HomeMy WebLinkAbout1/5/2005 - STAFF REPORTS (11) DATE: January 5, 2005
TO: City Council
FROM: Director of Public Works/City Engineer
Procurement & Contracting Manager
APPROVE SOLE-SOURCE PURCHASE OF CATERPILLAR ENGINE REPAIR PARTS
RECOMMENDATION:
That the City Council approve the sole-source purchase of Caterpillar engine repair
parts from Johnson Power Systems of Riverside, California in an amount not to exceed
$100,000.
SUMMARY:
For a number of years the City has purchased Caterpillar parts for it's Co-Generation
facilities through a purchase agreement with Johnson Power Systems of Riverside, the
sole authorized source for Caterpillar parts in the local area. Staff normally requests
Council's approval for a not-to-exceed amount for as-needed purchases of repair parts
from Johnson Power Systems. On December 17, 2003, City Council approved a not-to-
exceed amount of$100,000 for purchase in FY 03104. It was not anticipated that a large
approval would be required in the current fiscal year, but a South Coast Air Quality
Management District (SCAQMD) inspection has indicated that the City's Co-Generation
plant engines do not meet new, more stringent, air quality standards for calendar year
2005. Staff therefore requests City Council authorization for purchase of Caterpillar
repair parts, in an amount not-to-exceed $100,000, required to overhaul the engines and
add the necessary control devices to bring the engine into SCAQMD compliance.
BACKGROUND:
The two Caterpillar generator systems were originally purchased from Johnson Power
Systems and have since been maintained by the City's Co-Generation and HVAC
technicians. Johnson understands the nature of our operation and the need for
availability of repair parts. Each day of down time costs the City in excess of $15,000 in
lost capacity payments and energy costs.
In order to keep our insurance in effect, we must purchase original manufacturer-
specified and approved (Catepillar) parts. By building the good working relationship with
Johnson Power Systems, we have been able to meet the City's power requirements and
fulfill the operating requirements of our contract with Southern California Edison.
Typically, a single engine overhaul runs in excess of $40,000. Because Caterpillar
controls the price structure of its parts, it is impossible to secure discount pricing through
competitive bidding, literally making Johnson Power Systems a sole source for
Caterpillar parts. Issuance of a blanket purchase order to Johnson Power Systems will
assure staff's ability to immediately respond to repair problems, decreasing the
frequency and duration of down times.
Caterpillar Engine Repair Parts
January 5, 2005
Page 2
Funds are available in Account 520-5641-43240, Other Contract Services.
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DAVIDJ. BARAKIAN B UCE O NS , CPPO, C.P.M.
Director of Public Works/City Engineer Procuremen & Contracting Manager
City Manager
ATTACHMENT:
1. Minute Order
REVIEWED BY DEPT. OF FINANCE
MINUTE ORDER NO.
APPROVING SOLE-SOURCE
PURCHASE OF CATERPILLAR
ENGINE REPAIR PARTS FROM
JOHNSON POWER SYSTEMS OF
RIVERSIDE, CALIFORNIA IN AN
AMOUNT NOT TO EXCEED $100,000.
I HEREBY CERTIFY that this Minute Order, approving sole-source purchase of
Caterpillar engine repair parts from Johnson Power Systems of Riverside, California, in
an amount not to exceed $100,000, was approved by the City Council of the City of Palm
Springs, California, in a meeting thereof held on the 5th day of January, 2005.
Kathleen D. Hart
Acting City Clerk