Report Prepared by: Bill Osmer, PWM - Wastewater
Title
SUBJECT: Authorization to Waive the Competitive Bidding Requirements to Allow Cooperative Purchasing Through the Competitively Bid Bay Area Chemical Consortium and Authorization to Purchase Chemicals for Wastewater, Water, and Facilities for a Three (3) Year Term for a Total not to Exceed Amount of $1,204,000
REPORT IN BRIEF
Authorization to waive competitive bidding requirement to purchase chemicals from the competitively bid Bay Area Chemical Consortium for a three-year term.
RECOMMENDATION
City Council - Adopt a motion:
A. Waiving the City’s competitive bidding requirement and authorizing the purchase of chemicals for wastewater, water, and facilities from vendors competitively bid through the Bay Area Chemical Consortium for a three-year term for a total amount of $1,204,000; and
B. Authorizing the City Manager to approve additional expenditures not to exceed 10% of the three-year total for bid pricing changes in year two and three; and,
C. Authorizing the City Manager or designee to execute the necessary contracts and documents.
Body
ALTERNATIVES
1. Approve, as recommend by Staff; or,
2. Approve, subject to other than recommended by Staff; or,
3. Deny; or,
4. Refer to Staff for reconsideration of specific items; or,
5. Continue to a future meeting.
AUTHORITY
Merced City Charter, Section 200. Municipal Code Section 3.04.210-Exemptions from competitive bidding.
CITY COUNCIL PRIORITIES
As provided for in the 2021/2022 Adopted Budget.
DISCUSSION
The City of Merced Wastewater Treatment Plant (WWTP) uses several chemicals in the treatment of wastewater. Bidding for these chemicals for the small quantities the WWTP uses typically means paying higher prices. The WWTP previously requested and received approval from Council at the August 8, 2014, meeting to waive competitive bidding and purchase chemicals from the Bay Area Chemical Consortium (BACC).
The BACC is an informal consortium that advertises and opens sealed competitive bids, and then prepares bid recommendations. Agencies that join the BACC bid together as one entity, and thus gain the benefit of having a lower cost for chemicals. Agencies that wish to participate in the BACC pay a yearly participation fee to the BACC. This year, the participation fee was $771.62 (see attachment 1).
The WWTP uses sodium hypochlorite and ferric chloride to treat wastewater, the Water Division uses sodium hypochlorite in the disinfection of drinking water, and the Facilities Division uses sodium hypochlorite in the disinfection of McNamara Pool.
In this year’s BACC bid, Univar Solutions USA was the winning bid for sodium hypochlorite at $0.7124 per gallon (pre-tax) and Thatcher Company of California was the winning bid for ferric chloride at $773.00 per dry ton (pre-tax) (see attachments 2 and 3). The unit price could vary in year two and three, depending on the market.
The chart below outlines the average chemical usage and estimated yearly amount (includes sale and use tax).
|
|
WWTP |
Water |
Facilities |
|
|
Gallons |
Cost |
Gallons |
Cost |
Gallons |
Cost |
|
Sodium Hypochlorite |
10,250 |
$7,910 |
45,000 |
$34,700 |
4,000 |
$3,100 |
|
|
WWTP |
|
|
Tons |
Cost |
|
Ferric Chloride |
425 |
$355,623 |
The three-year total for sodium hypochlorite is estimated at $137,130; the three-year total for ferric chloride is estimated $1,066,870; for an approximate three-year total of $1,204,000.
WWTP staff would like to request Council approval to continue purchasing sodium hypochlorite and ferric chloride under the BACC bidding process, to enter into a Supplies and Services Agreement with Univar Solutions USA and Thatcher Company of California, and approve the City Manager to authorize any expenditures, not to exceed 10 percent of the three-year total, for unforeseen usages or an increase in bid pricing.
IMPACT ON CITY RESOURCES
Fund 553 Wastewater, Fund 557 Water, and Fund 671 Facilities annually budget for their respective chemical usage.
ATTACHMENTS
1. BACC Participation Fee invoice
2. Univar Solutions USA bid
3. Thatcher Company of California Bid