Small $5M contract grows to $40M as PUD takes more dam work in-house

WENATCHEE — What began as a modest $5 million support contract in 2022 has grown into a $40 million partnership as Chelan County PUD increasingly performs its own powerhouse modernization and repair work at Rock Island and Rocky Reach dams.

Commissioners on Feb. 2 approved additional change orders to a unit-priced labor contract with Bender CCP of Vernon, California, extending the agreement through August and adding $5 million to the remaining authorization. The action brings the total value of the contract over its four-year life to roughly $40 million.

But the growth in the contract, staff told commissioners, is less about escalating costs and more about the PUD’s expanding ability to do major hydrogeneration work with its own crews.

Tim McMaster, project delivery manager at Powerhouse One at Rock Island Dam, explained that the contract was originally intended as a way to supplement district crews as the PUD began taking on more of its own unit repair and modernization work rather than relying entirely on outside contractors.

“At that time, the previous contractor was still earmarked to perform some of the major tasks,” McMaster said. “Then we transitioned, and we started assuming more and more of the units.”

Over the past three and a half years, Chelan PUD has taken responsibility for rebuilding and modernizing multiple powerhouse units itself — first one, then several more — using its own central maintenance crews. The Bender contract provides specialized labor and capabilities for tasks that are infrequent or highly technical, such as discharge liner repairs, specialty concrete work, grouting and spillway-related projects.

The contract has also been used at Rocky Reach to assist with spillway work and other preparations tied to ongoing dam maintenance and modernization.

Commission Chair Kelly Allen asked McMaster to clarify for the public how a contract that began at $5 million had grown so significantly over a short period of time.

Originally, McMaster said, the scope of work expected from the PUD’s own crews was much smaller. As the district gained confidence and experience performing major unit work in-house, it began relying more heavily on the unit-price contract to fill in specialty gaps and support larger efforts.

“It’s actually been working really well,” PUD General Manager Kirk Hudson interjected. “As we take more work back, we release more of those task authorizations,” added General Counsel Erik Walquist.

Because the agreement is a unit-price contract, the PUD is not paying a flat amount but instead authorizing specific tasks as needed at pre-bid rates.

The additional funding approved Monday is intended to bridge the gap through the end of the contract term in August while the PUD solicits bids for a replacement agreement.

The evolution of the contract reflects a broader shift in how Chelan PUD approaches dam maintenance and modernization, relying more on internal expertise and using outside contractors strategically for specialized support rather than as primary builders.

“It’s safe to say when we originally were looking at our alternatives and weren’t sure how this was going to work, we started out small,” Hudson said.

Four years later, the results are visible in both the scale of the work being done in-house and the size of the contract that helps make it possible.

Andrew Simpson: 509-433-7626 or andrew@ward.media