The utility industry has come to favor the design-build method, as opposed to the more traditional design-bid-build method, for certain major projects like constructing new electric stations. A successful station project requires the smooth coordination of civil, structural, and electrical engineering with site preparation, foundation and substructure work, and equipment installation. In the traditional design-bid-build approach, one firm designs the station and another firm builds it; in contrast, the design-build method concentrates responsibility for design, procurement, and construction with a single firm.  By the late 1990s, many utilities had found that the design-build approach increased the chances that their station projects would be within schedule and budget, with fewer disputes along the way.

In recent years, BWP has successfully used the design-build method to construct or expand new electric stations. BWP has used the design-build approach for four major station projects: the Alan E. Capon Switching Station, the new Hollywood Way Distributing Station, an expansion of the Olive Switching Station to accommodate the Magnolia Power Project and, most recently, the installation of the two major transformer banks mentioned earlier. In each case, BWP was within schedule and budget, and did not have the coordination problems with civil and electrical work that had dogged earlier station projects.

The Council can approve design-build projects on a case-by-case basis. In 2001, the Council added Section 9-101(g) to the Burbank Municipal Code whereby the Council has the authority to approve design-build projects on a case-by-case basis when it finds that the use of this method is consistent with principles of competitive bidding.

ANALYSIS

I. BWP needs to build a replacement Burbank Station, estimated at $19.7 million, and coordinate this project with other capital improvement activities: undergrounding lines on adjacent streets, rebuilding overhead lines in surrounding neighborhoods, and removing the existing Burbank Station from the electric system.

Replacing Burbank Station is the key to strengthening the electrical backbone for the north-east to central area of the City. Burbank Station serves customers directly and supplies power to four other electric stations: Flower, McCambridge, San Jose, and Town. If Burbank Station were to go dark, these other stations would go dark as well, affecting 40,000 residents and several hundred businesses throughout the downtown area. Attachment 1 shows these areas, mostly within northeast Burbank, which Burbank Station serves directly and indirectly.

One year ago, the weakest links in BWP�s electrical backbone for the this area were the two transformer banks and connecting underground cable that supplied Burbank Station.  BWP replaced them this year, and the new transformers and cable are now in service. But, Burbank Station is now the weakest link.  BWP staff and some customers served by this station sometimes rightfully refer to the area as being first to have their electric service interrupted in high heat or other system stressing events and the last to have their service restored.  This is not too surprising when you consider that Burbank Station dates from the early 1940s, and is BWP�s oldest electric station:

• Replacing parts is difficult; many of them are obsolete.

• Burbank Station�s open-rack structure has become unsuitable.

• By modern standards, energized equipment and conductors are too close together to be safe; and some of the breakers may not be able to handle high short circuit currents safely.

• Exposed energized parts make the station vulnerable to outages from Mylar balloons and wind-blown debris.

• Open-rack stations are both land and maintenance hogs.

• The spider�s web of supporting steel, buss work and oil-filled breakers create an eyesore.

• The existing Burbank Station can only take advantage of some of the capacity of the new transformer banks and connecting cable.

• The old transformer banks and cable could only deliver 112 megawatts (MW) to Burbank Station; now they can deliver 270 MW from the Olive Switching Station, a 241% increase.

• But, the existing Burbank Station end can only handle 175 MW due to limitations of its open-rack construction and underground substructure.

In recent years, BWP has mitigated some of the drawbacks of the existing Burbank Station. Staff reduced the number of customers served directly from Burbank Station, replaced some equipment, and built a high safety wall between the station and the Main Administration Building. But, the real solution is to build a replacement Burbank Station with larger capacity and modern technology that can remain within the BWP Yard.

Building the replacement Burbank Station is part of BWP�s approved capital improvement budget. Staff estimates the total cost of building the station to be about $19.7 million over the next four years:

This estimate relies on past experience as well as input from Power Engineers, and makes an allowance for the rising price of metals and construction costs. The $19.7 million total breaks down into three major categories:

• About $16.42 million, including contingency, for a design-build contract to do the detail design, equipment procurement, and construction of the station.

• About $2.3 million for in-house labor and material costs over the next four years.

• About $1.0 million over a three-year period for undergrounding the circuits that leave the station.

Staff�s goal is to energize the replacement Burbank Station by July 1, 2008, in time to handle the summer loads for that year. Complete transfer of all the 34,500-volt circuits, which would enable BWP to demolish the existing Burbank Station, would occur by July 1, 2009.

