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HomeMy WebLinkAbout2002-10-21 City Council (10)City of Palo Alto C ty Manager’s Report TO: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PUBLIC WORKS OCTOBER 21, 2002 CMR:426:02 REQUEST FOR APPROVAL OF INCREASED CHANGE ORDER AUTHORITY FOR CONTRACT #S0124304 BETWEEN THE CITY OF PALO ALTO’ AND NORTRAX WEST (FORMERLY EMPIRE EQUIPMENT COMPANY) IN THE AMOUNT OF $175,000 FOR LANDFILL HEAVY EQUIPMENT MAINTENANCE AND REPAIR EQUIPMENT 6 RECOMMENDATION Staff recommends that Council increase the contract change order authority with Nortrax West (formerly Empire Equipment Company) in the amount of $175,000 for landfill heavy equipment maintenance and repair, bringing the total amount of the contract to $600,000. DISCUSSION BackgroUnd In April 2000, Council awarded a three-year contract with Empire Equipment Company in the amount of $425,000 for landfill heavy equipment maintenance and repair. (See Attachment A). Project Description The work performed under the existing contract with Nortrax West is for the ongoing maintenance and repair of specialized landfill and compost processing equipment that includes a bulldozer, two loaders, a large compactor, a scraper, a tub grinder, a compost turner and a compost screener. The contractor provides a mechanic and a purpose-built service truckthat is fully equipped with tools and supplies, so that the majority of the maintenance and repair work may be accomplished on-site. The contractor is also capable of transporting oversize equipment to its local repair facility for major repairs. The original requested contract amount of $425,000 was based on the total cost for preventive maintenance services; the cost for 4,500 repair labor hours, and an anticipated cost increase of five percent for each successive year of the contract. Contract maintenance and repair costs were extrapolated from prior year actuals. CMR:426:02 Page 1 of 3 It was anticipated that the cost for maintaining the City’s landfill equipment would remain relatively stable during the term of this contract, as several pieces of equipment purchased during 1998-99 were still covered by extended warranty agreements. Unfortunately, costs have increased dramatically over the last two and one-half years, as evidenced by the attached chart (Attachment B). A detailed analysis of these costs revealed two major reasons for the unanticipated increase: Two new pieces of equipment (a compost turner, and a second wheel loader)were added during FY 1999-00 to augment the composting program. The estimated maintenance cost for this equipment was included in the initial contract amount; however, the actual costs were higher than the estimate. In addition, there was a period of overlap where surplus equipment was used while Refuse waited for this new equipment to be delivered. The maintenance costs on the older, less reliable surplus equipment were higher than normal. The annual maintenance costs for the City’s 1996 Fuel Harvester wood grinder more than doubled (from $32,000 to $73,000) between 1998 and 1999. The maintenance cost for this machine was $76,000 in 2000, and $74,000 in 2001. The dramatic increase in maintenance costs can