It is the recommendation of Fleet Services to repair unit 23501, a Komatsu Loader assigned to Compost Marketing & Operations, through Kirby Smith Machinery, Inc. for $156,687.01.
The subject rubber-tired loader entered service in January 2023 with an acquisition cost of $314,535.25, and a life expectancy of five years. On September 2, 2023, the loader was involved in an accident resulting in extensive damage to the cab and the rear portion of the unit. Because of the extensive technology components, the unit must be repaired and recertified by the manufacturer. In its current condition, the value of the loader is approximately $40,000. If it is repaired and recertified, the value will be approximately $257,000 and would have a remaining life expectancy of four years.
Staff also evaluated the replacement of the damaged unit. However, the lead time is approximately 300 days for a new unit compared to 45 days for repair of the existing unit which would necessitate renting a replacement unit for eight to ten months at a cost of approximately $80,000 to $100,000. In addition, the purchase of a new unit would cost approximately $390,000 due to inflation. Considering the possible choices, Fleet recommends repairing the unit as the most cost-effective option.
The repair of this unit is necessary for the following reasons:
1. This unit is essential to this departments’ daily operations and is required to avoid additional costs such as equipment rentals during the major compost processing and production months.
2. Not repairing this unit will result in a much larger capital expense to purchase a new unit with very little return on the damaged unit.
The City is exempt from the competitive bid process for this purchase as allowed by Texas Local Government Code Chapter 252 Subchapter B Section 252.022 (a)(3). (City of Plano Internal Contract No. 2024-0184-O)