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HomeMy WebLinkAboutBPMC Sept 6, 2017BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING SPECIAL MEETING Alaska Energy Authority,Anchorage,Alaska September 6,2017 ch 1.CALL TO ORDER Chair Janorschke called this telephonic meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:00 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Brad Janorschke (Homer Electric Association [HEA]);Cory Borgeson (Golden Valley Electric Association [GVEA]);Bryan Carey (Alaska Energy Authority [AEA]);Burke Wick (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);and Jeff Warner (Anchorage Municipal Light &Power [ML&P]). 3.PUBLIC ROLL CALL Tom Erickson,Michelle Hope,Rich Wooten,Kirk Warren,Brenda Applegate and Teri Webster, (AEA);Brian Bjorkquist (Attorney General's Office);Mark Johnson (CEA);Bob Day,Emily Hutchinson and Larry Jorgensen (HEA);Kirk Gibson (McDowell Rackner Gibson,PC);Gary Kuhn,David Pease (MEA);Molly Morrison (MLP);Leo Quiachon (GVEA);Jay Thom,Brad Melocik (DOWL);and Bernie Smith. 4.PUBLIC COMMENTS None 5,AGENDA APPROVAL MOTION:Mr.Izzo made a motion to approve the agenda.Motion seconded by Mr. Wick. Mr.Borgeson asked to add a Battle Creek bidding document update to the agenda.This meeting was noticed as a special meeting with a single topic of Battle Creek procurement and Mr. Bjorkquist stated adding a bidding update to the procurement discussion is valid.The agenda was unanimously approved. 6.NEW BUSINESS Mr.Carey is sending draft bid documents to the utilities today for their review with edits due back in one week.The bid will go out to the public Sept.15 with a contractor site visit Sept 27. BPMC Minutes 9/6/17 Page |of 3 The construction of the Battle Creek Diversion Project falls under DOT&PF construction procurement authority.The Procurement Code used authorizes a number of procurement methods and each of these procurement methods allow for different methods of payment. The development of the solicitation is still in progress but it will be solicited as an Invitation to Bid (ITB). The method of payment for the project is written as a combination of lump sum items and unit price items The engineer has estimated quantities that goes into the bid schedule for the contractors.There will be variances due to the unknown depth of bedrock,overburden,etc,so the unit price is used for those items and the lump sum will be used for items that have very little variances.This method reduces risk for the Contractor and adds flexibility for the owner. Mr.Izzo asked if we have an idea of how many contractors will bid.Mr.Carey estimates it will be many due to inquires received lately.This job can be done by many construction contractors as they are all skilled to build a road in mountainous terrain. Motion:Mr.Wick made the following motion: The Bradley Project Management Committee (BPMC)has reviewed the proposed procedures included in the draft memo from AEA to its Board dated September 6,2017, detailing the procurement procedures for the Bradley Lake Hydro,West Fork Upper Battle Creek Diversion Project (Project),that will be followed and the BPMC confirms its concurrence with the methods selected by AEA and expected to be used to procure the Project work. The motion was seconded by Mr.Warner. Mr.Borgeson asked how much of this bid will be unit priced vs.fixed priced?Mr.Thom stated around $7 million or 25 percent will be lump sum.They incorporated a 15 percent variance. This is in line with the general practice of DOT&PF and other heavy civil projects with significant unknown field conditions. Mr.Borgeson asked how having a unit priced method reduces the risk of the cost.Mr.Thom replied stating it is the best way to provide the contractors with a basis for their bid.DOWL has determined through LIDAR what the ground surface is.Also the upper and lower road sections have different cut slopes.By giving the contractors an estimate in unit priced quantities they can calculate the unknowns more accurately.This method of payment is the standard used for DOT Highways projects and has worked well. Mr.Erickson confirms this method is the best method to get the best cost and the assume little risk.Mr.Wick confirmed the lump sum items are the most difficult to work with and he agrees the right way to proceed is by using the unit pricing. A vote was called and the motion passed 5-1 with GVEA opposing. 