Toronto Biosolids Beneficial Use Program Update -

Award of Design Build Contracts for Biosolids Truck Loading

and Odour Control Facilities and Plant Wide Heating System

at Ashbridges Bay Treatment Plant;

Amendment of Agreement with Terratec Environmental Ltd.

The Works Committee recommends the adoption of the following joint report (July 6, 1999) from the Commissioner of Works and Emergency Services and the Chief Financial Officer and Treasurer, subject to amending Recommendation No. (4) to read as follows:

"(4)staff be authorized to continue negotiations with Toronto Hydro Energy Services to address electrical and thermal power supply, and to report back on progress at the next meeting of the Works Committee, scheduled to be held on September 8, 1999.":

Purpose:

The purpose of this report is to provide an update on the implementation of the Toronto Biosolids Beneficial Use Program, to advise the Committee of the results of the Request for Proposals (RFP) issued for the Biosolids Truck Loading and Odour Control Facilities (Loading) and the Plant Wide Heating System (Heating), to request authority to enter into Agreement with the successful respondents, and to amend the existing Agreement related to biosolids land application demonstration.

Funding Sources, Financial Implications and Impact Statement:

Funding in the amount of $83,758,000.00 is available in the approved 1999-2003 Water and Wastewater Services Capital Works Program Account Nos. 2200112 and 2200110, Ashbridges Bay Treatment Plant (formerly Main Treatment Plant), and Account No. 22000034, Equipment Replacement.

Recommendations:

It is recommended that:

(1)authority be granted to commence negotiations with and, if successfully concluded, enter into an Agreement with ICON Systems Limited (ICON) for the design, construction and commissioning of a biosolids truck loading and odour control facility in accordance with ICON's proposal dated June 14, 1999, at a lump sum price of $44,332,992.97, including contingencies and full GST, on the terms and conditions as set out in this report, RFP No. 9155-99-01548, and otherwise on such terms and conditions satisfactory to the Commissioner of Works and Emergency Services and in a form satisfactory to the City Solicitor;

(2)authority be granted to commence negotiations with and, if successfully concluded, enter into an Agreement with Thorburn Penny Limited (TPL) for the design, construction and commissioning of a plant wide heating system in accordance with TPL's proposal dated June 16, 1999, at a lump sum price of $17,847,719.00, including contingencies and full GST, on the terms and conditions as set out in this report, RFP No. 9155-99-01547, and otherwise on such terms and conditions satisfactory to the Commissioner of Works and Emergency Services and in a form satisfactory to the City Solicitor;

(3)authority be granted to amend the existing Agreement with Terratec Environmental Ltd. for biosolids land application demonstration to include increased quantities of the Ashbridges Bay Treatment Plant biosolids, in order to accommodate execution of the biosolids design build projects on terms and conditions described further in this report and otherwise on such terms and conditions satisfactory to the Commissioner of Works and Emergency Services and in a form satisfactory to the City Solicitor; and

(4)staff be authorized to continue negotiations with Toronto Hydro Energy Services to address alternative thermal power supply.

Council Reference/Background/History:

On September 24, 1997, the former Metropolitan Toronto Council adopted Clause No. 8 of Report No. 12 of The Environment and Public Space Committee, titled "Main Treatment Plant Environmental Assessment Implementation Plan", which endorsed the conclusions of the Main Treatment Plant Environmental Assessment, including the phased implementation of Biosolids Beneficial Use following the completion of four demonstration programs.

In January 1998, the Works and Utilities Committee requested the Commissioner of Works and Emergency Services to report on the feasibility of accelerating the shutdown of incineration at the Plant. The Plant is now known as the Ashbridges Bay Treatment Plant (ABTP) as a result of the MTP EA Mediation Agreement approved by Council at its meeting of June 9, 10, and 11, 1999.

