wastewater treatment operations presentation title...wastewater treatment o&m contract - 1...

Wastewater Treatment O&M Contract - 1

Presentation Title Subtitle (optional)

Date Vancouver City Council Workshop/Public Hearing Staff, Title Staff, Title

Wastewater Treatment Operations

O&M Contract Procurement

July 20, 2015

Vancouver City Council Workshop

Brian Carlson, Public Works Director

Dan Swensen, Engineering and

Construction Services Manager


• City of Vancouver contract operations experience

• Overview of procurement process and results

• Overview of CH2M proposal and proposed service

contract

• Westside Headworks project and SCADA Upgrade

• Contract transition process

• Questions, discussion and next steps

Presentation Overview


• City staff operates and maintains the sewer collection system

including 32 pump stations; provides planning, development

review and engineering services; industrial waste pretreatment

program; NPDES and other environmental permit compliance;

treatment plant capital; and treatment plant contract oversight.

• Since 1978, operation and maintenance of the Marine Park and

Westside Water Reclamation Plants, the Industrial Food Waste

Pretreatment Lagoon, and 8 pump stations performed by

contract operator (currently Veolia Water).

Vancouver Wastewater System

Wastewater Trea=O&M Contract - 4

Facilities managed under Contract


Has been very positive with proven results:

• Environmental excellence in treatment

• Professionally operated and maintained facilities

• Innovation, continuous improvement and nimbleness

• Cost-effective operations

COV experience with Contract Operations


continued

What contract operations is and is not: • Experts hired to operate the facilities

• Guarantees on facility performance and costs, shared and transferred risk

• Not privatizing, leasing or handing over facilities to corporate control

• City maintains control of utility, rate setting, policy control, NPDES permits, relations with customers, and control of collection system



continued

Public/Private partnerships – What makes them work?

• Common goals and shared objectives

• Routine communication and consultation, close working

relationships and continuous collaboration and cooperation

• Accountability, flexibility, risk sharing and fair compensation for

services

• Longer term contracts typically function better – allow contractor

to invest in facilities and receive return, grow pride in operations

and community, ‘ownership’ in results.



• City has utilized the private sector to operate wastewater treatment facilities since 1978. Veolia Water has provided these services under several contracts and under different company names for that duration.

• January 2011 – Veolia contract extended to Dec 31, 2015; decision made to engage in an open competitive process prior to contract expiration.

• January 2014 – Workshop regarding proposed schedule and process. Confirmed continued use of private contractor.

• Periodic process updates through City Manager communications.

Decision to seek proposals


• Planning work began mid-2013

• Retained Eisenhardt Group in early 2014 to assist with RFQ and

RFP development.

• RFQ issued June 2014. Received responses from three

qualified firms (American Water, CH2M and Veolia) by August

2014 deadline.

• Retained law firm of Hawkins, Delafield and Wood to assist with

drafting the service contract.

• Issued RFP on Dec. 16, 2014 to the three pre-qualified firms – Proposed contract included.

Procurement Process


• Proposal preparation December 2014 – April 2015

• Detailed proposals submitted April 15, 2015 by all three firms.

• Proposals reviewed and evaluated. Process included interviews.

A six member proposal evaluation committee scored proposals.

Other staff and external resources also participated and

contributed to the review process.

• Recommendation made to enter into contract negotiations with

top-ranked proposer early June.

• Contract negotiations completed June 18, 2015.

Procurement Process continued


• Three prequalified proposers submitted proposals – American

Water, CH2M and Veolia Water

• A “best value” selection process

• Proposals evaluated based upon:

Proposer information and qualifications (30%)

Technical proposal (40%)

Financial proposal and costs (30%)

• CH2M was the highest ranked (scored) by the evaluation

committee. Recommendation was unanimous.

