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1. OFFICE OF OPERATIONAL SERVICES
PUBLIC WORKS DEPARTMENT
Commission Meeting
March 20, 2012 @ 6:00 p.m.
Temp. Resolution No. R-5103
Solid Waste Disposal RFP
Approval of Top-Ranked Firm to
Commence Negotiations
2. • Presentation team
• Overview
• Why issue an RFP
• Key RFP elements
• Procurement process
• Recommended next steps
• Process Value
Discussion Topics
3. • Vernon Hargray
– ACM Operational Services
• Thomas Good
– Public Works Director
– Resource Recovery Board – Technical Advisory Committee (RRB/TAC) representative for
over 10 years w/ 4 years as Chair
• Randy Cross
– Procurement Director
– National Institute of Government Procurement
• Sandy Gutner, P. E.
– President Value Added Consulting
– Over 25 years solid waste management w/ 6 years as the RRB and Broward County Solid
Waste Consultant
Presentation Team
4. • City enters into an ILA with Broward County for solid
waste disposal services in 1986 becoming a
“contract community”
• Other Cities executed same ILA creating the
Broward Solid Waste Disposal District (BSWDD)
dependent to the county
• Broward County issued bonds to support the
BSWDD and required all contract communities to
deliver wastes to system to ensure revenue stream
(Flow Control)
Overview
5. Overview (cont.)
• The Interlocal Agreement (ILA) for solid waste
disposal is set to expire in 2013
• City Manager recognized the City had a
window of opportunity to engage in free market
options that could return greater benefits to the
City
• City Commission voted to not sign the ILA on
November 26, 2010 and to proceed with its
own RFP for disposal services
6.
7. Let’s Review
• 2010 Proposed Service Agreement would have
exposed City to many undefined risks and
liabilities:
– Pay for capital upgrade/replacements
– Cover increasing costs for treatment of ash landfill runoff
– Make up lost revenues due to changes in law
– Increase in property taxes
• No control on District programs and how they are
funded
• Potential exists for disproportionate costs to
Contract Communities
8. $65.19
To
$140.21
What Could’ve Happened?
Low range is a conservative firm price beginning 2013 and high range is potential
cost increase (risks and pass-thru’s) throughout 10-year term
$53.19
to
$110.02
Miramar
Tipping
Fee
Service
Agreement Fee
District
Program
Expenses
$12.00
To
$30.17
9. • The private disposal facilities no longer require
public obligation to share in risk after July 2013
• 2.5 year window of opportunity for market
competition
• Commission philosophy to competitively bid
services
Also Considered
Hence, City deferred ILA until results of an
formal competitive process
Note: Broward County and Ft. Lauderdale voted down the ILA Extension and Service
Agreement
10. • BCCMA Coconut Creek (1/13/2011)
• Stakeholder Meeting Miramar (1/27/11)
– All City Managers throughout Broward County
invited to participate;
– Total of 16 participating agencies:
• Lauderdale by-the-Sea, Hallandale Beach, Coconut Creek,
Coral Springs, Margate, Broward County, Davie, Southwest
Ranches, Oakland Park, Sunrise, Fort Lauderdale, Weston,
Deerfield Beach, Plantation, Cooper City, and Miramar
• RFP Review by Stakeholders (3/23/11)
Disposal RFP Participation
11. Leadership Objectives for RFP
• Minimize Risks and Liabilities
• Competitive Rate Structure for Residents
• Uninterrupted Waste Disposal Services at
expiration of ILA
• Environmentally Sound Solid Waste Management
• Service Reliability
• Opportunity for Market Participation
12.
13. RFP Highlights
RFP Element Overview
Scope Requested Disposal services or Processing, Transfer
and Disposal.
Term 5 year initial term, up to (3) 5 year
renewals.
Technical Proposal • Technical and financial qualifications
• Project technical approach
• Business terms
Cost Proposals • Disposal (including receiving)
• Revenue Sharing (optional)
• Maximum Inflation (optional)
14. Technical Proposals
• Team experience
• Financial qualifications
• Technical Approach
– Direct disposal services
– Receipt, Processing and Disposal
– Existing or Proposed facilities
– Transition plan, if facility not existing
• Acceptance/Modification of RFP Business Terms
15. • Scope of service
• Contract Term
• Project Security
• Transition period responsibilities
• Addresses Unusual Circumstances
General Business Terms
16. • Disposal charges
– Service Fee ($/ton received)
• Inflationary Adjustments
– Bureau of Labor Statistics index, specified in RFP
– RFP allowed for optional reduced %. (% of index)
– Option for maximum inflationary adjustment
• Revenue Sharing
– $/ton of waste delivered
– Not based on performance or market pricing
Cost Proposals
18. • If Unusual Circumstances result in Contractor
total costs to increase > 10%, Contractor may
request relief.
