HomeMy WebLinkAboutAward Protest - Fagen
MEMORANDUM
DATE: June 22, 2010
TO: Deschutes County Board of Commissioners
FROM: Joe Stutler, Deschutes County Forester
RE: Fagen Protest
On May 24, 2010 I sent via email a Request for Proposal (RFP) with a response
date and time of 5:00 p.m. (COB) on June 3, 2010. There are ten contractors
(providers) of tub/horizontal grinding on the Deschutes County Qualified Pool and
each received the request of which six responded. The specific questions asked
were as follows:
RFP Questions
1. We are required to produce 22,000 Green Tons of biomass, how will
the material be utilized and to what source(s) (specifically) will the material
be delivered after the grinding? If contracts exist with companies for
biomass products, please identify the names and locations.
2. If there is delay in transporting ground material, how long will the
material occupy the disposal site?
3. All grinding will be at designated disposal sites with road access,
please provide both the daily and monthly production levels in both Green
Tons and Chip Truck Loads.
4. How many jobs will either be created or maintained with this job
opportunity including your company and others associated with the effort?
5. Please provide total cost of grinding, loading and off-site transportation,
please provide that cost in terms of $/hour.
6. Please provide costs of mobilization/re-mobilization from one disposal
site to another, please provide that cost in terms of $/hour.
On June 11, 2010 I reviewed and analyzed the responses and sent my proposed
recommendations to the respondents. On June 18, 2010 Mr. Wade Fagen
(Fagen Trees and Chips) decided to protest my recommendations to the
Deschutes County Board of Commissioners. On the same day (June 18, 2010)
and prior to filing a protest, Mr. Fagen and I discussed the process, bids, criteria
used for making the recommendation and the merits of economic stimulus before
he decided to file a protest. We simply could not reach common ground on his
issues.
My first response is that Mr. Fagen’s protest appears to address “non merit”
issues of the RFP, consequently either non-responsive or Mr. Fagen wants to
change the process or change his response to the RFP. Mr. Fagen seems to
want to address carbon sequestration with his protest which was not a
consideration in the RFP. Another consideration is the definition of biomass. In
the original RFP I did not specifically quote the commonly used definition of
biomass. Based on my professional experience with biomass and after research
on the internet there is a wide range of definitions but the most commonly
understood definition of biomass is “plant materials and animal waste used as
fuel to create power by burning.” All of the other respondents seemed to
understand the intent of the RFP.
Listed below are the key points/issues of Mr. Fagen’s protest which I will address
individually.
1. I feel that our discussion of the results did not give my situation the proper
respect and understanding that it truly deserved. Response: On June 2,
2010 the day before the responses were due, Mr. Fagen submitted a
response. After reviewing his response, Item 2 was not adequately
addressed from the perspective that I could not sufficiently evaluate his
response. I called Mr. Fagen and explained my concern and ask that he
re-evaluate that response and gave an explanation of my desired
expectations. Later that day (June 2, 2010) Mr. Fagen amended his
original bid with the necessary information for Item 2. On June 18, 2010
Mr. Fagen and I discussed my evaluation and proposed recommendations
of the responses. Mr. Fagen did have the same definition of biomass as
me or the commonly held definition. Additionally, Mr. Fagen wanted to
address carbon sequestration and keeping the economic stimulus results
local in Deschutes County, which were not considerations of the RFP. Mr.
Fagen asked that I discard the entire response and issue another RFP
addressing his issues, which I declined. In summary, I worked with Mr.
Fagen before and after the responses were due and the results are that I
understand Mr. Fagen issues, I simply do not agree.
2. I would like to submit a formal appeal and would like to further the
discussion of keeping the money here in Central Oregon. Response: The
Biomass Stimulus Grant asked us to look beyond Deschutes County and
we are looking at potential biomass opportunities in four counties, thus
responsive to the grant received. The grant specifically asks us to
consider biomass projects to improve the following scenario: “resulting in
loss of jobs both in the field and at biomass energy facilities. Increasing the
availability of biomass material will help to fill raw material gaps and allow
retention of employees at facilities that produce energy from biomass.”
Since we have limited biomass energy facilities in Deschutes County, I
was looking at job opportunities at those locations with my RFP questions.
The reality is both contractors which are recommended to receive
contracts employ people who live and work in Deschutes County thus
local salaries, fuel, lodging and meals will also contribute to the local
economy. The importance of jobs at the co-generations facilities and
retaining the biomass energy infrastructure is also an important goal of the
Stimulus Grant and was addressed in the RFP. The retention of the
biomass energy infrastructure is important in furthering goals of wildland
fire hazardous fuels reduction since it is the only industry that can support
the long term use of large quantities of biomass materials. The stability of
the biomass energy infrastructure also provides the basis for planned co-
generation facilities to be built in Central Oregon.
3. It seems as though you want the grinding done for free. Response: Since
the RFP asked for cost for grinding and other associated costs for
mobilization and trucking this does not seem to fit with the RFP.
