2008 Road Salt Bid Tab
Lisa Koppin of Montgomery Co. and I opened bids on Thursday for the rock salt. The results are not pretty … as a matter of fact, it’s pretty ugly. Morton, Cargill and North American are the only companies who submitted bids. Detroit Salt, Central Salt, and American Salt submitted No Bids. Only 51 of our 105 entities received prices for the 124,400 Tons that were bid by Morton and Cargill. Our total bid was for 255,045 Tons.
The North American Salt Company (NASC) submitted a bid for 40,000 Tons that was not bid to individual entities. The salt will be imported for use by SWOP4G to divide between entities however we see fit. The price of the salt is $154.00/Ton, and the salt is FOB their docks in Cincinnati and/or Portsmouth. SWOP4G would have to agree to take the 40,000 Tons at one time, since it would be coming by vessel to the United States. SWOP4G would be responsible for purchasing 100% of the 40,000 Tons, and it must be shipped by March 31, 2009. The offer is subject to prior sale and salt availability. Also, the salt does not comply with AASHTO Specification 143. The product does not have a brand name, and NASC does not agree to reimburse for any addition expense to SWOP4G member. There are many more exceptions to our bid, which I can send you if you are interested. Basically, we order and pay for the salt; they make the arrangements, and if it doesn’t arrive, is bad salt, or any other problems arise, NASC is not responsible.
Morton’s bid has the following stipulations:
- Award must be made within five (5) business days of the Bid Opening date. Otherwise, Morton’s price is automatically withdrawn. NOTE: This date would be September 5, 2008. If you are going to accept their bid, you MUST notify them of your intent to accept the bid and enter into a contract by Friday, September 8. You then have 30 days to decide what your tonnage will be (see “30 day” specification following).
- Solar Salt may be substituted for Rock Salt. Please see Specification Sheet.
- Customer must guarantee 100% of their stated needs by 4/30/09. Customer may within 30 days of the Bid Opening, reduce their original estimate stated on this bid, but must guarantee to purchase 100% of the adjusted amount by 4/30/09. Delivery under normal conditions will be completed within 5 days. Due to the salt shortage, please fill your bins early and maintain full inventory while supplies last.
Cargill’s bid has the following stipulations:
“Cargill offers to provide 70,900 tons of bulk rock salt, 100% of the estimated quantities of each point we submitted a price, effective August 28, 2008 for the duration of the 2008-2009 rock salt contract. The parties would agree that this supersedes any previous agreements to deliver salt during the period of August 28, 2008 through October 1, 2009. Cargill may subsequently agree to supply additional tons of rock salt on mutually agreeable terms. This aggregate tonnage of rock salt will be allotted for the participants listed on the bid at the time of the bid opening. In no event shall Cargill be obligated to supply any rock salt product in excess of 70,900 tons nor fill orders once the aggregate tonnage has been met. Cargill does not agree to pay damages or penalties for failing to supply the rock salt product ordered in excess of the maximum aggregate tonnage of 70,900 tons.”
As you can see, none of the bids are desirable, but the Cargill and Morton bids are as good as I feel we are going to get. The State of Ohio opened on Tuesday of this week, and got about the same result. They rejected the Cargill and Morton bids as “unresponsive,” since they included the stipulations shown above. They changed their specifications to include a minimum of 80% and maximum of 100% that would be purchased. They also made a few other changes in the bid to make it less restrictive, and have gone out for a rebid, which is scheduled to be opened on Friday, September 5. My fear (as well as that of those I have talked to in the industry) is that if we do not accept the Morton and Cargill bids as is, we risk losing them to higher bids if we try to rebid them. There truly is a shortage of salt in our area, and the salt that is here is committed. There is plenty of salt in the mines, but they can only bring out so much salt in a day’s time, and it is a slow process to get it up the river to our area. To put it in perspective, our bid is for 255,045 Tons of salt. One barge can only bring 1,500 Tons up the river. You can see how many barges it takes to get our quantity up the river and into the area. Then, add in the State of Ohio’s quantity (1.4 million Tons), West Virginia, Indiana, Illinois, Pennsylvania, etc., etc. Last winter, we depleted not only the salt they expected to sell, but their reserves, as well. Those in the industry are saying that last year is the worst they have ever seen, and some have been in the industry for 30+ years. The bottom line is that there is a shortage. Each salt company has a limited number of tons to bid, and if we rebid the salt already committed to us by Morton and Cargill on this bid, we may lose it to the State’s bid next Friday.
Imported salt does not generally meet the AASHTO specifications, but is better than nothing. Some imported salt is from the salt mines, similar to what we have here. Other salt is Solar Salt, which is processed from salt water and dried. Imported salt is very expensive, due in most part to the transportation charges. Although the salt companies tell me it works as well as domestic salt, I have not spoken to anyone with actual experience. However, in this situation, I believe imported salt is better than no salt.
For this reason, Lisa and I are recommending that those of you who have received bids from Morton and Cargill make the award, if you can live with the conditions stated above. IF YOU CHOOSE TO CONTRACT FOR LESS THAN YOU ORIGINALLY ESTIMATED ON THE BID, PLEASE CALL ME AT 513-425-7832. We will rebid those entities who did not receive any bids, with the stipulation that we will accept a 100% maximum guaranteed purchase, take out all piler requirements, and that we will accept imported salt. I know this is not what you would like to have, but in an effort to get bids, we need to accept these terms. If you choose NOT to participate in this bid, let me know immediately. I will have the bid on the street by Tuesday, at the latest.
Cindy Strayer, CPPB
Middletown Purchasing Agent
513-425-7832 – voice
513-425-7869 – fax
cindys@cityofmiddletown.org
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