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HomeMy WebLinkAboutAgenda Item - 2025-06-17 - Number 10.3 - Special Procurement, Wastewater Treatment Plant 10.3 O F �s� COUNCIL REPORT —� OREGO� Subject: Resolution 25-28, Approval for Special Procurement of Professional Services for the Wastewater Treatment Facility Meeting Date: June 17, 2025 Staff Member: Stefan Broadus, PE Director of Special Projects Report Date: May 23, 2025 Department: Public Works - Engineering Action Required Advisory Board/Commission Recommendation ❑X Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑X Resolution ❑ Not Applicable ❑ Information Only Comments: ❑ Council Direction ❑ Consent Agenda Staff Recommendation: Approve Resolution 25-28 adopting findings and approval for a special procurement for professional services, and exempting the contract from competitive solicitation in order to negotiate a professional services contract with Jacobs Engineering Group Inc. for the Wastewater Treatment Facility project. Recommended Language for Motion: Move to adopt Resolution 25-28. Project/ Issue Relates To: Collaborate with the City of Portland to make a financially and environmentally responsible long-term investment in a wastewater treatment facility. Issue before Council (Highlight Policy Question): ❑X Council Goals/Priorities EAdopted Master Plan(s) ❑Not Applicable Respect. Excel'ence. Trust. Service, 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 2 BACKGROUND Existing Plant The existing Tryon Creek Wastewater Treatment Plant (TCWTP) was built in 1964 and is owned and operated by the Portland Bureau of Environmental Services (BES). The plant is reaching the end of its useful life cycle and needs to be upgraded or replaced. Project Commencement In 2018,the cities of Lake Oswego and Portland began actively exploring the option of designing, building, financing, operating, and maintaining (DBFOM) a new Wastewater Treatment Facility (WWTF) to replace the existing Tryon Creek plant under a public-private partnership. On December 18, 2018, the Council approved Resolution 18-55, which authorized a special procurement using a competitive selection process to enter into a Design, Build, Finance,Operate and Maintain (DBFOM) contract for new wastewater treatment plant. P3 & Preliminary Development Following a competitive process that included a solicitation for Requests for Qualifications (Feb. 2019) and then Request for Proposals (Fall 2020) from the qualified firms, the City selected EPCOR Foothills Water Partners (EWFP) as the preferred proposer. On May 4, 2021, the City entered into a Preliminary Services Agreement (PSA) for the DBFOM of a new plant with EPCOR Foothills Water Partners, who had reorganized as EPCOR Foothills Water Project (EFWP). The preliminary services phase was originally intended to develop designs to the 60% phase as well as complete a large number of deliverables that include advancing permitting, scoping costs, developing schedule, completing archeological and environmental studies, and many other items. In April 2023, the Council authorized extending the work under the PSA with EFWP for up to one year. During this time, EFWP advanced designs to a 90% level as well as completed a number of deliverables, and successfully completed phase one of the WWTF Project. In January 2024, the City and EWFP were not able to reach agreement on the terms of the Project Agreement (PA), and the Council directed staff to explore competitive procurement methods, including special procurement and alternative contracting methods for final design,construction, operation and maintenance of a new WWTF. DBOM Delivery Selection, RFQ, and RFP After careful consideration of the available delivery methods, staff recommended a new procurement for a vendor to provide the Design-Build-Operation-Maintenance (DBOM) services, which was approved by Council on May 7th, 2024. The project team, with guidance from their Owner's Advisor, prepared a two-step procurement approach. The first of which would be a Request for Qualifications (RFQ). The Statements of Qualifications (SOQ) received in response to the RFQ would be evaluated and shortlisted to determine the entities eligible to submit a fixed- price proposal to second step of the procurement, a Request for Proposals (RFP). The RFP would eventually result in a negotiated and executed PA. Respect. Excel'ence. Trust. Service, 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 3 To gauge interest and to help develop the contents of the RFQ, a notice of market sounding conferences was publicly advertised on June 3rd, 2024.Throughout June,these conferences were held with six potential respondents. Based on those conversations and the level of interest expressed, the project