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HomeMy WebLinkAbout2000-30 Wastewater Exempt BidsRESOLUTION NO. 2000- BEFORE THE CITY OF ASHLAND LOCAL CONTRACT REVIEW BOARD RESOLUTION EXEMPTING FROM COMPETITIVE BIDDING THE REMAINING CONSTRUCTION WORK LCRB RESOLUTION ON THE WASTEWATER TREATMENT PLANT SITE Recitals: A. ORS 279.015 and AMC § 2.50.030.B permits the Ashland City Council sitting as the Local Contract Review Board to exempt contracts from competitive bidding if it finds: 1. The lack of bids will not result in favoritism or substantially diminish competition in awarding the contract; and 2. The exemption will result in substantial cost savings. B. This statute and ordinance provide that in making such findings, the Board may consider the type, cost, amount of the contract, number of persons available to bid, and such other factors as the Board may deem appropriate. Where appropriate, the Board shall direct the use of alternate contracting and pumhasing practices that take account of market realities and modern or innovative contracting and purchasing methods, which are also consistent with the public policy of encouraging competition. C. In order to exempt a public contract from competitive bidding, the Board must adopt written findings that support the awarding of a particular public contract or a class of public contracts without competitive bidding. The findings must show that the exemption of a contract or class of contracts complies with the requirements of AMC § 2.50.030.B. The Board adopts the attached findings contained in the council communication from Paula Brown dated November 21,2000, as findings justifying the exemption. The Board finds that this exemption will not result in favoritism or substantially diminish competition in awarding the contract and the exemption will result in substantial cost savings. The Board resolves that an exemption be granted as follows: Remaining Construction Work on The Wastewater Treatment Plant Site. This project, including the new membrane filtration facilities and the biosolids handling portions to be constructed and operated at the existing wastewater treatment plant site, is exempted from competitive bidding. This resolution was read by title only in accordance with Ashland Municipal Code BArbara Christensen, City Recorder SIGNED and APPROVED this ,~ day of Paul Nolte, City Attorney /~-~"~'- ,2000. ~haw, Mayor PAGE 1-LCBR EXEMPTION (G:\IegaI\PAUL\ORD\LCRB\WWTP exemption res .wpd) Findings in Support of Competitive Bidding Exemption Membrane Filtration and Remaining On-Site Process Improvements Ashland Wastewater Treatment Plant INTRODUCTION The City has been constructing major improvements to the Wastewater Treatment Plant facility under a contract with Slayden Construction (Slayden) since September 1998. Originally the wastewater treatment plant improvements were designed as two distinct pieces; the initial phase as process improvements at the wastewater treatment plant site (Project A), and the second phase (Project B) for facilities to be constructed on the City's hillside farmland for effluent reuse and biosolids application. The City has determined not to continue with the second phase and will continue on-site with a tertiary system. All of the process improvements, including the new membrane filtration facilities and the biosolids handling portions will be constructed and operational at the existing wastewater treatment plant site and nothing will be constructed on a differing site. Through a Mutual Agreement and Order (MAO), the Department of Environmental Quality (DEQ) mandates timing of completion for these new improvements, and for the remaining process improvements which are under the existing contract. As such, this requires an evaluation of construction timing opportunities. The term of the original contract with Slayden was for construction and modifications to the process improvements on the treatment plant site, the original "Project A". The initial contract award was for $12,374,000 with a completion date of December 29, 2000. Slayden's contract has had numerous change orders to resolve differing site conditions, clarifications of the plans and specifications, adding reconstruction of the Ashland Creek Pump Station, adding provisions for interim sludge handling modifications, and recently the addition of significant piping to accommodate the expected membrane filters and biosolids handling within the middle of the plant site. As of this date, 31 change orders have been authorized bringing the total contract authorization to $15,791,461. Although the City has not negotiated a final change to the contract length, it is understood that Slayden is not expected to be complete with all of the original contract items by the December 2000 deadline. As briefly mentioned above, the MAO from the DEQ has imposed strict timeframes on the completion of the membrane facilities in order to meet waste load allocations and permit limits for effluent discharges to the creek. With the completion of the pilot study for the membrane facilities in October 2000, final design has begun and discussions with DEQ are continuing. Final design of the membrane system is to be