HomeMy WebLinkAboutStaff Report 13652
City of Palo Alto (ID # 13652)
City Council Staff Report
Meeting Date: 11/29/2021
City of Palo Alto Page 1
Title: Approval of Amended and Restated Purchase Order Number
4521000199 with Altec Industries, Inc., to Increase the Purchase Order
Amount by $33,202 to a New Not-to-Exceed Amount of $667,068, for the
Purchase of Two Peterbilt Crane Trucks through a Cooperative Contract, in
the Scheduled Vehicle and Equipment Replacement -Fiscal Year 2020 Capital
Improvement Project (VR-20000)
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council approve and authorize the City Manager or their designee to
execute Amended and Restated Purchase Order No. 4521000199 (Attachment A) with Altec
Industries, Inc., to increase the Purchase Order amount by $33,202 for a new total not to
exceed amount of $667,068 in the Scheduled Vehicle and Equipment Replacement - Fiscal Year
2020 Capital Improvement Project (VR-20000), for the purchase of two 2022 Model DH50
Hydraulic Digger Derrick rear-mount Peterbilt crane trucks, utilizing a cooperative purchase
agreement via Sourcewell (contract number 012418-ALT), a cooperative purchasing agency
serving government and not-for-profit organizations.
Background
On January 11, 2021, Council approved a request to purchase two new 2022 Model DH50
Hydraulic Digger Derrick rear-mount Peterbilt crane trucks (CMR 11582) for an amount not to
exceed $633,866, to replace units 7602 and 7603. These vehicles were programmed in the
Fiscal Year 2020 Scheduled Vehicle and Equipment Replacement Capital Improvement Program
project (VR-20000). Purchase Order 4521000199, in the amount of $633,866 was issued with
Altec Industries, Inc. (Altec) on January 13, 2021.
Discussion
On August 13, 2021, Altec reached out to Public Works Fleet staff and indicated that with the
unprecedented rise in materials costs experienced over the last year, they have reached a point
where they are no longer able to absorb these increases from their suppliers. In turn, Altec can
no longer honor the original quote provided to the City for these new units and has provided a
letter recognizing these unique market conditions (Attachment B). An additional surcharge, per
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City of Palo Alto Page 2
unit, in the amount of $9,924 now applies to the Altec portion of the build. Also reflected is a
surcharge from Peterbilt of $4,960 per chassis as well as an updated sales tax quote that
reflects the current sales tax rate of 9.125%. A revised quote for the new total purchase cost of
$667,068 was provided on October 19, 2021 (Attachment C). Altec’s contract amendment with
Sourcewell, in which Sourcewell approved Altec’s request to adjust its existing Sourcewell
contract pricing, was also provided (Attachment D), along with Peterbilt’s breakdown of the
surcharges for the chassis (Attachment E).
Procurement Process
Palo Alto Municipal Code section 2.30.360 (j) allows the use of cooperative purchasing
agreements in lieu of conducting a competitive solicitation. Altec was awarded a contract by
Sourcewell (formerly known as the National Joint Powers Alliance or NJPA), a cooperative
purchasing agency serving governmental, higher education, K-12 education, not-for-profit,
tribal government, and other public agencies. Sourcewell conducted a Request for Proposals
under which Altec Capital was an awarded vendor. Altec’s contract with Sourcewell was
subsequently amended to allow Altec to increase its contract pricing.
If this request is not approved, we will forfeit the two 2022 Peterbilt chassis that are designated
for this build. Staff would then have to request a new specification and quote for a later year
model chassis and return to Council for approval. This would further increase the purchase cost
and delay the delivery of these new vehicles. On this basis, staff recommends proceeding with
the amendment.
Resource Impact
Funding was approved for the purchase of two 2022 Model DH50 Hydraulic Digger Derrick rear
mount crane trucks in the Fiscal Year 2020 Scheduled Vehicle and Equipment Replacement
Capital Improvement Project (VR-20000). Funding appropriated in VR-20000 in the FY 2022
Budget is sufficient to cover the increased costs of the purchases recommended in this report.
Stakeholder Engagement
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for
approval. FRC approved the replacement of these two vehicles through the scheduled five-year
replacement review.
Policy Implications
The approval of this request to purchase vehicles is consistent with existing City policies,
including the Council-approved Utilities Strategic Plan. The Utilities Strategic Plan includes
operating the electrical distribution system in a cost-effective manner, which includes
investments in vehicles and infrastructure to deliver reliable service.
Environmental Review
This purchase is exempt from the provisions of the California Environmental Quality Act (CEQA)
under Sections 10560 and 10561.
Attachments:
• Attachment5.a: Attachment B - Altec Material Surcharge Letter
• Attachment5.b: Attachment C - Quote
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City of Palo Alto Page 3
• Attachment5.c: Attachment D - Altec/Sourcewell Contract Amendment
• Attachment5.d: Attachment E - Statement from Coast Counties Peterbilt
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September 21, 2021 City of Palo Alto, Thank you for being a valued Altec customer. We greatly appreciate our relationship and look forward to serving you
for years to come. Costs in our industry continue to be volatile, increasing, and in cases like steel, at unprecedented levels. These increases have been widespread, affecting not only commodities like steel, aluminum, resins, and petroleum-based products, but also manufactured components from industrial suppliers. Steel futures indicate that prices will remain at elevated levels for the foreseeable future. The Producer Price Indexes (PPIs) below illustrate the magnitude of the
impact to our business.