Results of Procurement Process


“Meets, Exceeds, Outstanding”

Key Points of Scoring Results


• Employee Owned Company

• Started in 1946 in Corvallis Oregon

• 25,000 professionals worldwide

• $5.5 billion 2014 revenues

• Recognized leader in full-service operations for public and private clients

• More than an operator - OMI is a wholly owned subsidiary

Overview of CH2M


• 5000 employees in the Northwest

• O&M for:

Seattle

Wilsonville

Spokane County

Walla Walla

Twin Falls

• Knows Vancouver’s facilities and operations

CH2M In the Northwest


CH2M’s operating record and history is excellent: • Environmental compliance and stewardship

• Asset management

• SCADA systems

• Continuous improvement and innovation

• Safety

• Good neighbor status

• Employee satisfaction

• Community involvement

CH2M Operations Record


• Westside Influent Headworks proposal

• SCADA System upgrade plan

• Strong asset management proposal including ISO compliance

• Experienced and very strong operations and management team

• Access to technical and engineering expertise and support for improved plant operations and regulatory trends and issues

• Continuous improvement focus including a cost savings sharing proposal

• Cost controls and guarantees

• Emphasis on transparency and access to records, data and costs

Highlights of CH2M Proposal


• New contract contains current industry contract best practices

reflected in language – Operations and Maintenance, Asset

Management, Risk Assumption, Cost Controls and Guarantees

• Is performance oriented and results based not methods based

• 10-year initial term with the possibility of two 5-year extensions

• Early termination clause for convenience

• Anticipates undertaking two major capital projects: Westside Headworks and SCADA control system upgrade/replacement

Overview of Contract


• Contractor payments combination of a base service fee and

certain pass-through and reimbursable costs

• City will now pay facility electric and natural gas bill directly

subject to upper usage caps

• Potential additional reduction of service fee based upon

contractual cost savings sharing approach

• Initial (2016) contract value = approximately $7 million per year

including service fee and pass-through costs

Overview of Contract continued


• $1.63 million project (est.)

• Results in operational efficiencies

and reduces risk

• CH2M partnership 50/50

• City costs capped at $800K

• 18 months after implementation

base fee reduced $180K/year

• ROI of 4.5 years

Westside Influent Headworks


• Existing SCADA system outdated and at end of life – 30-year-

old technology

• RFP contemplated SCADA replacement project

• CH2M is a leader in SCADA control

• New system will integrate current facilities with state-of-art

industry standard technology

• Improve operations, reliability, security, transparency and

availability of data and reduce risk

Planned SCADA System Upgrade


• CH2M projected 2016 costs – $7.0 million

• 2016 costs that COV will start to pay directly:

Utility costs – Estimated at $1.1 million including electricity

and natural gas.

• Comparable 2014 total billed costs – $9.7 million

(includes utilities)

• COV total costs will reduce by $1.6 million annually, propose to

reinvest into capital upgrades

Proposed Contract Costs


• CH2M and Veolia have extensive experience in managing similar transitions.

• CH2M proposal outlines transition plan emphasizing collaboration, transparency and communication. Experienced team leading transition.

• Transition efforts sensitive to existing staff’s situation and availability.

• City staff will work closely with CH2M and Veolia to plan, coordinate and ensure a seamless transition occurs.

• Transition can be completed by 12/31/2015.

Transition


• Very specialized talent currently working at the facilities.

• CH2M recognizes value of that talent and the roots existing

employees have in our community.

• Upon contract approval, CH2M will immediately begin

recruitment efforts of existing employees to identify possible

employees.

• CH2M anticipates many existing employees will be offered

employment.

Existing Employees


• July 27, 2015 – Seek Council approval of proposed

contract

• Early August 2015 – Begin transition period with

workshops for current on-site employees

• January 1, 2016 – New contract operations begin

Note: Contract is currently being reviewed by WDOE

Next Steps/Timeline


• Dan Swensen, Engineering and Construction

Services Manager (360)487-7750

[email protected]

• Brian Carlson, Public Works Director (360)487-7130

[email protected]

Follow-up Questions and Discussion

To request other formats, please contact: City Manager’s Office (360) 487-8600 | WA Relay: 711 [email protected]

mailto:[email protected]

mailto:[email protected]

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