team was anticipating a strong response to the RFQ. Additionally, an honoraria stipend was approved by Council on July 16th, 2024 to further incentivize participation. The RFQ was advertised on July 19th, 2024. A pre-submittal meeting and site tour was held on August 15th, 2024 and was well attended. The RFQ closed on October 11th, with one submittal received from Jacobs Engineering Group Inc. (Jacobs). Despite receiving just one submittal, the project team determined that continuing with the second step of the Procurement (RFP) offers the most advantages to the City. Representatives on the project team from the City of Portland Bureau of Environmental Sciences have been consulted on this as well and concur with this conclusion. The reduction in competition by only having one proposal has been minimized or even offset by conducting a series of workshops with Jacobs over the last six months to facilitate and expedite final design decisions, terms of the eventual agreement, and to right-size the risk transfer. This would have been more difficult with multiple bidders. Next Steps The project team anticipates releasing the RFP to Jacobs within the next few weeks.Jacobs would then prepare their response. The eventual proposal will be reviewed and negotiated by the project team leading to the execution of the PA anticipated around the end of 2025. DISCUSSION Professional Services to be Performed Jacobs has prepared a scope and fee proposal to perform various data collection activities relating to Geotechnical exploration and Cultural Resources evaluation. The geotechnical work will better characterize subsurface conditions, include the presence (or absence) of debris and boulders, bedrock profile, and what the dewatering requirements will be. This investigation will provide Jacobs with greater insight into what they will be faced with during construction and will enable them to optimize their design. Without this information, Jacobs would include this risk into their price increasing the cost of project delivery to the City. The Cultural Resources component of the work is to satisfy regulations from the State Historic Preservation Office. This is a component of the permitting process for this project, and allows us to proceed with the EPA's WIFIA loan. Exemption from Competitive Solicitation OAR 125-247-0288 outlines a contract-specific procurement method that allows for a contracting procedure distinct from the standard competitive bidding process. This approach enables the award of a one-time contract for a single, clearly defined project. The contract-specific procurement process is considered appropriate in circumstances involving unique project requirements, emergency situations, or when the work necessitates complex phasing or highly coordinated scheduling efforts. Respect. Excel'ence. Trust. Service, 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 4 Jacobs has the resources on staff to perform this work without hiring subconsultants minimizing the cost to the City. This work could be competitively procured but would create schedule delay and would likely see limited participation due to Jacobs' existing role on this project. Additionally, Jacobs performing these tasks maintains clear professional responsibility of the findings, further reducing risk to the City. Value of Data Collection The tasks included in this procurement will help optimize the design for both cost and quality. Jacobs will have a greater understanding of what they will encounter during excavation which reduces their risk which, in turn, reduces the cost to the City for the project. Ownership of Findings By executing a professional services contract with Jacobs, the City will own the data collected. It is anticipated that Jacobs will use the data to complete the design of the plant and provide the proposal used to execute the PA. In the unlikely outcome that the City cannot reach an agreement with Jacobs, the data collected during this effort would be a valuable asset in taking the next steps of finding a new partner to deliver the project. FISCAL IMPACT The scope and fee proposal from Jacobs to perform these professional services is $232,543. There's no way to calculate the exact return on this investment (and much of it mandatory regardless), but the project team would anticipate the data collected from this effort to reduce the eventual project cost by at least this amount, and probably more so in the form of optimized design and reduced risk. RECOMMENDATIONS Approve Resolution 25-28, adopting findings and approval for a special procurement for professional services, and exempting the contract from competitive solicitation in order to negotiate a professional services contract with Jacobs Engineering Group Inc.for