Exhibit 1 - Agenda Information SheetCity of Denton
_____________________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
CFO: Cassey Ogden
DATE: October 18, 2022
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to execute a contract with Techline, Inc., for overhead and underground
transformers for the Denton Municipal Electric Department as set forth in the contract; providing for the
expenditure of funds therefor; and providing an effective date (RFQ 8064 – contract for overhead and
underground transformers awarded to Techline, Inc., for three (3) years, with the option for two (2)
additional one (1) year extensions, in the five (5) year not-to-exceed amount of $75,000,000.00). The Public
Utilities Board recommends approval (7-0 ).
INFORMATION/BACKGROUND
The proposed contract is to supply utility overhead and underground distribution transformers which are
utilized by Denton Municipal Electric (DME) to provide electric distribution service to new customers as well
as replacements for existing transformers that are identified as overloaded or have failed.
DME uses single-phase and three-phase distribution transformers in overhead and underground configurations
to provide electric service to customers. The transformers ordered and used by DME are purchased with varied
electrical demands and secondary voltages as outlined in DME’s Tariffs and Electric Service Standards. In
order to allow the City to capitalize and depreciate transformers upon receipt, transformers are purchased using
DME’s capital accounts instead of the City of Denton’s Distribution Center Working Capital account.
DME previously experienced a lead time of approximately sixteen (16) weeks for new transformers and at a
much lesser cost. Worldwide supply chain issues are being seen by every electric utility in the nation and DME
is also experiencing issues. Currently, there is a sixty (60) plus week lead time for transformers with the
potential for time frames to be extended even further out. Pricing for transformers has skyrocketed as
manufacturers work to provide the demand of the electric utility industry and their customers. The increase in
pricing is shown in the table below which reflects DME’s experience with other contracts where transformers
could be purchased.
Item Percent Increase
50kVA 240/120 Pad 251%
75kVA 240/120 Pad 278%
100kVA 240/120 Pad 267%
167kVA 240/120 Pad 272%
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Development of new sub-divisions, multi-family housing, commercial, and industrial developments is not
slowing down in Denton despite economic conditions and supply chain issues. The current supply chain issues
and material shortages being experienced across the country by all electric utilities will continue to extend lead
times and potentially increase pricing as demand is outpacing supply. To meet the expectations of customers
and developers in Denton, DME must take measures now to ensure that we have sufficient infrastructure
materials, including transformers, to meet the demand. The following factors were analyzed to determine the
spend authority needed during the five (5) year term of the contract:
• Known and active DME projects
• Projected additional needs over the term of the proposed contract
• Routine replacement and maintenance requirements
• Inventory stock to meet resiliency and reliability expectations under all potential weather conditions
• Extended lead times
Based on these factors, the estimated value is $75 million ($75,000,000).
Project Description Estimated 5-Yr Expenditure
Year 1 $15,000,000
Year 2 $15,000,000
Year 3 $15,000,000
Year 4 $15,000,000
Year 5 $15,000,000
Total $75,000,000
To expedite capital project delivery and reduce staff time and City resources, the City’s intent was to solicit
and award a pre-qualified list of vendors for the proposed contracts for Underground and Overhead
Transformers. The City of Denton would then specify a scope of work per project and receive quotes from
the pre-qualified contracts. However, the Request for Qualifications (RFQ) only returned one submittal,
which resulted in one (1) contractor receiving the whole bid. The contractor met the minimum required
criteria by being licensed by the State of Texas for Underground and Overhead Transformers. There is no
guaranteed minimum amount of work under this contract.
Request for Qualifications (RFQ) for overhead and underground transformers was sent to 139 prospective
firms, including 10 Denton firms, for these items. In addition, the RFQ was placed on the Procurement
website for prospective respondents to download and advertised in the local newspaper. One (1) statement
of qualifications (SOQ) was received. The SOQ was evaluated based on published criteria including
compliance with specifications, understanding the needs of the City, delivery/project schedule, firm
overview and personnel, and probable performance. Based upon this evaluation, the recommended award
is to Techline, Inc., and is determined to be the most qualified firm for the City.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On October 10, 2022, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award a contract with Techline, Inc., for overhead and underground transformers for the Denton Municipal
Electric Department, in a three (3) year, with the option for two (2) additional one (1) year extensions, in
the five (5) year not-to-exceed amount of $75,000,000.
PRINCIPAL PLACE OF BUSINESS
Techline, Inc.
Fort Worth, TX
ESTIMATED SCHEDULE OF PROJECT
This is an initial three (3) year contract with two (2) additional one (1) year periods, with all terms and
conditions remaining the same.
FISCAL INFORMATION
These products and services will be funded through the using department’s budget on an as-needed basis.
The City will only pay for services rendered and is not obligated to pay the full contract amount unless
needed.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Presentation
Exhibit 3: Ordinance and Contracts
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Jerry Fielder, 940-349-7676, or Randall A. Key, 940-
349-7665.
Legal point of contact: Marcella Lunn at 940-349-8333.