HomeMy WebLinkAbout2002-02-04 City Council (2)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
4
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
FEBRUARY 4, 2002 CMR:127:02
APPROVAL OF AMENDMENT TO EXISTING CONTRACT NO.
C135651 WITH PLANERGY INTERNATIONAL FOR THE
EMERGENCY RENTAL OF A 5-MEGAWATT BACKUP DIESEL
GENERATOR CHANGING THE CONTRACT AMOUNT FROM
$392,785 TO $532,785
RECOMMENDATION
Staff recommends that Council approve and authorize the Mayor to execute the attached
contract amendment with Planergy International (C 135651) for additional but unforeseen
costs related to installation and rental of emergency diesel generators, increasing the
contract amount from $392,785 to $532,785.
DISCUSSION
Because of the deteriorating energy situation that faced California in the spring of 2001,
Council approved a contract with Planergy International for the engineering, procurement
and construction related to the short-term rental of 5 megawatts (MWs) of portable back-
up generators in April 2001. These units were to be temporarily located at the City of
Palo Alto Municipal Service Center (MSC). Planergy International served as the turn-key
contractor for this project.
The original scope of Work for services to be provided by Planergy included:
1) Procurement of 5 MWs of diesel generation at the MSC, and related engineering
and installation services.
2) Three-month rental of the diesel-fired generators (four units which are each 1350
kW).
3) Maintenance services for the generators as required.
CMR: 127:02 Page 1 of 3
The generators were intended for use during Stage 3 electric shortages when the
California Independent System Operator required Palo Alto to curtail load on the electric
system. CPAU installed the back-up generators to reduce rolling blackouts for
customers. At that time, the diesel generators were planned to be removed no later than
September 15, 2001.
The original schedule anticipated installation would be completed by June 1, 2001, with
removal by the end of August 2001, pending start-up of permanent replacement natural
gas generators. Diesel generator installation was actually completed early in May. The
natural gas generator delivery and installation schedule was delayed by a combination of
City process requirements and manufacturing delays caused by high demand for
generators during the summer. The generators could have been removed at the end of
July after the end of the 3 month rental term. However, in order to maintain the backup
generator capability for averting potential rolling blackouts, the diesel generators were
kept online and available until the natural gas generators were delivered and operational.
This requirement resulted in diesel generators being onsite at the MSC until November
16, 2001, three and a half months longer than expected. The prime contractor Planergy
International has offered to pay for two months’ rent, requesting that Palo Alto pay only
for the rental due to early installation (one month) and up to the original "no later than"
date of September 15, 2001 (two weeks). Staff believes that this request is equitable and
fair, and recommends that Council approve the contract amendment.
The fast-track emergency nature of the project led to some unforeseen installation costs
due to fire, safety, and other ordinance requirements. These additional installation costs
total approximately $9,800 beyond the approved $30,000 contingency.
RESOURCE IMPACT
Funds required to amend the contract are available in the existing budget. The
recommended contract amendment would bring the total contract authority from the
current $392,785 to $532,785 an increase of 36% (30% due to additional rental, 6% due
to additional installation costs). Change orders to date have increased the contract
authority by $17,785 from the original $375,000 to $392,785. Funds for the $140,000
increase in contract authority are available in the current Electric Operations budget from
funds that had been budgeted for diesel fuel for the generators which was not needed. No
further costs associated with this project are anticipated.
POLICY IMPLICATIONS
CMR:127:02 Page 2 of 3
This recommendation is consistent with prior Council action with regards to the energy
emergency facing California in the spring of 2001. The backup generator project supports
Utilities Strategic Plan Key Strategy 1; Operate distribution systems in a cost-effective
manner, and Strategy 4; Deliver products and services for competitive markets.
ENVIRONMENTAL REVIEW
No further environmental review is required for this project.
ATTACHMENTS
A: Amendment No. One to Agreement No. C135651
PREPARED BY:
Karl Knapp, Manffg~ment Specialist
DEPARTMENT HEAD:
LRICH
Director of Utilities
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 127:02 Page 3 of 3
AMENDMENT NO. ONE TO AGREEMENT NO. C135651
BETWEEN THE CITY OF PALO ALTO AND
PLANERGY SERVICES, INC. FOR ENGINEERING,
CONSULTING, PROCUREMENT AND OPERATIONAL
SUPPORT SERVICES
This Amendment No.One to Agreement No. C135651
(Agreement) is entered into , by and between the
CITY OF PALO ALTO (CITY"), and PLANERGY SERVICES INC., a Delaware
corporation, located at 1003 W. Cutting Blvd., Suite ii0 Richmond,
CA 94804-2028 ("CONTRACTOR").
