New Treasure Island Wastewater Treatment Plant
Project
August 23, 2022
Jignesh Desai, Senior Project Manager
Infrastructure
Services of the San Francisco Public Utilities Commission AGENDA
• Project Background
• Overview of Procurement Effort
• Authorize Negotiation Request
• Questions
Background – New Treasure Island Treatment Plant
3 Overview of Procurement Effort
Request for Qualifications
• On August 5, 2020, SFPUC advertised Request for Qualification (RFQ)
• On September 22, 2020, SFPUC received response from two proposers.
SFPUC evaluated and pre-qualified the following two firms:
• MWH Constructors & Webcor Builders (MWH/Webcor)
• PCL Construction & Stantec Consulting Services (PCL/Stantec) 4 Overview of Procurement Effort
Request for Proposals
• On December 27, 2021, SFPUC advertised Request for Proposal (RFP) • Proposals received on May 24, 2022
• The RFP contained the Technical Bridging Documents, performance design criteria, and fixed budget limit for the project.
• The Technical Bridging Documents are primarily “performance based”, providing the Design-Builder the opportunity to develop cost-effective solutions 5 Non-Responsive Bid Determination
• San Francisco’s general policy, as reflected in the Administrative Code section 6.22.(h)(1) requirement that the Commission must approve any increase in construction contract amounts that exceed 10%, is that a cost overrun of over 10% constitutes a material change. • Bids that exceed 110% of the Fixed Budget Limit are materially nonresponsive to this Request for Proposals
• SFPUC has determined that MWH/Webcor submitted a materially nonresponsive bid, which leaves PCL/Stantec as the sole responsive bidder.
6 Staff Recommendation
• The project team recommends the General Manager’s adoption of the proposed findings and seeks Commission approval of the findings and Commission authorization to engage in negotiations for Contract DB-132 with PCL/Stantec and any other qualified contractor, consistent with Administrative Code 6.23(c)(3).
7 8
QUESTIONS
DEPARTMENT
Infrastructure
AGENDA NO.
12 MEETING DATE
August 23, 2022
APPROVAL:
COMMISSION
SECRETARY
Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Approve General Manager’s Determination and Authorize General Manager to Negotiate: Regular Calendar
Contract Manager: Jignesh Desai
Authorize Negotiations for Contract No . DB-132, New Treasure Island Wastewater Treatment Plant Project
Summary of
Proposed
Commission Action:
Approve the General Manager’s July 27, 2022 determination under San Francisco Administrative Code Section 6.23(c)(3) that negotiations with the responsible bidder submitting the sole responsive bid or any other qualified contractor are warranted because (1) the qualifications for bidders were not too onerous; (2) the non-responsive bid received cannot be easily cured ; and (3) rebidding the contract would likely not result in more than one responsive bid by responsible bidders at bid prices substantially lower than the bid price received for Contract No. DB-132, New Treasure Island Wastewater Treatment Plant Project; and authorize the General Manager to negotiate an agreement with the sole responsible bidder or any qualified contractor, and if such negotiations are successful, to return to the Commission for award of the contract.
Background: The Naval Station Treasure Island is a former United States Navy (Navy) base located in San Francisco that consists of two islands, Treasure Island (TI) and Yerba Buena Island (YBI), connected by a causeway. Based on the Memorandum of Understanding between T reasure Island Development Authority and the San Francisco Public Utilities Commission ( SFPUC), the SFPUC has been operating and maintaining TI and YBI existing utility systems.
The overall scope of this complex development program phased over 15- to 20- years includes: demolition of existing buildings and utilities, geotechnical improvements, construction of 8,000 new homes, and construction of new wastewater and stormwater infrastructure. The SFPUC is responsible for the planning, design, and construction of the new Treasure Island Wastewater Treatment Plant.
