DATE: September 16, 2019
SUBJECT:
Title
RESOLUTION AUTHORIZING A SOLE SOURCE AGREEMENT TO COCHRAN INC. DBA COCHRAN MARINE, LLC FOR THE PERIOD OF SEPTEMBER 11, 2019 TO JUNE 30, 2022 TO CONTINUE CRUISE SHIP SHORE POWER CONNECTION, COMMISSIONING, AND MAINTENANCE SERVICES SUPPORTING THE PROPRIETARY SHORE POWER SYSTEM AT B STREET AND BROADWAY PIERS IN AN AMOUNT NOT TO EXCEED $901,164. FUNDS FOR THE FIRST YEAR OF THIS EXPENDITURE OF $246,015 ARE INCLUDED IN THE APPROVED FY 2020 BUDGET. FUNDS REQUIRED FOR FUTURE FISCAL YEARS WILL BE BUDGETED FOR IN THE APPROPRIATE YEAR SUBJECT TO BOARD APPROVAL UPON ADOPTION OF EACH FISCAL YEAR’S BUDGET
Body
EXECUTIVE SUMMARY:
The San Diego Unified Port District (District) installed shore power facilities at the B Street and Broadway Cruise Ship Terminals in December 2010. The shore power facilities are part of the District’s commitment to environmental sustainability. The shore power system brought the District and its cruise customers into compliance with the California Air Resources Board (CARB) requirement that cruise lines with five (5) or more calls at California ports use a shore power system for at least 50% of their calls per quarter, this increased to 70% in 2017 and will increase to 80% in 2020.
In 2009, the District entered into a sole-source agreement with Cochran Marine, LLC (Cochran) for the design, installation, maintenance and operation of the shore power system. Cochran provides a proprietary software control system for shore power operations and maintenance. The cruise industry considers Cochran’s system the only viable option in North America for a shore power operations and maintenance system and advised the District that they would only support the use of the Cochran system due to potential damage to cruise ships from a system malfunction using a less certain system. Cochran has a strong reputation of reliability and safety.
The current agreement with Cochran for the operation and maintenance of the system expires on September 30, 2019. A new service agreement will be required in order to continue to use the proprietary system as it is configured, and to comply with the at-berth regulation for the next three years, in an amount not to exceed $901,164.
RECOMMENDATION:
Recommendation
Adopt a Resolution authorizing a sole source agreement with Cochran Marine, LLC, for Shore Power Connection, Commissioning, and Maintenance Services from September 11, 2019 through June 30, 2022 in an amount not to exceed $901,164.00.
Body
FISCAL IMPACT:
Funds for the first year of this expenditure of $246,015 are included in the approved FY 2020 budget within the Maritime Equipment Maintenance expense account. Staff estimates annual cash requirement of approximately $300,400 resulting in a 3-year total cash requirement of $901,164.00 (see table below).
Funds required for future fiscal years will be budgeted for in the appropriate year subject to Board approval upon adoption of each fiscal year’s budget.
Cash Flow Forecast FY 19/20 FY 20/21 FY 21/22___
$246,015.00 $323,340.00 $331,809.00
$$901,164.00 Total Cash Requirement
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A thriving and modern maritime seaport.
• A vibrant waterfront destination where residents and visitors converge.
• A Port with a healthy and sustainable bay and its environment.
DISCUSSION:
The State of California, via the California Air Resources Board (CARB), requires that cruise lines with five (5) or more calls at California ports must use a shore power system for at least 70% of their vessel calls per quarter through 2019. The regulation went into effect on January 1, 2014 and is part of a state-wide effort to reduce the negative impacts of air emissions in the transportation sector. The at-berth requirement will increase to 80% per quarter next year (2020).
Shore power is an electric system, located at a cruise or cargo terminal, which allows a vessel to “plug-in” and use power from the shore-side utility. The system reduces air emissions by allowing vessels to turn off fossil fuel burning engines and instead draw energy from the power grid.
The Port of San Diego was the second port in California to install a shore power system at its cruise terminal. The system came online December 2010 and serves both B Street Cruise Ship Terminal and Broadway Pavilion. It was designed, built and installed by Cochran. Cochran is the industry leader in ship-to-shore shore power systems and has installed similar systems at the ports of Seattle, San Francisco, Long Beach, New York and Vancouver, British Columbia.
During development of the shore power project, District staff consulted with cruise vessel owners and operators regarding multiple shore power systems and vendors. Through this process, staff recognized a strong industry desire that the Cochran system be installed at the District’s cruise facilities, due to Cochran’s positive industry reputation, offering a proprietary system that is widely considered to be the safest and most reliable. Other shore power systems were deemed unreliable and posed a possible risk of damage or major service interruptions for the District and cruise customers to confidently pursue them as viable alternatives.
