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Home My WebLink About2010-07-26 10-268 ORDERCOUNCIL ACTION Item No.1 n � 6 g Date: July 26, 2010 Item/Subject: Order, Authorizing Contract Amendment with Honeywell — WWTP Operations Building Heating and Ventilation System Responsible Department: WWTP Commentary: In December 2007, Honeywell, as part of its technical energy audit contract, submitted its report of projects for the WWTP facilities. Due to the efficiency of the plant operations, the projects that were brought forward were more operational in nature. At that time, the only project identified as a priority was the upgrade of the heating and ventilation systems. Based on this direction, Honeywell developed a project to address the HVAC systems. Due to the estimated project cost, the City requested Honeywell to reduce the scope of work to make the project more affordable. The currently proposed project would replace the current HVAC system at the WWTP's Operations building. The current system is a low pressure steam system that was installed in 1968, which has not only reached the end of its useful life, but does not comply with current life safety codes. In accordance with the City contractual provisions, upon completion of the engineering and design of the system, Honeywell administered a competitive bid process. Staff spent a significant amount of time thoroughly reviewing the project scope, the process employed as well as the overall reasonableness of the proposed pricing structure. This order would authorize an amendment to our existing contract with Honeywell, in the amount of $1,004,146 and allowing the project to be completed prior to the upcoming heating season. Manager's Comments: This was reviewed by the Finance Committee and approval 7/19/2010. Department Head Interim City Manager Associated Information: Memos from Brad Moore and Honeywell, Open Book Pricing Summary Budget Approval: nance Director Legal Approval: Solicitor Introduced for X Passage First Reading Referral Assigned to Councilor - Weston CITY OF BANGOR July 26, 2010 (TITLE.) Order, Authorizing Contract Amendment with Honeywell - WWTP Operations Building Heating and Ventilation System By the City Council of the City of Bangor.• ORDERED, THAT the Finance Director is hereby authorized to execute a contract amendment with Honeywell for the purpose replacing the WWTP Operations building heating and ventilation system . IN CITY COUNCIL July 26, 2010 Motin Made and Seconded for Passage Passed <qtpr�14Q DEPUTY CITY CLERK 5�0lq 10-268 (T1TLE9)_Ajjthnri zing Contract Amendment with AnnP=11 WWTP Operations Building Hpatine and Ventilatin System Assigned to Council 10 `'6g MEMO July 12, 2010 To: Finance Committee Debbie Cyr Jim Ring Fr: Brad Moore Re: WWTP Operations Building Heating System The Wastewater Treatment Plant, for several years, has recognized the need to replace the heating and ventilating systems in the operations building. The heating system is a low pressure steam system that was installed in 1968. The need for this replacement was confirmed by Honeywell through the energy audit process. Most of the major components of the heating and ventilating system are original and are in need of replacement The City entered into a contractual agreement with Honeywell to proceed with final design and implementation for the replacement of the heating and ventilating systems. The contract defined the process for competitive pricing, allowable mark ups and open book pricing. Honeywell completed final design, bid the project and submitted a final proposal. As a result of the project cost, the City requested Honeywell reduce the scope to make the replacement more affordable. Honeywell subsequently provided another proposal with the reduced scope. The project was then advertized and CCB, Inc., of Westbrook, Maine, was the successful bidder and would handle the general contracting and mechanical installation work. CCB, Inc., has been providing construction services in New England for 63 years and staff agrees the company is capable of handling the scope of work in this project. As a part of our review of the project and the process Honeywell has used, staff contacted CH2M Hill as a sort of peer review. CH2M Hill is very familiar with the wastewater treatment plant and the procurement process Honeywell has used. CH2M Hill felt that Honeywell's proposal pricing is reasonable and the markups are in line with typical values for this process. Staff considered the possibility of going to a standard competitive bid process but concluded that it would delay the implementation of the project and quite likely result in no cost savings. Honeywell did go through a competitive process in selecting the general contractor. Considering the current economic climate, staff believes the pricing received reflects the current trend of low construction costs. Delaying the project to next year will be very likely more expensive. Honeywell's proposal provides guaranteed pricing, which is defined as a firm fixed price (no change orders) for the contracted scope of work. This is an advantage to the City on a project with this complexity. As mentioned above, Jim Ring and Brad Moore have had numerous conversations with Honeywell representatives, primarily Jim Lucy. These discussions involved the contractual agreement between the City and Honeywell, scope of work, the competitive bid process and Honeywell's mark up for the project. Included with this memo is a letter from Mr. Jim Lucy, dated June 17, 2010, summarizing the engineering and bid process for this project along with the pricing summary provided by Honeywell. After discussions in house and with Honeywell, staff recommends proceeding with this project at the quoted cost of $1,004,146. 