(13)AR 061907 Award of Bid for transformers

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF JUNE 19, 2007 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Award of Bid for Various Transformers, Item 1 to Howard Industries, %Young & Company, in the Amount of $15,750.90, Items #246, #8, #9 and #11 to Ermco, %McAvoy & Markham, in the Amount of $177,156.10, Items #12 —16 to H D Supply, Inc. in the Amount of $80,747.03 and Reject Bids for Items #7 and #11 and Award to H D Supply Inc. in the Amount of $55,131.33, per Section 3.08.140(e) of the Colton Municipal Code. DATE: June 11, 2007 ITEM #13 BACKGROUND: The City purchases transformers into Electric Stores inventory when the need arises to upgrade, replace, or install a new transformer for an Electric customer. The City also orders back-up transformers to be used to replace a transformer that goes bad in the system. Back-up transformers are necessary, due to the long delivery time. Lead times for transformers have increased the past one to two years because of the devastating hurricanes and last summers high heat. At this time, the Electric Utility has a requirement for various sizes of pole and pad mount transformers to be used for both back-up and upcoming commercial and residential projects. DISCUSSION/ANALYSIS: On May 9, 2007, the Electric Department posted a Notice Inviting Bids for these transformers. Bid packages were mailed to eight suppliers of distribution transformers. A bid opening was held at 2:30 P.M. on May 31, 2007 at the Electric Department Administrative offices. Six bids were received and evaluated. One distributor, H D Supply, Power, submitted bids from two different manufacturers, Cooper and General Electric. A Bid Analysis is attached showing the price and delivery quoted by each vendor. The recommended vendor's price is underlined for each size transformer. The total of bid award is listed at the bottom for the recommended vendor. Also attached is a Transformer Load Loss Evaluation. This evaluation shows the life cycle cost of the transformer over its useful lifetime, using a combination of loss calculations supplied by the transformer manufacturer and the unit price quoted by the vendor. To evaluate the lowest cost bid, the life cycle costs demonstrate the cost of the transformer over its "in-service" life, taking into consideration the degradation over time. The transformer that loses the least over the useful life results in the lowest cost of the equipment. It is a function of which manufacturer has the least loss. The lead times quoted for the padmount transformers vary from 21-23 weeks to 42-44 weeks. The lowest evaluated bidder for Items #7 and #10 have a delivery lead time of 38-41 weeks, two times longer than the second lowest evaluated bidder. Staff has determined the need for these