By adoption of Clause No. 2 of Report No. 6 of The Works and Utilities Committee, at its meeting of July 8, 9, and 10, 1998, City Council authorized the Commissioner of Works and Emergency Services to establish the Biosolids Multi-Stakeholder Committee (BMSC) and Independent Review Committee (IRC), retain consultants, and request proposals to allow for the shutdown of sewage sludge incinerators at the Ashbridges Bay Treatment Plant within a three-year period. This initiative is now known as the Toronto Biosolids Beneficial Use Program.

At its meeting of July 28, 1998, City Council adopted Clause No. 5 of Report No. 7 of The Works and Utilities Committee, which contained an accelerated timeline developed for planning purposes by the Committee for the initial implementation of the Biosolids Beneficial Use Program. Subsequently, with input from the BMSC, an aggressive timeline was set with the target date of December 31, 2000, for the end of sludge incineration at the Ashbridges Bay Treatment Plant.

By adoption of clauses embodied in Report No. 5 of The Strategic Policies and Priorities Committee at its meeting of March 2, 3, and 4, 1999, City Council authorized staff to negotiate Agreements for the beneficial use of the City's biosolids with Terratec Environmental Ltd. (Terratec) and USF Canada Inc. (USF).

The adoption of the above-noted report also authorized the use of a Request for Qualifications (RFQ) followed by a Request for Proposals (RFP) as a methodology for the selection of firms to undertake design/build contracts for the necessary biosolids truck loading and odour control facilities and a plant wide heating system, as well as authorized the shortlisting of respondents to the Request for Qualifications to receive the RFP.

Preliminary cost estimates of the design/build projects for the Toronto Biosolids Beneficial Use Program were also included in the adopted report, and corresponding expenditure was provided in the 1999-2003 WPC Capital Works Program.

Comments and/or Discussion and/or Justification:

In order to support the beneficial use contracts described above, and to allow the shut down of incinerators, it is necessary to implement modifications to the ABTP as part of the Biosolids Beneficial Use Program. These modifications will replace some of the services currently linked to the incineration process. The required modifications are:

-the installation of a new biosolids loading and storage facilities to allow for unrestricted removal of biosolids from the plant by the land application contractor(s);

-the installation of hot water boilers and related piping to replace the heat generation currently provided by incineration; and,

-provision of new odour control facilities to treat odourous air from the dewatering building, the existing loading facility, the biosolids storage facility, and the new loading facility to replace the odour control currently provided by incineration.

The time available to design and construct these facilities is very short, and the design/build delivery method will be utilized to ensure they are operational prior to December 31, 2000. The Purchasing and Materials Management Division of the Finance Department assisted the staff of the Water Pollution Control Section and its consultant in the development and issuing of the RFQ and RFP. The three projects were bundled into two calls: (1) for the design and construction of the biosolids loading facility and odour control facility, and (2) for the design and construction of plant heating facilities.

The process for selection of design/build teams was developed by the City's biosolids consultants, R.V. Anderson Associates Limited and Brown and Caldwell. The method used was adopted from the Canadian Construction Association for design/build projects. This procurement strategy was consistent with that developed by the BMSC and IRC for the biosolids beneficial use projects. The progress of these design/build projects was reviewed on a regular basis by the public participating in the ABTP Neighbourhood Liaison Committee.

The key milestone dates during the design/build procurement process were;

Advertise for Letters of InterestJanuary 26, 1999

Issue Request for Qualifications (RFQ)February 12, 1999

Receive Statements of Qualification March 11, 1999

Short list respondentsMarch 29, 1999

Issue Request for Proposal (RFP) to Short listed FirmsApril 6 (loading) and 14 (heating), 1999

Receive ProposalsJune 14 (loading) and 16 (heating), 1999

Issue requests for supplemental informationJune 22, 25, 27, 1999

Respondent interviewsJune 28, 29 and 30, 1999

Finalize evaluation July 12, 1999

Recommend Award to Works CommitteeJuly 14, 1999

RFQ Responses:

Statements of qualifications were received from six firms for the Loading project and six firms for the Heating project. Following a technical review of their experience and financial capabilities, the following firms where shortlisted and received RFP's:

Loading ProjectHeating Project

CH2M Waterworks/ComstockAGRA Monenco Inc.