7.MEMBERS COMMENTS None. BPMC Minutes 9/6/17 Page 2 of 3 -omey 8.NEXT MEETING DATE -September 29,2017 9.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 9:52 a.m. BY: Brad Janorschke;Attest:fx %ZaBryan@4rey Alaska Energy Authority,S<cretary BPMC Minutes 9/6/17 Page 3 of 3 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE TELEPHONIC SPECIAL MEETING Wednesday,Sept 6,2017 9:00 a.m. TO PARTICIPATE IN THE MEETING,DIAL 1-888-585-9008 AND USE CODE 467 050 126.-Ycd7. 9. AGENDA CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL PUBLIC COMMENTS AGENDA APPROVAL NEW BUSINESS A.BATTLE CREEK PROCURMENT MEMBERS COMMENTS NEXT MEETING DATE -SEPT 29,2017 10.ADJOURNMENT I=ALASKAQuamENERGYAUTHORITY MEMORANDUM Date:September 6,2017 To:AEA Board From:AEA Management Subject:Battle Creek Procurement Follow Up As a follow up to the Board's discussion of August 10,2017 related to the legal authoritative guidance that directs the procurement and bidding actions for the Bradley Lake Hydro,West Fork Upper Battle Creek Diversion Project (Battle Creek Diversion Project),we'd like to provide the following information. LEGAL FRAMEWORK: 1.To start with,State of Alaska public contracts are controlled by AS 36.30,the State Procurement Code (the Code). 2.As relates to construction of a state facility,Battle Creek in this instance,the Code gives control over the construction to the Commissioner of Transportation. 3.Thus,the construction of the Battle Creek Diversion Project falls under DOT&PF construction procurement authority. 4.This means that Battle Creek construction contracting procedures not only comply with the Code,but also must be in accordance with 2 AAC 12.DOT &PF standard contract clauses would/will thus be used,as appropriate,for Battle Creek. 5.Under AS 36.30,2 AAC 12,the Administrative Manual,and the delegations of authority from the Commissioner of the Department of Transportation and Public Facilities (DOT&PF)AEA is delegated procurement authority for and in support of those programs administered by AEA,subject to certain restrictions. 6.In short,the D.O.T.Commissioner has delegated to AEA the authority to bid construction projects (Battle Creek)if AEA follows DOT allowed procurement and payment methods. ALLOWED D.O.T.PROCUREMENT METHODS APPROPRIATE FOR BATTLE CREEK: The Code authorizes a number of procurement methods,including but not limited to: e Invitations to Bid, e Multi-Step Sealed Bidding, e Request for Proposals, e Multi-Step Sealed Proposals, e Single Source Procurements, e Limited Competition Procurements, fakenefrgyauthoritytorg) 813 West Northern Lights Boulevard Anchorage,Alaska 99503 1 907.771.3000 Toll Free (Alaska Only)888.300.8534 F 907.771.3044 Battle Creek Procurement Follow Up September 6,2017 Page 2 of 4 e Innovative Procurements, e Emergency procurements,and e Small Procurements ALLOWED PAYMENT METHODS APPROPRIATE FOR BATTLE CREEK: Each of these procurement methods allow for different methods of payment.Methods of Payment include,but are not limited to: e Lump Sum or Firm Fixed Price, e Fixed Price Plus Expenses, ®Time and Materials, ©Cost Plus Fixed Fee, e Unit Price,and e Cost Plus with a GMP DESIGN HISTORY &BACKGROUND: Final Design of the Battle Creek Diversion Project began in 2016 and used the Utilities' previously advertised Stetson Creek Diversion Project technical documents as a template.The Battle Creek Diversion technical specifications are tailored to this project specifically,are stand- alone,and in the Master Format (a standard for organizing specifications and other written