City Council Agenda Report
Meeting Date: December 3, 2024
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Efren Peregrina Renteria, Procurement Specialist Subject
Purchase Contract with Ingersoll Rand, Inc.
Recommendation
A. Find that the best interests of the City are served by a direct award of a Purchase Contract to Ingersoll Rand, Inc. (Ingersoll Rand), without a competitive selection process, pursuant to Section 3.32.110 (B)(2) of the Vernon Municipal Code (VMC) based on the durability, performance and compatibility and cost effectiveness of the Ingersoll air compressor; B. Approve the issuance of a Purchase Contract with Ingersoll Rand in an amount not-to-exceed $136,556.72 to procure an air compressor;
C. Find that it is commercially unreasonable to rebid the proposed five-year PartsCARE Agreement that is standard for Ingersoll to provide maintenance and diagnostic services, pursuant to VMC Section 3.32.220(B), as they are the manufacturer and best suited to provide the required services; and
D. Approve and authorize the City Administrator to execute a PartsCARE Agreement with Ingersoll Rand, in substantially the same form as submitted, to provide maintenance and diagnostic services for an amount not-to-exceed $30,550.04 for a term of five years.
Background
The Malburg Generating Station (MGS) utilizes two Ingersoll Sierra H100 oil-free air compressors, which are essential for providing compressed air necessary for the operation of control valves throughout the facility and the gas turbines. A failure of these compressors would lead to a complete shutdown of the plant. Approximately four years ago, the primary compressor was replaced because of performance problems and the deterioration of the compressor screw coating, which was found to be beyond repair. On September 6, 2024, during a heatwave, the primary compressor failed due to excessively high ambient temperatures. The backup compressor was activated but also failed shortly thereafter due to temperature-related and technical complications, resulting in a five-hour outage of the plant.
VPU’s on-site mechanics inspected the backup air compressor and identified continued abnormal operating behavior and poor performance. This compressor has experienced intermittent issues dating back to May 2024. While temporary part replacements were initially effective, recent repairs have failed to restore the compressor to its designed performance and overall reliability. The backup compressor is approximately 17 years old, which is well beyond its typical lifespan. Considering its age and the mechanical issues, it is imperative to replace the backup air compressor and ensure overall reliability of plant operations.
The proposed Purchase Contract can be exempt from competitive selection pursuant to Section
3.32.110(B)(2) if a direct award is found to be in the best interests of the City. VMC Section
3.32.110(B)(3) indicates that the City Council has the authority to make such a finding when the proposed contract exceeds $100,000. A direct award to Ingersoll Rand is in the best interest of the City, given their exceptional equipment and capability to supply an air compressor that will not disrupt plant operations. Ingersoll’s H100A Sierra air compressors are designed with longlife stainless-steel components, which not only ensure durability but also reduce utility maintenance costs due to their ability to withstand varying temperatures and levels of pressure.
Furthermore, Ingersoll's air compressors feature an electronic interface that enables communication between units, which is critical to overall plant reliability. This system allows the standby compressor to automatically activate when the primary compressor encounters performance issues or fails, sending a signal to initiate the standby unit. Using a different brand of compressor would lack this functionality, potentially delaying the activation of the standby unit and risking a loss of plant instrument air, which could lead to a plant shutdown. Additionally, MGS has a substantial inventory of spare parts specifically for these compressors, which would remain compatible with any replacement unit. The air compressor being decommissioned will also be dismantled for usable parts, providing an additional inventory of spare parts.
Therefore, staff recommends approving the issuance of a Purchase Contract to Ingersoll Rand and execution of the proposal to procure one H100A Sierra air compressor in the amount not to exceed $136,556.72. Additionally, staff recommends approval of a five (5) year standard PartsCARE Agreement, pursuant to Section 3.32.220(B), with Ingersoll Rand to provide maintenance and diagnostic services for the proposed and previously acquired four-year-old Ingersoll Sierra H100 oil-free air compressors in an amount not-to-exceed $30,550.04, with the amounts to be billed semi-annually. Pursuant to VMC Section 3.32.030(A), City Council approval is required as the total value of the Purchase Order requested exceeds $100,000.
Ingersoll Rand’s terms and conditions have been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $167,106.76. Sufficient funds are available in the Electric Fund Budget, Malburg Generation Station, Professional Services-Technical, Account No. 055-050- 586-529225 for the PartsCARE Agreement and the Electric Fund Budget, Malburg Generation Station, Capital Outlay, Account No. 055-050-586-660000 for the H100A Sierra air compressor for the current fiscal year and funds will be budgeted in subsequent years.
Attachments
1. Ingersoll Rand, Inc. – Proposal
2. Ingersoll Rand, Inc. – PartsCARE Agreement