HomeMy WebLinkAbout08-01-2012 Operations Committee Agenda Packet Orange County Sanitation District Wednesday, August 1, 2012
Regular Meeting of the °F, " 5:00 P.M.
Operations Committee Administration Building
Board Room
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 593-7130
AGENDA
PLEDGE OF ALLEGIANCE:
DECLARATION OF QUORUM:
PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the
Clerk of the Board. Speakers are requested to limit comments to three minutes.
REPORTS: The Committee Chair and the General Manager may present verbal reports on
miscellaneous matters of general interest to the Committee Members. These reports are for information
only and require no action by the Committee.
DEPARTMENT HEAD REPORT:
CONSENT CALENDAR:
1. Approve Minutes of June 6, 2012, Operations Committee meeting.
2. Recommend to the Board of Directors to:
Approve a contingency increase of $79,540 (10%) to the Professional Design
Services Agreement with AECOM Technical Services for the Balboa Trunk
Sewer Rehabilitation, Project No. 547, for a total contingency of $159,280
(20%).
08/01/12 Operations Committee Agenda Page 1 of 3
3. Recommend to the Board of Directors to:
Approve a contingency increase of $266,248 (13%) to the construction contract
with J. Fletcher Creamer & Son, Inc., for Interplant Gas Line Rehabilitation,
Project No. J-106, for a total contingency of$409,612 (20%)
4. Recommend to the Board of Directors to:
Approve a budget increase of $97,000 for Central Generation Automation,
Project J-79-1, for a total budget amount of$23,443,000.
5. Approve a name change for Project No. P2-106 from Chemical Scrubber
Conversions and Piping System Improvements to "Boiler System Rehabilitation
and Scrubbers H & I Demolition at Plant No. 2".
NON-CONSENT:
6. Recommend to the Board of Directors to:
A. Receive and file Statement of Complaint for the Recommendation of
Biosolids Management Contract Award letter dated July 12, 2012 from
Terra Renewal West LLC protesting award to Tule Ranch;
B. Receive and file letter dated July 23, 2012 to Terra Renewal West LLC
responding to the Statement of Complaint; and,
C. Approve a contract with Tule Ranch to manage the Orange County
Sanitation District's biosolids from Reclamation Plant No. 1 and Treatment
Plant No. 2 for land application and/or landfill disposal (Specification No.
S-2011-513BD), for the period commencing on January 1, 2013 through
December 31, 2017, with one five-year renewal option, for the unit price of
$54.50 per ton for land application, for a total annual amount not to
exceed $19,000,000.
INFORMATION ITEMS:
7. Changes to Ocean Monitoring Program with the new Ocean Discharge Permit
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
08/01/12 Operations Committee Agenda Page 2 of 3
ADJOURNMENT:
The next Operations Committee meeting is scheduled for Wednesday, September 5,
2012, at 5:00 p.m.
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at
(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability
and the type of accommodation requested.
Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda
has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis
Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public
records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting
to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board.
NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the
Clerk of the Board 14 days before the meeting.
Made E.Ayala
Clerk of the Board
(714)593-7130
mavala(d)ocsd.com
For any questions on the agenda,Committee members may contact staff at:
General Manager Jim Ruth (714)593-7110 iruthfclocsd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rghirelli(/Docsd.cem
Assistant General Manager Jim Herberg (714)593-7300 iherbemra)ocsd.com
Director of Facility Support Services Nick Arhontes (714)593-7210 narhontesaocsd.com
Director of Operations&Maintenance Ed Tortes 714 593-7080 etorres ocsd.com
08/01/12 Operations Committee Agenda Page 3 of 3
OPERATIONS COMMITTEE Meeting Date To91.of Dlr.
08/01/12 08/22/12
AGENDA REPORT Item Number Item Number
z
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Assistant General Manager
CIP Project Manager: Pamela Koester
SUBJECT: BALBOA TRUNK SEWER REHABILITATION, PROJECT NO. 5-47
GENERAL MANAGER'S RECOMMENDATION
Approve a contingency increase of $79,540 (10%) to the Professional Design Services
Agreement with AECOM Technical Services for the Balboa Trunk Sewer Rehabilitation,
Project No. 5-47, for a total contingency of$159,280 (20%).
SUMMARY
This project will rehabilitate 11,931 feet of 15 to 24-inch diameter sewers and 40
manholes along Newport and Balboa Boulevards on the Balboa Peninsula in Newport
Beach. AECOM Technical Services is providing engineering services for this project.
As the Preliminary Design Report (PDR) was being completed in August 2010, Newport
Beach requested the Orange County Sanitation District (Sanitation District) analyze
several options to replace some of the sewers on the Balboa Penisula instead of
rehabilitating them. Based on additional investigations conducted by the Sanitation
District staff, it has been determined that replacing the existing sewer would not be
necessary. The Sanitation District is now in a position to move forward with the original
project. Due to the schedule delay, AECOM Technical Services needs to verify project
assumptions, schedule, and construction costs in order to move forward with final
design.
It is estimated that the fees required to restart the project and revise the design to meet
current design standards will exceed the available contingency. This additional
contingency approval of $79,640 is being requested to cover the remaining design
effort.
PRIOR COMMITTEE/BOARD ACTIONS
December 2008 — Approved a Professional Design Services Agreement with AECOM
Technical Services to provide professional design services for the Balboa Trunk Sewer
Rehabiltiation, Project No. 5-47, for an amount not to exceed $796,404; and approved a
contingency of$79,640 (10%).
Page 1 of 2
ADDITIONAL INFORMATION
The purpose of this project is to rehabilitate 11,931 feet of the Balboa Trunk Sewer and
40 manholes along Newport and Balboa Boulevards on the Balboa Peninsula in
Newport Beach. The preliminary design of this project started in March of 2009. The
major tasks asociated with the PDR included preparation of updated sewer plans based
on a new survey; hydraulic analyses of the trunk sewer to determine if surcharging
conditions exist in the trunk sewer that need to be addressed; condition assessment of
existing sewers and manholes; identification of suitable rehabitation techniques; and
preparation of construction costs and schedule. A draft PDR was completed in August
of 2010.
As the PDR was being completed, the City of Newport Beach requested the Sanitation
District consider replacing a specific segment of the Balboa Trunk Sewer due to
potential hydraulic issues in the local sewers that may be caused by the hydraulics of
the Balboa Trunk Sewer. The Sanitation District conducted a more in-depth analysis of
the sewer hydraulics and Newport Beach conducted flow monitoring on specific local
sewers that discharge into the Balboa Trunk Sewer. After reviewing the new data, it
was determined that the Balboa Trunk Sewer is not responsible for local sewer
hydraulic issues. The project is now ready to move forward as originally planned.
Since considerable time has passed since the PDR was completed, verification of
existing conditions is warranted. In addition, the plans and specifications need to be
brought up to current requirements including updated cost information, revised sewer
bypass requirements and design, revised stormwater specifications as well as a review
of specifications that may have been revised since the PDR was prepared. Changes
will also need to be made to the traffic control plans and construction phasing based on
current conditions.
CEQA
This project was included in the 2007 Collections Projects, Environmental Impact
Report (EIR). A Notice of Exemption was filed on June 8, 2010.
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Sanitation District's Delegation of
Authority. This item is budgeted and the budget is sufficient for the recommended
action (FY2012-13, Section 8, Page 26).
Date of Approval Contract Amount Continaencv
12/3/08 $796,404 $ 79,640 (10%)
8/22/12 $ 79,640 (10%)
$159,280 (20%)
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Page 2 of 2
OPERATIONS COMMITTEE Meeting pate Toad.of W.
08,01, oe/zz/12
AGENDA REPORT Item 3 bar Item Number
3
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Assistant General Manager
Project Manager: Martin Dix
SUBJECT: INTERPLANT GAS LINE REHABILITATION, PROJECT NO. J-106
GENERAL MANAGER'S RECOMMENDATION
Approve a contingency increase of $266,248 (13%) to the construction contract with J.
Fletcher Creamer & Son, Inc., for Interplant Gas Line Rehabilitation, Project No. J-106,
for a total contingency of$409,612 (20%)
SUMMARY
This project rehabilitates the Interplant Gas Line (pipeline) by installing a new high
density polyethylene pipe (HDPE) within the pipeline. The pipeline was built to transport
digester gas from Plant No. 1 to the cogeneration equipment located at Plant No. 2
where it would be used to generate electricity to operate portions of the Plant No. 2
facility. This project provides a cost savings by maximizing the use of available digester
gas for energy production, and reduces air quality emissions by limiting the flaring of
excess digester gas.
Since the pipeline transports digester gas, the pipeline falls under the jurisdiction of the
US Department of Transportation (DOT) which develops and enforces gas pipeline
regulations. At the beginning of construction, the Orange County Sanitation District
(Sanitation District) staff discovered that the specified HDPE material was based on an
industry standard, but not the standard used by the DOT. The DOT regulations specify
a thicker pipeline wall than the contract specified pipeline. This change in requirement
translates to a higher pipeline material cost.
