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HomeMy WebLinkAbout11. Amend existiing Professional Engineering Services Agreement with MWH Constructors, Inc. and Stantec for Filter Plant and Clearwell Improvements DP 7361Page 1 of 5 Item 11. DCENTRALSAN MEETING DATE: JULY25, 2024 BOARD OF DIRECTORS POSITION PAPER SUBJECT: AUTHORIZE THE GENERAL MANAGER TO AMEND AN EXISTING PROFESSIONAL ENGINEERING SERVICES AGREEMENT I N AN AMOUNT NOT TO EXCEED $300,000 WITH MWH CONSTRUCTORS, INC. (MWH), INCREASING THE AGREEMENT FROM $3,200,000 TO $3,500,000 FOR CONSTRUCTION MANAGEMENT SERVICES; AMEND AN EXISTING PROFESSIONAL ENGINEERING SERVICES AGREEMENT I N AN AMOUNT NOTTO EXCEED $580,000 WITH STANTEC, INCREASING THE AGREEMENT FROM $5,852,000 TO $6,432,000; AND AUTHORIZE A BUDGET TRANSFER I N THE AMOUNT OF $2,320,000 FROM THE CAPITAL IMPROVEMENT BUDGET CONTINGENCY FOR THE FILTER PLANT AND CLEARWELL IMPROVEMENTS, PHASE 1A, DISTRICT PROJECT 7361 SUBMITTED BY: INITIATING DEPARTMENT: CRAIG MIZUTANI, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES - CAPITAL PROJECTS REVIEWED BY: EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER GREG NORBY, DEPUTY GM - ENGINEERING & OPERATIONS Roger S. Bailey General Manager ISSUE Authorization from the Board of Directors (Board) is required to execute an amendment to a professional engineering services agreement for amounts greater than $200,000 and transfer more than $500,000 within the Capital Improvement Program. BACKGROUND On August 20, 2020, the Board awarded a $26.6 million construction contract to C. Overaa & Co. (Overaa), a $1,300,000 amendment to Stantec for engineering services during construction (ESDC), and a $2,100,000 agreement to provide construction management (CM) services with MWH Constructors, I nc. July 25, 2024 Special Board Meeting Agenda Packet - Page 60 of 188 Page 2 of 5 (MW H) for the Filter Plant and Clearwell Improvements, Phase 1 A, District Project 7361 (Project). At time of award, the ESDC and CM costs total approximately 12.4 percent of the construction costs. The bid provided by Overaa was significantly competitive and below the engineer's estimate by $8,000,000, not including any additive bid items. Overaa was also about $3,000,000 below the second lowest bidder. This Project includes major civil, electrical, instrumentation and controls, mechanical, and process renovations and improvements for the Recycled Water/Filter Plant area. Major elements of the Project include: • Construction of two new recycled water storage tanks and associated filtered effluent lift station • Construction of a new 12kV electrical substation, including feeders, transformers, switchgear, and motor control centers (MCCs) • Replacement of pump motors and variable frequency drives (VFDs) • Rehabilitation of one of the existing four filters with new underdrain system and media • Raising of levees near Wet Weather Basin C and construction of new roadways around the clearwell Construction of the Project commenced in October 2020 and was scheduled to be completed by October 14, 2022. The completion date has been revised several times due to supply chain -related delays in equipment delivery. Most notably, delivery of major electrical components such as VFDs, transformers, and MCCs was delayed by months. The delay in electrical equipment has had a trickle -down effect on the entire Project. Currently, it is anticipated that the completion of the Project will extend to early 2025. To ensure the continuation of Stantec's ESDC through the end of the Project, an additional $580,000 in funding is required and $300,000 for CM under MWH. Staff has been managing the resources as efficiently and effectively to support the progress of the construction since the original completion date. At times, staff has supplemented the service to be cost effective where feasible. 