1 STAFF REPORT
DATE
: August 22, 2023
TO: Ju
stin Hess, City Manager
FR
OM: Dawn Roth Lindell, General Manager, Burbank Water and Power VIA: Mandip Samra, Assistant General Manager, Power Supply BY: Michael Wang, Principal Electrical Engineer
SUBJ
ECT: Adoption of a Resolution to Approve Design and Construction Services to Support the Iron-Flow Battery Project, Authorize the BWP General Manager to Negotiate and Execute the Design- Build Contract with WE O’Neil Construction Co. of California and Authorize the Assistant General Manager (Power Supply) to Approve Plans and Specifications
RECO
MMENDATION
Adopt A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING DESIGN
AND CONSTRUCTION SERVICES TO SUPPORT THE IRON-FLOW
BATTERY PROJECT, AUTHORIZING THE BWP GENERAL MANAGER TO NEGOTIATE AND EXECUTE THE DESIGN-BUILD CONTRACT WITH WE O’NEIL
CONSTRUCTION
CO. OF CALIFORNIA AND AUTHORIZING THE ASSISTANT
GENERAL MANAGER (POWER SUPPLY) TO APPROVE PLANS AND
SPECIFICATIONS
(Attachment 1).
BACKGROUND
In December 2021, BWP was awarded a Demonstration of Energy and Efficiency Development (DEED) grant in the amount of $125,000 from the American Public Power Association (APPA). The grant was for a 75 kilowatt (kW) and 500 kW per hour iron-flow energy storage pilot project (iron-f low battery). On May 24, 2022, the Burbank City Counc il voted unanimously to approve the agreement with APPA for the grant funding and move forward with the iron-f low battery project.
BWP is developing a pilot project to demonstrate an iron-f low battery on the MPP eco-campus.
An iron-f low battery is a long-d uration battery that enables energy delivery for up to 6 hours. Iron-flow batteries use materials that are abundant on earth, such as iron, salt, and water, for the electrolyte.
Energy storage systems of all types assist with smoothing out the intermittency caused by renewable resources (namely solar and wind resources), allow energy to be
shifted when needed to meet energy demand, defer upgrades to the transmission
and distribution system and have no air emissions (when interconnected
to a renewable resource). This pilot project will be interconnected with the existing 265 kW hour solar installation on the MP P eco-campus.
WATER AND
POWER
2 The project is underway, and ESS Inc. (ESS) has been selected as the battery manufacturer. The battery is currently in production and expected to be delivered on-site towards the end of 2023. This design-build contract will provide services to integrate the iron-flow battery once delivered.
Staff presented the design-build scope and contractor selection to BWP Board on August 3, 2023 and received their support and recommendation to move forward by seeking approval from and adoption of the proposed resolution by the City Council.
DISCUSSION
Design-Build Contractor Selection
Staff has initiated and completed the r equest for proposal (RFP) process for the design and construction services for the iron- flow battery project. Staff is now seeking the City Council’s approval to award the design-build (DB) contract to WE O’Neil.
On June 7, 2023, staff released an RFP under b id schedule no. 1518 to 3 DB firms that BWP prequalified using recommendations from the battery manufacturer and interviews.
A mandatory pre-proposal meeting and job walk were conducted on June 13, 2023, which was attended by contractors’ representatives from two firms. Two firms responded to purchasing with a proposal on July 12, 2023.
The scope of work for this DB contract includes the engineering and site preparation for the iron-flow battery to be installed on the BWP campus . This scope will include all electrical and civil design work required to integrate the battery on- site. Construction activities included in t his scope are demolition, battery foundation, secondary containment, removable vehicle bollards, and battery installation.
Upon receipt of proposals, the city’s Purchasing Division reviewed them to ensure they were complete and responsive. Purchasing deemed one of the firms non-responsive due to not meeting the proposal requirements. After removing the price proposal, which exclusively contains the cost of each proposal, purchasing notified BWP on July 13, 2023, that the proposal was ready and available for BWP to begin its evaluations.
The proposal was evaluated using a set of ranking criteria, including business history and performance (20 percent), technical and service (30 percent), schedule (10 percent), and price (4 0 percent). The e valuation team consisted of highly qualified personnel with expertise in electrical systems, including an electrical engineer, substation maintenance and construction staff, and a power production engineer. Upon completing the proposal evaluations, the e valuation team compiled and submitted its ranking scores to purchasing. Afterward, p urchasing was allowed to release the price proposal to BWP.
The price proposal was scored, and final evaluations were tabulated.
After tabulating the score, the evaluation team determined that the only responsive proposal was submitted by WE O’Neil. WE O’Neil is qualified to provide design and construction services to support the completion of the iron- flow battery project. WE O’Neil’s proposal has met all the requirements specified in the RFP , and their Special Projects team is specialized in the installation of smaller-scale projects such as the iron- 3 flow battery project. WE O’Neil’s team consists of seasoned and dedicated construction team members with a long history of successful projects and excellent references. As such, WE O’Neil’s proposal represents the best value proposal to accomplish the City’s objectives.
After releasing the total ranking scores to purchasing, BWP entered into negotiations with WE O’Neil to settle scope, pricing, and schedule matters and is finalizing the contract terms.
Staff is recommending that the City Council find that WE O’Neil’s proposal presents th e best value, that it is in the best interest of the City to waive the traditional competitive bidding process in favor of this design- build process, and authorize the BWP General Manager to finalize and execute this design- build contract as set forth in the draft resolution.
Design Immunity
California Gov. Code, Section 830.6 provides for design immunity to the city when the City Council approves the final plans and specifications. Design immunity is a li ability protection provided for public projects when plans have been reasonably approved, and errors may have been found at a later time. In a traditional design-bid-build project, design or plan approval occurs when City Council awards the construction project just after bidding. With a DB project, final plans and specifications are not completed until after City Council approval. Therefore, for the city to retain design immunity, City Council or any employee exercising discretionary authority must approve the plans and specifications for a project using the DB method. The City Council may also delegate this authority.
Accordingly, staff is requesting the City Council to delegate authority for approving plans and specifications to the BWP Assistant General Manager (Power Supply), or designee.
ENVIRONMENTAL REVIEW
This design and construction work authorized by the resolution consists of minor alteration of existing public structures, facilities, and mechanical equipment, involving negligible or no expansion of existing or former use. As such, staff recommends that the City Council find such activity and adoption of this resolution categorically exempt under the California Environmental Quality Act (CEQA) Guidelines and that no exceptions apply (14 CCR §§ 15300.2; 15301).
FISCAL IMPACT
The total cost of the WE O’Neil design -build contract to provide design and construction services for the iron-flow battery is $296,169. Negotiations to the final contract terms are ongoing and there may be a reduction in cost based on the discussion, this price will be updated accordingly when going to City Council for approval. In addition, staff will recommend a contingency amount of $ 29,617 (10 percent) to address any unforeseen issues or circumstances. The proposal cost is higher than the original engineer’s estimate of $200,000, which was a rough estimate based on initial discussions with contractors in the field. Challenges in site construction due to existing site conditions increased the level of difficulty for the build and contributed to variation from the original estimate.
4 Sufficient funds exist in the budget to fund the DB firm contract for this fiscal year 2023- 2024.
CONCLUSION
Staff recommends that the City Council delegate authority to the General Manager of BWP to negotiate and execute a DB contract with WE O’Neil pending successful negotiation and delegate authority to approve plans and specifications of the DB contract to retain design immunity, as set forth in the draft resolution.
ATTACHMENTS
Attachment 1 – Resolution
Attachment 2 – Exhibit “A” Scope of Work