RECITALS:
WHEREAS, the Agreement was entered into between the
parties for installation and rental of emergency diesel generators
("Services"); and
WHEREAS, the parties wish to amend the Agreement to
increase the amount of the contract;
NOW, THEREFORE, in consideration of the covenants, terms,
conditions, and provisions of this Amendment, the parties agree:
SECTION I. Section 4.1 is hereby amended to read as
/follows :
"4.1 In consideration of the full performance
of -the Services by CONTRACTOR, CITY will pay
CONTRACTOR in accordance with Exhibit "B," at total
cost not to exceed Five Hundred Thirty Two Thousand
Seven Hundred Eighty Four dollars and Seventy Seven
cents ($532,784.77). CONTRACTOR may submit
progress billings for services performed and
current monthly rental or lease charges for payment
within 30 days."
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SECTION 2. The following exhibit to the Contract is
hereby amended to the attachments to this Amendment, which is
incorporated in full by this reference:
a. Exhibit "B" entitled "Rate Schedule".
SECTION 3. Except as herein modified, all other
provisions of the Agreement, including any exhibits and subsequent
amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly
authorized representatives executed this Amendment on the date
first above written.
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
Assistant City Manager
DireCtor of Administrative
Services ~
Director of Utilities
Attachments:
Mayor
PLANERGY SERVICES, INC.
By
Name : Howard W. Cann
Title: President and Chief Executive Officer
Name : Paul Schleifer
Title: Executive Vice President
Taxpayer Identification No.
680-138-424
(Compliance with Corp. Code ~ 313 is
required if the entity on whose behalf
this contract is signed is a corporation.
In the alternative, a certified corporate
resolution attesting to the signatory
authority of the individuals signing in
their respective capacities is acceptable)
EXHIBIT "B": RATE SCHEDULE
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Exhibit B: Rate Schedule
This project is being compIeted on a time-and-materials basis with a Guaranteed
Maximum Price (GMP), subject to the following rates, fees and markups:
Vice President, Onsite Power Generation
Senior Engineer/Project Manager
Purchading/Logistics Support
Adminstrative
$135.00 per hour
$110.00 per hour
$75.00 per hour
$55.00 per hour
Travel and misc. expenses
Markup on subcontract labor
Markup on rental
Markup on equipment
Markup on freight
actual cost +20%
actual cost +20%
.actual cost +20%
actual cost +20%
actual cost + 0%
Note that markup calculation is based on specialized nature of the project and fast track
schedule.
Guaranteed Maximum Price
Monthly Rental of Diesel Generator (including markup)$79,200/month
Guaranteed Maximum Price (contract total)$532,784.77
All other costs will be basef!~, upon the Rate Schedule above.
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
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On ~4/~y~~a2-~z n , before me, the undersigned, a
notary public in=/~and f,or said County, personally appeared
personally known to me ~ proved to me on the basis of
satisfactory evidence) to be the person~sg- whose name,s+ is/4~r-e-
subscribed to the within instrument, and acknowledged to me that
he/s~-k~f- ’executed the same in his/~-h~ authorized
capacity(~, and that by his/~’~-~ signature,s+ on the
instrument the person~, or the entity upon behalf of which the
person+s¢-acted, executed the instrument.
WITNESS my hand and official seal.
Lc
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CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code ~ 1189)
STATE OF
C0U~T~" 0F
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. On ~i~’~Z ~ , before me, the undersigned, a
notary public in /and ~ for said County, personally appeared,
personally known to me (~ proved to me on the basis of
satisfactory evidence) to be the person+s-~ whose name~s~
subscribed to the within instrument, and acknowledged to me that
he/~ executed the same in his/-~z7~ authorized
capacityii~, and that by his/hcr/thc~ signature~ on the
instrument the person-~-J~, or the entity upon behalf of which the
person~s~ acted, executed the instrument.
WITNESS my hand and official seal.
lature of Notary Pu
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