REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Negotiate and Execute an Agreement for Services with International Cooling Tower to Overhaul a Cooling Tower and to Perform Ongoing As-needed Maintenance and Repair Services at the Donald Von Raesfeld Power Plant for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara's Electric Utility, Silicon Valley Power (SVP), operates three power generation facilities within the city limits: the Donald Von Raesfeld Power Plant (DVR), the City of Santa Clara Cogen, and the Gianera Generating Station. The DVR facility is the main plant and is a 2x1 combined cycle power plant rated at 147 Megawatts of electrical power. The cooling tower at the DVR was designed to reject waste heat from equipment for the safe, reliable operation of the DVR. The cooling tower was constructed and commissioned in 2005 by GEA Integrated Cooling Technologies.
Recent inspections of the DVR cooling tower have determined that for reliability, some structural and rotating equipment require replacement as soon as possible.
DISCUSSION
On August 24, 2022, staff issued a Request for Proposals (RFP) #22-23-20 to solicit proposals from qualified firms for the overhaul of the DVR cooling tower, as-needed maintenance and repairs, ongoing support testing and inspection, and associated materials and equipment at the DVR.
Services will include cooling tower overhaul, as needed maintenance and repairs, ongoing testing and inspection, associated materials and equipment, and contingency. The RFP was published on the City’s bid notification system and three proposals were received from Cooling Tower Depot (Golden, CO), EvapTech, Inc. (Edwardsville, KS), and International Cooling Tower (Deer Park, TX).
Evaluation Process:
Proposals were evaluated and scored independently by a three-member evaluation team against the criteria and weights published in the RFP. Cooling Tower Depot, EvapTech, and International Cooling Tower were invited to oral presentations to demonstrate their knowledge and understanding of the City’s requirements, and provide detailed information on their project delivery approach.
Following oral presentations, the evaluation team finalized their scores depicted in the following table:
|
Criteria |
Max Points |
Cooling Tower Depot |
EvapTech, Inc. |
International Cooling Tower |
|
Experience and Qualifications |
30 |
18 |
26 |
23 |
|
Technical Capability |
25 |
17 |
20 |
18 |
|
Safety |
25 |
21 |
20 |
23 |
|
Cost / Cost Realism |
20 |
13 |
10 |
20 |
|
Total Score |
100 |
69 |
76 |
84 |
Award Recommendation:
Staff recommends award of contract to International Cooling Tower as the most advantageous and best value proposal per the evaluation criteria set forth in the RFP.
Staff conducted reference checks with Arizona Public Service (Phoenix, AZ), Sunrise Power Co. LLC (Fellows, CA), and Chevron Phillips Chemical (The Woodlands, TX). All references were positive.
Notice of Intended Award:
A Notice of Intended Award announcing the City’s recommended vendor was issued on November 28, 2022.
Term of Agreement:
The term of the proposed agreement will be five years. The City reserves the right to exercise up to one (1) one-year option to extend the agreement, for a total of six years.
Summary of Services:
The proposed agreement will include a detailed scope of services. Services include cooling tower overhaul, as needed maintenance and repairs, ongoing support, testing and inspection, as well as associated materials and equipment, and contingency. For the cooling tower overhaul, compensation will be based on milestone payments based on completion of project deliverables including a final system acceptance before final payment. The cooling tower overhaul project includes a one-year warranty.
Cost Summary:
Pricing under the proposed agreement is set forth below:
Cooling Tower Overhaul Services
Cooling Tower Overhaul $ 399,400
Repairs and Replacement $ 326,300
Support Services $ 97,100
Testing and Inspection $ 31,500
Shipping and Freight $ 95,800
Estimated Sales Taxes for Material and Equipment $ 39,797
Subtotal $ 989,897 Firm fixed price
As Needed Maintenance Repairs
and Inspection Services (5-year term) $ 500,000
Contingency $ 510,103
Maximum Compensation $2,000,000
Staff recommends that the City Manager is authorized to negotiate and execute future amendments to this agreement in an amount not to exceed one million additional dollars (total maximum compensation not to exceed $3 million) subject to the appropriation of funds to address future unanticipated needs. This will ensure that a contract is already in place to avoid emergency activity and maintain the power plant in a reliable operating condition and meeting regulatory requirements.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the actions being considered are exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15301 of Title 14 of the California Code of Regulations as the services involve maintenance and repair of existing facilities and mechanical equipment.
FISCAL IMPACT
The maximum compensation under the proposed agreement with International Cooling Tower is $2,000,000, which includes a fixed price amount of $989,897 for the cooling tower overhaul services and $1,010,103 for contingency and as needed maintenance, repairs and inspection services. The City Manager would also be authorized to negotiate and execute future amendments to the agreement of up to $1,000,000, which would bring the total maximum compensation to $3,000,000.
Sufficient funds are available in the Generation Capital Maintenance and Betterments project (CIP #2119) in the Electric Utility Capital Fund.
Funding for future years will be requested through the corresponding budget process.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are categorically exempt from CEQA pursuant to Section 15301 of Title 14 of the California Code of Regulations;
2. Authorize the City Manager to negotiate and execute an Agreement for Services with International Cooling Tower for a five-year term beginning on or around March 1, 2023, with a maximum compensation not to exceed $2,000,000 to perform ongoing as-needed maintenance and repair services at the Donald Von Raesfeld Power Plant for Silicon Valley Power; and
3. Authorize the City Manager take any and all actions as are necessary or advisable to implement and administer the Agreement and negotiate and execute amendments to the Agreement to (a) to add or delete services consistent with the scope of the services for the Agreement, (b) incorporate future rate adjustments, and (c) increase maximum compensation up to a total maximum compensation of $3,000,000 subject to the appropriation of funds.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Office of the City Manager