10 "68 Honeywell June 17, 2010 Mr. Bradley Moore Superintendent, Wastewater Treatment Plant 760 Main Street Bangor, ME 04401 Brad, The following is a summary of the bid process Honeywell followed to develop the proposed upgrades at the treatment plant. I have also enclosed our open book pricing summary consistent with appendix B of Honeywell's contract with the City for technical energy audits and project development. This open book pricing summary includes Honeywell's project costs with our agreed upon contract mark-up for overhead and profit. Background: In August of 2006 Honeywell was selected by the City of Bangor following a competitive Request for Proposal bid process to enter into a contract to perform technical energy audits and develop performance contracting projects for 42 buildings throughout the City representing 1,316,418 square feet. The project development contract entered into between the City and Honeywell incorporated an open book pricing requirement that included a fixed mark-up for overhead and profit. These mark-ups are 13% and 10% respectively on top of actual project costs. The technical energy audits were broken into four groups including the general fund, airport, school department and waste water treatment facilities. In December of 2007 Honeywell submitted its technical energy audit report for the Waste Water Treatment Plant facilities. The report included recommendations to reduce energy costs, sludge tipping fees and upgrade HVAC systems to replace equipment at the end of its useful life and to meet current code standards for ventilation in the operations building. In March of 2008 Honeywell received feedback from the City on the recommended measures it would like to proceed with for final design and implementation. Following the completion of the final engineering and bidding phase Honeywell submitted its final proposal to the City in November of 2008. Since this period of time the project has been delayed due to available capital dollars. In an effort to reduce project costs the City and Honeywell have made recommendations to value engineer and modify the selected scope of work to reduce project costs within available funding levels. The current proposal is the result of those efforts. Bid Process: Honeywell's typical bidding practices are dependant on the availability of our internal resources. For this project Honeywell will self perform the controls portion of the work along with project management, administration and commissioning tasks. The controls portion is quoted, as negotiated previously with the city, using our posted manufacturer's prices for equipment and the hours and associated labor costs for the controls work. Following the completion of final engineering and design drawings Honeywell administered a competitive bid process for the scope of work excluding the controls and oil pre -heaters which are manufactured and installed by the supplier. Five pre -qualified contractors were invited to bid + x:68 Honeywell on the general contracting and mechanical work and three pre -qualified contractors submitted pricing. The three responding bidders were: • Sullivan and Merritt • CCB, Inc. • RTH Mechanical The results of the bidding for the general contracting and mechanical scope selected in March of 2008 are as follows: • Sullivan and Merritt Constructors- $1,022,200 • CCB, Inc- $750,000 • RTH Mechanical- $958,321 Due to the large variation in bids, Honeywell conducted post -bidding interviews to confirm that each bidder understood the scope of work and required procedures for completing the work. CCB, Inc. was the selected bidder on price and overall comprehension of the required work to be completed. Following the completion of the bidding and contractor selection all recent scope modifications made by the City have been re -quoted by the selected contractor CCB, Inc. The following open book pricing summary outlines Honeywell's project costs consistent with our project development agreement. Due to project budget constraints and in an effort to work with the City Honeywell has excluded a significant amount of actual hours spent on this project during the engineering and design phase. Please let us know if you have any questions or if you would like any additional documentation regarding the bidding process. Regards, Jim Lucy d i j L •ry of r µ I' Open Book Pricing Summary alne Waste Water Treatment Plant s - �3. 06"M 6"t Army W*ft A. PCE Lobo '" 'WWW" '11911 y4vap.... v Tot6tt A. PCE $ 88 14 240 $ 21.110 B NI&V $ 8814 - $ - C TECHIENG controls eng $ 50 07 - $ - D. Const Mgml $ 9699 90 $ 8,722 Sub Total $ 9699 458 $ 29,832 E Contracts $ 9699 0 $ - F Consultant S - 36200 0 $ 36.200 G. Financial Specialist $ 67,07 0 $ - H. Ck>ncal/Adrnin $ 44.71 0 $ - i. Program Management $ 8814 0 $ - Sub Total $ 88 14 36200 0 $ 36.200 J Travel/Expenses $ 540 855 $ 540 Sub Total $ 540 $ 540 Design Subtotal $ 36,740 $ 66,572 Installation �3. 06"M 6"t Army W*ft A. PCE $ 88 14 24 B M&V $ 8814 0 $ En�ineerin/Technica! Sub Total 24..._$ ..................._Z_ 115 C Contracts $ 96 99 0 $ D. ClericaVAdrnin $ 44.11 0 E. Construction Management $ 9699 458 $ 44,421 Project ManagemontlSite Leader $ 79.49 0 $ - Control Software Engineer $ 74 18 175 $ 12 982 Control Technician $ 8370 222 $ 18.581 Fitters $ 7626 0 $ Commissioning $ 7949 0 $ F. Program Management $ 88 14 0 $ Pro ram Management Sub Tota! 855 $ 75,984 Material $ Outside Purchase S $ - Honeywell Mfg Posted Price Material Sub Total $ 29,009 $ 29,009 $ 29,009 $ 29.0091 Subcontractors $ General Contactor $ 523,841 $ 523.841 Oil Heaters $ 5,400 $ 5,400 Controls Electrical Installation $ 76,599 $ 76,599 S $ $ $ $ S $ Subcontractors Sub Total $ 605.840 $ 605,840 Other itn lementation Expenses 1 Travel/Expenses $ - $ - 2. PerformancolPayment Bond 3 4,519 $ 4,619 3 Contingency Other Implementation Expenses $ 21,170 $ 25,689 $ 21,170 25.689 1 Installation Subtotal $ 660,537 879 $ 738,637 Summary Energy Audit Subtotal $ - $ 2,631 Design Subtotal S - $ 66,572 Installation Subtotal $ 660,537 879 $ 7 38.637 Total Direct Costs $ 660,537 879 $ 807,840 Mark-up Percent 13'i6 10"•41 Marko $ 196,305 '. Total Project Price Less Financing $ 1,004,146 Capital Funding $ Total Financed Amount $ 1,004,146 Construction Interest $ TOTAL FINANCED PLUS INTEREST $ 1,004,146