TRANSMITTAL LETTER FOR BOARD MEETING OF APRIL 5, 2012
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Issue purchase order to Alfa Laval, Inc. to Furnish and Deliver One Alfa Laval ALDEC G3-125 Test Centrifuge at the Stickney Water Reclamation Plant, in an amount not to exceed $175,000.00, Account 201-50000-645650, Requisition No. 1326602
Body
Dear Sir:
Authorization is requested to issue a purchase order to Alfa Laval, Inc., to furnish and deliver one Alfa Laval ALDEC G3-125 Test Centrifuge at the Stickney Water Reclamation Plant.
On March 1, 2010, the District trades, with the assistance of Alfa Laval, Inc., completed the installation of one (1) Alfa Laval ALDEC G3-125 Test Centrifuge at the Stickney Water Reclamation Plant. This new generation of Alfa Laval's centrifuges was installed in the place of one of the 21 existing centrifuges currently in operation for the purpose of dewatering the post-digestion solids, in order to test and compare its operation and performance to the existing centrifuges. This testing was deemed necessary because the existing centrifuges are reaching the end of their useful life and because the test results were to be used to aid the Engineering Department in the design of a new project, to Furnish, Deliver and Install Centrifuges at the Calumet Water Reclamation Plant. Since that time, the centrifuges at Calumet have been shut down indefinitely.
Alfa Laval claimed that the G3-125 centrifuge would be able to process twice the quantity of biosolids than the existing model while simultaneously achieving a 50% reduction in energy usage. In addition, they also claimed that maintenance costs would be reduced due to increased reliability.
District staff conducted a study through August 26, 2011, by replacing one of the existing centrifuges with the G3-125 and comparing its operations and performance with the other twenty (20) centrifuges. The G3-125 was able to process an average of 54.3 DT/day while the average throughput of the 20 existing centrifuges was 29 DT/day.
The G3-125 exhibited considerable savings in electricity usage over that of the existing model, utilizing an average of 24 kWh/DT vs. 83 kWh/DT, or a 70% reduction. At the current cost of electricity ($0.0712/kWh) this equates to a saving of $4.14/DT of biosolids processed. At a daily production of 54.3 DT, an annual savings of $82,052.73 per centrifuge would be achieved. Based on the actual number of days in operation during the study period, the actual electricity cost savings achieved were $39,819.71.
Therefore, based on the data gathered in the study, Alfa Laval's claims of increased production and reduced energy usage were verified. However, due to the short study period, sufficient data on maintenance issues have not been collected to verify the claim of less frequent maintenance and therefore, the overall savings compared to the existing units are not completely known.
Alfa Laval, Inc. is the manufacturer and sole source supplier of the G3-125 centrifuge. The District originally received a proposal from Alfa Laval on May 24, 2011, in the amount of $550,000.00 to purchase the G3-125 centrifuge. The unit is now being sold on the market for $750,000.00. While the District had the use of the centrifuge to process its biosolids without first having to purchase it, Alfa Laval also received a benefit through the knowledge gained by testing their new model under actual operating conditions. Therefore, the District rejected their offer and requested a substantial price reduction. Alfa Laval then offered the centrifuge for purchase at an amount of $175,000.00.
Considering that our existing centrifuges are aging, any unit needing replacement in the future would be replaced by a new generation machine like the G3-125. In addition, the proven higher efficiency of the G3-125 plus the low price offered by the vendor makes the purchase of this unit a beneficial investment. It is therefore recommended that the G3-125 test unit be purchased.
Alfa Laval, Inc. is registered and in good standing with the Illinois Secretary of State.
The Multi-Project Labor Agreement is not applicable to this contract because it is primarily a furnish and deliver contract.
In view of the foregoing, it is requested that the Director of Procurement and Materials Management be authorized to issue a purchase order to Alfa Laval, Inc., in an amount not to exceed $175,000.00.
Funds are available in Account 201-50000-645650.
Requested, Manju Prakash Sharma, Director of Maintenance and Operations, SES:LCS:SO'C
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for April 5, 2012