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HomeMy WebLinkAboutTR-62-94 V11 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File # Date: MONDAY, JULY 18, 1994 Res. # Report#:___TR_-62-94 File #: By-Law# Subject: CO-OPERATIVE PURCHASING Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-62-94 be received; 2 . THAT the concept of establishing the Durham Purchasing Co- operative be approved; and 3 . THAT Council endorse in principle the proposed "draft" Constitution (subject to revision) for the Durham Purchasing Co-operative. . 13ACKGROUND AND COMMENT: 1 .0 Co-operative Purchasing Government agencies, boards and commissions oftentimes procure common or similar commodities and services . An effective and efficient means by which to procure such commodities and services is by joint effort as a co-operative purchasing group. The advantages include savings generated to each participant as a result of volume buying while reducing duplication of effort. To date, the Municipality of Clarington has benefited by participating in various co-operative efforts such as road salt, gravel, gasoline and diesel fuel. Albeit successful, problems have occurred and may be overcome in future with a more formalized approach as a group. The time has come to expand the membership base and explore the commonality of the 22 I E4yp"N'I(&4 I I ­1 PITS RECY-D WER REPORT NO. : TR-62-94 PAGE 2 CO-OPERATIVE PURCHASING needs within the group, and administer the procurement as a group to obtain maximum value for the dollar spent while minimizing administrative costs associated with the process . Before staff commit significant time to this endeavour, it is felt that Council be advised and requested to support the concept. 2 . 0 Introduction Various public funded agencies have expressed an interest in participating as a co-operative purchasing group, and, wish to pursue the co-operative effort as the Durham Purchasing Co- operative. • Regional Municipality of Durham 0 Corporation of the Town of Pickering • Corporation of the Town of Ajax • Corporation of the Town of Whitby • Corporation of the City of Oshawa 0 Corporation of the Municipality of Clarington • Oshawa Public Utilities Commission 0 Pickering Hydro Electric Commission • Ajax Hydro • Whitby Hydro • Clarington Hydro 3. 0 Me- ership I Membership shall be open to any agency in agreement to comply with established procedures for calling and awarding tenders, quotations and proposals operating within the Regional Municipality of Durham supported by public funds . Consideration may be given to expand the boundary to provide opportunity for other agencies to participate if agreed upon by a quorum of the Durham Purchasing Co-operative. i REPORT NO. : TR-62-94 PAGE 3 CO-OPERATIVE PURCHASING 4 . 0 Operating Principles The Durham Purchasing Co-operative shall endeavour to acquire commodities and services at the lowest overall cost/best value without discrimination of favouritism consistent with the application of the highest standards of purchasing and business ethics. 5 . 0 Purpose The purpose of the Durham Purchasing Co-operative shall be to promote efficiency in the purchasing and materials management of commodities and services by: • jointly inviting tenders, quotations and/or proposals for common requirements; • encouraging standardization and improvement of specifications for common requirements; • exchanging market information; • promote closer co-operation, exchange of information and interaction among members; and • exchange professional development through joint study and evaluation of current and state-of-the-art managerial and administrative processes as related to procurement. 6 . 0 Participation Agencies shall share responsibility to act as a host for a co- operative tender, quotation and proposal call and be considered the Lead Agency and calling procedures of the Lead Agency shall govern. An agency without established calling procedures shall utilize appropriate procedures available. An agency may elect to participate in a co-operative call and in so doing, agrees to remain committed to the call and award its requirements based upon the overall lowest cost/best value, subject to the availability and approval of funds by the respective council, board or commission. i I REPORT NO. : TR-62-94 PAGE 4 CO-OPERATIVE PURCHASING 7 . 0 List of Bidders The Lead Agency shall utilize guidelines to develop a bidder's list and bidder suggestions forwarded by participating agencies . 8 . 0 Endorsement In order to continue in this direction, endorsement in principle by Council is required. This will provide the opportunity for the Municipality of Clarington to be an integral part of the framework required to continue developing the Durham Purchasing Co-operative, its "draft" Constitution and ultimately benefit from its use. Attached, marked Schedule "A" , for Council's review, is a proposed "draft" Constitution for the Durham Purchasing Co-operative. This constitution is subject to review and must be approved by all members of the Co-operative. Once all members have agreed on the terms, the Constitution will be brought back to Council for their final approval. For Council's information, a report similar to this one is being presented to the Councils or Commissions of each of the participants for approval in principal before continuing in this direction. Respectfully submitted, Reviewed by, Ma 'e Marano, H.BSc . ,AMCT. , W.H. Stockwell, Treasurer Chief Administrative Officer MM*LB*ld i I i i SCHEDULE "A" Group/Association NAME DRAFT TERMS OF REFERENCE/CONSTITUTION 1. FORMATION 1. 1 The participating Purchasing Department representatives of the agencies listed below agree to engage in a co-operative purchasing group. 2. NAME 2 . 1 The name of the group shall be The Durham Regional Co- operative Purchasing Group/Association (herein after referred to as the Group/Association) . 3. PURPOSE 3 . 1 The purpose of the Group/Association shall be to promote efficiency in the purchasing and materials management of goods and services by: 3 . 1. 1 Jointly inviting tenders, proposals and/or quotations for commonly-used items. 3 . 1. 2 Encouraging standardization of specifications for commonly used-items. 3. 1. 3 Exchanging market information. 3 . 1. 