A budget increase is not needed to cover the additional contingency request. At the
April 2012 Board meeting, the construction contract for the Interplant Gas Line
Rehabilitation Project was awarded to J. Fletcher Creamer & Son, Inc. for $2,048,060,
which is $991,940 less than the budgeted construction amount.
To cover the costs of the thicker pipeline material to meet DOT requirements, staff is
requesting an additional contingency of $266,248 (13%), for a total project contingency
of$409,612 (20%).
Page 1 of 2
PRIOR COMMITTEE/BOARD ACTIONS
April, 2012 — Approved Plans and Specifications for Interplant Gas Line Rehabilitation,
Project No. J-106, on file at the office of the Clerk of the Board; approved Addendum
No. 1 to the plans and specifications; received and filed bid tabulation and
recommendation; awarded a construction contract to J. Fletcher Creamer & Son, Inc.
for Interplant Gas Line Rehabilitation, Project No. J-106, for a total amount not to
exceed $2,048,060; and, approved a contingency of$143,364 (7%).
ADDITIONAL INFORMATION
The Design Consultant used a pipeline standard that is not allowed by the DOT. During
design, the focus of the rehabilitation project was to ensure the rehabilitation pipeline
meet operating pressure requirements governed by a factor of safety. However, the
DOT pipeline standard derates HDPE material for gas use; therefore, a thicker HOPE
material is needed to achieve the same operating pressure. The project specifications
and particularly the pipeline specification section was reviewed by the design team and
the issue relating to the DOT requirements for the pipeline material was an oversight
that was not recognized until the pipeline construction material submittal was received
from the Contractor.
CEQA
Notice of Exemption was filed on January 19, 2006.
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request for increase in the project contingency complies with authority levels of the
Sanitation District's Delegation of Authority. This item has been budgeted and the
budget is sufficient for the recommended action (FY2012-13, Section 8, Page 66).
Date of Approval Contract Amount Continaencv
04/25/12 $2,048,060 $143,364 (7%)
08/22/12 $266,248 (13%)
Total Contingency $409,612(20%)
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Page 2 of 2
OPERATIONS COMMITTEE Meeting Date TOBd.0111M.
08/01/12 OB/22/12
AGENDA REPORT Item Number Ham Number
a
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Assistant General Manager
CIP Project Manager: Dean Fisher
SUBJECT: CENTRAL GENERATION AUTOMATION, PROJECT NO. J-79-1
GENERAL MANAGER'S RECOMMENDATION
Approve a budget increase of $97,000 for Central Generation Automation, Project
J-79-1, for a total budget amount of$23,443,000.
SUMMARY
This project installs new control systems for the Central Generation Systems (CGS) at
Reclamation Plant No. 1 and Treatment Plant No. 2. The original control systems were
installed 20 years ago and are no longer supported by the original manufacturer. The
construction was substantially completed in November 2011.
The J-79-1 budget also funded Project No. J-79-1A; the installation of Continuous
Emissions Monitoring Systems for each engine in the CGS system, in accordance with
the Southern California Air Quality Management Board regulations. The construction
was substantially completed in September 2009.
The project is being closed out. Additional budget is being requested to cover staff
costs to complete the record documentation and finalize the project.
PRIOR COMMITTEE/BOARD ACTIONS
In January 2009, the Board approved a contract with Sachs Electric Company for an
amount of $9,252,315 to replace the control systems for the Central Generation
Systems.
In September 2008, the Board approved a contract with the Morrow Meadows
Corporation for an amount of$3,958,700 to install CEMS units on each CGS engine.
ADDITIONAL INFORMATION
N/A
CEQA
N/A
Page 1 of 2
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Sanitation District's Delegation of
Authority. This item is budgeted, but the budget is insufficient for the recommended
action (FY 2012-13, Section 8, Page 69). The requested budget increase will be funded
from offsets within the CIP Budget.
Date of Approval Contract Amount Contingency
N/A N/A N/A
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Page 2 of 2
OPERATIONS COMMITTEE Meeting Date To Bd.of Dir.
o8/gv12
AGENDA REPORT Item Number Item Number
s
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Assistant General Manager
CIP Project Manager: Wendy Sevenandt
SUBJECT: CHEMICAL SCRUBBER CONVERSIONS AND PIPING SYSTEM
IMPROVEMENTS, PROJECT NO. P2-106
GENERAL MANAGER'S RECOMMENDATION
Approve a name change for Project No. P2-106 from "Chemical Scrubber Conversions
and Piping System Improvements" to "Boiler System Rehabilitation and Scrubbers H & I
Demolition at Plant No. 2."
SUMMARY
The original project scope was to convert existing chemical scrubbers to biological
scrubbers, install plant water booster pumps in the dewatering building, and rehabilitate
the boiler feed water piping system at Plant No. 2.
In October 2011, the General Manager approved a scope change to include boiler
upgrades to meet upcoming Air Quality Management District regulations. This scope
change was within the General Manager's contingency allowance.
The current project scope that will be published for bidding will accomplish the following
at Plant No. 2: (1) rehabilitate the existing boiler system; and (2) demolish scrubbers H
& I.
The name change is recommended to more accurately reflect the work to be
accomplished.
PRIOR COMMITTEE/BOARD ACTIONS
July 2010 - Approved a Professional Design Services Agreement with Dudek for
Chemical Scrubber Conversions and Piping System Improvements, Project No. P2-106,
providing for engineering design services for an amount not to exceed $165,559 and
approve a contingency in the amount of$16,555 (10%).
Page 1 of 2
October 2009 - Established a budget for Chemical Scrubber Conversions and Piping
System Improvements, Project No. P2-106, in the amount of $3,261,000, and
authorized General Manager to negotiate with Dudek for design and construction
support services for Project No. 132-106.
ADDITIONAL INFORMATION
None.
CEQA
A Notice of Exemption was filed on August 24, 2006. Chemical Scrubber Conversions
and Piping System Improvements, Project No. P2-106, was determined to be
categorically exempt under CEQA Section 15301(b) because the project consists of
minor modifications to existing facilities with no increase in treatment capacity.
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Orange County Sanitation District's
Delegation of Authority. This item has been budgeted and the budget is sufficient for
the recommended action. (FY2012-13, Section 8, Page 81).
Date of Approval Contract Amount Contingency
N/A N/A N/A
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Page 2 of 2
OPERATIONS COMMITTEE Meeting Date TOBd 0111 ,.
08/01/12 OBft2/12
AGENDA REPORT Item Number Item Number
6
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Assistant General Manager
Env. Compliance: Jim Colston, Env. Compliance Manager
SUBJECT: BIOSOLIDS MANAGEMENT CONTRACT AWARD RECOMMENDATION
—TULE RANCH
GENERAL MANAGER'S RECOMMENDATION
A. Receive and file Statement of Complaint for the Recommendation of Biosolids
Management Contract Award letter dated July 12, 2012 from Terra Renewal West
LLC protesting award to Tule Ranch;
B. Receive and file letter dated July 23, 2012 to Terra Renewal West LLC responding
to the Statement of Complaint; and,
C. Approve a contract with Tule Ranch to manage the Orange County Sanitation
District's biosolids from Reclamation Plant No. 1 and Treatment Plant No. 2 for land
application and/or landfill disposal (Specification No. S-2011-51313D), for the period
commencing on January 1, 2013 through December 31, 2017, with one five-year
renewal option, for the unit price of $54.50 per ton for land application, for a total
annual amount not to exceed $19,000,000.
SUMMARY
The Orange County Sanitation District (OCSD) currently has two biosolids management
contractors providing land application and composting. The land application contract is
scheduled to expire on December 31, 2012.
OCSD released a Request for Proposals (RFP) on January 31, 2012 seeking proposals
from qualified professional biosolids management contractors to provide land
application after December 31, 2012.
A total of six proposals were received on April 17, 2012. The proposals were evaluated
and ranked based on pre-defined scoring for technical and cost considerations in
accordance with OCSD's Resolution No. 07-04, Section 5.07. The firm with the highest
ranking by the staff evaluation panel is Tule Ranch, the current land application
contractor.
Contractor selection was on the agenda for consideration at the June 27, 2012 regular
Board Meeting. The item was continued to the August 1, 2012 Operations Committee
meeting. Questions raised by the Board of Directors at the June 27 meeting are
Page 1 of 11
addressed in the "Additional Information" section of this report. Specifically, the RFP
process, review criteria, and evaluation panel are explained in detail.
Terra Renewal West LLC (Terra Renewal), one of the proposers, sent a Statement of
Complaint letter dated July 12, 2012 regarding the award recommendation. OCSD
reviewed and responded to Terra Renewal's Statement of Complaint and found that the
complaint does not merit a change to the award recommendation.
