Agenda Item 8.C.
Budgeted: Yes
Budget amount: $265,500
Line Item: PC 2 and 15 - Line Items 5006
and 5009
Legal Counsel Review: Yes
Meeting Date: June 5, 2025
TO: Board of Directors
FROM: Amber Boone, General Manager
STAFF CONTACT: Jim Burror, Deputy General Manager/Chief Engineer SUBJECT: Chlor Alkali Products 5.25%-12.5% Sodium Hypochlorite (Bleach) and 30%-50% Sodium Hydroxide (Caustic Soda) Contract Award
[Project Committees 2 and 15]
Summary
SOCWA staff requests that the Board authorize the General Manager to execute two contracts to supply and deliver chlor alkali products to the South Orange County Wastewater Authority (SOCWA), City of San Clemente (CSC), Moulton Niguel Water District (MNWD), Santa Margarita Water District (SMWD), Trabuco Canyon Water District (TCWD), El Toro Water District (ETWD), and Irvine Ranch Water District (IRWD).
The estimated value for the contracts for SOCWA over the next 4 years is $1,300,000. The estimated value for the contracts for SOCWA and the member agencies over the next 4 years is about $7,500,000. Since the value of the chlor alkali products contracts exceed $100,000 per year, SOCWA’s Uniform Purchasing Policy 1.715 requires the Board to authorize the General Manager to execute these contracts.
Discussion/Analysis
SOCWA and the participating agencies use chlor-alkali products extensively in the treatment plants for disinfection of recycled water, wastewater treatment process control, and to control odors in foul air scrubbings. Chlor-Aikali products include 5.25% and 12.5% sodium hypochlorite (bleach) and 25%, 30%, and 50% sodium hydroxide (caustic soda). The proposals were reviewed and evaluated by SOCWA staff.
SOCWA received proposals from the following companies (in alphabetical order):
• Brenntag Pacific, Inc. (Brenntag)
• JC Jones, Inc. (JC Jones)
• NorthStar Chemical, Inc. (a DBA of Pacific Star Chemical, LLC.) (NorthStar) • Olin, Inc. (Olin)
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Initial Proposal Review for Minimum Requirements
The initial review of all the proposals was that they were responsive to the Request for Proposals.
NorthStar only proposed to provide sodium hydroxide. Olin only proposed to provide sodium hypochlorite. Brenntag did not propose to provide 5.25% sodium hypochlorite used by ETWD.
Brenntag proposes an initial contract term of 6 months; all the other vendors proposed a 12-month initial term.
Initial Rating of Responsive Proposals
During the review of the proposals, SOCWA staff determined that the best value for SOCWA and the participating agencies is to pursue two (2) contracts. This is because splitting contracts by chemical type leverages vendor specialization and maximizes potential cost savings. The vendors were rated using the following weighted criteria:
• Compensation rate (30 points)
• Experience/qualifications (10 points)
• Product integrity (10 points)
• Reference testimony (10 Points)
The ratings and estimated contract costs for the proposals are included in Tables 1 through 6:
Table 1 - Sodium Hypochlorite (Bleach) Proposal Ratings (in alphabetical order) Company
Costs (up
to 30
points)
Experience
(up to 10
Points)
Product
integrity/Specs
(up to 10
points)
References
(up to 10
points)
Total (up
to 60
points)
Brenntag 0 9 10 5 24
JCI Jones 30 9 10 10 59
Olin 1.62 10 10 10 32.62
Brenntag
Brenntag had the highest cost using the method in the Request for Proposal document. They have many active water and wastewater agency bleach contracts in Southern California. Two of the three Brenntag references provided did not respond to SOCWA’s requests for information.
SOCWA staff contacted SCWD staff regarding their past contract(s) with Brenntag. Brenntag does have three Southern California production sites, more than the other vendors.
JCI Jones
JCI Jones had the lowest cost using the method in the Request for Proposal document. They have many active water and wastewater agency bleach contracts in Southern California. The references JCI Jones provided provided positive feedback and did not note delivery issues, safety concerns, or contract issues. SOCWA used JCI in the past for bulk chlorine deliveries and did not have any noted issues with deliveries, safety, or contract issues. JCI Jones has one Southern California production site and eleven (11) nationally.
