Scrap Metal Purchase Agreement Template

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					                        SCRAP METAL DISPOSAL SERVICES
                            PRE-PROPOSAL MEETING
                                  RFP #04-51583
                                 January 28, 2004
                                    9:00 a.m.


Mickey Roberts                                 Jim Bly (via telephone conference call)
Mickey Roberts Scrap Metals                    J&M Enterprises
#2 Road 5287                                   Box 633
Bloomfield, NM 87413                           Artesia, NM 88210
(505) 632-0694                                 (505) 457-2899

City of Farmington:

Kim Townsend, Animas Power Plant
Bob Schrag, Warehouse                          599-8400
Steve Henson, Elec. Line                       599-8331
Kristi Benson, Purchasing                      599-1368

PLEASE NOTE: These minutes are neither verbatim nor complete. The quality of the
recording (extraneous noise and the fact that most of the speakers were too far away from
the recorder to be picked up completely) prevents such a transcription from being made.

KRISTI:       Good morning everyone. We’re here for the Pre-Proposal Meeting for the
Scrap Metal Disposal Services. The sign-in sheet is here. Jim, I’ll just go ahead and put
you down on the sign-in sheet as attending.

JIM:           Okay.

KRISTI:        Minutes of the meeting: we are recording the meeting, and we will
transcribe those minutes. They will be posted on the website hopefully within a couple of
days of the meeting. Next on the agenda are the Introductions.


I’m Kristi Benson. I’m with the City of Farmington Purchasing Department
I’m Kim Townsend. I’m with the Farmington Electric Utility
Bob Schrag, the City Warehouse

KRISTI:        You still there Jim?

JIM:           Yeah.

F:\PURCHASE\Minutes\Scrap Metal Disposal Svcs RFP 04-51583 Pre-Proposal.doc
KRISTI:        Okay. There’s a little bit of static going on.


I’m Mickey Roberts with Mickey Roberts Scrap Metals

KRISTI:        The next thing; I don’t know if everyone has a copy of the RFP itself,
because we will be going through that. The Project Summary; the actual Project
Description is on page 5. We are looking for a company to purchase our scrap metal.
The scrap metal is sold “as is”, “where is”, no warranties expressed or implied. We will
have containers at the Municipal Operations Center (MOC), at the Central Warehouse,
and at Vehicle Maintenance on Browning Parkway, Parks Operations on Fairgrounds,
and the Animas Power Plant on McCormick School Road, and they’re in the process of
building the Bluffiew Power Plant. We would put one there too, once that’s built.

JIM:           But you all furnish the containers?

KRISTI:        No, you would provide the containers.

JIM:           Is there any specifications for the containers?

KRISTI:       I think it’s just something that we would agree to. I don’t think it has to be
anything spectacular, just something that would hold the scrap metal.

JIM:           There’s no minimum size, maximum size, or anything like that?

KRISTI:        No, not at this time. The next thing that I have highlighted is the price,
which is on page 6. What we are doing is using the American Metal Market to come up
with the price for each of the categories of scrap. I have that list on page 6. We would
use the estimated dealer buying prices and the estimated prices for an export dealer,
broker, or processor. That part applies to the iron and the stainless steel. Exhibit B in
your packet shows the scrap metal prices that we would get from the American Metal
Market. That’s what we’re basing it on. Any questions on the pricing?

MICKEY:        Of course if varies depending on what the market is?

KRISTI:        Right.

JIM:          Can you repeat the questions from the other people, because I can’t hear
them very well.

KRISTI:        He said that the pricing would just vary based on the market, which is

JIM:            Right. My question is; would the price be determined as of the day of pick
up, day of sale, or the day we pay for it. It does vary, and sometimes, pretty dramatically.
What date would be the set date for determining the price?

KRISTI:      “The price shall be calculated using the highest EDBP and EPDBP, listed
for the Monday prior to the date the scrap metal is picked up. If you picked some up
today, Monday pricing would be effective.

JIM:           Okay.

KRISTI:       We do have the subscription for the Monday American Metal Market.
That’s what we would be looking at on that.

JIM:           Okay.

KRISTI:        Anything else on the pricing?

