REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement for Services with Mesa Energy Systems, Inc. for As-Needed Heating, Ventilation, Air Conditioner and Chiller Inspection, Maintenance, and Repair Services
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 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 rated at 147 Megawatts of electrical power. The City of Santa Clara Cogeneration Plant is a cogeneration facility that utilizes two gas turbines for power generation. Additionally, the waste heat is collected to generate steam for supply to a paper mill. This facility is rated at 7 Megawatts. The Gianera Generating Station, the City’s peaking generation facility, is rated at 49.5 Megawatts of electrical power.
These power plants have control buildings with electronic control equipment that utilize heating, ventilation and air conditioner (HVAC) systems to operate properly. Consequently, SVP requires routine servicing of the HVAC systems to ensure that the buildings and the equipment housed in the buildings stay cool enough to function properly.
The DVR plant also uses centrifugal chillers to cool the inlet air to maximize the megawatt output of its gas turbines. These chillers are critical equipment in the power plants and require routine inspection, maintenance, and repair services.
SVP requires a qualified contractor to provide HVAC and chiller inspection, maintenance, and repair services to support the uninterrupted generation provided by the in-city power plants. In addition to the power plants, HVAC services may be required at other SVP locations such as remote facilities, or server rooms associated with critical infrastructure.
DISCUSSION
Pursuant to City Code Section 2.105.330, a formal qualifications-based Request for Proposals/Statement of Qualifications (SOQ) process was conducted for this procurement, with the award recommendation based on “best value.” The factors considered in the award were experience and qualifications of the firm, and approach to safety.
In June 2021, the City issued the SOQ for as-needed heating, ventilation, air conditioner (HVAC) and chiller inspection, repair, and maintenance services, using the City’s e-procurement system. A total of 45 companies viewed the SOQ, and the City received proposals from three companies:
• A&B Mechanical Inc. (Livermore, CA)
• Mesa Energy Systems, Inc. (San Leandro, CA)
• United Mechanical Inc. (San Jose, CA)
The written proposals were evaluated and scored against the criteria and weights published in the SOQ by a three-member evaluation team consisting of staff from SVP. The proposals were evaluated on proposer qualifications and experience; qualifications of proposed individual staff; and approach to performing the required HVAC and chiller inspection, maintenance, and repair services.
Staff recommends award of a contract to Mesa Energy Systems, Inc. (Mesa) as the most advantageous and best value proposal based upon the final evaluation ranking. Mesa’s proposal met or exceeded all the SOQ specifications.
The proposed Agreement includes provisions of all labor, materials, equipment, and technical expertise needed to provide the required services including, but not limited to, HVAC and chiller inspection and maintenance services; as-needed HVAC and chiller repair services; and installation and commissioning of new HVAC units.
The initial five-year term of the agreement shall end on or about December 15, 2026. The proposed Agreement includes up to five one-year options to renew. Staff requests approval for the City Manager to execute the proposed Agreement in an amount not to exceed $750,000 during the initial term. Staff also requests approval for the City Manager to execute five one-year options to renew the proposed Agreement after the initial term, at the discretion of the City.
Mesa’s hourly rates shall be fixed for the first two years of the proposed Agreement term, and annual costs are not expected to exceed $750,000 during the initial term. Exercise of the option terms after the initial five-year term shall be based on renewal quotes from Mesa. Any requests for compensation increases must be justified by the company and are subject to approval by the City and the annual appropriations of funds.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378 (b)(2) in that the proposed actions are agreements for the purchase of products and services that are continuing maintenance and administrative activities.
FISCAL IMPACT
The total cost of the proposed Agreement with Mesa is not anticipated to exceed $750,000 over the five-year initial term.
Sufficient funds are available in the FY 2021/22 Operating Budget in the Electric Utility Operating Fund Contractual Services account based on the facility or asset requiring service. Budget for future years will be included in recommended budgets.
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> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute the proposed Agreement for Services with Mesa Energy Systems, Inc. for as-needed heating, ventilation, air conditioner and chiller inspection, maintenance, and repair services, in an amount not-to-exceed $750,000 during the initial five-year term, ending December 2026, subject to the annual appropriation of funds;
2. Authorize the City Manager to make minor changes to the proposed Agreement for Services subject to approval by the City Attorney as to form;
3. Authorize the City Manager to execute up to five one-year options to extend the term of the proposed Agreement for Services after the initial term, ending December 2031, assuming all options are exercised, and subject to the annual appropriation of funds; and
4. Authorize the City Manager to take actions to add or delete services consistent with the scope of the proposed Agreement for Services and allow future rate adjustments subject to request and justification by contractor, approval by the City, and the appropriation of funds.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Proposed Agreement for Services