The replacement Burbank Station will still be within the BWP Yard, near the corner of Olive Avenue and Lake Street. This year an engineering consultant, Power Engineers, Inc. (Power Engineers), verified staff�s belief that a replacement Burbank Station, using modern gas-insulated switchgear (GIS), could fit in the southwest corner of the BWP Yard. The consultant even found ways to shrink staff�s initial land requirement by 20%, enabling the replacement Burbank Station to avoid interfering with other facilities or invading existing green space. As with other recently built BWP electric stations, the replacement Burbank Station will have equipment and live parts that are enclosed rather than exposed.

The circuits will enter and leave the replacement Burbank Station from underground. The replacement Burbank Station will interconnect with eight, 34,500-volt subtransmission lines and eight, 12,470-volt distribution lines. If these circuits entered as overhead lines, they would overcrowd the rights-of-way or line clearances along Lake Street and Olive Avenue, posing a safety hazard and creating a greater eyesore than exists already. The solution is to put these lines underground, which also makes the existing power lines along Lake Street unnecessary, allowing BWP to remove them.

If all of the lines, including the communication lines, were removed next to the Lake Street perimeter of the replacement Burbank Station, then BWP can readily use cranes to lift the equipment for the replacement Burbank Station over the existing wall; otherwise, moving the new equipment into the BWP Yard becomes problematic. From the perspective of building the replacement Burbank Station, an advantage of having an established Olive Avenue Underground Utility District No. 1 is the ability to have the communication companies remove their wires at their own expense, estimated at $300,000, rather than BWP�s.

BWP will be rebuilding many of the overhead lines that the replacement Burbank Station will supply. Like BWP�s other modern distributing stations, the circuits that fan out to the surrounding neighborhoods will be energized at a higher voltage, 12,470 volts instead of the existing 4,160 volts. (The higher voltage reduces losses as well as the number of circuits that need to leave the station.) Although these circuits leave the station underground, after a suitable distance they rise up a power pole and go overhead. In order to enable the overhead lines to safely handle the higher voltage, BWP will need to set taller poles, increase the spacing between conductors and do other pole line work. Staff needs to pace this voltage conversion activity so that, when the replacement Burbank Station is completed, the neighborhood lines will be ready to receive power at 12,470 volts.

Removing the existing Burbank Station from the high voltage network must be done with great care to avoid service outages. When the replacement Burbank Station is completed, BWP will begin to move lines from the existing Burbank Station to the replacement one. At the end of the process the four stations mentioned earlier, Flower, McCambridge, Town, and San Jose, will receive their power from the replacement Burbank Station. Staff must handle this transition with great care so as not to cause extensive power outages, and has retained Power Engineers to assist with the system analysis as lines are reconfigured.

II. A design-build contract, awarded after competitive bidding, affords BWP the best chance of completing the replacement Burbank Station within schedule and budget, and in a manner that meshes smoothly with related capital improvement projects.

BWP believes that the design-build method will be an especially good approach for building the replacement Burbank Station. As mentioned earlier, a successful station project requires the smooth coordination of civil, structural, and electrical design with site preparation, foundation and substructure work, and equipment installation. Under the traditional design-bid-build approach, BWP would engage an engineering firm to design the station and then hire a construction company to build it.  This invites a lack of coordination and conflict among engineers of different disciplines, and between engineers and field crews.

In contrast, under the design-build (or turnkey) approach, BWP would engage a single firm to be responsible for design, procurement, and construction. Early collaboration between design and construction teams minimizes the chance of costly errors. And even if such errors do occur, the design-builders have the obligation to correct them at their own expense.

When designing and building the replacement Burbank Station, there will be even more of a coordination challenge, owing to the related BWP Yard improvements, undergrounding, and voltage conversion that will take place concurrently. Having a single design-builder for the Burbank Station will make inter-project coordination more manageable.

Selecting a design-builder through fresh competitive bidding is appropriate at this time. As a result of competitive bidding back in 2001, staff had selected ABB, Inc. (ABB) as the design-builder for the Alan E. Capon Switching Station. Owing to the very successful completion of this project, which was within schedule and budget with no contractor-initiated change orders, BWP continued to use ABB on a sole-source for other station projects, including the construction of the new Hollywood Way Station, the expansion of the Olive Switching Station. Earlier in June, ABB completed installing the new transformer banks that serve the existing Burbank Station, and will serve the replacement one.

In every instance, ABB has continued to deliver projects within schedule and budget with a minimum of friction. At the same time, another firm, Siemens, has built a good track record of successful turnkey electric station projects for the Anaheim Public Utilities Department. Moreover, both ABB and Siemens offer station equipment that can meet BWP�s requirements for the new Burbank Station. And there may be other firms offering the same capabilities. Staff therefore believes that it is appropriate to open the design-build of the replacement Burbank Station to competitive bidding.

