Posting Language
Title
Authorize additional contingency funding for the contract for construction services to extend a chilled water transmission system at a 6th Street corridor for Austin Energy with Primoris Energy Services Corporation, in the amount of $15,757,999 for a revised total contract amount not to exceed $44,000,000. Funding: $15,757,999 is available in the Capital Budget of Austin Energy.
Body
Lead Department
Austin Financial Services.
Managing Department
Austin Energy.
Fiscal Note
Funding is available in the Capital Budget of Austin Energy.
Procurement Language:
Ratification.
MBE / WBE:
This contract was awarded in compliance with the City Code Chapter 2-9A (Minority-Owned and Women-Owned Business Enterprise Procurement Program). Current participation to date is 25.06% MBE and 0.98% WBE.
Prior Council Action:
November 21, 2024 - Council approved a contract with Primoris Energy Services Corporation for the 6th Street Chilled Water Transmission Line Extension Project.
December 11, 2025 - Council approved $5,648,400 in additional authorization for this contract.
For More Information:
Direct questions regarding this Recommendation for Council Action to Austin Financial Services - Central Procurement at: FSDCentralProcurementRCAs@austintexas.gov or 512-974-2500.
Council Committee, Boards and Commission Action:
November 9, 2026 - To be reviewed by the Electric Utility Commission.
Additional Backup Information:
The requested action is for Council to authorize additional contingency funding for the 6th Street Chilled Water Transmission Main Extension Project contract with Primoris Energy Services Corporation, so that this critical Austin Energy infrastructure work can continue. Per Texas Local Government Code 252.048(d), the original contract amount may not be increased by more than 25 percent. For this project, costs necessary to complete additional and remaining work exceeds the 25 percent threshold; however, that work is exempt under Subsections 252.022(a)-(2) and 252.022(a)(3) of the Texas Local Government Code as a procurement necessary to protect and preserve the public health and safety of the citizens of Austin and as a procurement necessary because of unforeseen damage to public property.
The 6th Street Chilled Water Transmission Main Extension Project is a critical Austin Energy infrastructure project currently in construction in downtown Austin. The project extends the City's chilled water transmission system through a key 6th Street corridor and is necessary to support reliable, chilled water service and maintain the integrity of the District Energy system.
During construction, the project encountered numerous unforeseen underground conditions that could not reasonably have been identified during design and planning despite subsurface utility engineering, potholing, utility coordination, field investigations, and engineering reviews. Conditions encountered include tieback obstructions, existing voids, water infiltration from deteriorated infrastructure, underground structures, flooding, degraded soils, and hazardous gas.
Although the project went through the Austin Utility Location and Coordination Committee, the conflicts ultimately encountered in the field were not identified during that review. The project also experienced impacts from Winter Storm Fern, copper theft, and vandalism to construction equipment. These unforeseen conditions changed the means and methods of construction, required engineering redesign and schedule extensions, and increased construction costs beyond the statutory 25 percent change order limit.
The work is necessary to safely complete and stabilize the partially constructed underground chilled water infrastructure and address unforeseen field conditions that could otherwise create risks to the surrounding public right-of-way and existing City utilities. Completing this work also protects Austin Energy’s existing investment in the project, prevents further deterioration or damage to public infrastructure, and ensures the chilled water system can be placed into reliable and safe operation.
This request for additional contingency funding allows for the expeditious processing of any change orders to cover unforeseen construction costs associated with the project. By authorizing the additional contingency funding, Council is authorizing any change orders within the contingency amount.
The project is under active construction, with partially completed tunnels, installed chilled water infrastructure, open excavations, and active traffic control. Suspending the work would significantly delay completion, increase costs, risk public health and safety, risk further damage to property, and prolong impacts to downtown traffic, businesses, and the public. Project completion is expected by June 2027.
This project is located within zip code 78701 (District 9).