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File #: 2021-435    Version: 1 Name:
Type: Resolution Status: Passed
File created: 11/3/2021 In control: Board of Directors Workshop Meeting
On agenda: 11/18/2021 Final action: 11/18/2021
Title: Proposed Purchase Order Renewal No. 3 Purchase Order No. 0004302 Liquid Chlorine Vendor: JCI Jones Chemicals
Sponsors: Navid Mehram
Indexes: Wastewater Operations
Attachments: 1. Chemical Memo Final.11.3.pdf


Proposed Purchase Order Renewal No. 3

Purchase Order No. 0004302

Liquid Chlorine                      

Vendor:  JCI Jones Chemicals



Agenda of:                     November 18, 2021

Item No.:                     2021-435

Amount:                     Original Purchase Order                                  $  1,142,064.00                 

                      Purchase Order Renewal No. 1                             408,816.00

                      Purchase Order Renewal No. 2                             438,208.00

                      Proposed Purchase Order Renewal No. 3             794,240.00                   

                      Total Revised Purchase Order                         $  2,783,328.00


TO:                     The Honorable

                     Board of Directors

                     Great Lakes Water Authority


FROM:                     Suzanne R. Coffey, P.E.,

                      Interim Chief Executive Officer

                     Great Lakes Water Authority


DATE:                     November 3, 2021


RE:                                          Proposed Purchase Order Renewal No. 3

                     Purchase Order No. 0004302

                     Liquid Chlorine

                     Vendor:  JCI Jones Chemicals



Upon recommendation of Navid Mehram, Chief Operating Officer - Wastewater Operating Services, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), authorizes the Interim Chief Executive Officer (ICEO) to enter into Purchase Order No. 0004302, “Liquid Chlorine” with JCI Jones Chemical Inc., at an increased cost of $794,240.00 for a total cost not to exceed $2,783,328.00 and an increased duration of one (1) year for a total purchase order duration of six (6) years; and authorizes the Interim CEO to take such other action as may be necessary to accomplish the intent of this vote.


The Water Resource Recovery Facility (WRRF) treats on average 650 million gallons per day (MGD) and can increase to 1,700 MGD during wet weather events. The WRRF uses chlorine for disinfection prior to discharge to receiving water bodies. The disinfection is a requirement per the National Pollutant Discharge Elimination Permit (NPDES).

GLWA has exercised its discretion by extending the contract to a full 5-year duration. The second renewal (fifth-year term) will end on December 31, 2021. However, due to the COVID-19 pandemic, there is a severe shortage of chlorine supply and many supply chain challenges. To ensure the continuity of chlorine supply, it is recommended to extend the current purchase order for one (1) additional year making the term of the contract six (6) years.


Since March of 2020, GLWA has experienced intermittent difficulties and delays in obtaining chemicals. Although, GLWA has maintained compliance and has successfully procured the needed chemicals for treatment, the challenges of the supply chain persist.

The difficulties have been caused by two separate but concurring issues. The first is manufacturer availability due to increased demand specifically for chlorine and chlorine-based chemicals as a result of the pandemic. This includes a) one manufacturing plant shifting from industrial to retail chemical supply focus and b) hurricanes which have intermittently caused manufacturing interruptions. The second factor is the transportation industry. GLWA receives chemicals in one-ton containers and railcars. The transportation industry issues experienced have negatively impacted the chemical industry.

Through diligent review and surveying of the market, our Procurement Team’s professional judgment and recommendation to extend the current purchase order by one (1) year will ensure the continuity of Chlorine supply for our operations.

Additionally, in the Procurement Director’s November 3, 2021, memo to the Board (attached) related to chemical contracts, the procurement strategy is to extend all current chemical contracts for a minimum of one (1) year to give adequate time to fully assess the market and allow manufacturers to catch up production with demand. This prudent approach will protect the continuity of GLWA’s supply while allowing assessment of the current market. Procurement will also use this time to identify the possibility of new sources of product. Procurement is implementing a dual sourcing plan for redundancy in chemicals to avoid any interruption in chemical supply going forward.





Original Contract Time                                                              Three (3) years  (01/01/2017 - 12/31/2019)

Purchase Order Renewal No.1                         One (1) year      (01/01/2020 - 12/31/2020)

Purchase Order Renewal No. 2                          One (1) year      (01/01/2021 - 12/31/2021)

Proposed Purchase Order Renewal No. 3      One (1) year      (01/01/2022 - 12/31/2022)

Total Revised Time                                              Six (6) Years      (01/01/2017 - 12/31/2022)



Original Purchase Order Amount                                           $ 1,142,064.00

Purchase Order Renewal No.1                                 408,816.00

Purchase Order Renewal No. 2                                438,208.00

Proposed Purchase Order Renewal No. 3                794,240.00

New Purchase Order Total                                                                $ 2,783,328.00



Summary:  The proposed contract extension for chlorine was anticipated as an ongoing component of the wastewater financial plan.

There will be a proposed budget amendment for chemical costs.  This is being evaluated on a prospective basis.  Typically, the volume of these chemicals varies by year, due to demand, which may cause a budget amendment.   Secondly, specific to this year is the nature of price increases outlined in this memo and the memo from the Procurement Director to the Board dated November 3, 2021.  The funding for the budget amendment will first come from an overall review of the other chemical budgets, secondly from other budgeted areas, and finally from the wastewater unallocated reserves.


Funding Source: Operations and Maintenance Budget (5960)

Cost Center: Wastewater Secondary Processing (892224)

Expense Type: Operating Supplies - Chemicals (621600)




Estimated Cost by Year and Related Forecast Variance:

                     FY 2017 Budget (Prorated; 7.5 months)                              $418,750.00

                     FY 2018 Amended Budget                                                                                    405,600.00

                     FY 2019 Amended Budget                                                         400,000.00

                     FY 2020 Budget                                                                                                             421,000.00

                     FY 2021 Budget                                                                                               398,400.00

                     FY 2022 Budget                                                                                               473,300.00

                     FY 2023 Forecast Plan (Prorated; 4.5 months)                     287.250.00

                                          Financial Plan Forecast                                      $2,804,300.00

                     Maximum Contract                                                                                $2,783,328.00

                     Forecast Variance ((Negative) Positive)             $20,972.00



This item was presented to the Operations and Resources Committee at its meeting on November 10, 2021. The Operations and Resources Committee unanimously recommended that the GLWA Board adopt the resolution as presented.


This item does not impact the shared services agreement between GLWA and DWSD.