The proposed contract with Tule Ranch for normal operations would cover
approximately one-third to one-half of OCSD's daily production at the rate of $54.50 per
ton for land application. This price is a reduction of $1.00 per ton from Tula's current
price of$55.50 per ton.
The proposed contract also provides for a failsafe option for landfilling all of OCSD's
biosolids at the rate of $69.00 per ton if unusual circumstances such as severe weather
or other emergency conditions require OCSD to divert all of our biosolids to a landfill
until conditions return to normal.
PRIOR COMMITTEE/BOARD ACTIONS
June 27, 2012 — Continued approval of a contract to manage OCSD's biosolids to
August 1, 2012 Operations Committee.
ADDITIONAL INFORMATION
OCSD has an existing contract with Tule Ranch for the management of biosolids. The
contract expires at the end of this year. The current contract rate is $55.25 per ton for
land application. Tule Ranch has performed exceptionally well over the life of the
contract.
In January 2012, OCSD issued a Request for Proposals to re-contract the land
application biosolids tonnage. The RFP set forth the process for considering the
proposals. The RFP process awards the contract based on the best value to OCSD
rather than just the lowest price. The RFP explained that best value would be
determined by an evaluation committee of staff experts who would rank the proposals
based on the following criteria:
Criteria
Max
Evaluation Criteria Points
(Weight)
1. Overall Qualification and Experience of Firm — Include 100 pts.
experience working with public agencies, length of experience in (10%)
land applying and landfilling biosolids and stability of fine,
experience and technical competence of subcontractors, if any,
and knowledge of the laws and regulations.
Page 2 of 11
2. Staffing Organization — Include qualifications of staff, particularly 100 pts.
key personnel and Project Manager/Project Lead/Foreman that will (10%)
directly work with OCSD staff.
3. Financial Capabilities — Include Net Worth Capital of the last 100 pts.
three years (Balance Sheets) and if Proponent is now the debtor in (10%)
a bankruptcy case.
4. Work Plan — Include project approach, activities, schedule, project 400 pts.
siting, management system preparedness and conformance, (40%)
contractor diversification, and compliance.
5. Cost and Price 300 pts.
(30%)
Total 1000 pts.
100%
In April 2012, OCSD received proposals from six firms in response to the RFP. The
evaluation committee determined that five of the six firms met the minimum acceptable
qualifications set forth in the RFP: (1)Avragro Systems, (2) Nursery Products,
(3) McCarthy Farms, (4) Terra Renewal, and (5) Tule Ranch.
The evaluation committee then ranked the five proposals according to the criteria set
forth in the RFP. After considering the first four criteria — everything except price — the
evaluation committee gave Tule Ranch the highest score of 670 points. McCarthy
Farms received the second highest score of 630 points. The third-ranked firm, Terra
Renewal, received a substantially lower score of 460 points.
Because the scores received by Tule Ranch and McCarthy Farms were very close, staff
initiated the "Best and Final Offer" process as described in the RFP. Pursuant to this
process, OCSD staff invited Tule Ranch and McCarthy Farms to meet with OCSD staff
on May 23rtl to obtain clarification and additional information, and to discuss specified
issues. During the meeting with McCarthy Farms, OCSD staff learned that McCarthy
Farms had not finished testing its proposed biosolids management process. Thus,
McCarthy Farms could not provide a firm cost proposal. McCarthy Farms elected at
that time to withdraw from the RFP process.
During the meeting with Tule Ranch, OCSD staff obtained additional information and
negotiated the appropriate formula for calculating the fuel surcharge fee. This fee will
escalate based on the price of diesel fuel.
After conclusion of the RFP process, OCSD staff recommended that the Board approve
a contract with Tule Ranch on the following basic terms:
Page 3 d 11
Term: January 1, 2013 through December 31, 2017, with one five-year renewal
option;
Price:
o $54.50 per ton for land application in Arizona;
o $69.00 per ton for landfill disposal in Arizona (to be used in emergencies
only);
o $6.00 per ton (hauling only) for Orange County landfill;
o A fuel surcharge fee with an escalator based on the actual price of diesel
fuel; and
o A total annual amount not to exceed $19 million.
The proposed contract would not obligate OCSD to provide any minimum amount of
biosolids to Tule Ranch. OCSD staff anticipates managing roughly 250 tons per day
under the contract. This represents about one-third of OCSD's total production of
biosolids. At the rate of$54.50 per ton, managing 250 tons per day is projected to cost
$13,625 a day, or$4,973,125 per year. The annual "not to exceed" amount of
$19 million represents the cost of managing OCSD's total production of 750 tons per
day in the unlikely event that OCSD suddenly has no other management options
(failsafe back-up capacity required in RFP).
At the Board meeting of June 271h, Terra Renewal submitted a letter objecting to the
proposed award to Tule Ranch based on the fact that Terra Renewal offered a lower
price.
After additional review, staff continues to recommend awarding the contract to Tule
Ranch rather than Terra Renewal, despite the fact that Terra Renewal offers a lower
price, for the following key reasons:
1. This award is not based on the low bid. The RFP appropriately stated that
the contract would be awarded based on best value to OCSD rather than
the lowest price. Price was one factor, but only one factor, to be
considered in the evaluation. Biosolids management is subject to very
close scrutiny by local governments, the press, and the public. In the
past, local governments have banned the land application of biosolids
based on perceived risks to human health and the environment. It is very
important that OCSD's contractors adhere to the highest standards in
managing OCSD's biosolids. Thus, pursuant to the RFP, staff
recommends awarding the contract to the most qualified firm — Tule
Ranch—even though that firm does not offer the lowest price.
2. Tule Ranch is the most qualified by a substantial margin. The evaluation
committee ranked Tule Ranch substantially higher than Terra Renewal —
the committee gave Tule Ranch 670 points, and gave Terra Renewal only
Page 4 of 11
460 points. Tule Ranch scored significantly higher across the board in all
evaluation categories.
3. Terra Renewal substantially overstated the cost difference. Terra
Renewal claims that the Terra Renewal price would save OCSD $6 million
over five years as compared with the Tule Ranch price. This is not
correct. OCSD anticipates sending roughly 250 tons per day under the
proposed contract. Based on 250 tons per day, Terra Renewal's price
would save about $2.1 million over the 5-year life of the contract as
compared with Tule Ranch. To put this figure in perspective, it is 2.1% of
the total amount that OCSD has budgeted for biosolids management
during the five-year period — about$100 million.
4. OCSD staff negotiated with Tule Ranch, and the price is fair and
reasonable. OCSD's experts concluded that the Tule Ranch price is fair
and reasonable based on the market for biosolids management.
Moreover, OCSD staff negotiated the terms of the agreement with Tule
Ranch, obtaining a $1 per ton reduction in the price and a favorable
calculation for the fuel surcharge fee.
S. The process was fair. The RFP process was fair to all proposers. The
evaluation panel consisted of impartial experts from various disciplines
who applied objective criteria. All of the criteria to be applied were set
forth in the RFP. As an added measure, OCSD retained the services of
an outside consultant who specializes in public procurements to ensure
that the process was open and fair.
QUESTIONS PRESENTED
Why is the Award Based on Best Value Rather than the Lowest Price?
Under state law and OCSD's Purchasing Resolution 07-04, OCSD generally awards
contracts based on either (1) competitive bids, or (2) competitive proposals. Under a
competitive bid process, OCSD awards the contract to the lowest responsive,
responsible bidder. The contract is not awarded to the "most qualified" firm. Rather,
the contract is awarded to the lowest bidder that submits a responsive bid and is
deemed to be responsible. The competitive bid approach is generally appropriate for
the procurement of goods and services that are considered to be interchangeable.
OCSD follows a competitive bid process, for example, for the award of public works
construction contracts and most contracts for the purchase of goods and services.
Under a competitive proposal process, in contrast, OCSD awards the contract to the
.most qualified" proposer based on a fair and reasonable price. A competitive proposal
process is generally appropriate for the procurement of goods and services that are not
considered interchangeable. Under a competitive proposal process, OCSD awards the
contract based on the "best value" to OCSD rather than the lowest price. Price is one
factor, but only one factor, that OCSD considers when evaluating competitive proposals.
Page 5 of 11
OCSD follows a competitive proposal process, for example, for professional design
service contracts and for most other types of professional service contracts.
OCSD used a competitive proposal process for the contract here because biosolids
management services are not interchangeable. Moreover, OCSD has a great deal at
stake in ensuring that its biosolids management contractors are the most qualified
available, assuming that the price is fair and reasonable.
Since the late 1990s, local governments, the press, regulators, and the public served
have expressed a variety of concerns about the land application of biosolids in their
communities. These concerns include perceived threats to human health and the
environment and complaints about traffic, odor, and noise. In some cases, a
combination of politics, media attention, and public perception has led to outright bans
on the land application of biosolids.
