Exhibit 1 - Agenda Information Sheet - Amendment 2City of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
ACM: David Gaines
DATE: October 6, 2020
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the approval of a second amendment to a Professional Services Agreement between the City of
Denton and SGS Engineering, LLC, amending the contract approved by City Council on July 19, 2011, in
the not-to-exceed amount of $1,260,000, amended by amendment 1 approved by City Council, said second
amendment to continue to provide additional services for CIP Projects where structural and electrical
designs, transmission line designs, protection system designs, and other engineering related support is
required; providing for the expenditure of funds therefor; and providing an effective date (File 4755 –
providing for an additional second amendment expenditure amount not-to-exceed $3,500,000 with the total
contract amount not-to-exceed $11,435,000). The Public Utilities Board recommends approval (7 - 0).
INFORMATION/BACKGROUND
Denton Municipal Electric (DME) requires the support of consulting engineers to aid in the production of
engineered drawings for substation and transmission line construction. DME utilizes the services of SGS
Engineering, LLC (SGS) to design structural, electrical, and system protection systems for substations and
transmission lines. In addition, SGS provides assistance in construction inspection services.
DME’s current contract with SGS is not sufficiently funded for all required services for the approved CIP
projects which include substation rating upgrades, relay and RTU upgrades, and design of upgrades and
reconstruction of transmission lines. SGS also provides construction inspection services to assure
transmission lines are built to DME specifications. DME does not currently have technical staff who are
experienced with the required in-house expertise to design and manage the current list of substation and
transmission projects included in our CIP. Using SGS Engineering as a resource is an efficient and
reasonable method for obtaining the temporary and specialized services needed.
DME proposes a second amendment to the existing SGS contract for professional and technical services
needed to complete the tasks. This includes a contingency item to provide funding for unforeseen
miscellaneous support.
The original contract amount was $1,260,000. A first amendment amount of $6,675,000 was approved by
City Council on 08/06/2013. The proposed second amendment adds $3,500,000 to the contract for a total
of $11,435,000.
SGS has successfully provided these services to DME since 1999. SGS has already committed a large
amount of manhours on projects. If a consultant, other than SGS, were to assume the activities listed in
Exhibit 2, the new consultant would require significant time to become familiar with the DME transmission
system and its relay and control schemes. They would also have to verify/review existing concepts and
designs; which would be duplicating the many hours already spent on the listed projects. Extensive staff
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Denton, Texas
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time and resources would be expended to provide support and training to assure the new consultant has a
precise grasp of DME’s procedures and protection philosophies. Unfamiliarity of DME’s protection
schemes could lead to mis-operations and outages.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On July 19, 2011, City Council approved a contract with SGS Engineers, LLC, in the not-to-exceed amount
of $1,260,000 (Ordinance 2011-110).
On August 6, 2013, City Council approved Amendment 2 with SGS Engineers, LLC, in the not-to-exceed
amount of $6,675,000 (Ordinance 2013-191).
On September 28, 2020, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award Amendment No. 2 with SGS Engineers, LLC, to provide services for CIP projects where structural
and electrical designs, transmission line designs, protection system designs, and other engineering related
support is required, in the not-to-exceed amount $3,500,000, for a total amended contract amount of
$11,435,000.
PRINCIPAL PLACE OF BUSINESS
SGS Engineering, LLC
Lubbock, TX
ESTIMATED SCHEDULE OF PROJECT
This project is ongoing.
FISCAL INFORMATION
The majority of the work proposed within the transmission category for CIP projects, and will be recovered
through the Public Utility Commission Transmission Cost of Service program (TCOS). The proposed
amendment will not increase CIP cost. Amounts for all capital projects were included in the approved CIP.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Original Ordinance and Contract
Exhibit 3: Ordinance and Amendment 1
Exhibit 4: Ordinance and Amendment 2
Exhibit 5: Presentation
Exhibit 6: LLC Members
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Jerry Fielder, 940-349-7173.
Legal point of contact: Mack Reinwand at 940-349-8333.