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HomeMy WebLinkAboutBPW-02-16-00-01Centrifuge BidRESOLUTION NO. BPW-02-16-O0-0! A RESOLUTION OF THE BOARD OF PUBLIC'WORKS AND SAFETY OF THE CITY OF CARMEL DETERMINING TO FORGO COMPETITIVE BIDDING 'AND REQUEST PROPOSALS FOR A CENTRIFUGE FOR THE CARMEL WASTEWATER UTILITY WHEREAS, pursuant to Indiana Code, the Board of Public Works and Safety (the "Board") may enter into contracts for wastewater equipment as they are "duly authorized and empowered by law or delegated and entmsted with authority to make purchases of material, equipment, goods, and supplies"; and WHEREAS, pursuant to Indiana Code 5-22-2-25, the Board is a purchasing agency as it is authorized to enter into contracts by this article; and WHEREAS, the City of Carmel has determined to purchase a centrifuge for its wastewater utility; and WHEREAS, although price will be an important consideration in purchasing the centrifuge, other factors are equally important, including but not limited to, dependability, durability, repair costs, and availability of replacement parts; and WHEREAS, pursuant to Indiana Code 5-22-9-1 the Board is authorized, as a purchasing agent, to make a written determination that the use of competitive sealed bidding is not practical or not advantageous to the governmental body and may award a contract using the procedures of this Ind. Code Chapter 5-22-9 for requesting proposals; and WHEREAS, pursuant to Indiana Code 5-22-9-2, when such a determination is made the Board shall solicit proposals through a request for proposals, after giving public notice of such request according to Indiana Code 5-3-1, which must include the following: 1 ) the factors or criteria that will be used in evaluating the proposals, 2) a statement concerning the relative importance of price and the other evaluation factors, 3) a statement concerning whether the proposal must be accompanied by a certified check or other evidence of financial responsibility, which may be imposed in accordance with rules of the governmental body, and 4) a statement conceming whether discussions may be conducted with responsible offerors, who submit proposals determined to be reasonably susceptible of being selected for award; and WHEREAS, pursuant to Indiana Code 5-22-9-4, the Board shall then open proposals so as to avoid disclosure of contents to competing offerors during the process of negotiation; and WHEREAS, pursuant to Indiana Code 5-22-9-5, the Board shall then prepare a register of proposals that is open to public inspection after the award of the contract which contains a copy of the request for proposals; a list of all persons to whom copies of the request for proposals were given; a list of all proposals received that includes the names and addresses of all offerors, the dollar amount of each offer and the name of the successful offeror and the dollar amount of that offer; the basis on which the award was made; and the contents of the contract file except proprietary information; and WHEREAS, pursuant to Indiana Code 5-22:9-6, the Board may conduct discussions with the final offerors who submitted proposals as provided in the request for proposals or under the roles of the Board; and WHEREAS, pursuant to Indiana Code 5-22-9-7, the Board shall award the contract to the responsible offeror whose proposal is determined in writing to be the most advantageous to the Board, considering price and other evaluation factors set forth in the request for proposals; and WHEREAS, the procedures set Forth in Ind. Code Chapter 5-22-9 will allow the City to maintain appropriate price competition while allowing it at the same. time to evaluate offers on the other important bases besides price. NOW, THEREFORE, BE IT RESOLVED BY THIS BOARD OF PUBLIC WORKS AND SAFETY that: 1. The Board is making a written determination that competitive sealed bidding is either not practicable or not advantageous to the governmental body. 2. The Board is determining that receiving proposals is the preferred method of awarding a contract for the purchase of a centrifuge for the Carreel Wastewater Utility. 