TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
Gwen Eng, Purchasing Manager
SUBJECT:Title
Resolution Authorizing the Purchase of Auto Parts from Completes Plus for the Next Three Years at an Estimated Annual Cost of $50,000; and Authorizing the City Manager to Extend the Terms of the Purchase Order for Up to Two Additional Years (Finance Director Moe).
ADOPT RESOLUTION NO. 17-0093
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council: a) adopt Resolution No. 17-0093 approving a three-year contract with Completes Plus for the purchase of auto parts with an estimated annual cost of $50,000, and b) authorize the City Manager to extend the term of the contract for up to two additional one-year terms if deemed in the City’s best interest.
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FISCAL IMPLICATIONS:
Staff estimates that expenditures against this contract will not exceed $50,000 per year. This estimate is based on the highest volume that the City has historically purchased. Sufficient funds are budgeted and available for on-going maintenance and replacement parts for the City’s fleet of vehicles.
BACKGROUND:
The City maintains a fleet of approximately 150 vehicles. A small parts inventory is kept primarily for routine maintenance, which is replenished on a regular basis; however, most parts are ordered on an as-needed basis (this reduces the City’s carrying costs for inventory and reduces the likelihood of the City stocking obsolete parts). Vehicle repairs are performed as quickly as possible to minimize any service disruption; therefore, parts must be readily available and delivered in a timely manner.
In responding to the Request for Proposal, vendors provided the City with the brands of after-market auto parts carried. These products are required to meet or exceed original equipment manufacturer (OEM) specifications. In addition, vendors provided discounts from the manufacturers’ suggested list prices. The discounts will be firm for the contract life but the list prices, set by the manufacturer, may fluctuate based upon market conditions (typically prices change one or twice a year).
DISCUSSION:
Staff solicited proposals and seven responses were received. Vendor selection is based upon several factors: brands of auto parts available, order fill rate, ability to meet a one-hour delivery requirement, on-line catalog and ordering, pricing and return/credit policies.
In order to evaluate the cost-effectiveness of the proposals, each vendor provided pricing (discounts) on a list of 29 auto parts that the City typically purchases. The following is a recap of the total costs for those parts based on the City’s historical usage:
Vendor - Sample Cost
1. Completes Plus - $1,294.20
2. Factory Motor Sports - $1,380.54
3. Eddings Enterprises, Inc. - $1,478.28
4. Warren Distributing - $1,603.73
5. Eddings Bros. NAPA - $1,630.91
6. H&H Wholesale Parts - Incomplete
7. O’Reilly Auto Parts - Incomplete
H&H Wholesale Parts and O’Reilly Auto Parts did not supply pricing on all products. As a result, their bids are considered incomplete.
The lowest responsive, responsible bidder is Completes Plus. Therefore, staff recommends that the City Council award a three-year auto parts contract to Completes Plus. Additionally, staff is recommending that the City Manager be given the authority to exercise the two one-year extensions should it be determined to be in the City’s best interest.
If approved, the contract will be in the form of a purchase order (no separate contract document). The City may cancel the contract at any time without cause if necessary.
PUBLIC OUTREACH/INTEREST:
This bid was advertised on the City’s website as well as BidSync, a public bid notification board.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
Attachment
Resolution No. 17-0093