Board Memo Sole Source Purchase Two Refurbished Jenbacher JMS316 Engines.pdf
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- Solicitation number
- S-C25102-00004389
- Issued by
- Marion County, Oregon
About this file
This is a Board Memo for a sole source purchase by Clean Water Services, a water utility district in Oregon. The memo requests approval to purchase two refurbished Jenbacher JMS316 cogeneration engines from Western Energy Systems, a Division of Penn Detroit Diesel Allison, LLC. The engines will replace two existing GE Jenbacher JMS316 units currently operating at the Durham Water Resource Recovery Facility that have reached the end of their operating life after approximately 60,000 operating hours. The original engines were purchased in 2013 for $3,037,596 total ($1,518,798 each including shipping and installation). The Board approved the designation of these specific cogeneration engine systems supplied by Western Energy Systems on June 4, 2013 (Minute Order 13-42), and subsequently approved a sole source maintenance contract with the same vendor on May 23, 2017 (Minute Order 17-28) for up to five years with a one-year extension option.
The total cost for the sole source purchase is not to exceed $744,130, comprised of $669,130 for two refurbished engines at $334,565 each, $50,000 for generator refurbishment ($25,000 per generator), and an estimated $25,000 for shipping the original engines to the Jenbacher facility. This refurbished engine option provides a 79 percent savings compared to the original 2013 purchase price. Clean Water Services has budgeted $850,000 in Fiscal Year 2022-23 for this purchase from budget account 106.000.0000.52495. The sole source justification is based on Clean Water Services' Purchasing Rule 15-060, which permits sole source awards when only one manufacturer or seller provides the required product and efficient utilization of existing equipment requires compatible equipment acquisition. No community feedback was noted, and the September 20, 2022 Board meeting was the scheduled approval date.
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Text version
AGENDA
CLEAN WATER SERVICES BOARD OF DIRECTORS
Date: September 20, 2022 Agenda Category: Consent
CPO (if applicable) CPO 4M
Approve a Sole Source Purchase with Western Energy Systems, a Division of Penn Detroit Diesel Allison, LLC, for Two Refurbished Jenbacher JMS316 Engines
Agenda Title:
Jennifer To, Enterprise Asset Technical Services Director (po) Presented by:
REQUESTED ACTION
Approve a sole source purchase with Western Energy Systems, a Division of Penn Detroit Diesel Allison, LLC, (WES) to purchase two refurbished Jenbacher JMS316 engines in an amount not to exceed $744,130 including shipping charges.
SUMMARY
Clean Water Services’ (District) operates two GE Jenbacher JMS316 engine generators at the Durham Water Resource Recovery Facility. The engines have come to the end of their operating life and need to be overhauled or replaced. District purchased the engines in 2013 for $3,037,596, or $1,518,798 each including shipping and installation. The engine maintenance schedule calls for the engines to receive a complete overhaul after 60,000 hours in operation.
The engines are expected to reach 60,000 operating hours in December 2022.
The manufacturer provides customers with the opportunity to exchange the engines with fully refurbished engines. District would like to exchange its engines with two replacement refurbished engines at the cost of $334,565 each, or $669,130. Additional charges associated with the overhaul and engine exchange include generator refurbishment at $25,000 per generator. When the replacement engines have been installed, the manufacturer will coordinate shipping the original engines to its Jenbacher facility at the additional estimated cost to District of $25,000. Purchasing the refurbished engines instead of purchasing two new engines provides District with a savings of 79 percent based upon the 2013 purchase price.
Under District Purchasing Rule 15-060, the Board of Directors (Board) may award a contract for a particular product or service if there is only one manufacturer or seller of the product or service of the quality required, and upon making written findings that efficient utilization of the existing equipment or supplies requires acquisition of compatible equipment or services. These findings apply to this request to approve the sole source purchase of two refurbished Jenbacher JMS316 cogeneration engines from WES because it is the only entity that provides this generator model.
ADDITIONAL INFORMATION
Community Feedback: N/A
Legal History/Prior Board Action:
• On May 28, 2013, the Board was asked to approve District’s application to designate cogeneration engine systems supplied by WES in the construction contract documents for the Durham Advanced Wastewater Treatment Facility Cogeneration and Brown Grease Receiving Facilities Project No. 6471 in the amount of $3,037,596. This item was removed from the Board agenda for May 18, 2013, under Minute Order 13-37.
• On June 4, 2013, the Board approved District’s application to designate cogeneration engine systems supplied by WES in the construction contract documents for the Durham Advanced Wastewater Treatment Facility Cogeneration and Brown Grease Receiving Facilities Project No. 6471 in the amount of $3,037,596 under Minute Order 13-42.
• On May 23, 2017, the Board approved a sole source contract with WES for Engine Maintenance Services Project No. 6844 for a term of up to five years in an amount not to exceed $854,458 with a one-year option to extend the contract if unused service hours remain under Minute Order 17-28.
Budget Impact: District has $850,000 budgeted in Fiscal Year 2022-23 for this purchase.
Budget account: 106.000.0000.52495.
| September 20, 2022 |
| Consent |
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