3. The Board will follow the procedures outlined above and the provisions of the Indiana Code 5-22-9 for requesting proposals. Dated: V~./~{. ~ ATT~ ~'~) INDS01 MZD 355966vl ~~' -2- CITY OF CARME L WATER-WASTEWATER UTILITIES ONE-CIVIC SQUARE · P.O. BOX 1399 · CARMEL, INDIANA 46~ (31 7) 571-2443 · FAX (31 7) 571-2- December 20, 1999 Mr. Charlie Pride Indiana State Board of Accounts 302 W. Washington Indianapolis, IN 46204 Dear Mr. Pride: The City of Carmel's Wastewater Utility is planning a sludge dewatering improvement at its' Wastewater Treatment Plant. The main component of the dewatering improvement is two centrifuges. For the past 1-½ years we have reviewed the equipment of approximately 6 manufacturers. We have paid for the testing of four different centrifuges on site at our Wastewater Treatment Plant. In October of this year, the City legally advertised for Qualifications from Centrifuge Manufacturers. We received Statements of Qualifications from three manufacturers at the November 3, 1999 meeting of the Board of Public Works and Safety. Out of the three manufacturers, one clearly did not meet our requirements. Another states they can meet our requirements but have only built 4 similar machines and all four are in Europe whereas our specifications for qualifications clearly requested references for machines operating in the United States. The third manufacturer can meet our specifications. We have received budgetary pricing from the second and third manufacturers of $290,000 and $350,000 respectively for each centrifuge purchased. The City is planning to purchase two centrifuges. The City of Carmel's Utility personnel believe it is in the City's best long-term interest to purchase the centrifuge from the third manufacturer. We would like to pre-qualify the third manufacturer in accordance with IC 5-22-16-3 then Special Purchase the equipment in accordance with IC 5-22-10-8, 9 & 10. We would then negotiate the cost of equipment with the third manufacturer. The equipment would then be purchased from the third manufacturer if the negotiated cost were comparable to the budgetary pricing. As an alternative to a Special Purchase, we would like to pre-qualify the second and third manufacturer then following a resolution by the Board of Public Works, we would Request Proposals from the two manufacturers in accordance with IC 5-22-9. Selection of the successful proposal would be based on cost and other evaluation criteria. However, cost would not necessarily be the primary criteria for selection. The City of Carmel's Utility personnel strongly believes the first alternative is in the City's best interests however, the second alternative is preferred over publicly bidding the centrifuge purchase. We are asking for the State Board of Accounts determination of acceptance of either the first or second alternative for purchase of the two centfifuges. Please feel free to call me if you have any questions or need additional information. We are willing to meet with you or your personnel to further discuss this purchase. Sincerely, Utility Director CC: Diana Cordray, Clerk Treasurer Joe Staehler, City Purchasing Agent Ed Wolfe, Plant Manager STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WAStIINGTON STREET 4TH FLOOR, ROOM FA18 INDIANAPOLIS, INDIANA 46204-2765 Telephone: (317) 232-2513 Fax: (317) 2324711 Web Site: www.state.in.us/sboa January 4, 2000 File: Hamilton-Utilities Mr. John Duffy, Utility Director City of Carmel Wastewater Utilities One Civic Square, P.O. Box 1399 Carmel, IN 46032 Re: Purchasing Dear Mr. Duffy: This is in response to your letter dated December 20, 1999. You state that the Carmel Wasterwater Utility is considering purchasing two centfifuges. Further, you state that you have legally advertised for this equipment and that of the three responses received, only one supplier clearly met the specifications. The Board &Public Works and Safety would like to purchase the equipment from this manufacturer, even though the price quoted was not the lowest quote, by following the provisions of IC 5-22-10, commonly referred to as Special Purchasing Methods. We suggest you obtain a written opinion from the Board of Works Attorney to determine if this type of purchase would meet the requirements to be considered a special purchase as provided for in IC 5-22-10. We would respect such opinion in an audit of the City' s records. Feel free to contact Larry Tippin of this office if you have further questions or concerns. Very truly yours th:t;l' III, C.P.A. LT:td cc: Data File BARNES &THORNBURG Nicholas K. Kile (317) 231-7768 Eraall: nkile@btlaw. corn 11 SouthMeridian Street Indianapolis, lndiana 46204 (317) 638-1313 Fax (317) 231-7433 John Duffy, Utilities Manager City of Carmel One Civic Square Post Office Box 1399 Carmel, Indiana 46032 AUG 17 999 Dear John: You asked for an analysis of how the City of Carmel could prequalify bidders or otherwise develop some level of flexibility in bidding for a centrifuge for the Carreel Wastewater Utility. Specifically, I understand that you are looking for a very specific design which would be standard for the supplier awarded the contract. This is so replacement parts will be easier and less expensive to obtain. Although there are many contractors who could make the