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Olin
Olin had the second-lowest cost using the method in the Request for Proposal document, but the cost result was very close to the highest score of Brenntag’s. Thus, the straight-line method used to determine the weighted cost points is near Brenntag’s. Olin is the current provider of bleach to SOCWA and its member agencies. They also have many other active water and wastewater agency bleach contracts in Southern California. SOCWA staff and the references Olin provided provided positive feedback and did not note any delivery issues, safety concerns, or contract issues. Olin has one Southern California production site and thirteen (13) nationally.
Table 2 - Sodium Hypochlorite (Bleach) Proposal Pricing ($/Gallon)(1) Chemical and Concentration Delivery Vol. Brenntag JCI Olin Current Sodium Hypochlorite - 12.5% (501-1000 gals) $3.95 $3.2038 DNP $3.09 Sodium Hypochlorite - 12.5% (1001-2000 gals) $2.99 $2.4038 DNP $2.82 Sodium Hypochlorite - 12.5% (2001-3000 gals) $2.79 $1.9538 DNP $2.65 Sodium Hypochlorite - 12.5% (3001-4000 gals) $2.49 $1.7538 DNP $2.49 Sodium Hypochlorite - 12.5% (4001-4500 gals) $2.28 $1.6538 DNP $2.35 Sodium Hypochlorite - 12.5% (>4500 gals) $2.25 $1.5838 DNP $2.22 Sodium Hypochlorite - 5.25% (>4800 gals) DNP $1.0538 DNP $1.30 (1) Prices do not include applicable fees, taxes, and tariffs that will be included in the contract terms and conditions.
Table 3 - Sodium Hypochlorite (Bleach) Proposal Pricing Annual Estimated Contract Value (1) (in alphabetical order)
Vendor
Est. Annual Contract
Value(1)
Brenntag $225,304
JCI Jones $158,594
Olin $222,300
Current $222,300
(1) Calculated based on SOCWA’s CY2024 usage.
Table 4 - Sodium Hydroxide (Caustic Soda) Proposal Rating Table (in alphabetical order) Company
Costs (up
to 30
points)
Experience
(up to 10
Points)
Product
integrity/Specs
(up to 10
points)
References
(up to 10
points)
Total (up
to 60
points)
Brenntag 0 9 10 5 24
JCI Jones 21.2 10 10 10 51.2
Northstar 30 10 8 10 58
Brenntag
Brenntag had the highest cost using the method in the Request for Proposal document. They have many active water and wastewater agency caustic soda contracts in Southern California. 109
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Two of the three Brenntag references provided did not respond to SOCWA’s requests for information. SOCWA staff contacted SCWD staff regarding their past contract(s) with Brenntag.
Brenntag does have three Southern California production sites, more than the other vendors.
JCI Jones
JCI Jones had the second-lowest cost using the method in the Request for Proposal document.
The cost result was near the middle of the costs the other two proposers proposed. They have many active water and wastewater agency caustic soda contracts in Southern California. The references JCI Jones provided provided positive feedback and did not note delivery issues, safety concerns, or contract issues. SOCWA used JCI in the past for bulk chlorine deliveries and did not have any noted issues with deliveries, safety, or contract issues. JCI Jones has one Southern California production site and eleven (11) nationally.
NorthStar
NorthStar had the lowest cost using the method in the Request for Proposal document. NorthStar is the current provider of caustic soda to SOCWA and its member agencies. They also have many other active water and wastewater agency caustic soda contracts in Southern California. SOCWA staff and the references NorthStar provided positive feedback and did not note delivery issues, safety concerns, or contract issues. NorthStar imports all its caustic soda from overseas.
However, NorthStar has not had any supply interruptions over the past 6 years, during which SOCWA has been contracting with NorthStar for caustic soda.
