title
APPROVE PURCHASE OF MEMBRANE FILTERS FROM FILMTEC CORPORATION FOR THE DELTA WATER TREATMENT PLANT
recommended action
RECOMMENDATION
It is recommended that the City Council approve a resolution to:
1. Approve findings pursuant to Stockton Municipal Code Section 3.68.070 for an exception to the competitive bidding process.
2. Authorize the purchase of membrane filters from FilmTec Corporation.
It is also recommended that the City Manager be authorized to take appropriate actions to carry out the purpose and intent of this resolution.
body
Summary
The Delta Water Treatment Plant (DWTP) utilizes advanced membrane ultra-filtration to provide Stockton residents with high-quality drinking water that meets all State and Federal regulations. Under normal operations, membrane filters have a life span of five to ten years. The membranes require replacement to maintain treatment plant operations. Currently, FilmTec Corporation (formerly Evoqua Water Technologies, Inc.) is the only manufacturer of membrane filters approved by the State Water Resources Control Board (SWRCB). These membrane filters are the correct size for the membrane filtration system used at the DWTP. Staff recommends approval of a sole-source purchase agreement with FilmTec Corporation for two membrane filter units in the amount of $384,851.10. Upon purchase and delivery, membrane installation will be completed by the Municipal Utilities Department (MUD) staff to ensure the continued production of high-quality drinking water for Stockton residents.
DISCUSSION
Background
The MUD operates and maintains the DWTP. When the DWTP was designed and constructed, advanced membrane filtration was installed in the treatment process to provide Stockton residents with high-quality drinking water that meets all State and Federal regulations. The membrane filtration system uses filters that have a finite life span of five to ten years and require replacement under a regular maintenance program. If the filters are not replaced under the maintenance program, drinking water quality will not meet State and Federal standards, and the DWTP may need to stop production.
On December 31, 2019, the Memcor membrane product line was purchased from Evoqua Water Technologies LLC by DuPont de Nemours Inc. (DuPont) and is now operating under DuPont’s FilmTec Corporation business unit. The contracts issued for the supply and installation of Memcor membrane equipment were transferred with the sale of Memcor product Line to FilmTec Corporation, including all bonds and insurance certificates. The Memcor business is 100% owned by FilmTec Corporation.
Present Situation
Evoqua Water Technologies, Inc. (FilmTec Corporation) supplied all the membrane units at the DWTP in 2014. The DWTP maintenance program required the MUD to begin replacing membrane units in 2019. Under this program, two membrane units of ten total would be replaced each year beginning in Fiscal Year 2018-19 and completed in 2024. This will ensure the filtration system is properly maintained and operated. The purchase of additional membranes will continue the maintenance program for the next year.
The use of membrane filter technology is required to be approved by the SWRCB. FilmTec Corporation is currently the only approved manufacturer of membrane filters for water treatment by the SWRCB. In addition, this manufacturer has the correct type and size membranes designed for installation at the DWTP.
Staff recommends the City Council approve a sole-source purchase agreement for two FilmTec Corporation membrane filter units. FilmTec Corporation is providing the same pricing for the membrane filter units, and the free shipping as Evoqua Water Technologies did last year. The cost of the membrane filter units is $353,074.40 (Exhibit 1 to the Resolution). Shipping is included in the base price, and when adding a 9 percent sales tax, the revised purchase price total is $384,851.10.
A purchase order (PO) will be issued to FilmTec Corporation for purchase and delivery of the membrane filter units. The PO includes the City’s standard terms and conditions (Exhibit 2 to the Resolution) with revisions requested by FilmTec Corporation, which afford certain protections related to the filter purchase. This purchase will ensure the DWTP is properly maintained for normal treatment operations.
Findings
Stockton Municipal Code Section 3.68.070(A)(4) provides an exception to the competitive bidding requirements for purchases exceeding $75,000 when City Council approves findings that support and justify the purchase.
Proposed findings to support this purchase are:
1. There are no other alternative membrane filters that meet National Sanitation Foundation standards, that have been approved by the SWRCB and are the correct type and size for the DWTP membrane filter unit.
2. Membrane filter replacement is a standard maintenance practice required to preserve the quality of the filtration treatment process and the production of high-quality drinking water. If the filters are not replaced before the end of service life, the City’s water production could possibly fail to meet state and federal standards.
3. Maintaining the drinking water production system with the current type of membranes is more cost-effective than replacing them, due to the supporting infrastructure, piping, structures, connections, electrical, tooling, and instrumentation in place for the existing membrane filtration system. Therefore, using the current type of membranes is in the public interest.
4. The membrane filtration system warranty covers material and labor costs for repairs due to defective membrane filters. The use of any membrane filter not supplied by FilmTec Corporation will void the existing warranty.
Staff recommends the City Council approve these findings as an exception to the competitive bidding process and authorize the purchase of two membrane filters from FilmTec Corporation in the amount of $384,851.10.
FINANCIAL SUMMARY
The cost of the FilmTec Corporation filter units is $384,851.10. The FY 2020-21 Annual Budget includes appropriation to cover the purchase and delivery of two membrane units in the following account:
421-4234-606 Water Utility Fund, Delta Water Treatment Plant, Capital Maintenance.
There is no impact to the General Fund or any other unrestricted fund from this action.