REPORT TO THE CITY COUNCIL FROM: BROCK D. BUCHE, PE, PLS, Director Department of Public Utilities BY: RUSSELL B. GUILLIAMS, Water Manager - Certified Department of Public Utilities - Water Division SUBJECT ..Title Award a requirements contract to WestAir Gases and Equipment, Inc., for the purchase of Bulk Liquid Oxygen for three-years with two optional one-year extensions, for a total amount of $1,370,318.05, plus annual Consumer Price Index increases (Bid File 12400338) (Citywide). ..Body RECOMMENDATION Staff recommends that City Council award a three-year requirements contract, with two optional one-year extensions, for a total amount of $1,370,318.05, plus annual Consumer Price Index (CPI) increases to WestAir Gases and Equipment, Inc. (WestAir), of Fresno, California, for Bulk Liquid Oxygen (LOX); and authorize the Director of Public Utilities, or designee, to sign the contract on behalf of the City of Fresno. EXECUTIVE SUMMARY The Department of Public Utilities - Water Division (Water) 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) and the Southeast Surface Water Treatment Facility (SESWTF) collectively produce over 80 million gallons of drinking water per day. Ozone is produced on site at both locations utilizing LOX to achieve the desired disinfectant. LOX is necessary for both facilities to produce potable drinking water and without it, production of ozone cannot occur, and these treatment facilities cannot operate per State issued operational permit requirements. Staff recommends that Council award a three-year requirements contract to WestAir, for a total amount of $1,370,318.05, plus annual CPI increases, with two optional one-year extensions, for the delivery of LOX to both the NESWTF and the SESWTF for the continued production of safe drinking water. BACKGROUND The NESWTF produces in excess of 30 million gallons of drinking water a day and the SESWTF produces over 50 million gallons of drinking water a day. To protect the public against viruses and bacteria, the State Water Resources Control Board Division of Drinking Water regulations require that the water is disinfected. LOX is used in the on-site production of ozone, which is the primary disinfectant. Without the delivery of Bulk LOX, ozone cannot be produced, and consequently the NESWTF and the SESWTF will not be able to produce safe potable drinking water. A Notice Inviting Bids was published on September 15, 2023, per the City of Fresno Charter Section 1208. One bid was received. WestAir submitted the sole bid in the amount of $1,370,318.05. Staff recommends that Council award a Requirements Contract for Bulk Liquid Oxygen to WestAir for the total amount of $1,370,318.05 for three-years with two optional one-year extensions. This will allow for continued delivery of LOX and uninterrupted production of safe drinking water. ENVIRONMENTAL FINDINGS By definition provided in the California Environmental Quality Act Guidelines Section 15378, the award of this requirements contract does not qualify as a "project". LOCAL PREFERENCE Local preference was not implemented pursuant to Fresno Municipal Code Section 4-109(b), as WestAir Gases and Equipment, Inc. was the sole bidder and is a local business. FISCAL IMPACT There is no impact to the General Fund. This contract has citywide benefit. Funding for this contract is included in the Fiscal Year 2024 Water Enterprise Fund. Attachments: Bid Evaluation and Fiscal Impact Statement Sample Contract