DATE: January 23, 2024
TO: Board of Supervisors
SUBMITTED BY: Robert W. Bash, Director, Internal Services/Chief Information Officer
SUBJECT: Retroactive Agreement with California Business Machines, Inc.
RECOMMENDED ACTION(S):
TITLE
1. Make a finding that is in the best interest of the County to suspend the competitive bidding process consistent with Administrative Policy No. 34 for unusual or extraordinary circumstances, to purchase new copiers for County departments and also maintain the County’s existing copiers; and
2. Approve and authorize the Chairman to execute a retroactive Agreement with California Business Machines, Inc. for the purchase and maintenance of new and existing copiers used throughout County departments, retroactive to January 8, 2024, for an initial three-year term with two optional one-year extension, total not to exceed $6,000,000.
REPORT
Approval of the recommended actions will allow the Internal Services Department-Purchasing Division (ISD-Purchasing) to continue using California Business Machines, Inc. (CBM) for the purchase and maintenance of copiers, as CBM is the only local Authorized Kyocera Managed Document Services (MDS) dealer in the Central Valley that can provide maintenance and support services for the copiers operated by the County, which have been customized for the County’s use. The item is countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the recommended actions, the County will be subject to higher pricing for the purchase and maintenance of copiers, until a new agreement can be executed. The County would still need to maintain its current contract with CBM for maintenance, as the County currently owns approximately 629 Kyocera copiers, and CBM is the only local authorized dealer for Kyocera.
SUSPENSION OF COMPETITION/SOLE SOURCE CONTRACT:
ISD-Purchasing’s request for suspension of the competitive process is consistent with Administrative Policy No. 34 as CBM is the only local authorized Kyocera Managed Document Services (MDS) Dealer servicing the Central Valley. County staff conducted a comparison between the potential costs to procure services through a piggyback of Omnia Partners agreement with Kyocera Document Solutions America, Inc., Agreement No. R191101 or a suspension of competition. A suspension of competition was determined to be more advantageous to the County, as CBM can provide the maintenance and support services needed for the approximately 629 copiers owned by the County and the approximately 72 rented copiers, at a potential savings of approximately $700,000, when compared to the Omnia Partners piggyback agreement, over the potential five-year term of the recommended agreement.
In August 2023, ISD-Purchasing sent a Customer Experience Survey to all County Departments regarding their satisfaction with CBM. When asked if customers would choose to stay with the current vendor, 100% of the responses were in the affirmative. When asked about experience with the vendor’s support, 67% responded that CBM is “above average,” and 33% responded that CBM is “outstanding.” Internal Services Department recommends that the best interest of the County would be served by not securing competitive bids.
RETROACTIVE AGREEMENT:
The recommended agreement is retroactive to January 8, 2024, as the Department received the final approved agreement from CBM on December 15, 2023, due to extended contract negotiations.
FISCAL IMPACT:
The maximum amount of the recommended agreement is $6,000,000. All costs associated with the purchase and maintenance of copiers are charged directly to the requesting department. Each requesting department will need sufficient appropriations for the use of this contract within FY 2023-24 Adopted Budget and will be included in subsequent budget requests.
DISCUSSION:
On January 8, 2019, your Board approved Agreement No. A-19-011 with CBM for the purchase, rental, and maintenance of the County’s copiers, effective upon execution for a potential five-year term. That Agreement expires on January 7, 2024.
ISD-Purchasing compared the costs between using a procurement process outside the competitive bid (“piggybacking”), and a suspension of competition. The suspension of competition was determined to be more advantageous to the County’s current use of approximately 629 copiers owned by the County and the approximately 72 rented copiers being serviced by CBM. Furthermore, CBM is the only local and authorized Kyocera Managed Document Services (MDS) Dealer servicing the Central Valley, and will offer the County preferential pricing and a savings of approximately $700,000 over the potential five-year term, when compared to using the piggybacking procurement process.
The replacement of the older copiers with new copiers will also result in significant cost savings related to copier maintenance, for the departments choosing to replace their older machines.
ISD-Purchasing recommends entering into the recommended agreement with CBM. Approval of the first recommended action will make a finding that it is in the County’s best interest to suspend the competitive bidding process consistent with Administrative Policy No. 34, as CBM is the only local Authorized Kyocera MDS dealer in the Central Valley that can provide maintenance and support services for the copiers operated by the County, which have been customized for the County’s use.
Approval of the recommended actions will approve the agreement with CBM for the purchase and maintenance of new and existing copiers retroactive to January 8, 2024, for a potential five-year term, which includes a three-year initial term with two optional one-year extensions, total not to exceed $6,000,000.
REFERENCE MATERIAL:
BAI #40, January 8, 2019
ATTACHMENTS INCLUDED AND/OR ON FILE:
Suspension of Competition Acquisition Request
On file with Clerk - Agreement with California Business Machines, Inc.
CAO ANALYST:
Ahla Yang