SR 11-28-2017 3F
City Council Report
City Council Meeting: November 28, 2017
Agenda Item: 3.F
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To: Mayor and City Council
From: Edward King, Director, Big Blue Bus, Transit Maintenance
Subject: Purchase of Fire Apparatus Replacement Parts and Services
Recommended Action
Staff recommends that the City Council:
1. Authorize the Purchasing Services Manager to issue a purchase order with
Kovatch Mobile Equipment Corporation (KME), a Pennsylvania-based company,
for the purchase of Original Equipment Manufacturer (O.E.M.) repair parts, and
O.E.M. repairs of Fire Vehicles in the amount not to exceed $99,000 for one
year, with four (4) additional 1-year renewal options, with a 10% increase in the
second year and an additional 3% increase per year for years two through five,
for a total amount not to exceed $568,265 with future year funding contingent on
Council budget approval.
2. Authorize additional expenditures in the amount of $66,089 in FY16-17 in order
to address needed repairs critical to the maintenance and operation of the fire
vehicles.
Executive Summary
In order to provide timely maintenance and repair of Fire Department’s critical public
safety vehicles and ensure repairs will be performed to Original Equipment
Manufacturer (OEM) standards, Fire Department staff recommends the execution of an
agreement with the original vehicle vendor, KME Corporation. This recommendation is
based on a sole source exemption for repair services and replacement parts needed in
an amount not to exceed $99,000 for one year, with four (4) additional one-year options,
for a total amount not to exceed $634,354. The sole source exemption is based on
KME’s ability, as the OEM, to provide proprietary parts and equipment.
Background
In 1998, the City started purchasing KME Fire vehicles for support of its fire suppression
services. The City currently operates eight heavy-duty KME Fire vehicles. These
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vehicles range from 40’ pump trucks to 60’ ladder trucks, with an average age of 11
years.
In 2011, a competitive bid was awarded to KME for genuine KME vehicle replacement
parts and services, for a three-year period. Although the City advertised this bid, there
was only one bidder who could provide genuine OEM parts. During the term of this
purchasing agreement the average costs were $64,794 per year.
In 2014, a competitive bid was posted for genuine KME replacement parts and related
services. KME was the only prospective bidder to respond and was awarded the bid for
a three (3) year period for a total not to exceed $175,000. Additionally KME explained to
the City that it was the exclusive distributer of KME OEM parts.
A Sole Source request for an amount not to exceed $99,000 was approved by the City
Manager on September 13, 2017. The basis of the Sole Source was KME’s ability to
provide proprietary replacement parts in which they are the Original Equipment
Manufacturer and authorized distributor. In addition, historically KME has been the only
bidder to respond to a Request for Bid for genuine KME replacement parts and services
in the last two solicitations. Parts that are proprietary to KME include interior and
exterior body panels, Hale pump replacement parts, interior cabinetry components,
Class 1 multiplex electrical system components and software, switch panels, engine
radiators, fans, suspension parts, electronic modules, and specialty relays.
Discussion
KME is the manufacturer of City of Santa Monica Fire Department’s (SMFD) fleet of
Frontline apparatus such as pump trucks and ladder trucks. As the manufacturer of the
Frontline Fire Department apparatus, KME is able to provide proprietary replacement
parts, hardware and service to the eight KME Fire Apparatus in SMFD’s fleet.
Routine maintenance and repairs are performed by the Big Blue Bus staff to maintain
Fire apparatus in safe operating condition. The purchase of OEM parts would enable
Big Blue Bus staff to service and maintain Fire apparatus to manufacturer specifications
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and ensure safe, efficient, and effective operation. As the manufacturer of the City’s
fleet of frontline engines, KME is able to provide proprietary parts needed to make
repairs to the Fire Department’s apparatus. In addition to the current fleet of KME
apparatus, four (4) reserve Pierce vehicles will be replaced by four (4) KME vehicles in
FY2018-19, expanding our fire vehicle fleet to 12 and requiring more support.
As a result of the aging equipment and the expansion, BBB is estimating $99,000 for
FY2017-18. This amount was approved through a sole source exemption signed by the
City Manager to provide interim funding while the procurement process is completed.
This estimate is based on a quote for commonly used parts provided by KME with a 3%
cost escalation for each of the four (4) option years of the contract. Additionally there
was a 10% cost escalation in year two (2) of the contract in recognition of the 50%
increase in the KME fleet size caused by the purchase of four (4) new KME vehicles in
FY2018-19. The five-year total contract amount is not to exceed $634,354. This amount
includes $66,089 of expenditures that were incurred and fully paid in FY16-17 in excess
of City Council approval under the previous bid.
Vendor/Consultant Selection
Staff recommends KME Corporation as an exception to the competitive bidding process
pursuant to Section 2.24.080 (d). As the Original Equipment Manufacturer of Fire
Department’s frontline engines, KME provides proprietary OEM parts and hardware
needed to maintain and provide repairs to the KME fire apparatus in SMFD’s fleet. As
noted, KME is the only authorized provider of parts for its vehicles.
Financial Impacts and Budget Actions
The purchase order to be awarded to KME Corporation is for an amount not to exceed
$568,265. Funds of $99,000 are available in the FY 2017-18 budget in the Fire
Department. The purchase order will be charged to account 01312.569290. Future year
funding is contingent on Council budget approval.
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Prepared By: David Nanjo, Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. OaksInitiative disclosure form -KME
CITY OF SANTA MONICA
OAKS INITIATIVE NOTICE
NOTICE TO APPLICANTS, BIDDERS, PROPOSERS
AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,
OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA
Santa Monica’s voters adopted a City Charter amendment commonly known as
the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and
information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s
text from the City Clerk.
This information is required by City Charter Article XXII—Taxpayer Protection. It
prohibits a public official from receiving, and a person or entity from conferring, specified
personal benefits or campaign advantages from a person or entity after the official votes,
or otherwise takes official action, to award a “public benefit” to that person or entity. The
prohibition applies within and outside of the geographical boundaries of Santa Monica.
All persons or entities applying or receiving public benefits from the City of Santa
Monica shall provide the names of trustees, directors, partners, and officers, and names
of persons with more than a 10% equity, participation or revenue interest. An exception
exists for persons serving in those capacities as volunteers, without compensation, for
organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the
Internal Revenue Code. However, this exception does not apply if the organization is a
political committee or controls political committees. Examples of a “public benefit” include
public contracts to provide goods or services worth more than $25,000 or a land use
approval worth more than $25,000 over a 12-month period.
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an
entity, rather than an individual person, the information includes the name of every person
who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent
interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks
Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This
information must be updated and supplied every 12 months.
CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by
an entity, rather than an individual person, the information includes the name of every
person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten
percent interest in the entity.
Public benefits include:
1. Personal services contracts in excess of $25,000 over any 12-month period;
2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-
month period;
3. Purchase, sale or lease of real property to or from the City in excess of $25,000
over a 12- month period;
4. Non-competitive franchise awards with gross revenue of $50,000 or more in any
12-month period;
5. Land use variance, special use permit, or other exception to an established land
use plan, where the decision has a value in excess of $25,000;
6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-
month period; or
7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-
month period.
Name(s) of persons or entities receiving public benefit:
Name(s) of trustees, directors, partners, and officers:
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
Prepared by: ____________________________Title: __________________________
Signature: ______________________________________ Date: ________________
Email: ____________________________________ Phone: ____________________
FOR CITY USE ONLY:
Bid/PO/Contract # ____________________________ Permit # ___________________________