ARCSINE ENGINEERING; AND 4) CAROLLO ENGINEERS, INC., AS STIPULATED WITHIN; • EXECUTE TWO PROFESSIONAL SERVICES AGREEMENTS FOR ENGINEERING SUPPORT DURING CONSTRUCTION WITH: 1) HDR, INC. I N AN AMOUNT NOT TO EXCEED $1 MILLION; AND 2) DEGENKOLB ENGINEERS I N AN AMOUNT NOT TO EXCEED $650,000; AND • INCLUDE A CONTINGENCY UP TO 15-PERCENT FOR THE PROJECT 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 ISSUE On June 16, 2021, three sealed bids were received and opened for the construction of the Solids Handling Facility Improvements, District Project 7348 (Solids Project). The Board of Directors (Board) must award the contract or reject all bids within 120 calendar days or by October 14, 2021 . Authorization is also required to execute agreements or amendments greater than $200,000 and to include up to 15- percent project contingency. August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 3 of 28 Page 2 of 26 BACKGROUND The Solids Project was introduced to the Capital Improvement Program (CI P) in Fiscal Year(FY) 2017-18 as a recommendation of the Comprehensive Wastewater Master Plan to consolidate several projects already identified in the Treatment Plant Program since 2010. These projects were all related to solids processing and handling within or around the Solids Conditioning Building (SCB). Since then, staff has made significant progress in performing condition assessments, piloting new air pollution control equipment, pre-selecting critical equipment, such as the centrifuges, cake pumps and wet scrubbers, coordinating with regulatory agencies, sequencing and developing construction constraints, applying for a State Revolving Fund (SRF) loan, pre-qualifying general and electrical contractors, completing the design and receiving bids.A site location map is provided as Attachment 1. The following major elements are included in the Solids Project: • Replacement of the two wet scrubber systems with new air pollution control equipment to meet air regulations, including a new Venturi scrubber capable of handling waste heat bypass events. • Replacement of the four centrifuges, cake pumps, and sludge blending, storage, and mixing systems. • Upgrades to the incinerator burners and after-burner with modern control equipment. • Addition of a new Ash Handling Building to modernize the ash handling, conveyance, and improve loading facilities to reduce fugitive ash emissions, and improve reliability. • Construction of major seismic modifications to the SCB and to the two existing incinerators to meet the current seismic standards. • Addition of a new electrical room including major electrical, instrumentation, and controls, as well as replacement of older electrical systems to accommodate the new equipment. • Requirement of significant constraints, including restrictions to shut down the incinerators, install temporary electrical facilities, and the off-haul and disposal of sludge. • Demolition of the abandoned digester tank near the SCB. (Completed) • Construction of the emergency stairway for the third-floor control room in the SCB for safety egress. (Completed) • Construction of the modifications to the Emergency Sludge Loadout Facility to reliably operate and load sludge for extended durations. (Completed) The Solids Project is the largest single renovation project that Central San has undertaken since the treatment plant was expanded in the 1970's.As with all large or critical projects, staff has been updating the Board through Committee and Board meetings throughout the process. Since 2017, staff has received authorization from the Board on several occasions for work leading to today. A summary of prior Board actions is outlined in Attachment 2. Bid Schedule:The Solids Project was advertised on February 22 and March 1, 2021. The original bid opening date, April 28, 2021, was extended on multiple occasions and was changed to June 16, 2021 due to requests from bidders and scope clarifications by addenda. Nine addenda were issued during the bid period. Staff facilitated over 20 bidder site visits and answered over 300 bid questions. The project documents, bid forms, and security included a 120-calendar day period in which bids cannot be withdrawn to accommodate for the SRF review, which is common practice for large SRF-financed projects. Bid Opening and Evaluation:The Engineer's estimate for construction was originally listed at $110 million (M)when first advertised, and later amended up to $140 M to reflect changes in the evolving bid market and elements included in the addenda. Three bids were received and publicly opened, that ranged from $179,841,000 to $216,293,989.A summary of bids is shown in Attachment 3. August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 4 of 28 Page 3 of 26 Capital Projects staff conducted a technical and commercial review of the bids and determined that Kiewit I nfrastructure West Co. (Kiewit) is the lowest responsible and responsive bidder with a bid amount of $179,841,000. During the bid evaluation, staff found one minor discrepancy, which was clarified by Kiewit. The discrepancy was that Kiewit did not correctly list the name of the packaged electrical systems (motor control centers and variable frequency drives) as required by the technical specifications. This discrepancy is considered non-material by staff. The lowest bidder is approximately$40 M above Central San's latest construction estimate. Staff's bid review included meetings with the three bidding general contractors, MW H Constructors, I nc. (MW H), and several other consultants. After discussions with the three bidders, it became clear that the cost of materials, vendors, and subcontractors were significantly higher than the estimate, which is the main factor for receiving higher bid pricing. The increases were due to uncertainty in local, U.S., and global market conditions engendered by the