Title
MOTION TO APPROVE A CHANGE ORDER IN THE AMOUNT OF $436,170 WITH LHOIST NORTH AMERICA OF ALABAMA, LLC., FOR THE PURCHASE OF QUICKLIME ON AN AS-NEEDED BASIS, UTILIZING THE PRICING ESTABLISHED BY THE SOUTHEAST FLORIDA GOVERNMENTAL COOPERATIVE PURCHASING GROUP (CO-OP) BID # 20-21B, INCREASING THE ANNUAL AMOUNT TO AN AMOUNT NOT TO EXCEED $1,632,330.00, PURSUANT TO SECTION 35.18(C)(6) OF THE CITY'S CODE OF ORDINANCES.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City's Code of Ordinances is titled "PROCUREMENT PROCEDURES, PUBLIC FUNDS."
- Section 35.18 of the City's Code of Ordinances is titled "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(C) states that "Only the following situations are exempt from the competitive bid and competitive proposal requirements of this section:"
- Section 35.18(C)(6) states that, "Cooperative purchasing plans are exempt from this section."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A) of the City's Code of Ordinances is titled "City Commission Approval."
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $25,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
- Chapter 35.28 of the City’s Code of Ordinances is titled “CHANGE ORDERS.”
- Chapter 35.28(B) states that “Notwithstanding the provisions of division (A), the City Manager is not authorized to approve a change order without authorization of the City Commission where the initial purchase required the City Commission’s approval and where the sum of all change orders issued under the contract exceeds 5% of the original contract amount or $25,000.
SUMMARY EXPLANATION AND BACKGROUND:
1. In accordance with the City's Utilities Operations and Management Agreement with Jacobs/OMI, the City is responsible for providing chemicals for the operation of the Utility.
2. The Utilities Department uses calcium oxide, also known as quick lime, as part of the treatment process at the City's water treatment plant.
3. On October 21, 2020, the City Commission approved the purchase of quick lime, on an as-needed basis, utilizing the Southeast Governmental Cooperative Purchasing Group (Co-Op), at a unit price of $284.80 per ton equating to an annual amount not to exceed $1,196,160.00, throughout the term of the three (3) year contract dated November 1, 2020 through October 31, 2023.
4. The Co-Op agreement allows for price adjustments on a quarterly basis if the vendor is able to provide substantive documentation to support the request for an increase based on material price, costs of transportation, and fuel surcharge costs. Throughout the term of the contract, the price has fluctuated. In the first two quarters of this calendar year, the price was $392.20 per ton and, in the current quarter, the price is $388.65 per ton. Throughout 2023, therefore, the price has been significantly greater than the original $284.80 per ton, upon which the originally approved contract value of $1,196,160.00 was based and expenditure on this commodity will exceed that contract value.
5 The lead agency for this Co-Op, the City of Tamarac, has a bid open at this time for quick lime which will be presented to their Commission for approval some time in October. Once the new bid is approved and updated for the Cooperative purchasing group, the Utilities Staff plans to present that new Co-Op contract to the Commission for consideration.
6 Based on the above, Utilities Staff recommends City Commission approval of a change order to the above-referenced contract in the amount of $436,170.00 to purchase Quicklime on an as-needed basis from Lhoist North American of Alabama, LLC. utilizing pricing established by the Southeast Florida Governmental Purchasing Cooperative Group (Co-Op) Bid # 20-21B, thereby increasing the annual not to exceed amount from $1,196,160.00 (4,200 Tons x $284.80/Ton) to $1,632,330.00 (4,200 Tons x $388.65/Ton), pursuant to Section 35.18(C)(6) of the City's Code of Ordinances.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: $1,632,330.00 of which $1,184.622.40 has been spent to date in FY2023.
b) Amount budgeted for this item in Account No: 471-533-6031-552430-0000-000-0000- (Operating Chemicals)
c) Source of funding for difference, if not fully budgeted: If needed, monies are available and will be moved accordingly from the following account numbers: 471-533-6032-552651-0000-000-0000- (Non-capital meters) and 471-533-6032-546250-0000-000-0000- (R&M Equipment)
d) 5 year projection of the operational cost of the project One month of usage remains in fiscal year 2023 and another month in fiscal year 2024. Below is a breakdown of estimated usage (300 tons per month).
|
|
FY 2023 |
FY 2024 |
Year 3 |
Year 4 |
Year 5 |
|
Revenues |
$0.00 |
$0.00 |
|
|
|
|
Expenditures |
$116,595.00 |
$116,595.00 |
|
|
|
|
Net Cost |
$116,595.00 |
$116,595.00 |
|
|
|
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Not Applicable.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Not Applicable.