Chandler, Ariz., explores an alternative delivery method to meet new arsenic rule
Communities and utilities across Arizona are exploring a wide range of creative procurement methods to meet the fast-approaching new arsenic rule of 10 ppb, effective January 2006. Some of these innovative solutions have proven more successful than others.
With the traditional procurement process, a utility secures its equipment design and process approach from a consulting engineer. Once approved, it formally opens the project up for bidding to the contracting community. Considered proposals must meet specification requirements, including supply of the listed equipment.
The city of Chandler, Ariz., took a different approach when it realized its original needs would not be met due to many contractual and economic issues. Instead of leasing equipment as originally planned, the city purchased an arsenic removal system from USFilter.
Request for proposals
Nearly two years ago, Chandler began investigating several treatment options to meet the upcoming arsenic rule. Realizing that many of its 20 active wells might require treatment, the city conducted an extensive piloting study to determine the most effective and economically feasible process. Adsorption treatment was selected, and vendors were then required to pre- qualify based on experience and performance ability.
Last January, the city issued a Request for Proposals to supply packaged arsenic treatment systems for 13 of its well sites. Originally, Chandler wanted an equipment vendor to supply, operate and lease the equipment for five years. Equipment specifications were very detailed. The proposals were to include demobilization costs for equipment removal. The city’s Construction Manager at Risk contractor was to install the equipment.
The city operates many older wells with an uncertain life-span. Coupled with the prospect of new technologies on the horizon, Chandler sought to minimize large capital investment in certain well sites. The objective was clear-cut: meet the new arsenic limit without committing the funds for a long-term solution. At the time, the city did not realize how ambitious this project would be.
Thrown a curve ball
At a pre-bid meeting in January, five companies showed interest in providing the requested arsenic treatment equipment. The city and its consulting engineer answered the suppliers’ questions. Based on the interest shown at the meeting, the city was confident that proposals would favorably address the city’s needs.
However, the opening bids were quite enlightening. Only two suppliers furnished proposals, and both far exceeded all budget estimates. In fact, both proposals contained so many exceptions that the city deemed the submittals non-responsive and rejected them.
With the compliance deadline looming, the city knew it would have to re-group quickly. As leasing was no longer an option, the city turned to its Construction Manager at Risk contractor to supply and install the necessary arsenic treatment equipment. Within days of the initial bid rejection, the contractor sent out a Request for Proposals to purchase treatment equipment. Four equipment vendors submitted proposals within two weeks of the request; the proposal from USFilter was accepted later that same week.
The winning bid
USFilter’s proposal consisted of supplying more than 300 tons of GFH adsorption media and 35 large diameter pressure vessels, including instrumentation and controls as well as backwash storage tanks. The project was broken into three phases, with the first lot to be delivered by late November 2005.
USFilter was awarded the job because the manufacturer could meet the performance requirements; deliver the equipment in a reasonable timeframe; and offer a complete solution-driven approach.
“There are as many procurement strategies as there are treatment strategies for arsenic removal,” stated Darin St. Germain, USFilter vice president of marketing. “And what is a good working solution at one place may not be at another. With Chandler, an open dialogue between the involved parties helped find the balance needed.”
The city is now on a fast track to install the required equipment before the January 2006 deadline. The schedule is tight and will require a dedicated team effort from all participants to make the project successful.
Chandler believes its experience shows that equipment vendors are not particularly supportive of the lease delivery mechanism. This is most likely because all the liability for the equipment and operational performance is transferred to the vendor. Further negotiations with vendors may have led to a successful lease/purchase contract, but as time was of the essence, the city opted for an outright purchase. However, equipment leasing remains advantageous, and Chandler may pursue this option on future projects.
“EPA’s arsenic rule creates unique challenges for utilities,” said Robert Mulvey, P.E., assistant director of Chandler’s municipal utilities department. “The city of Chandler will continue to explore creative compliance approaches such as equipment leasing wherever possible.”