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HomeMy WebLinkAboutTR-16-97 ADDENDUM #2 l� THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: MONDAY, OCTOBER 20 , 1997 Res. # r �/ By-Law# Report#: I R 1&-9? File#: Subject: ADDENDUM2 TO REPORT TR-16-9 7, ADVERTISING OF TENDERS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT Report TR-16-97 be lifted from the table; I 2 . THAT the tenders be advertised by the Purchasing Manager, in an effective and cost efficient manner, depending on the circumstances particular to each; j 3 . THAT the Purchasing Manager be authorized to implement the most effective electronic advertising service in accordance with any standard that may be established by the Durham Purchasing Co-Operative . BACKGROUND AND COMMENT: At a meeting held on March 24 , 1997, Council tabled Report TR-16-97 (copy attached Marked Schedule "A" ) , to allow staff to report on associated costs to potential bidders . The intention of Report TR-16-97 was to provide Council with various alternatives to reduce the current expenditure for advertising of tenders, in various newspapers, while at the same time meeting the electronic advertising requirements of the Ontario/Quebec Procurement Agreement . It is staff' s opinion, that the current legislation requiring electronic advertising of goods and services over $100, 000 . 00 provides the Municipality with an opportunity to reduce the current expenditure realized for newspaper advertising. °IEV EIq° ECYCLE lJ J u THIS IS PnWFED CN NECVCIEO PAPER ADDENDUM TO REPORT TR-16-97 PAGE 2 Since January, 1997, tenders have been advertised electronically on a network provided, at no charge, to members of the Ontario Public Buyers Association. Although there is also no charge to vendors for viewing these advertisements on the network, the response received has been minimal . Consequently, newspaper advertising has continued. Depending on the provider selected, the monthly subscription cost to both the Municipality and the vendor may vary. In addition, there may be a requirement for the advertising agency to allow the service provider to also distribute the tenders . For information purposes, the Provincial Government has recently awarded a tender to Cebra Inc . , Toronto, Ontario, for the provision of electronic tender advertising. This service is currently in the test period and is intended to be fully operational at the Provincial level by approximately December 1, 1997 . Upon completion of the test period, a similar test will be offered to a selected group within the Broader Public Sector. It is anticipated that it will not be offered to the entire Broader Public Sector, including Municipalities, until possibly February or March of 1998 . The current costs associated with using Cebra are as follows : Cost to Municipality Nil Cost to Vendor 8 . 95/month for access to postings for 1st year - price decreases by $1 . 00 for 2nd and 3rd year of contract plus minimal cost to download Part of the contractual obligation with Cebra is that they distribute all tenders that are advertised on their network. This provides a cost savings for the Municipality in both time, postage, and copy charges . ADDENDUM TO REPORT TR-16-97 PAGE 3 Note, the requirement for advertising of tenders electronically, applies only to the provision of goods and services over $100, 000 . 00 . This means that the smaller vendors that the Municipality deals with will not normally be faced with having to incur charges to view or obtain tenders electronically, as they will be readily accessible from the Municipality. Since the writing of Report TR-16-97 the Purchasing Manager has had the opportunity to attend presentations on electronic advertising, held by Cebra Inc, the current service provider to the Provincial Government, and is impressed with what they have to offer. In addition, there has been much discussion held by the members of the Durham Purchasing Co-operative Group as to the advantages and disadvantages of the various electronic advertising providers . It is the general opinion of the Durham Purchasing Co-operative Group, that the greatest opportunity for both vendors as well as Public Agencies, such as Municipalities, would exist if all Public Sectors within the Durham Region were using the same mechanism for advertising electronically. This would provide less confusion for the vendors as they would know where to look on the inter net for advertised tenders . This matter will be discussed further by the members of the co-operative and decided over the next couple of months . It is therefore recommended that the Purchasing Manager continue to monitor the situation and, that once the Durham Purchasing Co- operative has come to a consensus on this issue, be authorized to select the best most effective means of electronic advertising for the Municipality of Clarington tenders, that will benefit not only the Municipality but the vendors as well . � J � ADDENDUM TO REPORT TR-16-97 PAGE 4 Until such time as an appropriate provider has been selected by the Durham Purchasing Co-operative, in order to meet the terms of the Ontario Quebec Agreement, staff will continue to advertise tenders electronically on the Ontario Public Buyers network. It is also further recommended, that the Purchasing Manager be authorized to use whatever other form of advertising, over and above the electronic requirement, will be most beneficial for any given particular requirement . This may include or not include, newspaper advertising of individual tenders, a single annual advertisement of multiple tenders, the Community Activity Guide, or any other publication that may be appropriate for the requirement . It is staff' s opinion that it would be premature to establish a blanket policy for the manner in which all tenders are to be advertised. Each tender call must be evaluated on an individual basis as to the audience that the advertisement needs to reach in order to ensure that the best overall tender submissions will be received. As electronic advertising becomes more prominent and more widely used by the vendors, newspaper advertising will not always be required and this will allow the opportunity for potential cost savings in reducing advertising costs . As identified in Report TR- 16-97, the savings can range annually anywhere from $5, 500 . 00 to $17, 000 . 00 dependant upon the manner of advertising deemed appropriate for each tender. Respec,t4ully submitted, Reviewed by, e Marano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld UJ � THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: SPECIAL GENERAL PURPOSE AND ADMINISTRATION COMM: WWEE Date: THURSDAY, MARCH 6, 1997 Res.# By-Law# Report#: TR-16-97 File #: Subject: ADVERTISING OF TENDERS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT Report TR-16-97 be received for information; and 2 . THAT Council provide direction on one of the following options: 1) Advertise and distribute tenders electronically for goods & services valued at + $100 , 000 . 00 - continue advertising tenders less than $100, 000 . 00 locally; 2) Electronic advertising of all tenders, distribution remaining with the municipality, local advertising to continue for all tenders; 3) Electronic advertising of all tenders, distribution remaining with the municipality, local advertising to continue for tenders less than $100, 000 only; 4) Electronic advertising and distribution of all tenders, local advertising to be discontinued. BACKGROUND AND COMMENT: Effective July 1, 1997, the broader Dublic sector, which includes Municipalities, becomes subject to the terms and conditions of the Ontario/Quebec Procurement Agreement for the supply of goods and services . 4 REPORT NO. : TR-16-97 PAGE 2 The basic obligations of this agreement include reciprocal non- discrimination, open and transparent advertising, as well as a dispute mechanism. This includes the mandatory requirement to advertise tenders for goods and services, valued at over $100, 000 . 00 electronically by May 1, 1997, with full implementation by January 1, 1998 . It also provides for minimum time for submitting bids and the criteria that may then be used to evaluate bids . For the information of Council, the total expenditure incurred in 1996 for advertising of tenders was approximately $13, 000 . 00 . Of this amount, approximately $6, 500 . 00 was for advertising construction projects and/or goods and services valued over $100, 000 . 00 The current practice for the advertising of tenders is to place advertisements in the local papers on a rotating basis as appropriate, depending on the commodity required and the number of known bidders . In addition, construction projects are advertised in the Daily Commercial News . The terms of the Ontario/Quebec Procurement Agreement provides the Municipality with the opportunity to reduce the tender advertising expenditure as well as increase the productivity of the Purchasing Division. The following options for meeting this requirement, are provided as follows : OPTION 1 - ADVERTISE AND DISTRIBUTE TENDERS ELECTRONICALLY FOR GOODS & SERVICES VALUED AT + $100, 000 . 00 - CONTINUE ADVERTISING TENDERS LESS THAN $100, 000 . 00 LOCALLY I Currently providers such as the Open Bidding Services and the Electronic Tender Network Inc. provide electronic advertising and bid document distribution. This type of system is currently used by the Federal Government and a number of Ministries . i i REPORT NO. : TR-16-97 PAGE 3 Advantages : • minimal or no subscription cost for the Municipality • reduction of tender advertising costs, reproduction, and postage by transferring this responsibility to the Open Bidding Service • reduced administration costs • access to a well qualified national base of over 25, 000 suppliers • the opportunity to reduce the cost of acquiring goods and services value over $100, 000 . 