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APPROVE A MOTION TO ENTER INTO A COOPERATIVE AGREEMENT TO PURCHASE SHARP MULTI-FUNCTIONAL COPIER EQUIPMENT, RELATED SUPPLIES, AND MAINTENANCE SERVICES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a motion to:
1. Approve entering into a cooperative agreement (Attachment A) utilizing the Sourcewell Contract Number 030321-SEC to acquire multi-functional copier equipment, related supplies, and maintenance services with Sharp Electronics Corporation and its authorized dealer for Stockton, CA, Smile Business Products for four years through April 19, 2025, with a one-year (optional) extension through April 19, 2026, for a total estimated amount of $1,921,578.
2. Approve findings which support and justify an exception to the competitive bid process; and
3. Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of this motion.
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Summary
The proposed cooperative agreement with Sharp Electronics Corporation and its authorized dealer, Smile Business Products, Inc., is for the maintenance and repair services, supplies, and anticipated purchase of 63 replacement copiers over the next five years. The new copiers will replace aged equipment, where needed.
The Sharp electronics agreement was established through a request for proposal conducted by the Sourcewell Cooperative Purchasing Organization. Utilizing this Sourcewell cooperative agreement will allow the City to continue to support operational activities at competitive prices for scanning and copying of printed material. The proposed contract term through April 19, 2025, with the option to extend, if renewed by Sourcewell, through April 19, 2026, for a total estimated amount of $1,921,578.
DISCUSSION
Background
City-owned multi-functional copiers and printers are coordinated citywide and managed by the Information Technology (IT) Department. The IT Department manages the purchase of equipment and annual maintenance services. Each department is responsible for the effective use of the copiers, monitoring usage, and ordering ancillary supplies.
In 2016, a review of the City’s installed fleet of copiers, facsimiles, and multi-function printers was completed by staff. The team reviewed several master agreements to determine the best value for continued print services. City staff reviewed various cooperative agencies for digital copier and multi-function devices, along with related supplies and maintenance services. Below are factors considered for the selection of a provider for this type of equipment:
• Equipment quality and reliability
• Price for equipment configured to meet department needs
• Local dealer availability and support capabilities
• Master agreement longevity
Staff reviewed multiple manufacturers: Canon, Konica-Minolta, Ricoh, Sharp Electronics, and Xerox Corporation. Sharp Electronics ranked as best qualified to meet the City’s multi-functional copier requirements based on the following factors, which established the current City standard for copier equipment used throughout the City:
• Equipment quality
• Equipment speed (copies per minute and first-copy speeds)
• Local service availability
• Low cost-per-copy in both Black & White and Color modes
• Continued service support from the dealership which supports much of City’s current fleet
Staff and Sharp Electronics’ authorized vendor partner, Smile Business Products, utilized the Sourcewell cooperative agreement for competitive pricing. The selection criteria for the equipment remain valid, and the Sourcewell cooperative agreement provides the City with discounted pricing for equipment and maintenance services.
Present Situation
The City owns a fleet of 64 Sharp Electronics multi-functional copiers, of which the life cycle for each is five years. As our fleet ages, the IT Department purchases replacement machines. Currently, we utilize Sourcewell Contract Number 083116-SEC, which expires on October 19, 2021, and is being replaced by Sourcewell Contract Number 030321-SEC for purchases, maintenance, and supplies. Smile Business Products is the only local Authorized Sharp Dealer for Sharp multi-functional copiers providing sales and service in Stockton, CA. Although execution of the new contract will begin after October 1, 2021, Smile Business Products will honor service and order requests made from October 1, 2021, under the new contract.
The Sourcewell cooperative agreement with Sharp Electronics Corporation and its authorized dealer for Stockton, CA, Smile Business Products, will continue to provide the City with competitive pricing for multi-functional copier equipment, related supplies, and maintenance services for a total estimated amount of $1,921,578. Discounts provided through the Sourcewell agreement range from 48% to 70% off the Manufacturer Suggested Retail Price (MRSP) for multi-function copiers, and from 10% to 31% off the full-service monthly maintenance per copy fee.
Table 1 - Prior-Year Expenditures for Smile Business Products
|
Expenditure Description |
FY 2018-19 |
FY 2019-20 |
FY 2020-21 |
|
Annual Maintenance |
$185,828 |
$196,445 |
$209,201 |
|
Monthly Maintenance Expense |
$15,486 |
$16,370 |
$17,433 |
|
New and Replacement Equipment |
$72,926 |
- |
$5,691 |
|
Total |
$258,754 |
$196,445 |
$214,892 |
Table 2 - Estimated Future Costs
|
Expenditure Description |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 (optional) |
Estimated Total |
|
Annual Maintenance* |
$196,886 |
$206,730 |
$217,066 |
$227,920 |
239,316 |
$1,087,918 |
|
Monthly maintenance expense |
$16,407 |
$17,227 |
$18,089 |
$18,993 |
$19,943 |
$90,660 |
|
Additional Estimated Costs** |
$10,000 |
$10,000 |
$10,000 |
$10,000 |
$10,000 |
$50,000 |
|
New and Replacement Equipment*** |
$253,000 |
$297,000 |
$22,000 |
$99,000 |
$22,000 |
$693,000 |
|
New and Replacement Units |
23 |
27 |
2 |
9 |
2 |
63 |
|
Total |
$459,886 |
$513,730 |
$249,066 |
$336,920 |
$271,316 |
$1,921,578 |
* See Attachment A - Agreement with Sharp Electronics Corporation
** Additional estimated costs for supplies not included in the contract (e.g. toner waste boxes)
*** Replacement costs budgeted at $11,000 per unit
Staff recommends entering into a cooperative agreement (Attachment A) to utilize the Sourcewell Contract Number 030321-SEC and award a contract with Sharp Electronics Corporation and its authorized dealer for Stockton, CA, Smile Business Products for four years with the option to extend, if renewed by Sourcewell, through April 19, 2026, for a total estimated amount of $1,921,578.
Findings
Stockton Municipal Code Section 3.68.070(A)(5) provides an exception to the competitive bidding process where the City accesses the terms of a competitively bid and negotiated cooperative purchasing agreement and where the City Council has approved findings that support and justify the exception. The findings are as follows:
1. The process that was used to establish the Sourcewell cooperative agreement was awarded through a competitive process.
2. Smile Business Products is the only local Authorized Sharp Dealer for Sharp Brand copier, printer, multi-functional products providing sales and service in Stockton, CA.
3. Participation in the Sourcewell agreement with Sharp Electronics and its authorized dealer, Smile Business Products, will provide the City with significant cost benefits on prices.
4. The use of an existing cooperative agreement will reduce the administrative burden and time required to conduct a separate competitive procurement.
FINANCIAL SUMMARY
The cooperative agreement with Sharp Electronics Corporation and its authorized dealer, Smile Business Products, Inc., is for the acquisition of multi-functional copier equipment, related supplies, and maintenance services. Total expenditures are estimated at $1,921,578 for services beginning October 1, 2021, through April 19, 2026, which includes an additional one-year optional extension. Budget for the Fiscal Year 2021-22 cost is appropriated in the 510 Technology Fund, Project accounts, and Department accounts.
Future annual estimated costs will be included in the annual budget appropriation process.
Attachment A - Cooperative Agreement with Sharp Electronics