BOARD MEETING DATE: September 5, 2008
AGENDA NO. 3

PROPOSAL:

Execute Contract to Evaluate Emission Control Technologies for Further Reducing Sulfur Oxides Emissions from Stationary Sources in the SCAQMD SOx RECLAIM Program.

SYNOPSIS:

On July 11, 2008, the Board approved release of an RFP to obtain proposals from qualified contractors with technical expertise and experience in sulfur oxides (SOx) emissions control technologies. Qualified contractor(s) would be selected to conduct engineering evaluations and cost estimates on existing commercially viable control technologies to further reduce SOx emissions from seven major emitting categories of stationary source equipment in the AQMD’s SOx RECLAIM program. This project would assist staff in identifying Best Available Retrofit Control Technologies (BARCT) to be implemented within the 2011-2014 time frame to help the Basin attain the PM2.5 ambient air quality standards. The funding will be reimbursed by the affected industries based on amendments to Regulation III in 2008. This action is to execute the contract with the firms listed in Table 1 for an amount not to exceed the specified amount.

COMMITTEE:

Not Applicable.

RECOMMENDED ACTIONS:

1. Appropriate $334,860 from the Undesignated Fund Balance to Planning, Rule Development, and Area Sources Budget, Services and Supplies Major Object, Professional and Special Services Account; and
2. Authorize the Executive Officer to execute a contract with ETS, Inc. in the amount not to exceed $289,360; and Nexidea, Inc. in the amount not to exceed $45,500 to conduct an evaluation of emission control technologies for further reducing SOx emissions from seven categories of stationary sources in the AQMD SOx RECLAIM program.
    

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On July 11, 2008, the Board approved release of an RFP to obtain proposals from qualified contractors with technical expertise and experience in sulfur oxides (SOx) emissions control technologies. Qualified contractor(s) would be selected to conduct engineering evaluations and cost estimates on existing commercially viable control technologies to further reduce SOx emissions from seven major emitting categories of stationary source equipment in the AQMD’s SOx RECLAIM program. This project would assist staff in identifying Best Available Retrofit Control Technologies (BARCT) to be implemented within the 2011-2014 time frame to help the Basin attain the PM2.5 ambient air quality standards. The funding will be reimbursed by the affected industries based on amendments to Regulation III in 2008.
 

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site. Information was also available on AQMD’s bidder’s 24-hour telephone message line at (909) 396-2724. 

Furthermore, since this project is highly technical in nature, AQMD staff has downloaded copies of the RFP from the AQMD website and e-mailed to eighteen (18) highly specialized contracting firms/contractors recommended by vendors and manufacturers of air pollution control equipment and the Western State Petroleum Association (WSPA) as shown in Table A-1 of Attachment A.

The AQMD’s procurement office received and accepted a total of six (6) proposals submitted by the contractors listed below in response to the RFP when final bidding closed at 5:00 p.m. on August 15, 2008:

1. Compliance Strategies & Solutions, Inc. (CS2)
2. Environmental Remediation Services, Inc.
3. ETS Inc.
4. Foley Environmental
5. Nexidea
6. Norton Engineering Consultants, Inc.
    

Bid Evaluation

The AQMD formed an evaluation panel in August 2008 to evaluate the potential contractors. The four member evaluation panel consisted of one AQMD Assistant Deputy Executive Officer from Planning, Rule Development, and Area Sources Division; one AQMD Program Supervisor of the Best Available Control Technology team; one AQMD Program Supervisor of the Refinery Team; and one representative from WSPA. Staff also invited one representative from the environmental group and two representatives from the U.S. EPA, however, due to schedule conflicts, they could not participate in the evaluation process for this RFP.

For technical criteria, the panel evaluated the contractors for each of the three Modules and five Sub-Modules in the proposal using the form provided in Attachment B. For technical criteria, the panel agreed that the contractors demonstrated an understanding of the scope of work, possessed good qualifications, and had different levels of experience on the seven specific processes specified in the RFP, as well as the air pollution control technologies to further reduce SOx emissions from these processes. In addition, the panel agreed that the contractors presented good approaches, workable schedule, and sensible staff assignment that could be relied upon to bring the project into completion regardless of the challenging deadlines specified in the RFP.