00 through increased competition Disadvantages : • suppliers must pay a user fee for its services - ie : $100 . 00 - $130 . 00 annually, $0 .40 per minute for usage or per page • this will be an added expense for many Municipality of Clarington vendors • may discourage local participation of vendors, as under the current terms of the agreement with the Open Bidding Service, the Municipality can no longer distribute the tender documents . All interested bidders must go through the Open Bidding Service . ESTT1` "8D ANNUA L; SX VINGS Advertising (Eliminate Daily $5, 500 . 00 Commercial News) Postage $1, 000 . 00 Reproduction/Administration $2, 000 . 00 TOTAL $8, 500 . 00 I REPORT NO. : TR-16-97 PAGE 4 OPTION 2 - ELECTRONIC ADVERTISING OF ALL TENDERS, DISTRIBUTION REMAINING WITH THE MUNICIPALITY, LOCAL ADVERTISING TO CONTINUE FOR ALL TENDERS Currently two known methods are available which are provided by the Electronic Tender Network Inc . and the Ontario Public Buyers Internet Advertising Service . While at present, both of these alternatives offer advertising to the Municipality at no charge, this may change in 1997, and a minimal annual charge may apply. E.STIMATED :ADVERTISING SAVINGS... Would eliminate need to $5, 500 . 00 advertise in Daily Commercial News . Advantages/Disadvantages Same as Option I except: • Municipality still incurs the administration cost of distributing the tenders • suppliers do not incur annual or usage fee • Municipality maintains local presence through advertising locally • duplication of advertising for those tenders valued at under $100, 000 . 00 OPTION 3 - ELECTRONIC ADVERTISING OF ALL TENDERS, DISTRIBUTION REMAINING WITH THE MUNICIPALITY, LOCAL ADVERTISING TO CONTINUE FOR TENDERS LESS THAN $100, 000 ONLY I Estimated Advertising Savings $6, 500 . 00 i i REPORT NO. : TR-16-97 PAGE 5 Advantages/Disadvantages Same as Option 2 except: • increased savings as there is no duplication of advertising of those tenders valued at under $100, 000 . 00 OPTION 4 - ELECTRONIC ADVERTISING AND DISTRIBUTION OF ALL TENDERS, LOCAL ADVERTISING TO BE DISCONTINUED. Savings would be increased by the elimination of the need to advertise any tender in the newspapers . As an alternative to advertising, one advertisement could be placed in the local papers at the beginning of the year, listing all known tenders to be issued throughout the year. In addition, notices could also be placed in existing publications such as the Activity Guide . ES ZMAT D ANNUAL SAVINGS Advertising $13 , 000 . 00 Postage $ 1, 500 . 00 Reproduction/Administration $ 2, 500 . 00 ITOTAL $17, 000 . 00 Advantages/Disadvantages Same as Option 1 except: • risk of potential bidders not seeing the advertisement • additional cost to suppliers • increased savings to Municipality UJ � REPORT NO. : TR-16-97 PAGE 6 Note, as the Purchasing By-law currently reads "All tenders shall be called by Public Advertisement, unless otherwise directed by Council and/or Committee" , and as electronic advertising is a means of public advertisement, no change to the existing by-law is necessary. Regardless of which of the above alternatives are selected, it will be necessary for the Purchasing Division to have internet access before the end of 1997 . Therefore, appropriate funding for access and training will need to be accommodated for in the 1997 overall Budget . It is anticipated that internet access for two staff members will be sufficient at this time. Respectfully submitted, Reviewed by, Marie Marano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld i I I I 1 i I i i / 9 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: MONDAY, MARCH 17, 1997 Res. # By-Law# Report#: TR-16-97 File #: Subject: ADDENDUM TO REPORT TR-16-97, ADVERTISING OF TENDERS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT Addendum to Report TR-16-97 be received for information. BACKGROUND AND INFORMATION: Report TR-16-97 provided Council with 4 options to choose from in order to meet the requirements of the Ontario/Quebec Procurement Agreement for the supply of goods and services. It is possible for the Municipality to meet the terms of the Procurement Agreement by advertising on the internet while at the same time maintaining distribution of the tenders in house and continuing the current advertising practices. Therefore, Option 5 has been added which provides for remaining with the current practice. There is however, an opportunity to reduce the total advertising expenditure for tenders as well as to increase the productivity of the Purchasing Division, while still meeting the terms of the agreement. With Options 1, 2, 3 and 4, the savings identified, include -:elimination of advertising in the Daily Commercial News, as it is perceived that advertising on the internet will reach a greater "number' ofa potential vendors. In 1996 the expenditure for this publi.cati.on only, amounted to approximately $5,500 .00. fr t 00 ^'+� s�� `try}"zr ,: iA J=re ,y S!''