HomeMy WebLinkAboutHeli-Mart - Approve and Authorize Sole Source Justification �)F e i Z:,� J"
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City of Huntington Beach
File #: 21-549 MEETING DATE: 8/3/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Julian Harvey, Interim Chief of Police
Subject:
Approve and authorize a 5-year Sole Source Agreement with Heli-Mart to supply helicopter
components to maintain the City's helicopter fleet
Statement of Issue:
The Police Air Support Unit is requesting a Sole Source Agreement with Heli-Mart to supply
helicopter components to maintain the city fleet of helicopters.
Financial Impact:
The proposed Sole Source Agreement would allow the department to purchase $340,000 of
components per year for the next five years. Purchasing from Heli-Mart would result in cost savings
of approximately 20% when compared to other parts vendors, due to the discount provided by Heli-
Mart to the City of Huntington Beach. Based in Orange County, Heli-Mart's proximity will also result
in additional cost savings through the elimination of shipping charges, which would be in the tens of
thousands of dollars if another vendor was selected.
Recommended Action:
Approve and authorize the Mayor and City Clerk to authorize a Sole Source agreement with Heli-
Mart
Alternative Action(s):
Do not approve and direct staff accordingly. Although there are other parts suppliers, Heli-Mart has a
significantly more comprehensive parts inventory than its competitors and is on call for the Police Air
Support Unit 24 hours per day, which is critical to the emergency operations of the City.
Analysis:
The Police Department is requesting to renew the Sole Source Agreement for the purchase of
helicopter components from Heli-Mart. The Huntington Beach Police Air Support Unit maintains a
fleet of three helicopters and is responsible for providing Air Support services to Huntington Beach,
Newport Beach, Costa Mesa, and Irvine. As such, the aircraft need to be ready on a moment's
notice.
City of Huntington Beach Page 1 of 2 Pnnted on 721/2021
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File #: 21-549 MEETING DATE: 8/3/2021
Based in Orange County, Heli-Mart's proximity allows for the delivery of parts within hours upon
ordering and does not charge the City for shipping. In terms of parts availability, additional research
conducted by the Police Department has demonstrated that Heli-Mart's inventory is significantly more
comprehensive than its competitors. Multiple times in the recent past, the Air Support Unit has
ordered parts from Heli-Mart that no other supplier was able to obtain. Without these parts, the
aircraft would not have been able to fly. The next two closest vendors have smaller parts inventories,
charge for shipping, and are located in Camarillo, CA, and Oceanside, CA. Having a local supplier
with a vast inventory of readily available parts at a discounted price will result in fewer hours of
aircraft unavailability due to maintenance. In addition to being a local vendor, Heli-Mart is on call for
the Police Air Support Unit 24 hours a day and can deliver parts within 30 minutes if need be.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(§):
1. Sole Source justification
City of Huntington Beach Page 2 of 2 Primed on 7128/2021
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CITY OF HUNTINGTON BEACH RECEIVED
Sole-Source Justification JUL 15 2021
(For use on all goods and services acgwsit
--' �r �epartmen'.
This justification document consists of two 12)pages. All infomration must be provided and all questions must answered. The"Required
Approvals" section must include a date for each signature,as appropriate for the transaction.
Requesting Department Information
Date: June 17, 2021
Requestor Name: Sgt.Jeff Goodspeed Division Manager: Lt.Chris Nesmith
names Do not sign
Department: Polk@ Department Head: Chief Harvey
JType names Do not sign Must be same as signature below
Department Contact Information
Contact Name: Sgt. Jeff Goodspeed Street Address: 18401 Gothard St.,
Telephone: 714-536-5997 Huntington Beach, Ca 92648
Fax: Shipping Address: Same
Cellular hone:
Required Contact Information
Contractor/Supplier Name: Helimart Inc.
Contractor/Supplier Address: 17811 Mitchell N.
Contractor/Supplier City/State/Zip: Irvine CA 92614
Original Contract Amount:' Amendment Amount:' (if applicable) New Contract Amount
$$M.000 per year for 3 years $$330,000 In 2020 $$340,000 per year for the next 5
(Includes original contract and previously years
approved amendments) ('Current amendment only) ('In"des onginal contract and all amendments,
mcludi current amendment
Provide a brief description of the acquisition, including all goods and/or services the contractor will vide:
Helicopter parts
Contract Type and Term
Contract Type: Contract Term: What account number will be used to purchase?
Select One: ® Goods Begin 7 1-21 Business Unit
❑ Service
❑ Goods 8 Services End 7 1-26 Object Code
Required Approvals
./DeparrurprF Head P Pcipal Finance Analyst Chief Financial Officer Assistant City Manager
❑ Denied Ld etl ❑Denied EJApproved El Denied proved ❑Denied
. I ( -r�j
ature Signature Signature Signature
I V 7/1cl 21 Z 7-:2- 1
Date Dale Date Da
Date exceeding$50,000
must be approved by City Council
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CITY OF HUNTINGTON BEACH
Sole Source Justification
61, tFor use on all goods and services acquisitions i
Complete responses must be provided for all of the following items.
