HomeMy WebLinkAboutStaff Report 2301-08075.Approval of Amended and Restated Purchase Order Number 4522000178 with Interstate
Truck Center, to Increase the Purchase Order Amount by $96,767 for a New Not-to-
Exceed Amount of $487,768, Which Includes a 5% Contingency in the Amount of $23,227
for Unforeseen Price Increases, for the Purchase of a 2024 Peterbilt 537 with a Western
Truck Fab Service Body; CEQA status – exempt under CEQA Guidelines, Section 15061.
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CITY COUNCIL
STAFF REPORT
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: September 5, 2023
Report #: 2301-0807
TITLE
Approval of Amended and Restated Purchase Order Number 4522000178 with Interstate Truck Center,
to Increase the Purchase Order Amount by $96,767 for a New Not-to-Exceed Amount of $487,768,
Which Includes a 5% Contingency in the Amount of $23,227 for Unforeseen Price Increases, for the
Purchase of a 2024 Peterbilt 537 with a Western Truck Fab Service Body; CEQA status – exempt under
CEQA Guidelines, Section 15061.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to amend
purchase order 4522000178 with Interstate Truck Center d/b/a Valley Peterbilt by increasing the not to
exceed amount by $96,767 for a new total not to exceed amount of $487,768 which includes a 5%
contingency in the amount of $23,227 for unforeseen price increases, for the purchase of a 2024 Peterbilt
537 Extended Cab Chassis with Western Truck Fab Maintenance, Construction Service Body, utilizing
cooperative purchase agreement number 060920 between Peterbilt Motors Company and Sourcewell, a
government agency and service cooperative that offers cooperative procurement solutions to
government entities.
BACKGROUND
On December 6, 2021, Council approved a request to purchase one new 2023 Peterbilt 537 Extended Cab
Chassis with American Truck and Trailer Body Maintenance, Construction Service Body1 for an amount
not to exceed $391,002, to replace unit 8792. At this time, Council approved a transfer of $191,002 from
the Gas Fund to the Vehicle Replacement and Maintenance Fund to support this purchase. This vehicle
was programmed in the Scheduled Vehicle and Equipment Replacement - Fiscal Year 2022 capital project
(VR-22000). Purchase order 4522000178, in the amount of $391,001.22 was issued to Interstate Truck
Center d/b/a/ Valley Peterbilt on November 17, 2021.
The service trucks play a significant role in maintaining, installing, and repairing essential infrastructure
like the City’s water, natural gas, and wastewater systems. These trucks carry specialized equipment to
diagnose and repair utilities. They are essential because they are used to perform and complete day-to-
1 City Council, December 6, 2021; Agenda Item #; SR #13430;
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2021/id.-13430-contract-for-purchase-of-a-peterbilt-537-with-service-body.pdf
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day tasks, respond to emergencies, and they enable timely and safe restoration of services during outages.
Not replacing utility trucks would result in compromised service quality, increased costs, safety hazards,
and reduced customer satisfaction.
ANALYSIS
Project Description
On September 14, 2022, Interstate Truck Center, d/b/a/ Valley Peterbilt, reached out to Public Works
Fleet staff and indicated that due to a chassis shortage, the order of the 2023 model year chassis had
been canceled. On November 9, 2022, American Truck and Trailer Body announced that they were going
out of business and could no longer provide the body for this purchase. A new quote to reflect the
pricing of a 2024 model year chassis with new vendor Western Truck Fab supplying the body was
provided on April 12, 2023, for a new total of $464,5412
Procurement Process
Palo Alto Municipal Code section 2.30.360(j) authorizes the use of Intergovernmental Cooperative
Purchasing agreements in lieu of conducting a competitive solicitation. A quote from Interstate Truck
Center d/b/a/ Valley Peterbilt was originally obtained through Sourcewell on October 12, 20213 , utilizing
cooperative purchase agreement number 060920 between Peterbilt Motors Company and Sourcewell, a
government agency and service cooperative that offers cooperative procurement solutions to
government entities. The Peterbilt Motors Company – Sourcewell cooperative purchasing contract is valid
through August 1, 20244.
If this recommendation is not approved, the City will no longer have the option of purchasing this 2024
model Peterbilt chassis. Staff would need to request a new specification for a 2025, or later year model4
and return to Council for approval. This would further increase the cost and delay the delivery of this new
vehicle. Staff recommends that Council approve the amended purchase order (with Interstate Truck
Center d/b/a/ Valley Peterbilt for the purchase of one new 2024 Peterbilt 537 Extended Cab Chassis with
Western Truck Fab Maintenance, Construction Service Body.
With the vehicles that are readily available in the market today, this vehicle is not a candidate for
electrification, as there are no manufacturers that make a suitable chassis. While staff is deferring certain
vehicle replacements with a goal of securing electric vehicle options as discussed during the FY 2024
budget hearings, staff recommends proceeding with this diesel truck replacement. As described in Staff
Report #13430 (see footnote #1 above), the existing truck is a 2007 model, and was originally planned to
be replaced two years ago through the FY 2022 vehicle replacement project. There has been an increase
in repair tickets over the past few years for this unit and we anticipate that, as this vehicle continues to
age, we will experience increased downtime which would negitively impact services. Leasing is not a
2 Interstate Truck Center d/b/ Valley Peterbilt Quote, April 12, 2023;
https://www.cityofpaloalto.org/files/assets/public/public-works/public-services/fleet/attachment-a-quote-1.pdf
3 Interstate Truck Center d/b/ Valley Peterbilt Quote, October 12, 2021;
https://www.cityofpaloalto.org/files/assets/public/public-works/public-services/fleet/sourcewell-contract-
060920-pmc-2021.pdf
4 Sourcewell Contract #060920-PMC; https://www.cityofpaloalto.org/files/assets/public/public-works/public-
services/contracts/peterbilt-contract-060920.pdf
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feasible option as this vehicle requires customized specifications for operations. Even with approval of the
staff recommendation, the replacement truck is not expected to be received for at least two years. The
other three Utilities Water/Gas/Wastewater trucks were replaced in 2017, and it is important that these
trucks remain in good working condition.
FISCAL/RESOURCE IMPACT
Funding was approved for the purchase of one 2024 Peterbilt 537 Extended Cab Chassis with Western
Truck Fab Maintenance, Construction Service Body in the Scheduled Vehicle and Equipment Replacement
- Fiscal Year 2022 Capital Project (VR-22000).
Approval of the 5% contingency is important as staff has experienced, not only with this purchase but with
many other vehicle purchases in the last two years, uncertainty in pricing. Manufacturers and vendors
cannot guarantee their pricing as they are experiencing ongoing supply chain issues and materials pricing
fluctuation. Whereas, in the past, these increases were not passed on to the consumer but absorbed by
the manufacturers and vendors, they have become too great and we are now subject to last minute price
changes. The contingency allows for staff to proceed with the purchase without having to return to
Council for authorization in the event of a minor price increase.
STAKEHOLDER ENGAGEMENT
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for approval. FRC
approved the replacement of this vehicle through the scheduled five-year replacement review.
ENVIRONMENTAL REVIEW
The vehicle being supplied is in conformance with all applicable emissions laws and regulations.
Accordingly, this purchase is exempt from the California Environmental Quality Act under CEQA guidelines
(Section 15061).
ATTACHMENTS
None.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer