Explanation
1. BACKGROUND
The purpose of this ordinance is to authorize the Director of Finance and Management to modify contracts with Ohio Machinery Co., formerly known as Esec Corporation dba Columbus Peterbilt, for the purchase of two single axle dump trucks with snow equipment for the Department of Public Service, Division of Infrastructure Management in an amount of up to $207,248.34.
The Department of Public Service, Division of Infrastructure Management, is responsible for maintaining Columbus roadways. This includes filling potholes, street sweeping, mowing, alley resurfacing, and snow and ice removal. Ordinance 2084-2021 authorized the purchase of two single axle dump trucks with snow equipment for the purpose of maintaining the roads at a cost of $195,885.83 per truck. The City had a multiple year Universal Term Contract established for dump trucks with Ohio Machinery Co., PA004939, which was updated to PA005655.
After ordinance 2084-2021 authorized the purchase of two single axle dump trucks with snow equipment and the trucks were delivered, Ohio Machinery Co. notified the Director of Finance and Management that due to supply chain issues resulting from long lead times for production and delivery in the post-pandemic market place, a surcharge of $103,624.17 per truck was necessary due to raw material and component price increases from manufactures and their suppliers. The Department of Public Service feels these changes are acceptable and the vehicles offered by Ohio Machinery Co. will meet the needs of the Department.
1.1 Amount of additional funds to be expended: $207,248.34
Original contract amount: $391,771.66 (PO292870, Ord 2084-2021)
The total of Modification 1: $207,248.34 (This Ordinance)
The contract amount including all modifications: $599,020.00
1.2 Reasons additional goods/services could not be foreseen:
The pandemic affected timelines for truck builds due to the purchasing components needed, and timelines were subject to global availability. Pricing continued to fluctuate across industries during these extended timelines due to lack of availability of components and raw materials.
1.3 Reasons other procurement processes are not used:
Specialized truck builds take over one year to build, which is dependent on the order date and place in the ordering queue. The order had been placed and the trucks delivered; thus, cancelling the order would add an additional 1 to 2 years to the order timeline, during which time prices would likely increase further. Additionally, the aging fleet of operational dump trucks makes it necessary to purchase the trucks now so they can be used this winter for snow and ice operations.
1.4 How the cost of the modification was determined:
The additional surcharges were determined by industry pricing documents provided by the manufacturer’s suppliers, showing increased costs in raw materials and components.
Searches in the System for Award Management (Federal) and the Findings for Recovery list (State) produced no findings against Ohio Machinery Co., formerly known as Esec Corporation dba Columbus Peterbilt.
2. CONTRACT COMPLIANCE INFORMATION
The contract compliance number for Ohio Machinery Co., formerly known as Esec Corporation dba Columbus Peterbilt, is CC006428 and expires 5/8/2026.
3. FISCAL IMPACT
Funds are budgeted and available for this expenditure from the Municipal Motor Vehicle Tax Fund (Fund 2266). Transfer of appropriation from 02 to 06 is necessary for this purchase.
4. MINORITY AND WOMAN OWNED BUSINESS ENTERPRISE & SMALL LOCAL BUSINESS ENTERPRISE PROGRAM
These expenditures are being made from Universal Term Contracts established for use by the City’s Purchasing Office and as such do not require MWBE goals to be established.
5. EMERGENCY DESIGNATION
The department requests emergency designation so this equipment can be put into service as quickly as possible to prevent interruption to, or disruption of, the Division of Infrastructure Management Snow and Ice winter operations.
Title
To authorize the Finance and Management Director, on behalf of the Department of Public Service, to modify contracts with Ohio Machinery Co. to allow for raw material and component surcharges for two trucks; to authorize the transfer of appropriation within the Municipal Motor Vehicle Tax Fund; to authorize the expenditure of up to $207,248.34 from the Municipal Motor Vehicle Tax Fund; and to declare an emergency. ($207,248.34)
Body
WHEREAS, the Department of Public Service, Division of Infrastructure Management, has a need for two single axle dump trucks with snow equipment; and
WHEREAS, ordinance 2084-2021 authorized the purchase of and payment for the two single axle and dump trucks; and
WHEREAS, ESEC Corporation was acquired by Ohio Machinery Co., formerly known as Esec Corporation dba Columbus Peterbilt, and all existing contracts with the City of Columbus were inherited therein, authorized by Ordinance 2634-2021; and
WHEREAS, after ordinance 2084-2021 was passed and the trucks were delivered, Ohio Machinery Co. notified the Director of Finance and Management that due to supply chain issues beyond their control, a raw materials and component surcharge in the post-pandemic market place of $103,624.17 per truck was necessary due to raw material and component price increases from manufactures and their suppliers; and
WHEREAS, the Department of Public Service feels the surcharge of $103,624.17 per truck offered by Ohio Machinery Co. is acceptable and the trucks will meet the needs of the Department; and
WHEREAS, it is necessary to authorize the Director of Finance and Management to modify the contracts with Ohio Machinery Co. to add a surcharge of $103,624.17 per truck for an existing order; and
WHEREAS, appropriation must be transferred from Object Class 02 to 06 in the Municipal Motor Vehicle Tax Fund to fund this purchase; and
WHEREAS, it is necessary to authorize the expenditure of up to $207,248.34 with Ohio Machinery Co. for the raw material and labor surcharges for the two trucks; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Finance in that it is immediately necessary to authorize the Director to modify the contracts for two single axle dump trucks with snow equipment and pay the additional surcharges so this equipment can be put into service as quickly as possible to prevent interruption to, or disruption of, the Division of Infrastructure Management operations, all for the immediate preservation of the public health, peace, property, safety, and welfare; and now, therefore:
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Finance and Management Director is hereby authorized to modify the contracts with Ohio Machinery Co. for two single axle dump trucks with snow equipment for the purpose of adding the surcharges of $103,624.17 per truck, for total surcharges of $207,248.34.
SECTION 2. That the transfer of appropriation of $207,248.34, or so much thereof as may be needed, is hereby authorized within Fund 2266 (the Municipal Motor Vehicle Tax Fund), Dept-Div 5911 (Division of Infrastructure Management), from Object Class 02 (Materials and Supplies) to Object Class 06 (Capital Outlay) per the account codes in the attachment to this ordinance.
SECTION 3. That the expenditure of $207,248.34, or as much thereof as may be necessary, is hereby authorized in Fund 2266 (the Municipal Motor Vehicle Tax Fund), Dept-Div 5911 (Division of Infrastructure Management) in Object Class 06 (Vehicles) per the account codes in the attachment to this ordinance.
SECTION 4. Funds are hereby deemed appropriated and expenditures and transfers authorized to carry out the purposes of this ordinance and the City Auditor shall establish such accounting codes as necessary.
SECTION 5. That the City Auditor is authorized to make any accounting changes to revise the funding source for all contracts or contract modifications associated with this ordinance.
SECTION 6. That the City Auditor is hereby authorized to transfer the unencumbered balance in a project account to the unallocated balance account within the same fund upon receipt of certification by the Director of the Department administering said project that the project has been completed and the monies are no longer required for said project.
SECTION 7. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor or ten days after passage if the Mayor neither approves nor vetoes the same.