HomeMy WebLinkAbout03/21/1995, C-7 - COOPERATIVE PURCHASING OF REPLACEMENT COPIERS MEETING DATE:
city of san ,Ais osispo .7-04-950
COUNCIL AGENDA REPORT 1TE""NUMBER:
FROM: Bill Statler, Director of Finance
SUBJECT: COOPERATIVE PURCHASING OF REPLACEMENT COPIERS
CAO RECOMNMNDATION
Approve three year agreement with Copytron for the purchase of copiers using a cooperative
purchasing agreement developed by the State of California and U.S. General Services Administration.
DISCUSSION
Background
In February of 1991, following an extensive evaluation and review process, the Council approved a
three year agreement with Copytron (the local distributor for Minolta) for copier purchases. This
agreement has since expired, and it is time to renew this agreement or select a new vendor in making
copier purchases. At this time, nine copiers are recommended for replacement, and funding for this
is available in the Equipment Replacement Fund. Before these replacements can be made however,
we need to approve a purchasing strategy.
As discussed below, we are recommending that the City make use of a revised cooperative purchasing
program recently developed by the state and federal government.
Proposed Copier Agreement
The State of California has recently implemented a new cooperative purchasing program called
"California Multiple Award Schedules" (CMAS) which basically "piggy-backs" purchasing agreements
developed by U.S. General Services Administration (GSA) with the State. The State in turn offers
these "piggy-back" agreements to local agencies. In essence, the City receives the same purchasing
power as the combined federal/state government under the CMAS program.
Several copier vendors participate in this program. Based on the results of our copier analysis in 1991
in terms of copier quality and performance, the following three copier manufacturers should be
seriously considered by the City under the CMAS program, and are represented locally in San Luis
Obispo by the following firms:
■ Canon More Office Systems
■ Minolta Copytron
■ Xerox The Standard Group
The following summarizes CMAS pricing for these manufacturers for comparably equipped copiers
in the mid and high volume ranges as defined in the City's copying management policy:
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COUNCIL AGENDA REPORT
CMAS Pricing Summary
Mid Volume Range Copiers Model No. Speed (cpm)* CMAS Price
Canon 4050B 40 cpm $10,186.75
Minolta 4050 45 cpm $9,272.00
Xerox 5053 52 cpm $10,605.00
High Volume Range Copiers Model No. Speed (cpm)* CMAS Price
Canon 6060B 60 cpm $17,694.00
Minolta 6000 60 cpm $13,612.00
Xerox 5365 62 cpm $20,130.00
' copies per minute
As reflected above, the Minolta copiers have lower CMAS pricing than the other two models at both
copier ranges.
In addition to reflecting CMAS pricing, the proposed agreement includes the following supplemental
features:
■ Guaranteeing CMAS/GSA pricing to the City for three years.
■ Installing copiers with a 90 day return clause; if we are not satisfied with their performance,
we can return the units and pay only the CMSA/GSA rental rate for the copies made.
■ Agreeing to provide the City maintenance service for 5 years or 2 million copies; if at any time
during this period we are not satisfied with a copier's performance, and Copytron has been
provided with written notice about the problem and provided 30 days to rectify it, Copytron
will replace the problem copier with a same or better unit.
■ Providing the City with remote diagnostics via phone line on copier problems and usage. With
this system, in many cases potential problems will be identified and resolved by Copytron from
their offices before they occur.
Benefits to this Approach
There are three major benefits to purchasing copiers through Copytron under CMSA pricing:
■ Quality products. Minolta manufactures a quality product and our previous experience with
their copy quality and performance has been good.
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COUNCIL AGENDA REPORT
■ Outstanding service. Copytron has done an outstanding job of servicing and supporting our
copier needs.
■ Exceptionally competitive pricing through cooperative purchasing. Taking advantage of
cooperative purchasing opportunities is a key Council objective for 1993-95. CMSA pricing
reflects the combined purchasing power of the state and federal government which we would
be clearly be unable to match on our own. For Minolta copiers, CMSA pricing reflects a
37.5% discount from their retail price list.
Replacement Copiers
■ Features. Copiers proposed for replacement at this time are summarized in Exhibit A. As
reflected in this schedule, six of these are mid-range volume copiers and three of them are high
volume copiers. In addition to features present in our current copiers such as automatic two-
sided copying and sorting, the replacement copiers will have on-line stapling and three hole
punching capabilities, which will significantly improve staff productivity.
■ Replacement criteria. Our current copying management policy sets a standard life for copiers
of 40 months. This guideline is based on several factors, including: a break-even point of 36
months for purchase over lease of copiers; our past history in keeping copiers for periods
longer than 36 months; increased downtime due to age after this point; and technological
obsolescence. All of the proposed replacement copiers more than meet this "useful life"
guideline of 40 months.
■ Funding availability. Of these nine copiers, the five purchased in February of 1991 were
identified for replacement in 1994-95 in the 1993-95 Financial Plan. The other four are
recommended for replacement at this time due to a scheduled price increase of 7.5% effective
April 1, 1995 (which is the reason this report is being presented to Council as a late item).
These copiers would otherwise have been scheduled for replacement in early 1995-96; by
replacing them at this time - which is still within our replacement guidelines - we can save
about $3,000. Overall, purchasing these nine copiers before April 1 will result in savings of
about $7,700.
Because of reduced pricing resulting from the CMSA cooperative purchasing program combined with
savings in other equipment replacement purchases, adequate funding is available in the existing
Equipment Replacement Fund budget for 1994-95 to accelerate the replacement of these four copiers
without an additional appropriation.
FISCAL IMPACT
■ Savings from cooperative purchasing. As reflected in Exhibit A, we will save about $62,000
under the CMAS pricing vs standard retail pricing. While we would expect to receive quotes
lower than retail list if we were to competitively bid this purchase on our own, it is highly
unlikely that we would have matched the pricing being provided to the state and federal
governments.
