City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: June 9, 2025
Report #:2407-3214
TITLE
Approve Three Professional Service Contracts: (1) Contract Number C25191790A with Ampirical Services, Inc.; (2) Contract Number C25191790B with Burns & McDonnell Western Enterprises, Inc.; and (3) Contract Number C25191790D with Transformer Consulting Services, Inc. in an Aggregated Amount Not-to-Exceed $15,000,000 Over a Three-Year Period for Utilities Electric Engineering Consulting Services and delegate authority to the City Manager to execute each vendor’s contract for two additional one-year extensions and increase the aggregated not to exceed amount to $25,000,000 ; CEQA Status: Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute three (3) professional service agreements with the following vendors in an aggregated not-to-exceed amount of $15 Million during the initial three-year contract term
1. Ampirical Services (Attachment A – C25191790A),
2. Burns & McDonnell Western Enterprises (Attachment B – C25191790B), and
3. Transformer Consulting Services (Attachment C – C25191790D).
EXECUTIVE SUMMARY
The report seeks authorization for three contracts with engineering consulting firms— Ampirical Services, Burns & McDonnell, and Transformer Consulting Services —for on-call engineering services. Following a comprehensive evaluation of proposals and consultant qualifications submitted in response to a Request for Proposals (RFP), staff recommends contracting with these firms to ensure timely access to expertise and support. The total aggregated authorization for all three contracts is limited to $15 million over the initial three-year term, an average of $5 million annually (timing will be dependent on capital project schedules). Executing these contracts provides flexibility and responsiveness to the City's Utility Electric Engineering needs and extends no guarantee of work to individual vendors over the contract period. The agreement sets each
consultant’s rates and the general scope of work that could be assigned through specific tasks to individual vendors.
BACKGROUND
The City of Palo Alto’s Electric Utility is in process of modernizing the electric distribution system to facilitate the additional electrical demand created by the transition from fossil fuels to electric powered homes and vehicles. This transition requires significant investment in the City’s electrical system over the next seven to ten years. These investments include design and construction work to upgrade electrical lines, replace transformers, increase substation capacity, and enhance the service reliability and resiliency of Palo Alto’s electric grid.
To reinforce and modernize Palo Alto’s electric substations and distribution systems, the Electric Fund’s proposed 2026–2030 Capital Budget exceeds $230 million and the proposed FY 2026 budget for all Electric Fund Projects is $81.8 million. To meet the work proposed through the end of FY 2030, annual expenditures must increase by approximately 5 to 6 times historical levels.
Due to the large increase in workload, the City does not have sufficient staff capacity to prepare design and construction documents for the projects scheduled in the proposed CIP. For this reason, staff is recommending that the City award a master professional services contract to the three responsive vendors. Over the next three years, staff will work with these professional service providers to complete design work for the following grid modernization projects:
•Phase 1 Overhead Distribution Upgrades (EL-24000)
•Phase 2 Overhead and Underground Distribution Upgrades (EL-24000) •Colorado Power Station - 115/60kV Unit# 3 Transformer replacement (EL-19001) •Colorado Substation - 12kV Distribution Upgrade (EL-24000) •East Meadow Substation - 4kV to 12kV Station Upgrade (EL-24000) •Inter-substation Line Protection Relay (EL-17005)
The Grid-Modernization CIP (EL-24000) collective funding totals $194,839,680 through FY 2030 and is included in the proposed FY2026 budget, however, this project is expected to exceed this five year CIP for a total project cost estimated at $300 million. ,. To replace major substation equipment at Colorado Substation (EL-19001) proposed funding totals $5,416,279 and project EL-17005 is planned to replace obsolete system protection equipment with an expected cost of $1,121,775.
