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HomeMy WebLinkAboutTR-16-97 ADDENDUM UNFINISHED BUSINESS THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# / � Date: MONDAY, MARCH 17, 1997 Res. #aa- 9-7 Report#: TR-16-9 7 File#: By-Law# 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. I BACKGROUND AND INFORMATION: j 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 . i 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 of potential vendors . In 1996 the expenditure for this publication only, amounted to approximately $5, 500 . 00 . PAP EPP APP ,E 1326 THGI PR WEDCN RECYCLED PAPER 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 1 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 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. 1327 ADDENDUM TO REPORT NO. : TR-16-97 PAGE 3 Option 3 Similar to Option 2, Option 3 provides for electronic advertising on the internet, through either the electronic Tender Network or the Ontario Public Buyers Internet Advertising Service . Again, the Open Bidding Service is not suggested here, as distribution of tenders remains with the Municipality. However, Option 3 provides advertising in local newspapers only those tenders valued at less than $100, 000 . 00 rather than all tenders . The savings for Option 3 is therefore greater than for Option 2, but less than for Option 1 as distribution of tenders is not included. Option 4 Option 4 provides for all tenders to be advertised electronically on the Open Bidding Service . As is contractually required, this service includes distribution of the tenders . In addition, all duplication of advertising is eliminated by not advertising in the local papers . Option 4 therefore provides the greatest potential for savings through elimination of newspaper advertising, photocopying, postage and distribution of tenders . Option 5 Option 5 provides for advertising all tenders on the internet through either the Electronic Tender Network or the Ontario Public Buyers Internet Advertising Service . The current practice for advertising in the Daily Commercial News and local newspapers would remain as is . In addition, distribution of all tenders would remain with the Municipality. There are no savings to be realized with this option. With Options 1, 3 , and 4, an alternative to newspaper advertising of each tender individually, would be to place one advertisement in the local papers at the beginning of the year, listing all known tenders throughout the year. This would assist in ensuring that 1328 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, v-�arie ara b, H.BSc . ,AMCT. , j -�' W.H. Stockwell, reasurer ( Chief Administrative Officer MM*LB*ld 1329 SCHEDULE "A" OPTION SUMMARY Optional Option 2 Option Option 4 pption 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. Advertise 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. 1330 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: SPECIAL GENERAL PURPOSE AND ADMINISTRATION COM%TWEE Date: THURSDAY, MARCH 6. 1997 Res. # Report#: TR-16-97 File #: By-Law# 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 public sector, which includes Municipalities, becomes subject to the terms and conditions of the Ontario/Quebec Procurement Agreement for the supply of goods and services. i AEC.«E M55aga'LO riErCtEO VAaEn 1331 v'.: ?_ - t't• wkr_ ti 't'p .=•�}emu .- .'r'n L" {�: - 1 :"4:::c:�:�' •qT St J' l4 r(,F�ti.'..�::. ' - ..Lr •.'.t �Y-Z.•.x•• •iti` a 3,: �'Ct,4y. ..;,L•{:: q ,T Y .•tC.. i.. REPORT. NO. . .TR-16-97' :y-� ,';'�' ir, '�-•. K;t. PAGEt 2•.v-.. .,•• • �,•w '+ '_P�:•5+. ).of� .M. t7 tI •rr _... - :•f(• .. Sint,if rF., ' �r:='%,•;.;yt,,:',�'.�''.(iT-^p'•i t%ill�j.;'..r, The basic obligations of this agreement include reciprocaiif oii= 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 than 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 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 1332 y 1 1 tti _ J.. .is",�.� !.;S�41l•'.lI t �S,J!.� 4 c(i-!i� .•�. 1-t _S 1�. .V::.`�'.Fririy�,,'���1.: •�+t,r'S:�� .. r .. .. , r-REPO RT :NO. - :� =�:. :;.:• l,.:a .-: h �s - ±c`i:•:.,:,:. t... PAGE 3 .. �.Y LAY{' L t• �.'t t i. •1+ 1' `Y — 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 Disadvantactes: • 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. ..................................:..:::::::: Advertising (Eliminate Daily $5, 500 . 00 Commercial News) Postage $1, 000. 00 Reproduction/Administration $2, 000 . 00 ITOTAL $8, 500 . 00 I i v-1" ?",3,. rJ: .' .y, _ -. _ ;,.i. ;1 ♦ tR1YVl.f ,1 '-'� if '1'441,14u.r7 UMT`�t := �: �+s �; t�-s E AGE REPORT-NO. TR-16-97 4. i . .. ,'x.`_- 1�t5•'jt- z v, t ? f4� Qt� yL.1�i •; 'r�•�\� r f / -.+a,,.;.: :kj j?��'tY"?' x` •�'.fix%3w'�i ING OF OPTION 2 - - :::.;". �_` �:,ti,.. .,.t;�•,",'_:,•r,.��,:-,,:• h �{ ELECTRONIC ADVERTIS ' ?Y 1 ALLTENDERS, 'DISTRIBU ' ' REMAINING WITH THE MUNICIPALITY, TO CO TY, LOCAL ADVERTISING 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. . MATED :>::>::>:::a::::>::::<:::>:;::-:::::::::::>:s>::»:=>::>:::::<:::>::::>:<:: ._�3VERTI�I1vG.>;• 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 0 Municipality maintains local presence through advertising locally 0 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 Estimated Advertising Savings $6, 500 .00 i 1 3'34+ I -K- Z'� -,.,qfr --';-REPOR Advant acre s'/Di s advantacfe s Same as Option 2 except: increased s.avings as there is no duplication of advertising of those tenders valued at under $100, 00o .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, notic.es could also be placed in existing publications such as the Activity Guide. $13, 000 . 00 $ 1, 500 . 00 Reproduction/Administration $ 2, 500 . 00 TOTAL $17, 000. 00 Advantages/Disa.dvantages Same as Option 1 except: 0 risk of potential bidders not seeing the advertisement 0 additional cost to suppliers increased savings to Municipality 335 •-�.'C.i-r F, :: is i.i ':'.:' X.44� .:+ yy,,``z r�i r - a t :-: .•. . .. s, ;,,� na+,A'a�� y Yr i 3^ �.ti#` •�N�?s��.. ..�: '. ... �ir2t�Fr-ck".`^ a+-;�'�::. : _ i `fr � ��Y t Y REPORT NO. . TR-16-97 r �rP1 GFs6 nn• F. yjblt.:Il w:z+ +-t. N Note, ' as the Purchasing By-law currently reads "All tenders 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 1336.