Vancouver City Council |
ADMINISTRATIVE REPORT
Date: December 8, 2003
Author/Local:L Berglund/7254RTS NO. 03854
CC File No. 1805
Meeting Date: February 10, 2004
TO:
Vancouver City Council
FROM:
Manager of Materials Management
General Manager and General Manager of Corporate Services
General Manager of Engineering ServicesSUBJECT:
Authorization for Contract PS03004 - Supply of Tools, Hardware, General Supplies and Personnel Safety Supplies.
RECOMMENDATION
A. THAT, subject to the conditions set out in Recommendations B, C, and D, an agreement be entered into with Acklands-Grainger Inc. to supply tools, hardware, general supplies and personnel safety supplies for a period of three years, with subsequent renewal options for two-12 month periods, at an estimated amount of $3,600,000 (plus PST, where applicable and GST) subject to a contract satisfactory to the Director of Legal Services, and the Manager of Materials Management. Source of funding from the departmental operating budgets.
B. THAT all legal documentation is to be in a form which is satisfactory to the Director of Legal Services, the General Manager and General Manager of Corporate Services, the General Manager of Engineering Services and the Manager of Materials Management.
C. THAT upon approval of the legal documentation by the Director of Legal Services, the General Manager and General Manager of Corporate Services, the General Manager of Engineering Services and the Manager of Materials Management, that the Director of Legal Services, the General Manager of Corporate Services, the General Manager of Engineering Services and the Manager of Materials Management be authorized to execute and deliver the necessary agreement on behalf of City Council.
D. THAT no legal rights or obligations shall arise hereby and none shall arise or be granted hereafter unless and until all contemplated legal documentation has been executed and delivered by all parties.
POLICY
The policy of Council is to enter into contracts for the purchase of equipment, supplies and services that will give the best value based on quality, service and price.
Contracts with a value over $300,000 are referred to Council for approval.
PURPOSE
The purpose of this report is to recommend that Council authorize a three-year contract with the option to extend for two additional 12-month periods to Acklands-Grainger Inc. for the supply of tools, hardware, general supplies and personnel safety products. This recommendation is based on responses to a public process through Request for Proposal PS03004.
DISCUSSION
The City spends an estimated $1,200,000 per year to provide tools, hardware, general supplies and personnel safety products to support operations through its Central Stores, Equipment Services, Police, Fire and Rescue Services, Park Board and other operating departments within the City of Vancouver.
On March 6, 2003, the City released a Request for Proposal (RFP PS03004) for any or all of two components for the supply of tools, hardware, general supplies and personnel safety products. The competition was advertised on the City's and BC Purchasing Commission's web site, in addition to notifying incumbent suppliers to the City and other well known vendors. An advertisement was placed in the Vancouver Sun.
Fifteen Proposals were received by the City Clerk's office and opened by Materials Management for immediate review for compliance to the mandatory requirements stated. Five Proposals were rejected for non-compliance.
The City's objectives for the RFP's supply and service requirements include:
· quality products at maximum value;
· timely deliveries at lowest cost to the City and to the vendor;
· consistent and best pricing for products;
· reduction of inventory investment within the respective facilities;
· lowered acquisition costs through the reduction of transactions by adopting a more efficient product ordering process and a streamlined payment system;
· a strong co-operative and proactive relationship with the vendor.The proposal request was structured in two parts; the supply of tools, hardware and general supplies and the supply of personnel safety supplies. The RFP stated that the City preferred to enter a Contract with one Proponent, however, due to the broad nature of the requirements the City reserved the right to contract with one or more Proponents.
Of the fifteen proposals received, only eight Proponents offered a sufficient number of products within their proposal that provided an overall solution incorporating both categories, however, each category was evaluated separately to provide an equal opportunity for compliant Proponents to be considered within the respective categories to which they were responding. After reviewing the evaluation team's scores and service requirement issues within each of the respective categories and in consideration of a substantially higher rating achieved in comparison to the other Proponents, the Manager of Materials Management decided that the City would receive the most benefit in allocating the requirements of the RFP for both categories to the recommended Proponent.
Evaluation criteria were as follows:
· Proponent Qualifications:
Factors considered included the firm's history, scope of service abilities, experience of key personnel, and product offering.
· General Requirements:
Factors considered included the capabilities of meeting the product and service needs of the City's key maintenance centres including delivering locally stocked products within 48 hours from the time an order is placed, business process technology including efficient ordering and billing provisions, product usage reporting capabilities and a workable transition and implementation plan.
· Risk:
Factors considered were identification of risks associated with implementing a contract of this nature, and a proposed solution to mitigate those risks.
· Value Added Services:
Factors considered included types of services that could be provided by the vendor such as local product availability, product training, elimination of back orders through performance review and dedicated stock, non-stock and non-standard products sourced from the City's needs.
· Quality of Proposal:
Factors considered included the organization, compliance and the comprehensiveness of the proposal.
· Financial Offering:
Pricing was determined by consideration of the Proponent's offering on a predetermined sample basket of products organized into commodity groups within the RFP. Using a value equalization analysis on common products quoted, the Proponent's offering was included within the overall evaluation after the subjective factors were scored.
The recommendation that the City authorize a contract with Acklands-Grainger Inc. for the supply of tools, hardware, general supplies and personnel safety supplies is based on the following strengths of their Proposal:
· Acklands-Grainger Inc. is a well-established vendor and has demonstrated their commitment to service and have demonstrated a depth of knowledge and experience within the products and the requirements of the RFP that they are supplying;
· has demonstrated as a current supplier that their products will meet the quality and value objectives of the RFP;
· has a dedicated and experienced staff to service the City's needs;
· achieved the highest overall RFP score.FINANCIAL IMPLICATIONS
With funding to be provided from the respective department's operating budgets, the financial offer for consideration as offered by the recommended solution and calculated from the representative sample of competitive items are summarized below:
Representative Sample Product Category
Recommended Proponent
Financial Offering
Present Cost
Variance
Savings
Tools, Hardware and General Supplies
Acklands-Grainger Ltd
127,679
135,714
8,035
5.92%
Personnel Safety Supplies
Acklands-Grainger Ltd
101,845
117,407
15,562
13.26%
Total
229,524
253,121
23,597
9.32%
The above table, reflecting current price and cost information, indicates the potential savings for the representative sample competitive package for tools, hardware, and general supplies is approximately 5.92% and for personnel safety supplies is approximately 13.26%, for a combined average of 9.32% or $23,597 annually. When applying those rates of savings to the combined overall estimated annual spend of $1,200,000, the direct savings opportunities translate to approximately $111,800 annually.
CONCLUSION
In consideration of the advantage to entering into a long term contract for the supply of tools, hardware, general supplies and personnel safety supplies, the recommendation to contract with Acklands-Grainger is deemed as the best value for the City. Based on the Proposals submitted this Proponent demonstrated that their solution would be able to meet the product, service and business process improvement objectives of the City.
* * * * *