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HomeMy WebLinkAboutItem 2f: Contract with Target Mailing Company for mailing servicesi DATE: October 2, 2012 STAFF REPORT Administrative Services Department TO: Mayor and City Council FROM: Hue Quach, Administrative Services Director By: Shannon Huang, Financial Services Manager reasurer <'�., SUBJECT: AUTHORIZE AND DIRECT THE CITY MANAGER TO EXECUTE A CONTRACT WITH TARGET MAILING COMPANY FOR MAILING SERVICES, IN AN AMOUNT NOT TO EXCEED $88,000 FOR THE PERIOD OF NOVEMBER 2012, THROUGH JUNE 2013, WITH THE OPTION OF THREE (3) ONE -YEAR EXTENSIONS IN AN AMOUNT NOT TO EXCEED $132,000 ANNUALLY Recommendation: Approve Al IMMARY In August 2012, a request for bid was solicited from fifteen firms for mailing service contract but only two responses were received from Licher Direct Mail and Target Mailing Company. Based on their lowest bid proposal and satisfactory reference checks, it is recommended that the City award the mailing service contract to Target Mailing Company for the period of November 2012, through June 2013, with three (3) one -year extension options. DISCUSSION The City has outgoing mail ranging from 400 to 700 pieces daily that requires folding, stuffing of inserts, and sealing. The mail service vendor picks up, meters, and delivers the mail to the Post.Office. Additionally, on a monthly basis, the mail service vendor also folds, inserts, and meters approximately 8,000 water bills. The City's current mail service vendor, Monrovia Mailing Services, has not met all the conditions and terms required within the contract. An essential component of the mailing service is to pick up and meter all City mail, and take it to the United States Post Office on the same day it is picked up. There have been several occasions that mailings were not delivered to the Post Office until a few days after pickup. Those delays have resulted in residents not receiving timely City materials, such as water bills and City Council agenda packets. MAILING SERVICES CONTRACT October 2, 2012 Page 2of2 Due to the untimely service and Monrovia Mailing's inability to correct the problem, a bid request was mailed to fifteen firms that provide similar mailing services last month. Unfortunately, only two proposals were submitted in response to the bid request. Those bids are noted in the table below. The low response rate may be attributable to the tight daily pick up schedule which requires a 3:00 p.m. pickup, then have those mail metered, and delivered before the Post Office closes. This requirement seems to only be cost effective and profitable for vendors that are located within close proximity of City Hall. Vendors Annual costs based on 600 mail /daily Tar et Mailing Company $126,340 Licher Direct Mail $145,380 Based on an average of 600 daily mail and 8,000 water bills monthly, the bid analysis determined that Target Mailing Company has provided the lowest bid proposal. Target Mailing Company's contract is not expected to exceed the estimated City mailing service budget of $132,000 annually. Although the contract amount is substantial, the estimated "true" service cost is $10,000 with the balance of approximately $122,000 in postage costs, which is a pass through expense from the Post Office. Reference calls were made to the City of Sierra Madre and Post Alarm Company with both organizations providing positive feedbacks for Target Mailing Company. FISCAL IMPACT The total mailing service contract, including postage, shall not exceed $88,000 annually for the period of November 2012, through June 2013. Funds have been included in the Fiscal Year 2012 -13 Operating Budget for this purpose. RECOMMENDATION It is recommended the City Council authorize and direct the City Manager to execute a contract with Target Mailing Company for mailing services, in an amount not to exceed $88,000 for the period of November 2012, through June 2013, with the option of three (3) one -year extensions in an amount not to exceed $132,000 annually. Approved: om�nic Lazz retto City Manager