04-18-2014 BPU RPT 08 - Laserfiche WebLink

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1111 A E R R, r, 7 RIVERSIDE PUBLIC UTILITIES P U S L I C ij,':IATYES Board Memorandum The issue for Board of Public Utilities consideration is ratification of Purchase Order No. 143803 in the amount of $250,000 for emergency gas turbine combustor repairs with GE Packaged Power Inc. in accordance with Article XII, Section 1202 (b) of the Riverside City Charter. That the Board of Public Utilities ratify the issuance of Purchase Order No,143803 in the amount of $250,000 for emergency gas turbine combustor repairs with GE Packaged Power Inc., of Houston, Texas, in accordance with Article X11., Section 1202(b) of the Riverside City Charter. BACKGROUND: On March 4, 2014, Riverside Public Utilities IRPUI staff contracted with TransCanada Turbines to perform a routine maintenance inspect tion of the gas turbine at the Clearwater Cogeneration Power Plant (Clearwater). During the inspection, significant cracks were detected on the combustor. Combustor cracks, while serious, are a common problem with turbines that have a run profile that includes frequent start, and stop cycles. As a precautionary measure, staff contracted with General Electric, Inc. (GE), the original equipment manufacturer (OEM), to perform a more thorough assessment of the combustor and the downstream equipment. The GE inspection revealed damage to not only the combustor, but also indicated early signs of minor turbine damage resulting from material that lib erated from the combustor. Based on GE's findings, Clearwater was placed in a "non-operational" status to prevent more downstream damage and potentially more costly repairs. GE, being the OEM, maintains the proprietary knowledge for, the gas turbine engine and combustor design at Clearwater. Staff obtained and evaluated a combustor exchange proposal from GE and determined the price to be fair and reasonable. Section 201 (c) of the City's Purchasing Resolution No. 22576 provides that competitive procurement may be waived if the Procurement can only be obtained from a sole source or timely from a single source and the Purchasing Services Manager is satisfied that the best price, terms and conditions for the Procurement thereof have been negotiated. The Purchasing Services Manager determined that the parts and set-vices for this repair could only be obtained through GE and formal competitive bidding was not required,