`+�ti`n F..r.; tEl�•y . ^ £ $ t. h t, � �'�e[era[o I )11 - TtSR V{lIIFDCN IIEGYQHIFM[q . ADDENDUM TO REPORT NO. : TR-16-97 PAGE 2 The options provided are intended to offer varying degrees of local newspaper advertising which in turn are reflected in the total savings for each option. In addition, two of the options provided include outsourcing of the distribution of the actual tender documents, which in turn results in additional savings for the Municipality in photocopying, staff time, and postage . For clarification, the attached schedule "A" compares each of the options which are summarized as follows : Option I Tenders valued at over $100, 000 . 00 would be advertised on an electronic provider called, the Open Bidding Service . This service also includes distribution of tenders, at a nominal cost to the Municipality. There is also a charge to vendors to access the tenders from the Ontario Bidding Service. By outsourcing the distribution of tenders, the Municipality therefore realizes additional savings in photocopying, staff time, and postage . Note, if this service is used, under the contract terms with the Open Bidding Service, the Municipality would not be allowed to distribute the tenders that are advertised on the service . In order to avoid duplication of advertising, only those tenders, valued at less than $100, 000 . 00 would be advertised in local papers . As tenders valued at less than $100, 000 . 00 are not advertised on the Open Bidding Service, distribution, for those tenders only, would remain with the Municipality, thereby allowing some no charge access for vendors . Option 2 i This option provides for electronic advertising of all tenders on the internet, through either the Electronic Tender Network or the Ontario Public Buyers Internet Advertising Service. Note, The Open Bidding Service is not suggested here, as Option 2 provides for the distribution of tenders to remain with the Municipality. Therefore the savings for Option 2 is less than for Option 1 as there is no savings realized for photocopying, distribution, etc . . In addition, this option also provides for continuing to advertise all tenders, regardless of the value, in the local newspapers, thus causing duplication of advertising. ADDENDUM TO REPORT NO. : TR-16-97 PAGE 4 local vendors are kept informed of Municipal tenders . In addition, notices could also be placed in existing publications such as the Activity Guide . As is indicated above, the main difference with each option is the degree of local newspaper advertising and whether or not the distribution of the tenders is outsourced. With respect to the position of other Municipalities in the Durham Region, staff are not aware of any progress in this area . As indicated in the body of this report, it is possible to meet the terms of the agreement by providing for electronic advertising only, with all other aspects for the form of advertising and distribution remaining the same . Therefore, other Municipalities may not give consideration to a change in policy or procedure. Respectfully submitted, Reviewed by, Marie Marano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld I i i � � 3 i SCHEDULE "A" OPTION SUMMARY dptaan X Opt�on� 2 Gptio Opttort 4 O46 S Advertise Electronically No Yes Yes Yes Yes ALL Tenders Advertise Electronically Yes No No No No Tenders greater than 100,00.00 only Advertise Locally ALL No Yes No No Yes Tenders Advertise Locally Tenders Yes No Yes No No less than $100,000.00 only Elimination of all Local No No No Yes No Advertising of tenders Distribution of Tenders by Yes No No Yes No outside firm Continue advertising in No No No No Yes Daily Commercial News SAVINGS $8,500.00 $5,500.00 $6,500.00 $17,000.00 $0.00 Definitions: Advertise Electronically:-means through service agency such as Electronic Network,Ontario Public Buyers Internet Advertising Service or Open Bidding Service. IAdvertise Locally: - means advertising in local newspapers. � Distribution of Tenders: - means outsourcing of internal Purchasing function of copying, mailing tenders and addendums. Note, when this service is utilized, the contract terms stipulate that the Municipality can not provide tender documents to interested bidders. Bidders must obtain tenders from the provider at a fixed fee. I i i I U Li l� i