Consent 1.A.6.
Regular City Council Meeting
- Meeting Date:
- 04/27/2015
- TITLE
- W.O. 15-17, WWTP Aeration Blower Improvements, Procurement Bid Award
- PRESENTED BY:
- David Mumford
- Department:
- Public Works
Presentation:
PROBLEM/ISSUE STATEMENT
The City of Billings has contracted with NorthWestern Energy (NWE) for an incentive payment to the City upon installing a new, more energy efficient turbo blower to be used in the Wastewater Treatment Plant's (WWTP) aeration process. The Incentive Agreement provides for payment from NWE to the City in an amount up to $145,000 upon satisfactory completion of the project.
This contract award is related to the pre-purchase (procurement) of a new turbo blower that meets the specifications outlined in the NWE agreement. The mechanical efficiency of a high-speed turbo blower is superior to the existing multi-stage turbine blower. The projected energy savings for installing a turbo blower is approximately 20% (420,000 kWh/yr). This blower is also designed to fit in with the aeration design currently underway as part of the WWTP's major overhaul/upgrade project. In addition to receiving the incentive from NWE, installing the turbo blower now will provide opportunities for plant staff to learn how these types of blowers are operated, maintained, and controlled well in advance of multiple turbo blowers being installed during the plant upgrade project. The bid package and associated contract have been written such that the initial blower purchased will establish what future blowers may be purchased and identify the costs associated with this future purchase--creating beneficial consistency and essentially "locking in" the price, allowing that future budget to be determined and maintained. The initial and future blowers will be installed by general contractors and will be awarded as separate construction contracts later. For the initial blower, the cost of the blower itself will likely be more than its installation costs, so pre-purchasing the equipment will eliminate having to pay substantial contractor mark-ups. These types of blowers have a fairly lengthy delivery time, so another reason for pre-purchasing the blower is to be better able to meet the deadline identified in the NWE incentive agreement.
This contract initially bid March 10, 2015. However, all three bids submitted included "exceptions" to the specifications. Awarding a contract with these exceptions would have likely led to a protest from the non-selected suppliers, so it was recommended (and Council approved) at the March 23 Council meeting to reject all bids and to rebid the project. Revisions were made to the specifications in an effort to eliminate any potential exceptions from the suppliers while maintaining all of the project's requirements. NWE was notified of the City's actions and will evaluate the schedule later, but still felt the full incentive would be honored. The re-bid of the project was advertised March 26, April 2 and April 9, 2015 in The Billings Times and on the City's website. Bids were opened April 14, 2015, and Council is asked to award a contract based on the bids.
This contract award is related to the pre-purchase (procurement) of a new turbo blower that meets the specifications outlined in the NWE agreement. The mechanical efficiency of a high-speed turbo blower is superior to the existing multi-stage turbine blower. The projected energy savings for installing a turbo blower is approximately 20% (420,000 kWh/yr). This blower is also designed to fit in with the aeration design currently underway as part of the WWTP's major overhaul/upgrade project. In addition to receiving the incentive from NWE, installing the turbo blower now will provide opportunities for plant staff to learn how these types of blowers are operated, maintained, and controlled well in advance of multiple turbo blowers being installed during the plant upgrade project. The bid package and associated contract have been written such that the initial blower purchased will establish what future blowers may be purchased and identify the costs associated with this future purchase--creating beneficial consistency and essentially "locking in" the price, allowing that future budget to be determined and maintained. The initial and future blowers will be installed by general contractors and will be awarded as separate construction contracts later. For the initial blower, the cost of the blower itself will likely be more than its installation costs, so pre-purchasing the equipment will eliminate having to pay substantial contractor mark-ups. These types of blowers have a fairly lengthy delivery time, so another reason for pre-purchasing the blower is to be better able to meet the deadline identified in the NWE incentive agreement.
This contract initially bid March 10, 2015. However, all three bids submitted included "exceptions" to the specifications. Awarding a contract with these exceptions would have likely led to a protest from the non-selected suppliers, so it was recommended (and Council approved) at the March 23 Council meeting to reject all bids and to rebid the project. Revisions were made to the specifications in an effort to eliminate any potential exceptions from the suppliers while maintaining all of the project's requirements. NWE was notified of the City's actions and will evaluate the schedule later, but still felt the full incentive would be honored. The re-bid of the project was advertised March 26, April 2 and April 9, 2015 in The Billings Times and on the City's website. Bids were opened April 14, 2015, and Council is asked to award a contract based on the bids.
ALTERNATIVES ANALYZED
The Council may:
• Award a procurement contract to the low bidder, Aerzen USA Corporation, in the amount of $157,714.00; or
• Reject all bids, which will delay ordering and the delivery of a blower, which will likely cause the City to miss the deadline in the NWE agreement, potentially resulting in the City missing out on part or all of the incentive payment.
• Award a procurement contract to the low bidder, Aerzen USA Corporation, in the amount of $157,714.00; or
• Reject all bids, which will delay ordering and the delivery of a blower, which will likely cause the City to miss the deadline in the NWE agreement, potentially resulting in the City missing out on part or all of the incentive payment.
FINANCIAL IMPACT
The following bid was received and evaluated. The bid is considered responsible.
The project is being funded by wastewater funds, as approved in the FY 2015 budget. There are sufficient funds available to cover the costs of the procurement contract.
| Turbo Blower Supplier (Contractor) | Bid |
| Aerzen USA Corporation | $ 157,714.00 |
The project is being funded by wastewater funds, as approved in the FY 2015 budget. There are sufficient funds available to cover the costs of the procurement contract.
RECOMMENDATION
Staff recommends Council award a procurement contract for W.O. 15-17--WWTP Aeration Blower Improvements to Aerzen USA Corporation in the amount of $157,714.00.