REPORT TO COUNCIL
SUBJECT
Title
Action on the Award of Purchase Orders to Celeros Flow Technology, Doing Business as Flow America, LLC, for Pressure Reducing Desuperheating Valves for the Donald Von Raesfeld Power Plant, in an Amount Not-to-Exceed $354,208
Report
BACKGROUND
The City of Santa Clara’s electric utility, Silicon Valley Power (SVP), operates two gas-fired power generation facilities within the City limits. The main facility, the Donald Von Raesfeld Power Plant (DVR), is a 2x1 combined cycle power plant with a rated capacity of approximately 147 megawatts of electrical power. The Gianera Generating Station provides an additional 49.5 megawatts of electrical capacity.
At DVR, the Pressure Reducing Desuperheating (PRDS) valves are a critical component of the boiler systems and are required to safely control and route steam during plant operations. The valves regulate steam pressure and temperature between the steam distribution system and the turbines. Without properly functioning valves, DVR cannot be safely started or shut down during normal operations or during a fault event.
The existing PRDS valves are more than 20 years old and have been routinely maintained throughout their service life. Despite ongoing maintenance, the valves are experiencing recurring failures and are reaching their end of useful life. Continued repairs are no longer cost-effective, and the PRDS valves need to be replaced.
DISCUSSION
Staff recommend a sole source procurement with Celeros Flow Technology, doing business as Flow America, LLC (Celeros) for the PRDS replacement valves. This recommendation is made pursuant to Section 2.105.280(b)(2) of the City of Santa Clara Code, which exempts purchases from competitive procurement requirements when necessary to ensure continued operation and function of existing systems currently in use by the City.
Celeros is the original equipment manufacturer of the existing PRDS valves. The proposed valves are direct-fit replacements and are fully compatible with DVR’s existing piping, actuators, and control systems. Procuring replacement valves from another manufacturer would require significant system modifications, including piping changes, requalification testing, and control system retuning. These modifications would introduce operational and safety risks and could extend plant outages, reduce plant availability, and increase overall project cost. As a result, the Purchasing Division Manager has determined that a sole source procurement is justified because alternative options are impractical and not in the City’s best interest.
Staff request authorization to issue Purchase Orders to Celeros for the purchase of two PRDS valves in a not-to-exceed amount of $354,208, inclusive of taxes, freight, and contingency, as shown in Table 1 below. A 20% contingency is requested to account for freight and market conditions, including potential tariffs that could affect overall costs.
|
Description |
Amount |
|
PRDS Valves ($134,475 each x 2) |
$268,950 |
|
Estimated Taxes (9.75%) |
$26,223 |
|
Subtotal |
$295,173 |
|
Contingency (20%) |
$59,035 |
|
Not-to-Exceed Maximum Compensation |
$354,208 |
Because the PRDS valves are custom-manufactured, Celeros has requested limited modifications to the City’s Standard Purchase Order Terms and Conditions, including milestone-based payments tied to defined deliverables and cancellation terms tied to manufacturing progress. The attached addendum to the City’s Standard Purchase Order Terms and Conditions has been reviewed and approved as to form by the City Attorney’s Office.
The anticipated manufacturing and delivery lead time is approximately 32 to 34 weeks from the time of purchase order issuance.
ENVIRONMENTAL REVIEW
Staff recommend that the City Council determine that the action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to section 15302 (Class 2 -Replacement or Reconstruction) of Title 14 of the California Code of Regulations as the proposed work involves the replacement of electric facilities (PRDS valves with substantially the same purpose and capacity as the facilities replaced.
FISCAL IMPACT
Sufficient funding for the purchase of the PRDS valves is available in the FY 2025/26 Capital Budget in the Valve Replacement and Repair Capital Improvement Project (CIP # 2437) funded in the Electric Utility Capital Fund.
COORDINATION
This report has been coordinated with the Finance Department and the 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 or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are exempt from CEQA pursuant to Section 15302 (Class 2 -Replacement or Reconstruction) of Title 14 of the California Code of Regulations;
2. Authorize the City Manager or designee to issue Purchase Orders to Celeros Flow Technology, doing business as Flow America, LLC, in substantially the form attached to this Report to Council, for a maximum compensation of $354,208, for the purchase of two replacement Pressure Reducing Desuperheating valves for the Donald Von Raesfeld Power Plant, subject to the appropriation of funds and review and approval as to form by the City Attorney; and
3. Authorize the City Manager or designee to take any actions as necessary to implement and administer the Purchase Orders, and to negotiate and execute amendments to the attached Purchase Order to make de minimis changes, subject to the above maximum compensation limit and review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Addendum to the City of Santa Clara’s Purchase Order Terms & Conditions With Flow America, LLC