Aug 09, 2023

Supervisors approve $3.2M purchase of new motor graders

The Jasper County Board of Supervisors on Feb. 15 accepted a $3.2 million bid from Murphy Tractor to replace the aging motor grader fleet at the engineer's office. The warranties of the current fleet are set to lapse in April 2023.

Jasper County Engineer Michael Frietsch requested approval to replace the 10 graders, which are vital to maintaining the county's gravel roads year-round. The machines are used by the secondary roads department to flatten gravel roads and remove large snowdrifts after storms.

Two different bids were submitted to the engineer's office. Each bid was based on a seven-year warranty service life as well as 10,000 hours of the engines running, Frietsch said.

The bid from Murphy Tractor came in at $3.22 million, while the bid from Ziegler came in at $3.525 million.

The two differing offers from each company regarding what will happen to the graders after their warranties expire in 2030, cause Frietsch to come up with an alternative plan.

Murphy guaranteed a trade-in value of $67,500 for each machine, promising the county a total of $675,000; while Ziegler guaranteed the repurchase of each machine for $145,000 each, or about $1.45 million in total.

Although Ziegler's offer does guarantee the county would recoup nearly half of its original investment, the initial purchase of the graders would require additional funds for the 2023 budget.

This issue prompted Frietsch to formulate a third option to recoup additional funds from the Murphy graders, deciding that at the end of the graders’ service lives, the board could auction off the 10 units.

"We believe that if we auction these machines off in seven years we’d be able to get around $100,000 for each machine," Frietsch said. "Theoretically we’d be able to recoup about a million dollars from the machine sales."

Another major factor in the bid consideration was the two different lead times cited by each manufacturer. Ziegler cited a delivery date of March 2023, while Murphy said if the county makes its order by Feb. 23 the new graders could be delivered as soon as October 2022.

"The problem we’ve got is that we are limited in the number of years we can use our current machines. April 2023 is when the CAT repurchase will take place, so we need a pretty high level of confidence that we’ll get our replacements by that March," Frietsch said. "CAT machines are made overseas and shipped in, as I understand it, whereas Deere builds everything down in Davenport."

After several other equipment purchases have been delayed due to supply chain issues, Frietsch recommended the supervisors accept the bid from Murphy, who ensured they could deliver by March 2023.

Contact Abby Knipfel at 641-792-4687 ext. 6531 or [email protected]