JIM:           My other question is: Are we going to bid that on a recovery basis, or are
we bidding it on whatever’s in the bin when we pick it up. Some of the things like the
ACSR, a lot of the places they throw the (inaudible), in the same bin, the recovery is
different. And if somebody throws some guy strand in there, that lowers the recovery.
Are we paying on what we get out of it, or do we have to pay on whatever the weight is
in the container when we pick it up?

BOB:           It would be based on the weight in the container. We do try to keep the
containers pure, but I realize there are some wrong metals put in the wrong containers. I
guess an answer to that; it would be based on the weight of the entire container. You
may want to base your percentage on a certain variance of what metal may be in that

JIM:           Could we put in that RFP as better that if there is above or below a certain
level of recovery, the industry standard level of recovery, that we could arbitrate the site?

KRISTI:        You can propose that. That doesn’t necessarily mean that we would
accept it.

JIM:            I have had times at some locations that somebody made a huge mistake.
I’ve got a bid right now that I picked up and it was supposed to be copper, and half of it
was brass. That’s surely going to lower the value of the container a whole lot, if I have to
take copper price for it.

KRISTI:        Okay. Has it been a serious problem in the past?

JIM:           Here and there. Normally like the gentlemen that said; everyone tries to
do their best part. Usually if you point it out, it won’t happen again for another five or
six months. It seems to be a sporatic problem. I assume it’s just a new crew that doesn’t

know what they’re doing. Somebody’s tired at night, and just loads in one bin because
they don’t want to drive around to the other places. My point of view; if I get a container
that’s supposed to be ASCR, and the whole bottom half of it is guy strand, I’m going to
end up paying an awful lot of money for scrap iron.

KRISTI:         We can talk about it a little bit and see if we can address that. Then we
can put that in the addendum, and see if we can address that issue.

JIM:          I think it would benefit Farmington, because, if we could do that, then I
can price my margins up and produce a higher bid.

KRISTI:         Okay. We’re going to have to see what we can figure out. We’ll put that
in the addendum. And you will get a copy of the addendum. We had references listed on
page 8. We want you to include at least three references of clients that you’re serving
right now, or within the past three years. I won’t go through all of this. I’m just going to
hit the things I think you should be aware of. Page 10, item number 13 is multiple
contracts. “The City reserves the right to award the contract to one or more Offerors, if
deemed to be in the best interest of the City. Offeror must state in its proposal if the
percentage offered to the City will be based on all or none basis.” So if you’re giving us
percentages that’s for the whole contract, you need to let us know that. If you don’t have
a problem with multiple contracts then let us know that too. Any questions as far as that
goes? We can get into Section 2, which is the proposal process. The actual due date for
this is scheduled for February 6th, by 2:00 pm. You will need to have that in here before
2:00, so we can open those up. It will be a private opening. RFP’s are confidential until
they are awarded. Page 11 shows the preliminary schedule, which shows the due date as
the 6th. The recommendation to the City Council will be on the 17th. They do have the
final say as far as the contract award. The evaluation committee makes the
recommendation, and they (Council) have the final say. Page 15 is the insurance
requirements. Standard template stuff for the City of Farmington is a million dollars
coverage. If there’s a problem with that, you’ll have to let me know or put it in your
RFP. Page 16 is the term of the contract, which is for one year, and renewable for up to
three more years. Exhibit A is the sample agreement, which is what we would be looking
to enter into. Are there any questions on that? Page 18 starts with the proposal format
requirements. We put this in here so each proposal section one is the same thing for all
Offerors. That way it’s just easier for the evaluation committee to look through those in a
more timely manner. Item 2 in that section, is the submittal form, page 2 of your RFP
package, needs to be signed and submitted. Page 22, which is the proposal schedule, is
where you can put your percentages that you want to offer to the City. That will need to
be included, along with that list.

KRISTI:        Jim, we’ve had another person arrive to our meeting. Steve Henson, he’s
with the Electric Utility Department. Any questions as far as the proposal format?

JIM:          I didn’t get a chance to look through the thing very well last night, but I’m
kind of curious, I didn’t notice anything in there and I heard you mention this morning.

Is the City of Farmington requiring any certification at all from the State of New Mexico
as far as environmental recycling operator certifications, and storm water certifications.

KRISTI:        Not at this time.