Of course, the concerns about biosolids management in general, and land application in
particular, are unjustified. Federal, state, and local governments have adopted
regulations designed to eliminate any risks posed by the land application of biosolids.
Moreover, qualified firms have for many years safely managed biosolids throughout
California and Arizona without any threat to the community or the environment.
However, because biosolids management is under close and constant scrutiny, it is very
important that OCSD set and follow the very highest standards in biosolids
management. To that end, OCSD became the first biosolids program in the nation to be
certified by the National Biosolids Partnership. This certification is granted when an
agency demonstrates (via a third-party audit) an effective management system that
complies with a best management standard (similar to ISO 14001) and continuous
improvement among many other criteria. In order to implement and maintain these high
standards, it is very important that OCSD select the most qualified firm that is willing to
perform the services at a fair and reasonable price. That is why OCSD elected to
pursue a competitive proposal process rather than a competitive bid process.
What Scores Did the Evaluation Committee Give to Each Proposal?
OCSD staff appointed an evaluation committee consisting of five OCSD staff members.
The committee evaluated the five proposals according to the first four criteria set forth in
the RFP (all criteria except price).
Criteria
Max
Evaluation Criteria Points
(Weight)
1. Overall Qualification and Experience of Firm — Include 100 pts.
experience working with public agencies, length of experience in (10%)
land applying and landfilling biosolids and stability of firm,
experience and technical competence of subcontractors, if any,
and knowledge of the laws and regulations.
Page 6 of 11
2. Staffing Organization — Include qualifications of staff, particularly 100 pts.
key personnel and Project Manager/Project Lead/Foreman that will (10%)
directly work with the District staff.
3. Financial Capabilities — Include Net Worth Capital of the last 100 pts.
three years (Balance Sheets) and if Proponent is now the debtor in (10%)
a bankruptcy case
4. Work Plan — Include project approach, activities, schedule, project 400 pts.
siting, management system preparedness and conformance, (40%)
contractor diversification, and compliance.
The evaluation committee used a consensus-scoring method in order to foster open
discussion among the panel members about relative strengths and weaknesses of each
proposal. During each meeting, the Procurement Officer directed the panel's attention
to each item in the specifications. The panel considered and discussed one proposal at
a time, comparing the proposal against the specifications. The results of the consensus
scoring are as follows:
5-2011-513BD
CONSENSUS Tule Terra
SCORING Ranch McCarthyRenewal Avra ro Nursery Possible
Qualifications 100 100 70 40 20 100
Staffing 90 90 70 40 20 100
Financial
Capabilities 80 80 40 0 20 100
Workplan 400 360 280 160 80 400
Total 670 630 460 240 140 700
The Tule Ranch proposal received the highest score based largely on the following
facts. Tule Ranch:
• Has the closest land application sites in Arizona. Other contractors may need to
travel farther.
• Established a truck-transfer yard in Yuma, Arizona to ensure that drivers comply
with Department of Transportation requirements.
• Has strong financials, based on both working capital and net worth. This allows
Tule Ranch to make ongoing capital investments in trucks, equipment, field
offices, maintenance yards, and land in order to ensure land application in
Arizona is sustainable in the long term. Strong financials also means that Tule
Ranch has the ability to honor an indemnity in favor of OCSD.
• Owns all of the trucks and land application equipment to be used under the
contract— there are no owner-operator subcontractors. Thus, Tule Ranch has a
centralized and documented preventive maintenance program, and OCSD can
Page 7 of 11
easily track training, hauling, regulatory compliance, data collection, and
responses to emergencies.
• Has direct control of all aspects of the operations (hauling, application to field,
incorporation/disking into soil, planting, harvesting, crop yields).
• Provided significant investment to meet OCSD's quality standards and oversight
requirements as set forth in OCSD's certified biosolids program.
• Established a local field office close to land application sites, so that it can
maintain closer oversight and control of field operations and respond more
quickly to any issues of concern.
What is the Cost Difference between Tule Ranch and Terra Renewal?
In their letter submitted at the June 27°i Board Meeting, Terra Renewal claimed that the
cost difference between the Tule Ranch proposal and the Terra Renewal proposal is
$6 million over the five-year life of the contract. This is incorrect.
OCSD anticipates sending 250 tons per day to Tule Ranch under the proposed contract
at a rate of$54.50 per ton. This amounts to a projected cost of about $13,625 per day
or $4,973,125 per year.
Terra Renewal's proposed rate is $49.88 per ton. Thus, Terra Renewal's proposal
would cost $12,470 per day or$4,551,550 per year.
The projected cost difference between the Tule Ranch proposal and the Terra Renewal
proposal, then, is $421,575 per year, or $2,107,875 over the five-year life of the
contract. To put this amount in perspective, the differential is 2.1% of the $100 million
total amount that OCSD has budgeted for biosolids management over the next five
years. The evaluation committee considered Tule Ranch's proposal to be the best
value as described above.
How Did Staff Take Price into Consideration?
As set forth in the RFP, the evaluation panel could give each proposal up to 300 points
based on cost. Pursuant to the RFP, cost proposals were submitted separately from
the technical proposals, so that the evaluation committee could consider qualifications
first and then price separately.
After determining that Tule Ranch and McCarthy Farms were the most qualified
vendors, the evaluation committee considered cost for those two firms only. The
following table presents the final scores taking into account cost for Tule Ranch and
McCarthy Farms:
Page 8 of 11
S-2011-
513BD
CONSENSUS McCarthy Tula Terra Avragro Nursery
SCORING Farms Ranch Renewal Systems Farms Possible
Qualifications 100 100 70 40 20 100
Staffing 90 90 70 40 20 100
Financial
Capabilities 80 80 40 0 20 100
Workplan 3601 4001 2801 160 80 400
Subtotal III
before Cost 140 700
Total Cost
Points based
on formula 300 253 300
TOTAL 930 923 460 240 140 1000
In the judgment of the evaluation panel, the prices proposed by both Tule Ranch and
McCarthy Farms were fair and reasonable based on the current market for biosolids
services. This conclusion was based on expert knowledge of the marketplace, including
a survey of biosolids contracts performed by the Southern California Alliance of Publicly
Owned Treatment Works (SCAP) in 2010.
The panel did not assign a price ranking for Terra Renewal, Avragro Systems, or
Nursery Farms because, as explained above, Tula Ranch and McCarthy Farms were
deemed to be the most qualified by a substantial margin. However, even if Terra
Renewal's proposal were given the maximum score of 300 for cost, Terra Renewal
would still be ranked well below Tule Ranch — 760 points for Terra Renewal vs. 923
points for Tula Ranch.
After the Best and Final Offer process was concluded, OCSD staff entered into final
negotiations with Tule Ranch regarding price. As a result of these negotiations, Tule
Ranch agreed to lower its price by $1 per ton, from $55.50 to $54.50 for land
application, and from $70 to $69 per ton for landfill disposal. The savings of $1 per ton
amounts to $91,250 per year, or$456,250 over the five-year life of the contract.
In exchange for the price reduction, OCSD staff agreed to remove the performance
bond requirement. A performance bond covers the cost of a bond company to perform
the work if Tula Ranch does not perform (or the expense involved in issuing another
RFP). Given Tula Ranch's financial strength, and 18-year history of working with
OCSD, it seems very unlikely that Tule Ranch would be unable to perform. Moreover,
OCSD maintains multiple contracts for biosolids management so as not to rely on any
one option.
Page 9 of 11
Was the Process Fair?
Staff strongly believes that the process followed in evaluating the proposals and
recommending award was extremely fair to all of the proposers. OCSD utilizes a
standard RFP format, thus staff followed the process as set forth in the RFP.
The evaluation committee was composed of experts from across the agency who
understand the procurement process and the needs of our biosolids management
program. The committee had five voting members: a project manager, a regulatory
compliance expert, a finance expert, a planning expert, and an operations expert. The
committee also included a non-voting risk management and safety expert. OCSD's
Procurement Officer/Sr. Buyer managed the procurement process and Michael Asner,
an external consultant "Fairness Officer," oversaw the process to ensure fairness within
the process, but neither were voting members.
Each evaluation committee member was responsible for reviewing and evaluating
each of the proposals, compiling lists of questions/issues for submission to the
suppliers, attending Supplier presentations, and delivering input to the process of
scoring and selection. [See attached Biosolids Management Program RFP Evaluation
Guide S-2011-513BD, Feb. 2, 2012] Each evaluation committee member was
required to determine if they had any financial or personal conflicts prior to serving on
the panel. Each evaluation committee member then executed a document certifying
that they did not have any conflicts that prevented them from serving on the panel.
A fairness officer is an independent external consultant with expertise in public
procurement. A fairness officer helps to ensure that the process for awarding contracts
is fair, open, and transparent.