Detailed technical scores for all contractors, scores for proposal costs, additional scores for small business, disabled veteran business enterprise (DVBE), local business etc., total scores and ranking are presented in Table A-2 to A-5 of Attachment A, respectively. The maximum score for technical skills and experience is 70. A minimum score of 56 on technical skills and experience was needed for the proposal to be deemed qualified for award. The lowest cost proposal for each module/sub-module was awarded the maximum score of 30 and all other cost proposals received scores on prorated basis from the lowest cost proposal. Additional points for small business, DVBE etc, not exceeding 15, were provided appropriately. Table A-2 to A-4 of Attachment A provides the scores awarded to the contractors for this project.

The names of the contractors receiving the highest scores, their project bids and total scores are presented in Table 2. Table 3 contains a summary of the scores awarded to each contracting firm for each module/sub-module of this proposal. In addition to the project bids, the AQMD has set aside $15,000 which will be divided equally to the contracting firms awarded the contracts to compensate for their time spent attending future Governing Board meetings.

Due to the reduced work load anticipated, staff currently intends to conduct the analysis for Module 1 in-house rather than contracting out this Module. However, staff reserves the right to conduct a separate procurement process to hire an expert consultant if needed in the near future to ensure that the data analysis for Module 1 would be conducted thoroughly and on time for the SOx RECLAIM rule development process.

As shown in Table 1, staff is recommending to award Module 2, 3-A, 3-D and 3-E to ETS Inc. at a fixed cost of $289,360, and Module 3-B and 3-C to Nexidea Inc. at a fixed cost of $45,500.

Table 1
List of Recommended Contracting Firms and Awards

Table 2
List of Contracting Firms Receiving Highest Scores and Project Costs

Table 3
Summary of Scores

Note: 1) The contracting firm did not receive a minimum technical score of 56 to be qualified; 2) Nexidea only provided bid for SRUs/Tail Gas, a part of Sub-Module A; 3) Norton Engineering proposed costs were higher than the maximum allowable budgets for Module 3-A and 3-B.
 

Proposals
A summary of the proposals and the selection process for each Module/Sub-Module is provided below.

• Module 1 - SOx Reducing Additives for Fluid Catalytic Cracking Units

Module 1 includes an engineering evaluation and cost analysis assessment for a total of up to $36,000 for SOx reducing additives for fluid catalytic cracking units.

It is anticipated that some local refineries will conduct a short-term testing program to verify the effectiveness of the FCCU SOx reducing additives in further reducing SOx emissions from the FCCU at their respective facilities. The testing program is expected to include a series of tests at these refineries to monitor the SOx emissions at various loading rates of the SOx reducing additives. During these testing trials, the FCCU’s operating parameters, FCCU’s stack opacity, as well as other multimedia impacts (e.g. particulate matter emissions) will also be monitored and studied concurrently with the SOx emissions.

Module 1 requires the contractor(s) to compile, summarize, report the results of the short-term testing program, and estimate the resulting cost-effectiveness. In formulating the recommendations to the AQMD, in addition to other data that may be available, the contractor shall consider all information provided by any refinery participating in the testing program. In addition, the contractor shall also provide the District with an estimated level that can be achieved for the refineries that do not participate in the testing program and the basis to support his/her recommendation.

Three contracting firms submitted bids for Module 1: ETS Inc., ERS, and Foley Environmental. The average technical scores awarded from the four evaluation panel members to ETS Inc., ERS and Foley Environmental are 56, 41 and 57, respectively. ERS score was lower than 56, therefore was not graded further. Among the remaining two contracting firms, Foley Environmental proposed the lowest cost for Module 1 at $30,400. All three contracting firms were classified as small business enterprises and received 10 additional points. The total scores for ETS Inc. and Foley Environmental are 91 and 97.

To date, only two out of the six local refineries committed to participate in the short-term testing program (a third refinery may participate pending the resolution of permitting issues), which will reduce the work load in Module 1 considerably, and therefore staff intends to conduct the analysis for Module 1 in-house. Staff reserves, however, the right to conduct a separate procurement process to hire an expert consultant if needed in the near future to ensure that the data analysis for Module 1 would be conducted thoroughly and on time for the SOx RECLAIM rule development process.

• Module 2 - Refinery Fuel Gas Treatment and Sulfur Recovery/Tail Gas Units

Module 2 includes an engineering evaluation and cost analysis assessment for a total of up to $124,000 for SOx reducing technologies used for refinery fuel gas treatment and sulfur recovery/tail gas treatment units.

