(9)AR 100510 HD Supply Bid Award

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STAFF REPORT ITEM NO. 09 DATE: OCTOBER 5, 2010 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: ROD FOSTER, CITY MANAGER/GENERAL MANAGER PREPARED BY: JAMES EARHART, INTERIM DIRECTOR OF UTILITY SERVICES SUBJECT: AWARD OF BID FOR VARIOUS TRANSFORMERS FOR T ELECTRIC UTILITY DEPARTMENT TO HD SUPPLY IN THE AMOUNT OF $45,270.80. RECOMMENDED ACTION It is recommended that City Council award the Bid for Various Size Transformers for the Electric Utility Department to HD Supply in the amount of $45,270.80. GOAL STATEMENT The proposed action will support the City's goal to provide safe, reliable, affordable, and environmentally sustainable electric service. BACKGROUND The electric utility purchases distribution transformers into inventory when the need arises to upgrade, replace, or install a new transformer for an electric customer. The electric utility also orders back-up transformers due to long delivery times. At this time, the electric utility has a requirement for pole and pad mounted transformers to be used for back-up. On August 16, 2010, staff issued a Notice Inviting Bids for Various Size Transformers for the Electric Utility Department, NIB -RG -1101. The Notice Inviting Bids and related documents were distributed through BidNet, the City's online bid system. The Notice Inviting Bids was also posted at City Hall. A public bid opening was held at 10:30 A.M., on August 31, 2010, at the Electric Department Administrative Offices. Eight bids were received. ISSUES/ANALYSIS The bids were evaluated as to compliance with the specifications. Distribution transformers are also evaluated for the total life cycle over each transformer's useful lifetime. This evaluation is performed using a combination of loss calculations supplied by the transformer manufacturer and the unit cost quoted by the vendor, and demonstrates the cost of the transformer over its "in- service" life. The transformer that loses the least over the useful life results in the lowest cost of