ADMINISTRATIVE REPORT

RTS No.04360
CC File No. 1805
Meeting Date: July 6, 2004

TO:

Vancouver City Council

FROM:

General Manager, Engineering Services
Manager, Materials Management

SUBJECT:

Award of Contract PS03006 - Supply and Services of Fleet Tires

RECOMMENDATION

POLICY

PURPOSE

The purpose of this report is to recommend that Council authorize a three (3) year contract with the option to extend for two (2) additional 12 month periods to Kal Tire for the supply and service of fleet tires. This recommendation is based on responses to a public process through Request for Proposal PS03006.

DISCUSSION

On November 14, 2003, the City issued a Request for Proposal for the supply and service of fleet tires. This Request for Proposal was advertised on the City's and BC Purchasing Commissions' web site, in addition to notifying incumbent suppliers to the City and other well known vendors. Also, an advertisement was placed in the Vancouver Sun.

This Request for Proposal was divided into the following categories:

Requirement "A" is for the supply of tires and related products and services for light truck, passenger car and other similar or related light duty vehicles having 16" light tires and smaller.

Requirement "B" is for the supply of tires and related products and services for heavy trucks having wheels larger than 16" in diameter, and equipment and other similar or related heavy duty vehicles.

The PST, the 7% GST (less any municipal rebate received) and any Provincial Environmental Levy are in addition to the pricing shown in this report.

The City's objectives for the RFP's supply and service requirement include a contractual relationship that includes:

Two (2) proponents attended the informational proposal pre-submission meeting and both proponents submitted proposals.

The RFP process and evaluation process was facilitated by the Materials Management Branch of Corporate Services. The evaluation team was comprised of representatives from Equipment Services and the Fire Department.

The evaluation team evaluated the Proposals based on the following criteria: proponent's qualifications, product information, service requirements, business requirements, inventory, environmental issues, value added products and services, warranty and disaster response emergency plan.

The following steps were taken in completing the evaluation process:

 

Kal Tire

Vendor B

     

Evaluation Score - Part A

76%

53.26%

- Part B

72.86%

54.%

     

Pricing - Part A

$ 152,320.00

$ 169,074.52

- Part B

$ 292,981.19

$ 205,804.60

Sub

$ 445,301.19

$ 374,879.12

Total RFP Score - Part A

77.89%

56.16%

Total RFP Score - Part B

72.63%

57.63%

The recommendation that the City execute a contract with Kal Tire is based on the following strengths of their proposal:

Kal Tire is a well established B.C. vendor and has demonstrated their ability to effectively provide product support and services;

Kal Tire achieved the highest overall RFP score.

Although the bid received from Kal Tire is initially priced $70,422.07 higher, 28% of the tires purchased are "Bandag". Based on the estimated annual tire purchases, it is expected that the "Bandag" product will save approximately $194,000.00 for an overall annual savings to the City of $123,500.00. The overall cost to the City over the contract period will be lower due to the extended life of these tires which is approximately 150% longer than the equivalent tire offered by Vendor B.

FINANCIAL IMPLICATIONS

Funding is to be provided from the Vehicle Maintenance Account. Based upon the City's average spending in 2001, 2002, and 2003 the City spends approximately $583,475.00 per year on tire related products and services. With the approval of this contract, it is expected that these costs will be reduced to approximately $445,300 per year.

SUMMARY

The recommendation to authorize a contract with Kal Tire is deemed to provide best value for the City over the term of the contract. Based on the proposals submitted, Kal Tire was the leading proponent demonstrating that their solution would be best able to provide the product and service requirements to the City.

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