COVI D-19 pandemic. This was further compounded by risk in vendors ability to receive materials or equipment on time to meet the milestones and various required timelines identified in the contract documents. These uncertainties added risk and increased costs as suppliers attempted to predict the future increases or pricing for commodities required for the work, which is anticipated to be four years or more to complete. During the bid period, the Solids Project team discussed the potential impact the COVI D-19 pandemic and supply chain constraints or delayed deliveries might have on the final bid price, including the rapidly escalating commodity pricing. For these reasons, staff raised the construction estimate from $110 M to a maximum of$140 M during the bid period to accommodate material prices and reflect the changes in the electrical scope made via addenda. Recently, staff working in the treatment plant are starting to report delays in major equipment, such as electrical, and significant cost escalation requests in steel or copper. It should be noted that staff had not seen or experienced significant cost escalation in past awarded construction projects during COVI D-19. Central San has awarded thirteen capital projects since the pandemic first started in March 2020, and all but one project came over the Engineer's estimate. I n October 2020, staff pre-qualified seven general contractors (GCs) and eight electrical subcontractors (ECs). During the bidding period, staff was informed that four GCs and six ECs would not be bidding on the Solids Project. Feedback for not bidding were mostly focused on the cost or the duration of the project, or due to pursuit of easier and smaller projects. Staff's assessment is that the complexity and risks of this project made it especially challenging for bidding as the Solids Project is not a typical public works, low bid project. Another issue leading to the higher cost difference was the limited competition. As stated before, only three GCs and two ECs provided bid prices. One electrical subcontractor, Mass Electric Construction Co., is a Kiewit Corporation subsidiary and provided a labor quote only to Kiewit. The other electrical subcontractor, Blocka Construction, I nc., provided pricing of over$58 M to the other two GCs. The low bidder did have better pricing from their electrical subcontractor, which was a significant reason for the difference between the low bidder and the two other bids received. Central San is the only public agency in California still operating sewage furnaces. The furnace work is specialized and there was only a single subcontractor that provided a quote. The Solids Project scope included 12 months of temporary sludge operations, including pumping, dewatering, odor control, conveyance, hauling, and disposal. Additional unit pricing was included for up to six months of temporary operations. Pricing received for the entire 18-month temporary scope ranged between $15.1 M and $34.53 M, which is significant. The Engineer's estimate was $18 M for sludge hauling. This indicates the wide variability in this scope item and the cost impact and the difference between the bids. Finally, the overall operations and construction risks influenced the final bid price. Many risks have been identified, including the milestones and constraints, project duration, combined with challenging elements August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 5 of 28 Page 4 of 26 such as deferred design, electrical being a critical path, and timely receipt of materials and equipment resulted contractors adding more value than taking on more risk than the Engineer's estimate anticipated. Construction Support: Staff will administer and have overall control of the construction and interaction with plant staff, engineering consultants, and safety for Central San employees. MW H will be the construction manager(CM) providing frontline or day-to-day management with the contractor, including general inspection, special inspections, coordination of construction activities, startup and commissioning services, recommending payments, schedule and cost review, file management, and various other support duties required to effectively manage the complexities of the Solids Project. MWH had been previously selected through a formal public solicitation and has been assisting staff with review of the bid documents, schedule analysis, and cost estimating. Staff negotiated the CM scope with MWH with a cost ceiling of $12.0 M. MWH's current agreement is valued at$1.1 M and including the CM services will result in a new cost ceiling of$13.1 M. Black&Veatch Corporation (B&V), and sub-consultants HDR, Inc. (HDR)and Degenkolb Engineers (Degenkolb) are the Solids Project designers. These firms were selected and hired under two solicitations that consisted of planning and detailed design.All three firms will provide engineering support during construction (ESDC) services. Staff is recommending a pay for performance fee structure with B&V based on previous experiences. The services with B&V will be on an as-needed basis with a not to exceed cost ceiling of$4.0 M. The current agreement amount is approximately$9.6 M and including the ESDC services will result in a new agreement valued at$13.6 M. HDR will provide structural and architectural ESDC services at a cost up to $1.0 M, while Degenkolb will provide seismic ESDC services for an amount not to exceed $650,000. Staff has elected to enter into agreement directly with each sub-consultant to better support the construction effort directly with Central San and MW H. During the bid phase, staff utilized Aresine Engineering (Aresine)to prepare additional drawings and specifications for the installation of temporary electrical and control systems related to existing systems that were not addressed by B&V's design. Staff intends to