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HomeMy WebLinkAboutItem 10j - Amazon Business Account for Equipment and SuppliesPurchase Order for Amazon Business Prime Account November 19, 2024 Page 1 of 3 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 Page 2 of 3 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 Page 3 of 3 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.