Electric transformer replacement going out for new bids

Project to be split in two with aim of getting lower price

LANSDALE » A big purchase for the Lansdale Electric Department is on hold for now, as borough officials look to go back to the market for a better price.

Borough staff reported Wednesday that another round of bids will be needed for a replacement electric transformer at the borough’s Richardson substation, as work proceeds on a nearby project to build apartments atop the Madison Parking Lot.

“We’ll do a prepare and advertise the new bid specifications for the month of May, and then that pushes things back, obviously, another month,” said Electric Superintendent Andy Krauss.

At the northwestern edge of the Madison Parking Lot, just below a water tower, the borough’s electric department owns and maintains two adjacent electric transformers: the Richardson substation is a Westinghouse unit that dates back to 1974, and the adjacent Lion substation is a newer transformer made by manufacturer ABB in 1996, with nearly new GE switchgear installed in 2016.

Replacing and upgrading the Richardson substation has been on the borough’s to-do list for several years, and developer Equus Capital Partners agreed to contribute to the cost of replacing the substation when their plans for building apartments atop the adjacent Madison Parking Lot were approved last year.

“The main focus of that Richardson substation was to help get the Equus project online, but with the upgrade of the Lyon station and the capacity there, we do have the capacity to carry that full project, with capacity that’s existing,” Krauss said.

In 2013, Krauss told council, a similar electric transformer upgrade with borough staff doing the installation ended up costing roughly $492,000, but the only responsible bidder for the most recent project came in at roughly $806,000, with several other bidders seeking the job but with problems with their paperwork.

“They ranged from $495,000, that didn’t even bid on half of the equipment, all the way to just shy of $1 million,” Krauss said.

Several factors could have led to those higher than expected bids, Krauss told council, including national and international discussions about trade and possible tariffs.

“The thinking is, the proposed steel tariffs have got American companies pushing the price of steel up, both for the transformer and the switchgear,” he said.

“So if we can separate them, and get different companies to bid on the transformer versus the switchgear, we can get that number down and also get more bidders to come to the table,” said Krauss.

When a request for proposals was posted, 29 firms sought information, but only six put in formal bids, and only one of those six qualified under the terms as set out, Krauss told council Wednesday night.

“So we felt comfortable rejecting those and going back out to bid,” he said.

Councilman Leon Angelichio asked if there were any commonalities in the problematic bids, and Krauss said they varied: one company only bid on the new transformers, not the accompanying switch gear, while a second bid included switchgear by a manufacturer the borough would prefer not to use to stay consistent with current equipment.

Another company also bid the wrong switch gear, while a different company included a smaller bid bond than was required in the package, Krauss told the board, but splitting the transformer itself from the switch gear and loosening the terms of what the transformer must be, should remove the paperwork problems and lead to more bidders and, hopefully, lower prices.

“What we’re going to do is remove the manufacturer specifications from the transformer. As long as it’s a good unit, with a good warranty, we’re OK with that,” Krauss said.

The borough’s long term capital project list had originally included $550,000 to $600,000 for the transformer upgrade, to be covered by funds from the Madison project, and Krauss said the split bids should produce a price tag back in that range.

“It’s going to cost the borough $500 to $800 to rebid it, and push things back a couple of months, but if we can save $100,000 or $150,000, we feel it’s worth it,” he said.

Lansdale’s borough council next meets at 7 p.m. on April 18 and its Electric committee next meets at 7 p.m. on May 2, both at the borough municipal building, 1 Vine St.