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HomeMy WebLinkAboutStaff Report 242-06City of Palo Alto C ty Manager’s Report TO: FROM: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS13 DATE:JUNE 5, 2006 CMR:242:06 SUBJECT:APPROVAL OF A PURCHASE ORDER WITH PETERSON TRACTOR COMPANY IN THE AMOUNT OF $379,499 FOR THE PURCHASE OF A WASTE-HANDLING (LANDFILL) WHEEL LOADER RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or his designee to execute a purchase order with Peterson Tractor Company in the amount of $374,499 for the purchase of a waste-handling (landfill) wheel loader. DISCUSSION Equipment Management’s current vehicle and equil~ment replacement workplan includes the replacement of a wheel loader. This piece of equipment is at the end of its useful life. The wheel loader that is to be replaced is one of two used in the City’s composting operation. It is used to load greenwaste material into a grinder; to load ground material into a screening machine; to turn compost windrows during the decomposition process, and to load finished compost into tracks. The loader proposed for purchase is approximately 25% larger than the current unit; large enough that it can also be used to perform work that is currently performed by a large scraper, also operated at the landfill. Since the scraper is due for replacement as well, purchasing the larger loader will allow Equipment Management to eliminate the scraper from the City’s fleet. This will result in a net savings of more than $100,000 in replacement costs, and $20,000 in annual operating costs. This purchase is conducted in accordance with Section 2.30.900 of the Palo Alto Municipal Code (Standardization), and approved by the City Manager. The determination to standardize on Caterpillar waste-handling equipment was based on the following factors: ¯Minimization of repair and maintenance costs; ¯Reduced requirements for operation and maintenance training; ¯Reduction in spare parts inventory Other factors were considered as well, such as staff’s previous experience with Caterpillar equipment, and the traditionally higher resale value of Caterpillar products. A detailed description of all of the factors that lead to this determination is provided in Attachment "A." CMR:242:06 Page 1 of 2 Peterson Tractor is the only Northern California distributor for Caterpillar waste-handling equipment. Peterson is proposing prieing that is indexed to the State of California’s ’qVlultipie Award Sehedule" (CMAS) program. This pricing is representative of pricing offered to other government agencies. RESOURCE IMPACT Funds have been budgeted for this vehicle acxluisition in Department Vehicle and Equipment Replacement budget_the FY 2005-06 Public Works POLICY IMPLICATIONS The purchase of Caterpillar landfilt equipment based on standardization has been previously authorized by the City Council (CMR 423:05 - 12/5/05). ENVIRONMENTAL REVIEW The equipment being purchased will produce substantially less exhaust emissions than the equipment it will replace. This purchase does not eonstitme a project for California Environmental Quality Act (CEQA) purposes, thus no environmental review is required. ATTACHMENTS Attachment A: Detailed Basis for Standardization Purchase of Landfill Equipment Attachment B: Certification of Non-Discrimination PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: Fleet Manager GLENN ROBERTS ~~Public Works - Assistant City Manager CMR:242:06 Page 2 of 2 Attachment "A" DETAILED BASIS FOR SOLE-SOURCE PURCHASE OF CATERPILLAR WASTE- HANDLING EQUIPMENT Waste-Handling Wheel Loader: The 2005-06 Vehicle and Equipment replacement schedule includes the replacement of a large wheel loader operated by Public Works Operations in their composfing operation The loader being replaced is a 1998 Caterpillar 950F Series II wheel loader, which has accumulated nearly 10,000 operating hours with no major or unusual repairs. Public Works is also operating a 2000 Caterpillar 950G wheel loader in the same operation. The Caterpillar model 966H, while larger, is very similar to both of the existing wheel loaders. Our research indicates that there are several manufacturers of wheel loaders in the 50,000-55,000 pound class that have distributors in Northern California; Caterpillar (966H), Case (921C), John Deere (744J), and Kawasaki (90ZV) and Volvo (L150). Equipment Management has evaluated the available wheel loaders, and has determined the Caterpillar 966H to be the best replacement for the existing loader. This sole- source request is based on the provisions of Section 2.30.900 of the Palo Alto Municipal Code (Standardization), and the following additional factors: Standardization: The Caterpillar 966H is functionally identical to the model it will replace, as well as another wheel loader (Caterpillar 950G) that will continue to be operated for several more years. It utilizes a "C" series Caterpillar engine, which is already being used in many on and off-highway applications within the City fleet. City departments currently operate more than 45 Caterpillar engines, 28 of which are the "C" model, in trucks, tractors, and standby generators. Equipment Management has made a significant investment in training, diagnostic equipment and software utilized in the troubleshooting and repair of Caterpillar engines. In addition, Caterpillar’s ACERT emissions control technology has allowed Caterpillar engines to meet current EPA Tier HI emissions standards with minimal impact to performance, fuel economy, oil change intervals, or cooling system design. Competing manufacturers use exhaust gas recirculation systems that noticeably decrease power and fuel economy. The competing loaders use proprietary engines, which have no counterparts in the City’s fleet. Since City staff will be maintaining this equipment, standardization is important factor, both from a productivity and cost-effectiveness standpoint. Although equipment-specific training will be provided with any machine we might purchase, our operators and service technicians will experience a seamless transition from the 950G to the 966H. Parts and Service Support: Peterson Tractor supports many wheel loaders operating in landfills throughout the Bay Area and Northern California. Peterson Tractor’s service facility is capable of performing any repair or overhaul on any machine they represent. Peterson also offers a 95% fill rate (within 24 hours) for parts on this model. Additionally, Peterson Tractor has been selling, servicing and maintaining Caterpillar equipment since 1936. In contrast, the John Deere line has been handled by three different distributors (Empire Equipment, Nortrax, and Pape Equipment) since 1998. The stability and support capability of the other distributors is not known. Resale value: Resale value is a major consideration in this purchase, due to the fact that the landfill will be closing in five to six years. In five years, this machine will be at mid-life, and will still have a great deal of residual value. Due to their popularity, the resale value of Caterpillar wheel loaders in this class is much higher than that of competing models. A review of a major internet heavy equipment auction site (MachineryTrader.com) revealed the following data: Auction Sales Results for 2000 and 2001 Model Year Wheel Loaders (50,000 - 55,000 pound class)* Manufacturer Caterpillar Case John Deere Kawasaki Volvo * Within the last 24 months Model 966G 921C 744H 90Z IV L150D Number of Sales 52 4 5 2 2 Average Sales Price ........ $132,000 $82,000 $83,500 $75,500 $65,000 High resale value will reduce the overall cost of this acquisition, and ultimately, the impact to the Vehicle Replacement Fund, since this particular piece of equipment will not be replaced at the end of its life (due to the landfill closure). ATTACHMENT B CER’TIFICA.TION OF NONDISCRIMINATION FORM 410 Subject: Purchase of a Waste-Handling (Landfill) Wheel Loader Cert~cati, ,n of Nondiscrimination: Certification of Nondiscrimination: As suppl;ers of goods and/or services to the Ci~,of Pato Alto in excess of $5,000, the firm, conb"actor or individual(s) listed below certify that: they do not and in the perfonnance of this c~ntract theywill not discriminate in employment of any person because ol~ race, skin color, gender, age, religion, disability, national origin, ancestry., sexual orientation, housing status, m~ri÷.a! status, familia! status, we]ght or height of such person; and further certify 1hat they are in co~npliance with all Federal. State and Io~! directives and executive orders ~garding nondiscrimination in emp!oymenL CITY OF P/’d..O ALTO P,w. tz,o,,PAGE 1 OF !