Title
Resolution to Amend Two Purchase Orders with Lunghamer Ford of Owosso LLC for City Vehicles ($48,531.00)
Memorandum
On November 15, 2021, City Council approved Resolution #21-410 approving the purchase of ten vehicles from Signature Ford (now Lunghamer Ford) in the amount of $360,892.00. On April 18, 2022, City Council approved Resolution #22-103 approving the purchase of six electric pickup trucks from Signature Ford in the amount of $240,585.00. Of the ten vehicles purchased under Resolution #21-410, nine were delivered leaving one Ford F-250 pickup truck (gasoline powered) outstanding. Of the six vehicles purchased under Resolution #22-103, only one has been delivered leaving five Ford F-150 Lightning (all-electric) pickup trucks outstanding. Each of these undelivered vehicles were 2022 model year (MY).
Ford Motor Company recently notified the City that they were unable to produce enough 2022 MY vehicles to address the orders they had received under the government contract program and each undelivered vehicle was being re-submitted as a 2023 MY. Additionally, they would be unable to protect the 2022 MY pricing for the new 2023 MY vehicles. The production issues and price increase are results of many factors including inflation related increases, raw material issues, etc. per the surcharge letter attached in Legistar.
The total increase for these six vehicles is in the amount of $48,531.00. The breakdown per vehicle is attached in Legistar. Staff reviewed the limited options available, but with Ford being the sole unionized, domestic automaker currently providing electric pickup trucks, staff is recommending that the City Council approve the price increase for these six vehicles. Cancelling the order would negatively impact City operations and sustainability efforts.
The price increase would increase PO #23-0588 in the amount of $18,305.00 and PO #23-0589 in the amount of $30,226.00. The funds for both PO's would be available without regard to fis...
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