A. THE GOODISERVICE REQUESTED IS RESTRICTED TO ONE SUPPLIER FOR THE REASONS STATED BELOW:
1. Why is the acquisition restricted to this goods/serviceslsupplier?
i Explain why the acquisition cannot be competitively bid
Helimart is a local aviation parts supplier that the HBPD has had a sole source agreement with for the
past six years. Helimart provides the Air Support Unit with the majority of all parts ordered to maintain
the readiness of the three Police Helicopters. Helimart maintains the largest parts inventory of any other
supplier to include the manufacturer. Helimart is located in Irvine, which allows them to deliver parts
within hours upon being ordered. Multiple times in the recent past, the Air Support Unit has ordered parts
from Helimart that no other supplier had access to. Without these parts, the aircraft would not have been
able to fly. The next two closest vendors. (Ro-Wing Aviation and Sea Side Helicopters ), are in Camarillo
CA, and Oceanside, Ca. Due to their distance, orders placed with these suppliers would take an extended
period to deliver. These vendors also have smaller inventories, which would cause back orders on parts.
Using these two vendors would also incur large shipping charges which are not incurred when ordering
From Helimart.
2. Provide the background of events leading to this acquisition.
The HBPD Air Support Unit maintains a fleet of three MD helicopters. With the responsibilities of
providing Air Support Services to Huntington Beach, the city contracts Air Support to the Cities of
Newport Beach, Costa Mesa, and Irvine as well. This requires the aircraft to be ready on a moment's
notice. To accomplish this, Helimart was chosen as a vendor due to their close proximity and discounts
they provide due to our long-standing history. Helimart is also on call for the HBPD 24 hours a day, which
no other vendor can do.
3. Describe the uniqueness of the acquisition (why was the good/service/supplier choseri
Helimart provides parts at a lower rate than other vendors do. They provide shipping at no cost and
when necessary they can deliver within 30 minutes. Helimart also maintains an FAA Repair Station
certification which allows them to overhaul certain parts which is an overall cost savings. Helimart is the
only vendor that can be on call 24 hours a day for our emergency needs.
4. What are the consequences of not purchasing the goods/services or contracting with the proposed
supplier?
If Helimart is not used as the vendor. the overall cost of the maintenance effort will rise along with
cancellation of flights due to lack of supplies. This would also reduce revenue generated from the
contract cities.
5. What market research was conducted to substantiate no competition, including evaluation of other items
considered?
i Provide a narrative of your efforts to identify otner similar or appropriate goodsiservices including a summary of how the department
concluded that such alternatives are either inappropriate or unavailable The names and addresses of suppliers contacted and the reasons
for not considering them must be included QR an explanation of why the survey or effort to identity other goods/services was not
performed )
Prior to submitting this justification the ASU contacted the two closest competitor vendors, (Ro-Wing
Aviation and Sea Side Aviation), and requested a quote for several random parts that would be needed in
the next fiscal year. We requested a price, whether the parts were currently in stock or needed to be
ordered from the manufacturer, the date and time of delivery, and any associated costs related to the
delivery of the parts. The manufacturer was also contacted with the same request.
Helimart's quote was the lowest from all of the vendors contacted and was the only one to offer free
shipping. Helimart had four of the five parts in stock with the fifth part being an overhaul with a cost
savings. This is possible due to their status as a Repair Station, otherwise this part had an extended
delivery time The other two vendors did not have any requested parts in stock. One competitor listed
delivery times of one day to 2 weeks and had a cost of$200 for delivery. The other competitor listed
delivery times of 1 week to 3 weeks, and one part being 110 weeks out, with a delivery cost of$800.
The manufacturer had every item in stock. However, their price was 10% -20 % higher than Helimart and
a shipping fee from Mesa Arizona.
B. PRICE ANALYSIS
1. How was the price offered determined to be fair and reasonable?
(Explain what the basis was for comparison and include cost analyses as applicable.)
The requested quotes of the five random parts from three vendors and the manufacturer was used to
determine a fair and reasonable comparison.
2. Describe any cost savings realized or costs avoided by acquiring the goods/services from this supplier.
The largest area of savings would be in shipping. Orders are made on a continual basis and shipping
charges would be in the tens of thousands of dollars yearly if Helimart is not used. Helimart is 2%-10%
cheaper than the two closest vendors as well as the manufacturer. Additionally if the ASU was required to
wait on parts shipped from other vendors, flight time would be lost and public safety would suffer as well
as revenue from the contract cities.
Remit completed form to: City of Huntington Beach—Purchasing Division
2000 Main Street, Huntington Beach, CA 92648-2702
3
Switzer, Donna
From: Nesmith, Christopher
Sent: Wednesday, September 8, 2021 10:S3 AM
To: Switzer, Donna
Subject: Helimart Sole Source
Hello,
The RCA that was approved on 8-3-21 makes reference to a 5 year agreement with Helimart. The terminology is
inaccurate, we do not have an Sole Source agreement, we have an approved Sole Source Justification. Please let me
know if you need anything else.
Thank you,
Chris
Lieutenant C. Nesmith
Huntington Beach Police Department
Detective Bureau Commander/Air Support Unit Commander
(714) 536-5918
cnesmith@hbpd.org