COUNCIL ACTION FORM

PURCHASE OF TRANSFORMERS FOR ELECTRIC SERVICES DEPARTMENT

This award is for the purchase of electric transformers necessary to meet the anticipated needs of the Electric Services Department. These transformers are kept on hand in order to ensure availability, which will enable staff to replace failed transformers quickly. They are also necessary to meet the anticipated needs of the Electric Services Department for new services and maintenance activities. Typically, these transformers are used to provide service for commercial and residential applications.

Lead times have become a challenge for many vendors of critical electric inventory components due to supply chain issues. To address the Electric Department's future need for transformers, staff issued a Request for Quotation (RFQ) for a one-time purchase of specific transformers, separated into two equipment groupings: single-phase pad-mounted transformers and three-phase pad-mounted transformers. On September 18, 2026, an RFQ document was posted to Ames Bids, the electronic bidding site.

Bids were received on September 29, 2026. The bids are shown in the table below. The table reviews the bids in two ways: 1) The "Response Total Cost" column is based on the unit cost of the transformers as bid by the supplier; 2) The "Evaluation Cost" reflects the unit cost of the transformers plus an "energy loss" component that considers losses in the transformer under no-loss and low-loss operation. Transformers that are less efficient under this evaluation are shown as costing more in this "Evaluation Cost" column.

*Price is inclusive of 6% State of Iowa Sales Taxes Plus 1% Local Tax.

**Bid evaluation was performed line by line. Full bid tab is attached. 

For the Single-Phase Transformer Group, Border States was the lowest responsible, responsive bidder (for both the Response Total Cost and Evaluation Cost) to offer transformers that met all specifications. WESCO Distribution was the lowest bidder on Bid Line 2, however, the bid was found to be non-responsive, as the manufacturer is not approved. 

For the Three-Phase Transformer Group, RESCO was the lowest responsible, responsive bidder (for Evaluation Cost) to offer transformers that met all specifications. RESCO was also the bidder for Response Total Cost on Bid Lines 4 and 5. WESCO Distribution was the lowest bidder for Response Total Cost on Line 6, however RESCO had the lowest Evaluation Cost. 

Of note, Border States included an "Order Note from Cooper Power" in its bid: "All prices here represent those in effect at time of quotation and are subject to change at a minimum of 30 days prior to shipment." 

Staff does not anticipate that the potential for price adjustment would be significant enough to warrant awarding the bid to the next lowest-cost vendor, which also has a Price Adjustment Clause. The price adjustments will be handled by a change order to the contract at the time the order is placed in accordance with the City's Purchasing Policies.

This contract will be funded from the Underground System Improvements/Transformers account in the adopted FY 2026/27 budget. The available budgeted amount is $400,000.

1. Award the following contracts for the purchase of inventory for Electric Services; Payments will be based on unit prices and quantities ordered, inclusive of all applicable sales taxes:
   1. Award a contract to Border States, of Ames, IA, in an amount not-to-exceed $69,243.13.
   2. Award a contract to RESCO, of Ankeny, IA, in an amount not-to-exceed $148,369.87.
       
2. Direct staff to award one or both contracts to other bidders.
   
   
3. Reject the bids.

Transformers are critical to provide reliable electric service to customers of the Ames Municipal Electric System. It is important to purchase transformers at the lowest possible cost with minimal risk to the City. It is also imperative to have transformers available to meet customer needs in the short-term as well as the long-term. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1, as described above.