Module 2 requires the contractor to visit each refinery to collect information on the current fuel gas treatment and sulfur recovery/tail gas units at each refinery, and assess site specific conditions. The contractor shall evaluate the existing commercially viable control technologies starting with the most effective control technology first, and make recommendations to the AQMD on at least two most effective control technologies for the refinery fuel gas treatment, and two for the sulfur recovery/tail gas treatment units, that could potentially be used to achieve additional emission reductions . The contractor shall estimate the emission reductions that could be achieved for the refinery fuel gas treatment system and the sulfur recovery/tail gas treatment system, the multimedia pollutant impacts (e.g. water, waste), and energy impacts of the technologies, and the associated cost effectiveness associated with the control technology.

There were two contracting firms that submitted bids for Module 2: ETS Inc. and ERS. The average technical scores from the four evaluation panel members awarded to ETS Inc. and ERS were 58 and 41. Only ETS, Inc. passed the required minimum technical criteria. Therefore, staff is recommending that ETS, Inc with a total score of 98 be awarded the contract for Module 2 at a fixed-price cost of $123,933.

• Module 3 - Wet/Dry Scrubbing Technology

Module 3 includes an engineering evaluation and cost analysis assessment for wet/dry scrubbers for a total of up to $200,000 for 5 sub-modules. The maximum budget is $133,000 for sub-module A, $14,000 for sub-module B, $24,000 for sub-module C, $14,000 for sub-module D, and $15,000 for sub-module E.

Module 3 requires the contractor(s) to visit each facility to gather site specific information and to conduct site-specific feasibility assessment analysis. The contractor(s) shall evaluate the existing commercially viable control technologies, starting with the most effective control technology, and make recommendations to the AQMD on various technologies that could potentially be used to achieve additional emission reductions, on various concentration targets that could be achieved with each technology, the estimated emission reductions, the multimedia pollutant impacts, energy impacts of the technologies, and the associated cost effectiveness associated with the control technology.

Sub-Module A - Wet/Dry Scrubbing Technology for Refinery Fluid Catalytic Cracking Units, Refinery Boilers/Heaters, and Refinery Sulfur Recovery Units and Tail Gas Treatment Processes
Five contracting firms submitted bids for Sub-Module A: CS2, ETS, ERS, Nexidea, and Norton Engineering. The average technical scores awarded to CS2, ETS, ERS, Nexidea, and Norton Engineering was 49, 59, 41, 56 and 59, respectively. Among the five contracting firms, ETS, Nexidea and Norton Engineering passed the minimum technical criteria. Nexidea provided bids only for SRUs/tail gas, less than what is required under Sub-Module A; and the proposed costs for Norton Engineering exceeded the maximum allowable costs for Sub-Module A. Therefore, staff is recommending that ETS, Inc. with a total score of 99 be awarded the contract for Sub-Module A at a fixed-cost of $130,107.

Sub-Module B - Wet/Dry Scrubbing Technology for Coke Calciner
Four contracting firms submitted bids for Sub-Module B: CS2, ETS, Nexidea, and Norton Engineering. The average technical scores awarded to CS2, ETS, Nexidea, and Norton Engineering was 48, 55, 57 and 57, respectively. CS2 and ETS scores were below 56 and Norton Engineering proposed costs were higher than the maximum allowable limit therefore they were not graded further. Staff is recommending that the contract for Sub-Module B be awarded to Nexidea with a total score of 92 and a fixed-price cost of $14,000.
 

Sub-Module C - Wet/Dry Scrubbing Technology for Sulfuric Acid Manufacturing Process
Four contracting firms submitted bids for Sub-Module C: CS2, ETS, ERS and Nexidea. The average technical scores awarded to CS2, ETS, ERS and Nexidea were 51, 55, 41 and 57, respectively. Only Nexidea passed the technical criteria and is proposed to be awarded a contract for Sub-Module C with a total score of 92 and a fixed-price cost of $13,910.
 

Sub-Module D - Wet/Dry Scrubbing Technology for Glass Manufacturing Plant
Three contracting firms submitted bids for Sub-Module D: CS2, ETS and Nexidea. The average technical scores awarded to CS2, ETS and Nexidea was 48, 59 and 54, respectively. Only ETS passed the technical criteria and is proposed to be awarded a contract for Sub-Module D at a fixed-price cost of $13,910 and a total score of 99.
 

Sub-Module E - Wet/Dry Scrubbing Technology for Cement Manufacturing Plant
Three contracting firms submitted bids for Sub-Module E: CS2, ETS and Nexidea. The average technical scores awarded to CS2, ETS and Nexidea was 48, 59 and 54, respectively. Only ETS passed the technical criteria and is proposed to be awarded a contract for Sub-Module E at a fixed-price cost of $13,910 and a total score of 99.
 