Because of the complexity, cost and historic contentiousness in securing a biosolids
management contractor, OCSD hired Michael Asner to serve as fairness officer. Mr.
Asner is a recognized national expert in procurement and has experience with high
risk RFPs. For the last 20 years, Mr. Asner has provided leadership in ensuring that
public procurement is based on 'fair, open, and transparent" competition. He has
acted as a Fairness Officer, developed training programs, and written articles and
guides related to this topic. He has been qualified as an expert witness in public
procurement by the Federal Court in Phoenix, Arizona. In addition, Michael Asner
participated as the "Fairness Officer" for OCSD's previous Biosolids RFP in 2003.
Michael Asner's website, www.rfi)mentor.com, contains a link to his
resume, http://www.rfpmentor.com/resume-michael-asner. It also contains a
section, htto://www.rfi)mentor.com/products, describing his current reference
publications, webinars and training CDs, and is used by more than 5000 public
agencies. One of his products, A Guide to Public Procurement for Elected Officials
and Public Sector Managers, is in wide distribution and is available in both printed and
electronic form. This Guide deals with 26 fundamental questions such as "Are bids
and proposals different?" and "What is the legal framework for procurement?"
Mr. Asner advised and directed the procurement and evaluation team during the RFP
process to ensure that every step could survive public and legal scrutiny. He was
Page 10 of 11
involved at every stage of this RFP process, from RFP development through the
completion of the evaluation process. At the conclusion of his service, Mr. Asner
provided OCSD management a written determination of his findings of the RFP
process, concluding that the process he observed was done in a fair, open, and
transparent manner and has identified this RFP evaluation as exemplary. (See
attached report from Michael Asner Consulting dated June 6, 2012)
CEQA
There is no change to the current operation or management of biosolids proposed by
the awarding of this contract.
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Sanitation District's Delegation of
Authority. This item has been budgeted. (Line item: Section 5, Page 6). Project
contingency funds (will or will not) be used for this (type of document, i.e. amendment).
Date of ADDroval Contract Amount Contlnaencv
08/22/12 $19,000,000 N/A
ATTACHMENTS
1. Letter from Terra Renewal dated July 12, 2012
2. Letter to Terra Renewal dated July 23, 2012
3. Biosolids Management Program RFP Evaluation Guide
4. Report from Michael Asner Consulting dated June 6, 2012
JH:JC:jb:gc
Page 11 of 11
Terra Renewal West,LLC
12812 Valley View St,Suite 9
TERRA Garden Grove,California 92845
renewal
July 12,2012
Chris Yates
Orange County Sanitation District, Purchasing
Senior Buyer
Re: Statement of Complaint for the Recommendation of Biosolids Management
Contract Award
This is Terra Renewal West, LLC's(Terra Renewal) statement of complaint regarding
the Orange County Sanitation District(District) evaluation panel's recommendation to
award a contract for the land application of the District's biosolids to Tale Ranch. We
thank the District for providing us the opportunity to file this statement of complaint.
Given the District and its Request for Proposal documents do not provide a formal protest
process, despite District staffs comments otherwise at the June 27 Board of Director's
meeting, we appreciate the District staffs development of a means for us to protest the
recommendation to award a contract through this statement of complaint process.
In addition to some ambiguity and contradictory information experienced during this
process, this complaint is based on: a)the evaluation panel's failure to consider the cost
of the proposals when evaluating the proposals, which does not comply with
requirements stated in the Request for Proposals' (REP)"Award of Proposal"provision;
b)the inequitable evaluation process employed by District staff to compare the proposals,
and; c)the District staff s recommendation to waive the selected proponent's requirement
to provide a performance bond in violation the requirements of the REP.
According to District staff and their Fairness Consultant during our debriefing meeting,
the District received five viable proposals and all five proponents were capable of
executing the services required in the REP. After completing the proposal evaluation
process,the evaluation panel selected a proposal and recommended their selection be
awarded a contract.
In their evaluation process,the evaluation panel did not consider the pricing of the
proposals when they made their selection,which District staff revealed during the
debriefing meeting. Pricing is a crucial aspect of this proposal, and, after determining
they received five (5)viable proposals,the evaluation panel subjectively decided to not
consider pricing of any of the viable proposals except one. In the RFP's Section 3.3,
"Award of Proposal", it states:
"Award will be made to the Proponent offering the most advantageous proposal
after consideration of all Evaluation Criteria set forth in Section 6"
The RFP's Evaluation Criteria Section 6 lists five criteria that the proposals would be
evaluated under. One of the five criteria is "Cost and Pricing", Section 6.5. The
evaluation panel's decision to not consider pricing when evaluating the proposals does
not comply with the required evaluation criteria set forth in the District's REP,therefore
failing to follow Section 3.3 of the REP.
Had the evaluation panel considered the pricing of the proposals as part of the evaluation
process,we feel Terra Renewal would have received the highest point total of the
proposals. Since Terra Renewal's proposed price was the lowest of the viable proposals
by a substantial margin,Terra Renewal would have received 300 points in the pricing
category. We don't know how the evaluation panel would have weighted the pricing had
they evaluated pricing,but we can speculate how the scoring would have occurred. As
an example,the panel could have scored each proposal using the price of the lowest
priced proposal as the bench mark for the other proposals. Then, as a subjective scoring
method we came up with, for each$175,000 per year higher a proponent's price is above
the bench mark price, the panel would deduct 100 points from the 300 possible points in
this category. Using these scoring criteria, the incumbent would have scored 60/300 to
Terra Renewal's 300/300, resulting in Terra Renewal being the highest scoring proponent
(see Table 1).
Table 1. Terra Renewal's Example of Proposal Scoring When Considering Pricing
Terra Renewal Tule Ranch
Consensus Score after 460/700 670/700
Evaluation Phase
Price Score using Terrra's 300/300 60/300
subjective scoria
TOTAL 760/1000 730/1000
In this scenario,Terra Renewal would have submitted the highest scoring proposal. The
$421,000 per year cost saving to the District should be weight heavily in the evaluation
process, in our opinion, as should be the opinion of the District. Especially when the
District says Terra Renewal is viable and Terra Renewal has been performing these
services for the District for the last four years under a subcontract with EnerTech
Environmental. A price differential of$421,000 per year higher than another viable
proposal should be apparent and score very few points in this category. The evaluation
panel's process to assign points in each evaluation category was subjective, and may be
counter to the District's fiduciary duty to the District's ratepayers.
Even though we feel our proposal score would have been highest when considering
pricing,in a subjective proposal evaluation and scoring process,the District is not
required to recommend the highest scoring proposal to the Board. One proposal may
receive higher scores in a subjective evaluation process,but, if the District receives
multiple viable proposals who can execute the services of this contract, the panel should
have recommended the proposal that is most advantageous to the District. A viable
proposal that saves the District$2,100,000 over five years is a transparent benefit to the
Page 2 of 5
District. Nowhere in the RFP does it state that the District is obligated to recommend
awarding a contract to the highest scoring proposal, as the District's Fairness Consultant
stated at the debriefing meeting. The RFP does state the District will make an award
"based on the best interest of OCSD after all factors have been evaluated", and pricing is
one of the most crucial factors in this proposal process.
The evaluation panel failed to act in the best interest of the District by disregarding the
significant saving provided by a viable proponent. Terra Renewal's viable proposal to
the District saves the District at least $2,100,000 over the first five year term of the
contract. By only considering the price of one of the five viable proposals,the evaluation
panel obligated the District to accept whatever the pricing was from that selected
proposal,whether it was $2,000,000 or$5,000,000 higher than another viable proposal.
The panel's decision to disregard pricing was not done in the best interests of the District,
most likely a glaring oversight by staff and the "Fairness Consultant'.
In today's tough economic climate,many cities and municipalities are dealing with
financial hardship and some are dealing with potential bankruptcy and bankruptcy. The
evaluation staffs disregard of the prices submitted for these services on a five to ten year
contract managing 90,000— 135,000 tons of biosolids per year is a disservice to the
District's ratepayers.
Another basis of our complaint is the District evaluation panel's inequitable evaluation of
the proposals. Not only did the evaluation panel disregard pricing as part of their
evaluation process, they also used different evaluation methods to score each proposal.
At the debriefing meeting, District staff stated that after they deemed five proposals as
viable. But,the panel decided to interview only two proponents regarding their
proposals. District staff admitted this decision was subjective and they could have
interviewed all five viable proponents. District staff stated that the interviewing process
is a means for the evaluation panel to clarify questions they have of the interviewed
proponent. Once the evaluation panel receives these clarifications, that proponent can
receive higher evaluation scores then originally given before the interview was
conducted. Since the panel did not interview all the proponents including Terra Renewal,
the evaluation scores are based on what we believe to be unequal scoring methods.
