HomeMy WebLinkAbout04.a. Review Draft Position Paper to authorize the General Manager to increase construction contract change order from $800,000 to $1,500,000 with C. Overaa & Co. for sludge blending and emergency storage tanks District Project 7348Page 1 of 8
Item 4.a.
DCENTRALSAN
MEETINGDATE: JANUARY15,2025
BOARD OF DIRECTORS
POSITION PAPER
DRAFT
SUBJECT: REVIEW DRAFT POSITION PAPER TO AUTHORIZE THE GENERAL
MANAGER TO INCREASE A CONSTRUCTION CONTRACT CHANGE
ORDER FROM $800,000 TO $1,500,000 WITH C. OVERAA & CO. FOR
ADDITIONAL WORK ON THE SLUDGE BLENDING AND EMERGENCY
STORAGE TANKS UNDER THE SOLIDS HANDLING FACILITY
IMPROVEMENTS - PHASE 1A, DISTRICT PROJECT 7348
SUBMITTED BY: INITIATING DEPARTMENT:
CRAIG MIZUTANI, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES-
EDGAR J. LOPEZ, CAPITAL PROJECTS CAPITAL PROJECTS
DIVISION MANAGER
REVIEWED BY: GREG NORBY, DEPUTY GM - ENGINEERING & OPERATIONS
ROGER S. BAILEY, GENERAL MANAGER
ISSUE
Authorization from the Board of Directors (Board) is required to execute a construction contract change
order in an amount greater than $200,000.
BACKGROUND
The sludge blending tank (SBT), located at the Martinez wastewater treatment plant, is crucial for the
sludge dewatering process and furnace operations, and is under construction for a new lightweight
concrete cover and piping modifications. On October 17, 2024, the Board authorized a construction
contract change order to the Solids Handling Facility I mprovements - Phase 1 A, District Project 7348
(Project) for additional work including specialty coatings and industrial cleaning of the tank and existing
piping systems.
To date, the specialty coatings work is complete. The general contractor, C. Overaa & Co. has hired a sub-
contractor and initiated the industrial cleaning of the SBT and associated piping systems. RES from
Pittsburg is performing the industrial cleaning and has successfully completed work at Central San in the
past. After several detailed field investigations and meetings, it was determined that additional costs were
needed to fully complete the cleaning of the systems along with extending the scope to the emergency
storage tank (EST).
The EST is located next to the SBT and is in service while the Project construction is taking place. It is
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estimated that the EST will be in operation for up to 10 months and will require additional inspections and
industrial cleaning similar to the SBT due to lime. Central San uses and mixes activated lime in the tanks to
help the furnace to produce consistent and acceptable ash to deliver off site. I n time, the lime builds up in
the tank and against the interior piping and reduces the internal diameter for flow causing burden to the
sludge blending pumps and potential failures related to over -pressuring the system. A temporary lime
system has been in place for the EST, and it is unknown how much cleaning will be required or how the
system will be impacted by the long duration of service. Therefore, staff is requesting an increase to the
cost ceiling of the change order to ensure that the SBT and EST are reliable and in optimal condition for
the Project and for the treatment plant operations.
The industrial cleaning was not included in the contract specifications, however, is within the scope of the
Project work and can be included in the contract as additional work due to unforeseen conditions upon
Board authorization.
ALTERNATIVES/CONSIDERATIONS
Time is of the essence for the proposed work as the Project is scheduled for a major shutdown of one
furnace starting at the end of February. This work will need to be completed by then for Operations to
switch furnaces as planned and as previously stated to continue reliable storage of sludge during the 18-
month furnace outage and for the overall Project improvements. The EST work could be performed later;
however, it is in the best interest of the Project and overall costs to perform the work sooner to avoid
added work to Operations, mobilizing another specialty contractor, or delaying the industrial cleaning and
risk storage capabilities while the Project is ramping up in construction with furnace and dewatering
equipment activities.
