05-01-86 Finance Comm MinutesMay 1, 1986 PUBLIC WORKS/FINANCE COMMITTEES 3:00 P.M.
Chairmen Ruiz and Palmer and Councilman Schindler in attendance. Mayor
Kennedy, DPW Hammer, Surveyor Zavodny, Garry Overn, Dennis Schwenk from Long
Machinery, Jeff Wallace and Dirk Kenfield from Davies, Howard Hurst, Dave
Melrose, and Roger Hopkins of the Daily Inter Lake also present.
FRONT END LOADER BIDS - The Committee took a few moments to read the
packet of information handed out which included a recommendation from DPW
Hammer, memo from Attorney Neier, and information from both Davies and Long
Machinery concerning their particular products. Both companies were invited
to give a short presentation of their position and product.
Dirk Kenfield from Davies stated that basically his contention was that
the two minor items on which they did not meet specifications, the reverse
gears and the electrical, and the dollar difference, they felt that the John
Deere was the cheaper buy. If the City considers Caterpillar's supposition
that they are going to be cheaper because they are going to be servicing every
3000 hours the City won't make that dollar difference up in twenty years.
If you take, according to the Caterpillar salesman, the higher cost of operating
and the higher fuel costs to be ekperienced you will more than make up for
the service dollar difference. So our basic premise is that you have to buy
the John Deere. It's cheaper, within the specifications except for two minor
things, and there wasn't anybody else that could bid, so John Deere feels
they were within the perameters of the specifications, and for $7,300 difference
you're getting a quality machine that will certainly hold up over a long period
of time. When asked what percentage of parts were available locally Mr. Kenfield
stated that he wasn't sure for that machine but in general the figure was
70 - 75%. The rest of the parts come out of Portland, who stocks 95i+ on
all equipment. That includes alot of old John Deere farm equipment. C. Palmer
asked about the comment that no one else could have bid, and the response
was that they could have bid but could not have met specifications. Then
he added that only four companies could have bid - Fiat, Case, John Deere,
and Caterpillar because of the mileage restrictions. When asked why Case
had not bid it was determined that the invitation to bid had not been sent'
because of an oversight, and when they had seen the ad in the newspaper they
had not responded quickly enough. C. Ruiz asked DPW Hammer if he had called
owners of John Deere loaders for opinions. He responded that he had attempted
but had not had a response. C. Schindler stated he had called several, who
said they were very happy, one just stating he had no problems.
Denis Schwenk from Long Machinery gave an overhead projection presentation
of the material provided in the handout at the beginning of the meeting (attached)
showing detailed comparison of John Deere and Caterpillar loaders in the areas
of individuals to contact to discuss Caterpillar vs. John Deere, fuel consumption
based on S.A.E. rating using specific temperature, altitude, and fuel, tire
replacement cost, maintenance costs, repair reserve, replacement costs, auction
values, downtime/maintenance, and initial price. He then went on to discuss
briefly the advantages of exchange components for various Caterpillar machinery
owned by the City, pointed out that oil and fuel filters are the same for
all City -owned Caterpillar equipment, and lubricant commonality.
C. Schindler asked about replacement parts and the response from Mr.
Schwenk was that Caterpillar parts prices are the same all over, while John
Deereprices vary between dealers. DPW Hammer said he had spoken with Gary
Stempin at the County landfill who told him the price of Caterpillar parts
PUBLIC WORKS/FINANCE COM1,11TTEES
May 1, 1986
Page 2
is decreasing. DPW Hammer asked what percentage of parts are carried locally
by Caterpillar. Mr. Schwenk said 829, locally with 99% overnight from the
Spokane emergency depot. DPW Hammer commented on his memo (attached) and
pointed out that the difference in fuel costs alone using $1.25/gallon amounted
to $15,000 over a ten year period. Secondly, the 930 Caterpillar front end
loader the City recently purchased was in really good shape and would be around
for a long time, and parts are interchangeable. Thirdly, the argument that
the maintenance and operations costs were not specifically asked for in the
bid specifications so therefore should not be considered was not valid because
the Council had previously asked for in the specifications and otherwise on
other pieces of equipment.
Acting Street Superintendent Garry Overn pointed out the advantage of
better control over the boom and bucket with the dual controls of the Caterpillar
in working in close quarters on City streets. C. Palmer asked about the problem
on the John Deere of the door not opening when the wheels are turned, and
Mr. Overn said that it would usually be parked straight but this can be a
problem if the machine is articulated. It was pointed out that there is an
exit through the window if the door cannot be opened.
C. Palmer refered to Attorney Neier's memo on Competitive Bidding and
Awarding of Contracts (attached) and asked if it addressed the way bids are
called for and the specifications and it was pointed out that this was addressed
in the last paragraph. The memo also stated that the reasons for a decision
by the Committee should be set forth in the minutes.
C. Ruiz debated whether fuel costs, resale value, etc. should be considered
in making a decision. DPW Hammer pointed out that the County includes these
costs in their decisions concerning equipment purchases. C. Schindler questioned
the validity of fuel costs unless they were based on an actual trial with
the actual equipment in question.
The question was raised if the City had had any trouble with the John
Deere backhoe. There has been no problem, and it was added that the John
Deere backhoe is considered the best equipment for the money, but for front-
end loaders for industrial use the Caterpillar is a better machine.
C. Schindler moved that the City accept the low bid of John Deere for
the articulated front-end loader. C. Palmer seconded in order to get it
on the floor. C. Palmer said he was concerned about the importance of the
24 volt system for starting reliability in cold weather and stated that adding
other input and staff input he would vote against the motion. C. Schindler
responded that Glacier Park had had no trouble with starting problems with
the 12 volt John Deere.
C. Palmer said there was an engineering problem when a door won't open
and said he didn't like the "what if's" of that situation.
Howard Hurst pointed out that historically this same decision has been
made over and over again through the bidding process, for the same reasons
discussed at this meeting, and over and over the Caterpillar is purchased
even though it was high bid because of the investment in quality.
PUBLIC WORKS/FINANCE COMMITTEES
May 1, 1986
Page 3
C. Palmer pointed out the fact of better control in tight situations.
Mayor Kennedy said he felt it important to take the recommendation of his
staff and he seconded C. Palmer's statements - he would stand with his staff
and department head in preference to the Caterpillar.
C. Ruiz stated that as president of the Council he represented the entire
Council and he had a problem with setting a precedent in the bidding process
by deciding on things not included in the bid (as the 10-year projection of
costs). He also stated he had a problem with DPW Hammer notcalling owners
of the two different pieces of equipment to poll them.
DPW Hammer responded that the bidding process had been done correctly
both by his office and the City Attorney, and stated his concern that the
Council would automatically take the low bid without regard to their responsi-
bility to the taxpayers.
C. Palmer stated that C. Ruiz should follow the Attorney's advice and
give reasons for waiving the specifications. C. Ruiz responded that the 12
volt system performed as well as the 24 volt and that City personnel said
that the extra reverse gears are not that important to performance. The vote
was to award the bid to John Deere with C. Ruiz and Schindler voting for and
C. Palmer voting against.
The question of tracking came up and C. Palmer asked Jeff Wallace if
the John Deere tracked, and Mr. Wallace replied that yes, it did, he had taken
it out in the field and driven it around himself. Others in the room disagreed
with that statement.
ajg
*The DPW Hammer memo, Attorney Neier's memo and the comparison material on
the John Deere and Caterpillar equipment are on file in the Public Works
Department and included with the original minutes of this meeting.
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