Okaloosa County BOCC — February 2, 2016 — Arbennie Pritchett WRF Expansion - Owner Purchase Material Program — agenda request

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: February 2, 2016 TO: Honorable Chairman and Members of the Board FROM: Jeff Littrell SUBJECT: Arbennie Pritchett WRF Expansion - Owner Purchase Material Program DEPARTMENT: Water and Sewer BCC DISTRICT: All STATEMENT OF ISSUE: Okaloosa County Water & Sewer (OCWS) requests the Board of County Commissioners (BCC) approval to grant signature authority to the Okaloosa County Purchasing Manager for the procurement of equipment and materials under the Owner Purchase Equipment and Materials (OPE) Program (see attachment, paragraph 8) specific to the Arbennie Pritchett Water Reclamation Facility (APWRF) 5 Million Gallon per Day (MGD) Expansion Project, Contract # C16-2352-WS. The objective is to lower the total cost of the project by eliminating sales tax on equipment and materials normally purchased directly by the contractor. Under the OPE Program, the contractor initiates requisitions, but the County issues purchase orders and pays the invoices. The equipment and materials are delivered directly to the contractor and the contractor assumes responsibility for inventory control and security. BACKGROUND: OCWS and CDM Smith, Inc. have entered into contract # C16-2352-WS for the 5 MGD expansion of the APWRF. This is a Lump Sum contract in the amount of $12,480,704 with a term of 545 calendar days from notice of commencement. CDM Smith, Inc., and OCWS have agreed to participate in an OPE Program for major equipment and materials purchases to allow OCWS to receive the sales tax savings afforded it by law. The estimated sales tax savings are over $250,000. As this is a Lump Sum contract, all purchases via the OPE Program are deducted from the lump sum contract amount by way of deductive change orders. The amount of the deductive change order exactly equals the cost of equipment and materials purchased for the contractor and the OPE Program provides multiple levels of review and a built- in system of checks and balances in the contract payment process. The OPE Program was successfully utilized during the initial construction of the APWRF and a tax cost savings of $587,289.46 was realized. By granting signature authority to the Purchasing Manager, this will help keep the OPE Program process streamlined and maintain efficiencies in the procurement process. On January 21, 2016 a meeting was conducted which included the Clerk of Court and staff, the Okaloosa County Purchasing Manager and staff, the Director of Okaloosa County Water & Sewer and staff, staff from Constantine Engineering (Program Manager for the project) and representatives of CDM Smith. A clear understanding of how the OPE Program will be implemented was reached between all of the parties involved. OPTIONS: Approve or deny RECOMMENDATIONS: Water & Sewer Staff recommend BCC approval to grant signature authority to the Okaloosa County Purchasing Manager for the procurement of equipment and material under the OPE Program for the APWRF Expansion Project, contract # C16-2352-WS. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator