TITLE
Recommendation to adopt resolution authorizing City Manager, or designee, to execute a contract, and any necessary documents including any necessary subsequent amendments, with Home Depot U.S.A., of Atlanta, GA, for furnishing and delivering maintenance, repair, and operations supplies and miscellaneous materials on an as-needed basis, on the same terms and conditions afforded to Maricopa County, AZ, through Omnia Partners, in a total annual amount of $1,000,000, with a 20 percent contingency in the amount of $200,000, for a total annual contract amount not to exceed $1,200,000, until the Omnia Partners contract expires on December 31, 2026, with the option to renew for as long as the Omnia Partners contract is in effect, at the discretion of the City Manager. (Citywide)
DISCUSSION
City Council approval is requested to enter into a contract with Home Depot U.S.A (Home Depot) for furnishing and delivering maintenance, repair, and operations supplies and miscellaneous materials on an as-needed basis for various City of Long Beach (City) Departments.
The Purchasing Division within the Department of Financial Management researched procurement options for as-needed maintenance, repair, and operations supplies and miscellaneous materials and discovered other agencies had completed an open, fair, transparent, and competitive procurement process. The City reviewed cooperative agreement options and determined that the contract between Maricopa County, AZ, through Omnia Partners, and Home Depot, provided the best value to the City.
Purchases under this contract are to be made at the two Signal Hill store locations. Currently, the City purchases these supplies and materials through a vendor with stores located within the City. Sales tax (including Measure A) generated from City purchases are then allocated to the City. Home Depot was selected based on its competitive pricing, service level, and breadth of product offerings. Home Depot also offers a rebate incentive up to 5 percent cash back on purchases over $100,000 and a volume price program on orders more than $2,000. Home Depot can manage high frequency, small volume, and will-call orders for a wide variety of materials used for special projects that would be impractical to bid individually.
City Charter Section 1802 provides an alternative procurement method by permitting the City to purchase or otherwise obtain services, supplies, materials, equipment, and labor with other governmental agencies. This alternative procurement method can save time and reduce costs through economies of scale by purchasing under existing contracts from other government agencies on a voluntary and selective basis, when authorized by a Resolution adopted by the City Council.
This matter was reviewed by Deputy City Attorney Erin Weesner-McKinley on July 18, 2022, Purchasing Agent Michelle Wilson on July 7, 2022, and by Revenue Management Officer Geraldine Alejo on July 14, 2022.
TIMING CONSIDERATIONS
City Council action to adopt a Resolution and award a contract concurrently is requested on August 9, 2022 to ensure the contract is in place expeditiously.
FISCAL IMPACT
The total annual contract amount will not exceed $1,200,000, inclusive of a 20 percent contingency, and is budgeted across various fund groups and departments.The contract will be used citywide on an as-needed basis. The City’s current vendor has local stores with sales tax (including Measure A) generated from City purchases allocated to the City. Based on the City’s recent purchases made under the current contract, the estimated annual sales and use tax revenue loss (including Measure A) is $8,000. This estimate is considered to be on the high-range with the actual revenue impact dependent on transaction-type and associated state tax distribution rules.This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. The award of this contract will provide continued support to our local economy by assisting in the preservation of 344 local jobs.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER