R2006-149 AUTHORIZING CHANGE ORDER

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�.. � � COUNCIL COMMUNICATION FORM PURCHASING& INTERNAL SERVICES MEMORANDUM #06-59 September 11, 2006 TO: Honorable Mayor Osborne and City Council FROM: Steve Garman, City Manager Ron Neufeld, Financial Management Director Deborah M. Perry, Purchasing Supervisor�.� SUBJECT: Additional cost for Hydrofluorosilicic Acid ' SUMMARY RECOMMENDATION: Staff recommends increasing contract to LCI Ltd. to furnish hydrofluorosilicic acid for the treatment of potable water. BACKGROUND: A contract was previously awarded to LCI, Ltd. in April of 2005 to furnish hydrofluorosilicic acid for water treatment for$145 per ton. Several circumstances have occurred which have affected the marketplace for this chemical. According to Rob Shirley, Water Production Manager, a manufacturing plant for this chemical has been closed causing an increase in cost to the suppliers. There is now a nationwide shortage for this chemical, increasing the price by approximately 50%. One of LCI's suppliers increased the cost for this chemical by 26% due to the demand and increased cost to produce this cheznical. Rob said the Illinois Environmental Protective Agency had contacted him prior to LCI's request for an increase, due to their learning of a shortage of hydrofluorosilicic acid. In addition, the Chemical Security and Safety Act of 2006 (5.2486) and Chemical Facility Anti-Terrorism Act of 2006 are under review by Senate causing chemical manufacturing and storage facilities to be proactive in adding expensive surveillance and mitigation equipment. Also, Homeland Security is continuing to put pressure on chemical manufacturing plants to improve their security by installing high tech surveillance and monitoring devices. Staff has surveyed the market place and contacted other vendors and their price was higher that the $204 request by LCI, Ltd.