Consideration and Approval of Sole Source Purchase:  Utilities Industrial Grade Water Work Supplies (Approve purchase from HD Supply, Inc. in an amount up to $379,418).

The purchase of these industrial grade water work supplies are critical to the Water Services Section, under the Utilities Division, to repair or replace both water and sewer infrastructure, due to old deteriorating infrastructure, broken or damaged infrastructure caused by cold weather climate and various other causes of breakage or damage to utility infrastructure.

The funding for these industrial grade water works supplies is budgeted in FY 2016 in several accounts that involve up to eight (8) programs, but is mainly funded through account numbers 202-08-303-1051-0-4360, 202-08-303-1052-0-4360, 202-08-303-1054-0-4237 and 202-08-303-1055-0-4360. The total FY2016 budget for these four (4) accounts equals $379,418.

COUNCIL GOALS: 
2) Ensure Flagstaff has a long-term water supply for current and future needs
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
11) Ensure that we are as prepared as possible for extreme weather events

No
 

 

1)  Approve the contract with HD Supply, Inc.
2)  Not approve the Contract with HD Supply, Inc. and direct staff to conduct a competitive bid process.  This option could result in a vendor outside the City of Flagstaff being the lowest bidder, but they would not have a Flagstaff location for our City utility staff to stop by and pick up the industrial grade water work supplies they need for a job they are working on.  Since the City's Central Warehouse has been re-purposed to the Police Department, we no longer inventory these industrial grade water work supplies.

The City's Central Warehouse facility used to be operated by the purchasing Section in which 90% of the inventory was industrial grade water work supplies (e.g., pipe, fittings, bushings, valves, meters, erts, fire hydrants, and other industrial grade water work supplies) necessary to repair or replace water and sewer infrastructure.  The Water Services Section, under the Utilities Division, used to requisition these industrial grade water work supplies from the Central Warehouse where these types of items were inventoried to maintain a high fill rate percentage. 

In the Spring of 2015, we conducted more in depth monitoring of our Warehouse operation and it became evident that, given the insignificant amount of inventory, it did not make sense to carry inventory due to carrying costs associated with inventory, as well as the work involved with monitoring and maintaining inventory control measures.  We have a local vendor who already inventories these items in large quantities and we were purchasing a significant amount of these items through them anyway.  In addition, given a relatively low level workload, it did not make sense to have a full-time Warehouse Technician/Buyer working out at the Warehouse when we could better utilize this position at City Hall assisting with the workload involving formal solicitations.    

Given this assessment of our Central  Warehouse operation, a decision was made to close down our Central Warehouse as a storage area for inventory and utilize industrial grade water work vendors to inventory these items for us.   We then re-purposed  the Central Warehouse to the Police Department, as they were in need of more facility space to store police evidence. 

Approximately 90% of the industrial grade water work inventory in the Central Warehouse were purchased from three (3) different vendors, based on competitive bidding.  Two (2) of these vendors are located outside of Flagstaff.  This worked out fine, as these three vendors shipped our orders to the Central Warehouse where they were received and stocked in inventory and our City's Water Services Section staff would go to the Central Warehouse and requisition items on an as needed basis.  Because of  the City's decision to transition out of the central warehousing operation and re-purpose the Central Warehouse to the City's police Department, we needed a vendor in the Flagstaff area who inventory the critical industrial grade water work supplies for our City's Water Services Section staff to stop by and requisition what they need for the work they are doing on any given day.  

After conducting extensive research, it was determined that HD Supply, Inc. is currently the only local Flagstaff vendor who is
authorized distributors inventory and  for the industrial grade water work supplies used by the Water Services Section, under the Utilities Division.
 

 

The Water Services Section, under the Utilities Division, have a critical need for various industrial grade water work supplies necessary to repair and replace the City's water and sewer infrastructure and need a local Flagstaff vendor who are authorized distributors of the industrial water work supplies they need.  Currently, HD Supply, Inc. is the only local Flagstaff vendor who can inventory and provide these critical industrial grade water works supplies.

Having industrial grade water works supplies readily available for our City's Water Services Section to repair, replace and maintain the City's water and sewer infrastructure as a service to our community.

 None