HomeMy WebLinkAboutStaff Report 192-06City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE:APRIL 10, 2006 CMR:192:06
SUBJECT:APPROVAL TO INCREASE PURCHASE ORDER NO. 4606000269 WITH
SIERRA CHEMICAL COMPANY BY $65,000 FOR A TOTAL OF $314,600
FOR THE PURCHASE OF BULK CHLORINE ANDSULFUR DIOXIDE
FOR THE WATER QUALITY CONTROL PLANT
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or his designee to amend
purchase order #4606000269 with Sierra Chemical Company to increase the maximum purchase
order amount by $65,000 for a total purchase order amount of $314,600.
DISCUSSION
The current purchase order #4606000269 with Sierra Chemical Company is for purchases of
chlorine and sulfur dioxide with a maximum expenditure amount of $249,600. The proposed
$65,000 increase requires Council approval because the resulting purchase order amount will
exceed $250,000. Chlorine is required for disinfection to protect public health and sulfur dioxide
is required to eliminate the chlorine residual of the Water Quality Control Plant effluent before
discharge into the Bay.
Based on the Request for Quotation for the purchase of Bulk Chlorine and Sulfur Dioxide in
December 2003, Sierra Chemical Company was awarded the purchase order to supply chlorine and
sulfur dioxide as specified. In September 2005, Sierra Chemical declared "force majeure" for all
sulfur dioxide supply contracts, including the City’s, because of a three month long strike at Teck
Cominco’s sulfur dioxide manufacturing plant in British Columbia. In order to supply the City
and the other customers, Sierra Chemical purchased sulfur dioxide from an East Coast
manufacturer at substantially higher material and freight costs. In addition Sierra Chemical sought
to increase chlorine prices charged to the City due to significant cost increases resulting from
government regulations and compliance fees, rising freight and fuel costs, and high manufacturing
costs. The City’s purchase order contract allowed the City to seek a new supplier in the event
force majeure was invoked. City staff contacted other chlorine and sulfur dioxide suppliers to
determine whether any competitive pricing opportunities existed. Staff was unable to locate a
supplier that could provide the chemicals at a lower cost or who would commit to firm pricing for
a reasonable time period. Based on this market research, staff concluded there was no advantage
to soliciting new bids at this time. Therefore, in order to insure adequate supplies of chlorine and
sulfur dioxide for the Water Quality Control Plant, staff recommends accepting Sierra Chemical’s
price increases and increasing the maximum purchase order amount by $65,000.
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CMR:192:06 Page 1 of 2
A new Request for Quotation has been issued to procure competitive bids for the purchase of
chlorine and sulfur dioxide for next fiscal year. However, this request to increase the purchase
order by $65,000 is necessary to ensure the Water Quality Control Plant has adequate quantities of
chorine and sulfur dioxide to meet requiremems for the remainder of this year.
RESOURCE IMPACT
Funds have been budgeted for these operational costs in the FY 2005-06 Wastewater Treatment
budget.
POLICY IMPLICATIONS
Authorization of the change order does not represent any change to the existing policy.
ENVIRONMENTAL REVIEW
Supplier is required to comply with all Federal, State and local environmental laws and regulations
applicable to the transportation and delivery of chlorine and sulfur dioxide.
PREPARED BY:
DEPARTMENT HEAD
GLENN ROBERTS
Director of Public Works
CITY MANAGER APPROVAL:
;ON
Assistant City Manager
CMR:192:06 Page 2 of 2
ATTACHMENT A
CERTIFICATION OF NONDISCRIMINATION SECTION 410
Certification ’of Nondiscrimination:
As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below
certify that they do not discriminate in employment with regards to age, race, color, religion, sex,
national origin, ancestl~, disability, or sexual preference; that they are in compliance with all
Federal, State, and local directives and executive orders regarding nondiscrimination in
employment.
(Sial’nature)- 7 "- -"(Signature)
S~=~1~, ~ v~Lynn Kinder
(Printed name of signatory)(Printed name of signatory)
President & CEO Sr, Vice-President/Secretary
(Title of signatory)(Title of signatory)
Note:The City, pursuant to Califomia Corporations Code Section 313 requires two corporate
officers to execute contracts. The signature of First Officer* must be one of the following:
Chairman of the Board; President; or Vice President, The signature of the Second Officer**
must be one of the following: Secretary; Assistant Secretary; Chief Financial Officer; or
Assistant Treasurer. In the alternative, a certified corporate resolution attesting to the
signatory authority of the individuals signing in their respective capacities is acceptable.
Or,
The ufldersigned certifies that the Bidder is not a corporation, and is not subject to the requirements
of California Corporations code, and hereby agrees to, and accepts the terms and conditions of this
RFQ.
(Sign, ature)
(Printed name of signatory)
(Title of signatory)
CITY OF PALO ALTO RFQ WQCP031117 PAGE 1 OF 1