Title
MOTION TO APPROVE THE INCREASE OF THE ESTIMATED ANNUAL EXPENSE TO HOME DEPOT USA, INC., UTILIZING OMNIA PARTNERS, PUBLIC SECTOR CONTRACT # 16154 "MAINTENANCE, REPAIR, OPERATING SUPPLIES, INDUSTRIAL SUPPLIES, AND RELATED PRODUCTS AND SERVICES" TO AN ESTIMATED ANNUAL AMOUNT OF $650,000, FOR THE CURRENT FIVE-YEAR TERM, PURSUANT TO SECTION 35.18(C)(6) OF THE CITY'S CODE OF ORDINANCES.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinance is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.18 of the City's Code of Ordinances is titled "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(C) states that "Only the following situations are exempt from the competitive bid and competitive proposal requirements of this section:"
- Section 35.18 (C)(6) states that “Cooperative purchasing plans are exempt from this section.”
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A) of the City's Code of Ordinances is titled "City Commission approval."
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $25,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
SUMMARY EXPLANATION AND BACKGROUND:
1. The City of Pembroke Pines needs to purchase maintenance and hardware supplies to support all City and Charter School operations.
2. On January 11, 2017, Maricopa County, Phoenix, AZ as the lead agency for U.S. Communities Government Purchasing Alliance (U.S. Communities and National IPA have come together as Omnia Parters, Public Sector) entered into a five (5) year contract with Home Depot USA, Inc., which commenced on February 1, 2017, through December 31, 2021. The contract includes the option to renew for an additional five years.
3. The contract with Home Depot offers the following annual volume rebate structure to OMNIA Partners registered agencies:
- 1% Annual Rebate on purchases of $10,000 to $25,000
- 2% Annual Rebate on purchases of $25,000 to $100,000
- 5% Annual Rebate on purchases over $100,000
4. In addition, bulk purchases of $1,500 or more qualify for possible price adjustments.
5. On October 16th, 2019, the City Commission approved utilizing Omnia Partners, Public Sector (Formerly U.S. Communities Government Purchasing Alliance) contract #16154 "Maintenance, Repair, Operating Supplies, Industrial Supplies, and Related Products and Services" with Home Depot USA, Inc. for an annual amount not to exceed $400,000 for a five (5) year period which expired on December 31st, 2021.
6. Omnia Partners, Public Sector Contract # 16154 allowed for the renewal of the Agreement for a period not to exceed the initial contract term of five (5) years, and as a result, the Agreement was renewed from January 1st, 2022, to December 31st, 2026.
7. On May 4th, 2022, the City Commission approved the continued utilization of Omnia Partners, Public Sector Contract #16154 with Home Depot U.S.A., Inc for a five (5) year term commencing on January 1st, 2022, and expiring on December 31st, 2026, as allowed by the agreement in the estimated annual amount of $475,000 based on an as-needed basis.
8. The estimated annual amount of $475,000 has been exceeded due to evolving demands across the various departments and charter schools, including renovations to the Housing Division's facilities, including but not limited to exterior renovations to the facilities, flooring renovations, appliance replacements, etc. along with construction and renovation of facilities at the Health Park by the Public Services Department, and electrical improvements at the at the RV Storage Lot for the Recreation and Cultural Arts Division.
9. As a result, the Public Services Department recommends increasing the estimated annual amount to $650,000, for the current five-year term of the agreement, due to the increased utilization of this contract and general inflation and increased prices for supplies.
10. Request City Commission to approve the increase of the estimated annual expense to Home Depot USA, Inc., utilizing Omnia Partners, Public Sector Contract # 16154 "Maintenance, Repair, Operating Supplies, Industrial Supplies, and Related Products and Services" to an estimated annual amount of $650,000, for the current five-year term, pursuant to Section 35.18(C)(6) of the City's Code of Ordinances.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: $650,000 estimated annually, cost may fluctuate up or down on an as-needed basis from various departments, therefore total annual costs may exceed $650,000.
b) Amount budgeted for this item in Account No: Each City Department and Charter School has a budget for purchasing maintenance and hardware supplies that is generally coded to object code # 546150 (R&M - Land, Building & Improvement).
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: $650,000 estimated annually per contract/calendar year, with an estimated 5% annual rebate:
|
|
Contract Yr. 2022 |
Contract Yr. 2023 |
Contract Yr. 2024 |
Contract Yr. 2025 |
Contract Yr. 2026 |
|
Revenues |
$32,500 |
$32,500 |
$32,500 |
$32,500 |
$32,500 |
|
Expenditures |
$650,000 |
$650,000 |
$650,000 |
$650,000 |
$650,000 |
|
Net Cost |
$617,500 |
$617,500 |
$617,500 |
$617,500 |
$617,500 |
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Not Applicable.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Not Applicable.