City of Lawrence

Finance Department

 

MEMORANDUM

 

DATE:

June 20, 2006

TO:

David Corliss

 

Interim City Manager

FROM:

Alan D. Landis, Purchasing Specialist

 

Steve Stewart,  Central Maintenance Garage Manager

RE:

City Vehicle Purchases Under MACPP

 

Pursuant to your request, information on purchasing City vehicles under the MACPP contract is provided below along with a recommendation that the City continue to purchase vehicles under this contract. 

 

Background

The City Commission has expressed a desire to use cooperative purchasing opportunities as a cost saving mechanism.  To that end, the City of Lawrence has been purchasing vehicles under the Mid America Council of Public Purchasing (MACPP) contract since 2003.  This cooperative purchasing arrangement has allowed the City to work with other municipalities, school districts and counties to obtain lower prices through volume discounts.

 

Attached is a list showing the vehicles included in the 2006 budget that have been purchased this year.  The list also indicates if the vehicle was purchased under the MACPP contract.   

 

How the MACPP Cooperative Bid Works

Upon request, the lead entity (currently the City of Olathe) sends out notification to all the participants of the cooperative and hosts a meeting to review bid specifications for all desired vehicle.  Larger vehicles such as solid waste trucks or specialty items like police motorcycles are not include in the MACPP contract.  

 

Once agreed upon, bid documents are sent out to vendors throughout the region, including the attached list of Lawrence vendors.  The lowest bid is selected and the bid price remains valid through the full production year.  The current MACPP contract prices became effective in October of 2005 and will remain in effect until September of this year. 

 

Advantages

Before purchasing from the MACPP contract, the City requested sealed bids for each type of vehicle being purchasing.  Many times, the City would need to purchase additional vehicles of the same type later in the year and would have to request sealed bids again.  This process required a great deal of staff time and provided less predictable pricing.  Through the MACPP arrangement, the lead entity is responsible for the administrative work related to developing bid specifications and requesting sealed bids.

 

In addition to staff time, purchasing vehicles under the MACPP contract saves the City money.  The cooperative is able to use the bargaining power of all of its participants to obtain lower prices. 

 

For example, the City purchased eleven police cars under the MACPP contract earlier this year.  A Lawrence vendor responded to the request for bids sent by the MACPP however, their bid was $4,642.00 higher than the winning bid.  The City also purchased a Ford Expedition for the Fire Department earlier this year.  MACPP bid requests were sent to local vendors however none submitted bids.  To ensure that using the MACPP bid process is the most cost effective however, the City requested pricing information from a local vendor for a vehicle with the exact specifications outlined in the MACPP bid.  The vendor’s estimate was $3,477.00 more than what the City paid for the vehicle under the MACPP contract. 

 

Recommendation

Purchasing under the MACPP contract saves staff time by eliminating the administrative work associated with going out for sealed bids for vehicles.  The contract also ensures that the City is making the most cost effective and efficient use of the City’s financial resources. 

 

Therefore, staff recommends the City continue to purchase vehicles, when possible, under the MACPP contract.