REPORT TO THE CITY COUNCIL September 27, 2018 FROM: MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH: BUD TICKEL, Assistant Director Department of Public Utilities, Water Division BY: RUSSELL B. GUILLIAMS, Chief of Water Operations Department of Public Utilities, Water Division SUBJECT ..Title Award a requirements contract to Tech Air of Northern California, LLC., doing business as Alliance Gas Products, for Bulk Liquid Oxygen in the amount of $137,786.37, for a term of one year with the possibility of two one-year extensions. Bid File 9452 (Citywide) ..Body RECOMMENDATION Staff recommends that City Council award a requirements contract in the amount of $137,786.37 to Tech Air of Northern California, LLC., for Bulk Liquid Oxygen (LOX), and authorize the City Manager, or designee, to sign agreement on behalf of the City to execute a one-year contract with provisions for two one-year extensions. EXECUTIVE SUMMARY The Department of Public Utilities - Water Division (Division) utilizes LOX to disinfect water for protection against viruses and bacteria pursuant to the California Department of Public Health regulations. The City's Northeast Surface Water Treatment Facility (NESWTF) produces up to 30 million gallons of drinking water per day, and the Southeast Surface Water Treatment Facility (SESWTF) produces up to 54 million gallons of drinking water per day. Ozone is produced on-site utilizing LOX to achieve disinfectant. Without LOX, production of ozone cannot occur, and the NESWTF and SESWTF cannot operate, as LOX is necessary for both facilities to produce potable drinking water. By executing a requirements contract with one supplier, the City establishes a firm price for a specified time, allowing the City to make purchases as needed. This contract is secured through the competitive bidding process, and funding for this contract is included in the FY2018-19 Water Enterprise Fund operating budget. Staff recommends award of a requirements contract to Tech Air of Northern California, LLC., in the amount of $137,786.37. BACKGROUND The NESWTF produces up to 30 million gallons a day of drinking water, and the SESWTF produces up to 54 million gallons a day of drinking water. To protect the public against viruses and bacteria, California Department of Health regulations require that the water is disinfected. As a primary disinfectant, ozone, and Bulk LOX is utilized on-site to generate ozone. Without Bulk LOX, the Division cannot produce ozone, and consequently the NESWTF and SESWTF will not be able to produce potable drinking water. A Notice Inviting Bids was published on April 20, 2018, per the City of Fresno Charter Section 1208. Ten Building Exchanges were faxed Notice Inviting Bids, and 12 specifications were distributed to proposed bidders. The bid opening was May 15, 2018, and two bids were received ranging from $137,786.37 to $164,981.48. Tech Air of Northern California, LLC., of Oakland, California submitted the lowest bid price in the amount of $137,786.37, and is considered the lowest responsive and responsible bidder. City Attorney has reviewed and approved to form. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guideline Section 15378, the award of this requirements contract does not qualify as a "project". LOCAL PREFERENCE Local Preference was not applied because neither of the bidders were local businesses pursuant to FMC 4-108. FISCAL IMPACT The General Fund is not impacted by this citywide expenditure, as the appropriations for the purchase of LOX are included within the FY2019 Water Enterprise Fund operating budget. Attachment - Bid Evaluation and Fiscal Impact Statement