On May 23, 2000, after a competitive bid process, the Board of Supervisors authorized the Purchasing Agent to enter into a three-year contract with MBA of California, Inc. to supply the County's approximately 330 copy machines to all County departments. The contract is uniquely favorable to the County in that the price is formulated based on actual copies made, and includes all maintenance and supplies, including toner cartridges. |
As a result of negotiations, MBA of California, Inc. has agreed to extend the contract for the additional two years as provided in the contract, and charge rates for the additional two years that are 10% less than the original contract price. The contract also provides that MBA of California, Inc. will continue to provide all supplies and maintenance on its machines.
Employee and Public Services recommends extending the master contract with MBA of California, Inc. for the additional two years, projecting a total savings countywide of $155,000 over the two year period. MBA of California, Inc. is able to offer this reduced price because the financing it originally received to supply the machines was amortized over three years, and interest rates have now declined. MBA of California, Inc. is willing to pass a portion of the savings on to us.
Our research indicates that if we cancel the contract and request formal bids, our cost will be 10% to 15% higher than we are now paying due to the fact that new machines will cost much more than the cost of continuing to use the machines we already have. The existing machines will not surpass their production limits by extending the contract, and in any event will be covered for all maintenance and service by MBA of California, Inc. Additionally, the contract provides for MBA of California to replace any defective machines at no cost to the County. It has been our experience that MBA of California, Inc. provides excellent response time and service.
MBA of California, Inc. has also agreed to donate all of the approximately 330 copy machines to the County at the end of this additional two years (as each machine's term expires) for the County to use in its Surplus property program. MBA of California, Inc. desires to further the County's objectives of recycling and assisting local non-profit organizations. While MBA of California, Inc. intends to pursue this donation as a tax deduction, the machines will transfer to the County's surplus program whether or not they are successful in this endeavor.
We have communicated our recommendation for the extension to all Department Directors and to departmental fiscal and purchasing representatives, and they are very pleased with the savings. |
Extending this contract supports vision points number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain; and number 21: understanding, supporting, and integrating the County vision into the delivery of services. |
The County will save $155,000 over the current price schedule if this contract is extended for the two years. Factoring in the fact that the County would likely experience a 10% to 15% price increase if we went to bid on new machines, the total savings are in the range of $250,000 to $275,000. |