The objective of the DB -132 project is to build a new wastewater treatment plant that will meet regulatory requirements and will provide reliable service Contract: DB-132, New Treasure Island Wastewater Treatment Plant Project Commission Meeting Date: August 23, 2022
for the Treasure Island residents and mee t the recycled water demands of the future redevelopment on the island. The existing plant was built by the Navy over 50 years ago and is past its useful life and no longer reliable. The existing plant is also not capable of providing recycled water and meeting the needs of the residents on the redeveloped island. The new wastewater treatment plant would be constructed immediately adjacent and to the south of the existing plant site consistent with the location identified in the Final Environmental Impact Report (https://sftreasureisland.org/FinalEIR).
The new plant would have the capacity to treat an estimated 1.3 Million Gallons a Day (MGD) average dry -weather flow and a peak wet -weather flow of 3.9 MGD. The preliminary treatment would remove large objects and grit. The secondary treatment process would use a membrane bioreactor that allows for improved treatment performance in a smaller space than a conventional design, i.e., a plant using secondary clarifiers . The membrane bioreactor is a combination of suspended growth biological treatment system (activated sludge) in combination with membrane filtration equipment which is used to perform solid -liquid separation . The membrane biorea ctor system provides better effluent quality by removing ba cteria, biochemical oxygen demand, indication of dissolved oxygen requirement for biological degradation of organic constitute s) and total suspended solids, consis tent with National Pollutant Discharge Elimination System permit requirements . Disinfected secondary-treated effluent would pass through wastewater wetlands to further reduce pollutants, and then be discharged into the adjacent stormwater outfall pipe for discharge to San Franci
sco Bay. Solids generated in the treatment
processes would be thickened and hauled to the SFPUC’s Oceanside Water Pollution Control Plant for digestion. The resulting biosolids would be trucked to an off-site landfill or suitable location for land application. In addition, the new plant will provide Title 22 (
State Water Resource Control Board
Regulation related to recycled water) disinfected tertiary recycled water to serve the planned Treasure Island/Yerba Buena Island (TI/YBI) redevelopment for re-use. About 0.43 to 0.98 MGD of the Title 22 effluent would be diverted from the treatment plant for landscape irrigation, urban farming, and toilet flushing. The remainder of the disinfected effluent from the treatment plant would be directed to the wetlands.
On April 23, 2019, by Resolution 19- 0082, the Commission approved the project delivery method of Design-Build-Operate for Project No. CWP11001, New Treasure Island Wastewater Treatment Plant. Subsequently, after collaboration with Operating Engineers and va rious stakeholders, the General Manager and Assistant General Manager of Wastewater requested removal of the Operation component and requested to solicit proposals as Design-Build delivery method.
On March 8, 2022, by Resolution 22-0052, the Commission approved the sole source designation of Emerson Process Management DCS equipment in DB - 132 New Treasure Island Treatment Plant contract documents, in order to match existing products in use across WWE facilities, pursuant to San Contract: DB-132, New Treasure Island Wastewater Treatment Plant Project Commission Meeting Date: August 23, 2022
Francisco Administrative Code Section 6.73(e) and California Public Contract Code Sections 3400(c)(2).
Overview of Pro curement Effort:
On August 5, 2020, SFPUC advertised Request for Qualification (RFQ) for DB-132 New Treasure Island Wastewater Treatment Plan t. The RFQ process screened the field of proposers and identified those who established meeting the minimum qualifications . On September 22, 2020, SFPUC received response from two proposers. SFPUC evaluated and pre-qualified the following two firms:
• MWH Constructors & Webcor Builders (MWH/Webcor)
• PCL Construction & Stantec Consulting Services (PCL/Stantec)
On December 27, 2021, SFPUC advertised Request for Proposal (RFP) for DB- 132 New Treasure Island Wastewater Treatment Plant and invited the two pre- qualified firms to submit fixed budget design -b
uild proposals by April 22,
2022. The RFP contain ed the Technical Bridging Documents, performance design criteria, and fixed budget limit for the project. The Technical Bridging Documents are primarily “performance based”, providing the Design-Builder the opportunity to develop cost-effective solutions.
