HomeMy WebLinkAboutRes2013-038 Sponsored by: Hunt
CITY OF SEWARD, ALASKA
RESOLUTION 2013 -038
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO MODIFY THE
PURCHASE AGREEMENT WITH R & M STEEL CO. FOR THE
PURCHASE AND SHIPMENT OF A STEEL BUILDING KIT AUTHORIZED
UNDER RESOLUTION 2013 -018 TO PERMIT THE SUBSTITUTION OF
INSULATED WALL AND ROOF PANELS FOR THE BATT INSULATION
AND SIDING ORIGINALLY SUPPLIED FOR A TOTAL AMOUNT NOT TO
EXCEED $121,600
WHEREAS, the Council approved Resolution 2013 -018 which authorized the City Manager
to enter into a purchase agreement with R &M Steel for the purchase of a steel building kit; and
WHEREAS, R &M Steel does not manufacture insulated wall and roof panels and, therefore
did not initially offer them as an option; and
WHEREAS, these insulated walls and panels are a specialized product, made to fit the
structures produced by R &M Steel; and
item WHEREAS, the steel building kit supplied by R &M Steel has, as a standard feature, batt
insulation, which requires four layers of material to function, that is: an outer steel skin, a moisture
barrier, the batt insulation and an inner steel skin, each of which requires about the same labor to
install as does a single set of insulated panels; and
WHEREAS, each of these items will have to be installed separately and sequentially which
will account for a substantial portion of the erection costs which could be saved by the use of
insulated panels; and
WHEREAS, several contractors have reported anecdotal evidence of "hot spots" and poor
energy conservation performance with batt insulation; and
WHEREAS, spray urethane foam insulation was estimated, by a local contractor at over
$180,000 plus the cost of erecting the inner and outer skins; and
WHEREAS, the net cost change to upgrade the building walls and roof from batt insulation, with its
attendant inner and outer skins and vapor barriers is $121, 600.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
CITY OF SEWARD, ALASKA
RESOLUTION 2013 -038
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Section 1. The City Council finds it is in the best interest of the public to modify the purchase
agreement with R & M Steel Co. under SCC 6.10.130 by incorporating the recitals above in the
Whereas clauses including specifically the finding that these insulating articles are being procured at
a lower cost without competitive bidding.
Section 2. The City Manager is authorized to modify the purchase agreement with R & M
Steel Co. for the purchase and shipment of a steel building kit authorized under Resolution 2013 -018
to increase the amount of the contract to cover the substitution of insulated wall and roof panels for
the batt insulation and siding originally supplied, said increase not to exceed $121,600. from account
505 -5052 -5930.
Section 3. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 28
day of May, 2013.
THE CITY OF SEWARD, ALASKA
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David Seaward, Mayor
AYES: Valdatta, Bardarson, Keil, Shafer, Casagranda, Terry, Seaward
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
J Kinney, CMC
City Clerk
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Agenda Statement
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Meeting Date: 28 May 2013 �� C... �
To: City Council C5aroi4
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Through: City Manager Jim Hunt
From: John Foutz, Electric Department Manager
Agenda Item: Modify the purchase agreement with R &M Steel for insulated wall and
roof panels
BACKGROUND & JUSTIFICATION:
On March 11, 2013, the Council approved Resolution 2013 -018 which authorized the City
Manager to enter into a purchase agreement with R &M Steel of Caldwell Idaho for the purchase
of a steel building kit. Included in that kit was insulation tailored to provide excellent energy
efficiency, with R- values of 25 in the walls and 38 in the roof.
Once the building was ordered, information began to come in from several contractors which
indicated that the batt insulation quoted for this building might not be the best choice. It was
proposed that sprayed on urethane insulation might be far more effective because, by virtue of its
installation process, it gives uniform insulation with no "hot spots" or variations in coverage.
Upon investigation we found that, while that is surely true, the cost of that proposition was such
that it did not lend itself to this project. John Martinez, of Precision Construction, gave us a
budgetary quote of $181,000, just to apply the foam. Fire code requires that spray on insulation
be entirely encapsulated in a covering having a 2 hour fire rating, such as %z thick sheetrock. The
addition of the sheetrock drives the cost of this option well over $200K.
Another contractor suggested that, given the cost of labor on a Little Davis Bacon project, we
might want to investigate foam cored panels, such as were used on the generator building in
2009. The Electric Department then made inquiries of R &M Steel about the availability of those
foam core panels. We were told that, since R &M does not manufacture those panels that they do
not offer them unless they are specifically asked for. As none of the other suppliers who provided
quotes on this building offered foam cored panels, it would appear to be the usual practice to
supply batt insulation unless requested otherwise.
We requested quotes to substitute foam cored panels for the batt insulation, the inner and outer
skins and the vapor barrier. Given a credit of $21,903 for the elimination of the batt insulation,
the inner and outer skins and the vapor barrier, the cost to upgrade to foam cored panels was
$121,900.
The procedure to install the foam panels is the same as the procedure for installing each of the
four other features of the batt insulation system. Thus is should be possible to save approximately
75% of the cost of the labor to go from a raw steel frame to a finished building. Furthermore,
energy savings in the future should be significant since the hot spots and potential drafts of the
batt system are eliminated in the panel system. It is thought that the resultant savings, in both
energy and labor, will more than justify the increased initial cost of the panels.
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Seward City Code §6.10.130 exempts specialized products from the competitive procurement
process, where it is in the public interest to do so. These insulated walls and panels are a
specialized product, made to fit the structures produced by R &M Steel and could not be procured
at a lower price using competitive bidding. Since their dimensional information is proprietary, it
is not available for us. Therefore, it is not in the public interest to purchase them by competitive
bid.
INTENT: To authorize the City Manager to modify the purchase agreement with R &M Steel of
Caldwell Idaho for the purchase and shipment of a steel building kit authorized under resolution
2013 -018 to permit the substitution of insulated wall and roof panels for the batt insulation and
siding originally supplied for a total amount not to exceed $121,600. from account 505 -5052-
5930.
CONSISTENCY CHECKLIST: Yes No N/A
1. Comprehensive Plan (1.3, 3.7.3.1, 3.7.3.2): X
2. Strategic Plan (document source here): X
3. Other (list): X
FISCAL NOTE: The total additional cost of this substitute purchase is an amount not to exceed
$121,600, which will come from the AEA grant already accepted. The original purchase of the
building from R &M Steel was not competitively bid as required by the City Code, for purchase of
items in excess of $50,000. Council did, however, authorize purchase of the building without
competitive bids. The granting agency has stated that the City's purchasing Code must be followed
in order for the project costs to be grant eligible. It is uncertain whether failure to competitively bid
this project is considered to have been consistent with the City Code, although the Council's
approval is assumed by the electric department, to suffice for purposes of receiving granting agency
authorization to purchase. The purchase of the replacement insulation panels was not competitively
bid and also exceeds the $50,000 threshold over which items must be competitively bid, unless a
public interest finding is accepted by the City Council.
Approved by Finance Department: Jety
ATTORNEY REVIEW: Yes No X
RECOMMENDATION:
Authorize the City Manager to modify the purchase agreement with R &M Steel of Caldwell
Idaho for the purchase and shipment of a steel building kit authorized under resolution 2013 -018
to permit the substitution of insulated wall and roof panels for the batt insulation and siding
originally supplied for a total amount not to exceed $121,600. from account 505 -5052 -5930.
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