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bids to closer conform to the budget for this purchase; 3) Reject both bids, alter the specifications to lower the cost of manufacture, and re-bid. Fire Chief Kapler stated having talked to the manufacturers and looking at the available options, it is his belief this cost can come in at the budgeted amount or very close. Mr. Kapler reviewed staff's recommended revised fire engine specifications. He advised his recommendation is to reject both bids, alter the specifications as outlined to lower the cost of manufacture, and to re- bid on a shorter period of time. Councilmember Elvig inquired about the recommended revised specification to include a hydraulic generator, rather than a diesel generator. He commented the generator is used a fair amount and the hydraulics run off the rest of the engine. This puts a burden on the rest of the system, and adds to the wear and tear on the rest of the vehicle. Fire Chief Kapler indicated this was the reason staff originally identified a diesel generator. However, when reviewing options to revise the specifications with the manufacturers, they used the term "nobody" puts diesel generators on these fire engines, and questioned how staff determined to include the diesel generator in the original specifications. Councilmember Look commented the bids are off about 10% from the budgeted amount. He questioned what negotiating power the City has with the two bidders on a competitive basis to get closer to the budgeted amount. Finance Officer Lund advised re-bidding through sealed bids would be required. Fire Chief Kapler indicated rejecting the bids and having talked to the manufacturers about the need to pull things out of the specification should send a clear message that the bids need to be tightened. Councilmember Look suggested prior to the City cutting from the specifications it should be determined what type of bid the manufacturers would come back with. Councilmember Elvig explained the public process includes a sealed bid process, and in order to receive another bid there needs to be a reason to reject the current bids. An addendum would need to be sent out with a different set of specifications or tighter specifications, or the determination that something was not done accurately in the submitted bids. The City does not have the negotiating power that the private sector has. He suggested the possibility of a slight change in specifications and re-bidding. However, this would need to be done with the understanding that this Committee would be willing for the bids to come in higher than the budgeted $360,000, as it is not likely the bids would come down 10%. Councilmember Look asked if the manufacturers generated the list of recommended specification changes. Fire Chief Kapler replied staff determined some of the changes and the manufacturers suggested a couple. He indicated it should be noted that to award a bid and then ask to value engineer it Finance Committee /April24, 2007 Page 2 of 4