Title
MOTION TO APPROVE A CHANGE ORDER TO IFB # PSUT-23-08 "WATER TREATMENT PLANT ELECTRICAL RENOVATION" IN THE AMOUNT NOT TO EXCEED $277,324.92, WHICH INCLUDES AN OWNER’S CONTINGENCY IN THE AMOUNT OF $75,000.00 AND A PAYMENT AND PERFORMANCE BOND IN THE AMOUNT OF $7,386.74, FOR THE REPLACEMENT OF THE EXISTING DIESEL TANKS AT THE WATER PLANT.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinances is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.15 defines an Invitation for Bid as “A written solicitation for competitive sealed bids with the title, date and hour of the public bid opening designated therein and specifically defining the commodities or services for which bids are sought. The invitation for bid shall be used when the city is capable of specifically defining the scope of work for which a service is required or when the city is capable of establishing precise specifications defining the actual commodities required. The invitation for bid shall include instructions to bidders, plans, drawings and specifications, if any, bid form and other required forms and documents to be submitted with the bid.”
- Section 35.18 of the City's Code of Ordinances is titled "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(A) states, "A purchase of or contracts for commodities or services that is estimated by the Chief Procurement Officer to cost more than $100,000 shall be based on sealed competitive solicitations as determined by the Chief Procurement Officer, except as specifically provided herein."
- Section 35.19 of the City's Code of Ordinances is titled "SEALED COMPETITIVE BIDDING PROCEDURE."
- Section 35.19(A) states "All sealed competitive solicitations as defined in § 35.18 shall be presented to the City Commission for their consideration prior to advertisement."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $100,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
- Section 35.15 defines CHANGE ORDER. "Changes, due to unanticipated conditions or developments, made to an executory contract, which do not substantially alter the character of the work contracted for, and which do not vary so substantially from the original specifications as to constitute a new undertaking. The changes must reasonably and conscientiously be viewed as being in fulfillment of the original scope of the contract rather than as departing therefrom. Further, the changes, when viewed against the background of the work described in the contract and the language used in the specifications, must clearly be directed either to the achievement of a more satisfactory result or the elimination of work not necessarily to the satisfactory completion of the contract."
- Section 35.28 of the City's Code of Ordinances is titled "CHANGE ORDERS."
- Section 35.28(B) states that "Notwithstanding the provisions of division (A) above, the City Manager is not authorized to approve a change order without authorization of the City Commission where the initial purchase required the City Commission’s approval and where the sum of all change orders issued under the contract exceeds 10% of the original contract amount or $25,000."
SUMMARY EXPLANATION AND BACKGROUND:
1. On October 18, 2023, the City Commission authorized the advertisement of IFB # PSUT-23-08 "Water Treatment Plant Electrical Renovation", which was advertised on October 24, 2023.
2. The purpose of this solicitation was to seek proposals from qualified firms to furnish all labor, materials, equipment, services and incidentals for the Electrical Rehabilitation of the Water Treatment Plant (WTP) project.
3. On February 7, 2024, the City Commission awarded IFB# PSUT-23-08 to Edwards Electric Corp. in the amount not to exceed $4,248,950.00.
4. The electrical systems at the WTP are central to its operation. A detailed evaluation of these systems, performed by CH2M Engineers in 2020 as part of the development of the Utilities Comprehensive Master Capital Improvement Plan, concluded that they are at or close to the end of their useful lives and need to be replaced.
5. As the renovation work has proceeded, the Utilities Department and Edwards Electric Corp. have determined that additional work to replace the Main and Day diesel tanks is required to maintain safety standards and alignment with the other major electrical systems at the WTP.
6. The Day diesel tanks’ electrical system is in the same deteriorated condition that prompted the City to design and replace other major electrical systems at the Water Treatment Plant. Repairs of the existing system are becoming increasingly difficult due to the age of the equipment. Many of the required mechanical and electrical components are no longer manufactured or readily available in the open market, forcing staff to search for used replacement parts through secondary sources and online marketplaces. This creates challenges in obtaining parts in a timely manner and increases the risk of extended downtime and reliability issues.
7. The Utilities Department also completed an analysis of the Main tank and found that the cost of modifications that would bring it in line with today’s safety standards would entail work worth approximately 70 to 80 percent of the cost of a new tank.
8. Additionally, replacement of the tanks would provide further operational efficiencies through communications integration with the City’s updated SCADA systems and an estimated equipment lifespan of 20 years.
9. As a result, the Utilities Department and Edwards Electric Corp. have collaborated to develop a proposal to complete the replacement of the diesel tanks, estimated to cost $499, 836. This estimate includes the additional material, labor, and insurance costs associated with the additional work.
10. The Utilities Department is requesting a change order in the amount of $277,324.92 to address the replacement of the diesel tanks and the depletion of the current contingency balance. The proposed change order will utilize the remaining contingency balance of $297,511.08 and replenish the contingency to $75,000 to cover any future unforeseen conditions or project-related costs.
A breakdown of the Contract changes and requested change order is provided below:
|
Original Contract Sum |
$3,900,000.00 |
|
Original Contract Contingency |
$ 348,950.00 |
|
Contract with Contingency |
$4,248,950.00 |
|
Contingency Used To Date |
$ 51,438.92 |
|
Current Contingency Balance |
$ 297,511.08 |
|
Change Order Requested |
$ 499,836.00 |
|
Amount needed to complete |
$ 202,324.92 |
|
Additional Contingency |
$ 75,000.00 |
|
in case of unforeseen issues |
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Total Change Order Cost |
$ 277,324.92 |
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Revised Contract Total |
$4,526,274.92 |
11. Staff recommends City Commission approve the change order to IFB # PSUT-23-08 "Water Treatment Plant Electrical Renovation" in the amount not to exceed $277,324.92, which includes an additional owner’s contingency in the amount of $75,000.00 and a payment and performance bond in the amount of $7,386.74, for the replacement of the existing diesel tanks at the Water Treatment Plant.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: $277,324.92
b) Amount budgeted for this item in Account No: Funds are available in account #471-533-6031-663000-0000-000-0000- (Improvement Other Than Bldg).
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: Not Applicable.
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Not Applicable.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Not Applicable.