information for commercial and institutional projects in the U.S.and Canada). BATTLE CREEK'S SOLICITATION STATUS: The development of the solicitation is still in progress and,at this point,is expected to be solicited as an Invitation to Bid (ITB). The basis for this ITB use expectation is that AS 36.30.100 states that:...except as otherwise provided in this chapter,or unless specifically exempted by law,an agency contract shall be awarded by competitive sealed bidding.As there are essentially no compelling reasons or even motivations to not use an ITB,and since the requirements for this project are clear,precise,and complete,an ITB is the expected method to be used for the sealed bid process. Additionally,the bid schedule (the list of pay items,the units of measurement,and the estimated quantities)are being developed similar to what would be used in the current Standard Specifications for Highway Construction Manual (2017). Battle Creek Procurement Follow Up September 6,2017 Page 3 of4 BID DOCUMENTATION RELATED INFORMATION: Due to the estimated cost of construction,Escrow of Bid Documentation will also be required. Bid Documentation consists of written documentation of: ©quantity takeoffs, construction schedules on which the bid is based, cost estimates, rates of production and progress, assumptions,calculations,quotes from subcontractors and suppliers,and information used to prepare the Bid for the project.00000The bid documentation will remain in escrow,without access by either party,except as otherwise provided for in the contract. PAYMENT METHOD SELECTED FOR BATTLE CREEK The method of payment for the project at this point is expected to be Unit Price,based on Total Basic Bid (adjusted for applicable State preferences). The basis for expecting at this time to use Unit Price as the payment method is that Unit Price contracts offer advantages where quantities cannot be accurately predicted (such as when blasting in areas where substantive geotechnical investigations have not taken place,and where estimated quantities based on unknown field conditions exist).This method reduces risk for the Contractor and adds flexibility for the owner. This typically affords a lower overall price without added costs for risks that bidders must take into account.Additionally this method of payment is the standard used for DOT Highways projects and this project is essentially a road project with pipe laid under the surface of the road.The following bullet points are also expected to be part of the terms and conditions: ©The quantities for unit price in the Bid Schedule are estimates and do not constitute guaranty of the actual quantities involved in the work. ©Quantities will be used for the purposes of comparison of proposals and determining the amount of the payment and performance bond. ©If major contract line items (5 percent or more of the contract award amount)which varies in final quantity by greater than 25 percent,then either party to the contract may receive an equitable adjustment in the contract unit price of that item. o Payment will be based on the actual quantities furnished,or work performed. ©Payment will include compensation for furnishing all tools,equipment,supplies,and manufactured articles,and for all labor,operations,and incidentals in accordance with the requirements of the Contract Documents. ry Battle Creek Procurement Follow Up September 6,2017 Page 4 of 4 CONCLUSION/SUMMARY OF PLANNED PROCUREMENT AND PAYMENT METHODS The Battle Creek Diversion Project procurement and payment methods,as planned,are typical in nature to similar procurements and derived from statutes,regulations,guidance,and best practices. The next AEA board meeting is scheduled for September 21,2017.Unless there is reason to delay the solicitation for the Battle Creek Diversion Project,we plan to move forward with the following tentative schedule: Tentative schedule for Battle Creek procurement is: September 7th -Draft ITB to Utilities &procurement