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Home My WebLink About12/04/2012 Purchase of Standby Emergency Generator Station 17Mount Prospect Public Works Department INTEROFFICE MEMORANDUM TO: VILLAGE MANAGER MICHAEL E. JANONIS FROM: WATER & SEWER SUPERINTENDENT DATE: NOVEMBER 29, 2012 SUBJECT: PURCHASE OF STANDBY EMERGENCY GENERATOR STATION 17 (CIP) - ($300,760) Background In the capital improvements program (CIP), funds have been requested to purchase and install diesel - powered emergency generators for the Village's deep wells and booster pumping stations. The deep wells are the Village's emergency water source in the event that flow from the Northwest Suburban Municipal Joint Action Water Agency (NSMJAWA) is disrupted. The adjacent booster pumping stations are used to pump water out of storage tanks and help maintain distribution system pressure. The generators installed as part of this program are designed to power the entire booster station facility; including simultaneously operating the deep well and the booster pumps. Presently, diesel generators are installed at Booster Station 5 and Booster Station 16. Both of these generators are Caterpillar 750 KW. The current budget contains funds to purchase and install an emergency generator at Booster Station 17. Staff proposes to purchase and install a generator at Booster Station 11 in 2014 (CIP). Staff does not intend to install a generator at Booster Station 4 due to space constraints and limited incremental water production /storage capacity; it's a small station, on a small site, with small pumps. The emergency stand -by generator project will be completed after installation of the generator nt Rnnster Rtatinn 11 in 2014. Four (4) of the Village's five (5) deep well /booster pumping stations will be fully functional under emergency electrical power. The Village will have the ability to produce and distribute approximately 6 million gallons of water per day from wells and booster pumps powered by emergency generators. This capability will satisfy average daily demand (3.5 million gallons) and provide sufficient reserve for peak fire flows. The Public Works Department obtained the services of the Burns & McDonnell consulting engineers of Downers Grove, Illinois to develop a detailed set of specifications and bid documents necessary to procure an appropriately sized generator for Booster Station 17. Burns & McDonnell determined that a 750kw generator was of sufficient size and capability for this purpose. With each generator, there will be a super - critical muffler, a sound - attenuated enclosure to house the generator, and an above - ground, fire - rated, and 4,000 - gallon concrete diesel fuel Bid Results for Standby Emergency Generator— Station 17(CIP) November 29, 2012 Page 2 of 4 storage tank. The physical size of these units (241 x 10'W x 8'H) makes it impractical for the unit to be configured as a tow - behind portable and so the specifications call for a permanent installation. Bid Results On Monday, August 27, 2012 at 1:00 P.M., sealed bids for the proposed purchase of an emergency generator were opened and read aloud. Nine (9) invitational bids were distributed and public notice was placed in a local newspaper as required by Village purchasing policy. Five (5) additional bids were picked up by others. Only one bid was received. The bid result is as follows: Bidder Price Patten Power Systems, Elmhurst, IL $348,000 Discussion The sole bid received was submitted by Patten Power Systems of Elmhurst, Illinois. Patten is an authorized Caterpillar equipment distributor. Staff reviewed the Patten bid and found that the bidder satisfies specifications and is proposing similar equipment to what exists at Booster Stations 5 and 16. Since Patten provided both of our current booster station generators, staff is confident that they can deliver a satisfactory product. Since only one (1) bid was received, staff contacted the other firms who obtained bid packages to determine why there were not more bids. A total of 13 additional bid packages were distributed as part of the bidding process: • One (1) firm indicated they did not bid because they were bidding on larger projects and devoted their efforts to those projects. • One (1) firm indicated that they did not bid because they could not satisfy the specifications; their product line does not include a large enough generator. • One M firm indicated that they did not birl because they could not satisfy the specifications; they could not satisfy fuel storage tank and sound attenuation requirements. • Two (2) firms were contractors who only install generators thus did not bid. • Two (2) firms represented bid houses that collect bids for client referrals and they do not bid. • Five (5) firms explained that they include Caterpillar generators in their product lines and elected not to bid to avoid infringing on the local Caterpillar dealer (Patten). • One (1) firm did not submit a bid and failed to respond to our follow -up inquiries. Despite the fact that the bid was submitted as part of a public and competitive bidding process, staff remained concerned that the cost of this generator was prohibitive. Specifically, the engineer's estimate for the generator was $325,000. This sole competitive bid substantially Bid