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Business
Action Item
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DATE: Tuesday, April 4, 2006
TO: School Board Members
FROM: MaryEllen Elia, Superintendent
SUBJECT / RECOMMENDATIONS
Approve the Blanket Purchase Agreement with the Hon Company #4604-CM-Furniture (Business Division)
EXECUTIVE SUMMARY
On April 5, 2005, the Board approved a one year blanket purchase agreement with the Hon Company to maximize the discounts offered for Hon furniture. Higher fuel and steel prices are causing furniture manufacturers to increase their list prices for products, which result in an increased cost to the District. Knowing the volume of furniture purchases we are projecting over the next 12 months, we again contacted Hon to secure a better percentage discount than those stated on the State of Florida Contract. The manufacturer offered aggressive discounts under a blanket agreement that stipulates the District will purchase one million dollars (based on list price) of product over a twelve-month period. The discounts offered including installation range from 60% - 72%, and the discounts offered excluding installation range from 63% - 75.3%. This agreement also allows all schools and departments to receive the higher discount percentages regardless of purchase order amount. In other words, whether a school is buying one item or we are equipping a new school, every school or department will benefit from these aggressive discounts. In the event the District fails to meet the annual purchase projection, the District will be invoiced for the difference between the amount invoiced by Hon, and the amount the District would have been invoiced using the applicable discount from the State of Florida contract. Since last years' expenditures exceeded the one million purchase request and current needs are expected to be the same or greater than last year, we expect to satisfy the purchasing requirements of the blanket purchase agreement. Utilizing this agreement for our Hon furniture purchases resulted in an estimated $75,000 savings. This savings is in addition to the savings offered all entities that use the state furniture contract.
ANNUAL DISTRICT GOAL(S) AND CRITICAL SUCCESS FACTOR(S)
As stated in OPPAGA report: “Efficient purchasing and warehousing requires that management processes be in place to ensure that supplies, equipment and services vital to the school’s education mission are purchased from a competitive source, in the right quantity, delivered timely to the correct location, and stored in a secure location. These criteria should be met for each purchase without sacrificing quality.”
FINANCIAL IMPACT (Budgeted: Yes)
The item is funded in the various school or department budgets in the amount of $400,000. This amount assumes not less than 60% discount off manufacturer's list price. If a site declines installation included in the bid price, any associated costs for installation will be charged to that site.
EVALUATION
Contract Administration or evaluation is performed by the Project Manager (end user) and Purchasing Agent, who function as a team. Reviews are conducted face to face, typically quarterly, or by utilizing an on-line vendor performance report. Prior to soliciting a new contract, the Contract Administration team must first give consideration to the specifications and supporting data of the expiring contract.
SUBMITTED BY:
Verna Hurley, Assistant Manager
Willie T. Campbell, CPPB, CPPO
General Manager of Procurement
(813) 272-4374
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Gretchen Saunders
Chief Business Officer
(813) 272-4270
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5.06
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Hillsborough County Public Schools (Florida) * Mtg.#20060404_173 * Section E Item# 5.06
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