HomeMy WebLinkAboutAgenda Report - November 20, 2019 C-22AGENDA ITEM c-22
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AGENDA TITLE:
MEETING DATE:
PREPARED BY:
Adopt Resolution Authorizing Lodi Electric Utility to Purchase Supplies through
Long Term (2-year with 1-year extension) Contracts
November 20,2019
Electric Utility Director
RECOMMENDED AGTION:Adopt resolution authorizing Lodi Electric Utility to purchase
supplies through long term (2-year with 1-year extension) contracts
BACKGROUND INFORMATION: Lodi Electric Utility (LEU) navigates through the existing
bidding/purchasing process for supplies like wire, transformers and
poles multiple times throughout the year to order the 719 various
normal stock material items used daily to construct and maintain the Lodi Electric System.
As part of the current process, LEU asks vendors to bid on smaller quantities due to minimal storage
space at existing facilities; therefore needing to repeat this process more often. Some vendors will not bid
on these requests due to the small quantity. This overall process takes two or more months to receive
some materials and LEU pays a higher unit cost due to the low volume purchasing.
The proposed process would give LEU the ability to secure bids from vendors for aZ-year purchase
agreement with a 1-year extension clause using the existing standard bid process. Each long-term
agreement would then be approved by City Council on a one-time basis with staff then ordering off the
pre-approved bid "merìu." With the proposed process, LEU expects to:
. Expedite the delivery process from vendors who can stock materials at their localfacility.r Have the ability to secure reduced unit pricing by agreeing to 2-year terms with the vendorso Have the potential of competitive bidding between vendors.
While LEU expects to see a reduction in unit pricing as a result of larger quantities ordered over longer
periods of time, the actual savings are unknown at this time. LEU will provide an update to Council
annually as it relates to actual cost savings realized and will seek further direction from Council at the end
of the proposed 3-year term based on the effectiveness of the proposed change.
FISCAL IMPAGT: LEU expects to see a reduction in unit pricing by asking vendors to
bid on larger quantities of materials for longer terms.
FUNDING AVAILABLE: Continue charging all materials to the same inventory account
number 500.13496.
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PREPARED BY: Tim Combs, EU Superintendent
APPROVED
Electric Utility Director