4 Promote closer co-operation, exchange of information and interaction among association members. 3 . 1.5 Encourage professional development through joint study and evaluation of state of the art managerial processes. 3 .1.6 Any other method agreed upon by majority resolution of the Group/Association. 4. MEMBERSHIP 4 . 1 Membership shall be open to any Agency operating within the Regional Municipality of Durham supported by public funds such as health care institutions, educational institutions, government agencies, boards or commission subject to approval of the Group/Association. The membership will consist of representatives from: 4. 1. 1 The Regional Municipality of Durham 4 . 1. 2 The Town of Ajax i 4. 1. 3 Ajax Hydo r Z 6 i 4. 1.4 The Municipality of Clarington 4 . 1. 5 Clarington Hydro 4. 1. 6 The Corporation of the City of Oshawa 4 . 1. 7 Oshawa Public Utilities Commission 4. 1. 8 The Town of Pickering 4 . 1. 9 Pickering Hydro 4 . 1. 10 The Corporation of the Town of Whitby 4. 1. 11 Whitby Hydro 4 .2 Each member agency shall have one vote. 4. 3 Consideration will be given at any time to expanding the membership to include representatives of other agencies from within the geographic area of Durham Region. 4 .4 The Expansion shall be agreed upon by majority resolution of the Group/Association. 5. OFFICERS 5. 1 Officers of the Group/Association shall be a Chairperson, Vice Chairperson, Recording Secretary and a Tender Coordinator, to be elected annually from among the membership; the annual election to be at a meeting in June with the newly-elected officers to take office in the following September and the duties of each officer shall be: 5. 1. 1 The Chairperson shall preside at the meetings of the group; shall act as the procedural officer for the transaction of business; shall be empowered to conduct correspondence on behalf of the Group; and may appoint such committees, etc. , as are considered necessary. i 5. 1. 2 The Vice Chairperson shall in the absence of the Chairperson, preside at the meetings, act as the procedural officer for the transaction of business; shall be empowered to conduct correspondence on behalf of the Chairperson and other duties as assigned by the Chairperson. 5. 1. 3 The recording Secretary shall, at the request of the Chairperson of the Group/Association, or at least three (3) members of the Group/Association, issue notices of the meeting, listing the place, the time and, as fully as possible, the business to be transacted; shall keep the Minutes of the meetings, shall distribute such Minutes within two (2) weeks; and shall, at the direction of the Chairperson or the Group/Association members, by resolution, attend to the correspondence. 5.1 .4 The Tender Coordinator shall be responsible to update the cooperative tender listing and to follow up with the appropriate Purchasing Coordinator to ensure that renewal tenders are meeting the renewal target dates. 6. QUORUM 6. 1 A quorum shall consist of a majority of the Member Agencies. 7. MEETING PLACE 7. 1 A permanent meeting place for the Group/Association shall not be established, it being the intent that members act as the hosts for meetings of the Group/Association, either in rotation or as convenient. 8. MEETINGS 8 . 1 Meetings of the Group/Association shall be held monthly or as often as the Group/Association members collectively shall decide. 9. PRINCIPLES 9. 1 To carry out the aims and objectives of the Group/Association it shall be understood that a major function will be co- operative purchasing as a means of reducing costs of goods and services by permitting purchasing in larger volumes and at lower unit prices; and by avoiding possible duplication of effort. 10. TERMS OF REFERENCE 10. 1 The following terms shall apply to the Group' s/Association' s programme for co-operative purchasing ventures: 10. 1. 1 Only those goods and services that lend themselves to cost reduction because of volume and/or methods will be considered; 10. 1.2 It is understood that the interests of the representative's agency will at all times govern an individual decision whether or not to take part in a particular tender prior to tender call; 10.1. 3 No one member of the Group/Association shall be responsible for all tendering and it will be expected that all major participants will take a turn in preparing outgoing tenders; 10.1.4 It is recognized that, having regard to the various policies and procedures governing the purchasing for the participating agencies, the specific policy applying to the group representative who calls the tender shall govern for such issues as tax condition, discount requests, public disclosure, delivery; 10. 1.5 The control of ordering, receiving and paying for co-operatively tendered items will remain the responsibility of the individual agency for its portion of the co-operative tender total; 10. 1. 6 Tenders will be issued, as far as possible, in a document form agreed upon by the Group/Association as to conditions, etc. , and it is understood that individual specifications, delivery points, terms of payment, etc. , may vary; 10. 1. 7 Once the Group has agreed to issue a particular tender call in accordance with the purchasing co- operative procedures it will be expected that the participating members will remain committed to the tender call. The award, however will be subject to the respective agencies' approval. 10. 1. 8 Members who do not wish to participate in a tender call will, whenever possible, so signify and ask that the Recording Secretary note the fact in the minutes; 10. 1.9 All participating members will be expected to accept, and abide by, the Tendering Committee's decision to tender acceptance. 10. 1. 10 A member agency of the Group/Association may by two- thirds (213) majority vote have their membership terminated if they fail to follow the guidelines of this document. 11. AMENDMENTS 11. 1 Any amendments to these terms of reference must be adopted by a majority of the participating members 12. CONCLUSION 12 . 1 The Association/Group membership shall at all times be recognized as being voluntary in nature and beneficial in practice for achieving supplier effectiveness and efficiency in the best interests of purchasing for the participating agencies. I 29