the Wastewater Treatment Facility project. Respect. Excel'ence. Trust. Service, 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY RESOLUTION 25-28 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE OSWEGO,ACTING AS THE LAKE OSWEGO PUBLIC CONTRACTING REVIEW BOARD PURSUANT TO ORS 279A.060, ADOPTING FINDINGS AND APPROVAL FOR A SPECIAL PROCUREMENT FOR PROFESSIONAL SERVICES, AND EXEMPTING THE CONTRACT FROM COMPETITIVE SOLICITATION IN ORDER TO NEGOTIATE A PROFESSIONAL SERVICES CONTRACT WITH JACOBS ENGINEERING GROUP INC., FOR THE NEW WASTEWATER TREATMENT PLANT FACILITY. WHEREAS, the City Council of the City of Lake Oswego ("City") acts as the local contract review board for the City, and in that capacity has authority to exempt certain contracts from the competitive bidding requirements of ORS Chapter 279C; and WHEREAS, OAR 137-047- 0285 permits the awarding authority to award a contract as a special procurement pursuant to the requirements of ORS 2796. 085(4): (4) The ... local contract review board, ... may approve a special procurement if the ... board, finds that a written request submitted under subsection (2) or (3) of this section demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the ... board...: a) Is unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and b) (A) Is reasonably expected to result in substantial cost savings to the contracting agency or to the public; or (B) Otherwise substantially promotes the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B. 055, 279B. 060, 2796. 065 or 2796. 070 or under any rules adopted thereunder. WHEREAS, notice of the City Engineer's draft findings was published in the Oregon Daily Journal of Commerce and Building and Construction fourteen days in advance of this public hearing in accordance with ORS 279C.335(5); and WHEREAS, OAR 137-049-0620(1) authorizes an individual contract to be exempted from the competitive bidding process upon compliance with ORS 279C.335(1)(b), and (2). Resolution 25-28 Page 1of2 NOW THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS; BE IT RESOLVED the Lake Oswego City Council, acting as the Lake Oswego Public Contracting Review Board, hereby adopts Findings and approves a Special Procurement as follows: 1. The attached findings of the City Engineer in support of the request for approval of a special procurement for professional services contract with Jacobs Engineering Group Inc. are hereby adopted. 2. Based upon the foregoing findings of fact, that the contract with Jacobs Engineering Group Inc. for professional services is hereby exempted from the competitive solicitation process pursuant to LOPCR 047-0277(4) and is approved as a special procurement pursuant to OAR 137-047- 0285. 3. The City Manager is authorized to execute the attached contract fourteen days following public notice of the approval of the special procurement, pursuant to OAR 137- 047- 0285 and ORS 279B. 400. Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on this 17th day of June, 2025. AYES: NOES: ABSTAIN: EXCUSED: Joseph M. Buck, Mayor ATTEST: Kim Vermillion, Interim City Recorder APPROVED AS TO FORM: Ellen Osoinach, City Attorney Resolution 25-28 Page 2 of 2 FINDINGS OF FACT AUTHORIZING: APPROVAL FOR SPECIAL PROCUREMENT OF PROFESSIONAL SERVICES FOR THE WASTEWATER TREATMENT FACILITY AND EXEMPTING THE CONTRACT FROM COMPETITIVE SOLICITATION AND TO AWARD TO JACOBS ENGINEERING GROUP INC. Prepared by: Stefan Broadus, Project Director Date: 5/23/2025 1. General Oregon Revised Statute (ORS) 279C. 335 requires competitive bidding of public improvement contracts unless specifically exempted from competitive bidding. Under ORS 279C. 335( 2), a local contract review board (Lake Oswego City Council, in this instance) may exempt certain public improvement contracts from competitive bidding based on the following: a. The exemption is unlikely to encourage favoritism in awarding public improvement contracts or substantially diminish competition for public improvement contracts. b. Awarding a public improvement contract under the exemption will likely result in substantial cost savings and other substantial benefits to the contracting agency. In approving the findings under ORS 279C. 335( 2)( b), the Council shall consider the type, cost and the amount of the contract and, to the extent applicable to the particular public improvement contract, as outlined in ORS 279C. 335( 2)( b)( A- N). ORS 279C.330 defines "Findings" and identifies specific information to be provided as a part of the contracting agency justification. Under ORS 279C.335 (5) a public hearing must be held before the findings are adopted, allowing an opportunity for interested parties to comment on the draft findings. PURPOSE OF THESE FINDINGS: The City of Lake Oswego City Council held a public hearing as required by ORS 279C.335(5)(a) and adopts the following findings with respect to whether the exemption of a professional services contract from competitive solicitation and negotiating a contract with Jacobs Engineering Group Inc (Jacobs) would: 1) satisfy the "substantial cost savings" criterion at ORS 279C.335(2)(b) and OAR 137-049-0630, and 2)the criteria at ORS 279C.335(2)(a) that it is unlikely the exemption will "encourage favoritism" or "substantially diminish competition." 