Agenda Item 5.D.
Budgeted: Yes
Budget Amt: PC2 $300,000, PC 15
$105,000, PC 17 $475,000, Total 880,000
Line Item: PC 2, 15, & 17 Lines 5008
Legal Counsel Review: No
Meeting Date: August 3, 2023
TO: Board of Directors
FROM: Jim Burror, Acting General Manager/Director of Operations STAFF CONTACT: Jeanette Cotinola, Procurement/Contracts Manager SUBJECT: One (1) Year Contract Award to Miles Chemical for Ferric Chloride [Project Committees 2, 15 and 17]
Summary
The Ferric Chloride chemical contract with Miles Chemical expires in August. This chemical is necessary to maintain compliance with air quality regulations for sulfides in digester gas, control treatment plant odors, and ensure consistent settling in the wastewater treatment process.
The Board is being requested to approve a one (1) year contract with Miles Chemical for Ferric Chloride at $1,232 per dry ton, plus applicable fees and taxes, including applicable charges for split load deliveries, with up to four (4) annual renewals.
Discussion/Analysis
There remain only a few Ferric Chloride manufacturers in the western parts of the United States. Staff reviewed recent Ferric Chloride requisitions from around Southern California and found that three (3) companies were responding to requests for proposals to provide Ferric Chloride. SOCWA staff also found two bidding processes were recently completed in Southern California.
The recent bids for ferric chloride ranged from $1,233 to 2,040 per ton. Staff reviewed the recent procurement processes and found they were consistent with SOCWA’s cooperative purchasing or piggyback processes. SOCWA staff contacted the lowest bidder, and they offered the recently bid lowest price of $1,233 per ton (40+ ton deliveries) to SOCWA with options for extensions. The list of offered prices is below:
Miles Chemical was the recent low bidder and SOCWA’s current ferric chloride provider. The proposed one (1) year Contract is an increase of 26.36% over the current contract pricing. The increase is from $975 to $1,232 per ton. The high ferric chloride prices are due to price increases Volume Current Price Proposed Price Inc %
Dry ton (40k+) $975.00 $1,232.00 26.36%
Dry ton (>40k) $1,095.00 $1,425.00 30.14%
Dry ton (>20k) $1,216.00 $1,545.00 27.06%
52 Attachment 3
Contract Award to Miles Chemical for Ferric Chloride Page 2 of 3 August 3, 2023
from hydrochloric acid (HCl) supply chain disruptions. Additionally, the Federal government has banned the asbestos diaphragms used to produce HCl and other chlor-alkali products. This ban has restricted our nation’s production of HCl, and other chlor-alkali products, while the existing plants convert to the newer and more expensive asbestos-free technology.
Prior Related Project Committee or Board Action(s)
None
Fiscal Impact
The impact on each of the Project Committees will be a 26.36% increase over last year's expenses for ferric chloride. Only a 6% increase was estimated when the budget was initially estimated in April 2023.
The estimated impact of the 26.36% increase to the member agencies by PC is:
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PC2 Price inc. Solids O&M
MNWD $13,523 17.10%
SMWD $50,690 64.10%
SCWD $14,867 18.80%
Total $79,080 100.00%
PC15 Price inc. Solids O&M
CLB $14,855 53.67%
EBSD $637 2.30%
MNWD $0 0.00%
SCWD $12,187 44.03%
Total $27,678 100.00%
PC17 Price inc. Solids O&M
CLB $16,428 13.12%
EBSD $701 0.56%
ETWD $13,460 10.75%
MNWD $18,982 15.16%
SCWD $75,639 60.41%
Total $125,210 100.00%
53 Contract Award to Miles Chemical for Ferric Chloride Page 3 of 3 August 3, 2023
Recommended Action: Staff recommends the Board of Directors to authorize the Acting General Manager/Director of Operations to enter into a one (1) year contract with up to four (4) optional annual renewals with Miles Chemical, Inc. for Ferric Chloride at the following pricing:
Agency Total
CLB $31,282
EBSD $1,338
ETWD $13,460
MNWD $32,505
SMWD $50,690
SCWD $102,693
Total $231,968
Volume
Proposed Price
(per dry ton)
Dry ton (40k+) $1,232.00
Dry ton (>40k) $1,425.00
Dry ton (>20k) $1,545.00
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