A resolution to increase the likelihood that much-needed city vehicles and equipment can be purchased, was approved by the Plant City City Commission on Monday.
As a result, the city can now transfer funds from next fiscal year (2022-2023) to the current one (2021-2022) so these necessities can be bought ahead of time in a highly competitive market.
In March a contractor pulled out of a business deal for the City of Plant City to buy merchandise, stating that “we will not be able to fulfill this purchase due to production constraints, allocation, and supply chain material shortage.”
The proposed merchandise to be bought are 22 vehicles and equipment, consisting of 12 police cars, a 100-foot ladder for a fire truck, and an automated side-loading garbage truck – all costing $3,914,650.
Also, large equipment with 13 items for various departments includes two mobile generators of 100KW each which is enough to facilitate 10-single-family homes. And then there are two-reel mowers and a robotic field painter needed.
These amount to $758,741, adding up to $4,673,391 in total.
Seen as an urgent matter, the Plant City Procurement Division and Plant City City Manager wasted no time in trying to find a solution to the unexpected problem.
Although the city, for now, has a sufficient supply of vehicles and equipment for departments to perform at full capacity, the cancellation of the one contractor has raised concerns.
“We are faced with a continuing situation of scarcity,” McDaniel said. “It’s extremely difficult to get these vehicles. This is something that we’re faced with. It’s not improving at this point, and it’s going to make it increasingly difficult for us to get the vehicles and equipment we need to sustain our operations throughout the city, whether it be the police or fire departments, all the way down to our parks, utilities, (and) maintenance operations.”
Funds will now be drawn from a fleet budget account. This consists of a checking account the city uses to pay its bills and a savings account.
Vehicles and equipment are sourced and priced through what is known as a procurement process.
Manufacturers are producing merchandise that has a limited supply and production can stop without advance notice.
Currently manufacturers are withholding and cancelling production due to contract pricing disputes and negotiations.
“So, what we’re trying to do is place our order beforehand so that way we don’t get cancelled,” said Procurement Manager Robert Rosenstein.
When quotes were received, they used to be good for 30 or 40 days. Now it has dropped anywhere from 7 to 10 days, he added. And in some instances, the quoted merchandise is sold before the quote expires. Some dealers will not quote merchandise they don’t have in stock and will sell the product to the first buyer that comes along once the product arrives.
Other dealers accept orders that exceed their allotment, which leads to cancelled orders for the customers that are not first in line.
That’s all the more of a reason for the city to get a head start as early as possible.
Don Duckworth of Enterprise Fleet Management made an assessment:
Supplier and production challenges are expected to continue late into the 2023 model year in the U.S. and Canada
These supply chain challenges complicate the Original Equipment Manufacturers (OEM) ability to provide accurate order to deliver End of Day Order (OTD) forecasts/estimates
OEMs are accepting orders with future need by dates, but stress that they are not guaranteed due to the current environment
In most cases it is advised to place orders without a need by date, as future production challenges are unknown
Orders placed late in the model year or with a need by date late in the production cycle have historically been more at risk
Municipalities put orders in for various merchandise and dealers become flooded with those orders, causing more demand than supply.
Each year, citywide vehicles and equipment purchases are approved as part of the annual budget process. As each new fiscal year begins, specifications for all approved vehicles and equipment are developed.
Approving the recommended acquisitions will now afford the city the best opportunity to purchase vehicles and equipment as they become available. It also allows McDaniel to take the action necessary to purchase this merchandise as soon as they become available.
The commission passed the resolution by 5-0.