We continue to experience price increases from key suppliers as shown in examples below:
We will continue to focus on lean manufacturing and implement cost-saving measures where possible. However, we are unable to absorb the entirety of the increased material costs we are experiencing in today’s environment. To offset a portion of these unanticipated costs, Altec is continuing a 5% surcharge into 2022. We will continue to monitor material prices to evaluate the need for this surcharge. Thank you for your understanding. Steven Ankney
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Appendix: These images can be substituted in the letter as needed
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Quote Number:694090-1
Opportunity Number:10569607
Sourcewell Contract #:012418-ALT
Date:9/29/2021
REFERENCE ALTEC MODEL
50' Fully Hydraulic derrick, rear mount $225,797
(A.)
1
2
3
4
(A1.)
1 UHBD Aluminum Bayonet Capstan Drum (fits any winch extended shaft)$568
2 DP Dica Pads and Pad Holder - 24" x 24" x 1", With Rope Handle (Pair)$633
3 SPOT6 Remote Spot Light, LED, Permanent Mount, With Wireless Dash Mounted Controls
And Programmable Wireless Remote $709
4 VCAM Backup Camera System $835
5 TBE ELECTRIC TRAILER BRAKE CONTROLLER. Controls Trailers with Electric
Brakes, Wired to 7-Way Plug Next to Pintle Hook $233
6 ISG Inverter Storage Inside of Body Compartment with Guard $588
7
8
SOURCEWELL OPTIONS TOTAL:$229,363
(B.)
1 UNIT
2
UNIT & HYDRAULIC ACC
10' JIB and braket, AB chance adapter, PCD24B Capstain w/ foot controller, Hyd
hose reel (50'), Tiiger pole puller w/ brackets, custom rope guides, custom subbase
compartmentation
$11,700
3 BODY Custom 2020 Altec Body with ladder, hotstick and open top storage boxes ILO
Sourcewell contract $9,184
4
BODY & CHASSIS ACC
Holland pintle hitch, custom derrick access step, cone holder (underhung), shovel
storage, modified exhaust tip, sign base holder, rigging D-ring for capstan, two-pole
capacity pole rack
$4,251
5
ELECTRICAL
TruckLite spot light above rotation, 42" LED directional light bar, four (4) 4.75" flood
lights, four (4) Federal Signal lights, 3600W Inverter and two (2) Aux batteries, 120V
GFCI quad receptacle and two (2) standard 120V GFCI, boom out of stow
indicators, additional strobe
$10,785
6 FINISHING Non-Regional build, CA Crane Certification (Incl/ horn at lower controls)$408
7 CHASSIS Custom Peterbilt 348 ILO Sourcewell Contract $21,708
OPEN MARKET OPTIONS TOTAL:$58,036
SUB-TOTAL FOR UNIT/BODY/CHASSIS:$287,399
Delivery to Customer:$3,568
Chassis Surcharge:$4,960
Altec Material Surcharge:$9,924ESTIMATED Sales Tax (9.125%):$27,583
Doc/Admin Fee:$100
(C.)
1
2
3
4
Altec Industries, Inc.
SOURCEWELL OPTIONS ON CONTRACT (Unit)
SOURCEWELL OPTIONS ON CONTRACT (General)
OPEN MARKET ITEMS (Customer Requested)
TOTAL FOR UNIT/BODY/CHASSIS:(each) $333,534
TOTAL FOR UNIT/BODY/CHASSIS QUANITY OF TWO (2): $667,068
ADDITIONAL ITEMS (items are not included in total above)
DH50
Quoted for: City of Palo Alto
**Pricing valid for 45 days**
NOTES
PAINT COLOR: White to match chassis, unless otherwise specified
Quoted by: Omar Salcedo
Altec Account Manager: William Hamburger
Phone: (707) 693-2579 / Email: omar.salcedo@altec.com
BUILD LOCATION: St. Joseph, MO
WARRANTY: Standard Altec Warranty for Aerials and Derricks - One (1) year parts warranty One (1) year labor warranty Ninety
TRADE-IN: Equipment trades must be received in operational condition (as initial inspection) and DOT compliant at the time of
CHASSIS: Per Altec Commercial Standard
DELIVERY: No later than __270__ days ARO, FOB Customer Location
TERMS: Net 30 days
BEST VALUE: Altec boasts the following "Best Value" features: Altec ISO Grip Controls for Extra Protection, Only Lifetime
TO ORDER: To order, please contact the Altec Account Manager listed above.