continue using Aresine due to their expertise and understanding of Central San's standards and existing electrical systems. In addition, staff is also recommending electrical support by Carollo Engineers, Inc. (Carollo) since their field services can be provided locally to quickly respond to any issues that may arise during construction. Carollo was recently selected under a competitive solicitation to perform electrical inspection and CM services on an as- needed basis. These electrical services are focused on assisting and supplementing the specialized work that would be normally performed by staff. The anticipated budget for the electrical services is estimated at$2.0 M and will be performed on an as-needed basis and split between the two engineering firms. Electrical is one of the most critical and complex elements to the success of the Solids Project and has been the most difficult trade to find experienced and qualified, local personnel to help staff or to hire. Hazardous materials testing and related services are essential for a safe worksite and project. Existing building materials have lead paint or primers, asbestos, and a significant amount of concrete demolition will take place inside the SCB.Additionally, excavation for exterior shear walls and installation of drilled piles are expected to encounter contaminated soil. Staff is in the process of selecting a consultant to provide hazardous material support for the project. The costs for these services is expected to reach $1.0 M; Board approval will be requested at a future time. Staff has also identified the need to include additional professional engineering services for third-party review, quality assurance and quality control (QA/QC), cost reduction alternatives, and recommendations that can assist in a cost-effective project and avoid schedule impacts. The scope of services will focus on industrial mechanical and electrical, incinerator retrofits, installation of new air pollution control equipment, ash handling, and other elements or consulting work.A Request for Qualifications (RFQ) has been publicly advertised and staff anticipates a budget of$2.5 M for the additional services. The RFQ includes August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 6 of 28 Page 5 of 26 the ability to hire multiple firms, if needed; therefore, staff will return to the Board once the RFQ process is finalized and fees have been negotiated. California Environmental Quality Act(CEQA) At its December 6, 2018 meeting, the Board independently found that the Solids 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 CONSIDERATIONS: The following items were considered by staff as the project alternatives were evaluated over the past two months. Time - Rejecting all bids, proceeding with a project redesign, and rebidding the project is anticipated to result in as much as a 12-month delay to the start of construction. In addition, delaying the project will also impact Operations and delay the installation of new equipment and facilities, such as the new scrubbers and centrifuges. Most of the equipment being replaced under this project is beyond its useful life and in need of replacement. Costs - Repackaging and rebidding the project (or project phases) may not reduce total project costs or could possibly result in increased costs.An important consideration is that repackaging the project is primarily intended to reduce the exposure to risks such as delay claims during construction.Any cost savings that might be developed as part of a redesign may likely be offset by other factors like inflation or continued supply issues. Air Permit Compliance-The existing multiple hearth furnaces (MHFs) air pollution controls are having difficulty achieving air permit compliance.A priority will be to address these regulatory issues in an efficient manner. Since Clean Air Act Section 129 regulations (129 rule)went into effect in March 2016, the Bay Area Air Quality Management District (BAAQMD) has issued to Central San several notices of violations (NOVs) related to the emergency bypass damper openings. Staff has been able to reduce the frequency of bypass events, but because of inherent limitations of the existing equipment, the bypass damper continues to periodically open, in violation of the 129 rule. The MHFs also cannot consistently meet the hydrochloric acid (HCl) emission limit in the 129 rule. Staff has been working closely with United States Environmental Protection Agency (USE PA)to address these compliance challenges. Local regulation will also impact compliance. Data from an on-site pilot study conducted in 2018 indicate the new MHF air pollution control devices will significantly reduce the frequency of emergency bypass damper openings and reduce HCI and particulate matter(PM) emissions below their respective limits. BAAQMD Rule 6-1, which goes into effect in 2025, lowers the PM concentration limit on the MHFs and the existing air pollution control devices are not sufficient to ensure compliance. Staff with a specialty consultant, GHD, is currently doing pre-design for future devices to reduce PM and carbon oxide to the new standards. SCB Shutdowns -Shutting down most SCB processes, including temporary dewatering and hauling of sludge, will likely remain part of the scope of work; however, it may be reduced if the project is repackaged or phased. ALTERNATIVES: Staff evaluated several options; ultimately, there are three alternatives as follows: Alternative 1:Award the Contract Staff recommends to award the project, but to proceed with a two-step Notice to Proceed (NTP) since the project is over budget. Once awarded, staff and Kiewit will conduct a detailed analysis of the project August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 7 of 28 Page 6 of 26 sequencing, milestones, and evaluate other ways to reduce risks and potential costs to the