Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute an Agreement with Amazon Services, LLC (Amazon Business) to Use Amazon Business’ Online Marketplace for Purchases of Various Goods, Utilizing the OMNIA Partners Cooperative Contract, No. R-TC-17006
Staffreport
SUMMARY
This is an action to adopt a resolution that approves and authorizes the City Manager to execute all necessary documents to create an Amazon Business account, through its partnership with OMNIA Partners, as a government purchasing alliance for small item purchases.
RECOMMENDATIONS
Staff recommends the City Council approve and authorize the City Manager to enter into an agreement with Amazon Services, LLC, utilizing the OMNIA Partners Cooperative Contract, effective January 1, 2024 ending January 18, 2028, provided the Cooperative Contract is in effect.
BACKGROUND
Pursuant to purchasing ordinances, the City currently purchases small items (office supplies and equipment, paper products, etc.) through various office supply vendors, including Amazon. When purchasing from Amazon, decentralized accounts are used. Creating an Amazon Business account would allow the Finance Department to create guidelines and ensure that the purchasing ordinances, including local business preference, State-mandated regulations, e.g. SB 1383, and City Council approved thresholds are followed.
Amazon Business, through its partnership with OMNIA Partners, provides a unique government account that streamlines purchasing for local, state and federal government entities. Special benefits of this account includes category management, pricing discounts, strategic sourcing initiatives, automated reporting and free shipping.
Contracting policies allow leveraging competitively bid contracts from other public agencies as a template for the City to establish its own contract with the same terms. The current OMNIA Partners Cooperative Contract was competitively bid by Prince William County Public Schools (PWSC), VA and was awarded to Amazon Business in 2017. The initial term of the contract was awarded from January 2017 through January 2022 with the option to renew for three (3) additional two (2)-year periods (January 2028).
Analysis
Amazon Business allows government entities to leverage their partnership with OMNIA Partners, which is a leading national cooperative purchasing program. OMNIA Partners creates national cooperative contract purchasing opportunities and solutions on behalf of its members, which include all government, education and non-profit agencies nationwide. This essentially allows members to purchase on Amazon Business from 10 competitively awarded categories.
These cooperative contract purchasing opportunities present both time and cost savings for their users by consolidating numerous individually prepared solicitations to one cooperatively shared process and by the aggregation of demand from members nationwide. There are no spending minimums and a significant benefit of this account would provide the City with the most price competitive scenarios in real time for small item purchases.
Amazon use has grown and is widely popular among staff due to its convenience and competitive pricing. Amazon online purchases are projected to grow in future years. For the past 12 months, the City has spent $39,902, growing by 30% year over year.
Amazon Business Prime is also included with the Cooperative Contract. The benefits of Business Prime include unlimited two-day shipping on over 100 million eligible items, free same-day or one-day delivery on eligible orders, fast and easy purchasing, and discounted rates on goods the City procures the most.
To accommodate the continued need and growth in the City’s usage of Amazon, staff requests a not-to-exceed amount of $300,000 throughout the initial contract term. Departments will continue using their operating budgets and project funding to purchase various goods from Amazon Business.
Financial Impacts
The proposed agreement will not have any fiscal impact, as supplies are budgeted in various line items throughout the City.
ATTACHMENTS
• Attachment A - Draft Resolution Awarding Amazon Services, LLC (Amazon Business) for the Use of Online Marketplace for Purchases of Various Goods