SFPUC increases contingency by $5 million for Westside recycled water treatment facility after VFD corrosion and delays

The San Francisco Public Utilities Commission on Thursday approved a $5 million increase to the contract cost contingency for the Westside Recycled Water Treatment Facility at the Oceanside Plant (contract WD‑2776). Project staff said the funding increase will cover extended contractor overhead related to negotiated delays and equipment and mechanical/electrical changes needed after equipment failures were discovered during commissioning.

What happened: project staff described a major failure of reverse osmosis system variable frequency drives (VFDs) discovered during pre‑commissioning in 2023. SFPUC staff and an outside consultant concluded corrosion on the VFDs resulted from ventilation ducting that allowed moist air into electrical cabinets. Because most of the construction work under contract WD‑2776 was complete, staff contracted separately for replacement equipment and modifications rather than expand the original construction contract to perform the corrective work.

Costs and schedule

- SFPUC said replacement of the VFDs themselves is approximately $1.5 million and HVAC/ductwork modifications are roughly $0.5 million; the $5 million contingency request covers those changes plus negotiated contractor extended overhead related to delays and miscellaneous change orders.

- The project faced multiple delays during construction, including COVID‑related supply chain issues, parts long lead times for electrical and mechanical components, and contractor‑caused delays. The negotiated substantial completion date is 02/04/2025; administrative closeout work and corrective equipment replacement are still underway.

Commission action and context

Commissioners approved the contingency increase. Commissioner Levarone pressed staff on the cause of the failure; staff said the ductwork/ventilation design was defective and that Department of Public Works design elements were implicated. The commission voted to increase the contingency by $5 million to allow the contractor and the agency to finalize administrative closeout and corrective equipment replacement and to resume commissioning.

What’s next

Staff said it will complete equipment replacement, restart commissioning and continue administrative contract closeout work. The utility said it negotiated in good faith on concurrent delays and final overhead costs. The item passed with recorded ayes from President Stacy, Commissioner Jamdar, Commissioner Levarone and Commissioner Thurlow; Vice President Arce was absent.

Speakers recorded in the presentation included Barbara Palacios (Project Manager, Westside Enhanced Water Recycling Project) and follow‑up comments by senior water staff.