City Council Agenda Report
Meeting Date: February 3, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Labor and Materials Contract with Matheson Tri-Gas, Inc.
Recommendation
A. Approve and authorize the City Administrator to execute a Labor and Materials Contract with Matheson Tri-Gas, Inc., in substantially the same form as submitted, for specialty gases for the Malburg Generating Station for a total amount not-to-exceed $105,132.54, for a three-year term; and
B. Authorize a contingency amount of ten percent (10%) or $10,513.25 in the event of unforeseen expenses, including surcharges, price volatility and tariffs, and variations in quantity, and grant authority to the City Administrator to approve and execute amendments up to the contingency amount, if necessary.
Background
The Malburg Generating Station (MGS) is a 139-Megawatt (MW) 2x1 combined cycle generating station comprised of two Siemens SGT-800 Combustion Turbines. MGS requires various specialty gases for its daily operations. To comply with the Environmental Protection Agency (EPA) rules and regulations, MGS uses a Continuous Emission Monitoring System (CEMS) to monitor and record emissions data from the power plant. Calibration gas, a type of specialty gas, is essential for the operations of the CEMS. These gases are carefully selected to meet strict guidelines and serve as a known source for the calibration of the CEMS, ensuring compliance with EPA regulations. Vernon Public Utilities (VPU) must procure the necessary calibration gases to operate within the permitted regulations.
Following a Request for Bid (RFB) process, on September 15, 2022, the City Administrator approved a Labor and Materials Contract with Matheson Tri-Gas, Inc. (Matheson Tri-Gas) for the purchase of specialty gases in the amount of $80,000 for a term of three years. Subsequently, on April 2, 2024, the City Council approved Amendment No. 1 to increase the contract amount by $90,000 due to the optimization of the MGS operating profile, which led to a rise in nitrogen usage. The current agreement was set to expire on September 14, 2025.
As per Vernon Municipal Code (VMC) Section 3.32.070, on July 24, 2025, staff issued an RFB to solicit bids for the supply of specialty gases for MGS. The RFB was advertised on the City’s Planet Bids platform and in the local newspaper in compliance. However, only one bid was received during this process. Upon review, VPU staff determined that the bid did not meet the city’s requirements due to concerns about product availability, reliability, and pricing as well as relevant experience. As a result, the City exercised its right to reject the bid in accordance with VMC Section 3.32.170. Therefore, to ensure the continuity of service and allow sufficient time to reissue the RFB and assess new bids, on September 16, 2025, the City Council approved Amendment No. 2 to extend the term of the contract by an additional five (5) month period and increase the not-to-exceed amount by $15,000.The current agreement is now set to expire on February 14, 2026.
With the contract expiration date approaching, on December 23, 2025, staff reissued an RFB to seek bids for Specialty Gases for MGS, as required per VMC 3.32.070. The RFB was readvertised on the City’s Planet Bids platform. Bids were received from two firms by the January 5, 2026 deadline.
The bid results are as follows:
1. Matheson Tri-Gas, Inc. - $105,132.54
2. Airgas USA, LLC - $146,842.23
Matheson Tri-Gas was deemed the lowest and most responsible bidder to supply the necessary specialty gases. Accordingly, VPU staff recommends that the City Council approve a Labor and Materials Contract with Matheson Tri-Gas for Specialty Gases for MGS for a total amount not-toexceed $105,132.54. Additionally, staff recommends a contingency amount of ten percent (10%) or $10,513.25 in the event of unforeseen expenses, including surcharges, price volatility and tariffs, and variations in quantity, for a combined total not-to-exceed of $115,645.79. Pursuant to VMC Section 3.32.030(A), City Council approval is required for the proposed contract, as the total value of the contract exceeds $100,000.
The proposed contract has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not to exceed $115,645.79. Sufficient funds are available in the Electric Fund, Malburg Generating Station, Repairs and Maintenance, Account No. 055-050-586-529000 for the current fiscal year, and will be budgeted in subsequent years.
Attachments
1. Labor and Materials Contract with Matheson Tri-Gas, Inc.