Item No: 5H.
Meeting Date: July 22, 2013
From: Mike Thornton, Purchasing Manager
Subject: Resolution authorizing execution of an agreement with CG Power Systems for the purchase of a substation class power transformer.
Staff concurs with our Engineering firms recommendation to award the contract and purchase from CG Power Systems, Inc. for a total cost of $680,000.00.
The purpose of this purchase is to contract with a qualified and approved manufacturer/company to design, build, transport, install, and commission a three phase 67,000 to 13,090/7.560 volt substation class power transformer. This transformer will replace an existing aging transformer at the Center Street Substation.
The existing transformer to be replaced was installed around 1980 and was acquired when the City purchased the utility infrastructure from Florida Power. This transformer is experiencing problems as the Load Tap Changer (LTC) backboard has deteriorated beyond repair. The LTC is the key component of the transformer as it automatically raises and lowers the voltage out of the transformer based on the system load. Problems with this component are serious.
On April 23, 2013 the Purchasing Division issued Invitation to Bid (ITB) 130351. On May 23, 2013 the City received and opened 8 responses to the ITB. The detailed bid tabulation is attached for your review.
Analysis of the bid responses looked at three factors:
1) Purchase cost of the transformer,
2) Load losses for the transformer, and
3) An approved manufacturer as determined by our engineering firm, Booth & Associates, Inc.
The purchase cost is the base cost for the purchase and installation of the transformer. This cost is combined with the value assigned to the load losses of the transformer.
All transformers experience loss of power when converting from a higher voltage to a lower voltage. The amount of load loss during full load and no load conditions is multiplied by the cost of the power to come up with a total dollar value of load losses over a 20 year period. This total value of load losses is added to the purchase cost to provide a Total Cost of Ownership (TCO) of the transformer. The higher the load losses the less efficient the design of the transformer. It is possible to have a very low purchase cost for a transformer and then experience very high load losses. This result in higher TCO than if a higher priced, more efficient transformer was purchased that had lower losses over the 20 year period.
The final evaluation component is the recommendation of the City’s engineering firm, Booth & Associates (Booth). Booth has provided the attached recommendation to award to CG Power Systems USA, Inc. The low bidder Virginia Transformer is not on Booth’s approved manufacturer list. This list is maintained based on deficiencies in their production quality, including substandard cleanliness in their testing and tanking areas. The tanking area is where the core and coil assembly, having been carefully dried and impregnated with oil, is installed and sealed into the transformer tank. Controlling this environment is important to the long-term life of the transformer. The introduction of moisture (even humidity from the air) or impurities may not show up during testing or the early life the transformer, but can affect the longevity of the unit. Said production deficiencies lead to uncertainty in the quality of the units produced.
1. Approve the resolution authorizing execution of the agreement with CG Power Systems, Inc.
2. Such alternative action as the Commission may deem appropriate.
The Electric Department included $868,000 for this project in their current budget.
Department: _Electric Department______
Prepared by: _Mike Thornton________
Attachments: Yes__X__ No ______
Advertised: _X___Not Required ______
Dates: _May 22, 2013________________
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. _BLM,____________
Deputy C.M. ___________________
City Manager ___________________
Account No. _041-1099-531.64-60_
Project No. __410012___________
WF No. _____WF0824140 / 1____
RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH CG POWER SYSTEMS USA, INC. FOR PURCHASE OF A SUBSTATION CLASS POWER TRANSFORMER TO BE INSTALLED AT THE CENTER STREET SUBSTATION NOT TO EXCEED $680,000.00
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to execute an agreement with CG POWER SYSTEMS USA, INC. whose address is 6349 Avantha Drive, Washington, MO 63090 for the purchase and installation of a substation class power transformer at Center Street Substation pursuant to Invitation to Bid 130351.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __22nd_ day of ____July___ 2013.