CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: July 1, 2009
SUBJECT/TITLE: Approval of Award of Construction Contract, Bid No. 0126-09-RM-BC, Approval of Supplemental Appropriation for Substation BP-21 and Approval of Combining Projects 07149 and 0101237
TARGET ISSUE:
STATEMENT OF ISSUE
The Electric Utility has completed the design of substation BP-21 to provide electric service to the Fallschase development and other parts of the eastern part of the electric service territory. Procurement Services issued Bid No. 0126-09-RM-BC for the construction of the substation on April 24, 2009. Six bids were received ranging in price from $4,035,000 to $5,038,324. This agenda item is requesting City Commission approval for the award of the construction contract to the lowest responsive and responsible bidder, MasTec North America, Inc., in the amount of $4,035,000; authorization for the City Manager to execute a contract with the selected firm in accordance with Bid No. 0126-09-RM-BC; authorization for the City Manager or designee to approve contract amendments in an amount not to exceed 25% of the initial contract value; approval of an additional appropriation of $490,000 from existing FY2007 Bond Issue Fund Balance; and approval to combine project #0101237 – Substation BP 21 Construction, which is funded with existing bond proceeds from the FY2007 issue, with project #07149 – Fallschase Substation BP21.
RECOMMENDED ACTION
Option 1: Approve the award of contract for the construction of Substation BP-21 to MasTec North America, Inc. in the amount of $4,035,000; authorize the City Manager to execute a contract with the selected firm; authorize the City Manager or designee to approve contract amendments in an amount not to exceed 25% of the initial contract value; approve an additional appropriation of $490,000 from existing FY2007 Bond Issue Fund Balance; and approve combining project #0101237 (which is funded with existing bond proceeds from the FY2007 issue) with project #07149.
FISCAL IMPACT
Option 1: $4,035,000. The available balance in Project #07149 - Fallschase Substation BP21 will be $4,919,655 after the additional appropriation and combining Project #0101237 – Substation BP21 Construction with Project #07149.
Kevin G. Wailes, General Manager – Electric Utility
Anita Favors Thompson, City Manager
For information, please contact: Brian Fisher, Electric Power Engineering, x5034
SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
Substation BP-21 is one of the new substations on the east side of Tallahassee that will be served by the new Eastern Transmission Line. This substation will provide greater reliability and capacity in the eastern and northeastern part of the electric system by alleviating loading problems in the area that have been problematic over the last few years, provide backup for several substations in the area, as well as carry additional load created by the new Fallschase development.
Major equipment such as the 50MVA power transformer and 115kV circuit breakers have been purchased and are ready for installation pending the award of this construction contract. Other equipment such as 12kV circuit breakers will need to be purchased from project funds.
The original project budget was $5,000,000 and the current available balance is $4,148,253. Project #0101237 – Substation BP21 Construction is for work related to project 07149 and has an available balance of $281,402.63. The Electric Utility is requesting authorization to combine these projects for streamlined accounting and asset recognition. It is estimated that additional funding of $490,000 is required to complete the project. Any unused funds will be returned to the fund balance.
The design of this substation was changed during the design process to result in lower equipment and construction costs as well as anticipated lower maintenance costs and a higher degree of safety. Staff estimates the savings at $670,000 (approximately $420,000 on switchgear and $250,000 on the building) plus an undetermined amount on reduced future maintenance costs. Although the bid prices are higher than what was anticipated when the project budget was developed, staff believes the recommended contract price is reasonable when compared to the five higher bids.
Procurement Services and Budget and Policy have reviewed this agenda item and concur that it meets purchasing and budget guidelines.
CHARITABLE CONTRIBUTIONS
Bids received from six firms.
The low bidder, MasTec North America, Inc., made a contribution to the United Way of the Big Bend in the amount of $5,000.00. No other bidders made charitable contributions.
Award not based on Charitable Contribution Preference.
OPTIONS
Option 1: Approve the award of contract for the construction of Substation BP-21 to MasTec North America, Inc. in the amount of $4,035,000; authorize the City Manager to execute a contract with the selected firm; authorize the City Manager or designee to approve contract amendments in an amount not to exceed 25% of the initial contract value; approve an additional appropriation of $490,000 from existing FY2007 Bond Issue Fund Balance; and approve combining project #0101237 (which is funded with existing bond proceeds for the FY2007 issue) with project #07149.
Option 2: Approve the award of contract for the construction of Substation BP-21 to MasTec North America, Inc. in the amount of $4,035,000; authorize the City Manager to execute a contract with the selected firm; do not approve a supplemental appropriation and combination of projects for Substation BP-21 construction. This is not recommended since the project would be adversely impacted and would not have sufficient funding for proper completion.
Option 3: Cancel the bid and re-bid the construction project.
FISCAL IMPACT
Option 1: $4,035,000. The available balance in Project #07149 - Fallschase Substation BP21 will be $4,919,655 after the additional appropriation and combining Project #0101237 with Project #07149
Option 2: Unknown, but the project could not be completed and delaying this project for lack of funding may result in greater overall cost due to increased material and labor costs and decreased reliability to major customers.
Option 3: Unknown at this time but is not anticipated to be lower than Option 1.
ATTACHMENT/REFERENCE