HomeMy WebLinkAbout7 Contract for failed Truckee Substation Transormerenda Item #
CONSENT
To: Board of Directors
From: Joe Horvath
Date: October 07, 2015
Subject: Consideration of Modifying a Contract for the Replacement of the
Failed Truckee Substation Transformer
I WHY THIS MATTER IS BEFORE THE BOARD
Board approval is required for expenditures in excess of $15,000.
2. HISTORY
7
On the morning of Friday, February 6, 2015 a severe windstorm hit the greater
Truckee Tahoe area. Numerous trees fell across the District, including a tree near
Truckee Substation which resulted in an outage at the substation. One of the
transformers at Truckee Substation tripped off-line after experiencing an internal fault
within the transformer. Subsequent internal inspection revealed the clear indication of
a transformer winding failure. A failure of that magnitude requires refurbishment or
replacement of the transformer.
At the July 15, 2015 Board meeting, the Board was presented with firm quotes from
the original manufacturer, R.E. Uptegraff, for the refurbishment and replacement
options for the failed transformer. The cost to rebuild the failed transformer was
$79,458 (including shipment two ways) with a turnaround time of 16 to 18 weeks. The
cost to purchase a brand new transformer was $107,696 (including shipment one way)
with a delivery time of 22 to 24 weeks. The refurbishment cost was less and lead time
was significantly less than the purchase of a new unit, making the option of rebuilding
the failed transformer the better of the two options available. Therefore the Board
approved a contract with the R.E. Uptegraff Company of Scottdale, Pennsylvania to
refurbish the failed unit. The contract was in the amount of $79,458, plus a 10 percent
change order allowance in the amount of $7,946 for an amount not to exceed $87,404
plus tax.
3. NEW INFORMATION
On July 31, 2015, the failed transformer was loaded by crane onto a transport vehicle
for shipment to the Uptegraff facility in Pennsylvania. Subsequent to the loading the
transformer, the driver of the transport vehicle moved the vehicle to a location
immediately outside the substation in an attempt to let the mobile crane exit the
substation first.
Unfortunately, the new location was at a downslope and the transformer had not been
fully secured to the transport vehicle. The weight of the transformer broke the chains
and the transformer fell onto the ground. Fortunately there were no injuries to
personnel and no spillage of oil. The transformer was reloaded onto the vehicle and
properly secured for shipment.
Upon arrival at Uptegraff facility, tests were performed to determine the extent of the
damage to the transformer. Uptegraff then filed a claim with the transport company's
insurance carrier for the damage caused when the failed transformer fell off the trailer.
A settlement payment amount of $26,235.00 was received by Uptegraff. At this point,
Uptegraff contacted the District with a proposal to build a new transformer for the
District in lieu of refurbishing the failed unit. With the insurance proceeds applied to
the cost of the new unit, the price difference of the new unit over the refurbished unit
is only $11,653,
New Unit Cost $107,696
Refurbishment Cost $79,458
Difference $37,888
Insurance Proceeds ($26,235)
Cost Difference $11,653
Because the Board previously approved a change order allowance in the amount of
$7,946, the cost difference to purchase a new unit drops from $11,653 to $3,707.
Refurbishing a twice damaged transformer is problematic at best. For an additional
amount of only $3,707 the District can receive a brand new unit with a full factory
warranty. This is clearly the best option for the District.
4. FISCAL IMPACT
Sufficient funds exist within the FY15 Electric General Fund for the additional amount
of $3,707 to purchase a new unit in lieu of refurbishment of the failed substation
transformer.
5. RECOMMENDATION
Increase the previously approved change order allowance from $7,946 to $17,038
necessary to cover the additional amount and to provide a 5% change order flexibility
of $5,385 for the purchase of a new transformer.
Authorize the General Manager to void the previous refurbishment contract and enter
into a new contract for the purchase of a new substation transformer with R.E.
Uptegraff in the amount of $107,696 plus a 5 percent change order allowance in the
amount of $5,385 for an amount not to exceed $113,081 plus tax.
L
Stephen Hollabaugh
Assistant General Manager
Michael D. Holley
General Manager