Vancouver City Council |
ADMINISTRATIVE REPORT
Date: June 16, 2004
Author/Local: J Kuznik 4771RTS No.04360
CC File No. 1805
Meeting Date: July 6, 2004
TO:
Vancouver City Council
FROM:
General Manager, Engineering Services
Manager, Materials ManagementSUBJECT:
Award of Contract PS03006 - Supply and Services of Fleet Tires
RECOMMENDATION
A. THAT, subject to the conditions set out in Recommendations B, C, and D, an agreement be entered into with Kal Tire to supply fleet tires for a period of three (3) years, with subsequent renewal options for two-12 month extensions at an estimated cost of $ 445,300.00 annually plus the Provincial Sales tax, the Goods and Services Tax (less any municipal rebate received) and the Provincial Environmental Levy, subject to a contract satisfactory to the Director of Legal Services.
B. THAT, the Director of Legal Services be authorized to execute and deliver on behalf of the City all legal documents required to implement Recommendation A.
C. THAT, all such legal documents be on terms and conditions satisfactory to the General Manager of Engineering Services, Manager of Materials Management and the Director of Legal Services.
D. THAT, no legal rights or obligations will be created by Council=s adoption of Recommendation A, B and C above unless and until such legal documents are executed and delivered by the Director of Legal Services.
E. THAT, funding for the purchase described in Recommendation A be provided from the Vehicle Maintenance Account.
POLICY
The policy of Council is to secure 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.
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:
· a comprehensive range of quality tires offering lowest total cost of ownership and providing best value to the city;
· offering reliable and timely service including guaranteed service levels for emergency vehicles;
· reducing administration costs;
· a plan to address the City's environmental issues;
· reducing or eliminating obsolete inventory currently carried by the City;
· minimizing tire waste by developing a program to inspect and re-use tires removed from police vehicles, and;
· implementation of a vendor managed detailed reporting system.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:
· Proposals were evaluated by team members individually;
· A composite score was assigned to each proposal based on team member scores;
· Pricing was then combined with the team composite score to provide an overall rating;
· Final evaluation, and selection of vendor completed.
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 has demonstrated an in depth knowledge and experience with the products that they are supplying and with the requirements of the RFP;
· All their stores are networked allowing inventory to be accessed efficiently;
· Kal Tire has introduced electronic billing in 2004, which reduces administration costs;
· Kal Tire researches the industry application requirements to develop products for our operations. An example is reformulating rubber compounds to provide a better tire for the severe needs of the garbage trucks;
· Kal Tire has retread plants that have the ability to repair truck tires and over the road tires that would otherwise be disposed of;
· Kal Tire will work with the City to reduce obsolete inventories and develop a plan to re-use the Police pursuit tires;· Kal Tire offers an environmentally sound process called "Bandag", which recycles good tire casings, enabling the City to utilize "recapped tires". The "Bandag" recapping process has proven to extend the mileage of the tire by 150% over other recapping services, substantially reducing costs.
· Value added services such as:
o performance tracking;
o fleet survey and service tire report;
o working with the City on new product development;
o willingness to give courses to educate City staff on tires and new ways of repairing tires;
o opportunity for the City to test prototype tires for improved service;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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