Under the current terms of the SHACOG Rock Salt Contract, unless the municipality has terminated its individual agreement with Cargill, Inc. the participating municipality may give notice of its intent to extend the term of the contract from July 1, 2023 to June 30, 2024. This notice must be communicated in writing to the vendor by May 1, 2023. Cargill, Inc. then has until May 10, 2023 to notify the participating municipality in writing if it wants to continue the contractual relationship. If it agrees, then the contract continues under the same terms and conditions, with only the price subject to an adjustment. That price may be adjusted by the CPI formula in the contract. Only the original bid price, unchanged by fuel adjustments, is used in that calculation. By way of example, the formula would accommodate a 1.5% increase so if that percentage was to prevail, the price would from $88.96 (the initial bid price not altered by fuel price adjustments) per ton to $90.15 per ton.
The option to extend is exercised by giving written notice to the vendor by May 1, 2023 that your municipality is exercising that option. Because the municipality is the official party to the contract with the vendor, only the municipality can exercise the option. Consequently, each municipality must send its own letter. For your convenience, a sample letter is attached below. (This letter should be transferred to your municipal letterhead.) It is unknown if Cargill will grant exceptions for communications received late, so if you are going to invoke the option year, it is imperative that your letter is sent so that it arrives before the May 1, 2023 deadline. You should email your letter exercising the first option year to Salt_CustomerCareRoadSafety@cargill.com. Receipt is to be acknowledged by Cargill.
You are requested to copy both SHACOG and the QVCOG on your email. If Cargill, Inc. agrees to the option, those participating municipalities that invoked the first option year will receive subsequent communication concerning estimated requirements for the forthcoming winter season. If the vendor declines, you will receive pertinent information for the next bid.
Please note that you do not have to commit to an estimated tonnage requirement at this time. Your letter is intended only to secure the option year. Considerations concerning the balance of the current year purchase obligations and estimated requirements for the first option year, if successfully secured, will be addressed later in subsequent communications.
Should you have any questions or require additional information concerning the above, please contact the SHACOG office by phone at 412-429-1130 or by email at Sue.Dawson@shacog.com.