for final review and edits September 15th -Advertise ITB . September 25th -Pre-bid Conference in Anchorage September 27"-Pre-bid site visit for bidders at Bradley CONCURRENCE OF METHODS ON BEHALF OF THE UTILITIES: AEA asked that the BPMC Board Chair assign a Lead for the utilities for this project to be the main point of contact and spokesperson for the utilities during the construction of the Battle Creek Project.Lee Thibert was given this assignment by the BPMC Chair. The Bradley Project Management Committee West Ferk-Upper Battle Creek Lead and BRMC Chaieconfirm their concurrence with the methods selected by AEA and expected to be used to procure the project work. MA»N DOWL WEST FORK UPPER BATTLE CREEK DIVERSION (WFUBCD) PAYMENT METHOD DISCUSSION The design and specifications for the WFUBCD project were developed with the assumption that the construction would be measured and paid as a combination of lump sum items and unit price items.This is in line with the general practice of DOT&PF and other heavy civil projects with significant unknown field conditions.Compared to a firm fixed price method,this provides an equitable method for the Bidders to develop competitive prices,fair comparison of prices and reduces claims for "differing site conditions”. Lump sum is utilized where there is little potential for variation and unit price is utilized where variation is likely.For example the pipeline outfall concrete headwall is a lump sum,while the diversion dam concrete is unit price paid to the neat-lines of the forms.This is because the outfall dimensions are not likely to change while foundation conditions at the diversion are not known and cannot be observed until the Contractor diverts the stream and exposes the foundation.It may be necessary to adjust the structure dimensions based on local conditions.The mixture of lump sum and unit price items in this way does provide a measure of stability in the overall cost. The nature of the road construction leaves a level of uncertainty regarding the quantities and materials that will be encountered.In particular,the interface between general excavation (overburden)and rock excavation is unknown and will not be known until the excavation is performed.During design it was assumed that there is a uniform 3-ft thickness of overburden in the lower road and that the lower half of the upper road is assumed to have 5-ft of overburden.The upper half of the upper road is assumed to have no overburden. This provides a basis for unit price bidding,knowing that the actual quantities will vary.If the Contractor were to bid a lump sum price based on the plan lines,there would certainly be changes as the plan lines are based on the assumed rock contact.Having changes without unit prices established puts all the cards in the Contractor's hand when negotiating the change cost. Some items are designed to be installed as directed.For example the rock cut slopes may need some drilled anchors and in some areas rock netting.The locations and quantity are not known until the bedding and fracture pattern is exposed in the cut slope.Unit price provides method to only pay for actual use. There are field adjustments that will be needed during construction to match the actual field conditions.If there are not established unit prices to measure these adjustments,each adjustment becomes a negotiated change order with the Contractor in control of the cost information.For directed adjustments,the lump sum would not be a cost control,but rather would lead to cost increases.With lump sums,there would be no credits when the quantity reduces. Summary The combination of lump sum and unit prices proposed for WFUBCD provide lump sum stability on those items that cannot be easily measured or that can be pre-established.Unit prices are planned for items that would likely have changes during construction that would result in claims if they were treated as lump sum.We believe assigning lump sum values to these