2. Background A Request for Qualification (RFQ) was solicited by the City on October 11th, 2024 with one submittal received from Jacobs Engineering Group Inc. (Jacobs). The eventual outcome of the RFQ procurement (with the associated Request for Proposals) is a fixed priced proposal for Design-Build-Operate-Maintain services for the proposed Wastewater Treatment Facility as specified within an executed Project Agreement. Jacobs has prepared a scope and fee proposal to perform various data collection activities Page 1- Findings for a Special Procurement for the Wastewater Treatment Facility Project. relating to Geotechnical exploration and Cultural Resources evaluation. The geotechnical work will better characterize subsurface conditions, include the presence (or absence) of debris and boulders, bedrock profile, and what the dewatering requirements will be. This investigation will allow Jacobs to greater insight into what they will be faced with during construction and will enable them to optimize their design. Without this information, Jacobs will include this risk into their price increasing the cost of project delivery to the City. The Cultural Resources component of the work is to satisfy regulations from the State Historic Preservation Office. This is a component of the permitting process for this project, and allows us to proceed with the EPA's WIFIA loan. FINDINGS OF FACT Exemption from Competitive Bidding for a Public Improvement Contract This section provides findings that address the criteria promulgated under ORS 279C.335(2)(a),(b) relating to exemptions from competitive bidding requirements for public improvement contracts. The criteria are listed below. Findings addressing the relevant criterion follow the listing. Applicable Regulations: Criterion: (a) "...be unlikely to encourage favoritism, , or substantially diminish competition for public improvement contracts." Findings:Jacobs, as the Design, Build, Operate and Maintain (DBOM) entity, was selected through a competitive process in accordance with a Request for Qualifications (RFQ) selection process substantially similar to that used for the prior DBFOM solicitation and to the RFQ procedure in OAR 137-049-0645 to determine and rank the field of DBOM entities qualified to provide the required design, build, and operations and maintenance of the Wastewater Treatment Facility (WWTF) for the DBOM contract duration. The scope of work for the contract builds upon the knowledge gathered preparing the Statement of Qualification in response to the DBOM RFQ, as well as all the subsequent collaboration with the project team in developing the RFP afterwards. The scope of work for the contract builds upon the knowledge gathered by the prior work. Although it is possible for a proposer to devote the necessary time to acquaint itself with all of the prior and current work performed to date in order to prepare the proposal and preliminary services agreement, it is highly unlikely that they would and that they would be more qualified than Jacobs. Page 2- Findings for a Special Procurement for the Wastewater Treatment Facility Project. Criterion: (b)(1) "Granting the special procurement is reasonably expected to result in substantial cost savings to the contracting agency or to the public; or" Findings: Jacobs has prepared a scope and fee proposal to perform various data collection activities relating to Geotechnical exploration and Cultural Resources evaluation. The geotechnical work will better characterize subsurface conditions, include the presence (or absence) of debris and boulders, bedrock profile, and what the dewatering requirements will be. This investigation will provide Jacobs with greater insight into what they will be faced with during construction and will enable them to optimize their design. Without this information, Jacobs would include this risk into their price increasing the cost of project delivery to the City. The project team would anticipate the data collected from this effort to reduce the eventual project cost by at least the amount of the proposed fee, and probably more so in the form of optimized design and reduced risk. Page 3- Findings for a Special Procurement for the Wastewater Treatment Facility Project.