AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 19-001146
MEETING DATE:	11/19/19
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	2
SUBMITTING Agency/Department:	John Wayne Airport (Approved)
Department contact person(s):	Barry A. Rondinella (949) 252-5183
	Kevin B. Flynn (949) 252-6038

Subject: Approve Contract with Sterling Energy International, Inc.

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Discussion

3 Votes Board Majority

Budgeted: Yes

Current Year Cost: $1,959,131

Annual Cost:
FY 2020-21 $3,930,148
FY 2021-22 $3,940,472
FY 2022-23 $1,969,456

Staffing Impact:

# of Positions:

Sole Source: No

Current Fiscal Year Revenue: N/A

Funding Source: Airport Operating Fund 280:100%	County Audit in last 3 years: No

Prior Board Action: N/A

RECOMMENDED ACTION(S):

Find that the project is Categorically Exempt from the California Environmental Quality Act (CEQA), Class 1 (Existing Facilities) pursuant to CEQA Guidelines Section 15301.

Authorize the County Procurement Officer or authorized Deputy to execute a Contract with Sterling Energy International, Inc. for Central Utility Plant Operations and Maintenance Services, effective January 1, 2020, through December 31, 2022, in a total amount not to exceed $11,799,207, renewable for two additional years.

Pursuant to County Contract Policy Manual Section 3.3-113, authorize the County Procurement Officer or authorized Deputy to exercise a contingency contract cost increase, not to exceed a total of 10 percent of the contract amount for the first year of the Contract, for the entire term of the Contract, including renewals and within the scope of work set forth in the Contract. The use of this contingency contract cost increase is subject to approval requirements established by the County Procurement Officer.

SUMMARY:

Awarding a contract to Sterling Energy International, Inc. will provide continuous maintenance, operations and repair of John Wayne Airport’s Central Utility Plant.

BACKGROUND INFORMATION:

John Wayne Airport's (JWA) Central Utility Plant (CUP) is composed primarily of four natural gas motor-powered generator sets and their associated emissions control equipment, three centrifugal chillers, two hot water absorption chillers, electronic control and power distribution systems and associated infrastructure and utility equipment. The CUP provides electrical service and chilled water for Terminals A, B and C and electrical service for Parking Structures A1, A2, B2 and C.

The services provided under the Contract include the operation and maintenance of (1) the power generation equipment while ensuring compliance with the air quality emissions limits specified under the South Coast Air Quality Management District permit; (2) the chilled water system which provides chilled water for terminal air conditioning; and (3) the high voltage distribution system inside the CUP and from the utility point of connection to the step-down transformers in the terminals and parking structures. The services include, but are not limited to, supply support and procurement; systems monitoring; equipment warranty monitoring; emissions equipment monitoring and service; necessary upgrades; preventive maintenance and periodic servicing; consumable supplies input and management; urea emission control chemicals; calibration gases, equipment overhaul and/or repair and provision of plant operation related advice.

Sterling International, Inc. (Sterling) is the current contractor providing Operations and Maintenance services to the JWA CUP, which contract expires on December 31, 2019.

Proposals Requested

In preparation for the expiration of the current contract with Sterling, on July 26, 2019, JWA released a Request for Proposals (RFP) for CUP Operations and Maintenance services through BidSync and the JWA website. On August 8, 2019, four companies attended the mandatory pre-proposal meeting. Subsequently, three addenda to the RFP were issued and posted to BidSync.

Proposal Minimum Requirements

The RFP specified that Offerors must, at a minimum, be capable of providing service technicians, operators and managers with verifiable experience operating and maintaining Cummins natural gas-fired electrical generation equipment, Broad Absorption Chillers, Carrier Centrifugal Chillers, General Electric electrical switchgear, associated electronic control systems and emissions monitoring equipment.

Proposals Received

On August 27, 2019, JWA received and accepted two proposals. They are listed below alphabetically:

1.	Sterling
2.	Veolia Energy Operating Services, LLC (Veolia)

Proposal Evaluation

On September 23, 2019, the proposals were distributed to the evaluation committee members, which consisted of one Airport Development Representative, three Airport Maintenance Representatives and one Contracted Consulting Project Manager. The evaluation committee reviewed and evaluated the proposals using the weighted criteria noted below.

