CITY COUNCIL AGENDA ITEM
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Approve the award of Bid 26-055R, Tollway 34kV Switchgear Building, to Granite Construction Company for an amount not to exceed $3,964,772, plus a 3% contingency
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DEPARTMENT: Electric Utility
SUBMITTED BY: Raheel Arshed, Deputy Director
BACKGROUND:
The Electric Utility operates 16 substations that connect the City's transmission system and reduce transmission voltages to distribution voltages serving approximately 63,000 electric customers. The Tollway Substation, located near 215 Shuman Boulevard adjacent to Interstate 88, is one of the most critical substations in the City's electrical system. It is part of the northern 138kV transmission ring, serves as a major hub for the 34.5kV sub-transmission system, and supplies 12 of the City's 12.47kV distribution circuits.
Because of the substation's proximity to Interstate 88, salt spray from winter road maintenance accumulates on the insulators, creating conductive paths that can result in electrical flashovers. Salt contamination has caused two major 34.5kV outages over the past decade, affecting thousands of customers and resulting in extended restoration times due to the difficulty of replacing damaged equipment during winter conditions. To improve system reliability, the Electric Utility developed a plan to relocate the 34.5kV switchgear and associated equipment from the outdoors into an enclosed switchgear building.
The Electric Utility evaluated multiple building options and determined that a precast concrete structure is the most durable solution due to the substation's proximity to Interstate 88 and the effects of salt spray.
An initial solicitation in February 2026 resulted in only one bid and that bid significantly exceeded the engineer's estimate.
DISCUSSION:
On April 27, 2026, the Electric Utility issued Bid No. 26-055R, Tollway 34kV Switchgear Building, seeking qualified contractors to furnish all labor, materials, equipment, supervision, and construction services necessary to construct one precast concrete 34.5kV switchgear building.
Bids were received from the following vendors:
|
Vendor |
Proposed Cost |
|
Granite Construction Company |
$3,964,772 |
|
Engineer's Estimate |
$5,000,000 |
|
F.H. Paschen S.N. Nielsen & Associates LLC |
$5,075,002 |
|
Lindblad Construction Company |
$5,569,186 |
The bid includes all work necessary to construct the switchgear building, including:
• Foundation construction, excavation, concrete slab, and site work.
• Precast concrete walls, structural framing, and roof system.
• Mechanical systems, including HVAC and sump pump.
• Electrical systems, including lighting, grounding, receptacles, and power distribution.
• Interior finishes, fire protection, cable tray, and fiber tray installation.
The City has already committed to purchasing the third transformer and 34.5kV switchgear. Delaying construction of the building would postpone installation of this equipment and result in storage costs estimated at approximately $10,000 per month while increasing the risk of additional project cost escalation and delaying critical reliability improvements at Tollway Substation.
Staff determined that Granite Construction Company submitted the lowest responsive and responsible bid in accordance with Section 1-9B-7 of the Procurement Code (RBO-Qualified) and recommends award of the contract in the amount of $3,964,772.
The completion date of this project is March 27, 2027.
FISCAL IMPACT:
CIP #: EU086 - Tollway Substation Reliability Upgrade
Construction of a Tollway 34Kv switchgear building will be expensed to the Infrastructure account listed below. This work is being done in conjunction with EU086, the Tollway Substation Reliability Upgrade. The Electric Utility included $6,315,000 in the 2026 budget for expenses related to EU086. The award requested is within the budgeted amount for this project. Staff will ensure sufficient funding is included in the 2027 budget for any potential future expenses associated with this award.
|
Account Number |
Fund Description |
Total Budget Amount |
|
40251300-551502 |
Electric Utility Fund |
$25,151,500 |
*Per Council directive, contingency on construction projects is set at 3% on projects over $500,000 and 5% on projects under $500,000.