HomeMy WebLinkAboutA031 - Resolution awarding contract to Sargent & Lundy LLC, of Chicago, IL, for Engineering Services for Reciprocating Internal Combustion Engine (RICE) Electric Generation FacilityITEM #:33
DATE:07-22-25
DEPT:ELECTRIC
SUBJECT:ENGINEERING SERVICES FOR RECIPROCATING INTERNAL
COMBUSTION ENGINE (RICE) ELECTRIC GENERATION FACILITY
COUNCIL ACTION FORM
BACKGROUND:
The City's Electric Utility is in the midst of dynamic changes. The primary fuels used in the
City's Power Plant ten years ago (coal and refuse derived fuel) are different from those used
today (natural gas and refuse derived fuel), and those anticipated to be used in 2027 (natural
gas alone). Increasing demand for electric vehicles and other devices has changed how
metering infrastructure and rates are used to manage growth in load. Extreme weather events
(e.g., the 2020 derecho) and infrastructure investments by neighboring utilities have presented
the need and opportunity for additional electric transmission capabilities. Finally, the City's
Climate Action Plan has called for significant changes in how energy is produced to serve
Ames customers' needs.
In light of these dynamics and considering the infrastructure currently in place to meet the
Utility's needs, staff presented a “first-look” of its long-range plan to Council on December 17,
2024. This was followed up with an aggressive 5-year Capital Improvements Plan for the
Electric Utility presented and approved by Council earlier this year on June 17, 2025. At this
meeting, staff presented the results of studies that were performed by Electric staff and
engineering consultants, in the areas of Unit Health Assessment, Generation Alternatives, and
Generation Optimization. These studies helped determine the expected remaining life of Unit 7
and Unit 8 as well as determine the best technology to replace Unit 7, provide additional
capacity for today's load growth, and eventually replace Unit 8.
On May 1, 2025, staff issued a Request for Proposals (RFP) to hire an engineering firm
to serve as the Utility’s consultant to design a generation plant to meet the short and
long-term capacity obligations while also considering operational costs and
c h a r act e r ist i cs . The RFP document was posted on AmesBids by the City's Purchasing
division. On June 13, 2025, six proposals were received. Proposals were initially evaluated by
an evaluation team of City staff based on the the five criteria listed below (weights of each
category in parentheses):
1. Experience and qualifications of personnel (35%)
2. Capability of providing the requested services (25%)
3. Proposed schedule and timeline (15%)
4. Thoroughness of the proposal (10%)
5. Cost (15%)
The total points awarded in each category to the firms by the evaluation team are shown in
Table 1 below. The evaluation team scored the proposals on the four qualitative factors
only (1-4 from the list above) and did not have access to the cost proposal. The cost
was separately scored by Purchasing staff, who did not participate in the scoring on
the qualitative factors.
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Table 1. Initial Scores
FIRM
EXP
&
QUAL
CAPABILITY PROPOSED
SCHEDULE THOROUGHNESS
COST
(Scored By
Purchasing)
TOTAL
POINTS
Sargent &
Lundy
Chicago, IL
133 85 45 32 23 318
HDR
Engineering
Omaha, NE
105 75 45 32 30 287
DGR
Engineering
Rock Rapids,
IA
77 60 36 22 43 238
Olsson
Lincoln, NE 63 50 36 20 60 229
Zachry
Engineering
San Antonio,
TX
77 50 33 28 40 228
KCL
Engineering
Iowa City, IA
56 40 36 24 44 200
The firms proposed a considerable range for the estimated hours of work and the overall cost.
Table 2, below, reflects the points and ranking from the evaluation process and the estimated
hours and costs.
Table 2. Cost and Hours Detail
FIRM TOTAL
POINTS RANK COST HOURS
Sargent & Lundy
Chicago, IL 318 1 $6,885,000 37,790
HDR Engineering, Inc.
Omaha, NE 287 2 $5,250,000 28,101
DGR Engineering
Rock Rapids, IA 238 3 $3,899,602 37,928
Olsson
Lincoln, NE 229 4 $3,586,000 10,730
Zachry Engineering Corporation
San Antonio, TX 228 5 $3,485,000 15,982
KCL Engineering
Iowa City, IA 200 6 $2,593,345 9,620
The two highest ranked firms were invited to make presentations to the evaluation team. The
presentations were evaluated on:
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1. Experience (30%)
2. Understanding of the permitting process (20%)
3. Understanding of Ames and our unique needs (20%)
4. The firm's demonstrated approach to meeting the scope of services (20%)
5. The firm's ability to draft specifications that are inviting to contractors (10%)
The scores of the evaluation team for each of these evaluation categories are outlined in
Table 3, below:
Table 3. Presentation Scores
FIRM EXP PERMITTING UNDERSTANDING APPROACH SPECS PRESENTATION
POINTS
Sargent &
Lundy
Chicago, IL
144 88 68 92 40 432
HDR
Engineering,
Inc.
Omaha, NE
108 84 84 76 38 390
The points from the initial scoring of the proposals were added to the presentation points to
determine the final rankings as shown in Table 4, below:
Table 4. Final Points and Rankings
FIRM TOTAL FINAL
POINTS FINAL RANKING
Sargent & Lundy
Chicago, IL 750 1
HDR Engineering,
Inc.
Omaha, NE
677 2
After evaluating the proposals, staff determined that the proposal from Sargent &
Lundy LLC, Chicago, Illinois is most acceptable. The experience and qualifications of the
personnel, along with the significant number of similar projects completed by the firm, best fit
the needs of the City. Sargent & Lundy has considerable experience with RICE engines,
which sets it apart from other engineering firms for this project. The firm emphasized a
thorough approach to the project, including internal checks and balances to ensure that the
individual project components align with the overall project objectives. The description of this
approach was particularly impressive to the evaluation team.
Because of the more thorough approach to the design work, Sargent & Lundy assumed
a greater number of staff hours would be involved in completing the scope. Based on
the submitted rates and hours, the estimated cost for the Sargent & Lundy contract is
$6,885,000. It is important to note that the actual amount of the contract awarded to
Sargent & Lundy will be billed on a time and materials basis with a cost-not-to-exceed
$6,885,000. It is important to note that invoices will only be paid according to the rates
provided, for actual time spent.
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The majority of this contract will be expended in FY 2025/26 as design and engineering is
performed. There is currently a balance of $3,050,000 available in the current fiscal year for
this project, consisting of $2,000,000 from the adopted FY 2025/26 budget and $1,050,000 in
project savings in FY 2024/25, which will be carried over into FY 2025/26. In addition, the
adopted 2025-2030 CIP reflects $7,000,000 in FY 2026/27. This amount is earmarked for
building/infrastructure, and staff will draft the 2026-2031 CIP to reflect the portion of this
funding that is used for engineering.
It is intended to cover these costs from the available balance in the Electric Fund (currently
>$50,000,000), and reimburse the Fund when bonds are issued for the entire generation
project in FY 2026/27.
The City Council has previously discussed with staff two key components related to
this project, which will be covered in further detail during the staff presentation on July
22. These are: 1) the financing of the project and its impact on utility rates, and 2) the
location where the future generation will be sited and the feasibility and cost impacts of
an alternative location. A presentation will be attached to this report before the close of
business on Monday, July 21, which will include discussion of these topics.
ALTERNATIVES:
1. Award a contract to Sargent & Lundy LLC, Chicago, Illinois, for Engineering Services for
Reciprocating Internal Combustion Engine (RICE) Electric Generation Facility, in the
amount not-to-exceed $6,885,000.
2. Award a contract to another firm.
3. Reject all proposals.
CITY MANAGER'S RECOMMENDED ACTION:
The last time Electric Services expanded its baseload generation capacity was in the
1980s. Customer demands have grown, and generation infrastructure has aged since
then. Staff has extensively studied the needs, the life assessment of the existing
generation, the power production technologies available, and the financial
requirements to afford the additions. It is time to add new generation resources to meet
utility requirements.
Obtaining Engineering services from a consultant with extensive RICE plant experience
and capability is crucial for the Electric Services Department to ensure success in
building a generation plant that meets the short- and long-term capacity obligations
currently facing the utility. Therefore, it is t he recommendation of the City Manager that the
City Council adopt Alternative No.1 as stated above.
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