REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Issue Purchase Orders to The Okonite Company for the Purchase of Okonite Alternative Cables for Silicon Valley Power’s Distribution System
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On November 14, 2023, the City Council authorized the City Manager to issue purchase orders to The Okonite Company for the purchase of standard 1100 KCMil and 1/0 MCM cables on a sole source basis. Silicon Valley Power (SVP) uses these two types of Okonite cable to connect switchgears and transformers in SVP’s distribution system. The Okonite Company has been the original manufacturer for SVP’s medium voltage cables for the past 15 years.
The 2023 City Council authorization was for a cumulative total amount of $7,264,378 for the time period beginning on November 13, 2023 (the date of the City Council action), through December 31, 2025, subject to the annual appropriation of funds. Following City Council approval, staff placed orders for both standard cable types, with deliveries expected in December 2024.
Due to significant increases in lead times, along with SVP’s extensive capital improvement program and increased preventative maintenance, the demand for the cables has increased. For comparison, in 2020, SVP ordered 32,000 linear feet of cable, 12,000 linear feet in 2022, and 70,000 linear feet in 2023.
Due to the one-year lead time for the standard cable types and in order to meet the critical needs of the electric utility, including meeting construction timelines, SVP staff worked with the Purchasing Division to acquire alternative cables as a pilot solution. These alternative cables, commonly used by larger utilities, are stocked by the vendor. SVP staff have determined that these alternative cables will meet the needs of SVP as an interim solution. As a result, staff is requesting authorization to purchase additional quantities of these alternative cable types.
DISCUSSION
Under Sections 2.105.250 and 2.105.290 of the Santa Clara City Code, competitive procurement is not required when due to circumstances beyond the control of the City, the time necessary to use the competitive procurement procedure would result in substantial economic loss to the City or substantial interference with a critical City operation.
Given the long lead time for the standard Okonite cables and SVP’s urgent operational needs, staff requests authorization to purchase up to $1,000,000 of alternative Okonite cable products through the period ending December 31, 2025. These alternatives are slightly lower in price compared to the standard cables, with the alternative 1100 KCMil priced at $26.68 per foot (versus $28.03 for the standard cable) and the alternative 1/0 MCM cables priced at $9.63 per foot (versus $11.93 for the standard cable).
Once the standard cables are received, SVP does not anticipate further use of the alternative cable types as they typically require additional labor, tooling, and parts which may reduce cost savings realized. However, this interim solution will ensure that critical projects can continue without delay.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(2) of Title 14 of the California Code of Regulations as the proposed actions only authorize the purchase of supplies.
FISCAL IMPACT
Funding for the purchase orders is budgeted in the Electric Operating Fund or Electric Utility Capital Fund for specific capital projects where applicable.
Funding for future years will be included in future proposed budgets through the regular budget process.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to issue purchase orders to The Okonite Company for the purchase of Okonite alternative cables for Silicon Valley Power’s distribution system with a total maximum purchase amount not to exceed $1,000,000 for the time period beginning on the date of this authorization through December 31, 2025, in forms approved by the City Attorney and subject to the annual appropriation of funds; and
2. Authorize the City Manager to take any actions as necessary to implement and administer the purchase orders including issuing change orders, subject to annual appropriation of funds.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager