REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement with KSB, Inc. and on Amendment No.1 to the Agreement with Koffler Electrical Mechanical Apparatus Repair, Inc. for Motor and Pump Maintenance and Repair for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), operates two power plants: the Donald Von Raesfeld (DVR) Power Plant and the Gianera Generating Station (Gianera). These plants have a variety of pumps and motors from various manufacturers that are critical in SVP’s operations. To ensure optimal operations of the equipment, SVP engages multiple contractors to perform essential services including inspection, repair, and maintenance. Given the diverse range of motors and pumps, contractors must possess expertise across different pump and motor types and having multiple contractors in place improves availability in an emergency.
DISCUSSION
Pursuant to City Code Section 2.105.140(c), a formal Request for Proposals (RFP) was conducted, with the award recommendation based on “best value.”
The RFP for Motor and Pump Maintenance and Repair Services was published on the City’s e-procurement system. Two proposals were received from the following firms:
• KSB, Inc. (KSB)
• Koffler Electrical Mechanical Apparatus Repair, Inc. (Koffler)
The proposals were independently evaluated by a three-member evaluation panel against the criteria and weights published in the RFP, including experience, technical capability, and cost. The evaluation panel determined both proposals met the requirements of the RFP. Therefore, staff recommends the following actions with both firms, as detailed in this Report to Council.
Agreement for Services with KSB
Staff is recommending entering into a master agreement for services with KSB for a five-year term, to provide as-needed support for upcoming pump and motor repair services, for a maximum compensation of $1,000,000. This year, SVP plans to repair the DVR’s boiler feed pumps, and KSB is the original equipment manufacturer.
Amendment No. 1 to the Agreement for Services with Koffler
Koffler initially entered into a master agreement for services executed on July 24, 2023, for work that needed to be completed during a planned outage in November 2023. This agreement initially fell within the City Manager's approval authority of $250,000. Staff now is seeking approval to execute Amendment No. 1 to increase the maximum compensation by $750,000, for a revised maximum compensation of $1,000,000, to align with anticipated service requirements over the five-year term.
Both agreements are for five-year terms ending on July 31, 2028, with an additional one-year option to extend the term through July 31, 2029. Rates for labor and materials are established in the agreements and are subject to reasonable annual increases after the initial fixed period. Any rate increases are subject to approval by the City and must be substantiated by the contractors to the satisfaction of the City.
The maximum compensation of $1,000,000 for each agreement is based on past usage of the services. However, future requirements for the services may increase due to unanticipated repairs or regulatory changes. Therefore, staff also recommends authorizing the City Manager to execute amendments to increase compensation for an additional $1,000,000 between both agreements to a maximum not to exceed amount of $1,500,000 for each agreement.
Actual work will be assigned to the contractors pursuant to a secondary bid process. When work is identified, SVP will obtain quotes from KSB and Koffler, and SVP will select the quote based on schedule availability, experience with the specific motor or pump, and cost.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the actions being considered are exempt from the California Environmental Quality Act (“CEQA”) pursuant 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 combined maximum compensation under the proposed agreements with KSB and Koffler is $3,000,000 ($1,500,000 for each agreement) over the life of the agreements. Sufficient funds are available in the FY 2023/24 Operating Budget in the Electric Utility Operating Fund and may be included in capital projects budget where appropriate.
Funds required for both agreements in future years will be included in proposed budgets for the corresponding years.
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, or by email to: clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are exempt from CEQA pursuant to Section 15301 (Existing Facilities) of Title 14 of the California Code of Regulations;
2. Authorize the City Manager to execute an Agreement for Services with KSB, Inc. for motor and pump maintenance and repair services for a five-year term ending on July 31, 2028, with a maximum compensation not to exceed $1,000,000, to be funded by the SVP Operating or Capital Fund as applicable;
3. Authorize the City Manager to execute Amendment No. 1 to the Agreement for Services with Koffler Electrical Mechanical Apparatus Repair, Inc. for motor and pump maintenance and repair services for a five-year term ending on July 31, 2028, to increase the maximum compensation by $750,000 for a revised maximum compensation amount of $1,000,000, to be funded by the SVP Operating or Capital Fund as applicable; and
4. Authorize the City Manager to take any actions as necessary to implement and administer the above agreements and negotiate and execute amendments to (a) add or delete services consistent with the scope of services; (b) adjust future rates to account for reasonable changes in labor and materials rates; (c) exercise a one-year option to extend the term of each agreement through July 31, 2029; and (d) increase compensation for an additional $1,000,000 between both agreements for a total maximum compensation of $3,000,000 ($1,500,000 for each agreement), subject to the appropriation of funds and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Proposed Agreement for Services with KSB, Inc.
2. Agreement for Services with Koffler Electrical Mechanical Apparatus Repair, Inc.
3. Proposed Amendment No. 1 with Koffler Electrical Mechanical Apparatus Repair, Inc.