III. BWP is preparing a Request for Proposal No. 1216 (RFP 1216) that seeks to select a design-builder on a �best value� basis, which fulfills the requirement that use of the design-build method be consistent with principles of competitive bidding.

Besides receiving assistance from Power Engineers in the preparation of RFP 1216, staff is meeting regularly with the City Attorney�s Office and the Purchasing Division.  Staff is completing:

Soil test and soil report.

• Technical specifications for major electrical equipment.

• Preliminary design drawings.

• Design and performance criteria.

• Final scope of work.

• Updated contractual terms and conditions, including insurance requirements and liability provisions.

• Scoring method when evaluating bidders on price, company history (including safety record and financial stability), compliance with the technical specifications, and caliber of the people assigned to the design-build team.

 Also, RFP 1216 will make clear that:

• The contractor will comply with all applicable City codes, including those addressing working hours, traffic control, noise control, and dust control.

• The contractor will get all necessary permits from the Building Division and Public Works Department.

• The replacement Burbank Station will take full advantage of modern design practices:

• The higher-voltage portion will have state-of-the-art, minimum-maintenance 38,000-volt Gas Insulated Switchgear (GIS) technology, similar to that used in BWP�s newer electric stations.

• The lower-voltage portion will have 15,000-volt rated metal clad switchgear.

• There will be no open-rack busses or structures.

• All lines originating from the replacement Burbank Station will go underground.

• The equipment enclosures will harmonize with the surrounding BWP Yard and have pleasing architecture.

• The design-build of the replacement Burbank Station will take no more than 30 months, and this period will have phases designed to minimize disruptions to the electric system, and benchmarks to measure contractor performance.

• Only IBEW workers will do any electrical work that is contracted out.

Staff plans to issue RFP 1216 in early August 2006, and award the design-build contract in December 2006.

A four-person Selection Committee of BWP staff would evaluate the proposals and determine the �best value� proposal, instead of the �lowest responsible bidder� proposal. The design/build of the new Burbank Station has two critical components:

• Major station equipment such as transformers and switchgear.

• Caliber of the firm�s project engineering and management.

Because major equipment represents 60% of the project cost, a �lowest responsible bidder� approach would encourage bidders to over-emphasize low equipment cost, and under emphasize the caliber of the firm�s project team. (Staff fears the contractors would pay more attention to the word �lowest� than to the word �responsible.�) As other utilities have found to their regret, equipment quality and project management capability both suffer, and change orders multiply. These drawbacks can wipe out the presumed advantages of equipment with a lower first cost.

Staff�s �best value� evaluation system will be able to encourage competitive equipment pricing, but not so much that bidders would have an incentive to cut corners on their project management. RFP 1216 would include an up-front scoring system that tells bidders the weight carried by each scoring factor, including quality of firm, quality of project team, and equipment pricing.

Each Selection Committee member will individually score each company, and the average of the individual scores will determine the final point score, and ranking. The City will have reasonable flexibility to negotiate the final terms with the firm offering the �best value� proposal.

BWP has met with the Employee Bargaining Groups. BWP informed the BCEA, BMA, and IBEW that it intends to contract out the work to build the new Burbank Station under RFP 1216, and would meet with each of them on a more formal basis before staff sends out RFP 1216.

The CEQA Process has been completed.  Building a new Burbank Station within the BWP Yard, near Olive Avenue and Lake Street, is included within the BWP Yard Plan Project, which is categorically exempt under CEQA Guidelines 15301 Class1(b) and 15302 Class 2(b),(c), and (d).  The Public Notice of Environmental Decision (NOED) was posted in the Planning Division for 21 days, beginning on May 30, 2006. The NOED was removed on June 21, 2006.

FISCAL IMPACT

Building a replacement Burbank Station is already a part of BWP�s approved capital improvement budget. Soliciting design-build proposals to build this station offers BWP the best chance of staying within schedule and budget; the fiscal impact is positive.

RECOMMENDATION

Staff recommends that the Council adopt a resolution to authorize the BWP General Manager to solicit design-build proposals for the work under RFP 1216 to build a replacement Burbank Station.

If the Council concurs, the appropriate action would be a motion to adopt the Resolution entitled:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AUTHORIZING THE GENERAL MANAGER OF BURBANK WATER AND POWER TO SOLICIT DESIGN-BUILD PROPOSALS FOR A REPLACEMENT BURBANK STATION (RFP NO. 1216)

DDB:GLS:jg

Attachment:  Areas affected by Burbank Station

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