complete in December and a contract for construction of the chosen membrane system and facilities is to be in place by mid-January 2001. Page 1 of 5 It is proposed that Slayden's contract be modified to include all of the work which will be completed on the existing wastewater treatment plant site to maintain construction quality control, keep current with the timing restriction placed by DEQ and allow continuity and full coordination of the ongoing construction and plant operations during the final construction portions. FAVORITISM/COMPETITION Carollo Engineers, the City's engineering design consultant will design and identify specifications for the remaining new system and facilities. Carollo's engineering cost estimates for the membrane filters and the final biosolids handling facilities will have an independent third party value engineering and cost estimate completed. These estimates will be the determining factors used in negotiating a fair price for the change order with Slayden. The final terms and conditions of each portion of the final change orders for the wastewater treatment plant will be evaluated by Carollo and the City, thus discouraging any favoritism in the awarding of the contract. Because of the existing contract with Slayden, and the unique circumstances presented with the existing construction and site configurations, it is unlikely that an exemption authorizing these specific change orders to Slayden will encourage favoritism in the awarding ofpublic contracts or substantially diminish competition for public contracts. "' COST SAVINGS The ability of the City to provide efficient infrastructure facilities to meet the needs of its constituents in a timely and cost-efficient manner at the lowest cost to taxpayers, will be significantly enhanced by the continued construction efforts and successes of Slayden Construction. Specifically, substantial cost savings will be realized by the City and by the public as the result of the City's ability to negotiate a change order to the existing contract with Slayden which will allow for a successful, fast-track project to meet DEQ timelines, avoids lost time from preparing complete bid documents and bid level construction drawings and specifications (saves 60-90 days), avoids bid time (45-60 days), avoids duplicative construction efforts, thus saving construction dollars. In addition to the significant time saved, the specific cost savings to the City are: a) The City will realize a cost savings of over $250,000 in construction costs to keep the project moving forward, eliminate any duplicate construction tasks of re-do work to have Slayden complete the current project and the hire a subsequent contractor to come in and remobilize and start over in an area finished by Slayden. If the City were to competitively bid these system changes, the City is obligated to complete Slayden's contracted work or pay a penalty for work removed from the contract so that another Page 2 of 5 contractor could move into the site. If Slayden is required to finish their work, there is significant site work that must be re-done for the construction of the membrane and solids handling facilities. b) In addition, Slayden is familiar with the site and all utility locations and persons responsible for the existing site conditions. That coordination will be lost and unknown utility locations could hamper construction or add unnecessary costs. c) The contract change order will use a guaranteed maximum price, or fixed-priced structure, either of which will provide the City with protection against cost overruns and will also provide cost savings. Slayden is familiar with the City's expectations and with Carollo's requirements and engineering inspection and specifications. The cost of the negotiated contract char~ge will also be reviewed by an independent consultant to ensure price competitiveness. Cost savings to the City are further anticipated through the use of this negotiated change order by reducing design time as detailed construction bidding level drawings and specifications are unnecessary (savings of approximately $150,000); by eliminating design flaws and misunderstandings through continuous discussions between the City, design engineer (Carollo Engineers), and the contractor (Slayden); by incorporating value engineering suggestions from all parties and the independent engineering estimator into the design phase in a team approach; and in shortening construction time. The award of a negotiated change order to the contract with Slayden for the construction and installation of membrane filtration units and the biosolids handling facilities on the wastewater treatment plant site pursuant to this exemption will result in substantial cost savings to the City. OPERATIONAL, BUDGET~ FINANCIAL To accomplish the goal of designing and constructing the remaining integrated processes at the wastewater treatment plant site while maintaining full functioning of the system and ensure that all components are fully compatible with its existing system, it is necessary to identify a contractor that is familiar with all operational components and the interrelationship of those components to produce a safe, reliable