| | | | | | | | Agenda Item - 3.f.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | William E. Murray
| | Dept.: | City Manager
| Dept.: | Public Works
| | Subject: | Authorize the issuance of an increase to blanket purchase orders to All American Asphalt, Vulcan Materials, and R.J. Noble for asphalt products. (Cost: $200,000) (Action Item) | Date: | 9/14/2021 |
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| | | | | | | | OBJECTIVE
For the City Council to authorize issuance of an increased blanket purchase order to All American Asphalt, Vulcan Materials, and R.J. Noble in the amount of $200,000 per year. |
| | | | | | | | BACKGROUND
The City currently has blanket purchase orders for All American Asphalt, Vulcan Materials, and R. J. Noble in the amount of $600,000 per year. The current blanket purchase orders are used to obtain asphalt products on an as-needed basis. The Street Division’s Asphalt section uses asphalt products for performing repairs on damaged sections of roadway and also for projects designed to improve the pavement condition index throughout the City. The Water Services Division’s Distribution section uses asphalt concrete to repair the streets after work has been completed on underground services throughout the City.
These three local vendors are the only vendors in close proximity able to provide the City with reliable hot-mix asphalt at the required temperature for placement on an as-needed basis. Transport costs also add considerably to the overall cost of asphalt in terms of employee time and vehicle usage, thus it is in the City's best interest to continue using these vendors. |
| | | | | | | | DISCUSSION
The cost of asphalt fluctuates constantly due to crude oil prices, demand, supply, and new plant technologies. Over the past year, asphalt costs have escalated by approximately 77 percent, thus impacting the ability to sustain the same level of repair work. In addition, the Water Distribution section has been tasked with a significant increase of new water service line installations due to the upsurge of Accessory Dwelling Units. Therefore, staff is recommending increasing the blanket purchase orders by $200,000 for a total of $800,000 per year to adequately fund these street repairs. |
| | | | | | | | FINANCIAL IMPACT
The three (3) combined blanket purchase orders will increase by $200,000 for a total of $800,000 per year. Funding has been allocated in the Public Works Department Budget. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Authorize the Finance Director to increase the blanket purchase order for three (3) vendors for asphalt products in the firm and fixed amount of $200,000 for a total of $800,000 per year; and
- Authorize the City Manager to review and approve annual renewals, provided that sufficient funds are budgeted for renewal.
By: Raul Leyva, Public Works Supervisor
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