• Applies to total cost, not to individual cost items
(e.g. fuel or labor)
• Contractor must demonstrate cost increase.
• City is not obligated to grant relief.
Unusual Circumstances
19. • Guarantees performance of all Contractor’s
obligations and responsibilities.
• If Contractor fails to perform, Guarantor is
obligated to perform.
• Guarantee by corporate parent company,
or all corporate parents, if Joint Venture.
Project Guarantee
20. • Issued by bank.
• $ value equal to 6 months of total disposal
charges.
• If facility not available by July 2013, City can draw
on the LOC to cover the difference between
proposed cost and actual cost.
• LOC use can last for a long time
Irrevocable Letter of Credit
21. Irrevocable LOC Example
Assume Proposed Cost is $40/ton
Assume Miramar disposes 65,000 tons/year
Letter of Credit Value = 32,500 tons x $40/ton = $1.3M
If Actual Cost = $50/ton Cost if proposed facility not available July 2013
Difference $10/ton Amount eligible for LOC draw
LOC available 2 years [$1.3M ÷ 65,000 ton/yr] ÷ [$10/ton]
22. • Assures City that contractor is
fully able to deliver service before
City is fully committed
• If Conditions can not be met,
allows City to seek alternatives.
Conditions Precedent Concept
23. Contractor must provide:
• Evidence that all rights, permits and
approvals to provide the Disposal Services
• Executed Project Guaranty Agreement
• Executed Irrevocable Letter of Credit
Conditions Precedent in RFP
24. 2nd Ranked
Firm
Milestones and Check Points
Ranking
Proposals
Received
Yes
No
Notice-to-
Proceed
No
Milestones and Check Points
Negotiat
e Agmt
Contract
Date
Conditions
Precedent
Met?
Agreement
on Terms?
25.
26. • RFP formally issued on March 9th
• Pre-proposal conference held on March
28th
• RFP closed on June 2nd
• Three proposals received
– Wheelabrator Technologies
– Sun Recycling and Bergeron Environmental-Joint Venture
– Sun Recycling and Bergeron Environmental-Joint Venture
(Alternate Proposal)*
RFP Process Timeline
* Alternate geared primarily
toward C&D disposal.
29. • Evaluation team charged with actual review and
scoring of proposals.
• Evaluation Team Members represents a
diversity of communities and decision makers:
– City Manager, Coconut Creek;
– Public Works Director, Hallandale Beach;
– Public Works Director, Oakland Park;
– Intergovernmental Affairs Manager, Davie;
– Finance Director, Miramar.
Evaluation Team Members
30. • Consists of three categories;
– Qualifications = 20 points
– Technical = 35 points
– Price = 45 points
• Proposers must receive 65 percent of max
points for technical and qualifications (each) to
have sealed prices opened;
• All proposals met technical/qualifications 65
percent requirements.
Evaluation Criteria
31. • Both proposers to submit best and final
offer
• Prices to be based on a single per-ton cost
– Simplified price evaluation process
– Easy to recognize costs
– Recognizes economies of scale
• Proposers were accorded fair and equal
treatment
Best & Final Offer
34. • On December 12, 2011 the Evaluation team
completed its review and scoring for the
proposals:
– Wheelabrator disposal
– Sun/Bergeron receiving and disposal
• City Procurement Department completed final
tabulation;
• Evaluation team ranks;
– Sun/Bergeron = No. 1;
– Wheelabrator = No. 2
Final Evaluation
35. Final Ranking
Disposal of Solid Waste
Services
Proposal Ranking
Sun/Bergeron Wheelabrator
Total 447.8 426.2
Ranking 1 2
36.
37. • Time to meet Conditions Precedent
• Changes to disposal locations
• Reporting requirements
• Facility access
• Logistical and administrative details
Example of Items to Negotiate
42. • Approving the ranking of the solid waste
disposal proposals and authorize
negotiation with the top-ranked firm,
Sun/Bergeron, and should negotiations
be unsuccessful, begin negotiations with
the second ranked firm, Wheelabrator.
Recommendation