be attributed in part to continual!y increasing production demands. At the time of its purchase, the Fuel Harvester was the largest and most powerful machine the City could reasonably afford. Over time however, it became apparent that the machine was undersized and underpowered for its intended application. Another major reason for the cost increase is that the machine’s hammermill assembly suffered several major failures during 2000 and 2001 (at an average repair cost of $30,000 per occurrence). These failures, in conjunction with the overload necessary to keep up with production demands, caused greater than anticipated wear and tear to the rest of the machine. The machine breaks down due to non-organic material inappropriately (e.g. steel rods) dumped with green waste. In a further effort to reduce maintenance costs related to the composting operation, the Fuel Harvester tub grinder was replaced with a new Morbark horizontal grinder in March 2002, one year ahead of its scheduled replacement date. The horizontal feed configuration is a much safer design (as it prevents material from being thrown into the air) than is the tub-style feed of the Fuel Harvester grinder. The Morbark grinder is larger, more powerful and more substantially constructed than the Fuel Harvester, and better suited to higher production requirements of the current composting program RESOURCE IMPACT Sufficient funding is available in the FY 2002-03 Public Works Department Equipment Management Operations and Maintenance budget to cover this increase. CMR:426:02 Page 2 of 3 POLICY IMPLICATIONS Authorization of the contract does not represent any change to the existing policy. ENVIRONMENTAL REVIEW This project is exempt from CEQA under Section 1530 of the CEQA guidelines. ATTACHMENTS Attachment A: CMR:207:00 Attachment B: Graph of 1998-2002 Landfill Equipment Maintenance Costs PREPARED BY: Keith LaHaie, Fleet Manager DEPARTMENT HEAD: CITY MANAGER APPROVAL: J. MICHAEL SARTOR Assistant Director of Public Works ENEST City Manager CMR:426:02 Page 3 of 3 ATTACHMENT A City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS 5 DATE: SUBJECT: APRIL 17, 2000 CMR: 207:00 AWARD OF CONTRACT TO EMPIRE EQUIPMENT COMPANY IN THE AMOUNT OF $425,000 FOR LANDFILL HEAVY EQUIPMENT MAINTENANCE AND REPAIR EQUIPMENT RECOMMENDATION Staff recommends that Council: Approve and authorize the Mayor-to execute the attached three-year contract with Empire Equipment Company in the amount of $425,000 for landfill heavy equipment maintenance and repair. Authorize the City Manager or designee to exercise the option to renew the contract for the second and third year, provided the contractor is responsive to the City’s needs, and the quality of the contractor’s work is acceptable during the first year of the contract. DISCUSSION Project Description The work to be performed under this contract is for the ongoing maintenance and repair of specialized landfill and compost processing equipment that includes two bulldozers, two loaders, a large compactor, a Scraper, a tub grinder, a compost turner and a Compost screener. The contractor provides a mechanic and a purpose-built service truck that is fully equipped with tools and supplies, so