DATE: June 1, 2017
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Kristine Tallent, Assistant City Administrator - Finance and Administration / CFO
Mark Hilty, Assistant City Administrator for Public Works
Michelle Hatcher, Interim Director, Water Management Department
Juan Davis, Superintendent, Water Reclamation Facility
Brian Wilcox, Purchasing Manager
SUBJECT:
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Acknowledge Report Of Emergency Purchase From J&T Services, LLC Of Columbia, Tennessee Of Services Pertaining To The Rebuilding Of An Oxidation Ditch Mixer Gear Box In The Total Amount Of $25,096.88 For The Water Reclamation Division Of The Water Management Department ($65,000.00 For Line Item Budgeted In 431-82620-52213 For Fiscal Year 2017)
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Purpose
The purpose of this procurement is to purchase the rebuilding of an oxidation ditch mixer gear box at the City’s Water Reclamation Facility. The gear box (or gear reducer) that needed to be rebuilt was manufactured by Sumitomo and is used at the Water Reclamation Facility for oxidation ditch no. 1.
Background
On October 27, 2016, the Sumitomo gear box for oxidation ditch no. 1 at the Water Reclamation Facility failed. The following day, at the request of City staff, J&T Services removed the failed gear box from the Water Reclamation Facility and prepared it for shipping to Ovivo, the company that installed the oxidation ditch and supplied the equipment - including the Sumitomo mixer gear box - necessary to operate the oxidation ditch for repair. After Ovivo completed the rebuild of the failed gear box, on May 9, 2017, J&T Services reinstalled the repaired gear box and put it back into service.
J&T Services has now invoiced the City in the total amount of $25,096.88. Of this amount, $19,547.00 is for the gear box rebuilding services rendered by Ovivo; the balance ($5,549.88) is for removal of the failed gear box, shipping and reinstallation of the rebuilt gear box, which services were rendered by J&T Services. The rebuilt gear box is now performing satisfactorily.
The portion of the invoice attributable to the gear box rebuilding services rendered by Ovivo ($19,547.00) is $1,777.00 more than staff had been quoted by Ovivo in December. The difference is due to a 10% mark-up by J&T Services.
The following excerpt from the City’s Purchasing Policy describes how emergency purchases are to be handled:
When in the judgment of the City Administrator, the Department Head or the Purchasing Manager there exists an emergency impinging on public health, safety or welfare and a purchase valued at or greater than $10,000 is necessary, then the competitive purchasing provisions contained in this Purchasing Policy may be waived; provided, however, that if the emergency purchase is valued at or greater than $25,000 it shall be reported to the Board of Mayor and Aldermen at its next scheduled meeting.
As the gear box is critical to the operation of the oxidation ditch and thus to the year-round operation of the Water Reclamation Facility, staff determined that the repair qualified as an emergency purchase. Further, as having the gear box rebuilt by the company that installed the oxidation ditch and supplied the equipment necessary to operate the oxidation ditch seemed (and still seems) imperative, staff concluded that competitively pricing the gear box rebuilding was not a viable option.
Financial Impact
The gear box failure was not anticipated in the budget for fiscal year 2017. However, City staff believe the total cost of the repair may be absorbed in the Water Management Department budget for fiscal year 2017.
Recommendation
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Staff recommends that the Board of Mayor and Aldermen acknowledge receipt of this report of the emergency purchase from J&T Services, LLC of Columbia, Tennessee of services pertaining to the rebuilding of an oxidation ditch mixer gear box in the total amount of $25,096.88 for the Water Reclamation Division of the Water Management Department. Purchasing Manager Brian Wilcox believes the staff recommendation appears to be made in a fair and impartial manner based upon the information available, and that the emergency purchase appears to be justified.