JIM:           So this is a wide open bid for anybody whether they’re a licensed recycler
or not?

KRISTI:        At this point. We may want to talk about that too, and put something in
the addendum, as far as being licensed. That’s a good point. I appreciate you bringing
that up. I guess I didn’t realize you had to be licensed. I guess that would make sense.

JIM:          They don’t enforce it well. It’s kind of aggravating on my part that we
went through all the trouble to do all that, and then it seems like it doesn’t benefit us.
Except, we get inspected every 60 days.

KRISTI:         We’ll have to talk about that also and address it in the addendum. I
appreciate you bringing that up. Page 20 starts with the evaluation criteria. I have tried
to explain how the points of the pricing will be calculated on that. I did bring a sample. I
also have it on the computer, if you have questions on it. What we’ll do is calculate a
value, which shows right there that’s a sample. It would just take the estimated quantity
times the AMM price. Then the percentage to the City will be the total dollar value.
Then of course we have 8 different categories of scrap, so each of those categories will
have an equal value to, not to exceed 45 points. Hopefully that’s clear as mud. If you
want to take time to look at it and give me a call later on, that’s fine. I’ll try to explain it
that way too. 35 points will go for experience. 15 points will go to detail and quality of
the proposal. 5 points is the familiarity with the Four Corners area. That’s not a whole
lot of points for that.

MICKEY:         Keep it simple.

KRISTI:         Page 22 again is the proposal schedule. That’s what you’ll need to fill out
as far as your percentage paid to the City, and submit that with your proposal. Exhibit A
is the draft agreement. I encourage you to read through that and let us know of any
portions that you’re not comfortable with, and put that in your proposal, so we’ll know
going in that’s what you’re looking at. After the draft agreement is Exhibit B which is
just copies of the American Metal Market. Each one: the first one is the Aluminum, the
second one’s the Copper, and so forth. That’s what we’ll be looking at as far as pricing
when you guys pick up the scrap metal. That’s all I have. I’ll open it back up to the
Offerors, for anybody that has any questions or concerns.

JIM:          The entities that have the containers; are they going to notify us, and then
what kind of lead time would we have to come and pick it up. In other words, if they
called me mid morning, would I have to be there in the afternoon to service the

BOB:           Yes, we will notify the successful bidder when we need the containers
emptied. We like as quick as turn-around as possible, but I don’t know if there’s a
specific time period limit in the RFP.

KRISTI:        I don’t think we have a time limit.

BOB:           I think 48 hours is a reasonable time.

JIM:           Two days would be the maximum if you want.

BOB:           Probably the maximum we’d be comfortable with.

JIM:           How far is the State Highway Department yard from you all?

KRISTI:        About 15 miles. Why are you interested in that?

JIM:           I already have a contract for the State’s stuff, and I’m already going to be
working in that yard anyway.

KRISTI:        I see.

JIM:           I could double up on it if that occurred.

STEVE:         Do they show an address in Farmington, or in Bloomfield?

JIM:           They gave me Farmington district. There’s an address that says Aztec

STEVE:         It’s between Aztec and Bloomfield.

JIM:           I’m not real sure where it’s located at.

KRISTI:        It’s about 15 miles at least.

JIM:           In the past I’ve just subbed that out, so I haven’t been there but one time to
look at it.

KRISTI:        Any other questions? My name and number is on Page 2 of the package.
If you run across something that you didn’t ask today, just give me a call, and I’ll do my
best to answer your question. We will be looking at those couple of questions you
brought up Jim, and issuing an addendum. I think I have in here that it’s supposed to be
out by tomorrow. I will do my best to get that done.

JIM:           Okay.

KRISTI:        Then it will be due on the 6th. Is everyone comfortable with that date?

JIM:         If we can get that addendum before the weekend. I’m comfortable with

JIM:           You have a physical address on that so we can send the proposal by
Airborne, or Fed Ex, or something like that.

KRISTI:      That’s also on page 2. It has the mailing address and the location.

JIM:         I think that’s all I have at this time.

KRISTI:      Everyone else okay with that? Okay. Thanks a lot, and we’ll get the
addendum issued as fast as we can.

Transcribed by: Jennifer Thomas
Double Checked by: Kristi Benson
Completed: 2/2/04


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