contractor and Central San. This approach is recommended since Central San has not executed the final SRF Agreement and needs an additional $77.5 M to fund the total estimated project cost. Staff met with Kiewit and discussed the timing of funding, using provisions within the contract documents to initiate the contract, and use of the termination clause if there is not adequate funding or issues are discovered during the findings of the schedule and costs analysis.An initial NTP would be issued to conduct a review as stated above and of such items as deferred design components (temporary seismic shoring and electrical), sludge hauling, and the detailed schedule of values for the contract. Kiewit has several in-house resources and experienced leadership in building industrial and complicated construction similar to the Solids Project within their local Fairfield office.A second NTP for construction will not be issued until Central San and Kiewit are comfortable in moving forward with costs and schedule. In the event a NTP is not issued, the contract will be terminated by Central San.Accordingly, Central San would be required to pay the cost incurred by Kiewit and time needed to reestablish their contract terms. Staff explored the option of extending the time for award beyond the bonded 120 calendar days. This option was not pursued since Kiewit would be beyond the guaranteed pricing with all their vendors, suppliers, and subcontractors and likely result in additional costs. Alternative 2: Reject Bids The Board may elect to reject bids, which would result in staff having to regroup to determine the best solution moving forward. Several options exist; however, staff would have to continue evaluating and report back to the Board if one of the following options were selected. (a) Rebid the Solids Project: Staff would conform all the addenda with the contract documents, evaluate and incorporate more ways to reduce risks, and rebid within six to nine months. This option may mitigate some effects of the current market; however, other costs may increase which cannot be foreseen. The federal government is in the process of authorizing a large infrastructure bill of over$1 trillion which would likely impact the construction industry. Waiting to rebid within a year is likely not enough time for significant change in market conditions.Also, without significant changes to the scope of work, staff expects that the two higher bidders would not participate in a re-bid. If this option is pursued, staff would remove the pre- qualification for contractors in an attempt to get more interest. (b) Rebid Solids Project within Approved Budget: Staff could repackage the project and rebid some of the project elements to stay within the current authorized budget of$183.9 M. This would require removing and delaying some of the scope to fit the budget and add future project(s)to complete the remainder of the scope. (c) Consider Design-Build Project Delivery: Staff could evaluate a design-build delivery method. Under this approach, staff would be using the existing Solids Project's bid package as a basis. This would allow a contractor with a designer to work together to optimize the Solids Project while starting construction on critical path elements. Additional time would be required to prepare the front ends and specifications for alternate construction delivery and put the responsibility of the changes of the design and sequence onto the contractor to resolve. A design-build approach would likely attract more bidders than rebidding the Solids Project under option (a) as several design-build contractors were interested and did not participate during the pre-qualification process. However, staff expects that the bid price would increase compared to the Kiewit bid. The only advantage for this option would be that the design-build cost would be considered a maximum price while the contractor works to stay within the bid. (d) Perform the Solids Project in Multiple Phases: Staff could separate and implement the Solids Project scope into multiple phases. This would include repackaging the work in various smaller projects which could be implemented in either two or up to six phases. The first phase(s) could prioritize the new August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 8 of 28 Page 7 of 26 electrical room, seismic utility relocations, new wet scrubbers, centrifuges and cake pumps, ash facility, and low impact seismic renovations within the building. The subsequent phase(s)would continue seismic work, sludge blending tanks, prepare and execute a partial building shutdown, and install and commission new miscellaneous equipment. Final phase(s) may complete seismic work, complete electrical demolition, and finish some remaining project elements. One advantage with multiple project phases is that by reducing the scope of work and duration on each phase, Central San has less exposure to cumulative delay change order claims and risks during construction. Central San would also have the ability to incorporate the lessons learned and construction challenges into the future phases. Disadvantages with this option is increasing the overall Solids Project duration and extending the timeline before new equipment is placed into service.As for costs, staff believes that multiple phases or smaller projects will increase the bidder competition thus likely to lower the construction costs. However, the engineering costs and staff time to support a longer duration and multiple contracts would offset some of the potential savings. This alternative is possible, however, there are no guarantee that the overall costs will lower since staff estimates that an additional three to four years would be needed to complete all the scope identified in the Solids Project. Alternative 3:Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions with all