TO: Board of Trustees
THROUGH: Mary DeLoretto, Interim Executive Director
FROM: Bill Greene, Chief Finance Officer
PRESENTER(S): Todd Mills, Director of Supply Chain
TITLE:
title
Contract: Requisition-to-Purchase Order Automation Software (Fairmarkit, Inc.)
end
AGENDA ITEM TYPE:
Procurement Contract/Change Order
RECOMMENDATION:
Approve award and authorize Executive Director to execute a contract and associated disbursements with Fairmarkit, Inc. for requisition to purchase order automation software in the amount of $650,000 over 5 years.
BACKGROUND:
As UTA’s fleet of Bus, Light Rail, and Commuter Rail vehicles age the volume of parts needed for repairs increases. In addition, there are significant challenges in parts sourcing across the transit industry. Long lead-times, high prices and limited competition represent a few of these challenges.
DISCUSSION:
By utilizing a requisition-to-PO software we will be able to reduce the clerical functions of the inventory buyers which will allow them to allocate more time to value-add activities, such as sourcing obsolete parts, finding new suppliers, and holding existing suppliers accountable for quality and on-time delivery. As part of Supply Chain’s continuous improvement initiative, this software will assist UTA in meeting the growing parts demand of an aging fleet with our current buyer staffing level, while developing a broader base of suppliers.
UTA utilizes an ERP system for its’ vehicle repair-parts inventory which calculates reorder points and automatically releases a requisition when inventory levels fall below the reorder point. The goal of this initiative is to select a firm to provide and implement a software system that will process daily requisitions into request for quotes (RFQ), send the RFQs to multiple suppliers (from previous purchases and/or from the firm’s database of suppliers), manage and compile the quotes from multiple bidders, provide a summary of quotes received, and process the quote into a purchase order once the buyer has made the purchase decision. UTA’s desire with this system is to reduce the current workload for routine purchases so buyers can allocate more time to the value-add activities noted above.
In October 2021 UTA conducted a competitive procurement where multiple proposals were received and evaluated for best-value to UTA. Fairmarkit, Inc. was selected as the best-value supplier for this service. There is an implementation fee of $25,000, and an annual service fee of $125,000, for a total of $150,000 the first year. Additional years are a fixed fee of $125,000, for a total contract value of $650,000. The base term of the contract is 3 years, with two 1-year options for extension.
CONTRACT SUMMARY:
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Contractor Name: |
Fairmarkit, Inc. |
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Contract Number: |
21-03500 |
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Base Contract Effective Dates: |
2/1/2022- 1/31/2025 |
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Extended Contract Dates: |
2/1/2025 - 1/31/2027 |
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Existing Contract Value: |
N/A |
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Amendment Amount: |
N/A |
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New/Total Amount Contract Value: |
$650,000 |
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Procurement Method: |
Request For Proposal |
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Funding Sources: |
Local operating funds |
ALTERNATIVES:
Add additional staff as needed to meet the growing volume of parts for UTA’s fleet.
FISCAL IMPACT:
This will be funded through the Supply Chain Department operating budget.
ATTACHMENTS:
Contract