FROM: James D. Herberg, General Manager
Originator: Rob Thompson, Assistant General Manager
SUBJECT:
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LIQUID FERRIC CHLORIDE SPECIFICATION NO. C-2019-1037BD CONTINGENCY INCREASE
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GENERAL MANAGER'S RECOMMENDATION
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RECOMMENDATION: Recommend to the Board of Directors to:
Approve a unit price contingency of $78.70 per dry ton (13.18%) which is a $19 per dry ton (3.18%) contingency increase to the liquid Ferric Chloride Agreement with Pencco, Inc., Specification No. C-2019-1037BD, for the period beginning July 1, 2021 through June 30, 2022. New dry ton unit cost not to exceed $675.70 per dry ton. New contract estimated total is $2,027,100 plus applicable sales tax.
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BACKGROUND
Ferric Chloride is used at both treatment plants. The main use is in the primary treatment process to enhance coagulation. Ferric Chloride also reduces odors and corrosion by controlling hydrogen sulfide formation and is added to the digesters as needed for hydrogen sulfide control.
In May 2019, the Orange County Sanitation District (OC San) Board of Directors awarded an Agreement to Pencco, Inc. for liquid Ferric Chloride, Specification No. C-2019-1037BD, for a unit price of $597 per dry ton delivered, for an estimated annual amount of $1,791,000 (plus applicable sales tax) with four, one-year renewal options. The Board of Directors also approved a unit price contingency of 10%.
In March 2020, staff negotiated a price increase of 9.8% which is within the 10% unit price contingency for the contract period July 1, 2020 to June 30, 2021.
When staff initiated the agreement renewal process for July 1, 2021 through June 30, 2022, Pencco notified staff that there will be an increase in the unit price for Ferric Chloride. The unit price increase is related to an increase in iron commodity pricing.
RELEVANT STANDARDS
* 24/7/365 treatment plant reliability
* Zero odor incidents/events under normal operating conditions for Plant Nos. 1 and 2
*...
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