Procurement Effort Key Dates
Pre-Submittal Conference February 8, 2022
Pre-Submittal Site Walk February 9, 2022
DB-132 RFP Addendum No. 1
(Appendix H: Supplemental Request for
Qualifications (SRFQ))
February 15, 2022
DB-132 RFP Addendum No. 3
(Extended Proposal Due Date per Proposer’s Request) May 24, 2022 SFPUC Completed Evaluation of SRFQ May 19, 2022
Proposals Received from Pre-Qualified Firms May 24, 2022 SFPUC issued Preliminary Notice of Proposal
Rejection to MWH/Webcor to find their proposal non-
responsive due to a material deviation greater than
110% of the fixed budget limit
June 14, 2022
The General Manager has determined, in conformance with Administrative Code Section 6.23(c)(3), that (A) the qualifications for bidders were not too onerous, (B) that the non- responsive bid cannot be easily cured, and (C) that rebidding the contract would likely not result in more than one responsive bid by responsible bidders at bid prices substantially lower than the bid price received. Therefore, staff recommends the Commission authorize the General Contract: DB-132, New Treasure Island Wastewater Treatment Plant Project Commission Meeting Date: August 23, 2022
Manager to negotiate with the sole responsible bidder or any qualified contractor. Any qualified contractor may include those on the list of prequalified contractors or any other contractor that meets the minim um qualifications stated in the Request for Qualifications.
Upon conclusion of the negotiations, if successful, staff will return to this Commission and recommend award of the contract to a responsible contractor that has agreed to contract terms in the best interests of the City.
Description of
Scope of Work:
The c ontract work location is at Treasure Island, San Francisco, CA . The contract work consists of:
• Provide the wastewater treatment and recycled water treatment requirements of the new TI/YBI development in compliance with performance and design criteria as outlined in RFP;
• Design, Construct and Commission the new plant for operation by 2026 within awarded price;
• Maximize control of odors to the fence line;
• Optimize life-cycle costs;
• Produce Title 22-compliant water for re-use; and
• Provide flexibility to comply with future regulations.
Result of Inaction: A delay in authorizing this negotiation will postpone critical construction of a new plant that will impact the on-going development at Treasure Island and increases risks of regulatory non-compliance with existing aged plant.
Budget, Funding
and Costs:
Funding: Project No. CWP11001, New Treasure Island Wastewater Treatment Plant
Engineer’s Estimate: $158,500,000
Schedule: Estimated Notice-to-Proceed Date: October 24, 2022 Estimated Completion Date: October 22, 2025
Contract Duration: 1, 095 consecutive calendar days (975 consecutive calendar days to Substantial Completion and an additional 120 consecutive calendar days to Final Completion)
Compliance with
Chapter 14B: Local
Business Enterprise
Utilization and Non-
Discrimination in
Contracting
Ordinance:
Set: The Contract Monitoring Division established a Local Business Enterprise subcontracting requirement of 13% and 15% for the respective design and construction phases for this contract.
Submitted: TBD at the conclusion of negotiations.
Contract: DB-132, New Treasure Island Wastewater Treatment Plant Project Commission Meeting Date: August 23, 2022
Environmental
Review
This action to determine that contract negotiations are warranted and to authorize negotiations with any qualified contractor(s) does not constitute a “project” under CEQA Guidelines Section 15378(a) because there would be no physical change in the environment.
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution to approve the General Manager’s determination set forth in his July 27, 2022 memorandum, authorizing SFPUC staff to enter into contract negotiations with any qualified contractor(s) for Contract No. DB-
132, New Treasure Island
Wastewater Treatment Plant.