that the majority of the maintenance and repair work may be accomplished on-site. The contractor is also Capable of transporting oversize equipment to its local repair facility for major repairs. Bid Process It was not possible to include in the bid documents a description of every job that might be requested during the term of the contract, so contractors were asked to bid the total cost of three years’ preventive maintenance service for all of the equipment, hourly labor rate, and parts discounts. The requested .contract amount of $425,000 was based on the total cost for preventive maintenance services, the cost for 4,500 repair labor hours, and CMR:207:00 Page 1 of 3 an anticipated cost increase, of five percent for each successive year of the contract. A review of maintenance records indicates that an average of 1,500 repair labor hours are expended on this equipment annually. A notice inviting formal bids for heavy equipment maintenance was sent on March 1, 2000 to six contractors. The bidding period was 21 days. Bids were received from two qualified contractors on March 28, 2000, as listed on the attached bid summary (Attachment A). Bids ranged from a high of $512,975 to a low bid of $389,042. Two of the contractors not responding indicated that they were not qualified to work Caterpillar equipment, one did not offer the service we were requesting and one claimed that they did not have enough time to prepare and submit a bid. Staff has reviewed all bids submitted and recommends that the bid of $389,042 submitted by Empire Equipment Company be accepted and that Empire Equipment Company be declared the lowest responsible bidder. The bid is 14 percent below the staff estimate of $ 450,000. Bids were solicited from all heavy equipment maintenance contractors in the Bay Area. Based on the response to this and past bids, it is apparent that this highly specialized service is only available from two contractors, which for the last ten years have been Peterson Tractor Company and Empire Equipment Company. Therefore, calling for bids again would be unavailing. Empire Equipment Company has maintained the City’s landfill equipment for more than 10 years, and has generally performed satisfactorily. RESOURCE IMPACT It is anticipated that the cost for maintaining the City’s landfill equipment will remain relatively stable during the term of this contract, as several pieces of equipment purchased during 1998-99 are still covered by extended warranty agreements. Funds have been budgeted in the FY 1999-00 Public Works Department Equipment Management Operations and Maintenance budget for this contract. POLICY IMPLICATIONS Authorization of the contract does not represent any change to the existing policy. ENVIRONMENTAL REVIEW This project is exempt from CEQA under Section 1530 of the CEQA guidelines. ATTACHMENTS Attachment A: Attachment B: Bid Summary Contract PREPARED BY:Keith LaHaie, Fleet Manager Page 2 of 3 CMR:207:00 DEPARTMENT HEAD: GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: Assistant City Manager CMR:207:00 Page 3 of 3 ii C C C LL C w n \ UJ BY THIS AGREEMENT MADE ANDENTERED INTO ON THE B~’ AND BETWEEN THE CITY OF PALO ALTO "CITY", .AND fil~pire Equil~mat Company - (ADDRESS)38600 Cedar Blvd, ¯ ATTACHMENT B DAY OF fDA E TO BE E19-- ~.BY CITY PURCHASING ,a (510) (CITY) Newark (ZIP) 94560 (PHONE) 726-2.505 "CONTRACTOR" ~N CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES H ERETO AGREE AS FOLLOWS: ® CONTRACTOR S.,,..