(8)AR 050608 Bid for Transformers

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ITEM #8 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 6, 2008 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Award of Bid for Various Transformers as follows: Item 1 to ERMCO, c/o McAvoy & Markham, in the Amount of $4,837.98, Items 2, 3, and 4 to HD Supply, Inc., in the Amount of $38,484.00, and Item 5 to Wesco Distribution in the Amount of $50,463.64. DATE: April 23, 2008 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 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 March 28, 2008, the Electric Department posted a Notice Inviting Bids for these transformers on BidNet. Bid notification was sent to 28 registered vendors on the BidNet System. A bid opening was held at 2:30 P.M. on April 23, 2008 at the Electric Department Administrative offices. Five 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. FINANCIAL IMPACT: These transformers are purchased into Electric Stores inventory account number 520-1500-154. The transformers are charged to the appropriate budgeted account, as they are needed. The stores inventory account is a balance sheet account and has no budgetary impacts. The Electric Department includes money in each Fiscal Year's Budget for Capital Improvement Projects.