Phase I Written Proposals (Value: 80% of total score) were rated based on the following criteria:

Overall Responsiveness 15%
Qualifications and Experience 15%
Approach and Methodology 30%
Proposed Staffing 20%
Proposed Fees 20%
Financial Stability (Pass or Fail)

The evaluation committee deemed both proposals to be qualified submittals and determined that it would be appropriate for both proposers to provide oral presentations.

Phase II Oral Presentations (Value: 20% of total score) were rated based on the following criteria:

Overall Responsiveness 15%
Qualifications and Experience 15%
Approach and Methodology 30%
Proposed Staffing 20%
Proposed Fees 20%
Financial Stability (Pass or Fail)

The total weighted scoring of the proposals is shown below:

Proposer	Written (80%)	Oral (20%)	Total
Sterling	73	17	90
Veolia	43	12	55

Summary of the Proposals

Both Sterling and Veolia are service leaders in their industry and have shown significant experience in servicing and maintaining CUP electrical generation equipment and chilled water production equipment similar to the CUP at JWA.

Sterling’s proposal scored highest in all categories. Its written proposal and oral presentation demonstrated that it provides a combination of quality, experience and value-added service supporting safety and efficiency. Sterling has experience with start-up and commissioning of new power plants, operations and maintenance of existing power plants, environmental compliance with operating plants and plant turn-around projects. Sterling is based in Costa Mesa, California.

Veolia’s proposal reflected its experience and large global presence in providing energy management solutions. It has nearly 171,000 employees worldwide providing water, waste and energy solutions while producing nearly 56 million megawatt-hours of energy worldwide. Veolia is based in Boston, Massachusetts, with local offices and experience within the County providing Operations and Maintenance services to Saddleback College in Mission Viejo, California.

Based on the defined evaluation criteria and scoring noted above, the evaluation committee determined that the written proposal and oral presentation from Sterling are the most responsive to the requirements of the RFP. See Attachment B for the Scoring Summary and Rater Sheets. Sterling demonstrated full understanding of the RFP specifications and described its ability to provide successful Operations and Maintenance services to the JWA CUP.

Some noteworthy differences in the two proposals are as follows:

Staffing Plan

Sterling identified specific staff that would serve JWA. Veolia identified a Project Manager with the remainder of the positions serving JWA to be identified at a later date.

Compensation

q Material and Expense Mark-Up: Sterling completed the proposal form identifying a 4.5 percent mark-up. Veolia did not complete the form and did not identify its proposed mark-up in the proposal.

q Overall Cost: The compensation component of the RFP was for labor and materials to operate and maintain the CUP for three years. The RFP stated, “Large expenses such as major engine overhauls costing over $50,000 may be procured by County." In its proposal, Veolia “presumes that a majority of the subcontractor costs >$50,000 will be direct-billed to the airport." Veolia’s proposed compensation total is $4,593,275 over three years. Sterling’s proposed compensation total is $11,799,207 and incorporates all items, including those estimated to cost more than $50,000.

Sterling’s proposal reflects costs that are historically consistent with the total cost to operate and maintain the CUP.

Accordingly, JWA seeks Board of Supervisors' approval to award the proposed contract to Sterling for CUP Operations and Maintenance Services. JWA's past and present experience with Sterling has been at least satisfactory. JWA has verified there are no concerns that must be addressed with respect to Contractor's ownership/name, litigation status or conflicts with County interest.

The Contract includes subcontractors. See Attachment C for information regarding subcontractors and Contract Summary Form.

Compliance with CEQA: The proposed project is Categorically Exempt (Class 1) from the provisions of CEQA pursuant to Section 15301 because it consists of the repair and maintenance of existing public facilities, including mechanical equipment, involving negligible or no expansion of the use.

FINANCIAL IMPACT:

Appropriations for this Contract are included in the FY 2019-20 Budget for Airport Operating Fund 280 and will be included in the budgeting process for future years.

The Contract contains language that allows the County to terminate the Contract without penalty for cause or after 30 days' written notice without cause.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Contract MA 280-20010615 with Sterling Energy International, Inc.
Attachment B - Scoring Summary and Rater Sheets
Attachment C - Contract Summary Form