Sourcewell (formerly NJPA) updated with surcharges with updated tax
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Supplier Name:
CONTRACT AMENDMENT PRICE AND PRODUCT CHANGE REQUEST FORM
Altec Industries, Inc 012418-ALT Sourcewell Contract Number: (Contract)
Instructions A request for product or service changes, additions, or deletions to the Contract will be considered at any time throughout the Contract term. All modifications must be within the scope of the original RFP and be in the best interests of Sourcewell and Sourcewell Participating Entities. If approved, the request will be incorporated into the above- referenced contract; however, no changes will be binding unless the request is approved by the Manager of Supplier Development and this request is signed by Sourcewell’s Chief Procurement Officer.
Additions: New products and related services may be added to the contract if they are within the scope of the original RFP.
Deletions: Products and related services may be deleted from the contract if they are no longer available.
Price increases: Price increase requests must provide sufficient justification for the change (e.g., recently imposed tariffs or significant petroleum cost increases), not merely generalized statements requesting the increase.
Price decreases: Price decreases are accepted at any time.
Submit this request to the assigned Sourcewell Supplier Development Administrator.
______________________________________________________________________________________________
Request
Check all that apply
✔ Adding Products/Services
✔ Deleting Products/Services
✔ Price Increase
✔
✔
Price Decrease
Other
Detailed Justification for Changes
1. Changed Product List
List the products and/or services that are changing from the previous contract price list, along with the percentage
change for each item or category. Attach a separate sheet if a large number of changes are included in this request.
Please see attached document "Supplement to P&P" for detail around 2023 Model Year pricing.
Additionally the surcharge approved from PnP June 6 2021 is being extended and will effect trucks currently scheduled to complete production through the 1st half of 2022. This action is expanding the reach to orders quoted before 5-4-2021 which will invoice between 7-1-2021 and 6-30-2022 (originally invoice dates were 7-1-2021 to 12-31-2021)
DocuSign Envelope ID: 7D0F5D62-3A21-46AB-AE69-F155C7C15C87
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2. Justification for Changes
Provide justification and documentation explaining the requested changes (e.g., add a product because of technology
advances in new model of equipment, increased raw material costs, add a Hot List of products). Include the percentage
range of increase.
Please see attached document Altec Model Year 2023 Price Increase Reference Material. Significant changes since Altec's most recent P&P (fully executed 5-4-2021): * Altec Model Year 2023 pricing is now being quoted * Costs continue to increase and remain at unprecedented levels * Chassis new model year pricing has significantly increased, especially Ford Light Duty
3. Product additions only
Describe how the product additions fit within the scope of the original RFP.
Altec would like to add a new hybrid technology, JEMS SE Jobsite Anti-Idle and ePTO for Service Aerials with "Fiber to the Boom Tip" included. This is within the scope of the original RFP in that it provides Sourcewell members the most up to date offering to reduce emissions at their job site while performing work with our equipment.
4. Price changes or product/service additions only
State how the requested pricing is consistent with current Sourcewell contract pricing.
Pricing is consistent with our existing Sourcewell contract in that the discount ratio % from MSRP is maintained and within the limits we proposed on contract.
Complete Restatement of Pricing Submitted
I understand that a complete restatement of pricing must be attached with this request or it will not be processed.
Approvals
Supplier Offer:
This Price and Product Change Request has been submitted for review to be considered as an amendment to the above
referenced Contract. Riley Browne Digitally signed by: Riley Browne DN: CN = Riley Browne C = US O = Altec Industries Inc OU = A01427E000001689A3A3F4C00012E5A 9-8-2021 By: Date: 2021.09.08 12:30:54 -05'00' Supplier Authorized Signature Date
Riley Browne - Contract Specialist
Print Name and Title of Authorized Signer
Sourcewell Acceptance:
Sourcewell accepts Supplier’s offer in this Price and Product Change Request. By Sourcewell’s signature below, this
document becomes an amendment to the above referenced Contract and incorporates all referenced attachments into
this Amendment.
By:
Jeremy Schwartz
Sourcewell Chief Procurement Officer
Date
DocuSign Envelope ID: 7D0F5D62-3A21-46AB-AE69-F155C7C15C87
9/14/2021 | 8:41 AM CDT
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Statement from Coast Counties Peterbilt
Without rehashing the detail of the causes, the bottom line is the following as it relates to your size of
truck:
• Thousands of trucks slated for 2021 production have been taken out of build slots and put in an
unscheduled 2022 build bucket
• They have abandoned and/or modified the previous plan sent over in early August imposing
surcharges on all scheduled units depending on deal
• While a large portion of 2021 orders for fleets were cancelled and must be repriced/reordered
the older priced units remain viable to build with structured increases
• All dealers were placed on allocation, we are allowed a limited number of build slots per
model/month throughout the year.
In your case what we would have is access to build your truck in the first half of next year with one more
additional $1,000 material surcharge, a $500 increase in freight, and inclusion of the new mandatory
CARB emission warranty. So with that pricing we would be as follows:
(2) 2023 Peterbilt 348 2-axle Trucks
Original sale price: $ 91,105.00
Surcharge from August 2, 2021 1,000.00
Surcharge for 2022 build 1,000.00
2022 Freight surcharge 500.00
5 year/150,000 CARB emission warranty 2,460.00
Total per unit $ 96,065.00
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