A Replacement Burbank Station would take advantage of the same modern design practices that characterized BWP�s recent station projects, including the use of 38,000-volt Gas Insulated Switchgear (GIS) technology in a pre-engineered equipment enclosure, and the undergrounding of lines that enter the station.

Power Engineers, Inc. (Power Engineers) confirmed the soundness of BWP�s conceptual design for a Replacement Burbank Station and that such a station could fit in the southwest corner of the BWP Yard near Olive Avenue and Lake Street. Power Engineers also updated the major equipment specification items to assure consistency with latest industry standards, while allowing a variety of equipment manufactures to meet the specifications.

BWP�s goal is to energize the Replacement Burbank Station by July 1, 2008, and transfer all load from the old Burbank Station by July 1, 2009.

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. 

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 pre-design-build 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.

The City Council authorized the General Manager of Burbank Water and Power to solicit design-build proposals for a Replacement Burbank Station. On June 27, 2006, the City Council approved Resolution 27,268 and authorized the BWP General Manager to solicit design- build proposals for a Replacement Burbank Station under RFP 1216.

RFP 1216 provided a comprehensive description of the Replacement Burbank Station project.  RFP 1216 has three major sections:

• Project Manual. Includes price proposal and all commercial terms: Request for Proposals, Instructions to Proposers, Qualification Questionnaire, Evaluation Criteria, Weight and Scoring System, Proposal Bond, Data Sheets for Major Equipment Items 1 through 5 and two equipment enclosures for Technical Review, Design and Management Proposal, Summary Price Proposal with details of Major Equipment Items 1 to 5 costs, Design-Build Agreement, General Conditions, Bonds, Insurance and Warranties.

• Design Criteria and Technical Specifications.  Includes detailed design criteria and technical specifications for Major Equipment Items 1 to 5 and two equipment enclosures, civil work, electrical work, ducts and manholes, as well as all station testing and commissioning.

• Plans and Drawings. Includes conceptual design drawings, station location, layout of major equipment, soil report, ground resistivity, underground getaways, layout of underground connection to Lake 1 Unit and to Magnolia Power Project (MPP) Auxiliaries Transformer, and layout of duct work in the vicinity of the station. Includes detailed construction phasing of the project which is designed to minimize construction-related disruption of the 34,500-volt system. Also specifies that IBEW workers are to do all electrical trade work within the Replacement Burbank Station.

RFP 1216 set a completion deadline of June 30, 2009.

BWP received three proposals in response to RFP 1216. Financial Services Department�s Purchasing Division (Purchasing) advertised RFP 1216 in The Burbank Leader on August 9, 2006 and August 12, 2006. On August 9, 2006, RFP 1216 became available to interested bidders.  BWP held a pre-bid meeting and job walk on August 30, 2006; 32 people from 15 different companies attended. Following the meeting, Purchasing sent out four addendums and allowed two date extensions, making October 10, 2006, the deadline for submitting proposals.

BWP received three proposals:

• ABB, Inc. (ABB). ABB would be the prime contractor, providing project management, site management and design services. ABB proposes Miron Electric as subcontractors for the electric work; Shaw and Sons for the civil work, including foundations and transformer oil containments; and Pouk and Steinle for ducts and manhole work.

• Siemens Power Transmission and Distribution, Inc. (Siemens). Siemens would be the prime contractor, providing project management, site management and design services. Siemens proposes ORSA Consulting Engineers, Inc. as part of the design team; and PAR Electric (a subsidiary of Quanta Services) as a subcontractor to perform electrical, civil, and conduit work.

• Contra Costa Electric/Energy Delivery Services-Shaw (Contra Costa/EDS Shaw). Contra Costa Electric would be the prime contractor providing project management, site management, electrical work, and conduit work. EDS Shaw would provide engineering support, major equipment procurement, and project management support. Simmons Construction, Inc. would provide support for equipment foundations and enclosures.

ANALYSIS

BWP Staff�s objective was to identify the �best value� proposal, rather than the �lowest responsible bidder� proposal. The design/build of the Replacement 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 approximately 50% of the project cost, a �lowest responsible bidder� approach could encourage bidders to over-emphasize low equipment cost, and under emphasize the caliber of the firm�s project team and quality of work. (Staff feared 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.

