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Home My WebLink AboutTR-16-97 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: SPECIAL GENERAL PURPOSE AND ADMINISTRATION COMNggWEE f J/, C,_,!5-E- Date: THURSDAY, MARCH 6, 1997 Res. #Ca Pal—IG -`�-T 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 fl�n iLn PAPEA 331 iHS'C"','RED M RECYCLED PAPER 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 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 . 332 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 . ESTIMATED ANNUAL SAVINGS Advertising (Eliminate Daily $5, 500 . 00 Commercial News) Postage $1, 000 . 00 Reproduction/Administration $2 , 000 . 00 TOTAL $8, 500 . 00 � 37 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. ESTIMATED ADVERTISING SAVINGS Would eliminate need to $5, 500 . 00 advertise in Daily Commercial News. Advantages/Disadvantages Same as Option 1 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 Estimated Advertising Savings F $6, 500 . 00 334 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: I MATED ANNUAL; SAVINGS: Advertising $13 , 000 . 00 Postage $ 1, 500 . 00 Reproduction/Administration $ 2, 500 . 00 TOTAL $17, 000 . 00 Advantages/Disadvantacres Same as Option 1 except: • risk of potential bidders not seeing the advertisement • additional cost to suppliers • increased savings to Municipality j - 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, 4?� M ie Marano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld 336