DATE: October 28, 2015
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Russell Truell, Assistant City Administrator / CFO
Mark Hilty, Water Management Director
Michelle Hatcher, Water Management Assistant Director
Russell Sullivan, Water Treatment Superintendent
Juan Davis, Water Reclamation Superintendent
Brian Wilcox, Purchasing Manager
SUBJECT:
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Consideration Of Bid Award To American Development Corporation Of Fayetteville, Tennessee In The Delivered Bid Price Amount Of $1.45 Per Gallon For The Water And Wastewater Treatment Chemical Sodium Hypochlorite For A Specified Term Of Award, With Options To Extend, For The Water Management Department (Purchasing Office Procurement Solicitation No. 2016-001; Contract No. 2015-0361) (11/10/15 WS)
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Purpose
The purpose of this procurement is to establish unit pricing for the supply and delivery upon demand of the water and wastewater treatment chemical sodium hypochlorite (a.k.a., bleach or liquid bleach or chlorine bleach) for an initial term of award through June 30, 2017, with up to three (3) options to extend, each time for up to one (1) additional year, for the Water Management Department. This chemical is routinely used at the City’s Water Treatment Facility for the production of potable water as well as at the City’s Water Reclamation Facility for the disinfection of reclaimed water.
Background
The City published on August 20, 2015 a Notice to Bidders in the Williamson Herald for supply and delivery upon demand of each of the following water and wastewater treatment chemicals for the specified term of award: sodium hypochlorite (Purchasing Office Solicitation No. 2016-001), sodium hydroxide (2016-002), muriatic acid (hydrochloric) (2016-003), and sludge polymer (2016-004); each being bid independently. In addition, bid documents were sent on or about the same date directly to nineteen (19) potential bidders known or thought to be interested in this solicitation. Bids from four (4) vendors were publicly opened at the bid opening held on October 15, 2015. A tabulation of the bids received for this solicitation is attached.
Financial Impact
The apparent lowest, most responsive and responsible bid, from American Development Corporation of Fayetteville, Tennessee, is in the amount of $1.45 per gallon for the Water Treatment Facility and $1.45 per gallon for the Water Reclamation Facility for sodium hypochlorite. This bid was identified because it is the lowest bid that meets or exceeds the City’s intention as expressed and implied by the City’s specifications as well as the instructions, terms and conditions pertaining to this procurement solicitation. It is worth noting that the City did receive two bids that quoted lower pricing than was quoted by American Development Corporation; however, neither of these bids included the required documentation to qualify as responsive to the City’s procurement solicitation.
By comparison with the unit pricing being paid by the City currently for sodium hypochlorite ($1.48 per gallon for the Water Treatment Facility and $1.57 per gallon for the Water Reclamation Facility), which unit pricing was established by competitive process conducted in 2013 for the Water Treatment Facility and 2012 for the Water Reclamation Facility, the 2015 unit pricing bid by American Development Corporation is $0.03 per gallon (2%) lower for the Water Treatment Facility and $0.12 per gallon (8%) lower for the Water Reclamation Facility. (It is worth noting that the 2015 solicitation for bids for sodium hypochlorite was for both plants unlike the 2012 and 2013 solicitations for bids for sodium hypochlorite which were for one plant each.)
The Water Management Department estimates that the Water Treatment Facility may require 26,000 gallons of sodium hypochlorite per year and that the Water Reclamation Facility may require 65,000 gallons of sodium hypochlorite per year. (Bidders were advised and cautioned that the indicated estimated quantities represent only approximate projections and do not represent guaranteed minimums or maximums.) Thus, the total value of an award to American Development Corporation pursuant to the unit pricing described above for the two specified uses of sodium hypochlorite if all options to extend the term of award are exercised (a potential total of 4.5 years) is estimated to be $593,775. The Water Treatment Division of the Water Management Department budget for fiscal year 2016 allocates $283,250 out of the Water Fund, and the Water Reclamation Division allocates $231,750 out of the Wastewater Fund, for the purchase of chemicals and lab supplies.
Options
In accordance with the bid documents, the City reserves the right to reject any and all bids.
Recommendation
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Staff recommends that the City accept, contingent upon Law Department and City Administrator approval of City Contract No. 2015-0361, the apparent lowest best bid, from American Development Corporation of Fayetteville, Tennessee, in the delivered bid price amount of $1.45 per gallon for the Water Treatment Facility and $1.45 per gallon for the Water Reclamation Facility, for the water and wastewater treatment chemical sodium hypochlorite for a specified term of award, with options to extend, for the Water Management Department. Purchasing Manager Brian Wilcox is of the opinion that the prepared specifications as distributed allowed for competition among multiple vendors, and that the staff recommendation appears to be made in a fair and impartial manner based upon the bids received.