MINUTES OF THE ENGINEERING AND OPERATIONS COMMITTEE
MAY 16, 2005
CALL TO ORDER / ROLL CALL
Chairman Knutson called the Engineering and Operations Committee to order
at 1:37 p.m. Committee members present were Vice Chairs Ferguson and Johnson
and Directors Brammell, Croucher, Lewanski, Lewinger, and Sundram. Committee
members absent were Directors Broomell, Inzunza, Loveland, Rogers, Thompson,
and Tu. At that time there was a quorum of the Committee. Staff present was
General Manager Stapleton, General Counsel Hentschke, Deputy General Manager
Lanspery, Assistant General Manager Cushman, Director of Operations and Maintenance
Eaton, Director of Engineering Economides, Director of Right of Way Rose, Assistant
Director of Engineering Stift, and Engineering Manager Steele.
SAN VICENTE PIPELINE BID RESULTS
Chairman Knutson informed the committee that the purpose of the meeting was
to discuss the bid results, contract award options, and budget implications
in order to provide staff direction on the award of the San Vicente Pipeline
contract.
Mr. Economides gave a brief overview of the San Vicente Pipeline project,
and turned the presentation over to Mr. Steele.
Mr. Steele stated that the construction cost estimate for the project was
$161 million, while the bids received were $198 million, $202 million, and $230
million. The design consultant, Jacobs Civil, and staff studied the cost estimate
against the bids submitted and found that the cost estimate underestimated the
cost and labor of equipment for the project and the amount of time the contractor
required to physically tunnel through the various ground conditions.
Committee members Thompson and Tu arrived.
Mr. Mike McRae, from Jacobs, gave a more detailed explanation of the review
of the cost estimate comparison, including labor, equipment operating, and current
market conditions. The evaluation found explainable discrepancies of $12 million
in equipment, $5 million in an omitted blasting restriction, and $20 million
in tunneling advance rates. Another item discussed was the increased volume
of ongoing tunnel projects throughout the country, where there was over three
times the amount of tunnel construction started in 2004 than in past years,
which had resulted in competition for labor, as well as contractors taking on
less risk and elevated bid prices. After taking those items into consideration,
it was determined the cost estimate was comparable to the bids received.
Directors asked questions and made comments about this item.
Director Sundram requested a copy of the ESP cost value study.
Mr. Economides informed the committee that the larger bid price and adding
the surge control facility to the San Vicente Pipeline Project would result
in an overall $99 million project budget increase, of which $55 million had
already been brought to the attention of the Board. Staff provided options to
mitigate that budget difference, including deferral of projects, elimination
of projects, and a combination of deferral and elimination.
Director Lewinger introduced two motions:
1. Recommend that staff proceed with the San Vicente Pipeline bid award at
the June 23, 2005 Board meeting;
2. Convene a Member Agency General Manager’s committee to discuss project
deferral and elimination in order to provide a recommendation to the Engineering
and Operations committee.
Vice Chair Ferguson seconded, and the motion passed unanimously.
ADJOURNMENT
There being no further business to come before the Engineering and Operations
Committee, Chairman Knutson adjourned the meeting at 3:07 p.m.
______________________________
Bill Knutson
Chair, Engineering and Operations
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