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