Exhibit 1 - Agenda Information Sheet - Amendment 1
City of Denton
__________________________________________________________________________________
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
DCM: David Gaines
DATE: August 16, 2022
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the approval of Change Order No. 1 to the Design-Build Agreement between the City of Denton
and Beta Engineering, LLC, for the design and construction of the Hickory Gas Insulated Substation for
Denton Municipal Electric; providing for the expenditure of funds therefor; and providing an effective date
(RFQ 7670 – Change Order No. 1 in the not-to-exceed amount of $811,000.00, for a total contract award
aggregated to $41,280,000.00). The Public Utilities Board recommends approval (5 - 0).
INFORMATION/BACKGROUND
During the design phase for the Hickory GIS Substation project, Beta Engineering and Denton Municipal
Electric determined it necessary to amend the existing contract (7670) to ensure the project is completed on
time and to ensure the successful operation of this facility for its service life.
As Beta Engineering initiated substation transformer procurement, they were notified by Waukesha that the
lead time for delivery increased from 6 months to over two years and would significantly delay the project.
To ensure the project schedule, DME and Beta Engineering propose utilizing two existing, already
procured, spare substation transformers owned by DME for the Hickory GIS Substation. These transformers
are located at McKinney Substation within the city limits but will require disassembly and relocation to the
Hickory GIS Substation site. Due to this scope change, Beta Engineering is entitled to a change order
according to Article V of the Design-Build Agreement for costs to move DME’s two existing substation
transformers to the Hickory GIS Substation project site in an amount of $372,000.00. These costs are shown
in items A1, B1, and B3 in Figure 1. Beta will continue to purchase two new substation transformers from
Waukesha to replace the DME units at McKinney Substation.
Secondly, the Design-Build Agreement requires Beta Engineering to provide DME a credit for changes in
copper material if it is less than 95% of the Reference Price for this commodity agreed to in the contract.
Beta determined that Reference Pricing for underground copper transmission cable was 94.2% of the agreed
amount and results in a credit of $9,000. This cost is shown in item A2 in Figure 1.
The third change is the cost to modify relay and control drawings after the designs were complete. The
changes are estimated to be 182 labor hours for a total cost of $22,000. This cost is shown in item A3 in
Figure 1.
Lastly, to guarantee the gas insulated equipment inside the substation operates below its maximum design
temperature, DME and Beta Engineering have determined air conditioning is needed to maintain a constant
temperature to ensure the gas insulated equipment operates safely and effectively for the life of this
equipment. Due to this scope change, Beta engineering is entitled to a change order according to Article V
of the Design-Build Agreement for design and procurement costs in the amount of $426,000. This cost is
shown in item B4 in Figure 1.
DME’s owner engineer Black and Veatch has reviewed these changes and agrees with the change order
costs.
$426,000 of this Change Order is attributable to the transmission category and will ultimately be recovered
through the Public Utility Commission transmission cost of service program (TCOS). The proposed Change
Order will not increase CIP costs.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On December 14, 2021, City Council approved a contract with Beta Engineering, LLC, in the not-to-exceed
amount of $40,469,000.00 (Ordinance 21-2701).
On August 8, 2022, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award Change Order 1 with Beta Engineering, LLC, for the design and construction of the Hickory Gas
Insulated Substation (GIS) for Denton Municipal Electric, in a not-to-exceed amount of $811,000, for a
total amended contract amount of $41,280,000.
PRINCIPAL PLACE OF BUSINESS
Beta Engineering, LLC
Pineville, LA
ESTIMATED SCHEDULE
Project designs will begin (or continue) immediately upon approval by the City Council and will proceed
in accordance with project needs.
FISCAL INFORMATION
These services will be funded from account 603234500. Purchase Order #198980 will be revised to include
the first change order amount of $811,000. The total amount of this contract is $41,280,000.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Original Ordinance and Design-Build Agreement
Exhibit 3: LLC Members
Exhibit 4: Ordinance and Change Order 1
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Mark Zimmerer, 940-349-7169.
Legal point of contact: Marcella Lunn at 940-349-8333.