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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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 9 of 18 Page 2 of 8 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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 10 of 18 Page 3 of 8 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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 11 of 18 Page 4 of 8 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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 12 of 18 Page 5 of 8 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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 13 of 18 Page 6 of 8 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 ` `�``} January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 14 of 18 Page 7 of 8 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 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 15 of 18 Page 8 of 8 January 15, 2025 EOPS Regular Committee Meeting Agenda Packet - Page 16 of 18