Consideration and Approval of Contract: Approve Addendum A to the existing (2) two-year Client Value Agreement (CVA) with Empire Southwest, LLC, adding additional City-owned Caterpillar equipment to the Lube Services provided in the CVA.
 

1. Approve Addendum A to the existing (2) two-year Client Value Agreement (CVA) with Empire Southwest, LLC, adding additional City-owned Caterpillar equipment to the Lube Services provided in the CVA, for a total amount not to exceed $350,000, annually, for the remaining term; and
2. Authorize the City Manager to execute all necessary documents.

The City of Flagstaff has multiple pieces of Caterpillar (CAT) equipment. We are requesting approval of Addendum A to the existing Client Value Agreement (CVA) with Empire Southwest, LLC (Empire CAT) who will deliver expert maintenance services for newer CAT equipment owned by the City, using Original Equipment Manufacturer (OEM) parts and recommended fluids. As the authorized service provider for CAT equipment, Empire CAT offers specialized knowledge and technical expertise, adhering to manufacturer-recommended service intervals and procedures. Their technicians, factory-trained by Caterpillar, ensure all work and parts comply with warranty requirements. The CVA establishes Empire CAT as a sole-source provider, with pricing locked for the contract duration with an annual cost not to exceed $350,000.

This fixed pricing safeguards the City against economic or industry cost increases, supporting stable budgeting for relevant departments. Through proprietary telematics, Empire CAT can monitor equipment performance, schedule services, and provide a comprehensive maintenance plan. The Client Value Agreement provides specific entity service and guarantees standardized labor and parts costs over its term, contributing to cost predictability and operational planning for the City.

The two-year Client Value Agreement with Empire CAT secures fixed pricing for routine maintenance on selected Caterpillar equipment. Funding for these services is already allocated within departmental maintenance budgets. This contract establishes set rates for lube services but incurs no upfront cost; the City will only be billed for services as they are performed. The intent is to maintain budget predictability for maintenance expenses over the contract period.

1. On November 19, 2024, the City Council approved the Client Value Agreement Terms and Conditions and Client Value Agreement (CVA) Schedule A, in an amount not to exceed $150,000 annually, which was executed December 5, 2024.
2. Approval of Addendum A will add eleven pieces of City-owned Cat equipment to the December 5, 2024 CVA and bring the total cost to an amount not to exceed $350,000, annually.

1. Approve Addendum A to the CVA with Empire Southwest, LLC and obtain set rates for needed maintenance services; or
2. Do not approve Addendum A and City staff will obtain maintenance services as needed, paying the rate applicable at that time of service.

Empire CAT will provide specialized maintenance services for the City of Flagstaff's newer CAT equipment, utilizing Original Equipment Manufacturer (OEM) parts and recommended fluids. As the authorized CAT service provider, Empire CAT brings advanced technical expertise and adheres to manufacturer recommended service intervals and procedures. Their factory-trained technicians ensure all work and parts meet warranty standards. The Client Value Agreement designates Empire CAT as a sole-source provider with fixed pricing for the contract term, protecting the City from economic or industry-related price increases and enabling stable budgeting for relevant departments. With proprietary telematics, Empire CAT monitors equipment performance, schedules maintenance, and provides a comprehensive service plan. Empire CAT will also be tracking the preventive maintenance for all CAT equipment. The contract guarantees consistent labor and parts costs, supporting cost predictability and streamlined operational planning for the City. Fleet worked with Procurement and Legal to cultivate an agreeable contract between the City and Empire CAT.

• Enhance the organization's fiscal stability & increase efficiency & effectiveness.
• Be an employer of choice through inclusive recruitment & by providing employees with the necessary
• tools, training, support & compensation.
• Deliver outstanding services to residents through a healthy, well maintained infrastructure system.

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