TRANSMITTAL LETTER FOR BOARD MEETING OF APRIL 16, 2026
COMMITTEE ON PROCUREMENT
Mr. John P. Murray, Executive Director
Title
Authority to increase Contract 20-RFP-28R Biogas Combined Heat and Power System, Egan WRP, to Baxter & Woodman/Boller Construction, LLC in an amount of $101,421.60, from an amount of $14,818,752.22, to an amount not to exceed $14,920,173.82, Accounts 101-50000-612490, 201-50000-612450, 201-50000-645650, Purchase Orders 3130589, 3130593, and 4000112
Body
Dear Sir:
On January 4, 2024, the Board of Commissioners authorized the Director of Procurement and Materials Management to award Contract 20-RFP-28R Biogas Combined Heat and Power System, Egan WRP, to Baxter & Woodman/Boller Construction, LLC, in an amount not to exceed $14,591,109.00. The scheduled contract completion date is December 21, 2026.
As of April 3, 2026, the attached list of change orders has been approved.
Original Contract Amount $14,591,109.00
Date of Board Approval 1/4/2024
Cumulative Change Orders (3/20/2026) $227,643.22
% Change of Original Contract Value 1.56%
Current Contract Value $14,818,752.22
Requested Increase $101,421.60
New Contract Value $14,920,173.82
% Change of Current Contract Value 0.69%
Total % Change of Original Contract Value 2.26%
At the time of bidding, the contractor used a United States (US) customs duty rate of 2.5 percent when preparing their price proposal for the combined heat and power (CHP) engines manufactured in Denmark. This assumption was based on a relatively consistent duty rate of 2.5 percent observed over the previous decade.
Following a change in the US Federal Administration in January 2025, and after the contract had been awarded and the CHP engines were already in production, new tariffs were imposed that significantly increased applicable customs duties. At the time the CHP engines were delivered to the US in December 2025, the duty rate had increased to 15 percent. The contractor has indicated that this increase in duty was not reasonably foreseeable at the time the proposal was prepared and, therefore, could not have been included in the original proposal pricing.
The scope of this change order is to compensate the contractor for the additional 12.5 percent tariff imposed on the CHP engines that was not reasonably foreseeable at the time of bidding. The District is aware that on February 20, 2026, the Supreme Court issued its decision that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. As such, the District will require the contractor to provide documentation demonstrating that Nissen Energy, the CHP manufacturer, submitted a reimbursement claim or post-summary correction to US Customs and Border Protection within 180 days. Additionally, Nissen Energy will be required to provide a commitment letter declaring that any refund received after challenging the tariffs shall be turned over to the District within 60 days of receipt.
The contractor submitted a cost proposal (CO-12) for an extra in the amount of $101,421.60. The engineer reviewed the proposal, found it to be reasonable, and stated via correspondence CO12 that the Engineering Department would recommend its approval.
This change order is in compliance with the Illinois Criminal Code since the change is due to circumstances not reasonably foreseeable at the time the contract was signed and is in the best interest of the District.
It is hereby recommended that the Board of Commissioners authorize the Director of Procurement and Materials Management to execute a change order to increase Contract 20-RFP-28R in an amount of $101,421.60 (0.69% of the current contract value), from an amount of $14,818,752.22, to an amount not to exceed $14,920,173.82.
Funds are available in Account 201-50000-645650.
Requested, Catherine A. O’Connor, Director of Engineering, KMF:LS
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Precious Brady-Davis, Chairperson Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for April 16, 2026
Attachment