Exhibit 1 - Agenda Information SheetCity of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Cassey Ogden
DATE: June 6, 2023
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 Alamo Transformer Supply Company, for the
purchase of refurbished, rebuilt, and salvaged transformers and transformer disposal for Denton Municipal
Electric as set forth in the contract; providing for the expenditure of funds therefor; and providing an
effective date (RFQ 8192 – contract for transformers awarded to Alamo Transformer Supply Company, in
the three (3) year not-to-exceed amount of $10,000,000.00). The Public Utilities Board recommends
approval (6 - 0).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Strengthen Community and Quality of Life.
INFORMATION/BACKGROUND
Denton Municipal Electric (DME) inventory of transformers currently in stock is at levels reserved for
emergencies and/or for the provision of electric service restoration associated with normal, daily operation
responsibilities. For new construction, DME prioritizes transformers on a project first come, first ready
basis for customers and developers that have inspections and permits complete. DME has notified customers
and developers DME may not be able to provide service due to the low inventory of transformers and the
current supply chain issues.
Supply chain issues for distribution transformers continue to be a challenge. There are major shortages
nationwide of critical electric utility equipment such as electric distribution transformers, underground
cables, substation equipment, and other equipment necessary to maintain and provide new electric service
in Denton. The need for this contract with Alamo Transformers stems from lead times on transformers
approaching 80 weeks in some instances. Vendors cannot provide reliable estimates of lead times for
equipment. DME has seen an increase of 350% or higher in the average cost of transformers supplied by
its vendors.
The number of transformers purchased from this contract will fluctuate. Since this contract is to purchase
refurbished and rebuilt transformers, the purchases will depend on the availability of the current vendor and
the supply chain. Having this contract in place will slow the need for DME to make emergency purchases
of transformers.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
This contract will include refurbishing and rebuilding of transformers and also allow DME to purchase
rebuilt transformers. This contract will include the pick-up and disposal of salvaged transformers that cannot
be repaired and the pickup and disposal of transformer oil.
To promote sustainability and strengthen the Denton community, DME needs a contract in place to keep
the correct number of electric transformers on hand for electric outages and new electric projects. While
many surrounding electric utilities are shutting down because of the transformer supply chain, this contract
for purchasing refurbished transformers and refurbishing our old existing transformers will help DME
operate as normal.
This contract with be a 3-year contract. This contract will not exceed $10,000,000.
The items are stocked by the DME pole yard and used as needed. The commodities are “common stock
items” in the DME capital inventory.
Project Description Estimated 3-Year Expenditure
Year 1 $ 3,000,000
Year 2 $ 3,000,000
Year 3 $ 3,000,000
Contingency $ 1,000,000
Total: $10,000,000
Requests for Qualifications were sent to 320 prospective suppliers of this item. In addition, specifications
were placed on the Procurement website for prospective suppliers to download and advertised in the local
newspaper. Three (3) qualifications were received and evaluated based upon published criteria including
communication and responsiveness, ability to meet schedule, experience and qualifications, past
performance, and overall fit. Based upon this evaluation, the recommended award is to Alamo Transformers
Supply Company, and is determined to be the best value for the City.
NIGP Code Used for Solicitation: 285 - Electrical Equipment and
Supplies (Except Cable and Wire)
Notifications sent for Solicitation sent in IonWave: 320
Number of Suppliers that viewed Solicitation in IonWave: 18
HUB-Historically Underutilized Business Invitations sent out: 32
SBE-Small Business Enterprise Invitations sent out: 135
Responses from Solicitation: 3
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On May 22, 2023, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award a contract with Alamo Transformer Supply Company, for the purchase of refurbished, rebuilt, and
salvaged transformers and transformer disposal for Denton Municipal Electric in a three (3) year not-to-
exceed amount of $10,000,000.
PRINCIPAL PLACE OF BUSINESS
Alamo Transformer Supply Company
San Antonio, TX
SUSTAINABILITY MEASURES
Deploying a refurbished transformer is an excellent way to minimize waste and reuse valuable resources.
Refurbishing a transformer is more efficient than recycling its component materials and reduces the demand
for energy and materials needed to manufacture new transformers from scratch.
ESTIMATED SCHEDULE OF PROJECT
This is a three (3) year contract.
FISCAL INFORMATION
These items will be funded from the DME Capital Budget account 605227500.1350.3680. Requisitions will
be entered on an as-needed basis. The budgeted amount for this item is $10,000,000. 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: Evaluation Sheet
Exhibit 3: Presentation
Exhibit 4: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Randy Key, 940-231-2966.
Legal point of contact: Marcella Lunn at 940-349-8333.