HomeMy WebLinkAboutEngineering & Operations MINUTES 08-17-21 Page 2 of 17
CENTRAL SAN
CENTRAL CONTRA COSTA SANITARY DISTRICT 5019 IMHOFF PLACE, MARTINEZ, CA 9A553-A392
REGULAR MEETING OF THE BOARD OF TADJPI ECK
TAD J PILECKI
CENTRAL CONTRA COSTA President
VID R.SANITARY DISTRICT °A Prresidesid wILLIAem
ent Pro Tem
ENGINEERING & OPERATIONS BARBARA D.HOCKETT
COMMITTEE MARIAH N.LAURITZEN
MICHAEL R.MCGILL
MINUTES PHONE: (925)228-9500
FAX.- (925)372-0192
Tuesday, August 17, 2021 www.centralsan.org
11:00 a.m.
(All attendees participated via videoconference)
Committee:
Member Mariah Lauritzen
Member Tad Pilecki (alternate for Chair D. Williams)
Staff.
Roger S. Bailey, General Manager
Kenton L. Alm, District Counsel
Katie Young, Secretary of the District
Philip Leiber, Director of Finance and Administration
Jean-Marc Petit, Director of Engineering and Technical Services
Danea Gemmell, Planning and Development Services Division Manager
Edgar Lopez, Capital Projects Division Manager
Thomas Brightbill, Senior Engineer (left during Item 4.a.)
Nathan Hodges, Senior Engineer
Amelia Berumen, Assistant to the Secretary of the District
1. Notice
This meeting was held in accordance with the Brown Act as in effect under the
State Emergency Services Act, the Governor's Emergency Declaration related
to COVID-19, and the Governor's Executive Order N-29-that allowed
attendance by Board Members, District staff, and the public to participate and
conduct the meeting by teleconference, videoconference, or both. The agenda
included instructions for options in which the public could participate in the
meeting.
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2. Call Meeting to Order
Member Lauritzen called the meeting to order at 11:00 a.m.
3. Public Comments
No public comments.
Member Lauritzen indicated the meeting would need to end by Noon.
4. Agenda Items
a.* Review draft Position Paper to award a construction contract in the
amount of$179,841,000 to Kiewit Infrastructure West Co. (Kiewit), 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
(B&V); 2) MWH Constructors, Inc.; 3) Aresine Engineering (Aresine);
and 4) Carollo Engineers, Inc., as stipulated within;
• Execute two professional services agreements for engineering
support during construction with: 1) HDR, Inc. in an amount not to
exceed $1 million; and 2) Degenkolb Engineers in an amount not to
exceed $650,000; and
• Include a contingency up to 15-percent for the project
Mr. Petit reviewed a modified presentation than was included with the
agenda materials (attached). He continued with an in-depth recap from
prior Committee project updates of the various project components,
stages, and the overall multiple project complexities throughout the design
and bidding phases.
Of particular note for this discussion, the four-year construction duration in
order to keep the facility functioning during the work has been a complexity.
Bid Period Challenges:
During the multiple pre-bid meetings, prequalified contractors started to
wane as the project was considered risky with numerous electrical
elements and schedule challenges. One of the nine addenda had an
extensive array of electrical components to provide clarification of details
not identified in the original bid documents, as well has widespread
temporary power requirements. Of the seven prequalified general
contractors, three bid, and, of the eight electrical subcontractors, only two
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participated. There was a large cost difference between the three bids
received.
With regard to the electrical addendum, Aresine was used to assist with the
electrical review of the B&V design. Aresine's continued services, as well
as other listed consultants, are a part of staff's pending recommendation
for the Board to authorize cost ceiling increases to some existing
agreements and execution of other new agreements.
It was noted that material price increases were another issue, and the
aforementioned four-year construction duration was reflected in the pricing
as well.
Cost Estimate Budget Escalations:
On slide 7, Mr. Petit discussed the cost estimate progression over the last
five fiscal years.
Mr. Bailey stated this is a very important project and noted this slide
demonstrates the uncertainty with the budgeted figures and clearly shows
outstanding escalations. He shared a viewpoint of some issues that need
to be resolved, including:
• Cost from inception to date; nearly$200 million more, a
fundamental issue;
• What is the best solution to treat solids now;
• Given where the cost is at $261.3 million, what is the optimal
solution for handling solids;
• Explore the bid to determine if there are opportunities for value
engineering and concurrently look at opportunities for handling
solids in a comprehensive way,
• Consider the handling of solids over a period of time and some
tasks that need to be done in the next twenty years; and
• Should staff look at an opportunity to do an ultimate solution now
with the cost currently faced than it originally envisioned.
With that shared, Mr. Bailey stated staff was not asking for a
recommendation today but to consider authorizing the General Manager
to enter into an arrangement with Kiewit with conditions to explore these
options discussed.
From a Board Member's perspective, Member Pilecki stated it is difficult to
put one's hands around this project's latest development. He
recommended it would be helpful to include a column to show what the
construction cost was rather than the total project cost during these
periods. Additionally, the project scope changed over time as well. For
example, in FY 2017-18 the project cost was about $60 million, but did not
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include relocation of an electrical room. Member Pilecki further suggested
it would be helpful to add a column of major components of the projects,
starting in FY 2017-18 forward, to show what may have caused the
increase in cost over the fiscal years and components that were not
always part of a defined scope of work.
