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APPROVE MOTION TO ENTER INTO A COOPERATIVE PURCHASING AGREEMENT FOR MAINTENANCE, REPAIR, OPERATING SUPPLIES, INDUSTRIAL SUPPLIES, AND RELATED PRODUCTS AND SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Approve findings pursuant to Stockton Municipal Code 3.68.070 in support of an exception to the competitive bidding process.
2. Authorize City Manager to execute Omnia Partners Cooperative Purchase Agreement, No. 16154, with The Home Depot U.S.A., Inc., to provide Maintenance, Repair, Operating Supplies (MRO), Industrial Supplies, and Related Products and Services, for a term through December 31, 2026, in a total not-to-exceed amount of $225,000.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
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Summary
The City of Stockton has a need for contracts for Maintenance, Repair, Operating Supplies (MRO), Industrial Supplies and Related Products and Services to support City operations.
For many years the City has been using The Home Depot for MRO, Industrial Supplies and Related products and Services via purchase orders and p-card transactions. The estimated annual cumulative spend exceeds the City’s formal procurement threshold; therefore, the City needs to have a formal contract agreement in place.
The City of Stockton has a need to acquire these goods and services to meet its needs and provide services to our community. This contract will be used by all City departments.
Omnia Partners is a cooperative purchasing organization that works with lead public agencies to manage, evaluate, and award national contracts. Once awarded, these cooperative contracts are marketed by Omnia Partners and made available to other public entities, such as counties, municipalities, school districts, special districts, and nonprofit organizations, allowing them to access competitive pricing and services from the selected suppliers. Omnia Partners collaborated with Maricopa County, AZ, to solicit, evaluate and award a contract for the purchase of Maintenance Repair and Operating Supplies and Services. The contract was granted to The Home Depot U.S.A., Inc.
The Home Depot U.S.A., Inc.is the world’s largest home improvement retailer that specializes in tools, appliances, and building materials which satisfies our needs for MRO supplies and services. The company has a strong presence in both physical retail locations and e-commerce. There are two (2) The Home Depot U.S.A., Inc. stores located within the City of Stockton area to support City operations. They also have a growing emphasis on digital services and delivery options.
It is recommended that City Council approve a motion authorizing the City Manager to execute the City’s Cooperative/Piggyback Agreement with The Home Depot U.S.A., Inc. as specified above.
DISCUSSION
The City requires the acquisition of MRO supplies and services to meet the City’s needs and provide services to the community with an estimated amount of $225,000 per year. This contract will be used by all City Departments.
The use of cooperative purchasing agreements leverages the collective buying power of the cooperative partners to negotiate lower prices. The strength in the numbers of cooperative partners enables members to access a contractual solution that could not be achieved on their own.
This solicitation and contract document have been reviewed, and it has been determined that the contract meets the needs of City departments and City Procurement requirements, pursuant to Stockton Municipal Code 3.68.070 and City policies 17.05.010 (General Procurement Policy), 17.05.020 (Formal Procurement Policy), and 17.05.060 (Exemptions to Competitive Bidding Policy).
Present Situation
At present there is no contract for these services, and the annual expenditure exceeds our formal competitive threshold of $100,000 and requires a formal agreement with Council approval.
The Omnia Partners cooperative contract offers Maintenance Repair and Operating Supplies and Services at significant discounts through the two (2) local The Home Depot U.S.A., Inc. stores or through their e-commerce portal.
Utilizing the Omnia Partners cooperative agreement allows the City the opportunity to participate in leveraged negotiated pricing that we could not necessarily obtain on our own. Benefits Summary:
• Rebate: earn up to a 5% rebate
• Paint rewards: 20% off interior, exterior liquids paints, stains and primers at checkout
• Preferred pricing
• Bulk Eligible
• Volume Pricing
• Easy Purchase tracking-Online Account management for Reconciliation
• Emergency preparedness
• Green spend reporting
Staff recommends entering into the City’s Cooperative Agreement (Attachment A) to utilize Omnia Partners’ contract with The Home Depot U.S.A., Inc. #16154.
Findings
Stockton Municipal Code Section 3.68.070(A)(5) allows an exception to the competitive bidding process, enabling the City to utilize the terms and conditions of a competitively solicited and negotiated cooperative purchasing agreement. The exception applies when the agreement meets the City’s procurement and business needs, and the City Council has approved findings that support and justify the exception. The following findings support and justify an exception under Section 3.68.070(A)(5):
1. Cooperative contracts qualify as an exception to the City’s competitive bidding process as outlined in City Municipal Code 3.68.070(A)(5) and City Policy 17.05.050, specifically: “Cooperative purchasing agreements authorized by the City Council for the purchase of supplies or services through other governmental jurisdictions or public agencies.”
2. The Request for Proposal (RFP) was conducted in line with procurement best practices through an open, competitive, and transparent solicitation process, adhering to all applicable procurement laws and regulations. The contract was solicited, evaluated, and awarded by the lead public agency, Maricopa County, AZ, specifically for MRO supplies and services to The Home Depot U.S.A., Inc.
3. The use of cooperative contracts aligns with procurement best practices by lowering the City’s procurement costs, improving time efficiency, and enabling the City to acquire products of equal or superior quality, along with value-added services, at competitive consortium-negotiated pricing.
4. By leveraging the Omnia Partners agreement, the City can take advantage of national pricing, securing discounts off parts and supplies. The City could not achieve this pricing through our own solicitation.
FINANCIAL SUMMARY
Funding for MRO supplies and services is already included within individual departmental operational budgets as part of the City’s annual budget process. No additional funding is required to enter into the cooperative purchasing agreement with The Home Depot U.S.A., Inc.
Attachment A - Omnia Partners Cooperative Contract #16154 with The Home Depot U.S.A., Inc.