Attachments: 1. General Manager Determination Memorandum dated July 27, 2022
Treasure Island Wastewater Treatment Plant (Existing and Planned)
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) is responsible for the planning, design, and construction of the new Treasure Island wastewater treatment plant; and WHEREAS, On December 27, 2021, SFPUC staff advertised Contract No. DB-132, New Treasure Island Wastewater Treatment Plant Project; and WHEREAS, The Engineer’s Estimate is $ 158,500,000 for this Project, with an estimated contract duration of 1,095 calendar days; and
WHEREAS, On May 24, 2022, two pre -qualified bidders submitted proposals for the Project; and
WHEREAS, SFPUC staff reviewed the two proposals for responsiveness, and rejected one proposal for being materially non-responsive; and
WHEREAS, In conformance with San Francisco Administrative Code Section 6.23(c)(3), the General Manager has determined that qualifications for bidders were not too onerous, that the non-responsive bid cannot be easily cured, and that rebidding the contract would likely not result in more than one responsive bid by responsible bidders at bid prices substantially lower than the bid price received; and
WHEREAS, Contract Monitoring Division established a Local Business Enterprise (LBE) subcontracting participation of 13% and 15% for the respective design and construction phases for this contract, and the final LBE commitments will be determined at the conclusion of negotiations; and
WHEREAS, This action to determin e that contract negotiations are warranted and to authorize negotiations with any qualified contractor(s) does not constitute a “project” under CEQA Guidelines Section 15378(a) because there would be no physical change in the environment; now, therefore, be it.
RESOLVED, That this Commission hereby approves the General Manager’s determination under Section 6.23(c)(3) of the San Francisco Administrative Code as set forth in his memorandum dated July 27, 2022 that (1) qualifications for bidders were not too onerous; (2) the non-responsive bid cannot be easily cured; and (3) rebidding the contract would likely not result in more than one responsive bid by responsible bidders at bid prices substantially lower than the bid price received for Contract No. DB-132, New Treasure Island Wastewater Treatment Plant and that doing so would not be in the City’s best interest and authorizes the General Manager to negotiate with the responsible bidder that submitted the sole responsive bid and any other qualified contractor, and if negotiations are successful, to return to this Commission for award of such contract.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of August 23, 2022.
Secretary, Public Utilities Commission
OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 9th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
Dat
e: July 27, 2022
To: Denni
s J. Herrera, General Manager
Through:
Stephen Robinson, AGM Infrastructure
Howard Fung, PMB Manager
From
: Jignesh Desai, Senior Project Manager
Calvin Huey, Project Engineer
Subj
ect: DB-132 New Treasure Island Wastewater Treatment Plant – SF Administrative Code Sec. 6.23(c)(3) Justification to Negotiate Fixed-Budget Design-Build Contract
The Cont
racts Administration Bureau (CAB) advertised Fixed -Budget Design- Build Contract No. DB-132, New Treasure Island Wastewater Treatment Plant , on December 27, 2021 , and received two (2) bids on May 24, 2022 from prequalified contractors : (1) MWH Constructors & Webcor Builders (MWH/Webcor); and (2) PCL Construction & Stantec Consulting Services (PCL/Stantec). MWH/Webcor’s bid was ~88% above the engineer’s estimate ; PCL/Stantec’s bid was ~7% above the engineer’s estimate.
St
aff anticipated that recent escalations in material and labor rates might yield proposals modestly above the engineer’s estimate. San Francisco’s general policy, as reflected in the Administrative Code section 6.22.(h)(1) requirement that the Commission must approv e any increase in construction contract amounts that exceed 10% , is that a cost overrun of over 10% constitutes a material change. Therefore, bids that exceed 110% of the Fixed Budget Limit are materially nonresponsive to this Request for Proposals (“RFP”).
Ac
cordingly, the SFPUC has determined t hat MWH/Webcor submitted a materially nonresponsive bid at 188% of the Fixed Budget Limit , which leaves PCL/Stantec as the sole responsive bidder.
San
Francisco Administrative Code Section 6.23(c)(3) provides that when the SFPUC receives both one responsive bid and at least one nonresponsive bid, staff may negotiate with qualified contractors if the General Manager make s certain findings specified below. The project team recommends adoption of these findings and entering into negoti ations for Contract DB-132 with PCL/Stantec and any other qualified contractors.