items would not reduce risk of cost increases but actually increase the cost risk. Bidding this project as a total lump sum would present significant bid risks to Contractors.We expect many would not pursue the project because of the high level of uncertainty and risk.The reduced level of competition generally leads to higher bid prices.It is our experience that Contractors will sharpen their bid price when there is an equitable method for cost adjustments.DOWL recommends that the project should utilize the mixture of unit price and lump sum presented in the bidding documents. \\ANC-FS\anc-projects\36\90067-01\56CostEst.Sched\WFUBCD Unit Price.docx Teri's copy Bradley Lake Project Management Committee {September 6,2017] MOTION The Bradley Project Management Committee (BPMC)has reviewed the proposed procedures included in the draft memo from AEA to its Board dated September 6,2017, detailing the procurement procedures for the Bradley Lake Hydro,West Fork Upper Battle Creek Diversion Project (Project),that will be followed and the BPMC confirms its concurrence with the methods selected by AEA and expected to be used to procure the Project work. Approved:Pourke [SE Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 STATUS:Active Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a special teleconference meeting on Wednesday,Sept 6,2017 at 9:00 a.m.The topic for this special meeting is to discuss the Battle Creek procurement.For additional information contact Teri Webster at 907-771-3074. This meeting will be conducted by electronic media pursuant to AS 44.62.310. A teleconference line has been set up to listen to the meeting.Dial 1-888-585-9008,Enter Code 467-050-126#. The public is invited to attend.The State of Alaska (AEA)complies with Title II of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3074 to make arrangements. Attachments,History,Details Attachments Details None .Commerce,Community andDepartment:Economic Development Revision History Category:Public Notices Created 8/31/2017 3:16:31 PM by tawebster Sub-Category:Location(s):Statewide Project/Regulation #: Publish Date:8/31/2017 Archive Date:9/7/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=1 86927 8/31/2017 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE TELEPHONIC SPECIAL MEETING K S Wednesday,Sept 6,2017 9:00 a.m. TO PARTICIPATE IN THE MEETING,DIAL 1-888-585-9008 AND USE CODE 467 050 126. 7. 9. AGENDA CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL PUBLIC COMMENTS AGENDA APPROVAL NEW BUSINESS A.BATTLE CREEK PROCURMENT MEMBERS COMMENTS NEXT MEETING DATE -SEPT 29,2017 © 10.ADJOURNMENT Bidding doc UKen>updake BPMC or IMC meeting availabilityyoreWemeMy / Possible |GVEA Map CEA Miso AEA.|Boardroom |Sewand HENdatesb.\|(Kirk)mM 4:920 |-|WN_[eute |My ak a io+>ke ery RRVidhopr"-MX 1 Ax®NLS we AD BPMC GVEK>ML&P CEA MEA Seward AEA BoardnEAyaoSirGVEAroom iz yY In y¥!]¥ok ¥\2\8om|Oo ¥IN UY |UY eye Y izle ¥r y 8-12 ¥ \2\\¥7 |pe NO NO EGEIVEAUG312017of==a 8c7™co|| ua 6DEs8 ,-<«LL 2AIDEAAEAAIDEAAEA BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) List of Representatives Representative Alternate Contact info Homer Electric Association Brad Janorschke Chairman Bob Day 907-283-2312 Email:bjanorschke@homerelectric.com Email:oday@homerelectric.com Assistant:Heather Smith Ph:907-283-2334 280 Airport Way,Kenai,AK 99611 Golden Valley Electric Association Email:cborgeson@gvea.comCoryBorgesonEmail:Inthompson@gvea.comoO)tn nabs Lynn Thompson |assistant:Susan Redlin Ph:907-458-5721P.O.Box 71249,Fairbanks,AK 99707 Alaska Energy Authority Email:bcarey@aidea.org Bryan Carey Email:kwarren@aidea.org Secretary/Treasurer Kirk Warren Assistant:Teri Webster Ph:771-3074 771-3065 Email:twebster@aidea.org 813 W.Northern Light Blvd,Anch.AK 99503 Anchorage Municipal Light &Power Mark Johnston 263-5825 Jeff Warner Email:Johnstonma@muni.org Email:Warnerja@muni.org Assistant:Erica Wilson Ph:263-5201 1200 E.First Ave,Anchorage,AK 99501 Chugach Electric Association