85 percent of the original contract work is complete with construction activities scheduled to ramp up in late July as all electrical items are on site. The remaining construction work includes some electrical installations, wire terminations, start-up, and commissioning. Construction is expected to continue until the end of this calendar year. Compliance testing and acceptance for Title 22 conducted by staff and Stantec will continue into the first quarter of 2025. Stantec is the design engineer for the Project and is providing ESDC, as well as permitting, commissioning, and technical services to verify the new recycled water tanks meet California State recycled water requirements (Title 22), as implemented by the Division of Drinking Water. Over the course of the Project, the following revisions to Stantec's agreement have been made: • Obtaining approval from the State to utilize computational fluid dynamics (CFD) in lieu of full scale testing for certain tests of the new tanks and hydraulic structures • Preliminary design for replacement of obsolete electrical gear (i.e. MCC 43) • Replacement of electrical feeders • Mechanical and HVAC upgrades to the Filter Building electrical areas Stantec's agreement costs of $5,852,000 consist of the original planning, predesign, and detailed design of the original Filter Plant and Clearwell I mprovements prior to the splitting and creation of Phases 1 A and 1 B. Phase 1 A is in construction, while Phase 1 B is in detailed design scheduled to be completed this year. The agreement was revised on two occasions to also include ESDC on August 20, 2020, for the construction of Phase 1 A and again on May 18, 2023. As for MW H, the cost ceiling for the agreement was increased from $2,100,000 to $2,600,000 at the September 2, 2021 Board meeting for additional services. Then, due to supply chain -related construction delays, MW H's agreement was extended and increased from $2,600,000 by $400,000 at the May 18, 2023 Board meeting. Staff included an additional $200,000 on November 20, 2023 under the General Manager's delegated authority. The current total contract amount is $3,200,000. An additional $300,000 is required to complete the CM services. The value of the CM services is expected to be over 50 percent the original estimate and contract value, however the construction duration has exceeded the time July 25, 2024 Special Board Meeting Agenda Packet - Page 61 of 188 Page 3 of 5 anticipated by over two years or 100 percent. The original construction contract amount was $26,584,000. To date, with the addition of approved change orders, the current contract value is $29,214,436. The value of outstanding and future change orders is anticipated to be approximately $650,000. Outstanding and future change orders include some of the following additional expenses: removal of the clearwell dividing wall, switchgear wiring, fire department access road, electrical feeder testing, turbidimeters, and changes for State of California Title 22 recycled water compliance. The total construction contract amount at project completion is anticipated to be $29,864,000. To date, $39,610,777 has been spent on the Project. It is anticipated that at the completion of the Project, with the additional costs for CM services and the other listed additional expenses, the total project cost will be approximately $42,709,000. The current budgeted amount for the Project is $40,389,000. Therefore, an additional $2,320,000 will be required to complete the Project. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) At its August 20, 2020 meeting, the Central San Board of Directors independently found that this Project is exempt from CEQA under Central San's CEQA Guidelines Section 15301, since it involves replacement of existing sewer facilities at substantially the same locations and with the same purpose and level of activity as the facilities being replaced. ALTERNATIVES/CONSIDERATIONS Staff considered several alternatives and does not recommend any of the following: Alternative 1 — Do not amend the ESDC contract with Stantec and complete the Project utilizing District staff. This is not recommended as Stantec has provided in-depth ESDC services and has intimate knowledge of the design that would be difficult to provide at this point in the project. Stantec has the technical knowledge and services to help support the Title 22 certification required by the State of California. Alternative 2 — Do not amend the existing ESDC or CM agreements and complete the services utilizing one of the other consulting firms with as -needed services to complete the Project. The District has several engineering and construction -related services agreements with other consulting firms. However, those firms would have to learn the details of a project that has been ongoing for over four years. The cost and time required to bring another firm on -board makes this alternative unfeasible. FINANCIAL IMPACTS The total cost to complete all aspects of the project is estimated