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Home My WebLink About15 Electric Utility Construction Services Contract 2023 VIP Powerline Corporation AGENDA ITEM #15 r P, I Public Utility District MEETING DATE: August 2, 2023 TO: Board of Directors FROM: Joe Horvath, Assistant General Manager/ Electric Utility Director SUBJECT: Consideration of Awarding the Electric Utility Construction Services 2023 Contract to VIP Powerline Corporation Zt APPROVED BY: Brian C. Wright, General Manager RECOMMENDATION: Authorize the General Manager to execute an Electric Utility Construction Services Contract with VIP Powerline Corporation for FY23, with 2 optional 1-year extensions, for a total not to exceed amount of$500,000 annually starting in FY23 and for each option year thereafter. BACKGROUND: The Electric Utility has hired contract crews from time to time to assist District crews with executing the high volume of capital improvement construction work that must be accomplished during the relatively short construction season in Truckee. The construction season typically starts in May and ends in mid-October, although this overall construction window can be shortened with a heavy winter as occurred this year. The use of contract crews is especially beneficial to the District this year because it helps offset the labor shortages caused by challenges in hiring as many qualified electrical journey-level line workers as needed. The District currently has 3 vacancies for journey-level line workers. Throughout the industry, electric utilities are struggling with a labor shortage of qualified electrical journey-level line workers. There is a high demand for this type of work and resources are scarce. There is increased pressure on Investor-Owned Utilities (IOUs) such as Pacific Gas and Electric (PG&E) to reduce the potential for fires around their electric infrastructure, and this has resulted in a dramatic increase in utility construction work. This has contributed to the lack of available qualified electrical journey-level lineperson workers. Over the past several years, Electric Operations has not been able to hire and retain as many qualified electrical journey-level staff as budgeted for and needed. The District has pivoted to hiring apprentices to train and develop them in-house into journey-level line workers, a process which requires a 3 to 4 year timeframe. This has been very successful, although the need still remains to fill journey-level line worker vacancies. Page 1 of 3 Page 34 of 165 This proposed contract will provide electric line construction crew(s) and associated equipment to be scheduled by District staff on an as-needed basis to assist with capital improvement construction activities and emergency response to the District's Electric Distribution System. ANALYSIS AND BODY: Electric Utility staff has identified the need to secure contracted utility line construction crew(s) to meet the electric system workload in a shortened construction schedule for 2023. This proposed contract will also support emergency or unplanned service outage response. Some system failures require emergency repair work matched with specialized electrical journey-level line workers, construction equipment, and other resources that a licensed contractor crew can provide. Staff proposes to utilize contract labor and equipment to supplement District electric utility crews in the construction of capital improvements including existing facilities upgrades and pole replacements, and emergency response as needed on the Electric Distribution System. Staff prepared a Request for Bids soliciting qualified contractors to provide Electric Construction crew(s) at the District's request and billed on a time/labor and equipment basis. These bids were for labor and equipment costs only, as materials were not included as a bid item since they will be supplied by the District to the successful bidder. The bid was advertised in the Sierra Sun and the bid opening was held at 2:00 PM on July 20, 2023. Staff received and evaluated a total of nine (9) bids as summarized below: Base Bid plus Option Bidder Location&aBase Bid Years Responsive VIP Powerline Corporation San Leandro, CA $9,090 $9,090 Yes Henkels & McCoy West West Sacramento, CA $8,847 $9,812 No Summit Line Construction Heber City, UT $9,534 $10,392 Yes Par West Contractors Vacaville, CA $10,238 $11,774 No Diversified Utility Services Bakersfield, CA $11,971 $12,809 No Hot Line Construction Brentwood, CA $12,475 $13,273 Yes Teichert Electrical, Inc. Sacramento, CA $12,958 $13,735 Yes UG Electric Construction Benicia, CA $11,227 $13,753 No Wasatch Electric Salt Lake City, UT $14,812 $15,849 No The Base Bid amount is the sum total price of all hourly rates for labor and equipment as listed on the Bid Schedule using a quantity of 1 for each Bid Item. The Base Bid plus Option Years amount adds the percentage increase as determined by each bidder for 2 Option Years. The Base Bid plus Option Years amount allows staff to compare and evaluate bids for the lowest overall price. It should be noted that there were mathematical errors made by most bidders when calculating the Option Year 1 and 2 costs. Correction of this error using the procedure indicated in the Bid Documents resulted in the final Base Bid plus Option Years cost amounts as listed above. Staff believes the Bid Documents clearly indicated the calculation formula for Option Year 1 Page 2 of 3 Page 35 of 165 and 2 costs. However, in the future, staff will include an example of a filled-out Bid Schedule for maximum clarity. This evaluation shows that VIP Powerline Corporation is the apparent Base Bid plus Option Years low bidder. Staff confirmed VIP Powerline Corporation's State License and they are registered with the Department of Industrial Relations (DIR). Staff checked references supplied by the contractor for previous work performed and found references to be satisfactory. This contractor demonstrates compliance with District standards and has the knowledge and skills required to perform the work. Therefore, staff considers the lowest Base Bid plus Option Years amount to be the lowest responsive bidder and recommends the award of the Contract to VIP Powerline Corporation. GOALS AND OBJECTIVES: District Code 1 .05.020 Objectives: 1. Responsibly serve the public. 4. Provide reliable and high quality electric supply and distribution system to meet current and future needs. 6. Manage the District in an effective, efficient and fiscally responsible manner. District Code 1 .05.030 Goals: 1. Manage for Financial Stability and Resiliency 4. Take the best of private sector thinking to modernize the utility and add value to our communities. FISCAL IMPACT: Funding of $500,000 for the first year of this Contract is available in the Electric Operating and Capital Fund budgets. The Electric Operations department currently has four position vacancies which are forecasted to have an estimated savings impact for FY23 of $385,894 in productive wages and $365,094 in overheads, combining for a cost savings of $750,988. This savings is partially offset by $228,846 for an unbudgeted electrician position which has remained filled in FY23. The net savings equates to $522,142, sufficient to cover the requested item's $500,000. If actual Electric Operating savings are less than forecasted, then the Electric Capital budget can fund at least $200,000 of the Contract based on anticipated labor funding from one project among several existing capital construction projects. The Contractor is anticipated to perform work to complete the ELF Fuse Deployment project (OR-23-6- 10) which has an overall labor budget, including overheads, of $220,000. Specific projects, and funding amounts used, are subject to change based on actual services rendered to each project. Continued work and funding under this Contract for FY24 and FY25 will be subject to satisfactory performance by the Contractor and Board approval of the FY24-25 Budget. ATTACHMENTS: None Page 3 of 3 Page 36 of 165