R90-156 AUTHORIZING AGREEMENT - EIGHMY MACHINERY, INC.

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PURCHASING & INTERNAL SERVICES MEMORANDUM #90 - 63 December 5, 1990 TO: James C. Bacon, Jr. , City Manager FROM: Deborah M. Perry, Purchasing Supervisor�\ ' SUBJECT: ENDLOADER BIDS Attached you will find a bid summary for two endloaders , to be used by the Street Division and the Lake Maintenance Division of the Public Works Department. These machines will replace a 1977 Case endloader previously sold at auction and a 1969 John Deere eridloader. Bids for the endloaders were received in May of this year, however they were rejected due to an internal analysis of the projected useful life of our equipment replacement program. In the past , the life of an endloader was approximately fifteen years . In some instances the Budget & Technology Division found it to be more beneficial to shorten the useful life of an endloader to five years because of the extensive cost of repairs being incurred the last ten years of its life. With these facts a new bid specification requesting two bids was prepared. Alternate 1 asked to buy the machines outright , while the second alternate asked for a total cost bid on the machines , guaranteeing a buy back at the end of 5 years or 5000 hours . Alternate 2 also asked for a cap on the maximum amount of repairs for 5 years. Funds for this equipment were approved in the FY1990-91 General Fund and Water Fund. Bid specifications were mailed to twelve companies for the endloaders . We received responses from six companies and three no bids . It is the staff recommendation to accept the total cost alternate low bid of Eighmy Machinery, Inc. to furnish two ( 2 ) Case 621 endloaders for $131 , 924 . The maximum cost of repairs will not exceed $4000 total for both machines for a 5 year or 5000 hour period. Eighmy Machinery also guarantees to buy back the 2 endloaders at the end of 5 years or 5000 hours for $110 , 000 total, thus the total cost would be $25 , 924 . cc: Beth Couter