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city of San ,_JS OBISPO
COUNCIL AGENDA REPORT
■ Funding. As discussed above, adequate funding is available for this purchase within existing
budget amounts.
ALTERNATIVES
■ Conduct our own purchasing process. We could prepare an RFP and conduct our own
purchasing process for a three year copier purchase agreement similar to the one that we
conducted four years ago. However, based on our experience at that time, this would be
extremely time-consuming and it is highly unlikely that it would result in more favorable
pricing than that already provided to the state and federal government.
■ Select another vendor from the CMSA program. As discussed above, the CMSA price list
for Minolta is very cost competitive with the other two "short-list" vendors (in fact, at this
time, they are lower than the other two for both copier volume types, but this could change
slightly over time). Additionally, and perhaps more importantly, we have been satisfied with
Minolta copier quality and performance, and we have received outstanding service and support
from Copytron.
■ Do not enter into a multi-year agreement. We could enter into an agreement with Copytron
for just these nine copiers, and not provide for continuity in maintenance and support in future
copier purchases; however, in our experience, administration of maintenance contracts is
enhanced if we can stay with one vendor for a reasonable period of time. In this case, we
believe that three years is a reasonable timeframe.
■ Defer purchase of four copiers. As noted above, four of these copiers were not initially
scheduled for replacement in 1994-95, but would be recommended for replacement in early
1995-96. These four copiers meet our guidelines for replacement at this time, and we will save
about $3,000 if we purchase them now rather than waiting another three months.
SUMMARY
In accordance with our replacement guidelines for copiers, it is recommended that nine copiers be
replaced at this time. Based on our favorable experience with Minolta copiers, the outstanding service
we have received from Copytron, and the very competitive pricing available to us under the CMAS
program, it is recommended that cooperative purchasing be used in entering into a three year
agreement with Copytron.
ATTACHMENT
Agreement with Copytron for copier purchases
EJMITS
A. Summary of proposed copier replacements at this time
i
AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of
, by and between the CITY OF SAN LUIS OBISPO, a municipal corporation,
hereinafter referred to as City, and COPYTRON, hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, the State of California (State) and the U.S. General Service Administration (GSA) have
entered into a cooperative purchasing agreement known as the California Multiple Award Schedules (CMAS)
program under which pricing for various goods and services secured by the GSA are made available to the State
and local government agencies; and
WHEREAS, Minolta Corporation is a participant in the CMAS program and the Contractor is the local
authorized distributor in San Luis Obispo for Minolta products; and
WHEREAS, the City has used Minolta copiers for the past four years and they have met the City's
expectations for quality and perfomtance; and
WHEREAS, the Contractor has provided outstanding service in maintaining and supporting these copiers;
and
WHEREAS, the pricing offered to the City for Minolta copiers under the CMAS program are very
competitive.
NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter
contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be for three years from the date of this Agreement.
2. COOPERATIVE PURCHASING. The City hereby enters into a cooperative purchasing
agreement with the Contractor for the purchase of copiers pursuant to the CMAS program. In addition to the
standard terms and conditions of the CMAS program, Contractor further agrees as follows:
a. In the event that the CMAS program is discontinued for any reason during the term of
this Agreement, Contractor agrees that it will continue to offer GSA pricing to the City.
b. All copiers purchased under this Agreement will be connected to the Minolta "Smart
System" (or similar successor program) for remote diagnostic service) via existing phone lines at no additional
cost to the City.
C. Payment will be made by the City to the Contractor within 90 days after copier
installation. At any time during this 90 day period, the City may direct removal of any copiers for any reason.
In this case, the Contractor shall be compensated at the GSA rental rate for any copies made during this period,
and no other compensation will be due to the Contractor.
d. As long as the City maintains a continuous maintenance contract, the Contractor will
warranty all copiers purchased under this Agreement for five years-or 2 million copies after purchase, whichever
comes first. Should any copier not function to the satisfaction of the City, and the City notifies the Contractor
of the problem in writing, the Contractor will rectify the problem within thirty (30) days after being so notified.
If the problem is not rectified to the City's satisfaction within this 30 day period, the Contractor shall, upon the
direction of the City, remove the copier and replace it with a new Minolta copier with the same or better features.
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e. The Contractor agrees to maintain insurance during the term of this Agreement pursuant
to the insurance requirements attached hereto.
3. CITY'S OBLIGATIONS. For providing goods and services as specified in this Agreement,
the City will pay and the Contractor shall receive therefor payments based upon the actual quantities ordered and
received by the City and the unit prices bid by the Contractor through the CMAS/GSA price schedules.
4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements
hereinbefore mentioned to be made and performed by the City, the Contractor agrees with the City to
do everything required by this Agreement.
5. NON-EXCLUSIVE AGREEMENT. The City reserves the right to purchase copiers from other
vendors during the term of this Agreement.
6. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement
shall be in writing and shall be effective only upon approval by the Council of the City.
7. COMPLETE AGREEMENT. This written Agreement, including all writings specifically
incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral
agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be
of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the
parties hereto.
8. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage
prepaid by registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93403
Contractor Copytron
712 Fiero Court, Suite 33
San Ldis Obispo, CA 93401
9. AUTHORITY TO EXECUTE AGREEMENT. Both the City and the Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and empowered
to execute Agreements for such parry.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
first above written.
ATTEST: CITY OF SAN LUIS OBISPO,
A Municipal Corporation
By:
Diane Gladwell, City Clerk Allen K. Settle, Mayor
APPROVED AS,GTIO ORM: CONTRACTOR
�v By: Co '0y T /coN
G. J rge n, Attorney 2 l�
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