new Solids Facilities Before issuing a final NTP with construction of the Solids Project, staff needs to reconsider and evaluate the long-term solids handling from current operations based on furnaces, ash disposal and steam recovery to include or change to anaerobic digestions. This could evaluate design and construction of all new solids and energy facilities such as anaerobic digestions including new cogeneration (Co-gen) run on biogas, not natural gas. This would include all new facilities located north of the emergency sludge loading facility. The current SCB and MHFs could continue to operate as the sludge disposal method in the interim. Followed by ultimately, the abandonment of the SCB, MHF, steam, auxiliary boilers, and existing natural gas driven Co-gen. This project could either be delivered as a typical design-bid-built, or design-build, or other approaches such as public-private partnership (P3). Biosolids disposal would be addressed either by continuing to use the existing MHFs for five to ten years, or using the newly renovated sludge loading building, or adding sludge dryers and pyrolizer. This alternative could be phased, with phase one focusing on adding two new anaerobic digesters, followed by a second phase for new biogas Co-gen, and final phase adding two additional digesters and biosolids handling. This would require time to select a new consultant team, prepare design and the front ends and specifications. This alternative, if fully implemented, would greatly simplify and modernize Central San's solids handling and energy facilities. This approach would likely attract more bidders than rebidding the Solids Project. The project could be constructed north of the sludge handling facility and would not require the complex sequencing and temporary work required for the current Solids Project. This would reduce risks, and would be designed and constructed within the same time frame, of four to five years. However, this would be a radical shift in Central San's process and would need to be carefully vetted and evaluated. Overall cost of this alternative may not be significantly less than the current approach, but should be evaluated based on the bids received for the Solids Project. It would, however, reduce many risks associated with the current path. The main risk associated with this alternative is the biosolids disposal and the potential future per- and polyfluoroalkyl substances (PFAS) regulations associated with biosolids disposal. While staff does not recommend rejecting all bids, staff recommends pursuing a three to four month evaluation of this alternative in more detail and compare the results with Alternative 1. FINANCIAL IMPACTS The total estimated project cost is $261,373,000 which includes all prebid expenditures, design, bidding, bid price, CM, consultant costs, staff time, and contingency as detailed in Attachment 4.A detailed financial analysis with alternatives will be presented to the Board at a workshop scheduled for August 26, 2021. The current budget for the Solids Project is shown on page 236 in the FY 2021-22 District Budget August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 9 of 28 Page 8 of 26 at$183,894,000. State of California Clean Water SRF Funding Central San has applied and requested a total of$173.1 M in funding from SRF and received approval. In December 2020, prior to advertising the Solids Project, staff submitted updated Solids Project documents in support of receiving the initial agreement. The Water Board informed staff in March 2021 that the initial agreement would be routed for Division of Financial Assistance (DFA) approvals, after which it would be sent to Central San for execution within the next several months. This initial agreement is currently being routed for Water Board officials' signatures and is expected to be issued to Central San within several weeks. Staff has recently spoken with the Water Board concerning the higher bids that was received and the need for additional funding. After the initial agreement is executed, the final project amount and supporting documents need to be submitted and will provide an opportunity for the Water Board to request additional funding for the budget gap that is necessary. Also, the Water Board indicated that if the Solids Project is rejected and split into more than two project phases, then it would be challenging to win approval for additional funding. Staff will consider SRF and other funding options as alternatives are evaluated. These will be presented at the August 26, 2021 Board Workshop for the Solids Project. Project Financing Approach As stated above, the total budget cost for the project listed for FY 2021-22 Budget is $183.9 M for the project. Staff has applied and is expected to receive the agreement from SRF for a loan of$173.1 M. The latest total estimated Project Cost is $261,373,000 as shown in Attachment 4. The variance between the FY 2021-22 Budget of$183.9 M and the latest estimated project cost of $261,373,000 is a gap of approximately$77.5 M. Proposed Financing of Project Gap: (To be addressed in more detail at the August 26, 2021 Special Board Workshop) • Reduce C I P for next four fiscal years by$5 M per year or$20 M. • Debt finance $52.75 M with either additional SRF and or Bond Financing. • Identify other savings or changes to the CI P. COMMITTEE RECOMMENDATION The Engineering and Operations Committee will review this matter at its August 17, 2021 meeting. Staff is not anticipating a recommendation as further discussion will be held with the Board of Directors on August 26, 2021 at a special workshop. RECOMMENDED BOARD ACTION Staff recommends the following Board actions: (A) Award a construction contract in the amount of $179,841,000 to Kiewit Infrastructure West Co., the lowest responsive and responsible bidder for the Solids Handling Facility Improvements, District Project 7348; (B) Authorize the General Manager to amend the following professional services agreements: 1. MW H Constructors, Inc. in an amount not to exceed $12.0 million, increasing the cost ceiling to $13.1 million for construction management services. 