Benefits to AQMD
The project would assist staff in identifying Best Available Retrofit Control Technologies (BARCT) to be implemented within the 2011-2014 time frame to help the Basin attain the PM2.5 ambient air quality standards.
 

Resource Impacts
Funds for this contract will be recovered from the affected industries based on the latest amendments to Regulation III in 2008.
 

ATTACHMENT A

LIST OF CONSULTANTS & SCORES
 

TABLE A-1
LIST OF CONSULTANTS

(Total 18 Consultants Contacted, 7 Proposals Submitted, and 6 Proposals Are Accepted for Further Evaluation)

TABLE A-2
TECHNICAL SCORES

TABLE A-3
SCORES FOR PROPOSED COSTS

TABLE A-4
ADDITIONAL SCORES

ATTACHMENT B

SCAQMD FORM USED FOR EVALUATION OF TECHNICAL CRITERIA

SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
PROPOSAL EVALUATION & CONTRACTOR SELECTION PROCESS
FOR REQUEST FOR PROPOSAL RFP #P2009-01

Evaluation of Emission Control Technologies
for Further Reducing Sulfur Oxides Emissions from Stationary Sources
in the South Coast Air Quality Management District’s RECLAIM Program
 

EVALUATION SCORING PROCESS

The following evaluation scoring process will be used to evaluate the bidders.

STEP 1 - TECHNICAL CRITERIA EVALUATED BY SELECTED PANEL MEMBERS

1. The selected panel members will evaluate the technical criteria for each module (or submodule) using the attached evaluation sheet.

2. For technical criteria, the following scoring system from 0 - 10 will be used:

Excellent = 10
Above Average = 8 - 9
Average = 5 - 7
Below Average = 0 - 4

3. For technical criteria, a weighting factor of 1 will be used for “Understanding the Scope of Work, and a weighting factor of 3 will be used for “Past Experience on Similar Projects” and for “Technical/Management Approach & Schedule”. A proposal must receive a total of 56 out of 70 points to pass the technical criteria. The proposal which does not pass the technical criteria will not be scored further.

Example
Understanding the Scope of Work = Excellent = 10 x 1 = 10
Past Experience on Similar Projects = Above Average = 8 x 3 = 24
Technical/Management Approach & Schedule = Above Average = 9 x 3 = 27
Total Score = 10 + 24 + 27 = 61 > 56 points → Pass Technical Criteria

4. Please submit your evaluations to Minh Pham, mpham@aqmd.gov, by 1:00 p.m. Wednesday, August 20, 2008.

STEP 2 - PROJECT COSTS DETERMINED BY AQMD STAFF
The panel members do not need to provide scores for cost. For each module (or submodule), the lowest cost proposal will be awarded a maximum point of 30. Other project cost proposals will be awarded points proportional to the lowest cost proposal. Staff will perform this mathematical calculation and the score will be added to the technical score provided by the evaluation panel.

Example
Lowest cost proposal for Module 1 = $30,000 = 30 points
Second lowest cost proposal for Module 1 = $35,000 = 30x(30K/35K)= 26 points
 

STEP 3 - ADDITIONAL POINTS DETERMINED BY AQMD STAFF
The panel members do not need to provide scores for additional points. Staff will give additional points, not exceeding 15 points, for small business, DVBE, use of small business or DVBE subcontractors, low-emission vehicle business, local business, and off-peak hours delivery business if justifiable.
 

STEP 4 – FINAL SCORES/RANKING AND MEETING
The panel members do not need to determine final scores and ranking. Staff will add the technical scores provided by the panel members to the scores for project costs and additional scores for small business, local business etc and rank the bidders for each module (or submodule.)

The final results will be presented to the panel members in the following meeting:

August 21, 2008
3:30 p.m.
SCAQMD Room 2B

Module 1: FCCU DeSOx Additives

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4

Module 2: Refinery SRUs & Fuel Gas Systems

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4

Module 3, SubModule A: Wet/Dry Scrubbers for FCCUs, Claus Units/Tail Gas, Boilers/Heaters

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4

Module 3, SubModule B: Wet/Dry Scrubbers for Coke Calciners

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4
 

Module 3, SubModule C: Wet/Dry Scrubbers for Sulfuric Acid Mfg Plants

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4
 

Module 3, SubModule D: Wet/Dry Scrubbers for Container Glass Acid Mfg Plants

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4
 

Module 3, SubModule E: Wet/Dry Scrubbers for Cement Plants

Score: Excellent = 10, Above Average = 8-9, Average = 5-7, Below Average = 0-4