We feel our score would have been higher had the evaluation panel included us in the
interview process. The interviewed proponents were given a significant advantage over
the other proponents by being able to clarify any questions the panel may have had
regarding their proposal. This is a clearly an inequitable evaluation process leading to
unequal evaluations of the proposals.
The third basis for our statement of complaint is the District's decision to waive the
requirement for the staff recommended incumbent to provide a performance bond. In a
competitive proposal process, all proponents must follow the requirements established in
the RFP documents. Section 3.18 of District's RFP requires any awarded contractor shall
provide a 100% faithful performance bond, as follows:
Page 3 of 5
3.18. Sureties —Awarded Contractor shall, before entering upon the performance of
this Agreement,furnish bonds approved by OCSC's General Counsel in the
amount of one hundred percent(10D%)of total annual compensation estimated
to be paid to Contractor, to guarantee the faithful performance of the work. This
Contract shall not become effective until such bonds are supplied to and
approved by OCSD. Bonds must be issued by a surety authorized by the State
Insurance Commissioner to do business in California and must be maintained
throughout the life of the project and during the warranty period.
This is straightforward. During the June 27 Board of Director's meeting,the District's
Environmental Compliance Manager stated the following(this quote was taken from the
District's recording of the Board meeting):
"Vile (the incumbent)has the ability and has offered to have a performance bond
for this contract. In discussions with our General Counsel's office,the decision
was made in the contracting process not to include a performance bond with the
standards with the biosolids contract because of the way we manage risk by
having multiple contractors. So that if one fails,the others can pick it up. That is
the way, in other words, there is some cost to the way we manage currently by
having multiple contractors. So adding that bond on top of that cost just adds us
an unnecessary cost. In other words, if Tale fails to perform the other contractors
pick it up in the mean time and we go back out with another contract and we get a
contract going forward."
If a performance bond was not necessary for this contract, it should have been made clear
during the RFP process. Additionally, allowing a company to avoid providing the
required performance bond does not add a cost to the District, as the District's
Environmental Compliance Manager claimed,because the proposal pricing was based on
a contract that included the cost of providing a performance bond. Waiving this
requirement appears to only benefit the company that is not going to provide a bond
because there is a cost for bonding.
And,providing a letter saying you can get a performance bond doesn't guarantee a
company can provide that bond. The only way to know if a company can provide a
performance bond is requiring the bond before entering into a contract, as the RFP states.
If the company can't provide a bond at that time,their proposal should be deemed non-
responsive. This waiving of a performance bond may provide a company an advantage
over the other companies by establishing a separate set of requirements just for that
company.
Our reasons for filing this statement of complaint are based on the proposal evaluation
and award process. We have omitted detailing our frustration regarding the District
staffs Agenda Report submitted to the Board of Director that lacked transparency and
the inaccurate comments made during the June 27 Board meeting from our statement
since it is does not apply to the RFP process. Based on the requirements in the District's
Request for Proposal document and District staff s statements, the award of proposal for
Page 4 of 5
this contract did not consider all the viable proponents' pricing, as required, the
evaluation process did not treat all viable proposals equally, and waiving the proposal
requirement of providing a performance bond creates an appearance of District
establishing different criteria for different proponents.
The land application of biosolids is not a Professional Services Agreement, like
consulting services, that may require the scrutiny of a proposal process. The District's
decision to issue a RFP for these services adds a tremendous amount of subjectivity to the
awarding process. Subjectivity adds personal opinion into what should be a bid process
where the lowest responsive bidder that meets all of the District's qualifications is
awarded a contract. The District staff s decision to award a contract to the proposal that
had the highest score in a subjective evaluation process opens the door to disagreements
over scoring criteria and the process. As it has been said,with subjective statements,
disagreements can go on forever.
Do to the compromised proposal evaluation and award process,we ask that District staff
recommend awarding a contract to Terra Renewal, the lowest cost viable option to the
District, or cancel this RFP and issue a Request for Bid for these services, where the
District selects the lowest priced responsive bidder.
Sincerely,
Jeff Thurber
General Manager
Terra Renewal West, LLC
Cc: Anne Marie Feery, OCSD Purchasing Supervisor
Page 5 of 5
ORANGE COUNTY SANITATION DISTRICT
We protect p,blic health and the ernimnment by providing elfectivs wastewater calleaion.weaanent and recycling.
July 23,2012
Mr.Jeff Thurber
General Manager
Terra Renewal West, LLC
sormna 12812 Valley View Street,Suite 9
-. anensun Garden Grove,CA 92845
Brea
some pan: RE: Statement of Complaint for the Recommendation of Biosolids Management
a1,r.ess Contract Award
hunra;o Willey
rwlerwo The Orange County Sanitation District (OCSD) received the Statement of Complaint from
ce,nen trove Terra Renewal West, LLC (Terra Renewal) dated July 12, 2012 (Request for Proposal (RFP)
CS-2011-5138D).
Hurruipwn Beach
xv,ns OCSD Staff has reviewed your Statement and notes that Terra Renewal focuses its complaint
Lr Hrei.e on three areas: (1)Performance Bond, (2)Evaluation Process,and (3) Pricing.
�"PP1f1d OCSD has included the following in response to Terra Renewal's Statement of Complaint:
Los aarn,we
Newyort esacn 1) Performance Bond
a-n, Terra Renewal states that "the District staffs recommendation to waive the
alecenna selected Proposels requirement to provide a performance bond is in violation of
sanw ana the requirements of the RFP."
Seel conch OCSD Response: To ensure performance, all proposers were required to show
swnwn proof of the ability to obtain a performance bond. A performance bond covers the
r chn cost of a bond company to perform the work if the Contractor does not perform (or
the expenses involved in issuing another RFP). The selected proposer met the RFP
PB" requirement concerning the ability to provide a performance bond.
s
sa After the proposer was selected, OCSD and the proposer entered into the
e� negotiation process. During those negotiations, it was determined that the bond
Cry requirement could be waived based on the selected proposer's financial strength
.t and successful work history. Moreover, OCSD maintains multiple contracts for
n Biosolids management so as not to rely on any one option, lessening the need for
the performance bond requirement. In exchange for this waiver, OCSD received a
ge reduction in price.
10944 Ellis Aveme • Fountain Valley,CA 92708-7018 • (71419622411 • www.ocod.wnn
Mr.Jeff Thurber
Terra Renewal West,LLC
July 23,2012
Page 2
OCSD did not waive the performance bond requirement included for all proposers
during the evaluation of the proposals. It was during negotiation of the final
contract that OCSD made a business decision to withdraw the bond requirement.
Under the terms of RFP, OCSD has complete discretion to negotiate terms that
OCSD deems are in the best interests of OCSD.
2) Evaluation Process
Terra Renewal states that "Another basis of our complaint is the District evaluation
panel's inequitable evaluation of the proposals . . . . We feel our score would have
been higher had the evaluation panel included us in the interview process. The
interviewed proposers were given a significant advantage over the other proposers
by being able to clarify any questions the panel may have had regarding their
proposal."
OCSD Response: OCSD's RFP interview process is not used to adjust scoring, but
rather to allow the proposers whose scores are most competitive an opportunity to
differentiate themselves from the other proposers being interviewed. After
evaluating and scoring the proposals to determine which proposers would be
interviewed,Terra Renewal scored substantially lower than two other firms.
3) Pricine
Terra Renewal states "In their evaluation process, the evaluation panel did not
consider the pricing of the proposals when they made their selection . . . :.
OCSD Response: Pursuant to the RFP, cost proposals were submitted separately
from the technical proposals, so that the evaluation committee could consider
qualifications first and then price separately.
After determining the two most qualified firms that scored higher than the other
proposers by a substantial margin, the evaluation committee considered the cost
component of the proposals for those two firms. In the judgment of the evaluation
panel, the costs proposed by the top scoring firms were fair and reasonable based
on the current market for Biosolids services. This conclusion was based on expert
knowledge of the marketplace, including a survey of the Biosolids contracts
performed by the Southern California Alliance of Publicly Owned Treatment Works
(SOAP). Moreover, it bears noting that, even if Terra Renewal's proposal were given
the maximum score of 300 for cost,Terra Renewal would still be ranked well below
Tule Ranch—760 points for Terra Renewal vs.923 points for Tule Ranch.
Mr.Jeff Thurber
Terra Renewal West, LLC
July 23, 2012
Page 3
In conclusion, OCSD staff strongly believes the process followed in evaluating the proposals
and recommending award was fair to all of the proposers, and the recommended award is
in the best interests of OCSD.
Therefore, based on the information listed above,your complaint is denied.
Sincerely,
5
lames D. Ruth
General Manager
IOR:mrs
cc: Chris Marks;Terra Renewal
EMT
James E. Colston, Environ Compl-Reg Affairs Manager
Bradley R. Hogin,General Counsel
4oJN`I Sn Nggl��N
0 i
2 p
F�I,HQ THE EMJ�PON
Biosolids Management Program
RFP Evaluation Guide
S-2011 -513B D
Feb. 2 , 2012
Biosolids Management Program
RFP Evaluation Guide
This evaluation Guide provides instructions for the following RFP:
1. Specification No. S-2011-513BD Land Application Recycling and Landfill Disposal
Options for Bibsorids Management.
