REPORT TO COUNCIL
SUBJECT
Title
Action on Award of Purchase Order to Canon Solutions America, Inc. for Citywide Leases and Maintenance Services for Copier/Multi-Function Devices (MFDs)
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On September 26, 2017, the City Council approved an agreement with Ricoh USA, Inc. (Ricoh) for Citywide Leases and Maintenance Services for Copier/Multi-Functional Devices (MFDs). The City leveraged a cooperative agreement through U.S. Communities (now OMNIA Partners). OMNIA Partners is an organization that brings together cooperative purchasing contracts for local government agencies. Currently, Ricoh provides approximately 100 Copier/Multi-Functional Devices (MFDs) located at various city facilities, along with toner replacements and repair services, used by City staff for copying, scanning, printing, and faxing.
The agreement with Ricoh has an initial term of five years plus two one-year options for a total of seven years. On August 30, 2022, the City Council approved Amendment No. 1 to exercise both options to extend the agreement through August 31, 2024.
DISCUSSION
In 2023, staff conducted research on cooperative agreements for copier/multifunctional devices lease and maintenance services. Their review encompassed various factors including the term of the agreements, range of services, product availability, and lease options. Staff identified cooperative purchasing agreements with OMNIA Partners that were competitively solicited and publicly awarded by the University of California (UC) system. Subsequently, staff invited the following three vendors to provide product demonstrations:
• Canon Solutions America Inc.
• Ricoh USA
• Xerox Corporation
Demonstrations were independently evaluated by a three-member evaluation team based on predetermined evaluation criteria. In addition, evaluators considered input from end users across the City who attended the demonstrations.
Staff recommends an award to Canon Solutions America, Inc. (Canon) for providing the best value including better print quality, integration with apps and onsite device management portal. This recommendation is pursuant to City Code Section 2.105.270(c) which states that the City may, without observing formal bidding requirements, “contract with a vendor under a contract awarded using preestablished cooperative purchasing agreements, when such agreement resulted from a competitive bid process that meets or exceeds the City’s competitive bid process.” The Purchasing Division Manager has determined that the above-mentioned competitive process meets or exceeds the City’s process.
The City will issue Purchase Orders to Canon that incorporate the Master Sales and Services Agreement Contract # 2020002755 (Master Agreement) available through OMNIA Partners. The terms and conditions are established under the Master Agreement, and the City’s Purchase Order(s) will define the terms specific to the City including pricing. The Master Agreement is effective from December 16, 2020 to December 15, 2025, plus five one-year options to renew through December 15, 2030. Pursuant to the terms of the Master Agreement, all purchase orders issued and accepted by Canon may survive the expiration or termination of the Master Agreement, thus allowing participating agencies’ purchase orders to exceed the term of the Master Agreement if the purchase order is issued prior to the expiration of the Master Agreement. Therefore, the City has negotiated an initial five-year term with five additional one-year options.
Under the purchase order, the City will pay a fixed monthly lease fee for the equipment, plus a per copy charge (print usage). While the lease price is a fixed amount, usage charges can vary and are difficult to forecast accurately. Based on previous data, the City’s monthly usage costs are forecasted to be approximately $5,000 per month. Canon has agreed to reduce their price by 6% in addition to the price listed under the OMNIA Partners agreement. The estimated monthly amount for leases is $13,500 and print usage is $5,000 during the initial five-year term for an amount of $1,110,000, and a contingency of $166,500 for a total maximum compensation of $1,276,500. Contingency is included to account for any usage charges that go beyond the forecast amount or for any unforeseen needs for additional equipment or services in the future. Beyond the initial term, the anticipated need for each option year is $244,200 and a contingency of $36,630 for a total annual maximum compensation of $280,830. The estimated amount for each option year is based on potential price increases, increased usage charges, and changes in the number of equipment, considering a maximum total increase of 10%.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
The Information Technology Department’s annual operating budget includes funding for printing services and is sufficient to cover the costs of this new agreement. Any additional funding required will be considered as part of the budget process.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute a Purchase Order with Canon Solutions America Inc. for Citywide Leases and Maintenance Services for Copier/Multi-Function Devices under the Master Agreement with lead public agency University of California through OMNIA Partners for an initial five-year term through June 30, 2029, with maximum compensation not-to-exceed $1,110,000 subject to the appropriation of funds and in a final form approved by the City Attorney;
2. Authorize the City Manager to execute change orders for a not-to-exceed contingency amount of $166,500 in the event additional equipment is required and/or usage increases during the initial term, subject to appropriation of funds and in a final form approved by the City Attorney; and
3. Authorize the City Manager to execute up to five one-year options to extend the purchase order after the initial term through June 30, 2034, pursuant to the terms of the cooperative solicitation, subject to the appropriation of funds, and in a final form approved by the City Attorney.
Staff
Reviewed by: Gaurav Garg, Director of Information Technology/CIO
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Executive Summary - OMNIA Partners and UC
2. UC Contract - Canon Solutions America, Inc.