May 9, 2006

SUBJECT:      Award of Bid No. F0501-41 to Rehabilitate One Digester at the Water Pollution Control Plant

REPORT IN BRIEF

Approval is requested for the award of a contract to D.W. Nicholson Corporation of Hayward to rehabilitate one digester lid and drain line at the Water Pollution Control Plant (Public Works Project #UY-03/01-05).

BACKGROUND

There are four anaerobic digesters at the Water Pollution Control Plant (WPCP) which are used to further degrade solid waste removed during the treatment of wastewater.  The methane gas produced as part of this process is captured and exported to the Power Generation Facility (PGF) at the WPCP where it is burned in two engines to generate electricity.

Digesters No. 1 and 2 were built in 1955, No. 3 in 1961, and No. 4 in 1969.  The existing lids have deteriorated, and methane has been discovered between the structural layers of the lids, creating a worker safety issue.  Spot repairs have provided some additional useful life, but are no longer adequate to fix the problem.  To prevent failure, the lids of all four digesters need to be replaced. Engineering studies and structural inspection have confirmed that replacement is more cost effective than repair.  Replacement is expected to extend the life of the digesters by another thirty years. Digester No. 3 was selected to be rehabilitated first, based upon its level of deterioration.

In addition to lid replacement, the scope of work will include relining the digester drain lines, a seismic retrofit, and replacing the sludge mixing system. The project also includes some upgrades that will serve the other three digester tanks when they are rehabilitated, including replacing the electrical Motor Control Center (MCC) and power supply panel that feeds all four digesters, and installing a gas refrigerant system.  The gas refrigerant system will improve the longevity of the PGF engines by improving gas quality and reducing costly engine repairs due to impurities in the methane collected from the digesters.

DISCUSSION

Bid specifications were prepared by Public Works and Purchasing staff. The Notice Inviting Bids was published in The Sun on January 18, 2006. The bid package was distributed to Bay Area Builders Exchanges and broadcast to potential contractors through the DemandStar by Onvia procurement network. Twenty-eight contractors requested bid documents.

Sealed bids were publicly opened on March 8, 2006. Two responsive bids were received.

An additional bid in the amount of $2,675,000 was received from Pacific Infrastructure of Pleasanton. However, it was determined to be non-responsive because the bidder failed to replace the original bid pricing pages with revised pricing pages which were required by Addendum No. 4.  The revised pricing pages added a separate line item for lead abatement to be included in the Base Bid. Additionally, Pacific Infrastructure listed no lead abatement contractor in the subcontractor listing section of its bid.

Staff recommends acceptance of the bid from D.W. Nicholson, the lowest responsive and responsible bidder.

A determination was made that this project will have no significant effect on the environment in accordance with CEQA guidelines for categorically exempt projects.

FISCAL IMPACT

Project costs include:

Funds are budgeted in FY 2005/2006 and FY 2006/2007 in Capital Projects No. 824300 – Rehabilitation of Digesters and Replacement of Digester Lids and No. 821111 – Power Generation Facility Improvements.

The funds budgeted in Capital Project No. 824300 in FY 2005/2006 and FY 2006/2007 are provided for the design and construction of Digester No. 3.  The original engineer’s estimate included in the Adopted FY 2005/2006 Budget was $1,730,000 per digester.  During the bidding process, additional significant issued were identified with the project.  Most notably, asbestos and lead paint needs to be removed, driving up cost.  This resulted in the revision of the engineer’s estimate to $2,714,000.  The lowest responsive bid came in 4% higher than the revised estimate.

Given that the bid for Digester No. 3 is higher than anticipated, staff will review and revise the FY 2006/2007 project budget to ensure sufficient funds are available to complete the rehabilitation of Digester No. 3.  This will be included with the recommended FY 2006/2007 budget.

Additionally, staff will review and revise the project budget for each of the remaining digesters to ensure sufficient funding.  This will be done as part of the Capital Improvement Project budget cycle next year.

RECOMMENDATION

It is recommended that Council:

Prepared by:

Elaine Wesely

Purchasing Officer

Reviewed by:

Mary J. Bradley

Director, Finance

Reviewed by:

Marvin Rose

Director, Public Works

Approved by:

Amy Chan

City Manager

Attachment

A. General Construction Contract (.pdf)