Administrative Code:
Administrative Code 6.23(c)(3) [One Responsive Bid Received; Other Nonresponsive Bids Received] provides the requirements for contract award under the bid results described above:
If only one Responsive Bid is received from a Responsible Bidder and other, nonresponsive Bids and/or Bids by nonresponsible Bidders are submitted for the same work, the Department Head may recommend the Award of a Contract to the sole Responsive, Responsible Bidder at the bid price received, provided that the bid price does not exceed the engineer's estimate for the work. If the Responsive bid price received exceeds the engineer's
estimate, the Department Head shall determine (A) whether the qualifications for Bidders were too onerous and not necessary for the work and/or (B) whether one or more of the nonresponsive Bids could be easily cured and whether the Bidders that submitted such Bids are still interested in bidding on t he work. If the Department Head determines that steps (A) and/or (B), above, would likely result in more than one Responsive Bid by Responsible Bidders, at bid prices
substantially lower than the bid price received, then the Department Head shall re- bid the work . If the Department Head determines that neither step (A) nor (B), above, would result in more than one Responsive Bid by Responsible Bidders at bid prices substantially lower than the bid price received, then the Department Head, with the approval of the Mayor or the board or commission concerned, as appropriate, may
negotiate with the sole Responsible Bidder or any qualified Contractor, or may order the work to be executed by the City.
The cost of negotiated work or the cost of work executed by the City shall not exceed any bid price received for the same work. (Emphasis added.)
The three questions derived from Section 6.23(c)(3) and corresponding responses are:
1. Were “the qualifications for Bidders …. too onerous and not necessary for the work"?
Response: No. The design and construction of New Treasure Island Wastewater Treatment plant requires specialized skills, and there is a very limited number of qualified firms . T herefore, SFPUC conducted extensive outreach and implemented a two-step procurement by issuing a RFQ/SRFQ and a RFP. The RFQ/SRFQ process resulted in only two pre-qualified teams.
2. Can “one or more of the nonresponsive Bids … be easily cured and [are] the Bidders that submitted such Bids… still interested in bidding on the work"?
Response: No. The nonresponsive bid amount of $297,222,524 received from MHW/Stantec is a substantially higher than the Fixed-Budget Limit of $158,500,000. This substantial amount above the Fixed -Budget-Limit cannot be easily cured. Because the nonresponsi ve bidder was almost $127 million above the low bidder, it will likely not be able to reduce its bid below the lowest bidder. Notably, MWH/Webcor did not protest the SFPUC’s Preliminary Notice of Proposal Rejection dated June 14, 2022.
3. Would changing the qualifications or rebidding to allow a bidder to cure “result in more than one Responsive Bid by Responsible Bidders at bid prices substantially lower than the bid price received”?
Response: No. The qualifications identified in the contract are required for performance of the specialized work required for the new wastewater treatment facility . Staff engaged in extensive outreach efforts to secure the interest of the two pre -qualified bidders. Based on those efforts, staff finds it to be extremely unlikely that it would be possible to secure additional bids from qualified firms, and even less likely that any such bids would be lower than the bid submitted by PCL/Stantec.
Proposed Findings:
In the procurement for Contract DB-132, for the reasons dis cussed above, I find:
1. The qualifications for bidders were not too onerous;
2. The nonresponsive bid received cannot be easily cured; and
3. Rebidding the contract would likely not result in more than one responsive bid by responsible bidders at bid prices subs tantially lower than the bid price received from PCL/Stantec.
The project team recommends the General Manager’s adoption of the foregoing proposed findings and seeking Commission approval of the findings and Commission authorization to engage in neg otiations for Contract DB-132 with PCL/Stantec and any other qualified contractor.
I adopt the proposed findings set forth above.
----------------------------------------------- -------------------------- Dennis J. Herrera Date
SFPUC, General Manager
August 1, 2022