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Regular Agenda Item 3. H.
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| Regular BOS Meeting |
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| Information |
| Request/Subject |
| Approval to increase the use of the discounts offered by Sourcewell-Caterpillar-Empire Southwest, LLC Contract Agreement (Sourcewell No. 032119-CAT) |
| Background Information |
On August 7, 2018, the Board of Supervisors approved Gila County utilizing Cooperative Agreement Sourcewell 032515-CAT for purchasing and repairing heavy equipment with related accessories, attachments, and supplies in the amount of $400,000. Using this Sourcewell Cooperative Agreement gives Gila County departments very good discounts.
An agreement between the Gila County departments and the Board of Supervisors was created to limit the maximum dollar amount each year. The first renewal of the agreement was approved by the Board of Supervisors on September 3, 2019, and the second renewal of the agreement was approved on August 17, 2020, each in the same amount of $400,000. |
| Evaluation |
The Public Works Department has purchased several pieces of equipment with the Sourcewell discount at Empire and two of those purchases are annual expenses against the $400,000 agreement amount. While Sourcewell Cooperative and Empire Southwest are not limited on what Gila County purchases using any of its discounts, Public Works put a limit together in 2018 based on the 2016 and 2017 purchases. During fiscal years (FY) 2018 and 2019, Public Works showed that the County purchases were just under $400,000.
In FY 2020, the expenses for the County exceeded the $400,000 amount almost eight months prior to the end of the term of the contract by $235,576 due to expensive repairs and new equipment purchases. Gila County General Services Manager let Empire Southwest know the County limit was reached. Since Gila County is a member of the Sourcewell Cooperative, it didn’t matter to Empire Southwest and they continued to discount the parts and services.
As of the last count in April 2021, the Sourcewell CAT balance is $86,993 out of $400,000 and there are two major repairs that can’t wait until August 16, 2021. The regular maintenance will use the remaining $86,993 by the contract renewal date in August. |
| Conclusion |
One of the Caterpillar equipment major repairs is a road Motor Grader J-020, a 2014 12M2 AWD, where metal has been found in the engine and the machine won’t run. The estimated cost to repair by reconditioning the engine is $68,988, plus or minus other items found while torn down.
The other piece of equipment is a Dozer T-004, a 1995 D8N, at the Buckhead Mesa Landfill that is leaking water and coolant into the oil system. The General Services shops have been working on the problem since 2019 and the machine has 8,000 hours on it and they typically last 10,000 hours. The engine could be reconditioned at a cost of approximately $66,946 or buy a long block for $76,139. It’s a good machine worth fixing and Public Works plans on keeping it by reconditioning the engine.
Fire danger is upon Gila County and Public Works staff believe that these are two vital pieces of equipment that must be useable prior to August 2021. |
| Recommendation |
| The Public Works Department Director recommends that the Sourcewell Caterpillar-Empire Southwest LLC Contract Agreement (Sourcewell No. 032119-CAT) be increased at this time to accommodate the two major equipment repairs by $160,000. The revised total amount of the agreement of $560,000 would be available through the current term between the Gila County departments and the Board of Supervisors until August 16, 2021. |
| Suggested Motion |
| Information/Discussion/Action to increase the amount of the Sourcewell-Caterpillar-Empire Southwest LLC Contract Agreement (Sourcewell No. 032119-CAT) by $160,000 for the repairs of heavy equipment making the total agreement amount $560,000 through the current term ending August 16, 2021. (Steve Sanders) |
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