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Item 4B Memo-Final CITY OF Item 413 SOUTH LAKE MEMORANDUM (January 17, 2017) To: Shana Yelverton, City Manager From: Rob Cohen, Director of Public Works Subject: Approve an annual purchase agreement with Martin Marietta Materials, Inc. for aggregate street materials through an interlocal agreement with the City of Grapevine in an amount not to exceed $150,000 Action Requested: Approve an annual purchase agreement with Martin Marietta Materials, Inc. for aggregate street materials through an interlocal agreement with the City of Grapevine in an amount not to exceed $150,000. Background Information: Various divisions of Public Works require the purchase of aggregate materials such as cement treated road base (CTB), cement treated sand (CTS), and rock. These materials are necessary to repair street failures and to facilitate utility repairs under pavement. The City's bidding process for this contract award was met through an interlocal agreement (ILA) with the City of Grapevine. Chapter 271 of the Texas Local Government Code allows governmental entities to enter into an ILA with other governmental entities to share contracts which have met the statutory bidding requirements as prescribed by the State of Texas. The City of Southlake has such an agreement with the City of Grapevine (Attachment A). In September 2012, the City of Grapevine awarded RFB 392-2012 to Texas Industries, Inc. (TXI) based on lowest price in the Bid Tabulation Sheet (Attachment B). In July 2014, aggregate producers Martin Marietta Materials, Inc. and TXI merged (Attachment C). In September 2016, the City of Grapevine renewed existing contract number 392-2012 for the purchase of aggregate materials with Martin Marietta Materials, Inc. (Attachment B). Item 413 Page 2 of 3 Martin Marietta Materials, Inc. is the sole source provider of CTB and CTS produced in a pug mill plant in the DFW Metroplex and its trademark SuperSlurryTm roadway product (Attachment E). These materials have a shelf life of approximately three hours and therefore, must be purchased locally. With the favorable pricing received in this contract and our experience with the vendor, staff recommends approval of the annual purchase agreement with Martin Marietta Materials, Inc. This renewal includes no increase in the cost of the Martin Marietta Materials, Inc., line items on the original bid. Financial Considerations: Funding for this contract is provided in the FY 2017 annual operating budget for Streets Division and the FY 2017 CIP budget. Expenditures will not exceed budgeted funds. Prior to Martin Marietta Materials, Inc. purchasing TXI on July 1 , 2014, the City purchased street materials from Martin Marietta Material, Inc. and TXI. In FY 2014, the City spent a combined total of $163,253 with Martin Marietta Materials, Inc. and TXI. In FY 2015, the City spent $154,087, in FY 2016, the City spent $149,225, and in FY 2017 to date, the City has spent $9,470 with Martin Marietta Materials, Inc. Strategic Link: This Item relates to the City's strategy map focus areas of Infrastructure and Partnerships & Volunteerism. It specifically relates to the City's Corporate Objectives to (132) collaborate with select partners to implement service solutions and (F2) invest to provide and maintain high quality public assets. Citizen Input/ Board Review: N/A Legal Review: N/A Alternatives: The City Council may approve or deny this purchasing agreement. Supporting Documents: Attachment A: Inter-local Government Agreement for Purchasing Attachment B: Grapevine 2016-2017 Contract Renewal Letter Attachment C: Announcement of Martin Marietta Materials, Inc. and TXI Merger Attachment D: Grapevine Award #392-2012 and Renewal History Attachment E: Sole Source letter(s) Item 4B Page 3 of 3 Staff Recommendation: Approve an annual purchase agreement with Martin Marietta Materials, Inc. for aggregate street materials through an interlocal agreement with the City of Grapevine in an amount not to exceed $150,000. Staff Contact: Rob Cohen, Director of Public Works Cristina McMurray, M.P.A, C.P.M, Deputy Director/Operations