Contracts/Purchasing: Chris Yates/Greg Blakeley
Project Manager:Tom Meregillano
TABLE OF CONTENTS
1. RFP Objective
2. Evaluation Guide Goal/Purpose
3. Evaluation Guide Deliverables
4. Project Scope
5. Project Strategy and Process Flow
5.1 Overall Evaluation Process
5.2 Project Schedule
6. Project Team Roles and Responsibilities
6.1 Responsibilities for All Team Members
6.2 Evaluation Team
7. RFP Evaluation Ranking Definitions
8. RFP Risks
8.1 Critical Success Factors
8.2 Risks
9. Quality Management
9.1 Lists of Pros, Cons, Issues, Questions
9.2 Evaluation Report
10. Evaluators'Worksheets
10.1 Draft Evaluation Worksheet
10.2 Consensus Scoring
10.3 Consensus Scoring Agreement Form
11. Evaluation Guide Approval
11.1 Approved By
11.2 Reviewed By
12.Attachments
12.1 Online Biosolids RFP Evaluator Instructions
3
1. RFP Objective
Orange County Sanitation District (OCSD) has a 2003 Long Range Biosolids
Management Plan (LRBMP), which provided a number of recommendations
for management of biosolids over the next several years.
A key recommendation of this plan is the diversification of biosolids products,
markets and contractors. As part of the continuation of the LRBMP, OCSD has
prepared a Request for Proposal (RFP). We are looking for vendors to propose
solutions which will comply with our policy and provide the needed processing
capacities in timely and cost-effective manner.
2. Evaluation Guide Goal/Purpose
The main purpose of this Guide is to ensure that the evaluation process is fair,
transparent and within the guidelines provided by the Purchasing Department.
The deliverable will be a Recommendation Report indicating the preferred
Contractor and the reasons behind the selection. The results and
recommendations from this evaluation will be presented to OCSD's Board of
Directors for approval.
3. Evaluation Guide Deliverables
As a result of the evaluation procedures described in this Guide,the
evaluation team will deliver the following:
• Recommendations Report — This report will document the
final recommendations that result from the evaluation process. twill
summarize the content of the proposals, key points differentiating each,
and the scoring each achieved related to the specifications outlined in
the RFP. It is anticipated that this document will identify the preferred
Supplier, the main reasons for selecting this Supplier, the current state
of negotiations, and will recommend that we complete negotiations and
award a contract.
• Presentation to OCSD•s Board of Directors -The Director of Engineering will
present the RFP Evaluation Recommendations to the OCSD's Board of Directors for
approval.
4
4. Project Scope
• Proponents have been requested to propose solutions in response to the issued RFP.
• As proposals are evaluated, all team members will compile a list of Pros, Cons, Issues,
and Questions related to the proposals.
• All team members will contribute to the final consensus scoring of each Supplier's
proposal.
5. Project Strategy and Process Flow
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5.1 The Overall Evaluation Process
The evaluation will consist of the follow steps:
I. Each proposal will be reviewed to ensure that all mandatory
requirements have been met. Proposals failing to meet one or more
mandatory requirements will be eliminated from further consideration.
The mandatory proposal requirements are summarized in Attachment
H of the RFP.
it. Each proponent's Financial Capabilities will be reviewed and scored
by the representative from Finance/Accounting.
iii. The evaluation team will review each proposal and
determine if any clarifications are required. If so,
Proponents will be contacted by OCSD.Discussions may
be conducted with Proponents who submit proposals
determined to be reasonably susceptible of being
selected for award for the purpose of assuring full
understanding of and responsiveness to solicitation
requirements.
iv. The evaluation team will determine a preliminary score
and rating for each proposal using the evaluation
procedures, evaluation criteria and weights described in
Section 5 and 6 of the RFP.
V. Based on the scores,the evaluation team may prepare a
short-list of those proposals which are judged as being
capable of providing an acceptable solution. Evaluation
team may require a visit to a Proponent's site as part of this
process.
vi. The evaluation team will open and score (using a pre-
determined scoring formula)the costs of the shortlisted
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Proponents. This scoring may or may not further narrow
the shortlist.
vii. The Proponents on the short-list, or all Proponents, may
be required to give a presentation explaining their
proposal and addressing requested clarifications.The
scores will then be finalized.
viii. These Proponents the short-list, or all Proponents, may be
asked to submit Best and Final Offers. (A brief explanation
about Best and Final Offers is contained in Attachment-I.)In
conducting discussions,there shall be no disclosure of any
information derived from proposals to competing
Proponents. Proposals submitted in response to Best and
Final Offer will be re-assessed using the same evaluation
criteria and scoring mechanisms that were used to score
the original proposals.
This analysis will produce a score for each proposal. Evaluation Team
may then select one or more of the highest scoring proposals for
negotiation of appropriate contract(s). Proposals will be selected in order
of decreasing scores.
5.2 Project Schedule
The project schedule may be found on the Sharepoint
Biosolids RFP Workspace
http://sharepoi nt/workspa ce/Biosol ids°/u20RFP/defa u lt.aspx.
6. Project Team Roles and Responsibilities
6.1 Responsibilities for All Team Members
6.1.1 An evaluation team member plays an active role in the selection of
Contractors.
6.1.2 A n objective process will determine the best overall Proponent for a given
proposal.
6.1.3 Evaluation criteria are items of importance that will be considered when
reviewing the proposals of each Proponent. The evaluation criteria and weights
have been included in the Request for Proposal(RFP) documents. The detailed
breakdown of how points will be assigned must be set prior to the proposal opening.
6.1.4. During the RFP process, the designated representative from Purchasing is
the ONLY person authorized to release results or communicate with the
Proponent. All requests for further information or clarification must be forwarded to
the Purchasing representative.
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6.1.5. All proposals and corresponding information are CONFIDENTIAL. This
information is not to be discussed with anyone outside the evaluation team.
6.1.6. An evaluation team member shall understand and abide by the provisions of
OCSD's "Conflict of Interest"policy.
6.1.7. While serving as an evaluation team member, all possible conflicts of interest
will be disclosed promptly to the Purchasing Officer.
6.1.8. The integrity of the RFP process should be beyond reproach.
6.2 Evaluation Team
The Evaluation Team is comprised of six evaluators who will contribute to the
consensus scoring. Chris Yates of OCSD Purchasing/Contracts Division,and
Michael Asner, an external consultant, overlook the process to ensure fairness within
the process. OCSD's outside legal advisors, Woodruff, Spradlin& Smart, have
contributed to the RFP and will be involved in the contracting process.
Each team member is responsible to review and evaluate each of the proposals,
compile lists of questions/Issues for submission to the suppliers, to attend Supplier
presentations, and to deliver input into the process of selection.
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7' RFP Evaluation Ranking Definitions
7.1 Exceptional (90to 100)—
o The approach will yield a result that exceeds the Objectives qualitatively.
o The proposal offers an approach or features with little or no risk.
o The response covers areas not originally addressed within the RFP category and
includes additional information and recommendations that would prove both
valuable and beneficial to OCSD.
o This response is considered an excellent approach demonstrating the Proponents
authoritative knowledge and understanding of the project.
7.2 Exceeds Objectives (70 to 89)—
o A very good response that shows experience and knowledge within the
category. The Proponent provides insight into their expertise,knowledge
and understanding of the subject matter.
o The collective approach yields a qualitative benefit to the project that is beyond
the minimum objectives.
o The approach being proposed or the majority of the features are acceptable or
above the objectives set out in the RFP.
o The Proponent can easily implement additional features or options. A minimal
number of resources will be required from OCSD.
7.3 Meets Objectives(50 to 69)—
o The approach or the majority of the features proposed meet the objectives.
o No apparent deficiencies noted. Some items could be improved upon but are
still considered acceptable. To enhance them may require rework and
resources from the Proponent and/or OCSD.
o The ranking should reflect some qualitative achievement(s) such as
acceptable delivery timeframe,end-user training program,etc.
7.4 Fails to Meet Objectives (below 50)-
o The proposed approach or a majority of the features for the item are deficient.
The approach taken is undesirable and correction would require a major and
material change in the proposal.
o The correction of any deficiencies either collectively or individually, poses a
serious problem in correction or has a"domino' effect on the other design
features.
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8. RFP Risks
8.1 CdticalSuccessFactors
Proponent's Proposal Format —the format of the all proposals should be similar
to make the job of comparison easier. The format has been suggested in the
RFP but we are not assured that all proponents will respond as requested.
Complete Proposal Review —the proposal evaluation team must work diligently to
ensure that they understand the complete content of the proposals. It will not be
appropriate to, for example, read the executive summary and financial
summary and jump to conclusions. A complete and thorough evaluation of all
content is required.
List of Pros, Cons, Issues,and Questions —in reviewing each proposal, all team
members must compile a list of Pros, Cons, Issues, and Questions. This list will
form the basis for discussion in the initial review meeting and when the team
performs consensus scoring. All team members must participate.
Consensus Scoring — The consensus scoring is an essential part of this
process.All team members must participate and understand thatthis grading will
lead to a recommended supplier.
Schedule —It will be essential for all team members to adhere to the schedule for this
project to be successful.
8.2 Risks
We have hired Michael Asner to assist the Project Team in identifying and
mitigating the major risks associated with this procurement process.
Risk of Litigation — This risk is due to the competitive nature of this project.
What if a Supplier that is not selected calls their lawyer immediately? What can
OCSD do to ensure that we are protected, and that our decision is not
challenged?
- All team members must completely review each proposal;
- All team members must contribute to the list of Pros/Cons/Issues/Questions
in writing;
- All team members must attend review meetings and Supplier
presentations, minutes must be recorded;
- All team members must work diligently towards achieving consensus
scores;
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• No team members are allowed to communicate in private directly with the
Suppliers until the competition has ended. All communications must go
through Purchasing, or more specifically, Chris Yates, Contracts/
Purchasing, Senior Buyer.
In the end, OCSD's recommendation must have strong foundation in the
form of a Recommendation Report. There must be compelling and
documented reasons why the Project Team recommends the preferred
supplier.
If there are any reasons why a team member cannot meet a project
obligation, he or she must inform the project manager as soon as possible.
All team members must obtain permission from their departments to
participate in this evaluation.
Risk of No Adequate Proposals - There is a chance that we receive no
proposals that are deemed appropriate or adequate, for a number of reasons.
What can OCSD do to ensure that we receive a winning proposal? What should
OCSD do in the event that we do not?
- A high quality Request For Proposal document is OCSD's best weapon
against this risk. The proper amount of time and planning has been
devoted to ensure a quality document.
- OCSD should not compromise its objectives. If no suitable solutions or
Suppliers are presented, OCSD should address the process and possibly
re-start.
Risk of Inability to Reach Consensus -There is a slight probability that we
receive a proposal that pleases half of the evaluation group, and another that
pleases the other half. What can OCSD do to ensure that we can get by an
impasse of that sort?
- The Project Manager and Conlracts/Purchasing will attempt to facilitate a
process which results in consensus.
- Issues that appear to be "show-stoppers", not allowing
consensus to be reached, will be brought up to the OCSD
Management for resolution.
- All team members must be reasonable and listen to the views of
others. Review the project objectives and goals to stay focused.
A balanced approach to evaluation should allow team members to
reach consensus.
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9 Quality Management
9.1 Lists of Pros, Cons, Issues,Questions
The Lists of Pros, Cons, Issues, and Questions are
essential to achieving a quality product. These lists should be
prepared by each Evaluator.
9.2 Evaluation Report
The Recommendation Report has to be a well-organized
document that illustrates a fair comparison of the proposals. It
should identify the pros, cons, issues,and questions clearly and
in a well-organized fashion.
It must identify the final consensus scores in a concise, easy to
understand format, make a clear indication of the preferred
supplier, and the main reasons for making the
recommendation.
10. Evaluator's Worksheets
10.1 Draft Evaluation Score Sheet—this worksheet will be used in your first draft
evaluation to discuss your projected scores and comments with the evaluation
team.
10.2 Consensus Scoring—this online worksheet will be used for team scoring. The
online documentation is input by Contracts/Purchasing.
10.3 Consensus Scoring Agreement Form—this signature form provides back-up
documentation that the team is in agreement with the Consensus Scoring.
11 Evaluation Guide Approval
11.1 Approved by: Contracts/Purchasing, Chris Yates, C.P.M., CPPB.
Project Manager,Tom Meregillano
11.2 Reviewedby: MichaelAsnerConsulting
12 Attachments
12.1 Attachment 1: Online RFP Evaluator Instructions
11
Michael Asner Consulting
MSuite 2003 Our 281h Year in Business
1028 Barclay St.
Vancouver, BC 1984 — 2012
Canada WE OBI
June 6, 2012
Marc Dubois
Contracts, Purchasing and Materials Manager
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, CA
U.S.A. 92708
Dear Marc
I am writing this report in my capacity as Fairness Advisor for OCSD's RFP S-2011-
513BD which was issued on Dec. 13, 2011.
My role on this project was to help OCSD ensure that the RFP process was conducted
in a way that is fair, open and transparent to all interested parties.
This RFP process consisted of a number of distinct steps. Each major step and my
comments on it is described below.
1. The RFP was prepared by the Procurement Officer, Chris Yates, working with
the Evaluation Committee and stakeholders and released on Dec. 13, 2011.
2. A non-mandatory Pre-Proposal telephone conference was held on Feb. 21,
2012. Vendors could participate by dialing in to the conference call.
3. Questions were received by OCSD and answered via addenda posted to
OCSD's planetbids' web site.
4. Six proposals were received.
• Avagro Systems
• McCarthy Family Farms
• Nursery Products
• Synagro
• Terra Renewal LLC
• Tule Ranch
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5. The Synagro proposal was disqualified as it failed to satisfy a mandatory
requirement and several of the minimum requirements.
6. The remaining five proposals were reviewed, clarifications were identified and
preliminary scores were assigned to the technical and management sections.
7. During the analysis, the Evaluation Committee identified two issues related to
contracting that required input from OCSD's counsel. A letter was sent to
Counsel. Counsel responded in writing. The issues were resolved to the
satisfaction of Counsel, the Procurement Officer and me.
8. Of the five proposals, three obtained low scores and were eliminated from further
consideration, without any examination of their costing proposals.These firms
were Avagro Systems, Nursery Products, and Terra Renewal LLC.
9. For the two remaining proposals, those from McCarthy Family Farms and Tule
Ranch, the cost proposals were examined and found to be complete and
acceptable.
10.The two highest ranking proposals, McCarthy Family Farms and Tule Ranch,
were sent letters Identifying Issues requiring clarification and inviting each to
submit clarification letters and to meet with the Evaluation Committee to discuss
its proposal.
11.Meetings were held with Tule Farms on May 23, 2012 and McCarthy Family
Farms on May 24.
12.During the meeting with McCarthy Family Farms, McCarthy Family Farms
acknowledged that it was lacking the required permitting and could not commit to
the prices stated in its proposal. For these reasons, McCarthy Family Farms
asked that it be permitted to withdraw its proposal. This was agreed to by the
Procurement Officer.
13.Notice of Intent to Issue a Contract was sent to Tule Ranch.
This RFP process(with the exception of the approval of the Board to award a contract
to Tule Farms) is now complete. OCSD will provide a debriefing to those unsuccessful
vendors that request one.
I was involved at every stage of this RFP process,from the RFP development phase
through to the completion of the evaluation process. I am satisfied beyond any doubt
that OCSD conducted a process that was rigorous and fair to all interested parties.
During the evaluation phase, OCSD made consistent efforts to develop procedures and
approaches that were designed to avoid giving an unfair advantage to any Respondent,
ensuring that each eligible Respondent was provided the same information on a timely
2
basis. I am also satisfied that the RFP Process was conducted in accordance with the
requirements prescribed in the RFP and with the concurrence of legal Counsel.
If you have any questions that arise from this description, I will be pleased to respond.
Yours truly
Michael Asner Consulting
Michael Asner
Fairness Advisor
3
OPERATIONS COMMITTEE NeebngDate To ad.ofDi,.
08,01,12 --
AGENDA REPORTItem Number Item Number
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Edward M. Torres, P.E., Operations & Maintenance Director
SUBJECT: Changes to Ocean Monitoring Program with the new Ocean
Discharge Permit
GENERAL MANAGER'S RECOMMENDATION
This is an information item.
SUMMARY
There are several noteworthy changes from the previous permit to the monitoring and
reporting program in Orange County Sanitation District's (OCSD) new Ocean Discharge
Permit. The new permit was approved by the Regional Water Quality Control Board and
EPA on June 15, 2012, and becomes effective July 18, 2012. These changes include
reductions in the frequency and volume of some core monitoring samples for effluent,
ocean, and beach bacterial monitoring, the addition of two new core ocean monitoring
elements, OCSD receiving credit for strategic process studies of several on-going
projects (e.g., the investigation into changes in biological community near the ocean
outfall), and allowing OCSD to reallocate monitoring resources when participating in
regional monitoring efforts. A brief presentation on these changes will be provided to the
Operations Committee.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
CEQA
N/A
BUDGET / DELEGATION OF AUTHORITY COMPLIANCE
N/A
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