Report Prepared by: Julio C. Márquez, Purchasing Supervisor, Finance Department.
Title
SUBJECT: Award Bid to Ferguson Enterprises LLC and PACE Supply Corp., and Approve Issuance of Purchase Orders (PO) in a not to Exceed Amount of $400,000 for Year One, and $435,000 for Year Two for the Purchase of Waterworks Supplies
REPORT IN BRIEF
Considers awarding the waterworks supplies’ bid by line item to Ferguson Enterprises LLC and PACE Supply Corp. in accordance with the attached price list, which shows the low bidder highlighted in green for each item for years one and two. Considers approving the issuance of POs to each vendor for the procurement of waterworks supplies in a not-to-exceed amount of $400,000 in combined purchases for calendar year 2024, and $435,000 for calendar year 2025 to account for potential inflation of about 8%.
RECOMMENDATION
City Council - Adopt a motion:
A. Awarding the bid for the supply of water works supplies to Ferguson Enterprises LLC and PACE Supply Corp.; and,
B. Authorizing the Purchasing Supervisor to issue POs to each vendor for 2024 and 2025 for a not-to-exceed amount of $400,000 and $435,000 respectivel; and,
C. Authorizing the City Manager and Deputy City Manager to execute the necessary documents; and,
D. Authorizing the Finance Officer to make the necessary budget adjustments.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Article XI, Section 1111-Competitive bidding, and Merced Municipal Code Chapter 3.04.050- Requisitions and 3.04.120 Written Contracts.
CITY COUNCIL PRIORITIES
As provided for in the 2023-2024 Adopted Budget.
DICUSSION
History and Past Actions
The Purchasing Division assists the Water Department with keeping an inventory of waterworks supplies. It is part of the overall inventory under the management of the division’s Central Stores. The City has met its needs for waterworks supplies in the past year through a Council approved one-year agreement. It consisted, in general, of the ongoing purchase on a as needed basis of waterworks supplies as listed in Exhibits 1 & 2.
Purchasing issued a request for bids for the procurement of waterworks supplies and performed a public bid opening on November 7, 2023. Ferguson and PACE provided a response. Exhibits 1 & 2 contain the bid pricing from Ferguson and PACE for years one and two. Pricing highlighted in green indicates the low bid for each item.
Staff recommends Council to award the bid to both vendors and allow the issuance of POs to each vendor for years 2024 (year one) and 2025 (year two) with the following understanding:
Each vendor will be awarded only the line items for which it was the low bidder. Should the vendor be awarded the line items for which it was the low bidder fail to honor the bid pricing over the prescribed year, Purchasing will order those same items from the other vendor who was not originally awarded those same line items. Before doing so, Purchasing will obtain separate quotes to compare prevailing pricing against the bid pricing submitted by the other vendor and select the lower of the two.
The reason for requesting this type of permission is to protect the City against the uncertainty of abrupt supply chain disruptions. Current on-going wars, US economy instability and potential socio-political strife due to the upcoming presidential election could very easily have detrimental effects on supply chains for the products in discussion.
The table below shows the calculated yearly average spent based on purchase records for the past three years for the two vendors among all City departments. Costs have gone up in recent years due to the lingering effects of the Covid-19 pandemic such as supply chain disruptions, manufacturing shortages, and inflation. Among other issues, markets have not recovered from the consequences of last year’s historic inflation rates. Thus, Staff requests Council to award the bid and approve the issuance of the POs as described above.
|
Fiscal Year |
Total/Year |
|
2020-21 |
243,032.94 |
|
2021-22 |
233,685.57 |
|
2022-23 |
415,937.13 |
|
Yearly Average |
297,551.88 |
The total combined amount of all POs for both vendors will not exceed the $400,000 maximum approved amount for year one and $435,000 for year two. Approximately, $300,000 will be used for the replenishing of water works supplies kept in inventory in the Central Stores warehouse. The approximately $100,000 remaining amount will be used for public works departments to purchase items for special or miscellaneous projects. All purchases of water works supplies not found in the attached pricing list will require obtaining at least two quotes from vendors. All unused POs will be set to expire by December 31, 2025.
IMPACT ON CITY RESOURCES
Purchases for the items in the pricing list are put into inventory. Items are expensed when Purchasing staff issues them to departments. In general, funding is available within the departments’ adopted budget.
ATTACHMENTS
1. Exhibit 1
2. Exhibit 2