operating system. Slayden Construction is familiar with not only the design team (Carollo) but also with the City and the City's wastewater treatment operational staff. Slayden has a proven track record with the City in quality control, construction capabilities, quality control, timely construction infrastructure and with both the City and Carotlo in developing a sound, financially responsive, quality product. All parties have deliberated on previous engineering design elements to provide a better wastewater treatment facility. Page 3 of 5 PUBLIC BENEFIT The public benefit to this negotiated change order will be a significant enhancement to the City's wastewater treatment infrastructure system by providing the highest quality effluent and improving water quality to Ashland and Bear Creeks, and by providing a fiscally responsible biosolids handling facility. With the completion of the entire wastewater treatment plant operational facilities in May 2001, Ashland will have the highest quality effluent in the state and will significantly enhance the environmental quality and water quality within the Bear Creek basin. With a negotiated change order to the current contract, the process will allow a seamless, fast- track construction completion date to provide the environmental quality improvements and will save the public money as discussed in the general findings above. VALUE ENGINEERING Cost estimates, constructability and an independent engineering design consultant will provide value engineering analysis during the initial design phase of design. This analysis is not compatible in competitive bidding unless it is after the fact. The advantage of this analysis during design is that cost savings are immediate rather than postponed as with competitive bidding. This will ensure a competitive negotiated change order for the work being performed. SPECIALIZED EXPERTISE Contractors, for this type of project, must have expertise and experience managing large complex, multi-phased construction contracts at an existing operating facility. Although there are other competent contractors that also have the ability to perform this type of work, the timing of this necessary negotiated change order does not permit solicitation. The specialized work of the change order and the coordination with the remaining contract work and the operation of the wastewater treatment plant does not allow for two contractors to work simultaneously at the site. PUBLIC SAFETY A negotiated change order to the current Slayden contract allows the City and the contractor to jointly develop a construction phasing plan, current operations plan and safety plan during the design process. This ensures that all safety provisions and temporary permanent facilities are clearly identified and included in the contract. It also ensures that all facilities remain operational throughout the contract period and that there is no ability to abdicate responsibility to a second contractor on site. A negotiated contract change order also ensure that the public's safety is met through timely completion of the contract work and no delays in the enhancement of water quality. Page 4 of 5 MARKET CONDITIONS This negotiated contract will have no negative impact on the contracting or subcontracting market in the Ashland - Medford metro area. A sufficient number of qualified firms are available to ensure adequate competition and any subcontracted work will be competitive. As a single contract exemption, market conditions will not be directly affected. However, positive indirect market impact will occur by creation of jobs and investment/development opportunities generated as a result of the contract, both as to rail construction and future PIC development. Although the change order to Slayden's current contract will be awarded without direct competition, a portion of the construction work will be performed by subcontractors who will be selected through a competitive process. Much of the project work is unique and it is highly unlikely that this procurement will have any effect on or substantially diminish competition for future public Contracts. TECHNICAL COMPLEXITY The complexity of this project and especially of this portion of the project is briefly described above in the Introduction. Existing facilities, utilities, and public dependence on the existing facilities are needed to remain functional during the construction phase. Remodeling or adding to existing facilities while maintaining a functional wastewater treatment plant require extensive planning and coordination that is very difficult to sufficiently portray on competitively bid construction documents. A negotiated change order to this contract allows the contractor to better understand operations impacts to the construction and participate in developing the construction phasing, construction site access, and other coordination processes required of projects at an operating treatment plant already in the midst of construction. The addition of a second contractor through a competitive bidding process would not offer this level of coordination and phasing. FUNDING SOURCES This project will be funded from a combination of sources. Page 5 of 5