ADMINISTRATIVE REPORT

Date: June 1, 1998

Author/Local: P. Kemp/7259

C.Wyatt/7254

CC File No. 1501

TO:	Vancouver City Council
FROM:	Manager of Purchasing Services
SUBJECT:	Corcan Furniture Purchases

RECOMMENDATION

THAT Council authorize the Manager of Purchasing Services to purchase no more than 3% of our annual furniture requirements direct from Corcan without the utilization of the competitive bid process.

GENERAL MANAGER’S COMMENTS

The General Manager of Corporate Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

The policy of Council is to utilize a competitive bid process in the procurement of equipment, supplies and services where pricing has not been previously established by open competition.

PURPOSE

This report recommends that the City commit to purchase no more than 3% of its furniture needs from Corcan without the requirement of open competition.

BACKGROUND

The Federation of Canadian Municipalities ("FCM") requests that municipalities support their recommendation to consider Corcan when purchasing furniture for municipal purposes for no more than 3% of its requirements. While furniture expenditures vary year to year, during 1997 we spent a total of $465,000, 3% of which would be approximately $14,000.

Corcan is a special operating agency of Correctional Services Canada that helps in "the safe integration of offenders into Canadian society by providing employment and training opportunities to offenders incarcerated in federal penitentiaries and for brief periods of time, after they are released into the community". One of the areas that provides training and employment opportunities to inmates is furniture manufacturing.

The program strives to achieve private sector standards of productivity and quality so that the inmate will be able to obtain and hold employment when he or she returns to the community. Corcan graduates are less likely to re-offend, contributing to the safety of the communities where the offenders return to live.

DISCUSSION

Purchasing Services reviewed the suitability of Corcan’s product lines and business philosophy vis a vis the economic and political impacts on us should we formally commit to do a certain percentage of business with Corcan.

Corcan’s product mix includes a number of products used by us. Their line of heavy duty institutional furniture (e.g. beds, dressers, and night tables for the lodges and fire halls) is of particular interest . The local furniture suppliers do not carry these items as part of their usual product line; consequently, when there is a requirement of these items, we have to have them custom made at considerable expense.

Corcan’s pricing appears competitive with the discounted prices we currently receive from the private sector on standard items. However, in order for us to meet a firm commitment to spend a specified percentage of our annual furniture dollars with Corcan, we will require the ability to award contracts to Corcan without the requirement of open competition.

The business community may charge that competing against a federally funded agency results in unfair competition. This concern can be addressed as follows:

a.Corcan has a policy of fair market pricing. It is a "price taker", that is, Corcan’s pricing has been set by federal purchasing agents at a level deemed to be competitive with what is offered in the private sector;

b.Corcan’s market share is small and presents no threat to Canadian businesses. It restricts its sales strictly to government bodies and chartered not-for-profit organizations;

c.It is in the community’s best interest that offenders returning to their communities, do so with the personal, social and job skills necessary to establish themselves as law abiding citizens.

Accordingly, we RECOMMEND that Council authorize the Manager of Purchasing Services to purchase no more than 3% of our annual furniture requirements direct from Corcan without the utilization of the competitive bid process.

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(c) 1998 City of Vancouver