~L PROVIDE OR FURNISH THE FOLLOWING SPECIFIED :1) GOODS AND MATERIALS,-2~ SERVICES OR 3J A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW AND A’F£ACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE: TITLE: (DESCRIPTION) Heavy equipment repair services at the City’s Ref~e Disposal ~rea according to attached specifications. . EXHIBITS THE FOLLOWING ATTACHED EXH1BtTS HEREBY" ARE MADE PART OF THIS AGREEMENT: Specifications Insurance Requirements Contractor’ S Bid TERM THE SERWC~S AND/OR MATERIALS FURNISHED UNDER,THIn AGREEMENT SHALL COMMENCEON AND SHALLSE COMPLETED BEFORE ___~pril 30t 2003 COMPENSATION FOR THE FULL PERFORMANCE OF TH~S AGREEMEnt: [] CITY SHALL PAY CONTRACTOR: Monthly, upon receipt.of invoices. Total contract ar~unt not ~o exceed $425,000 [] CONTRACTOR SHALL PAY CITY: CiTY ACCOUNT ¯NUMBER: PAYMENT RECORD (DEPARTMEm’USE REVERSE May i~ 2000 KEY CODE OBJECT I PROJECT PHASE NO.I DOLLAR AMOUNT 8 ] 5_3~40 3125 r I 425,000 GENERAL TERMS AND CONDITIONS ARE INCLUDED ON BOTH SIDES OF THIS AGREEMENT. THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION BY CITY. IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRIT[’EN ABOVE. HOLD HARMLESS, CONTRACTOR agrees to indemnify, defend and hold harmless CITY, Its Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of CONTRACTOR’S, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct, or conduct for which the law imposes strict liability on CONTRACTOR in the performance of or failure to perform this agreement by CONTRACTOR. ENTIRE AGREEMENT. This agreement and the terms and conditions on the reverse hereof represent the entire agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. All prior agreements, representations, .statements, negotiations and undertakings whether oral or written are superseded hereby. PROJECT MANAGER AND REPRESENTATIVE FOR CITY NAME Kei~l LaHaie DEPT.l~q/F_qu~pn~nt M~agarent P.O. BOX 10250 PALO ALTO, CA 94303 Telephone . (650) 496~9~ SOCIAL SECURITY OR I.R.S. NUMBER INVOICING SEND ALL INVOICES TO THE CITY, A’I-I’N: PROJECT MANAGER CiTY OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL BOXES BELOW) CITY DEPARTMENT ~]Funds Have BeenBudgeted (i) APPROVAL OVER $25,000 CITY OF PAL0 ALTO INSURANCE REVIEW (2) ASSISTANT CIT~ MANAGER MAYOR CPA 02782 RETAIN GREEN COPY FOR YOUR FILES CONTRACTOR REOIlISIT!©NER PURCHASING & CONTRACT ADMINISTRATION (3) APPROVAL OVER $65,000 ’~ " " ATTEST: " AP#RoV£D’AS ~0 FORMi CITY CLERK CITY ATTORNEY REV. 6/98 ACCEPTANCE. THIS AGREEMENT IS LIMITED TO THE TERMS AND CONDITIONS ON THE FACE AND BACK HEREOF WHICH INCLUDES ANY EXHIBITS REFERENCED. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, INTEREST OF CONTRACTOR. IT IS UNDERSTOOD AND AGREED THAT THIS AGREEMENT IS NOT A CONTRACT OF EMPLOYMENT IN THE SENSE THAT THE RELATION OF MASTER AND SERVANqF EXISTS BETWEBNTHE CITY AND UNDERSIGNED. AT ALL TIMES CONTRACTOR SHALL BE DEEMED TO BE AN INDEPENDENT CONTRACTOR AND CONTRACTOR IS NOT AUTHORIZED TO BIND CITY TO ANY CONTRACTS OR OTHER OBLIGATIONS, IN EXECUTING THIS AGREEMENT, CONTRACTOR CERTIFIES THAT NO ONE WHO HAS OR WILL HAVE ANY FINANCIAL INTEREST UNDER THIS AGREEMENT IS AN OFFICER OR EMPLOYEE OF CITY. INSURANCE. CONTRACTOR AGREES TO PROVIDE THE INSURANCE SPECIFIED IN THE "INSURANCE REQUIREMENTS" FORM ISSUED HEREWITH, IN THE EVENT SELLER IS UNABLE TO SECURE A POLICY ENDORSEMENT NAMING THE CITY OF PALO ALTO AS AN ADDITIONAL INSURED UNDER ANY COMPREHENSIVE GENERAL LIABILITY OR COMPREHENSIVE AUTOMOBILE POLICY OR POLICIES, CONTRACTOR SHALL AT A MINIMUM, AND ONLY WITH THE WRITTEN APPROVAL OF CITY’S RISK MANAGER OR DESIGNEE, CAUSE EACH SUCH INSURANCE POLICY OBTAINED BY IT TO CONTAIN AN ENDORSEMENT PROVIDING THAT THE INSURER WA’tVES ALL RIGHT~:OF RECOVERY BY WAY OF SUBROGATION AGAINST CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES IN CONNECTION WITH ANY DAMAGE, CLAIM, LIABILITY PERSONAL INJURY, OR WRONGFUL DEATH COVERED BY ANY SUCH POLICY, EACH SUCH POLICY OBTAINED BY CONTRACTOR SHALL CONTAIBi AN ENDORSEMENT REQUIRING THIRTY (30) DAYS’ WRITTEN NOTICE FROM THE INSURER TO CITY BEFORE CANCELLATION OR CHANGE IN THE COVERAGE, SCOPE OR AMOUNT OF SUCH POLICY. CONTRACTOR SHALL PROVIDE CERTIFICATES OF SUCH POLICIES OR OTHER EVIDENCE OF COVERAGE SATISFACTORY TO CITY’S RISK MANAGER~ "TOGETHER WITH EVIDENCE OF PAYMENT OF PREMIUMS, TO CITY AT THE COMMENCEMENT OF THIS AGREEMENT~ AND ON RENEWAL OF THE POLICY, OR POLICIES, NOT LATER THAN TWENTY (20) DAYS BEFORE EXPIRATION OF THE TERMS OF ANY SUCH POLICY, TERMiNATiON. THIS AGREEMENT MAY BE TERMINATED BY CITY UPON TEN (10~ DAYS WRITTEN NOTICE TO CONTRACTOR. MONIES THEN OWF~G BASED UPON WORK SATISFACTORILY ACCOMPLISHED SHALL BE PAID TO CONTRACTOR. CHANGES° THIS AGREEMENT SHALL NOT BE ASSIGNED oR TRANSFERRED WITHOUT THE WRITTEN CONSENT OF THE CITY. NO CHANGES OR VARIATIONS OF ANY KIND ARE AUTHORIZED WITHOUT THE WRITTEN CONSENT QF THE CITY MANAGER, AUDITS. CONTRACTOR AGREES TO PERMIT CITY TO AUDIT, AT ANY REASONABLE TIME DURING THE TERM OF THIS AGREEMENT AND FOR THREE (3) YEARS THEREAFTER, CONTRACTOR’S RECORDS PERTAINING TO MATTERS COVERED BY THIS AGREEMENT, CONTRACTOR FURTHER AGREES TO MAINTAIN SUCH RECORDS FOR AT LEAST THREE (3~, YEARS AFTER THE TERM OF THIS AGREEMENT. NO IMPLIED WA!VER. NO PAYIvlENT, PARTIAL PAYMENT, ACCEPTANCE, OR PARTIAL ACCEPTANCE BY CR’Y SHALL OPERATE AS A WAIVER ON THE PART OF CITY OF ANY OF ITS RIGHTS UNDER THIS AGREEMENT, CITY’S PROPERTY. TITLE TO CITY’S PROPERTY FURNISHED TO CONTRACTOR SHALL REMAIN IN THE CITY. CONTRACTOR SHALL NOT ALTER OR USE PROPERTY FOR ANY PURPOSE, OTHER THAN THAT SPECIFIED BY CITY, OR FOR ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF CIT~’. CONTRACTOR SHALL STORE, PROTECT, PRESERVE, REPAIR AND MAINTAIN SUCH PROPERTY IN ACCORDANCE WITH SOUND PROFESSIONAL PRACTICE, ALL A7 CONTRACTOR’S EXPENSE. NON-DISCRIMINATION. NO DISCRIMINATION SHALL BE MADE IN’THE " EMPLOYMENT OF PERSONS UNDER THIS AGREEMENT BECAUSE OF THE RACE, COLOR, NATIONAL ORIGIN, AGE, ANCESTRY, RELIGION OR SEX SUCH PERSON. WARRANTY. CONTRACTOR EXPRESSLY WARRANTS THAT ALL MATERIALS :AND SERVtCES COVERED BY THIS AGREEMENT SHALL CONFORM TO THE SPECIFICATIONS, REQUIREMENTS, NSTRUCTIONS, OR OTHER