Post Bid/Pre-Construction Estimate: (shown on slide 8 and Attachment 4)
Several topics were discussed, the main items summarized below:
• Mr. Petit clarified for Member Pilecki that the procured items are
within the general contractor bid cost on line 1.a. The contractor
would buy the pre-procured equipment (centrifuges, cake pumps,
and wet scrubbers) and install. To further clarify, Mr. Petit stated
the $496,000 expense, shown in section 3 of the table, was for
shop drawings and other work for that equipment. The District is not
obligated to purchase the equipment should the project be
canceled or all bids rejected. Member Pilecki stated this dynamic
was not clear in the draft Position Paper; staff will address in the
final Position Paper.
• Staff recommends a 15% project contingency. Many factors were
discussed for this proposed threshold, including:
o Project has a lot of risk associated with sequencing and
electrical;
o There is a lot to field verify with the contractor; reducing risk
during the field verification may help reduce cost to all
parties involved, including rate payers;
o Project is higher than estimated,
o Air permit threshold for furnace air limits reaching 50% of
original cost, adjusted for inflation, would require operation
under new multiple hearth furnace limits and add additional
project cost and air pollution control equipment.
Mr. Lopez cautioned that staff does not yet know the furnace limit
possibility and has not yet looked at the schedule of values with
Kiewit. Staff is looking at other alternatives and will not know until
under contract and under review.
Member Pilecki stated these factors shared need to be highlighted at
the upcoming special Board workshop and the contingency amount
needs a more detailed justification in the final Position Paper.
• Line item 1.e., the Emergency Sludge Loading Facility was
originally included in the project budget but was later removed and
made its own project. It was noted the improved facility would not
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be eligible for State Revolving Fund (SRF) reimbursement.
• Section 2.b., Consultants. In short, the construction management
services shown would be for the four-year construction duration.
There was discussion about the continued use of the design
consultant, B&V, for additional engineering services during
construction. It was clarified that B&V is the designer of record and
would be liable should something go astray. Staff has built a
suitable engineering support team with the consultants and
disciplines proposed in this section.
Value Engineerinq and a two-phase Notice to Proceed (NTP):
Mr. Petit discussed the consideration to value engineer the project to
confirm its approach, milestones and sequencing, and sludge hauling. He
noted that if some risk and elements could be reduced, staff would report
its findings after the task conclusion and could go to the Board with an
NTP for construction and potentially lower the numbers significantly.
Member Pilecki questioned the two-stage NTP proposal. He highlighted a
comment in the draft Position Paper that the bid period could not be
further extended because supplier and vendors needed to have contracts
validated, otherwise, there would be additional costs incurred. However, if
the Board were to move forward with staff's proposal, it would take several
months. Lastly, if the project does not move forward, he asked about all
the costs tied into the subcontractors, suppliers, etc.
Mr. Petit stated staff met with Kiewit and they also liked the value
engineering concept. However, the project would need to be awarded to
Kiewit and an immediate change order executed to include that step.
Moreover, such evaluation may not need all of the bid bond and other
construction type details. After the value engineering is completed, all
parties would have a better definition of the job and whether any cost had
changed. Kiewit would be compensated for their time on a predetermined
fee schedule.
Mr. Alm stated these contract specifications were developed by B&V that
used a national standard specifications model and incorporated different
provisions within. These specifications included helpful specific language
to address current circumstances, but the contract cannot be changed or
negotiated before award. He cited specific sections within the General
Conditions of the bid documents, including Section 8.10.B, Termination for
Convenience, and Section 9.08, which has significant detail about the
value engineering proposal.
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Discussion continued about the detail within these specifications to
provide clear direction for termination for convenience and five different
alternatives that could properly justify such action. The value of
engineering section includes how to evaluate proposals and costs.
Compared to typical District specifications, these documents provide a lot
of helpful information on how to proceed with such an approach that is not
typically taken and makes this option possible.
Moving forward, Mr. Petit mentioned that good headway has been made
with the SRF financing loan; two signatures are pending. The project
financing will be addressed at the special workshop scheduled on August
26 with the Board.
Due to time constraints, the discussion ceased at this point.
COMMITTEE ACTION: Received the information and provided input
to staff.
5. Announcements
Due to time constraints, there were no announcements.
6. Suggestions for Future Agenda Items
Due to time constraints, there was no discussion.
7. Future Scheduled Meetings
Tuesday, September 21, 2021 at 11:00 a.m.
Tuesday, October 12, 2021 at 11:00 a.m.
Tuesday, November 9, 2021 at 11:00 a.m.
8. Adjournment— at 12:00 p.m.
*Attachment
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Page 8 of 17
(Handout)
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?
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Page 9 of 17
SOLIDS HANDLING FACILITY IMPROVEMENTS
(SOLIDS PROJECT PHASE 1
1 2 2 3 4 5 6 7 8 Completed related
rte°el cts
Emergency Sludge
w Loadout
Emergency exterior
stairways
-� Digester demolition
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
AV
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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
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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
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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
-Erau,pme 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
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September 2, 2021 Regular Board Meeting Agenda Packet- Page 184 of 199
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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
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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
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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 �' I
• Total State Revolving Fund (SRF)Funding
Estimate-$173 million(M) ; r
• 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
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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.
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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.
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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
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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 Aw BEE
July 2021 July 2022 July 2023 July2024 July 2025 July 2026
Q L-. —ward: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
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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
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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)
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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.
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QUESTIONS?
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