ICON Systems LimitedComstock Canada

Granville ConstructorsICON Systems Limited

USF Canada / AsdorThorburn Penny Limited

In order to ensure that the proposals received would meet the needs of the City and could be successfully integrated into the ongoing operation of the ABTP, a 20 percent design of the required facilities was undertaken by the City's biosolids consultants prior to the development of the RFP. The 20 percent design was developed through extensive consideration of the reliability, flexibility and functionality required of these facilities to support the Biosolids Beneficial Use Program. The constraints of the existing ABTP infrastructure were also examined and many different approaches were considered. The resulting 20 percent design formed the basis of the RFP and the base bid for which all the shortlisted firms would be invited to submit proposals. Respondents were also allowed to submit one alternate design proposal which could be based on a different design concept while maintaining the same required functionality.

Significant attention was paid to the area of odour control. Samples were taken of odourous air from the existing dewatering and biosolids loading facilities and analyzed for the odourous compounds characteristic of biosolids. These samples and the air flow requirements needed to prevent release of odours from the existing and new biosolids facilities were used to develop the 20 percent design. The 20 percent design and RFP called for a three-stage odour control system, consisting of two stages of wet scrubbers followed by a biofilter. Preliminary odour modeling work shows that there will be no discernable odour from the new odour control facilities at the ABTP property line. The RFP required that the contractor undertake a significant series of odour removal tests prior to full operation of the new facilities to ensure that the odour control system is effective.

During the development of the 20 percent design and RFP, several presentations were made at the ABTP Neighborhood Liaison Committee meetings to provide for public input.

Proposals were received from the following firms:

Loading ProjectHeating Project

ICON Systems Limited (base and alternate bids)AGRA Monenco Inc. (base bid only)

Granville Constructors (base bid only)Comstock Canada (base bid only)

USF Canada/Asdor (base and alternate bids)ICON Systems Limited (base and alternate bids)

Thorburn Penny Limited (base bid only)

In order to ensure equitable treatment of all proponents, a formal evaluation procedure with established criteria and scoring methods was developed and provided to the Purchasing and Materials Management Division prior to the receipt of the proposals. After completing an initial review of required financial instrument which had to be included in the proposal, and a review of the companies' financial stability, the proposals were evaluated by a team of consultants and staff based on the criteria contained in Appendix A (attached).

Following the evaluation, it was determined that the proposals with the highest scores were provided by ICON Systems Limited (base bid) for the Loading project with a total cost of $44,332,992.97, and by Thorburn Penny Limited for the Heating project with a total cost of $17,847,719.00, including both contingencies and full GST.

The total cost of the three projects related to the ABTP Biosolids Beneficial Use Program, namely, the sludge pelletization facility (already awarded to USF Canada), sludge loading and odour control facility, and plant-wide heating facility, excluding contingencies, but including the related cost of engineering site services and administration during their execution, is within the approved budget.

Accordingly, the program can start this year as planned.

The scope of work related to the proposed new Biosolids Loading Facility includes demolition of three existing sludge incinerators to make room for installation of the three sludge storage silos. During the construction period, after decommissioning of the three incinerators and prior to commissioning of the Sludge Pelletizer and the new Biosolids Loading Facility, the ABTP sludge disposal capabilities will be reduced by 50 percent. To provide for the continuous and reliable disposal of the sludges processed by the plant (53,000 dry tonnes per year), it is recommended that the present Agreement between the City and Terratec Environmental Ltd. be amended. The amended Agreement would include an increased quantity of biosolids to be land applied under Terratec's ongoing demonstration project beginning in August 1999 and continuing until commencement of their new contract, previously approved by Council, in 2001.