DESCRIp~ TIONS UPON WHICH THIS AGREEMENT IS BASED, SHALL BE FIT AND SUFFICIENT FOR THE PURPOSE INTENDED, OF GOOD M~rERIAL AND WORKMANSHIP AND FREE FROM DEFECT AND THAT MATERIALS AND SERVICES OF CONTRACTOR’S DESIGN WILL BE FREE FROM DEFECT IN DESIGN. INSPECTION, TEST, ACCEPTANCE, PAYMENT OR USE OF THE GOODS FURNISHED HEREUNDER SHALL NOT AFFECT THE CONTRACTOR’S OBLIGATION UNDER THIS WARRANTY, AND SUCH WARRANTIES SHALL SURVIVE INSPECTION, TEST ACCEPTANCE AND USE. CONTRACTOR AGREES TO REPLACE, RESTORE, OR CORRECT DEFECTS OF ANY MATERIALS OR SERVICES NOT CONFORMING TO THE FOREGOING WARRANTY PROMPTLY, WITHOUT EXPENSE TO CITY, WHEN NOTIFIED OF SUCH NONCONFORMITY BY CITY, IN THE EVENT OF FAILURE BY CONTRACTOR TO CORRECT DEFECTS IN OR REPLACE NONCONFORMING. GOODS 08 SERMICES IPRO~#TL~, ~ITY, AFTER REASONABLE NOTICE TO CONTRACTOR, MAY MAKE SUCH CORRECTIONS OR REPLACE SUCH MATERIALS OR SERVICES AND CHARGE CONTRACTOR FOR THE COST INCURRED BY THE CITY THEREBY, . WORKERS~, COMPENSATION, CONTRACTOR; BY EXEOg][1NG THIS AGREEMENT, CERTIFIES THAT IT IS AWARE OF THE PROVISIONS OF THE LABOR CODE OF THE STATE OF CALIFORNIA WHICt:t REQU[~RE EVERY EMPLOYER TO BE INSURED AGAINST LIABILITY FOR WORKERS’ COMPENSATION OR TO UNDER]:AKE SE[-F-tI~SUR.AN.C:.E, IN AC,CORDANCE WITH THE PROVISIONS OF THAT CODE, AND CERTIFIES THAT IT WILL COMPLY WITH SUCH PROVISIONS BEFORE COMMENCING THE PERFORMANCE OF THE WORK OF THIS AGREEMENT, PRICE TERMS. (a) EXTRA CHARGES, INVOICES AND PAYMENT..NO ~XTRA CHARGES OF ANY KIND WILL BE ALLOWED UNLESS SPECIFICALLY AGREED TO IN WRITING BY CITY. ALL STATE AND FEDERAL EXCISE, SALES AND USE TAXES SHALL BE STATED SEPARATELY ON THE INVOICES. (b) TRANSPORTATION CHARGES, ANY TRANSPORTATION OHARG-4ES WITH RESPECT TO WHICH CONTRACTOR IS ENTITLED TO RECEIVE REIMBURSEMENT SHALL BE ADDED TO CONTRACTOR’S INVOICE AS A SEPARATE ITEM, WiTH THE RECEIPTED FREIGHT BILL ATTACHED THERETO. /c) CONTRACTOR WARRANTS THAT THE PRICES FOR MATERIALS QR SERVICES SOLD TO CITY IJI~DER THIS AGR~’EMENT AR~ NOT LESS FAVORABLE THAN THOSE CURRENTLY EXTENDED TO ANY OTHER CUSTOMERS OF THE SAME OR.LIKE ARTICLES OR SERVICES IN EQUAL OR LESS QUANTITIES, IN EVENT CONTRACTOR REDUCES ITS PRICE FOR SLICH MATERIALS OR SERVICES DURING THE TERM OF THIS AGREEMENT, CONTRACTOR AGREES TO REDUCE THE PRICES QR RATES HEREOF CORRESPONDINGLY, SCHEDULES OR DELIVERY. TIME IS OF THE ESSENCE OF THIS AGREEMENT, CONTRACTOR AGREES TO COMPLY WITH THE SPECIFIC SCHEDULE PROVIDED BY THE CITY OR AGREED UPON HEREIN WITHOUT DELAY AND WITHOUT ANTICIPATING CITY’S REQUIREMENTS, CONTRACTOR ALSO AGREES NOT TO MAKE MATERIAL COMMITMENTS OR SCHEDUL!NG ARRANGEMENTS IN EXCESS OF THE REQUIRED AMOUNT OR IN ADVANCE OF THE TIME NECESSARY TO MEET THE SCHEDULE(S) OF THIS AGREEMENT, IF ANY. TRANSPORTATION, PACKAGING & LABELING. ALL MATERIALS OR SERVICES ARE TO BE PROVIDED: (a) F.O,B. PALO ALTO UNLESS OTHERWISE SPECIFIED: (b) WITH A PACKING LIST ENCLOSED IN CARTONS, WHICH INDICATE THE AGREEMENT NUMBER, EXACT QUANTITY AND DESCRIPTIONS, CONCERNING ANY MATERIAL SHIPMENTS; (c) AND COMPLY WITH CURRENT PACKAGING AND LABELING REQUIREMENTS PRESCRIBED BY D.O.T. PAYMENT RECORD: (For Department Use! Warranl No.Date Warrant Ne.Date Amou[~t (2) ATTACHMENT B 0 0 0 0 0 00 0