In 2009, the District entered into a sole-source agreement with Cochran that covered the design, installation, maintenance and operation of the system (Attachments A & B). That same year, the Board passed resolution 2009-129 entering into a purchase agreement with Cochran for shore power system equipment and software. The purchase agreement specified that the software that controls the shore power system is proprietary and precludes any company other than Cochran or their direct sub-contractors, from operating the system. A copy of the resolution and purchase agreement is attached (Attachment C & D). Soon to be expired support services agreement is attached with amended date (Attachment E & F).
The 2016 sole source agreement with Cochran expires on September 30, 2019. A new service agreement will be required in order to continue to use the proprietary system as it is currently configured, and to fulfill agreements the District has made with cruise lines covering vessel calls through 2020. Because it is a proprietary system and software, a sole-source agreement is prudent to continue operations as the system is currently designed and configured. The proposed sole-source agreement is attached (Attachment G).
Due to the proprietary nature of the currently installed shore power system, and supporting equipment and software, as well as strong cruise lines’ assertion to use only the Cochran system, staff recommends that the Board adopt a Resolution authorizing a sole source agreement with Cochran Marine, LLC, for Shore Power Connection, Commissioning, and Maintenance Services from September 11, 2019 through June 30, 2022 in an amount not to exceed $901,164.00.
General Counsel’s Comments:
The Office of the General Counsel has reviewed the agenda and attachment, as presented to it, and approves them as to form and legality.
Environmental Review:
The proposed Board actions, including without limitation, a resolution authorizing an agreement for continued cruise ship shore power connection, commissioning, and maintenance services supporting the proprietary shore power system at B Street and Broadway Piers were adequately covered in the Mitigated Negative Declaration (MND) for the B Street Pier Shore Power Project (SCH #2009111064), certified by the District on January 5, 2010 (Resolution No. 2010-07). The proposed Board actions are not a separate “project” for CEQA purposes but subsequent discretionary approvals related to a previously approved project. (CEQA Guidelines § 15378(c); Van de Kamps Coalition v. Board of Trustees of Los Angeles Comm. College Dist. (2012) 206 Cal.App.4th 1036.) Additionally, pursuant to CEQA Guidelines Sections 15162 and 15163, and based on the review of the entire record, including without limitation, the MND, the District finds and recommends that the actions do not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the MND due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; and 2) no new information of substantial importance has come to light that (a) shows the project will have one or more significant effects not discussed in the MND, (b) identifies significant impacts would not be more severe than those analyzed in the MND, (c) shows that mitigation measures or alternatives are now feasible that were identified as infeasible and those mitigation measures or alternatives would reduce significant impacts, and (d) no changes to mitigation measures or alternatives have been identified or are required. Pursuant to CEQA Guidelines §15162(b), the District finds and recommends that no further analysis or environmental documentation is necessary. Accordingly, the proposed Board actions are merely a step in furtherance of the original project for which environmental review was performed and no supplemental or subsequent CEQA has been triggered, and no further environmental review is required.
The proposed Board action and the proposed project comply with Sections 21, 35, 81, and 87 of the Port Act which allow for the Board to pass resolutions, to do all acts necessary and convenient for the exercise of its powers, to use funds for the necessary expenses of conducting the District, and for the use of tidelands for the establishment, improvement, and conduct of a harbor, and for the construction, reconstruction, repair, maintenance, and operation of wharves, docks, piers, slips, quays, and all other works, buildings, facilities, utilities, structures, and appliances incidental, necessary, or convenient, for the promotion and accommodation of commerce and navigation. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed project is consistent with the Public Trust Doctrine.
In addition, on January 5, 2010, the Board authorized the issuance of a non-appealable Coastal Development Permit (CDP-2010-01) to allow for construction and operation of the shore power systems at the B Street and Broadway Piers (Resolution No. 2010-08). The proposed Board action and the proposed project would allow for furtherance of the project authorized under CDP-2010-01. No further approvals are required pursuant to the California Coastal Act or the District’s CDP Regulations.
Equal Opportunity Program:
Not applicable.
PREPARED BY:
Adam Deaton
Cruise Senior Trade Account Rep. Maritime
Attachment(s):
Attachment A: Service Agreement with Cochran Inc. for B Street and Broadway Piers Shore Power System Maintenance and Support
Attachment B: Resolution No 2009-136−Authorization to Enter into Service Agreement with Cochran Inc.
Attachment C: Resolution No 2009-129−Authorization to Enter into Purchase Agreement with Cochran Inc.
Attachment D: End User License Agreement with Cochran Incorporated for Shore Power Software
Attachment E: Agreement No. 113-2016−SN B Street and Broadway Pier Shore Power System Support Services
Attachment F: Amendment No. 4 to Agreement No. 113-2016-SN B Street and Broadway Pier Shore Power System Support Services
Attachment G: Proposed Sole Source Service Agreement with Cochran Inc. for B Street and Broadway Pier Shore Power System Support Services Agreement No. 124-2019SN