Staff recommends execution of the unit price agreement with Gresco Utility Supply, Inc. at the base unit prices listed in the agreement for an initial period of five years.
The City previously participated in the Florida Municipal Power Association (FMPA) cooperative agreement for transformers. The City has experienced ongoing quality and service problems with the FMPA contracted vendor. Additionally, the FMPA agreement does not provide for the vendor to stock transformers on behalf of the City. These two reasons prompted the Electric Department to seek a different supplier(s); one that could better meet the needs of the City of Leesburg.
The purpose of this Request for Proposal was to select and negotiate with a vendor to provide a transformer program with 2 components: 1) provide transformers for purchase by the Electric Department; and 2) reduce the number of transformers stocked by the City by maintaining an inventory of the most commonly used transformers at their site on behalf of the City.
Orders of electric power transformers typically have a long lead time from the manufacturers. This lead time causes the City to maintain a higher than desired stocking level on transformers. This is necessary to cover the order lead time and insure transformers are available when needed, especially during storm season. An integral part of this solicitation was the requirement of the successful vendor to maintain an inventory for the City. The City does not pay for these units until delivery; therefore, reducing the amount of cash tied up in inventory.
The Purchasing Division issued Request for Proposal 70124 soliciting interested and qualified firms to submit proposals on their transformer sales and stocking program. The Purchasing Division received five responses and requested presentations from the top three ranked firms. The proposals were evaluated by an evaluation committee consisting of Electric Department staff.
Following the presentations the three firms were scored and ranked by the evaluation committee as follows:
1) Gresco Utility Supply, Inc. (333 points)
2) HD Supply – Utilities (327 points)
3) Wesco Distribution (297 points)
Following the selection of Gresco Utility Supply, Inc. the Purchasing Division began negotiations with the vendor. These negotiations resulted in lowered transformer costs based on suggested specification changes from the vendor. The Electric Department revised the transformer specifications where savings could be realized without sacrificing quality and integrity of the transformers. Additionally, the old specifications were very unique to Leesburg. Removing some of these requirements has provided better pricing and the ability to use the same transformer as other electric utilities.
The pricing in this agreement, along with the changes in transformer specifications, will provide a three-year savings of approximately $1,609,222.00 based on previous transformer purchases. With the downturn in construction there has also been a reduced demand for electric transformers. While the total savings will be much less than this because of lower demand, the agreement will provide significant savings and improved service over our previous agreement through FMPA.
1. Approve execution of the agreement with Gresco Utility Supply, Inc.; or
2. Such alternative action as the Commission may deem appropriate
The overall fiscal impact will be lower transformer unit prices to the City. By Gresco agreeing to stock commonly used transformers for the City, the City will not have as much cash tied up in inventory.
Department: _Electric Department______
Prepared by: _Mike Thornton______
Attachments: Yes____ No __X____
Advertised: _X__Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. ___________JB_____
Deputy C.M. _______EFS_________
City Manager ___________________
Account No. ___NA____________
Project No. ____NA_____________
WF No. _______NA_____________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT WITH GRESCO UTILITY SERVICES, INC. FOR A STOCKING/PURCHASE PROGRAM FOR ELECTRIC POWER TRANSFORMERS FOR THE ELECTRIC DEPARTMENT; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the Mayor and City Clerk are hereby authorized to execute an agreement with GRESCO UTILITY SUPPLY, INC. whose address is 6421 CR 219, Wildwood Florida 34474, for an electric power transformer purchase and stocking program pursuant to RFP 70124.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __14th___ day of ___July______ 2008.