Item Number: 19
City Council / Board of Directors
Written Communications
Meeting of: February 18, 2025
Submitted By:
C. Eric Ray, Airport Director
Subject:
Building 724 Heating, Ventilation, and Air Conditioning System Replacement Recommendation:
That the Southern California Logistics Airport Authority Board of Directors:
(1) Reject FM Thomas Air Conditioning Inc., award to furnish and install a new HVAC system at Building 724, previously approved by the Board on December 17, 2024, and;
(2) Approve Amendment Four to the General Services Provider Standard Agreement between SCLAA and Allison Mechanical, Inc., increasing the not to exceed compensation amount from $50,000 to $150,000 and;
(3) Approve Allison Mechanical, Inc., to furnish and install a new Heating, Ventilation, and Air Conditioning (“HVAC”) system at Building 724.
Fiscal Impact:
This action will result in the expenditure of funds from Building 724 Maintenance Account 4501141A-52410 in the amount not to exceed $126,672. $139,305.20 is currently budgeted for general repairs and maintenance for Building 724. The budget is outlined below:
Current Budget
Expense
4501141A-52410 Bldg 724 Maintenance $139,305.20
Strategic Plan Goal:
Goal E. Invest in Infrastructure: The project invests in infrastructure by providing an operational HVAC system for Building 724
Background:
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Building 724 was built in 1988 and is a 16,250 square foot building that currently houses Aircraft Rescue & Fire Fighting personnel and equipment located at the Southern California Logistics Airport (“SCLA”). The air conditioning for the building is supplied by an HVAC system that is original to the building. In 2013, the HVAC system had major repairs performed at a cost of approximately $8,200 to extend its useful life.
Recently, the compressor in the HVAC system at Building 724 failed, rendering the system non-functional and making the building uncomfortably hot during the lingering days of summer. The compressor is a critical component that pushes compressed refrigerant through coils to remove heat from the air. The compression and decompression of the refrigerant as it is pumped internally through the coils of an HVAC system is what allows the system to remove heat, thus chilling the air. Without a functional compressor, the HVAC system cannot supply cool air to a building.
Staff invited the three qualified contractors that perform HVAC work at the SCLA to independently inspect the HVAC system and compressor located at Building 724. Each contractor recommended full-scale HVAC system replacement as the best option due to the overall age of the system and its components. Repair options were discussed but the repairs would necessitate removing and reinstalling multiple components of the system and the finished product would be a medley of new and aged parts, which could cause compatibility issues and premature failure of other parts of the system. Repair costs were quoted in the $40,000 range, which was deemed by staff to be prohibitively high given additional issues with the HVAC system at Building 724.
The existing Building 724 HVAC system uses a chemical refrigerant called R22 to remove heat from the system. R22 has been a standard industry refrigerant for several decades, but in 2020 the United States Environmental Protection Agency made it illegal to manufacture or import new R22 supply into the United States. With no new supply of R22 available, the cost to refill or top off a system that uses R22 is rapidly becoming prohibitive. In 2030, a total ban on purchases of R22 will take place, thus making it fiscally precarious and irresponsible to maintain an aging system that will be extremely expensive to refill, if a supply of R22 can even be located. Replacement refrigerants are not compatible with R22 systems, making full-scale replacement of the HVAC system the best option.
Based on the age of the current HVAC system, the cost of repairs, and the dwindling supply of and increasing cost of R22, staff concluded that the most fiscally sustainable way to provide air conditioning to Building 724 is to remove the non-functional HVAC system and replace it with a modern HVAC system that operates with modern refrigerant.
Discussion:
An HVAC replacement project of this size and importance necessitates the use of a qualified contractor that has the licenses, skills, and experience to furnish and install HVAC systems of this size. The SCLAA has active service contracts with three qualified HVAC contractors. They were each awarded service contacts after a bidding process that complies with City Municipal Code 2.28.090.
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To procure a bid for the installation of a new HVAC system for Building 724, in compliance with City Municipal Code 2.28.200, SCLAA staff requested a bid from each qualified contractor. Each contractor was able to inspect the site and ask questions about the work. All three contractors submitted quotes to furnish and install a new HVAC system for Building 724 as follows:
Bidder Name Bid Amount
FM Thomas Air Conditioning, Inc. $126,296
Allison Mechanical Inc. $126,672
Masco & Sons Heating and Air Conditioning, LLC. $152,000 Staff carefully reviewed each bid proposal and submittals for the project and determined FM Thomas Air Conditioning Inc., (“FM Thomas”) to be the best value bidder in accordance with City Municipal code 2.28.040. Staff brought the recommendation to award FM Thomas at the December 17, 2024 Board meeting. In January, when presented with Amendment Four for execution, FM Thomas submitted a revised bid that was $2,831 higher than their original bid, due to price increases, for a total not to exceed amount of $129,127. Recognizing this proposed increase caused FM Thomas’ bid to exceed the next best value bidder, Allison Mechanical, Inc., (“Allison”) staff contacted Allison to confirm their original quote of $126,672 was still valid. Furthermore, FM Thomas proposed an installation lead time of 15-16 weeks, whereas Allison proposed a 12-13 week lead time. The facts of this situation have compelled staff to determine Allison is now the best value bidder for this project.
The current General Services Provider Standard Agreement (“Agreement”) with Allison was entered into on July 29, 2024, for the not to exceed amount of $50,000, which was sufficient for regular HVAC maintenance and repair work. However, this large installation project will necessitate an increase to the Agreement amount. Approval of Amendment Four to the existing Agreement will allow Allison to continue to provide necessary HVAC Services for the SCLAA, including the installation of a new HVAC system at Building 724.
Therefore, staff requests and recommends the SCLAA Board of Directors: (1) reject FM Thomas to furnish and install the proposed HVAC system at Building 724, previously approved by the Board on December 17, 2024, and (2) approve Amendment Four to the General Services Provider Standard Agreement by and between the SCLAA and Allison, increasing the total not to exceed compensation from $50,000 to $150,000, for Qualified HVAC Maintenance, Repair, and Installation Services, Project #CC22-008-3, and (3) approve Allison to furnish and install the proposed HVAC system at Building 724.
Staff remains available for any questions or comments you may have.
CER/see
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Attachments: A. Site Map
B. Allison Mechanical Inc. Amendment Four
C. Allison Mechanical Inc. Bid Proposal
D. FM Thomas Air Conditioning, Inc. January Bid Proposal E. Municipal Code 2.28.090
F. Municipal Code 2.28.200
G. Municipal Code 2.28.040