News

Geneva to buy electric transformers through purchasing cooperative

Supply chain woes hinder manufacturers, drive up prices

GENEVA – The city will purchasing electric transformers and equipment from a company vetted and recommended by a purchasing cooperative.

Aldermen acting as the Committee of the Whole March 21 unanimously recommended approval of a contract with WESCO International Inc., of Pittsburgh, for $320,000.

The purchasing cooperative, Sourcewell, ensures the lowest possible bids from a wider pool of bidders, officials said. Sourcewell competitively bids procurement contracts for governments, public agencies and nonprofits.

“The transformer available from WESCO meet the city of Geneva’s specifications and Department of Energy efficiency standards,” City Administrator Stephanie Dawkins said.

According to a memo from Superintendent of Electrical Services Aaron Holton, the city was facing supply chain problems that would have affected its ability to buy transformers and other electrical equipment.

“In years past, the city would request sealed bids for multiyear delivery of distribution transformers and equipment,” Holton’s memo stated.

The electric division staff reached out to the city’s normal suppliers to advise them of the upcoming bid opportunity, he wrote.

“Staff was told by all but one supplier that they would not be submitting bids due to price volatility and supply chain shortages,” Holton’s memo stated. “Several transformer manufacturers are no longer accepting new orders or are taking on excessive lead times to any order that is accepted.”

In searching for an alternative source, staff found Sourcewell, which would give the city “an economy of scale we wouldn’t normally be capable of and broadens the bidding pool,” Horton’s memo stated.

Sourcewell sent requests for proposals to 111 companies and received 16 responses, ultimately deciding upon WESCO, documents show.

“WESCO offers products that are environmentally preferable and are identified as green energy and renewable through catalogs on their website,” according to Sourcwell’s recommendation.

Second Ward Alderman Bradley Kosirog asked how the pricing through the cooperative compared to the city’s previous electrical equipment purchases.

“That’s kind of a hard question to answer because of all the volatility right now,” Holton said. “We do have price escalation in the current blanket purchase order. And really, what we’re being told is nobody will set the price of a transformer until we order it. Going off the Sourcewell, we know that we’re getting their lowest possible bid, just like we would do with ours.”

Holton said the cost from 2019 and 2020 is up almost twice as much due to a shortage of materials such as copper and steel that go into the transformers.

“Several manufacturers aren’t even taking orders right now. Some are taking orders, but they’re three-plus years out,” Holton said.

WESCO’s start of construction is 52 weeks after the order and delivery is 10 weeks after that, Holton said.

The City Council will take final action.