4. I feel that my key points again stated below were not considered.
Response: Mr. Fagen’s key points were not part of the RFP or his initial
response and although understood, not considered as part of the RFP.
5. The material chipped will be made into mulch locally. This is more
beneficial at sequestering carbon in three ways: Response: Mulch is not
biomass by definition (plant material burned to create power). The reality
is mulch continues to release both carbon dioxide and methane gas as it
breaks down in nature. Methane gas is recognized as an even more
powerful greenhouse gas than carbon dioxide by the magnitude of at least
30 times. There is no evidence that mulch itself sequesters carbon in the
long term and must be replaced on a regular basis. Again sequestering
carbon was not a RFP response requirement.
6. The material is not burned, keeping carbons out of the air. Response:
True, the material is not burned (definition of biomass) but false from the
perspective that mulch continues to release carbon dioxide as well as
methane gas.
7. Since the material stays local, less forest fuels are used by decreased
transportation distance. Response: I think Mr. Fagen’s` point regarding
local use was to imply that less fossil fuel is consumed by local use which
is true. However, local use as mulch does not support the biomass
energy infrastructure, including transportation, which is a major goal of the
grant.
8. All equipment used runs on Bio-diesel, essentially a closed carbon loop
fuel, saving yet more carbon output. Response: Although important
neither were considerations in the RFP. Bio-diesel is currently not
produced locally in volume. The majority of the bio-diesel is produced
from soybeans grown in the Midwest using high levels of petroleum based
fertilizers and heavy irrigation. The environmental benefits of 100% bio-
diesel over the use of super low sulfur diesel, particulate filters, and bio-
diesel blends on a per energy unit basis have yet to show that 100% bio-
diesel is a superior choice for the environment. In fact, the National Bio-
diesel Board reports that burning 100% bio-diesel results in a 10%
increase in nitrogen oxides (NOx) when compared to standard diesel. In
addition, the American Society of Testing and Materials (ASTM) has only
approved bio-diesel blends of 20% or less for transportation use due to
concerns regarding “cold flow” properties, material compatibility,
maintenance intervals, fuel stability, biological growth, energy content, and
emissions influence with higher concentrations. Mr. Fagen may have a
personal preference to run 100% bio-diesel in his own trucks, but there is
no data supporting the overall lifecycle benefits of this over the 20% or
lower blends approved by the ASTM standard.
In addition to my specific response to Mr. Fagen’s protest issues, I have included
Attachments 1&2 for your review and consideration which include the RFP
questions, synopsis of response, my analysis and recommendations. Please
contact me if you have additional questions. Thank you for scheduling a hearing
date of June 30, 2010.
/s/ Joe Stutler
Joe Stutler
Deschutes County Forester
Attachments
Cc: Dave Kanner, Erik Kropp, Mark Pilliod
Attachment 1
2010 Biomass Bids
RFP Questions:
1. We are required to produce 22,000 Green Tons of
biomass, how will the material be utilized and to what
source(s) (specifically) will the material be delivered
after the grinding? If contracts exist with companies
for biomass products, please identify the names and
locations.
2. If there is delay in transporting ground material, how
long will the material occupy the disposal site?
3. All grinding will be at designated disposal sites with
road access, please provide both the daily and monthly
production levels in both Green Tons and Chip Truck
Loads.
4. How many jobs will either be created or maintained
with this job opportunity including your company and
others associated with the effort?
5. Please provide total cost of grinding, loading and off-
site transportation, please provide that cost in terms of
$/hour.
6. Please provide costs of mobilization/re-mobilization
from one disposal site to another, please provide that
cost in terms of $/hour.
Responses:
Bar 7 A:
1. Long history with numerous/diverse companies selling biomass
fuels, current agreement/contracts to three companies for biomass
products. Delivery of products based on location of raw material
and prices at the time.
2. No delay in transportation, grind into trucks.
3. Production rate is 8 loads (256 green tons) per day and 160 loads
(5120 GT) per month.
4. Create/maintain 6 jobs, possibly more with the need for trucking.
5. Costs would be $680 hour inclusive of grinder, trucks and other
equipment.
6. Mobilization is $90/hour not including the trucks.
T2:
1. Long history with numerous/diverse companies selling biomass
fuels, current agreement/contracts to five companies for biomass
products. Delivery of products based on location of raw material
and prices at the time.
2. No delay in transportation, grind into trucks.
3. Production rate is 10-15 truck loads (300-450 GT) per day and 220-
330 chips truck (7,000-10,000 GT) per month.
4. Create/maintain 25 jobs directly with T2 and retain 12 positions @
Prairie City facility for a total of 37 positions.
5. Costs vary depending on quality of product: $545/hr. for high
quality product; $685/hr. for marginal quality product; $400/hr. for
dirty material/green waste and $80/hr. to truck to designated facility
i.e. Knott Landfill. Charges will be for grinding only with high quality
product.
6. Mobilization is $150/hour flat rate.
Botanical Development:
1. Approximately 500 GT will be used for local landscape industry and
no current contracts exist.
2. Two weeks or less.
3. Production rate is 80 GT/day and 1,760 GT/month.
4. Create/maintain 12 jobs.
5. Costs would be $650/hr. and off site transportation is $100/hr/truck.
6. Mobilization is $100/hr flat rate.
Fagen Tree’s and Chips:
1. All material will be used for mulch locally, nothing identified for
contracts out of area.
2. No delay in transportation, grind into trucks.
3. Production rate is 4-8 trucks/day (100-160 GT) and 80-160
trucks/month (2000-4000 GT).
4. Create/maintain 13 jobs.
5. Costs would be $100/hr and $85/hr/truck.
6. Mobilization is $85/hr.
Tyler Seliger Excavation:
1. On going contract with White City and have a quote from Prairie
City.
2. The longest delay would be 1 week with hopes to transport daily.
3. Production rate is 6 trucks/day (180 GT) and 120 trucks/month
(3600 GT).
4. Create/maintain 15 jobs.
5. Costs would be $350/hr. for grinder, $140/hr. for
excavator/operator, $100/hr. for loader for total of $590/hr and
$85/hr. for each truck.
6. Mobilization is $120/hr.
Quicksilver:
1. Current contract with White City, potential delivery to other facilities.
2. No delay in transportation, grind into trucks.
3. Production rate is 12-14 trucks/day (360-420 GT) and 250-300
trucks/month (7500-8800 GT).
4. Create/maintain 10-15 jobs.
5. Costs would be $424/hr.
6. Mobilization costs would be $110/hr.
Selection/Recommendation of best value contractor: After
reviewing the response to the Request for Proposal and referring to the existing
agreement with Oregon Department of Forestry which is specific to the scope
and intent of the Stimulus Grant my recommendation to the County Administrator
and County Commissioners is as follows:
T2 will receive the primary contract for the work to be performed. Quicksilver will
be the primary backup and also receive a contract in the event T2 is unable to
keep up with the demand. I will make my recommendation for these contracts
based on the following:
1. T2 and Quicksilver can produce the most green tons both daily and
monthly of all the bidders. In reality we likely will exceed the 22,000
Green Ton targets thus volume/production is a key component.
2. Best value, both T2 and Quicksilver offer the best value based on
grinding/mobilization based on the quantity of the product to be delivered
with no additional costs per hour for trucking.
3. Job creation, T2 will create or maintain approximately 37 jobs and
Quicksilver can create or maintain 10-15 jobs.
4. One of the primary purposes of the Stimulus Grant is to process biomass
for energy production, T2 has the most contracts and diversity of delivery
options and able to handle a wide range of product.
5. Fagen and Botanical were not chosen because a majority of the product
would be used for mulch locally and no existing contracts for energy
production. The daily and monthly production rates of each would likely
not keep up with the demands. Additionally over all grind costs and costs
for trucking could actually result in over all cost being higher per green ton
based on the number of trucks and distances for hauling. T2 and
Quicksilver offered flat rates for the same services with much higher
production rates.
6. Bar Seven A was not chosen based on higher cost for grinding, lower
production rates and approximately six jobs created or maintained
although Bar Seven has a diverse delivery potential.
7. Tyler Seliger Excavation was not chosen based on higher overall costs,
lower production rates and only one source for product identified.
Below are excerpts from the Oregon Department of Forestry Agreement with
Deschutes County identifying both scope and purpose of the Stimulus Grant.
The purpose of the Grant is to fund work associated with collecting woody
biomass that is produced by thinning overstocked stands and processing it for
energy production.
The marginal economics of creating and transporting biomass especially during the recent
downturn in the economy has decreased the utilization of this material for producing
renewable energy. The cost of processing and transporting woody biomass using existing
techniques currently exceeds the value placed on the biomass as renewable energy.
Consequently, the woody biomass from hazardous fuel treatment projects has been burned
or the disposal has been postponed resu ltin g in loss of jobs both in th e field and at
biomass energy facilities.
Increasing the availability of biomass material will help to fill raw material gaps and
allow retention of employees at facilities that produce energy from biomass.
Attachment 2
Synopsis of Responses
Contractor Maximum
Production
Rate
Cost/hour Cost/Green
Ton
Additional
Costs
Biomass #Jobs
Bar 7 A 5,120
GT/Month
$680 $21.25 Unspecified
costs for
trucking
Yes 6
T2 10,000
GT/Month
$543
***average
of 3 quotes
$8.68 None Yes 37
Botanical
Development
1,760
GT/Month
$650 $59.09 $100/Hr.
and
unknown
per day.
Some/500
GT for
Mulch
12
Fagen Tree’s
and Chips
4,000
GT/Month
$100 $4.00 $85/hr. and
unknown
per day
No 13
Tyler Seliger
Excavation
3,600
GT/Month
$590 $24.8 $85/hr. and
unknown
per day
Yes 15
Quick Silver 8,800
GT/Month
$424 $7.70 None Yes 10-15
Green Ton Cost: 160 hrs. /Month X Cost/hr. divided by
Monthly Production Rate= Costs/Green Ton