Email:Lee_thibert@chugachelectric.com Lee Thibert Burke Wick Email:Burke_wick@chugachelectric.com 762-4517 Assistant:Connie Owens ph:762-4747 5601 Electron Drive,Anchorage,AK 99518 City of Seward John Foutz Email:jfoutz@cityofseward.net 224-4071 Assistant:Rebekah Ivy Ph:907-224-4073 Cell:907-362-1785 None P.O.Box 167 (238 5th Avenue) Seward,AK 99664 Matanuska Electric Association Tony Izzo 907-761-9212 Gary Kuhn Email:tony.izzo@mea.coop Email:gary.kuhn@mea.coop Assistant:Dawn Baham Ph:907-761-9285 P.O.Box 2929 (163 Industrial Way) Palmer,AK 99645 Kirk Gibson McDowell Rackner &Gibson PC Wk:503-290-3626;Cell 503-708-1341 Email:Kirk@mcd-law.com 419 SW 11th Street,Suite 400 Portland,Oregon 97205 Revised Date:9/5/2017 Faw Q®,o2-BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE First Second Firs PY C First Second First Second BPMC 9/6/17 AM bes Y ae NU Kiwi Ww Roll call from top to bottom ending with Chair Roll call Agenda Mo bom t Yes No Yes No Yes No Yes "No \Yes No Matanuska Electric Association wa TS Chugach Electric Association -Sew City of Seward CS Golden Valley Electric Association " , Alaska Energy Authority A Municipal Light &Power Cy Homer Electric Association " "Pp?WAC _cn 'ol First Second First Second First Second First Second First Second Roll call from top to bottom ending with Chair Yes No Yes No Yes No Yes No Yes No Matanuska Electric Association Chugach Electric Association City of Seward Golden Valley Electric Association Alaska Energy Authority Municipal Light &Power Homer Electric Association Next Meeting+¥8D 9(29 ATTENDANCE -_BPMC FPhone MEETING,Sept 6@s9:00 am:a -'COMMITTEE[MEMBERS _-__ALTERNATE SO:i /a ¢Cory Borgeson,Chair -_be ||aLynn ThompsonLee-Thibert-vice-Cheir CEA a Burke Wick7BradJanorschkeHEA|4 Bob Day -: Bryan Carey,Secretary/Tre:reasurer AEA |a Kirk Warren - -7 Tony Izz0 . -_ MEA |Gary Kuhn _;/ !-wtark-dotmstor-MLP |Jeff Warner ao oa -ae say - 'Public Members | COUNSEL _ CEA -_;Brian HiHickey (CEA)1 1 Kirk Gibson,McDowell Rackner &GibsonPC a wi Mark Johnson (CEA)_a S Brian Bjorkquist,Dept of Law a Sherri Higher (CEA)7 Paul Risse (CEA)[AEA |<Brenda Applegate'HEA Rich Baldwin (HEA)|Amy Adler eee Alan Owens (HEA)-: Jocelyn Gardner - _ Emily Hutchinson (HEA)a /Brandi White / |-Larry Jorgensen (HEA) -_Carmen Noble - MLP Anna Henderson (MLP)YA Teri Webster|!Molly Morrison (MLP)-DavidLockard ss- GVEA -_Ron!Wolfe (GVEA)Y Kirk Warren -_|Pete Sarauer (GVEA)John Springsteen 7 : MEA |__|Jim Brooks (MEA)Michael Lamb -|Gary Kuhn (MEA)-vv Gael Woolen|3%David Pease (MEA)oY Tow EricksemPublicaanBernie'Smith _4)Miackele VYope.;Crystal Enkvist (APA) -||MelHutchinson (APA)_/ ||TW Patch op - Fred Eoff (PEM):;7 : :-Cindy Cartledge (JDO)/:- .i Eric Myers (American Transmission (no)-7 oe -|a Leo Quiachnon,OVEN _ee_Jouy Thom,Bost | e|YBud.Meloate Doo |to ars ,Ve Prdidiny dor DOwe -Beand to wh\aay by Fip site.Sept IS ok to pluble .Site Views Sept 27 .Contracture poy auwet fashtuder Clearing,tentractors Working NOW done Thor FRITensUntpricechMostySomelumpsum.UnitinoaonTONY-est of taddees?Bt Yawnts ib will be alot Veep them busy 2-3 yrsCery-schedule .Und Orie,Method AssuMphin.Bide dy ouwkide of AEa6sheduleomrack,On Yrack.TF ols bidders thay would +eanwlaeGrom,Ae biddecs preference.Bads ened in |]renew.Open long Hime te Gwe thee to review logishisNov\&tentebwe.due date. APProvinas Hohon is -prthe NPPRoviNg proyect 7 Procuarement.|PoymentTeBWeearedNov16waneedYes|No.any cant is Unt Vs Fined .Jovy ow)*7 wa Lamp su 28%lumpsumlsVarienceoflumsun?ERS tine Feu alam to diverseElectricad5%&Civ,)Af arcing Ls 975%ok pracet wy J Canty Cot as Spplemen}® he pondows VOT procedures natonwide"Prd Woh ways,Tome tan}do both .Gmiracr dus,Assume Wile nsk,Burke=woAyNeesWetted Fixed Price isems Most AdReuld.Rig ht way 1s dora unih prize.Close PhO yack Marnage vent.Cory -huge TIS to unknown3Be,Mountamousherrain BOM.fer wile Bradley Lake Project Management Committee -Wednesday,Sept 6,2017 @ 9:00 am. **PLEASE WRITE LEGIBLY**_ NAME ORGANIZATION