centfifuge, only two or three already offer the centfifuge which Carmel wants as standard equipment. The answer to the public bidding question has been complicated by the legislature' s 1997 amendments to the public purchasing statutes. In short, although the answer is not clear (as will be explained below), the better answer is that the City can request proposals and make determinations on bases other than price. The Board of Public Works and Safety lets contracts for wastewater equipment. "A contract or an agreement with any contractor or contractors for labor, equipment, or materials shall be let and entered into under the statutes governing the letting of contracts by agencies of municipalities, including I.C. 5-17-1." Ind. Code § 36-9-23-6(c). In addition to Ind. Code Chapter 5-17-1, municipal wastewater public purchases were subject to ind. Code Chapter 36-i-9 at the time this language was adopted. This Chapter required the City to advertise for bids if the total price was to exceed $25,000 and to award the contract to the lowest responsible and responsive bidder. In the alternative to public bidding, the City could determine that proposals should be solicited and evaluated for criteria in addition to price. The difficulty is that in 1997 the General Assembly completely restructured public purchasing and repealed Ind. Code Chapter 36-1-9, along with many other provisions. In its place the legislature adopted Ind. Code Article 5-22, which applies to "every expenditure of public funds by a governmental body." Ind. Code § 5-22-1 - 1. Unfortunately, Ind. Code § 5-22-1-2( 13 ) excludes from the coverage of the new act "a municipality for the operation of municipal facilities used for the collection, treatment, purification, and disposal in a sanitary manner of liquid and sold waste, sewage, night soil, and industrial waste." On its face, this seems to suggest that the Carreel Wastewater Utility is not subject to the new public purchase statute. Indianapolis Fort Wayne South Bend Elkhart Chicago Washington, D.C. John Duffy, Utilities Manager August 16, 1999 Page 2 In my view, this would not be an appropriate interpretation. As noted, the new act applies to every expenditure of public funds (not just public purchases of supplies and equipment) and the exclusion therefore appears to be only for expenditures for the operation of the plant. This would seem to describe an expenditure pursuant to a contract to operate the facilities, such as a management contract. This interpretation is also consistent with how the legislation describes other exceptions. None of the other exceptions are for the "operation of' governmental facilities instead, entire governmental units are excluded, such as a hospital authority, a library board, a municipal water utility, or a housing authority. If the legislature had meant to exclude municipal wastewater utilities, it likely would have used different language to describe the exception. Secondly, if the new act does not apply, it would be entirely unclear how the wastewater utility is to make purchases. Ind. Code Article 5-17 still remains good law and applies now to purchases by governmental units except those that are subject to purchases under the new Act; however, this Article does not plainly require public bidding nor does it provide the criteria by which bids are to be evaluated. Instead, these provisions govem how the bidding is to be conducted. The requirement to bid and the evaluative criteria were previously supplied by Ind. Code Chapter 3 6-1-9, which has now been repealed and replaced with the new public purchase statute. Surely the legislature did not intend such a gap, but that would be the result unless the new act applies. Given my view that the new Public Purchase Act applies, the general rule is that contracts for the purchase of materials, equipment and supplies for a price of $25,000 or greater may only be awarded after preparation of specifications, publication of notice, and competitive bidding. Ind. Code § 5-22-7-1 and Chapter 5-22-8. The award is to be made to the lowest responsive and responsible bidder. Ind. Code § 5-22-7-8. As with the previous la~v-, Carmel may also employ the procedure of requesting proposals and evaluating for criteria other than price. These provisions are set forth in Ind. Code Chapter 5-22-9. The Board of Public Works and Safety must first make a written determination that the use of competitive' sealed bidding would not be advantageous to the City. Notice must be published of the request for proposal in the same manner as you would advertise for bids. There is flexibility to conduct discussions with those who submit proposals in order to obtain best and final offers from them. Award of the contract may be made to the offeror whose proposal is determined in writing to be the most advantageous to the governmental body after taking into consideration price and the other evaluation factors which are set forth in the request for proposal. Please understand that my conclusion regarding the applicability of the new Public Purchase Act cannot be deemed a certainty. Indeed, there is uncertainty even within my own law firm as to what the legislature likely intended by these changes. We have an ambiguity in the language and it could be argued this new Act does not apply. If it does not apply, Carmel is subject to the provisions BARNES &THORNBURG John Duffy, Utilities Manager August 16, 1999 Page 3 in Ind. Code Article 5-17. If so, it would be confusing how to proceed for the reasons mentioned previously. There is no provision in Ind. Code Article 5-17 providing flexibility to use a request for proposal mechanism. You should be aware that given this ambiguity in the language, someone might contend that the use of requests for proposals violates Ind. Code Article 5-17. If this is a prospective bidder, a challenge could be made to the purchase of the centrifuge. Further, Ind. Code § 5-17-1-6 provides that "any person, officer, board, commissioner, department, commission or purchasing agent who knowingly violates any of the terms of this Chapter commits a Class D felony." The penalties for a Class D felony are up to two years imprisonment with a potential for two more years for aggravating circumstances and a fine of not more than $10,000. Ind. Code § 35-5-2-7. Of course, in order to prove that anyone knowingly violated this article, someone would first have to prove that the individual knew the article applied, which would be difficult if not impossible given the ambiguities in the statute. See United States v. Harris, 942 F.2d 1125, 1132 (7th Cir. 1991) ("If the obligation to pay a tax is sufficiently in doubt, willfulness is impossible as a matter of law, and the' defendant' s actual intent is irrelevant. "') We could obtain further security for my interpretation by meeting with and obtaining the approval of the State Board of Accounts. Although this would not be binding on a disgruntled unsuccessful bidder, it should further insulate the City from the prospects of criminal liability. I hope this is helpful. My recommendation would be to request proposals on the centrifuge because in my view that is what the statute authorizes. At the same time, you must understand that there are inherent risks from using this process. Those risks can be mitigated through a meeting with the State Board of Accounts. Should you have any questions, please do not hesitate to ask. Si r Nicholas K. Kile NKK/wka cc: Mr. Douglas C. Haney Mr. James M. Gutting Mr. Brian L. Burdick INDS01 NKK 330782 BARNES &THORNBURG One Civi~, ~,quare Carreel, IN 46032 (317) 571-2443 0 17) 571-2462 FAX Carreel Utilities Ingl~ this cover sh~t I'! Urgent I'1 For Review [::] Please Coin,..a;a i'1 Pie Reply i'! Please Recycle · comments February 10, 2000 Memo to: City of Carmel Board of Public Works and Safety From: John Duffy RE: Resolution to forgo competitive bidding - Centrifuge Purchase Dear Board Members: After many hours spent in research, we have determined that our Wastewater Treatment Plant can be best served in the future by purchasing two centrifuges for the dewatering of sludge. The centrifuges will replace the existing belt press system we have that is nearing the end of its useful life. We also believe that the centrifuges will be more efficient and the starting point of developing a Class A bio-solid material. There are several different manufacturers of centrifuges. Through on site demonstrations and extensive research we have determined that one in particular suits our needs best. However, in a public bid format it may not be the least expensive, putting us in the possible position of having to purchase equipment that is not the best over the long term for the plant. Therefore we would like to request proposals where the manufacturers are aware up front that specifications besides price will be considered, and that specific specifications must be met. The attached documentation from Barnes and Thornburg and the State Board of accounts essentially recommends that we have the ability to do this based on the Public Purchasing Rules. However, it has also been recommended that the Board of Public Works approve a resolution stating our intentions. The resolution you have before you was written by Nick Kyle of Barnes and Thornburg and reviewed by City Attorney Doug Haney. I will be at the meeting to answer any questions you may have. Utility Director