HomeMy WebLinkAbout03.a. Draft Position Paper to Authorize the General Manager to Execute an Amendment to an Existing Services Contract with Alfred Conhagen, Inc. NTE $150,000 with Total Cost Ceiling to $322,250 for Completed Repairs to the Spare Steam Turbine RotorPage 1 of 2
Item 3.a.
DCENTRALSAN
MEETING DATE: APRIL 3, 2023
BOARD OF DIRECTORS
POSITION PAPER
DRAFT
SUBJECT: REVIEW DRAFT POSITION PAPER TO AUTHORIZE THE GENERAL
MANAGER TO EXECUTE AN AMENDMENT TO AN EXISTING SERVICES
CONTRACT WITH ALFRED CONHAGEN, INC. IN AN AMOUNT NOT TO
EXCEED $150,000, BRINGING THE TOTAL COST CEILING TO $322,250
FOR COMPLETED REPAIRS TO THE SPARE STEAM TURBINE ROTOR
SUBMITTED BY: INITIATING DEPARTMENT:
CLINTSHIMA, SENIOR ENGINEER OPERATIONS -MAINTENANCE
REVIEWED BY: NEIL MEYER, PLANT MAINTENANCE DIVISION MANAGER
PAUL SEITZ, PROVISIONAL DIRECTOR OF OPERATIONS
ISSUE
In accordance with purchasing procedures, Board of Directors (Board) authorization is required for the
General Manager to amend a services contract when the total amount exceeds the staff authority of
$200,000.
BACKGROUND
Central San operates two 2,950-hp steam -driven blowers to provide oxygen for the secondary treatment
process. When one turbine is online, the other serves as its backup. The new magnetic bearing electric
blowers, commissioned earlier this year, also provide redundancy.
Last year, Central San hired Alfred Conhagen, Inc. (Conhagen) to rebuild Aeration Unit #2 steam turbine.
When disassembling the steam turbine, a considerable amount of damage was found in the nozzle block
and throttle valve and the Board declared an emergency situation. Also, because of the substantial wear,
the existing rotor was removed and the spare rotor was installed. Plant Maintenance plans to perform an
overhaul of Aeration Unit #1 steam turbine later this year and expects to encounter a similar amount of
damage. Therefore, Plant Maintenance proceeded with repairing and balancing the rotor that was removed
from Aeration Unit #2 to be available as a spare for Aeration Unit #1.
Competitive pricing was obtained for the rotor repair work by Purchasing using the informal Request for
Quotations process. The repair scope includes cleaning, replacing the third stage turbine blades, as well
as low and high-speed balancing. Conhagen submitted the only bid of $134,875 and was awarded the
contract. When work began, Conhagen was unable to remove the blade wheels from the shaft, the shaft
April 3, 2023 EOPS Regular Committee Meeting Agenda Packet - Page 3 of 192
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needed to be cut out, and a new shaft had to be fabricated. The extra cost for the shaft work was $37,375,
bringing the total contract amount to $172,250. For comparison, purchasing a new shaft from the original
equipment manufacturer (OEM) would be approximately double the cost.
Conhagen has discovered that the seventh stage blades are not wedged properly and must be repaired.
Since the blades are partially worn, the blades should be replaced before re -wedging the wheel. The cost
for these additional repairs is approximately $150,000, bringing the total contract amount above the
$200,000 General Manager authority limit. Staff is seeking the Board's approval to amend the contract.
ALTERNATIVES/CONSIDERATIONS
Central San could purchase a new rotor from the OEM at a cost of approximately $1,300,000 with a lead
time of at least one year.
FINANCIAL IMPACTS
Funds to cover this contract amendment are available in the Plant Maintenance Fiscal Year 2022-23
Budget.
COMMITTEE RECOMMENDATION
The Engineering and Operations Committee reviewed this matter at its April 3, 2023 meeting and
recommended
RECOMMENDED BOARD ACTION
Authorize the General Manager to amend a services contract with Alfred Conhagen, I nc. in an amount not
to exceed $150,000 bringing the total cost ceiling to $322,250 for repairs to the spare steam turbine rotor.
Strategic Plan Tie -In
GOAL FIVE: Safety and Security
Strategy 1 - Reduce and eliminate risks of injury or illness
April 3, 2023 EOPS Regular Committee Meeting Agenda Packet - Page 4 of 192