A �best value� evaluation process still encourages competitive equipment pricing, but not so much that bidders have an incentive to cut corners on their project management teams and quality of work. RFP 1216 included an up-front �best value� scoring system that presented the major evaluation categories and their maximum allowable points:

Under the guidance of Purchasing, a four-person Selection Committee of BWP staff evaluated the bidders� proposals. The Selection Committee represented diverse perspectives within BWP:

• Dev Birla, Manager Transmission and Distribution Engineering (Electric Services Division, Engineering Section)

• Chuck Herron, Manager Electric Distribution (Electric Services Division, Line Section)

• William Hutchings, Principal Electrical Engineer (Power Systems Division, Engineering)

• Michael Kelly, Electrician Supervisor (Electrical Services Division, Electric Shop)

In addition to the Selection Committee, four others from BWP staff gave input during the evaluation and selection process: Senior Electrical Engineer Willie Josue (Electric Services Division, Engineering Section); Manager Electrical Equipment John Patterson (Electric Services Division, Electric and Test Shops); Senior Test Technician Mark McCord (Electrical Services Division, Test Shop), Power Dispatcher Ken Kramer (Power Systems Division, Energy Control Center).

Evaluation of Categories 1, 2, and 4 preceded the bidders� oral presentations (Category 3). With the assistance of the Financial Services Department and BWP Staff, Purchasing evaluated and scored each bidder for Category 1, �Business History and Past Performance.� Purchasing and BWP evaluated and scored each bidder for Category 4, �Price and Total Owning Cost:�

After the selection process, ABB offered to reduce its price by $26,000, from $17,273,260 to $17,247,260, in exchange for the City agreeing to limit their liability, exclusive of insurance, to the contract amount instead of twice the contract amount.  BWP Staff obtained the concurrence of Risk Management and the City Attorney�s Office, and the City accepted ABB�s offer.

Evaluation of Category 2 also preceded the bidders� oral presentations (Category 3). On October 31, 2006, key members of the BWP Electric Division Staff and three of the Selection Committee members evaluated and scored each bidder for Category 2, �Technical Proposal for Major Equipment Items.� They held conference calls with each bidder at separate times and asked detailed questions about the bidder�s technical proposal.  After the conference calls were concluded, the group discussed each proposal extensively and reached a consensus on the scoring.

Before the bidders made their oral presentations, the Selection Committee had the bidders� tabulated scores for Categories 1, 2, and 4.

Oral presentations took place on November 14, 2006, in the Magnolia Power Plant�s Colton Room. Each bidder had 90 minutes to make an oral presentation and introduce the bidder�s project team. Four members of the Selection Committee, five members of BWP staff, and two representatives from Purchasing (11 in all) listened to the presentations. Each bidder had to answer a standard set of 20 questions, along with follow-up questions as appropriate. Each Selection Committee member individually scored each oral presentation and the project team; the final score for Category 3 was the average of the individual scores.

Immediately following the oral presentation on November 14, 2006, the Selection Committee and Purchasing had reached the following discussion and consensus:

• ABB proposed the best team (internal and subcontractors) for this project.

• ABB�s proposed project team has worked together on other design-build projects, including the Lewis 230 kV Extension Project for City of Anaheim and (except for Pouk and Steinle) the Kellogg GIS Expansion Project for City of Glendale. All project team members (except Pouk and Steinle) have worked with ABB on all four previous design- build projects for BWP. All projects proceeded well and had no delays in completion. ABB did not initiate any change orders or press any claims.

• ABB is very willing to do the coordination necessary to keep the construction of the Replacement Burbank Station from interfering with other projects or making the 34,500-volt system vulnerable to outages. ABB demonstrated a high level of coordination on other BWP station projects.

• ABB offered the best technical proposal for Major Equipment Items 1 to 5 without any exceptions to BWP�s tight specifications. ABB proposed their own equipment for 38 kV Gas Insulated Switchgear (GIS) manufactured in Germany and 15 kV Air Insulated Switchgear (AIS) manufactured in Lake Mary, Florida. They selected a California manufacturing company, Delta Star, for supplying the power transformers, and a Canadian-based partner for the capacitor banks.

