HomeMy WebLinkAboutItem 10j - Amazon Business Account for Equipment and SuppliesPurchase Order for Amazon Business Prime Account
November 19, 2024
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DATE: November 19, 2024
TO: Honorable Mayor and City Council
FROM: Henry Chen, Interim Administrative Services Director
By: Monica Li, Buyer
SUBJECT: PURCHASE ORDER WITH AMAZON FOR EQUIPMENT AND SUPPLIES
IN THE AMOUNT OF $160,000, WITH THE OPTION TO RENEW FOR
TWO (2) ADDITIONAL YEARS
CEQA: Not a Project
Recommendation: Approve
SUMMARY
The City was approached by Amazon to gauge interest in opening a Citywide Amazon
Business Prime Account (“Business Prime”), based on an analysis of the City’s spending
history. Annually, approximately $160,000 is spent on various office supplies, electronics,
and other miscellaneous purchases with Amazon. As the total annual spend with Amazon
is expected to increase, the benefits associated with a Business Prime account could be
meaningful. The City is piggybacking off an OMNIA Partners cooperative purchasing
agreement that was competitively bid by other agencies and will benefit from its pricing
or better. It is recommended that the City Council approve a Purchase Order with
Amazon for $160,000, with the option to renew for an additional two (2) years at the sole
discretion of the City Manager, without requiring any further approvals from the City
Council, provided that the pricing structure and other details remain within inflationary
norms.
DISCUSSION
Procurement Cards (“P-Cards”) issued by Wells Fargo have been utilized by departments
throughout the City for small purchases like office supplies, electronics, and
miscellaneous goods through Amazon consumer accounts. Many of those purchases are
ultimately made through Amazon and various individual Amazon accounts.
As the total annual spend with Amazon continues to grow, it is believed that a more
formalized process would help ensure the efficient processing of these transactions, while
maintaining proper controls. Tools for monitoring compliance and providing systematic
order approvals will be provided to each department through the Business Prime account.
Purchase Order for Amazon Business Prime Account
November 19, 2024
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Other benefits of the Business Prime account include quantity discounts, automated
reporting, and competitive pricing. Business Prime accounts also offer unlimited free two-
day shipping, free same-day or one-day delivery on eligible orders, as well as access to
a rebate program. The first year of the program is offered as a free trial membership to
the City. In subsequent years, a cost of $1,299 per year will be charged for the Business
Prime membership, covering up to 100 account users.
By having one master account with Business Prime, the City will be able to generate
reports to track spending, view order approvals by department, and receive extended
payment terms to pay consolidated invoices. The rebate program provides 1% back on
all spend between $100,000 and $175,000, 2% back on all spend between $175,000 and
$250,000, and 3% back on all spend greater than $250,000. Approximately, $1,600 will
be generated from the rebate program based on the City's annual spending level, which
will offset the annual Business Prime membership cost of $1,299. There will also be a
savings on individual Prime Membership accounts, which will be closed as part of the
process.
Since, the option for consolidated invoices on extended terms can be applied against a
Purchase Order through Business Prime, P-Cards will no longer be used for Amazon
purchases. This will result in a decrease in the number of P-Card transactions and a
reduction in staff time spent tracking and reconciling Amazon purchases. Through this
process, the @arcadiaca.gov email domain will also be claimed by the City, preventing
new accounts from being created with the City’s domain on Amazon. Instead, new users
will be directed to request an invitation from the main administrator of the City’s Business
Prime account.
The opportunity to streamline purchasing processes and provide cost savings is offered
to the City through the transition to an Amazon Business Prime account. By centralizing
Amazon purchases under one master account, spending can be better monitored,
administrative burdens can be reduced, and compliance across all departments can be
ensured.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the
environment.
FISCAL IMPACT
Sufficient funds for the purchase of equipment and supplies of each department are
budgeted in the FY 2024-25 Operating Budget.
Purchase Order for Amazon Business Prime Account
November 19, 2024
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RECOMMENDATION
It is recommended the City Council determine that this action is not a project under the
California Environmental Quality Act (“CEQA”); and approve a Purchase Order with
Amazon in the amount of $160,000, with the option to renew for two (2) additional years
at the sole discretion of the City Manager, without requiring any further approvals from
the City Council, provided that the pricing structure and other details remain within
inflationary norms.