SR 05-24-2016 3H
City Council
Report
City Council Meeting: May 24, 2016
Agenda Item: 3.H
To: Mayor and City Council
From: Martin Pastucha, Director, Public Works, Water Resources
Subject: Sole Source Purchase of Water Treatment Chemical Analyzer Equipment,
Instruments and Reagents
Recommended Action
Staff recommends that the City Council authorize the Purchasing Services Manager to
issue a blanket purchase order with Hach Company, a Colorado-based company, for
water treatment chemical analyzer equipment and reagents. This recommended award
is made as an exception to the competitive bidding process pursuant to Section
2.24.080 (d) and is for a total amount not to exceed $350,000 over a five-year period
ending June 30, 2021 with future year funding contingent on Council budget approval.
Executive Summary
The Arcadia Water Treatment Plant and Charnock Well Field are equipped with 48
Hach analyzers to measure water quality and chemistry for groundwater treated and
delivered to Santa Monica customers via the City's potable water system. City
treatment plant operators and chemists use Hach instruments and reagents to measure
the accuracy of analyzers and perform daily water quality testing in order to both meet
federal, state and local regulations and satisfy Santa Monica water customer
expectations for taste, odor, appearance and other aspects of water quality. Hach
Company is the sole source manufacturer and distributor of these products. Since July
2013, $127,140 has been spent through May 2016 under sole source purchase orders.
Staff recommends Council approve an additional purchase order award with Hach
Company for water treatment analyzers, instruments and reagents used by staff to
measure potable water quality and chemistry for a five-year period ending June 30,
2021 not to exceed $350,000.
Background
The Hach Company is a long-established firm headquartered in Loveland, Colorado,
which manufactures and distributes analytical instruments and reagents for water
testing and water quality analysis. To assist in monitoring the water quality and
chemistry of groundwater sourced from the Santa Monica Basin being treated and
supplied to Santa Monica customers via the City's potable water system, 48 Hach
analyzers have been installed at the Arcadia Water Plant (1228 S. Bundy Drive) and
Charnock Well Field (11375 Westminster Avenue). These analyzers measure various
aspects of water quality and chemistry including pH, ammonia, chloramines, chlorine,
conductivity, fluoride, sulfides, turbidity and other properties. City water treatment plant
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operators and chemists use Hach instruments and reagents to calibrate testing
equipment and perform daily water quality testing. The analyzers provide staff with the
data needed to make adjustments at various steps during the water treatment process
in order to deliver potable water that meets or exceeds federal, state and local
requirements as well as satisfy customer expectations for taste, odor, appearance and
other characteristics.
The majority of the analyzer equipment was purchased from Hach Company in 2011.
Repair and maintenance costs have increased each year, corresponding with the aging
of the system. In addition, while each analyzer has an expected lifespan of
approximately 10 years, staff has had to replace a small number of analyzers over the
past three years. Should analyzers fail in the future, replacements would cost
approximately $10,000 to $20,000 apiece. Since July 2013, $127,140 has been
expended under sole source purchase orders approved under the City Manager's
purchase authority:
FY 2013-14 - $38,644
FY 2014-15 - $45,512
FY 2015-16 - $42,984 as of May 2016.
Discussion
In order to keep the Arcadia Water Plant and Charnock Well Field Hach analyzers in
adequate operating condition to measure and ensure proper water quality and
chemistry, staff recommends continuing purchases of parts, instruments and reagents
from Hach Company for a five-year period ending June 30, 2021 in a not to exceed
amount of $350,000.
Vendor Selection
Staff recommends Hach Company to furnish and deliver water treatment chemical
analyzer equipment and reagents as an exception to the competitive process per
SMMC Section 2.24.080 Exception to Competitive Bidding Section. Hach analyzers
were installed by Black & Veatch in 2011 as part of plant upgrades bid through a
competitive process. Hach Company is the sole authorized manufacturer and direct
distributor for all Hach-branded instrumentation and chemistry. Replacement of Hach
analyzers with another brand would be currently cost-prohibitive at an estimated
replacement cost of $500,000; however, should individual analyzers become
inoperable, the City would consider alternative models from other manufacturers that do
not require consumable reagents for testing and calibration. Replacement analyzers
from other manufacturers would require additional staff training for proper operation.
Should the Water Resources Division discontinue use of Hach analyzers or should
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Hach Company begin licensing its products for re-sale, this purchase order would be
terminated.
Financial Impacts and Budget Actions
The blanket purchase order to be awarded to Hach Company is for an amount not to
exceed $350,000. Funds in the amount of $70,000 are included in the FY 2016-17
Proposed Budget in the Public Works Department. The blanket purchase order will be
charged to account 25671.544010. Future year funding is contingent on Council budget
approval.
Prepared By:
Kevin Nagata, Senior Administrative Analyst
Approved Forwarded to Council
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