HomeMy WebLinkAboutStaff Report 468-08City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY-MANAGER
DATE:DECEMBER 15, 2008
REPORT TYPE: CONSENT
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 468:08
SUBJECT:Approval of Amendment to Contract TC08125124 for Municipal Services
Center (MSC)-Warehouse Stock Items with HD Supply Utilities, LTD from
the Current Maximum of $250,000 to a Not-To-Exceed Amount of $475,000
for the Acquisition of Electrical Utility Parts on an As-Needed Basis
RECOMMENDATION
Staff recommends that Council:
Approve and authorize the City Manager or his designee to amend the contract with HD
Supply Utilities, LTD from $250,000 to a not-to-exceed amount of $475,000 through
May 15, 2009.
DISCUSSION
The Purchasing Department conducted a bid process that resulted in the award of a contract in
May 2008 for 371 different types of ’°stock" electric utility parts maintained at the MSC
Warehouse. The contract was awarded to HD Supply Utilities, LTD (HD). The parts from HD
are required to support the Utilities Department’s Capital Improvement projects, new electrical
service connections to customers in Palo Alto, and for miscellaneous repairs. Parts are ordered
from HD on an as needed basis to replenish inventory stock. The department pays for what it
uses and stores an adequate inventory of parts to complete planned and emergency projects.
Hence, this is an open contract where the amount spent could range from zero to the maximum
amount depending on the need for parts.
The initial contract estimate value was a not-to-exceed amount of $250,000 dollars. After re-
examination of historical utilization staff realized it has underestimated parts usage by
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approximately $100,000 and based on recent consumption trends staff estimates that and an
additional $125,000 will be required for a total of $225,000 for the remaining period of the
contract year. It is important.~to note that raising the limit of the contract does not necessarily
mean that the maximum amount of the contract will be spent. This request is based solely on
project and operational needs. If this CMR is not approved this will result in subject supplies
needing to be acquired through a purchase requisition method which will not only be inefficient
but also more costly to the organization.
RESOURCE IMPACT
There will be no new resource impact on the Electric Fund as a consequence of raising the HD
contract limit. The Electric Fund has sufficient budget in its capital and operating budget to
accommodate the requested $225,000 dollar increase.
POLICY IMPLICATIONS
Authorization of the amendment to the terrn contract does not represent any change to the
existing policy.
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PREPARED BY:
DEPARTMENT APPROVAL:
Administrative Services Director
CITY MANAGER APPROVAL:
JA~g KEENE
CitsiManager
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