ANALYSIS
On July 3, 2024, a Request for Proposal (RFP) was issued for electric engineering and design Professional Services. The RFP requested proposals to secure one or more consultants to assist the City for on-call utilities electric engineering consulting services in the areas of substation engineering, distribution engineering, and system protection design. The contracts will be for a three-year term with all three contracts subject to an aggregate, not-to-exceed amount of $15 million during the initial three-year term. The City’s July 2024 Request RFP was published and distributed to consulting firms that offer relevant services. The RFP allowed consultants to respond to one or more of the following major sections of the scope of work:
• Substation engineering
• Distribution engineering
• System protection
• SCADA (not being included in the proposed contracts)
• Fiber Optics (not being included in the proposed contract) • Customer Service application reviews (not being included in this contract) The RFP stated that more than one consulting firm may be retained to perform the tasks outlined in the RFP and that execution of a contract would not guarantee that the consultant would be awarded any specific tasks. The solicitation process is summarized in Table 1 below:
Table 1: Summary of Request for Proposal
Proposal Description On-Call Consulting Services for Electric Utility Engineering RFP No. 191790
Proposed Length of Project 3 years
Number of Vendors Notified 3272
Number of Proposal Packages Downloaded 39
Total Days to Respond to Proposal 40
Pre-Proposal Meeting Yes, non-mandatory
Pre-Proposal Meeting Date July 22, 2024
Number of Proposals Received 14
Proposal Price Range – Hourly Rates Hourly rate ranging from $165 - $291 Public Link to Solicitation https://procurement.opengov.com/portal/pa lo-alto-ca/projects/103876
Fourteen vendors responded to the City’s RFP and eleven consultants were selected for consideration based on the quality of their proposal, experience, responsiveness and cost to provide consulting services. Staff reviewed each firm's qualifications and submittals in response to the RFP relative to the criteria outlined in the RFP. Major evaluation criteria included: proposal quality and responsiveness, the overall firm’s experience, qualifications of individuals to be assigned to potential tasks, cost, recent dealing with relevant agencies, and the quality and completeness of the proposal. After staff review of the bids, the City recommends awarding the contract to three of the respondents.
The City recommends awarding the contracts to Ampirical Services, Burns & McDonnell Western Enterprises, and Transformer Consulting Services. The selected three consultants were ranked high based on the evaluation criteria. All the selected providers demonstrated an in-depth knowledge of the industry, flexibility to work with City on a variety of tasks, and their availability and responsiveness to respond to task order requests by City staff.
Council approval of the consulting agreements will enable staff to utilize these contract agreements for various projects that have been funded through the City’s Budget process. The contracts set each consultant’s rates and the general type of work the City may request.
On-call services will be assigned on a Task Order basis depending on which contractor has the staffing availability and relevant expertise for an upcoming City Electric Utility CIP. When services are needed, the City will contact the firms regarding their availability to perform the necessary work and request project-specific proposals and resumes for proposed staff. Individual Utilities project managers will be responsible for evaluating the adequacy of each Task Order’s proposed scope of work, reviewing the experience and billing rates of proposed staff with a project team, ensuring appropriately qualified staff are assigned to each Task Order, and managing each Task Order budget with necessary secondary management approval of the task orders in the respective division. To provide checks and balances, the Utilities’ Strategic Business Manager and their team will assist in overall contract management ensuring activities remain withing authorized levels.
FISCAL/RESOURCE IMPACT
Funding for the initial three years of these contracts is available under FY 2026 Electric Fund Capital Improvement Projects budget under CIP Project Grid Modernization for Electrification (EL-24000), improvement projects for Colorado Substation, and various system rebuilds. The primary use will be the Grid Modernization for Electrification project, estimated at $300 million to $350 million over a seven to ten year period. A reimbursement resolution was passed by the City Council1 with the intention to enable reimbursement of investments through the issuance of debt to finance this significant investment. Of the total project cost, approximately 40% would be necessary infrastructure maintenance and replacement while the remainder reflects proactive investment to support electrification goals. The services being provided by these contracts may be used to assist staff in providing engineering and design services on any of the Electric Projects proposed with the FY 2026 budget. Funding for future term extensions will be subject to the appropriation of funds through the budget process.
These task order-based Electric engineering consulting contracts will be used to supplement internal staff resources.
1 Resolution Passed by City Council; Resolution 10209
https://portal.laserfiche.com/Portal/DocView.aspx?id=126359&repo=r-704298fc
STAKEHOLDER ENGAGEMENT
This recommendation sets no new Council policy and is consistent with the Council-approved Utilities Strategic Plan and the adopted Sustainability and Climate Action Plan (S/CAP).
These contracts are on the City’s professional services template, which permits the City to terminate without cause/for convenience by providing written notice to the contractor. In the event the City finds itself facing a challenging budget situation, and it is determined that City resources need to be refocused elsewhere, the City can terminate for convenience. Other options include termination due to non-appropriation of funds or amending the assigned task orders to reduce costs, for example, by reducing the scope of work. These contracts may also be suspended by written notice of the City Manager.
ENVIRONMENTAL REVIEW
The Council’s approval of these engineering services agreements does not meet the definition of a project under Public Resources Code section 21065; thus, California Environmental Quality Act (“CEQA”) review is not required.
ATTACHMENTS
Attachment A: C25191790A Ampirical Services
Attachment B: C25191790B Burns & McDonnell Western Enterprises, Inc.
Attachment C: C25191790D Transformer Consulting Services, Inc.
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Jim Pachikara, Principal Engineer Electric & Fiber