Explanation
BACKGROUND: To modify the existing city-wide UTC contract for the option to purchase Highway Rock Salt to include the attached modification negotiated on behalf of the City by the City Attorney's Office. Formal bids were opened by the Purchasing Office on August 3, 2006. The Purchasing Office advertised and solicited competitive bids in accordance with Section 329.06. (Proposal No. SA002110). One contract was established in accordance with bids received and will expire on July 31, 2009. The following contract will be modified:
FL003290, Cargill, Inc. - Deicing Technology Business Unit, CC# 41-0177680 Expires 6/16/2010
1. Amount of additional funds: The estimated expenditure for this contract is $ 1,800,000.00 annually
($ 885,000.00 has been encumbered this winter season). The Public Service Department and other City Agencies will obtain separate approval to expend from their own budgeted funds for their estimated expenditures.
2. Reason for modification: This modification is the negotiated resolution of a dispute between the City and Cargill over the original contract terms.
3. Reason other procurement processes not used: Product shortages, limited supplier pool, and being in the midst of the winter season made any other process less likely to succeed.
4. How cost was determined: In exchange for a guarantee by the City to purchase 16,000 to 20,000 additional tons of highway rock salt prior to July 31, 2009 (or pay a storage fee), Cargill agrees to reduce the current contract price by $4.42 per ton to a fixed price of $54/ton.
Cargill, Inc. is not debarred according to the Federal Excluded Parties Listing or the State Auditor's Findings For Recovery Database.
FISCAL IMPACT: No funding is required to extend the option contracts. Various City agencies must set aside their own funding for their estimated expenditures.
To maintain an uninterrupted supply of service to the City Agency using the Universal Term Contract, this ordinance is be submitted as an emergency.
Title
To authorize and direct the Finance and Management Director to modify the UTC for the option to purchase Highway Rock Salt with Cargill, Inc. and to declare an emergency.
Body
WHEREAS, the Purchasing Office advertised and solicited formal bids in 2006 and Cargill, Inc. was selected as the lowest bidder and entered into a multi-year term universal term contract, No. FL003290, with the City; and
WHEREAS, in September of 2008 the City and Cargill had a dispute over the escalation clause contained in the contract; and
WHEREAS, the City and the vendor have agreed to modify FL003290 in order to settle the dispute,
WHEREAS, it is in the best interest of the City to modify the UTC; and
WHEREAS, Highway Rock Salt is necessary to properly maintain City of Columbus roadways and facilities,
WHEREAS, an emergency exists in the usual daily operation of the City of Columbus in that it is immediately necessary to modify FL003290 for an option to purchase Highway Rock Salt thereby preserving the public health, peace, property, safety, and welfare, now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Finance and Management Director be and is hereby authorized and directed to modify FL003290 with Cargill, Inc. to include the following terms: the price per ton will now be $54/ton and the City guarantees to order a minimum of 16,000 tons between the date of the modification and July 31, 2009.
SECTION 2. 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.