Table 5 - Sodium Hydroxide (Caustic Soda) Proposal Pricing ($/Gallon)(1) Chemical and Concentration Delivery Vol. Brenntag JCI NorthStar Current Sodium Hydroxide - 50% (1-500 gals) $5.25 $7.00 $3.60 $5.20 Sodium Hydroxide - 50% (501-1000 gals) $4.89 $4.70 $3.40 $4.45 Sodium Hydroxide - 50% (1001-2000 gals) $4.45 $3.50 $2.99 $3.99 Sodium Hydroxide - 50%(2) (2001-4000 gals) $3.99 $2.90
See
below $3.60
Sodium Hydroxide - 50%(2) (2001-3000 gals)
See
above
See
above $2.89
See
above
Sodium Hydroxide - 50%(2) (3001-4000 gals)
See
above
See
above $2.27
See
above
Sodium Hydroxide - 50%(2) (4001-4500 gals) $3.49 $2.65
See
above $2.98
Sodium Hydroxide - 50% (>4500 gals) Full Load $3.49 $2.60 $2.27 $2.98 Sodium Hydroxide - 30% (1-500 gals) $4.45 $6.00 $2.36 $3.63 Sodium Hydroxide - 30% (501-700 gal) $4.05 $3.60 $2.14 $3.18 Sodium Hydroxide - 30% (701-1000 gals) $4.05 $2.85 $1.97 $2.85 Sodium Hydroxide - 30% (1001-2000 gals) $3.45 $2.40 $1.86 $2.43 Sodium Hydroxide - 30% (2001-3000 gals) $2.65 $1.80 $1.69 $2.19 Sodium Hydroxide - 30% (3001-4000 gals) $2.65 $1.60 $1.50 $2.14 Sodium Hydroxide - 30% (>4000 gals) Full Load $2.26 $1.55 $1.40 $1.80 Sodium Hydroxide - 25% (501-1500 gals) $2.65 $3.30 $1.70 $2.30 (1) Prices do not include applicable fees, taxes, and tariffs that will be included in the contract terms and conditions.
(2) 2001 to 4000 gallons was bifurcated by NorthStar, as presented above. This did not affect the weighted cost ratings assessment.
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Table 6 - Sodium Hydroxide (Caustic Soda) Proposal Pricing Annual Estimated Contract Value (1) (in alphabetical order)
Vendor
Est. Annual Contract
Value(1)
Brenntag $50,593
JCI Jones $37,691
Northstar $32,907
Current $43,200
(1) Calculated based on SOCWA’s CY2024 usage.
Last Best and Final Offer Process (BAFO)
SOCWA staff contacted JCI regarding its sodium hypochlorite proposal. SOCWA staff requested that the pricing be extended to 12 months from the 6 months proposed by JCI. JCI accepted SOCWA’s request for a 12-month term.
SOCWA staff, in coordination with Counsel, worked with JCI and NorthStar to develop tariffrelated contract language. At this time, only NorthStar could provide a cost impact for the current tariffs placed on countries involved with their chemical production supply chain (a 10% tariff on materials from Japan and Korea). These impacts on NorthStar are as follows:
Proposed Tariff Impact per $/Gallon as of 5/1/25
Sodium Hydroxide 50% $0.14
Sodium Hydroxide 30% $0.07
Sodium Hydroxide 25% $0.06
To address tariff impacts and the ongoing uncertainty of changes to tariffs during the duration of the contract period, the following terms will be incorporated into these chemical contracts:
Impacts from Tariffs. The parties acknowledge and agree that tariffs, levies, duties, taxes, or laws/regulations of similar effect (collectively, “Tariffs”) may go into effect after the date hereof, and Vendor has not included the impact of any Tariffs in the Contract Sum. In the event that the cost of producing contracted products escalates prior to the expiration of the Contract Time due to Tariffs, whether such escalation is the result of direct Tariff assessments or the impact of Tariffs on demand and price for internationally or domestically produced chemicals, Vendor shall: (i) inform SOCWA of such escalation and shall provide back-up documentation establishing such escalation; (ii) use commercially reasonable efforts to work with SOCWA to develop mitigation strategies; (iii) be entitled to an increase in the contracted price per gallon to the extent of any substantiated material price escalation.
Proposal and BAFO Process Conclusions
SOCWA staff finds that the vendors with the highest ratings are JCI Jones for sodium hypochlorite (bleach) and NorthStar Chemical for sodium hydroxide (caustic soda).
Prior Related Project Committee or Board Action(s)
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None
Fiscal Impact
Not including potential Tariff impacts, it is estimated that there will be an annual cost decrease of $64,000, or about 29%, for sodium hypochlorite (bleach) and an annual cost decrease of $5,500, or about 13%, for sodium hydroxide (caustic soda).
Recommended Action: Staff recommends that the Board of Directors authorize the General Manager to:
1. Award a contract to JCI Jones Chemicals Inc. for sodium hypochlorite products for one (1) year with up to three (3) optional annual renewals;
2. Award a contract to NorthStar Chemical, Inc. (a DBA of Pacific Star Chemical, LLC.) for sodium hydroxide products for one (1) year with up to three (3) optional annual renewals; and
3. Initiate subsequent renewals with an increase of 10% or less. 112