Results for Standby Emergency Generator— Station 17(CIP) November 29, 2012 Page 3 of 4 exceeds this estimate, placing the balance of the generator project (modifying electrical connections and installing the generator), at risk of being over budget. As an alternative, staff investigated opportunities to purchase the generator via a joint purchasing agreement that satisfies the Village's public bidding requirements. The Village Code specifically provides that competitive bidding is not required when the village, pursuant to its home rule powers, enters into a joint purchasing contract for materials, supplies, or equipment with another entity which has conducted competitive bidding for those materials, supplies or equipment. Staff has previously used joint purchasing for a variety of acquisitions ranging from road salt to public works vehicles. Typically, staff utilizes the joint purchasing services of either the Northwest Suburban Municipal Conference or the State of Illinois' Central Management Services (CMS). Unfortunately, the Northwest Suburban Municipal Conference does not offer the joint purchase of large diesel generators and CMS discontinued the joint purchasing of generators in 2009. However, the Village previously joined a joint purchasing group called the National Joint Powers Alliance (NJPA), whose membership includes municipalities, counties, school districts, and non- profit organizations. Originally a creature of Minnesota state government, the NPJA is now a nation -wide joint purchasing facilitator that boasts over 48,000 member agencies and wields considerable purchasing power. The Village used the joint purchasing services of NJPA to acquire a snow removal tractor ( "Trackless ") vehicle that is utilized to remove snow from downtown sidewalks. The NJPA currently has a cooperative joint purchasing arrangement for electric generators. NJPA competitively bid the procurement of complete generator systems and awarded a joint purchasing contract to Caterpillar, Incorporated of Peoria, Illinois. The Village attorney has reviewed the arrangement and advises that the Village can participate in joint purchasing through NJPA. Staff contacted NJPA to obtain a quote for the generator package. NJPA can provide a Caterpillar 750 KW diesel generator pursuant to our bid specifications at a cost not to exceed $300,760. Interestingly, NJPA has advised us to facilitate procurement of the generator through the local Caterpillar distributor — Patten Power Systems of Elmhurst, Illinois. Subsequently, staff contacted Patten Power Systems to obtain an explanation for the significant variance between their competitive bid price ($348,000) and the NJPA joint - purchase price ($300,760). Patten explained that the NJPA discounts are applied at the corporate level and do not impact distributor commissions or fees. Consequently, they are able to facilitate the NJPA price because it costs less to obtain the generator from Caterpillar. Bid Results for Standby Emergency Generator — Station 17(CIP) November 29, 2012 Page 4 of 4 It is the opinion of staff that the best interests of the Village would be served by purchasing the generator through the NJPA joint purchasing agreement. The NJPA agreement satisfies the Village's bidding requirements and presents an opportunity to realize a $47,240 (14 %) savings over the competitively bid price. Additionally, the current NJPA price presents good value when compared to our last generator purchase in 2007. The unit cost for an equivalent Caterpillar generator in 2007 was $263,566. The increase ($37,194) between the current price ($300,760) and the 2007 price ($263,566) can be wholly explained by considering nominal inflation (2 %) compounded over the course of five (5) years, the addition of USEPA Tier II emission requirements (a federal mandate), the addition of a Veeder -Root fuel management system (a Village requirement), and the addition of load bank connections to facilitate resistive load bank testing (also a Village requirement). Finally, since both of the existing 75OKW generators installed at the booster pumping stations are of the same make, model, and manufacturer as the proposed NJPA generator (Caterpillar), parts, supplies, and maintenance costs can be minimized. Most importantly, all of the generators will have the same human - machine interfaces that should make them easier to program and operate. The next phase of this project would be to prepare the bid specifications to secure an electrical contracting firm to install the generator. A bid award for this work will be forthcoming for the Village Board's consideration after the delivery window for the generator is established. Recommendation recommend that the Village Board reject all bids to supply the 750KW standby emergency generator at Booster Station 17. 1 also recommend that the Village Board authorize staff purchase one (1) standby emergency generator through the National Joint Power Alliance joint purchasing agreement in an amount not to exceed $300,760. Sufficient funds for this proposed expenditure exist in the current budget Matt Overeem Water & Sewer Superintendent 1 Se . Dorsey Director of Public Works MO /SPD C:\ Users \sdorsey \Documents \Water \Generator 17 \emergency generator station 17 board award rev2.docx