Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve Amendment #4 to Contract #20160120 for the Supply of Zinc-Orthophosphate for the Water Treatment Facilities with Amaya Solutions, Inc. f/k/a American Water Chemicals, Inc. d/b/a American Water Chemicals
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Submitted By: Keith Stewart, Sr. Contracting Officer, Procurement Management Division (PMD).
Strategic Plan Link: The City's Goal of high-quality infrastructure and facilities.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Keith Stewart, PMD.
2. Parties: City of Port St. Lucie and Amaya Solutions, Inc. f/k/a American Water Chemicals, Inc. d/b/a American Water Chemicals (“AWC”).
3. Purpose: To amend Contract #20160120 to modify the pricing of Zinc-Orthophosphate for the City’s water treatment facilities.
4. New/Renewal/Modified: Modify.
5. Duration: The Contract commenced on July 1, 2016 and is a continuing contract unless amended, cancelled, or rebid.
6. Benefits to Port St. Lucie: To continue to provide AWC’s proprietary blend of the chemical Zinc-Orthophosphate as a corrosion inhibitor to protect the City’s facilities as part of the water treatment process.
7. Cost to Port St. Lucie (Annual and Potential): AWC seeks an increase from $0.83/lb. to $1.29/lb., which includes the cost of freight at $0.09/lb. Initial Annual Cost in the amount of $155,000.00 and total annual estimated cost for FY 25 is $250,000. Future expenditures will be appropriated as each year's budget allows.
Presentation Information: N/A.
Staff Recommendation: Move that the Council approve Amendment #4 to Contract #20160120 with AWC to provide Zinc-Orthophosphate at a rate of $1.29/lb., which includes the cost of freight at $0.09/lb.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve Amendment #4 to Contract #20160120.
1. Move that the Council not approve Amendment #4 to Contract #20160120 and provide staff with direction.
Background: The City, by and through its Utility Systems Department (“USD”), entered into Contract #20160120 with AWC, approved by the City Council on July 25, 2016, for the supply of Zinc-Orthophosphate, a proprietary blend successfully used as a corrosion inhibitor in the water treatment process. AWC subsequently assigned its rights under the contracts to Amaya Solutions, Inc. In FY 23/24, the Prineville Water Treatment Facility used 74,493 lbs. and the James E. Anderson (“JEA”) Water Treatment Facility used 74,507 lbs. of this chemical. The City has a separate contract with the same vendor for anti-scalant. The base component for AWC A-751 Corrosion Inhibitor is zinc, used in battery manufacturing, an industry which is experiencing an increase in demand. The world market for zinc has been disrupted by the massive demand for zinc in automobile batteries for Hybrid and Fully Electric vehicles. In addition, the availability of zinc for non-vehicle zinc applications is extremely low. Automotive manufacturers worldwide are willing to pay a premium for zinc which is simply passed onto the consumer.
The USD performed a pilot study at the water treatment plants in 2009 with Tetra Tech. The pilot showed that the Zinc Orthophosphate blend used at Prineville showed a significant reduction in corrosion. Corrosion inhibitors are not a “one size fits all” - the performance may vary and is specific to each water quality and can vary widely between similar applications. The AWC Blend was successfully tested and is a proprietary blend.
Issues/Analysis: Staff reviewed the requested price increase and recommends approval.
Financial Information: Account #431-0000-141005 (Chemicals).
Special Consideration: The Contract provides for price adjustments every 12 months. AWC was afforded one price adjustment via Amendment One in June 2021. Amendment #3 increased the prices and held the current requested price firm until July 1, 2023. The parties will re-evaluate every 6 months thereafter based on the Producer Price Index (“PPI”).
Location of Project: N/A.
Attachments:
Amendment #4 signed.
Amendment #3.
Amendment #2.
Amendment #1.
Original Contract.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 25099-02.
Legal Sufficiency Review:
Reviewed by Alyssa Lunin, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.