title
APPROVE RECOMMENDATION TO REJECT BID BY AIR PRODUCTS & CHEMICALS AND AWARD A CONTRACT TO MATHESON TRI-GAS FOR THE PURCHASE OF LIQUID OXYGEN FOR WATER TREATMENT
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Reject the bid submitted by Air Products & Chemicals, of Allentown, PA as nonresponsive pursuant to Stockton Municipal Code Section 3.68.160(B).
2. Award a five (5) year contract to Matheson Tri-Gas, Inc. of Lisle, IL, the next lowest bidder, for the purchase of liquid oxygen for water treatment.
It is further recommended that the City Manager be authorized to take appropriate actions to carry out the purpose and intent of this motion.
body
Summary
If approved, this action will authorize the City Manager to enter into a five (5) year contract for goods and services with Matheson Tri-Gas, Inc. of Lisle, IL for the purchase of liquid oxygen to be used in water treatment. Liquid oxygen is used to form ozone to control taste and odors in the treatment of potable water. The agreement is for the purchase and delivery of liquid oxygen for an estimated quantity of 95,000 gallons per year and an annual cost of $43,130.
DISCUSSION
Background
Chemicals aid in the water treatment process. The Delta Water Treatment Plant incorporates ozone to oxidize compounds that impart taste and odors in potable water. Ozone is generated when an electrical current is applied to oxygen in a reactor, and it controls the taste and odor of potable water. Raw water pumped from the Delta must be treated and filtered before delivering safe, clean drinking water to Stockton residents.
In 2012, when the Delta Water Treatment Plant began operation, the City solicited bids for liquid oxygen. Subsequently, the City awarded a 2-year contract with three, one-year extensions to Matheson Tri-Gas, Inc. of Lisle, IL. All three extensions were executed, and the final extension expired on June 30, 2017.
Present Situation
On April 15, 2017, the Municipal Utilities Department posted an invitation to bid in the Stockton Record (PUR 17-008) for the purchase of liquid oxygen for the Delta Water Treatment Plant.
In addition, notifications were sent via e-mail to eight chemical vendors.
On May 11, 2017, the City Clerk opened, examined and publicly declared the sealed bids for the purchase of liquid oxygen (PUR 17-008).
The bid results were as follows:
|
VENDOR, LOCATION |
UNIT COST/Gallon |
|
Air Products & Chemicals, Allentown, PA |
$0.3797 |
|
Matheson Tri-Gas, Inc. Lisle, IL |
$0.454 |
The bid submitted by Air Products & Chemicals was deemed “non-responsive” because Air Products requested changes, after their bid was submitted, in a document titled “Exceptions in Response to Request For Sealed Bids” (Attachment A). The supplemental document included the addition of sole warranty language, limitation of damages, pricing and supply predicated on the supply of Product from its producing facility, a request for an exception to 1.17 of the Bid and other “exceptions” that were not included in their bid documents.
Stockton Municipal Code (SMC) Section 3.68.160 provides that the City Council shall award a contract to the lowest and best regular responsible bidder, or reject all bids. In this present case, the lowest bidder requested consideration of exceptions to the contract terms prior to the scheduled bid opening. The City replied to all potential bidders in the City’s Bid Flash that exceptions to the advertised bid would not be accepted. After consulting with the City Attorney’s Office, it was determined that acceptance of the new terms could present potential risk of liability issues to the City of Stockton. As a result, staff recommends that the City Council reject the low bid and award to the next lowest bidder, Matheson Tri-Gas, Inc. Lisle, IL. Re-advertising for bids is not expected to improve bid results as there is a limited number of companies that supply liquid oxygen for water treatment. Additionally, re-advertising would delay the delivery of a critical product used in the water treatment process and would impact the City’s ability to produce the highest quality of treated water for our customers. The difference in price between the low bid and the second low bid is therefore considered acceptable and does not justify a re-advertisement.
The Matheson Tri-Gas bid is a regular bid in all respects and meets the City’s specifications. Matheson Tri-Gas has been the City’s supplier of liquid oxygen since the water treatment plant began operation in 2012 and they have performed well to date.
The proposed contract (Attachment B) consists of the purchase and delivery of approximately 95,000 gallons per year. The City will pay only for the quantity of liquid oxygen delivered.
FINANCIAL SUMMARY
Funds are available in the following account to cover the procurement of liquid oxygen for FY 2017-18:
421-4234-571, Delta Water Production, Chemicals
Funds will be allocated as follows:
Future chemical purchases will be budgeted in the same account in the following fiscal years to be approved by Council through the annual budget process.
There is no impact to the General Fund, or any other unrestricted fund, from this action.
Attachment A - Requested Exceptions from Air Products & Chemicals
Attachment B - Liquid Oxygen Contract