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County Administrator's Report 7. 5.

BCC Regular Meeting

Discussion

Meeting Date:	09/19/2019
Issue: Waste Services Department PN60193 Caterpillar D8T Track Type Tractor
From:	Pat Johnson
Department:	Waste Services
CAO Approval:

RECOMMENDATION:

Recommendation Concerning Waste Services Department PN60193 CAT D8T Track Type Tractor - Patrick T. Johnson, Waste Services Department Director

That the Board take the following action concerning the Waste Services Department PN60193 CAT D8T Track Type Tractor:

During the regular Board of County Commissioners (BCC) meeting on 09/05/2019, the Board removed CAR II-9 from the Agenda, and requested that staff obtain additional information associated with the Certified Rebuild of a County-owned CAT D8T PN60193. Based on discussion and direction from the Board, staff was to conduct a full cost benefit analysis comparing the certified rebuild unit with the purchase of a new unit. Key areas to address were residual value, cooperative purchasing contracts and warranties. Staff’s findings have been included in the Recommendation background.

Considering the performance history of previous Certified Rebuilds, costs savings, residual value risk, procurement timeline, and the ability to repurpose an existing asset, performing a certified rebuild is the preferred option.

A. Approve and authorize the issuance of a Purchase Order Contract to Thompson Tractor, Inc., SS 18-19.001, in the amount of $568,192.63, for a Certified Rebuild of the County owned PN60193 CAT D8T Track Type Tractor;

OR

B. Approve the procurement of a new Heavy Waste Handler Track Type Tractor, per BCC procurement policies, to include pricing from a competitively solicited cooperative purchasing Contract.

[Funding: Fund 401, Solid Waste Fund, Cost Center 230314, Solid Waste Management Operations; Object Code 56401, Machinery & Equipment]

BACKGROUND:

During the regular Board of County Commissioners (BCC) meeting on 09/05/2019, the Board removed CAR II-9 from the Agenda, and requested that staff obtain additional information associated with the Certified Rebuild of a county-owned CAT D8T PN 60193. Based on discussion and direction from the Board, staff was to conduct a full cost benefit analysis comparing the certified rebuild unit with the purchase of a new unit. Key areas to address were residual value, cooperative purchasing contracts and warranties.

**COST BENEFIT ANALYSIS**
	Rebuild CAT D8T Track Type	New CAT D8T Track Type
Price:	$568,192.63	$791,697.19
Residual Value:	$130,000	($130,000)
Net Cost	$568,192.63	$661,697.19
Net Savings	$93,504.56	$0.00
Warranty:	3yr/5,000 Hrs Powertrain - Hydraulics	5yr/7,500 Hrs. Powertrain - Hydraulics
Co-Op Purchasing Contract:	?	Yes
R/M of previous certified rebuilt tractor under warranty period	$147,346.00
R/M of previous new tractor under warranty period		$143,854.00

Notes:
- Residual value of 130k is estimate only
- The expense of performing rebuild is $93,504.56 less than the price of a new machine minus the residual value of existing tractor
- Warranties typically expire with hours of operation providing approximately one year of additional warranty with purchase of new tractor
- Previous Certified Rebuilds have performed satisfactorily operating an additional useful life in excess of 10,000 hours
- Out of pocket repair/maintenance expenses during warranty periods for both certified rebuild and new tractor has been typical wear items not covered under warranty
- Prices subject to increase January 01, 2020

BUDGETARY IMPACT:

Funds are available in Fund 401, Solid Waste Fund, Cost Center 230314, Solid Waste Management Operations; Object Code 56401, Machinery & Equipment

LEGAL CONSIDERATIONS/SIGN-OFF:

N/A

PERSONNEL:

N/A

POLICY/REQUIREMENT FOR BOARD ACTION:

This Recommendation is in compliance with the Code of Ordinances of Escambia County, Florida 1999, Chapter 46, Finance, Article II, Section 46-44, Application; exemptions; and Section 46-64, Board approval, and award a Purchase Order and State of Florida Statute 287.057(3)(c). Board approval is required for expenditures over $50,000.

IMPLEMENTATION/COORDINATION:

Pending Board approval; Waste Services staff will coordinate with Office of Purchasing to implement the Board's decision.

Attachments
Purchasing Web Posting
SS 18-19.001