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PROPOSAL:

Execute Contract to Cost Share Development and Demonstration of Zero- and Low-VOC Resin Technology for Advanced Control Measure Development

SYNOPSIS:

Stains, waterproofing sealers, and clear wood finishes used as architectural coatings emit over 12 tons per day of VOC emissions. Based on results of a competitive solicitation, AVES has been selected to develop and demonstrate a zero-VOC resin technology that could be used to formulate these coatings. If successful, this project will help identify possible ways to further reduce VOC emissions in the Basin from this source category. Total project cost is $557,500. AQMD’s contribution shall not exceed $185,000.

COMMITTEE:

Technology, April 16, 1999; fewer than three members were present and therefore, pursuant to the Procedures for Standing Committees of the Governing Board, the Committee forwards this letter without recommendation

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with AVES, an affiliate of ATC Associates, Inc. in an amount not to exceed $185,000 to develop and demonstrate zero- and low-VOC resin technology for advanced control measure development from the Advanced Technology Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The 1997 AQMP addresses emission reductions from architectural coatings in two control measures entitled "Further Emission Reductions from Architectural Coatings" (CM#97CTS-07) and "Long–Term Control Measure for Architectural Coatings" (CM#97ADV–ARCH). CM#97CTS-07 and CM#97ADV-ARCH require 50% and 25% emission reductions respectively. The 50% emission reduction was planned to be achieved in two phases by lowering the VOC limits in Rule 1113–Architectural Coatings. In phase I, Rule 1113 was amended on November 8, 1996 to achieve approximately 17.5% (10.3 t/d) emission reductions. In phase 2, an additional 34% (20.2t/d) emission reduction is anticipated with the forthcoming Rule 1113 amendment scheduled for public hearing on May 14, 1999.

The final 25% (14.5 t/d) emission reduction, as required by CM#97ADV–ARCH, calls for the development of zero-VOC architectural coatings in certain large volume categories. Staff has identified stains, waterproofing sealers, and clear wood finishes as large volume coatings which contribute 12 t/d of VOC emissions. This project is designed to identify potential lower VOC technology that can be subsequently utilized by staff in their technology assessment for further rulemaking, To achieve this goal, RFP#9899-14 was released on November 13, 1998 to seek bids for this project.

The RFP specified the completion of these tasks:

Task 1: Identify and develop promising resin technologies that can be used in a zero- or low-VOC coating system. Identify existing resin technologies that appear promising and develop new candidate resin technologies that can be utilized in formulating stains, waterproofing sealers, and clear wood finishes. Produce sufficient quantities of the resin systems for formulation and testing.

Task 2: Test the coatings on a variety of substrates using industry standard test methods. The coatings resulting from the developed resin technology will be evaluated for all relevant performance characteristics such as application, rheology, adhesion, hardness, durability, and coverage. Specific performance issues to be addressed include film thickness of applied coating; thinning required to apply the coating; need for priming the substrate; amount of topcoats required for finishing; need for any touch-up & repair of the coating; and reactivity of solvents used.

Task 3: Prepare a final report detailing all aspects of the project. The final report will include analyses of test results of all coatings for performance and full-scale application. The likelihood of manufacturing the coating system shall be evaluated. The cost and environmental impacts resulting from the use of this technology will also be analyzed. A sample of each coating sufficient for testing will be submitted along with the final report.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids was published in the following publications:

Additionally, notices of the RFP were mailed to the Black and Latino Legislative Caucuses, various chambers of commerce; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Over 250 copies of the RFP were mailed out and 8 vendors attended the mandatory bidders conference held on December 10, 1998.

Evaluation Panel

The four-member RFP evaluation panel consisted of three AQMD and one ARB staff. Of these panelists, one is Asian/Pacific Islander and three are Caucasian; one is female and three are male.

Bid Evaluation

Two bids were received in response to the RFP when final bidding closed at 5:00 p.m. on January 29, 1999. Both bids were from local business enterprises. However, none of them qualified for disabled veteran-owned business or woman-owned business enterprises. The attachment summarizes the evaluation of the proposals and respective rating of the submitted bids.

The two bids, submitted by Light Wave Energy Systems Company (LESCO) and AVES, an affiliate of ATC Associates Inc., were judged by the panel as meeting the minimum technical criteria of the Step 1 evaluation and capable of successfully completing the project. AVES and LESCO scored 85 and 73 points respectively in Step 1. Panel members judged that AVES has more relevant experience for this project. AVES is proposing to use a new resin technology called RESILEX which is a patented, zero-VOC, waterborne polymer. They used the same RESILEX resin technology to develop and demonstrate zero-VOC metal coatings for a project awarded to them by ARB. LESCO intended to develop ultraviolet (UV)-curable coatings for this project.

The Step 2 evaluation of the proposals that met the minimum technical criteria primarily considers cost-sharing offered by the bidder, cost-sharing requested by the bidder from AQMD, along with preference points for local businesses and DVBEs. The Step 2 final score also includes a credit of 50 percent of the points over 70 points received in the Step 1 technical evaluation process. The objective of this two-step evaluation process is to select the most cost-effective, technically sound bid. This component of Step 2 was used in this case to encourage higher cost-sharing from bidders.

AVES and LESCO requested AQMD to cost-share $185,000 and $250,000 respectively. The cost sharing offered by AVES and LESCO is $372,500 and $750,000 respectively. For the AQMD’s cost-sharing part in Step 2, AVES received maximum 40 points because they requested the lowest cost-sharing from AQMD; whereas, LESCO received 29.6 points based on the cost-sharing ratio. For the bidder’s cost-sharing part in Step 2, points are assigned based on the ratio of their cost-share amount compared to AQMD's cost-share amount; accordingly, as shown in the attachment, AVES and LESCO received 20.1 and 30 points respectively.

Benefits to AQMD

According to ARB estimates, the coating categories covered under this proposal represent over 12 tons per day of VOC emissions in the Basin. If successfully developed and implemented, new coating systems could reduce over 10 tons per day of VOC emissions.

Proposal

AVES has entered in a partnership with Adhesive Coatings Company (ADCO), a firm specializing in the development of zero-VOC water-based coatings. ADCO has developed and patented a zero-VOC, water-based resin technology called RESILEX which was used to develop and demonstrate a zero-VOC metal coating system through the Innovative Clean Air Technology (ICAT) program of ARB.

AVES is proposing to use the same RESILEX resin technology for the AQMD project. Necessary formulation adjustments will be made to this resin for formulating stains, waterproofing sealers, and clear wood finishes. The new zero-VOC coatings, formulated from this new technology, will be tested for properties outlined in task 2 of the RFP. The cost and environmental impacts of these new coatings will also be evaluated and presented in the final report.

Resource Impacts

Total project cost is $557,500. AQMD’s contribution shall not exceed $185,000 in funds. The contractor’s contribution will be $259,212 in-kind and $113,288 in cash.

Sufficient funds are available for this project in the Advanced Technology Fund. This fund was established as a trust fund for revenues received as a result of fines, penalties, and settlements from air pollution violations. These settlements were legally binding agreements that linked payments by the violators to use by AQMD to support the development and demonstration of advanced technologies, and assessment of resulting emission benefits.

Attachment

A – Evaluation of Respondents to RFP # 9899-14

Attachment A

Summary of Evaluation of Responses to RFP #9899-14

Two proposals were received in response to this RFP.

Step 1 - Technical Criteria (70 points minimum, 100 points maximum)

Step 2 - Cost and Other Factors (85 points maximum)

Total Score (100 points maximum)

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