• ABB took no exceptions to General Conditions, Limit of Liability, and other commercial terms and conditions. Both Siemens and Contra Costa had significant exceptions to the City�s terms and conditions.

• ABB included three different, no-cost options for greater station automation, an emerging industry standard. All three options propose using PC-based units with touch screen interface for local control and monitoring. Each option offers somewhat differing additional features and hardware modifications. BWP Staff agrees that it should select one of the options.

The Selection Committee unanimously recommended ABB for award of contract.

The 11 who had listened to the oral presentations reviewed all four evaluation criteria for each bidder and determined the overall ranking:

Although the Selection Committee believed any of the three bidders could successfully build the Replacement Burbank Station, ABB emerged with the �best value proposal� and also had the lowest firm price. The Selection Committee recommended the award of contract to ABB.

The Selection Committee and Purchasing wanted ABB to make a firm commitment that it would not substitute other individuals for the project manager, site manager, and project engineer that they had identified (as long as ABB continued to employ those individuals). ABB confirmed this commitment in an e-mail dated November 17, 2006.

In an e-mail dated November 17, 2006, ABB also confirmed that BWP could exercise one of the three Substation Automation Options offered by ABB with no additional cost to BWP.

ABB�s proposed price is consistent with the engineer�s estimate. Staff previously estimated the total cost of building the Replacement Burbank Station to be $19.7 million over the next four years, as stated in the report to Council dated June 27, 2006. This estimate was developed in March 2006, and relied on past experience as well as input from Power Engineers, and made an allowance for the rising price of metals and construction costs. The $19.7 million total breaks down into three major categories:

• About $16.4 million for a design-build contract to do the detail design, equipment procurement, and construction of the Replacement Burbank Station.

• About $2.3 million for in-house labor and material costs over the next four years.  Material costs (mostly underground power cable and devices) account for $1.1 million; Power Engineers� engineering assistance, $0.2 million; and in-house labor, $1.0 million.

• About $1.0 million over a three-year period for undergrounding the circuits leaving the station. During the bidding process, RFP 1216 included about $0.42 million of this amount for undergrounding work critical to the timely completion of the Replacement Burbank Station; specifically, installing seven maintenance holes and related work at Lake Street in the immediate vicinity of the station boundary. The remaining $0.58 million is part of Olive Avenue Underground Utility District 1 Project, currently out for re-bidding.

With the addition of the underground work just mentioned, the engineer�s estimate becomes $16,820,000, which is $427,000 less than ABB�s price proposal of $17,247,260. This price difference comes from the higher cost of the power transformers: $2,863,000 as compared to staff�s previous cost estimate of $2,300,000 in March 2006. In the eight months since this estimate, the prices of metals and oil have risen, factors that would especially impact the cost of transformers. The other cost variations are of minor significance and collectively result in offsetting cost decreases of $110,000, resulting in the $427,000 difference.

The additional $427,000 is reflected in staff�s latest estimate of project expenditures by fiscal year:

The BWP General Manager and his staff recommend ABB for award of contract.  The BWP General Manager reviewed the recommendation of the Selection Committee, along with a summary of overall score, ranking, and price information of each bidder, and agreed with the recommendation.

BWP has met with employee bargaining groups. BWP informed the BCEA, BMA, and IBEW that it intends to contract out the work to build the Replacement Burbank Station under RFP 1216.

The CEQA Process has been completed.  Building a Replacement 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.

FISCAL IMPACT

Building a Replacement Burbank Station is already a part of BWP�s approved five-year capital improvement budget. The additional $427,000 can be absorbed over the five years of the project.

RECOMMENDATION

Staff recommends that the Council adopt a resolution to award the contract to ABB, Inc. for the work under RFP 1216 to design-build the 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 APPROVING AND AUTHORIZING THE EXECUTION OF A DESIGN-BUILD CONTRACT WITH  ABB, INC. FOR THE  REPLACEMENT BURBANK STATION PROJECT (RFP NO. 1216) IN  AN AMOUNT NOT-TO-EXCEED $17,247,260.

DDB:GLS:jg

Attachment:  Overall summary score sheet with prices

c:         Bonnie Teaford, Public Works

            Rick Morillo, City Attorney�s Office

            Kristy Shadle, Purchasing

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