HomeMy WebLinkAboutItem 08 - Purchasing Card Services iuIICM !
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER n"
MEETING DATE: SEPTEMBER 4, 2012
SUBJECT: CONTRACT AMENDMENT FOR PURCHASING CARD
SERVICES FOR CITYWIDE USE
RECOMMENDATION:
City Council to consider approval of a contract amendment to extend the period of
performance to JPMorgan Chase Bank, N.A. for purchasing card services through an
existing interlocal cooperative purchasing agreement and an established contract with
the City of Fort Worth.
BACKGROUND:
The contract will be amended as required and in accordance with an interlocal
cooperative purchasing agreement with the City of Fort Worth as allowed by the
Interlocal Cooperation Act, Texas Government Code-, Chapter 791 and Texas Local
Government Code, Section 271.101 and 271.102 and satisfies all bidding requirements.
City of Fort Worth RFP and contract references:
• Request for Proposals 12-0106 to provide purchasing card services for the City
of Fort Worth and the Consortium; and
• Amendment of City Secretary Contract 35775 — Commercial Card Agreement to
provide for an additional five-year term with two, two-year renewal options and to
increase rebate percentages.
City staff uses the purchasing card {P-card} program to make efficient small dollar
purchases that have a maximum transaction amount of $3,000 in most cases. The City
will spend approximately $2,700,000 in FY2012 with vendors through the P-card
program.
The program's primary objectives are to achieve administrative savings associated with
an online electronic small-purchase billing/payment/management system, to consolidate
and enhance data collection and reporting, and to realize volume-based rebates.
Because of the all-electronic nature of the system, P-card transactions are less labor
intensive and therefore less expensive to process than payments by check.
The purchasing card program is checked for compliance at the user department levels
through a monitoring and reporting process during each billing cycle. The Purchasing
Division reviews compliance at a City-wide level. Audits can also be performed by the
Internal Audit Department and transactions are included in the annual audit of
expenditures completed by the external auditors.
The City of Fort Worth Purchasing Division issued a Request for Proposals (RFP) on
April 4, 2012, soliciting qualified firms to provide services related to the installation and
operation of purchasing card services. The RFP included the City's requirements for its
P-card program and evaluation factors such as system requirements, technical
qualifications, organization qualifications, financial strength and rebate structure. The
City's evaluation panel included representatives from the Financial Systems and
Treasury Divisions. The RFP also included requirements that other public entities be
allowed to access the contract via a cooperative purchasing agreement with the City. In
the past two years, the City and the current P-card provider, Chase Bank, have
developed a consortium of over 190 entities that cooperatively use the City's P-card
contract. This consortium spends approximately $300,000,000 through the program.
PRICE ANALYSIS - The program will be administered at no cost to the City. The rebate
is a variable percentage based on total annual dollars spent through the program.
AMENDED AGREEMENT TERM - Upon City Council's approval, the term for the
amended agreement will begin September 1, 2012 and expire August 31, 2017.
RENEWAL OPTIONS - This amended agreement may be renewed for up to two
additional, two-year periods at the City's option at the City's sole discretion.
Administrative Services staff recommends approval.
BS