HomeMy WebLinkAbout12/17/2003 - STAFF REPORTS (9) DATE: December 17, 2003
TO: City Council
FROM: Director of Procurement and Contracting
Director, Department of Public Works/City Engineer
APPROVE SOLE-SOURCE PURCHASE OF CATERPILLAR ENGINE REPAIR PARTS
RECOMMENDATION:
That the City Council renew the existing sole-source purchase of Caterpillar engine
repair parts from Johnson Power Systems of Riverside, California, for the period of
one (1) year, July 1, 2003 through June 30, 2004, in an amount not to exceed
$100,000.
SUMMARY:
The City has purchased repair parts for the Co-Generation facilities through a sole-
source purchase agreement with Johnson Power Systems of Riverside for several
years now. Staff recommends that this agreement be renewed so that continued cost
savings to the City may be realized for fiscal year 03/04.
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 parts. By building a good working relationship with Johnson
Power Systems, we have been able to meet our power requirements and fulfill the
contract agreement 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 staffs ability to immediately respond to repair problems, decreasing the
frequency and duration of down times. The dollar amount request is based on prior
years' experience.
Funds are available in Account 520-5641-48700, Cogan Special Parts and Repair.
HAROLD E. GOOD, Director DAVID J. BARAKIAN, Director
Procurement& Contracting Public Works/City Engineer
APPROVED.
City Manager
ATTACHMENT:
1. Minute Order REVIEWED BY DEPT. OF FINANCE
117 2 R
MINUTE ORDER NO.
APPROVING SOLE-SOURCE PURCHASE
OF CATERPILLAR ENGINE REPAIR PARTS
FROM JOHNSON POWER SYSTEMS OF
RIVERSIDE, CALIFORNIA, FOR A PERIOD
OF ONE (1) YEAR, JULY 1, 2003 THROUGH
JUNE 30, 2004, 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, for a period of one (1) year, July
1, 2003 through June 30, 2004, 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 17th day of
December, 2003.
BY: PATRICIA A. SANDERS
City Clerk