Lodi utility seeks to buy equipment in bulk

Lodi Electric Utility staff has asked the Lodi City Council to adopt a longterm purchasing agreement process that would allow the utility to buy electrical equipment in larger quantities to reduce material costs.

The request was made during Tuesday’s shirtsleeve meeting.

Under the LEU’s proposal, the city would secure vendor bids with a two-year purchase agreement — a sale agreement between a buyer and a seller — with an option to extend the agreement for an additional year. LEU Superintendent Tim Combs said the proposal is standard across electric utilities, and will be more cost effective and time efficient.

Combs noted that the current bidding process — the utility will request price bids for materials from multiple vendors to find the least expensive vendor to contract with — results in few bids because the utility purchases smaller quantities of its stock materials throughout the year.

LEU makes smaller quantity purchases due to the limited storage space it has in it’s 4,000-square-foot warehouse, according to Combs.

He added that the smaller purchases are more costly and take longer to receive because vendors do not find it cost effective to bid for LEU requests due to shipping and delivery costs.

“We are asking vendors to respond to smaller quantities, so many times they won’t respond to a bid,” Combs said. “The overall process (to receive) normal materials can take up to two months and some materials can take up to a year,”

If the LEU is left without certain materials, projects get backlogged until the materials are available. LEU Director Jeff Berkheimer said the utility recently ran out of 40-foot Douglas-fir poles, which are commonly used for utility poles and cross arms because of their strength-toweight ratio and their height. Without the poles the project was halted until LEU could put the materials out to bid.

“It has an impact on scheduling the work we do and having to re-prioritize,” Berkheimer said.

Michael Koinzan, a technician with the utility, said if the council were to approve a long-term purchasing agreement it would allow the utility to purchase stock materials in bulk, cut costs and give the city the option of storing materials with vendors until they are needed.

“Storing the materials would be embedded in the bid,” Deputy City Manager Andrew Keys said.

Councilman Doug Kuehne said he would like to see more concrete numbers, but supports the notion of saving costs.