Vancouver City Council |
ADMINISTRATIVE REPORT
Date: September 20, 2004
Author/Local: J Kuznik 4771RTS No.04360
CC File No. 1805
Meeting Date: October 5, 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 as follows:
Part A
Vendor
Item 1
Police Pursuit Tire
Irving Tire
Items 2 - 10
Light Truck and Passenger Car
Tires 16" and smallerKal Tire
Part B
All Items
Heavy Trucks
Tires 16" and largerKal 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 $ 455,300.00 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 existing Operating Budget.
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 Irving Tire for the supply and service of police pursuit tires and to Kal Tire for the supply and service of the remaining 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 sites, 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 reduce the City's environmental issues from used tires;
· 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, the Police Department 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 evaluation process began with an evaluation by each team member individually. Next, a composite score was assigned to each proposal based on individual team member scores. Pricing was then combined with the team composite score to provide an overall rating, and the final vendor selection was completed.
The table below summarizes the tabulation awarded the two vendors.
Kal Tire
Irving Tire
Evaluation Score - Part A
76%
53.26%
- Part B
72.86%
54.%
Pricing - Part A
$ 49,245.00
$ 56,002.02
- Police/Item 1
$103,075.00
$113,072.50
- 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%
It is recommended that the contract be split between the two vendors with Item 1 - Police Pursuit Tires, awarded to Irving Tire. The Vancouver Police Department has utilized the Goodyear GT RSA tire from Irving Tire on their patrol vehicles for many years. Police officers have been extensively trained and are accustomed to the handling characteristics of these tires during high speed pursuit. A change in tire types may jeopardize the effective safe handling performance of these vehicles.
The proposal from Kal Tire is very strong in all other areas. It is recommended that the remaining tendered items be awarded to Kal Tire based on best value given 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, when operational savings are taken into consideration, the cost to the city is less than with the other bid. Based on the estimated annual tire purchases, it is expected that the longer life Kal Tire "Bandag" product will provide annual savings of approximately $194,000.00 when compared to the other vendor.
When the higher purchase price is considered, the overall annual savings to the City is approximately $123,500.00 with the Kal Tire bid.
FINANCIAL IMPLICATIONS
Funding is to be provided from the existing Operating Budget. 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 $455,300. per year.
SUMMARY
The recommendation to authorize a contract with Irving Tire for Police pursuit tires and with Kal Tire for the remaining tires is deemed to provide best value for the City over the term of the contract.
* * * * *