2. Black& Veatch Corporation in an amount not to exceed $4.0 million, increasing the cost ceiling to $13.6 million for engineering support during construction. August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 10 of 28 Page 9 of 26 3. Aresine Engineering in an amount not to exceed $1.1 million, increasing the cost ceiling to $1.7 million for electrical engineering support. 4. Carollo Engineers, I nc. in an amount not to exceed $900,000, increasing the cost ceiling to $2.2 million for electrical field support. (C) Authorize the General Manager to execute the following two new professional services agreements for engineering support during construction: 1. HDR, I nc. in an amount not to exceed $1 million; and 2. Degenkolb Engineers at a cost not to exceed $650,000. (D) Authorize the General Manager to execute Contract Documents subject to SRF funding, submittal requirements, and include up to a 15-percent project contingency. Strategic Plan Tie-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 2—Execute long-term capital renewal and replacement program ATTACHMENTS: 1. Project Location Map 2. Prior Board Actions Summary 3. Summary of Bids 4. Post Bid / Preconstruction Estimate 5. Presentation August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 11 of 28 Page 10 of 26 o � CD O C r-p. CLEARWELL BASIN a CP pQ 0 NORTH 10 BASIN 3 C31.t E�3 o ° 3:3w �V1�0�' • ,I FILTER p DRAIN BACK PLANT CHANNEL N Q 0 0 400 800 FEET a PROJECT AREA CONSTRUCTION SOUTH ACCESS ROUTING NORTH BASIN O �O=� O CLARIFIERS� C?�V4U 0 AERATION SOLIDS CONTRACTOR TANKS �J STAGING AREA SOUTH o CLARIFIERS o �J SOLIDS BUILDING Q � O 1-5 ro O o v c 0 o PRIMARY TANKS a� I Attachment Y CENTRAL SAN SOLIDS HANDLING FACILITY IMPROVEMENTS N ' DISTRICT PROJECT 7348 1 Q Page 11 of 26 ATTACHMENT 2 HISTORICAL BOARD ACTION SUMMARY SOLIDS PROJECT, DISTRICT PROJECT 7348 Historical Board Action Summary: As with all large projects, staff has been continually updated during the development of the Solids Project. A list of prior Board actions are outlined below: • December 1, 2016 - Board approved combining projects, predesign funding, and a $2 million (M) Professional Engineering Services (PES) agreement with Black & Veatch (B&V) for the pre-design efforts; • December 15, 2016 - Board approved wet scrubber piloting work and contracts; • April 6, 2017 - Board approved air emissions testing consulting agreement to support wet scrubber piloting; • April 26, 2018 - Board approved amending the B&V agreement to include final design services for an amount not to exceed $5.9 M; • December 6, 2018 - Board approved resolution regarding funding eligibility for State Revolving Fund (SRF) funding; • December 20, 2018 - Board authorized the pre-selection and contracting for the centrifuge equipment, cake pump equipment, and new wet scrubber equipment; • June 20, 2019 - Board authorized a construction contract for the Emergency Sludge Loadout Facility Upgrades and amending the PES with B&V by $220,000; • December 19, 2019 - Board authorized a PES agreement with MWH Constructors, Inc. (MWH) for an amount not to exceed $400,000 for constructability review and pre-bid services; • August 6, 2020 - Board authorized the General Manager to submit an updated SRF loan application for additional funding and Board resolutions; • August 20, 2020 - Board authorized increasing the B&V agreement to $9,654,636 and the MWH agreement to $950,000; and • February 18, 2021 - Staff presented a project update and announced advertisement of project bidding. Additionally, the Board authorized the General Manager to amend the MWH PES to a ceiling of $1.1 M and amend the blanket agreement with Aresine Engineering to a ceiling of $975,000. August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 13 of 28 Page 12 of 26 ATTACHMENT 3 SOLIDS HANDLING FACILITY IMPROVEMENTS DISTRICT PROJECT 7348 SUMMARY OF BIDS PROJECT NO.: 7348 NO. OF ADDENDA: 9 DATE/TIME: JUNE 16, 2021/12:00 PM PROJECT NAME: SOLIDS HANDLING FACILITY IMPROVEMENTS PROJECT MANAGER: NATHAN HODGES PROJECT LOCATION: 5019 IMHOFF PLACE, MARTINEZ, CALIFORNIA ENGINEER'S ESTIMATE: $130,000,000 - $140,000,000 NO. BIDDER BID PRICE Kiewit Infrastructure West Co. $179,841,000 Fairfield, California 2 W.M. Lyles Co. $206,856,000 Fresno, California 3 Flatiron West Inc. $216,293,989 Benicia, California BIDS OPENED BY /s/ Katie Young DATE: June 16, 2021 at 12:30 p.m. via livestream due to COVID-19 August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 14 of 28 Page 13 of 26 ATTACHMENT 4 SOLIDS HANDLING FACILITY IMPROVEMENTS DISTRICT PROJECT 7348 POST-BID/PRECONSTRUCTION ESTIMATE No. Item Description Amounts %Construction Cost 1. CONSTRUCTION a. Construction Contract $179,841,000 b. Project Contingency at 15% (CM included) $27,000,000 c. Permits(Air Testing included) $1,000,000 d. Hazardous Compliance(Testing included) $700,000 e. ESLF Construction Completed(Not SRF Eligible) $2,866,000 SUBTOTAL-CONSTRUCTION $211,407,000 100% 2. CONSTRUCTION MANAGEMENT a. District Forces -Engineering staff(PM, RE, Safety,etc.) $6,000,000 -Operations Support, including Maintenance $5,000,000 b. Consultants -MWH: Construction Management Services $12,000,000 -Hazardous Material Consulting $300,000 -Existing Electrical Support(Aresine&Carollo) $2,000,000 -B&V(ESDC) $4,000,000 -HDR(ESDC) $1,000,000 -Degenkolb(ESDC) $650,000 -Furnace Support(TBD) $650,000 -As-needed Services, Third-Party Review, QA/QC,VE $2,500,000 SUBTOTAL-CONSTRUCTION MANAGEMENT $34,100,000 16.1% 3. PREBID EXPENDITURES a. Engineering -District Staff Time(Engr.And Operations) $3,900,000 -B&V $9,600,000 -MWH $1,100,000 -Other Consultants $720,000 -Equipment Selection Procurement $496,000 -Regulatory Permits $50,000 SUBTOTAL-PREBID EXPENDITURES $15,866,000 7.5% 4. TOTAL ESTIMATED PROJECT COST 1 $261,373,000 August 17, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 15 of 28 Attachment 5 (Updated, as presented) A. SOLIDS HANDLING FACILITY IMPROVEMENTS DISTRICT PROJECT 7348 PROJECT STATUS = Engineering &Operations Committee August 17, 2021 Jean-Marc Petit, P.E. Director of Engineering and Technical Services Edgar J. Lopez, P.E. Capital Projects Division Manager `` Revised I 1 AGENDA • Why are we doing this project? • Project Description and Background • Comprehensive Master Plan (2017) • In Current FY 21-22 CIB and 10-Yr CIP: • Solids Phase 1:Improvements to the Solids Handling Facilities DP-7348 • Steam System Improvements • Replace Co-Gen system • In Future CIP beyond 10-Yr: • Solids Phase 2:Add two Anaerobic Digesters with Digester Gas CO-Gen • Solids Phase 3:Add two additional Anaerobic Digesters and a Fluidized bed incinerator(And abandon existing MHFs) • Big Issues to discuss are: • 1)what is best path forward and, • 2) much higher cost for the proposed project. • What are the Alternatives? ffRUNFENT11M.M, � z 2 1 SOLIDS HANDLING FACILITY IMPROVEMENTS (SOLIDS PROJECT PHASE 1 1 2 2 3 4 5 6 7 8 Completed related O •rho ects l Emergency Sludge e Loadout • Emergency exterior stairways Digester demolition ' K yV EXISTING SLUDGE MULTIPLE AIR POLLUTION ASH HANDLING ELECTRICAL CENTRIFUGE SOLIDS DIGESTER BLENDING/ HEARTH CONTROL AND LOADOUT SYSTEMS DEWATERING CONDITIONING DEMOLITION STORAGE FURNACES SYSTEM BUILDING SEISMIC RETROFIT 3 3 SOLIDS PROJECT IS VERY COMPLEX AND RENOVATES AN OPERATING FACILITY WITH ALL THE SOLIDS AND POWER ELEMENTS OF THE TREATMENT PLANT 'I I' I ' 1 ' E I • � ! I tx I. 4 2 PRE-QUALIFIED GENERAL CONTRACTORS AND ELECTRICAL SUBCONTRACTORS General Contractors: Electrical Subcontractors: • Balfour Beatty Infrastructure, Inc. • Blocka Construction, Inc. • Flatiron West, Inc. • Con J. Franke Electric, Inc. • Kiewit Infrastructure West Co. • Contra Costa Electric, Inc. (Kiewit) • Helix Electric, Inc. • C. Overaa&Co. • Mass Electric Construction Company • Shimmick Construction Company, . San Joaquin Electric, Inc. Inc. • Walsh Construction • Shimmick Construction Company, Inc. • W. M. Lyles Co. • Sprig Electric Co. Bidders s BID SUMMARY Bid Opening: June 16,2021,2:30 PM Engineer's Estimate: $130,000,000-$140,000,000 No. Bidder Total Bid 1 Kiewit Infrastructure West Co. $179,841,000 2 W _Lyles Co_ $206,856,000 3 Flatiron West Inc_ $216,293,989 Subcontractor Lists Subcontractor Work Description Contractor 1 Industrial Furnace company Incinerator Sub Pacific Steel Group Rebar F.D.Thomas,Inc. Coati rkiInting Synagro-WWT Inc. Sludge Dewatering Mass Electric Construction Co. Electrical(Labor only) Contractor Blocka Construction,Inc. Electrical Intlustrial Furnace Company Incinerator Improvements WC Maloney Demolition Allied Steel Misc.Metals1Strui Steel Synagro—WWT Inc. Temporary Sludge Dewatering Pacific Steel Group Rebar F.D.Thomas,Inc. PaintingiViDoating Blocka Construction,Inc_ HVAC Contractor 3 Blocka Construction,Inc_ Eleducalfli Pacific Steel Group Rebar Intlustrial Furnace Company Incinerator Improvements Synagro—WWT Inc_ Temporary Sludge Dewatering Redwood Painting Paiutings]Ccatmgs t; 6 CENTRALSAN 6 3 REVIEW PROJECT COST ESTIMATE PROGRESSION AND INCREASES Fiscal Year CIB Budget Comments FY 17-18 $ 66,439,000 Master Plan FY 18-19 $ 82100 000 30%Design FY 19-20 $ 93 376,000 50%Design FY 20-21 $ 1211,234,000 90%Design FY 21-22 $ 183,984,000 100%estimate FY 21-22 CIB Project Approved Budget Revised in bideriod $ 213,984,000 U dated Burin biddin ate261, Post Bid Esti nate ttt Current Estimate m Nhm 1 1 7 7 POST BID/PRE-CONSTRUCTION ESTIMATE No. Item Description Amorint8 %Conatruorlon Cost 1 CON$TRUCTION a.ConsVrclJm Cnr&W 5179,841,000 b.Project Canlingency at 15%(CM Included) S27,000,11DO C.Pwmks(Air Tesdng Incruaeu) $1,000,000 d.Hazardous Cainplia roe[restiig included] S700,000 e.ESLF Coriatruction Completed(NotSRF Eligible) 52.886.000 SUBTOTAL-CONSTRUCTION 5211907000 100`%, 2- CONSTRUCTION MANAGEMENT a.Dorm Farces -Engi nearing staff(PM,RE,Safety,etc.) 56,000,000 -Operations Support-incl ud ing Mairdenanca $5,000,000 b.Consultants MWH:Canstrucoon Ma nagem ent Services $12,000,000 -Ha[2rdom Material Consulting 5300.00D -Existing Electrical Suppun(Aresine&Cerullo) 52,000,000 -S&V(ESDC) 59,000,000 H DR(E$K) 51,000,000 -Degeeaalb(ESDC) 5850,000 -Furnace Support(BD) 5850,000 -As-neede6 Sennas,Trwo-Party Revs .nk=.VE 52 300.000 SUBTOTAL-CONSTRUCTION MANAGEM ENT 534.100.000 16 1'%. 3- PREBID EXPENDITURES a.Engineering -Dlstrkt Stitt Tlme(Ergr.And Opewons) 53,900,000 -BBV $9,6N 000 -MWH 51,100,000 -Omer Consullaris 5720, ODD -Erauigme nt Selection Procure mem 5996,000 -Regulatory Parmits S50,OW SUBTOTAL-PREBID EXPENDITURES $15.866.000 754i 4. TOTAL ESTIMATED PROJECT COST 5201,979,000 8 CENTRALSAN 4 FISCAL YEAR (FY) 2021 -22 CAPITAL IMPROVEMENT BUDGET Budget-to- FY 2021-22 FY 2022-23 Future FYs Total Date $1,000,000 $- $- $- $1,000,000 12,090,000 - - - 12,090,000 Construction 6,894,000 21,000,000 45,000,000 98,000,000 170,894,000 ® $19,984,000 $21,000,000 $45,000,000 $98,000,000 $183,894,000 Central San has applied for a SRF Loan for up to$173.1 M 9 WIRT-72TV"M PROJECT FINANCING • FY 2021-22 Budget:............ $ 183.9 M • Total Estimated Project Cost: $ 261.4 M • Variance: ($ 77.5 M) Proposed Financing of Project Gap: (To be addressed on August 26, 2021 at Special Board Workshop) Options: • Reduce CIP for next four FYs by$5 M per year or$20 M • Debt finance$57 M with either additional SRF and or Bond Financing • SRF Loan for up to$173.1 M • Closeout savings on projects CENTRAL SAN 10 5 PRICE INCREASES AND DIFFERENCES • Since 2017, Scope of work has not changed • Reasons for increased costs: • Seismic walls and Implication on Construction Sequencing • Project Construction Constraints and milestones • Temporary Facilities such as Electrical • MHF Shut Down for 12 months and additional 6 months-$19 M • Deferred Design: Pipe and Electrical Conduits Supports and routing • Temporary Shoring Design for Seismic Walls • Ash system and metal building • Existing Electrical Systems issues • Electrical on critical path • 1,460 Days or over 4 years of Construction • Limited bidders–electrical and temporary sludge hauling • Bid Market Impacts • Global Supply Disruption during COVID-19 CENTRALSAN TENTATIVE PROJECT SCHEDULE • Bids opened on June 16, 2021 • Total State Revolving Fund (SRF)Funding Estimate-$173 million(M) I 7I ;ti e • SRF: • Final Agreement will be executed after bid opening and award of project • Anticipated Award: September 2,2021 • Initial Notice to Proceed(NTP)for Project and contract review:estimated November 2021 I - " • NTP for Construction:estimated March 2022 • Construction Period: 1,460 days — -- — -- — • Construction Complete:estimated April 1,2026 r 12 CENTRAL SAN 12 6 ALTERNATIVES • Alternative 1:Award the Contract Award the project to Kiewit but proceed with a two-step NTP. Evaluate and review project sequencing,milestones,costs,and more ways to reduce risks for the contractor and Central San.Staff will report back prior to issuing a NTP for construction. Recommended. • Alternative 2:Reiect Bids Not Recommended. • A)Rebid the Proiect:Staff would conform all the addenda with the contract documents,evaluate and incorporate more ways to reduce risks to the contractor and rebid within 6-9 months. • B)Rebid within Approved Budget:Staff could repackage and rebid the project to proceed within the$183.9 M budget and add a future project(s)to complete the remainder of the scope. • C)Consider Design-Build Proiect Delivery:Staff could evaluate alternative delivery to complete the project using design-build and use the existing Solids Project's bid documents as the basis. 13 CENTRAL SAN 13 ALTERNATIVES (CONTINUED) • Alternative 2:Reject Bids(Continued) • D.)Repackage Proiect in Multiple Phases:Staff could split and implement the Solids Project scope into multiple phases.This would include rebidding in various smaller projects which could be implemented in either two or up to six phases and take more years to complete. • Alternative 3:Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions with all new Solids Facilities:Staff recommends re-evaluating the long-term solids handling from current operations based on furnaces,ash disposal and steam recovery to including or changing to anaerobic digestions based on the higher costs of the Solids Project.Recommended. 14 CENTRALSAN 14 7 RE-EVALUATE LONG-TERM PATH FOR SOLIDS HANDLING AT CENTRAL SAN Alternative 1:Award based Alternative 3: Re-Evaluate on Contractor Design Assist Long-Term Solids Handling and reduce risk after VE Refurbish All New Project: Multiple --Anaerobic Hearth Digestion and Furnaces, 7 Biogas Co-Gen. continue with Abandon Steam. Steam and Convert to all Co-Gen with ` Electric Blowers Natural Gas Evaluate both = _ paths before NTP for construction 15 CENTRALSAN 15 CONSTRUCTION SCHEDULE Bid and Award NTP-1:Solids Handling Phase 1 Optimization VE with Kiewit Board decision on Alternative Path for Long-Term -Solids Handling NTP-2:for Construction Construction Alternative Long-Term Solids Handling Alternatives Evaluation BEE July 2021 July 2022 July 2023 July2024 July 2025 July 2026 Q Lila ana Award:February 22,2021—September 2,2021 NTP-1:Solids Handling Contract review with Kiewit and Engineering:October 2021—Feb.2022 Q Alternative Long-Term Solids Handling Alternatives Evaluation:September 2021—Feb.2022 Update Board in Feb.2020 and request approval for construction Q NTP-2:Proceed with Kiewit for Solids Handling Phase 1 Construction:March 2022 Construction Phase:March 1,2022—February 28,2026(1,460 Days) l l 16 CENTRAL SAN 16 8 PROJECT SUPPORT NEEDED • Construction Management: MWH Constructors, Inc. • Engineering Services During Construction: • Black & Veatch: Civil, Mechanical, HVAC, Electrical Instrumentation and Control Engineering (EAC) • HDR, Inc.: Architectural, Structural, and As-Needed • Degenkolb: Seismic Design • Aresine Engineering: Assist Capital Projects with Review of Electrical and Controls Items and Questions • (TBD): Furnace and Air Pollution Control • Others: Central San will be using As-Needed Engineering 17 CENTRALSAN 17 RECOMMENDED BOARD ACTION 1. Conditional award of a construction contract in the amount of $179,841,000 to Kiewit Infrastructure West Co., the lowest responsive and responsible bidder, for the construction of the Solids Handling Facility Improvements, District Project 7348. 2. Authorize the General Manager to amend the following agreements: a) MWH Constructors, Inc. at a cost not to exceed $12.0 million, increasing the cost ceiling to $13.1 million for construction management services. b) Black&Veatch at a cost not to exceed $4.0 million, increasing the cost ceiling to$13.6 million for engineering support during construction. c) Aresine Engineering at a cost not to exceed $1.1 million, increasing the cost ceiling to $1.7 million for electrical engineering support. d) Carollo Engineers, Inc. at a cost not to exceed $900,000, increasing the cost ceiling to $2.2 million for electrical field support. (continued)` r 18 CENTRALSAN 18 9 RECOMMENDED BOARD ACTION (CONTINUED) 3. Authorize the General Manager to execute the following new agreements for engineering support during construction: a) HDR, Inc. at a cost not to exceed $1.0 million. b) Degenkolb Engineers at a cost not to exceed $650,000. 4. Authorize the General Manager to execute Contract Documents subject to SRF funding, submittal requirements, and include up to a 15-percent project contingency. ` 19 CENTRALSAN 19 QUESTIONS? r zo 20 10