at $42,709,000 which includes planning, engineering, design, construction, testing, CM services, regulatory expenses, contingency, and all other necessary expenses. The total project budget at the time of award was $38,589,000 and increased to $40,389,000. To date, $39,610,777 has been spent and detailed in Attachment No. 1. Staff recommends increasing the total project budget by $2,320,000 to cover the additional project costs caused by supply -chain equipment and schedule delays, which would result in a new total project budget of $42,709,000 (approximately 110.6 percent of the original total project budget). Roughly 30 percent of the project costs is estimated to be for planning, design, and construction management or 41 percent related to the construction costs. Typical projects can range at a value of 25-35 percent of the construction costs; therefore, this project is estimated to be over by 6-16 percent due to the low bid price received and the two years of added time to construct the project. July 25, 2024 Special Board Meeting Agenda Packet - Page 62 of 188 Page 4 of 5 Adequate funds are available within the Fiscal Year (FY) 2024-25 Capital Improvement Budget Contingency; therefore, upon Board approval, a budget transfer in the amount of $2,320,000 would be completed to fund this additional scope of work. To date, there is adequate funding of $3,800,000 in the FY 2024-25 Contingency account. With the approval of the proposed $2,320,000 budget transfer, there will be $1,480,000 remaining in the account. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this subject at its special meeting on July 15, 2024 and recommended approval. RECOMMENDED BOARD ACTION Staff recommends the following: 1. Authorize the General Manager to amend an existing professional engineering services agreement in an amount not to exceed $300,000 with MW H, increasing the agreement from $3,200,000 to $3,500,000 for construction management services; 2. Authorize the General Manager to amend an existing professional engineering services agreement in an amount of $580,000 with Stantec, increasing the agreement from $5,852,000 to $6,432,000 for engineering services during construction; and 3. Authorize a budget transfer in the amount of $2,320,000 from the FY 2024-25 Capital Improvement Budget Contingency to fund the construction of the Filter Plant and Clearwell Improvements, Phase 1A, District Project 7361. Strategic Plan Tie -In GOAL TWO: Environmental Stewardship Strategy 1 - Achieve compliance in all regulations, Strategy 3 - Be a partner in regional development of local water supply, Strategy 4 - Identify and advance sustainability initiatives, including reducing energy usage and emissions GOAL FIVE: Safety and Security Strategy 1 - Reduce and eliminate risks of injury or illness, Strategy 2 - Protect personnel and assets from threats and emergencies GOAL SIX. Infrastructure Reliability Strategy 2 - Execute long-term capital renewal and replacement program ATTACHMENTS: 1. Total Estimated Project Costs Update July 25, 2024 Special Board Meeting Agenda Packet - Page 63 of 188 Page 5 of 5 ATTACHMENT 1 FILTER PLANT AND CLEARWELL IMPROVEMENTS, PHASE 1A DISTRICT PROJECT 7361 TOTAL ESTIMATED PROJECT COSTS UPDATE No. Item Description Current Budget Proposed Increases Revised Budget 1 CONSTRUCTION a. Construction Contract w/ additive items $26,584,000 $26,584,000 b. Contingency $2,735,000 $800,000 $3,535,000 d. Permit $100,000 $100,000 SUBTOTAL - CONSTRUCTION 2 CONSTRUCTION MANAGEMENT a. District Forces - Project Management $1,075,000 $240,000 $1,315,000 - Operational Support $325,000 $150,000 $475,000 - Regulatory Support $220,000 $150,000 $370,000 b. Consultants - Stantec ESDC* $1,550,000 $580,000 $2,130,000 - MWH Construction Management Services* $3,000,000 $300,000 $3,300,000 - Material Testing $300,000 $100,000 $400,000 - Geotechnical $100,000 $100,000 SUBTOTAL - CONSTRUCTION MANAGEMENT 3 PREBID EXPENDITURES a. Engineering - Planning and Pilot Studies $2,000,000 $2,000,000 b. Engineering - Design and Permitting $2,300,000 $2,300,000 c. Permitting $100,000 $100,000 4 TOTAL COSTS $40,389,000 $2,320,000 $42,709,000 * Consultant budgets only for construction phase, agreements includes planning, design services, and constructability reviews as well as services for the Phase 1 B project. Ex. MWH Construction review in design $200k. July 25, 2024 Special Board Meeting Agenda Packet - Page 64 of 188