Exhibit 1- Agenda Information SheetCity of Denton
_____________________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: June 27, 2023
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
ratifying the expenditure of funds by the City Manager with Turbo Systems US Inc., for the repair and
replacement of damaged turbos for the Denton Energy Center; providing for the expenditure of funds
therefor; and providing an effective date (File 8199 - awarded to Turbo Systems US Inc., in the not-to-
exceed amount of $1,051,444.84).
STRATEGIC ALIGNMENT
Pursue Organizational Excellence and Collaborative and Respectful Leadership
Foster Economic Opportunity and Affordability
INFORMATION/BACKGROUND
Recently, DME declared an Emergency purchase for repair services and replacement components of turbos
due to subsequent failure caused by foreign object debris (FOD). A FOD was introduced into the exhaust
stream and tried to pass through the turbos causing damage to the turbo nozzle and blades.
During the first occurrence, a complete inspection and root cause analysis was performed determining what
the cause of failure was. The investigation determined that the cylinder head was damaged by a camshaft
component failure. The camshaft failure resulted in damage to the cylinder head and resulted in foreign
material debris being introduced into the exhaust causing the subsequent turbo failure.
The forced outage was minimal as all parts were in inventory on-site to complete the necessary repairs.
Damaged turbo components once removed were sent to the manufacturer for repair & replacement
evaluation.
While the parts were at the manufacturer’s being inspected, we experienced a second head component
failure on another unit, also causing damage to that unit’s turbos. We had one turbo onsite in inventory for
repair and the other at the manufacturer being inspected for refurbishment. In order to promptly return the
unit to service for high energy demands and to fulfill our ERCOT obligations, the purchase of another turbo
was necessary to reduce the outage timeframe from 60 days to 4 days by overnighting a turbo replacement
from the manufacturer.
Turbo Systems Inc. (ABB) is the Original Equipment Manufacturer for the turbocharger as well as the only
authorized sales and service representative of our turbos. Turbo Systems US Inc. was able to provide the
needed turbocharger, delivery, and assembly onsite. The Complete turbo cost is $354,160.13 and
$57,098.80 for the freight cost. The turbocharger order in total was $411,258.93.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Turbos Systems US Inc. will also repair and return the failed turbochargers to the DEC. The total repair
cost was quoted at $694,401.30. After applied discounts, the total is lowered to $640,185.91 for the repairs
to ensure parts are onsite to reduce unit downtime ensuring availability for dispatch. The discount total is
$54,215.39 and repair/delivery time for the first 2 turbos is 7-30 days and the remaining turbos being
repaired and delivered within 30-120 days from the fully accepted order.
Description Estimated Expenditure
Repair Services for 4 Turbos $694,401.30
Complete Replacement Turbo $354,160.13
Freight Cost $57,098.80
Discount Applied ($54,215.39)
Total $1,051,444.48
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On June 26, 2023, this item will be presented to the Public Utilities Board (PUB) for consideration.
RECOMMENDATION
Award an ordinance with Turbo Systems Inc., for repair and replacement of damaged turbos for the Denton
Energy Center, in a Declaration of Emergency one-time purchase not-to-exceed amount of $ 1,051,444.84.
SUSTAINABILITY MEASURES
The engines of the Denton Energy Center cannot operate without a turbo and if not maintained will affect
the unit performance and emissions output due to improper air/fuel mixture therefor, replacement and
making the necessary repairs are critical for having the units available during high market prices to use as
a hedge and to also ensure peak performance and efficiency is maintained.
Currently, the turbos are in great working order and performing as intended however the failures have
triggered a complete investigation looking for a solution to prevent the premature failure of the cylinder
head components and prevent the subsequent turbo failures due to foreign debris being introduced into the
turbo.
We are currently in the process of conducting root cause analysis with the engine manufacturer for the failed
head components as well as with a third-party firm to determine the exact cause of the premature failures.
PRINCIPAL PLACE OF BUSINESS
Turbo Systems Inc.
Cary, North Carolina
ESTIMATED SCHEDULE OF PROJECT
This is a single purchase processed as an Emergency Deceleration to return the units from a forced outage
once all on-hand parts were exhausted. The service took place immediately to repair the unit and the parts
requiring rebuild were sent to the manufacturer. Delivery of the items will occur within 120 days after
receipt of the order.
FISCAL INFORMATION
These items will be funded from Denton Energy Center account 600105.6525.5500. Requisition #159003
has been entered into the system as a single one-time purchase. The budgeted amount for this item is
$1,051,444.48.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Declaration of Emergency
Exhibit 3: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Jason Brown, 940-349-7140.
Legal point of contact: Marcella Lunn at 940-349-8333.