SPECIAL MEETING

September 14, 1983

A Special Meeting of Council was held on September 14, 1983 at 8:30 p.m. with Mayor Carroll presiding. Council members present were Messrs. Richter, Tudor, Boaman, Hardcastle, Christiansen, Weyandt and Mr. Shevock. Mr. Witt was absent.

Contract Award - Superheater Unit #3 - McKee Run Power Plant

Mayor Carroll called the meeting to order and referred to City Manager Bartolotta to introduce the subject of unit #3 superheater contract award.

City Manager Bartolotta referred to the committee action form which outlined an evaluation of the bids for unit #3 superheater. The bids were received on August 15, 1983 in response to an invitation to bid, dated July 13, 1983, for a boiler study report and fabrication and erection of a high temperature superheater and associated supports and spacers. There were three contractors submitting proposals. The bids were as follows:

     1.   Babcox and Wilcox Company            -          $810,110

     2.   Combustion Engineering, Inc.            -          $558,949

     3.   Foster Wheeler Energy Corp.             -          $120,000

Stone and Webster, Engineering Corporation, reviewed the bids, conducted negotiation sessions and recommended that Babcox and Wilcox Company be awarded the contract for the Boiler Study and Fabrication and Delivery to Jobsite.

Based on the review of bids and negotiations by Stone and Webster, the City Manager recommended authorization of the expenditure of $957,000 for a Boiler Study Report, Fabrication, Delivery, Erection, Testing and Engineering of the high temperature superheater.

Mr. Frank Bower of Stone and Webster informed Council that the shortened life of unit #3 superheater was caused by the factors of over-temperature and corrosive deterioration. Due to the extensiveness of the damage and probable complete failure in the near future, Stone and Webster recommended that the unit be replaced involving complete analyzation and redesign.

Bids were solicited from only three firms, those firms being the most qualified in the country and probably throughout the world.

Stone and Webster’s analysis of the bids revealed that the Foster Wheeler bid included only a study of the boiler itself to determine what would be necessary to replace the superheater. Therefore, their bid was very low compared to the others submitted. The bid did not include redesign, manufacturer, fabrication, delivery, or any of the other requirements. They also offered to replace the superheater as a duplicate of the one now installed. Stone and Webster therefore considered the Foster Wheeler bid unresponsive.

Combustion Engineering, Inc. offered several alternatives but would only guarantee the materials and workmanship and not the performance of the boiler. However, their bid was not thrown out until an analysis of the cost was performed.

Mr. Bower stated that Babcox and Wilcox was the only truly responsive bidder. The firm proposed a well conceived computerized study that would formulate a complete redesign of the superheater. They are also willing to provide a guarantee for workmanship, materials and performance. For an extra cost they also offered an extended warranty on the boiler.

Based on Babcox and Wilcox’s age, experience, and submitted price, the quality of their offering, and the preparation that the company made, Mr. Bower stated that it is Stone and Webster’s opinion that Babcox and Wilcox is the only responsive and acceptable bidder. However, at this time, he recommended only those portions of the contract involving the study, design, engineering, computer analysis, furnishing, fabricating and delivery of the equipment be committed. After a design is completed so that those involved will know what they are working with, quotations will be solicited for erection of the equipment.

Mr. Bower informed Council that Stone and Webster will be sending one of their experts to the factory during the computer analysis stage for assurance that all decisions are in the best interest of the City of Dover.

Fielding questions by members of Council concerning design changes in the superheater, Mr. Bower stated that one of the problems with the present installation of unit #3 is that it was probably over-rated. The unit was designed originally to produce approximately 102 megawatts of electric energy. Some time between the construction of the boiler and the final acceptance, the unit was certified for 110 megawatts. This caused extensive wear and tear on the superheater due to overheating and shortened the life of the unit.

After analyzing and comparing each bid item as submitted by the bidders, Mr. Bower stated that the City is getting about a $55,000 lower price from B & W on the bottom line if you compare all items contained in the bid portfolios.

Mr. Darte felt that B & W submitted a responsive bid in that they are taking a systematic approach by test designing the unit so that it is not a trial and error process. Combustion Engineering’s bid proposed a design installed with modification later.

Mr. Richter moved to authorize the City Manager to expend up to $957,000 for a new unit #3 superheater erection and engineering which will proceed in the order of fabrication and engineering with a rebid on erection. The motion was seconded by Mr. Christiansen.

Questioned by Mr. Christiansen, Mr. Bartolotta stated that financing for the new superheater will involve 60% ($575,000) from the Depreciation Fund and the remaining 40% ($382,000) from Operation and Maintenance. Since $300,000 was originally budgeted for the Operation and Maintenance Fund, $82,000 of this amount will be taken from the capital projects which will partially defer some of the planned improvements to the system.

Mr. Hardcastle called for the question on the motion.

By a roll call vote of seven (7) yes, (Mr. Witt absent) the motion for the expenditure on unit #3 superheater was carried.

Meeting Adjourned at 10:00 P.M.

                                                                        WILLIAM H. WILLIS

                                                                        CITY CLERK

All orders, ordinances and resolutions adopted by City Council during their Special meeting of September 14, 1983, are hereby approved.

CRAWFORD J. CARROLL

                                                                        MAYOR

September 19, 1983

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