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Report
to General Committee - Finance and Administrative |
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TO: |
Mayor and Members of Council |
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FROM: |
Peter Loukes,
Director of Operations and Asset Management Barb Roth,
Director of Recreation and Cultural Services |
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PREPARED BY: |
Joel Lustig, Director , Financial
and Client Services Kevin Newson, Manager of |
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DATE OF MEETING: |
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SUBJECT: |
RFP Award #066-R-05 Supply and Delivery of Hardware,
Tools and Equipment |
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RECOMMENDATION:
THAT the report entitled “RFP Award #066-R-05
Supply and Delivery of Hardware, Tools and Equipment” be received;
AND THAT the contract for RFP 066-R-05
Supply and Delivery of Hardware, Tools and Equipment be awarded to the highest ranked and lowest priced proponent,
Acklands Grainger Inc. in the estimated annual amount of $375,000 exclusive of
GST for a period of 1 (ONE) year with an option to renew for an additional 2 (TWO)
years under the same terms and conditions at the sole discretion of the Town;
And that funding for this
contract be provided from facility maintenance accounts in the Operations and
Recreation & Culture departments;
And that projected cost
savings in the amount of $90,000 be removed from the 2006 Operating Budget
accounts identified in Appendix A with the corresponding offset in the
PURPOSE:
To obtain Council approval to award contract RFP
066-R-05, Supply and Delivery of Hardware, Tools and Equipment. This contract will streamline the procurement
activities of various departments by centralizing the supply and delivery of these items. This would lead to savings based on negotiated
bulk purchase and the ability to monitor spending activities through custom
built reports. Further, this contract
will reduce staff time spent on travelling to numerous retail locations and will ultimately lead to
product standardization.
BACKGROUND:
This
project is initiated from CSI (Core Services Implementation) as part of the
revenue strategy. Based on an analysis
of the Town’s
Analysis on 2004
The analysis of the 2004 (AMEX)
Creation of the
RFP Document and Determination of Savings
The 33 commodity groups were used for
quoting purposes in the RFP. These groups
were selected based on the most commonly ordered items from the 2004 purchasing
card records. They were grouped into
specific categories such as key locks, batteries, hand tools, yard tools
etc. The RFP also required that each
category be assigned a discount structure to ensure firm pricing.
Proposed Ordering
Process
Under the new contract with Acklands Grainger,
staff have the option of either having items delivered to Miller Avenue Store
Location or to pick up orders from Acklands Grainger’s new facility near Miller
Avenue, thereby eliminating unproductive Staff Hours. It should be noted that there is no charge
for next day delivery.
Benefits
The current method of procurement does not
permit volume discounts and product standardization. This contract will allow the standardization
of products and thus provide the opportunity for staff to negotiate volume
discount for bulk purchasing at the time of renewal. The final result will be consistency in terms of quality, service and
price.
Further, under the current system, the
Town is unable to track product descriptions and usage patterns, reducing the Town’s
ability to budget and forecast inventory. Acklands Grainger will provide customized reports
permitting staff to track purchases by dollar value, commodity type and spending
trend. This will assist in improving inventory
turnover allowing Town staff to manage resources.
An analysis of the 2004 (AMEX)
BID
INFORMATION:
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Advertised,
place and date |
Electronic
Tendering Network , |
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Bids
closed on |
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Number
picking up bid documents |
6 |
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Number
responding to bid |
3* |
* ONE bid was disqualified for not meeting
the mandatory criteria.
RFP EVALUATION PROCESS
The
RFP was evaluated in a two stage process by staff from Recreation and Cultural
Services, Operations and Asset Management Department and
Stage
Two comprised of a presentation by the two proponents to the Evaluation Team
with results listed in Table B.
PRICES ANALYSIS
A price comparison of the current pricing from the 25 different
retail suppliers with the lowest priced bidder, Acklands Grainger Inc.
indicated an annual savings of approximately 24%.
Considering
the total annual purchase of hardware, tools and equipment to be $375,000 in
2004, it can be estimated that a net annual savings of $90,000 (24% of
$375,000) can be achieved by the award of this contract.
DETAILED EVALUATION INFORMATION
as submitted:
RFP
Evaluation Criteria |
Weight |
Acklands |
Guillevin |
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1.
Product Details |
30% |
25.3% |
23% |
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2. Management Reporting Tools |
25% |
25% |
25% |
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3. Pricing Indication |
30% |
30% |
28.8% |
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4. Consulting Services – Inventory Mgmt.
Techniques |
10% |
10% |
10% |
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5.
Value Added Services |
5% |
3.3% |
2.6% |
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Grand
Total of Stage One |
100% |
93.6% |
89.6% |
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Presentation Evaluation
Criteria Table B |
Weight |
Acklands |
Guillevin |
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1. Ability to provide reporting information
to monitor spending trends |
5% |
4% |
4% |
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2. Willingness to work with the Town to
improve buying processes and
procedures |
5% |
4.1% |
3.8% |
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3. Ability to stock items and provide ad-hoc
services as specified by the users |
5% |
3.6% |
3.5% |
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4. Ability to provide solutions towards a
continuous improvement program |
5% |
3.6% |
3.8% |
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5. Willingness to reduce overall costs to the
organization |
5% |
3.9% |
3.8% |
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6. Overall Ability to meet the requirements
of the Town in a timely fashion |
5% |
3.7% |
3.5% |
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Grand Total of Stage Two |
30% |
22.9% |
22.4% |
Based on the analysis of the evaluation criterion as
mentioned in both Table A and B, it was determined that Acklands Grainger Inc. was
the highest ranked and the lowest priced proponent. It should be noted that Acklands
Grainger Inc. is located in
MONITORING THE CONTRACT AND NEXT STEPS
With
the award of this contract and the availability of customized report, staff
will be able to analyze spending trends.
In addition, reports will assist
Within
a year, based on the data accumulated, staff will determine if the introduction
of a centralized store operation (where commonly used items will be
inventoried) will assist in complimenting this initiative and further reduce
costs.
FINANCIAL CONSIDERATIONS:
Funding for this contract in
the estimated annual amount of $375,000 exclusive of GST will be provided from
facility maintenance accounts in the Operations and Recreation & Culture
departments.
In the 2004 Budget, a
purchasing analyst position was approved with a targeted savings of $200,000 to
be achieved from contract review/renegotiation, consolidation of purchases, and
the centralizing of the supply and delivery of hardware, tools, and
equipment. As a result of this
initiative, $90,000 of budget reductions can be made in the 2006 Operating Budget
(see Appendix A). The $90,000 will be
reduced from the
ATTACHMENT: Appendix A – 2006 Operating Budget
APPROVED BY:
________________________________________________________________
Peter
Loukes, P. Eng. Director, Operations and Asset Management
______________________________________________________
Barbara Roth, R.D.M.R., Director
of Recreation & Culture Services
_______________________________________________________
Jim Sales,
Commissioner, Community and Fire Services Commission
Q:\Finance
and Administration\Finance\Purchasing\2005 File Management\Contract
Management\066-R-05 Hardware, Tools & Equipment\066-R-05 Award Report.doc