The unit costs of the biosolids land application services under the present Agreement with Terratec are $85.00 per dry tonne for up to 10,000 dry tonnes per year, and $124.00 per dry tonne for any additional tonnage over and above the 10,000, for a total quantity not to exceed 17,000 dry tonnes per year.

Under the amended Agreement, Terratec would be taking up to 25,000 dry tonnes of biosolids per year from the plant, including the basic 10,000 tonnes at a unit cost of $85.00 per dry tonne and up to 15,000 dry tonnes of additional biosolids at a cost of $121.67 per dry tonne, both including all applicable taxes.

Recently staff received a written proposal from Toronto Hydro Energy Services Inc. (THES) to provide lower cost electrical and thermal energy to ABTP, which are made possible through cogeneration. Toronto Hydro is a taxable, incorporated business and the City is its largest customer. While we are reviewing the proposal at this time, there is a need to make certain decisions in order to meet Council's timeline for the elimination of incineration.

Toronto Hydro Energy Services Inc. have indicated that, notwithstanding our desire to award the design/build contracts at this time, they can still work with us to address our energy needs even after completion of the construction of the hot water boilers contained in this RFP award.

We will continue to negotiate with Toronto Hydro for the provision of electrical and/or thermal energy through cogeneration.

This report is subject to a favourable report from the Manager, Fair Wage and Labour Trades Office.

Conclusions:

It is recommended that the design/build contract for the ABTP Biosolids Loading and Odour Control Facilities be awarded to ICON Systems Ltd. at a cost of $44,332.992.97, including $2,250,000.00 for contingencies, and the Plant Wide Heating contract to Thorburn Penny Limited at a cost of $17,847,719.00, including $700,000.00 for contingencies.

It is also recommended that the existing Agreement between the City and Terratec Environmental Ltd. for biosolids land application demonstration be amended to include an additional amount of the ABTP processed biosolids, at a unit cost of $85.00 per dry tonne for the basic $10,000 dry tonnes per year and $121.67 per dry tonne for any additional tonne up to 15,000 dry tonnes per year with a total not to exceed 25,000 dry tonnes per year starting in August of this year and until the new Agreement with Terratec comes into force in 2001.

Contact Name: Contact Name:

R.M. Pickett, P.Eng.Lou Pagano

DirectorDirector , Purchasing and Materials Management Div.

Water Pollution ControlFinance Department

Telephone 392-8234Telephone 392-7311

Appendix "A"

(1)Experience and Capabilities:-Corporate structure

-Construction capability

-Personnel Qualifications/Experience

-Design/build experience

-Related design experience

-Related construction experience

-References

(2)Design and Permitting:

-Conformance with specifications

-Quality of design (including drawings)

-Reliability

-Equipment selection

-Ease of future expansion

-Systems Operation/Performance

-System Failure Redundancy

-Level of required maintenance

-Materials of construction

-Approach to approvals and permits

-Flexibility and functionality

-Lifecycle costs

(3)Approach and Methodology:

-Organization/coordination/quality control

-Risk assessment for the City

-Quality control in design/construction

-Construction methodology

-Construction control

-Approach to safety issues

-Commissioning of facilities/training

-Environmental protection plan

-Response to draft Form of Contract

(4)Schedule:

-Level of detail

-Manpower allocation

-Critical path/task relationship

-Time to complete

-Realism/flexibility of schedule

-MTP operation issues/interruptions

-Staging for December 31, 2000

A total of 150 points were available for the technical criteria. Respondents were required to achieve a minimum of 100 points to be considered responsive and be considered further. Once the technical evaluation was completed, the final criteria of price was applied.

(5)Price:

The relative weights of technical criteria and price were 75 percent and 25 percent respectively. The firm with the lowest price for each project received 50 points and proportionally lower points were apportioned for higher prices. The technical score and price score was then added together to obtain a total score.