FINANCIAL IMPACTS
The increase to the construction contract change order is estimated at $700,000, which will result in a total
cost of $1,500,000 for the work. The Project has adequate contingency approved by the Board at
$13,000,000. Change orders total approximately $965,408 as of November 2024 and includes the
coatings work. Once the industrial cleaning is complete, the estimated total will be approximately
$2,100,000. The total construction contract is valued at $126,288,000. Change orders to date equate to
roughly 0.8 percent of the total construction contract. Twenty-five percent of the contract time has expired
and 25 percent of the contract or $32,690,228 has been spent.
COMMITTEE RECOMMENDATION
The Engineering and Operations Committee reviewed this subject at its meeting on January 15, 2025, and
recommended
RECOMMENDED BOARD ACTION
Authorize the General Manager to increase a construction contract change order from $800,000 to
$1,500,000 with C. Overaa & Co. for additional work on the sludge blending and emergency storage tanks
under the Solids Handling Facility I mprovements - Phase 1 A, District Project 7348.
Strategic Plan re -In
GOAL ONE: Customer and Community
Strategy 1— Deliver high -quality customer service
GOAL TWO: Environmental Stewardship
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Strategy 1 - Achieve compliance in all regulations
GOAL FOUR: Governance and Fiscal Responsibility
Strategy 3 - Maintain financial stability and sustainability
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 1 - Manage assets optimally, Strategy 2 - Execute long-term capital renewal and replacement program
ATTACHMENTS:
1. Presentation
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Attachment 1
January 15, 2025
Increase Construction
.0
Contract Change Order -•�=
Request - Sludge
Blending and Emergency,
Storage Tanks
Engineering and Operations
Committee Meeting
Edgar J. Lopez, P.E.
Capital Projects Division Manager
Sludge Blending Tank ,
(S BT)
Old digester repurposed to a storage
tank for blending solids/sludge prior
to the furnace handling process
Tank cover is being replaced under
the Solids Handling Facility
Improvements - Phase 1A with
C. Overaa & Co.
Tank exterior was retrofitted several
years ago with a fiber wrap, L -
including seismic considerations•��
Future plans to be an emergency
storage tank
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Board authorized
$800,000 Change Order
on October 17, 2024
Scope of work includes concrete
repairs and coatings and cleaning
of lime deposits within SBT and
existing piping systems
To date, repairs and coatings are
complete and cleaning is underway
The Solids - Phase 1A project has a
four-year duration; conducting the
work now is cost -beneficial and
provides the needed reliability
during the project for furnace or
dewatering equipment retrofits
Change Order Costs
Original estimate of $800,000:
$380,000 for specialty coatings
(Actual $394,000 paid)
$420,000 for lime deposit cleaning
(In progress and increase in costs)
Cleaning of the tank and piping systems
requires hiring of specialty expert sub-
contractor, RES from Pittsburg, for
industrial cleaning
�1
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Before Cleaning 4
13
Change Order Costs (Cont.)
New estimate of $1,500,000:
$394,000 for specialty coatings
$1,106,000 for lime deposit cleaning for
the two tanks
The $700,000 is due to the addition of the
emergency storage tank and increase in
costs for the SBT, such as specialty
equipment rentals and disposal
p
ue A
x;
After Cleaning
i ;W
` `�``}
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Emergency Storage Tank
(EST) Y
Currently in operation as the SBT is
under construction 'wF
EST will be in operation for up to 10
months, the longest period experienced 1
by current staff or possibly ever
EST and duration of the temporary lime
system has caused additional work once��
the SBT is back in service y
Reliable sludge storage is critical as the t- "
first furnace is scheduled to be�
shutdown for 18 months starting at the
end of February
Recommended Board Action
Authorize the General Manager to OWN
increase a construction contract change
order from $800,000 to $1,500,000 with
C. Overaa & Co. for additional work on - — the sludge blending and emergency
storage tanks under the Solids Handling
Facility Improvements - Phase 1A,
District Project 7348.
i
t
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