HomeMy WebLinkAboutContract 44490 (2).�, _ �..�,
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Inci•emental Incentive Agreement
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The City of Forth Worth, Texas
And
W.W. Grainger, Inc.
This Increinental Incentive Agreement (the "Agreement") is made and entered into this
9th day of October, 2012 ("Effective Date") by and between The City of Forth Worth,
Texas (hereinafter referced to as the "Customer") and W.W. Grainger, Inc. an Illinois
Corporation with corporate headquartecs at 100 Grainger Parkway Lalce Forest, II 60045
(hereinafter referred to as "Grainger").
WITNESSETH:
WHEREAS, The State of Teaas and Grainger entered into that Conh�act 2-539030,
effective as of April 19, 2011 foc Maintenance, Repair and Operating Consumables,
which, including all exhibits and existing amendments is hereafter referred to as the
"TXMAS Agreement"; and
WHEREAS, Customer affiliated under the TXMAS Agreement on June 13, 20ll for all
Grainger purchases by Customer; and
WHEREAS, the undersigned representative of the Customer is authorized, on behalf of
that Customer, to contract with Grainger on the matters set forth herein; and
WHEREAS, the Customer has requested and subject to the terms and conditions herein,
Grainger hereby agrees to offer the within incentive program to Customer for its
purchases under the TXMAS Agreement;
NOW THEREFORE, in consideration of the mutual covenants, benefits and promises
herein stated and in conjunction with the TXMAS Agreement, the parties hereto agree to
the following teims and conditions.
1. INCREMENTAL GROWTH INCENTIVE. Effective for purchases made by
the Customer under the TXMAS Agreetnent during each successive March 1 st-
Febraury 28th period, beginning with March 1, 2012, and ending Februaiy 28,
2014, Grainget• will provide the Customer with an Incremental Growth Incentive.
For each such twelve �nonth period, Graingei• will calculate the Customer's total
put•chases under the TXMAS Agreement during the previous 12 months
("Incentive Baseline") and provide an incentive payment equal to 5% on the
Customer's incremental pur•chases in the cucrent annual pec•iod over the Incentive
Baseline. Total pucchases shall exclude returns, credits and othei• adjustments.
The Incentive Baseline to be applied to such purchases made from March 1, 2012-
Februaiy 28, 2013 will be $792,426, which amount is eQual to such purchases
calculated fi•om March 1, 201 1 through February 29, 2012.
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For eYample, if the Customer purchased $1,000,000 in year 1 and $1,800,000 in
year 2, Grainger would pay the Custoiner a 5% incentive on the $800,000 growth
for an incentive payment of $40,000. The two incentive payments due under• this
Agc•eeinent will be inade on or before Api•il 15, 2013 and April 15, 2014,
respectively. The Incentive Baseline will be reset each annual period as set forth
above and payment of the Incremental Growth Incentive will be based on the
Customer's incremental purchases over the prior year's purchases.
2. NOTICES. All notices, requests, demands and other communications under
this Agreement shall be given in writing. Such notices shall be deemed to have
been given when delivei•ed in pei•son or three (3) business days after being sent
via certified mail or upon deliveiy if sent via reputable overnight delivery service
and addressed to the appropi•iate party at its mailing address set forth below:
To Custo�ner: City of Fort Worth, Texas
To Grainger:
Purchasing Manger
1000 Throcicmorton Street
Fort Worth, Texas 76102
W.W. Grainger, Inc.
100 Grainger Pai•lcway
Lalce Forest, IL 60045
Attn: General Counsel
3. CHANGES. This Incremental Incentive Agreement shall only be amended by
express written agreement of Customer and Grainger.
IN WITNESS WHEREOF, the Customer and Grainger have executed this
Agreeinent as of the Effective Date.
W.W. Grainger, Inc.
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By:
Name: Tim Sweat
Title: District Sales Manager
Date: October 9, 2012
APP�OVED AS TO
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�� CITY ATTORNEY
l�EGA�ITY:
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City of Fort Worth
N me: usan Alanis
Title: Assistant City Manager
Date: October 9, 2012
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M&C Review
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Page 1 of 2
Officiai site of the City of �oft 4Varth, Texas
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COUNCIL ACTION: Approved on 10/9/2012
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DATE:
CODE:
10/9/2012
�
REFERENCE NO.: **P-11440
TYPE:
CONSENT
LOG NAME:
�. _'1�_1:�I�C�
13P12-0225 MRO
SUPPLIES EJH
NO
SUBJECT: Authorize Purchase Agreement with W.W. Grainger, Incorporated for Maintenance, Repair
and Operating Supplies for all City Departments Using a Cooperative Contract in the
Amount of $1,000,000.00 for the First Year and Authorize Execution of an Incremental
Incentive Agreement (ALL COUNCIL DISTRICTS)
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RECOMMENDATION:
It is recommended that the City Council
1. Authorize a purchase Agreement for maintenance, repair and operating supplies from W.W.
Grainger, Incorporated using the Texas Multiple Award Schedule (TXMAS) Cooperative Contract
Number 2-539030 for all City departments in the amount of $1,000,000.00 for the first year; and
2. Authorize the execution of an Incremental Incentive Agreement between the City of Fort Worth and
W.W. Grainger, Incorporated.
DISCUSSION:
This citywide purchasing Agreement will be used by various departments to repair city owned
facilities (buildings, pools, parks, roads, etc.) and equipment (HVAC, plumbing, mowers, etc.) W.W.
Grainger, Incorporated (Grainger) provides industrial maintenance, repair and operating supplies
such as door hardware, electric motors, electric and gasoline powered saws, pumps, light bulbs,
drills, bearings, seals, hydraulic and pneumatic components, safety equipment, fittings and other
industrial supplies.
TXMAS Cooperative Contract No. 2-539030 covers all items and services provided by Grainger. The
pricing consists of deep, discounted core lists supplemented with specific manufacturer discounts and
general discounts for product catalog categories. No guarantee was made that a specific amount of
goods or services would be purchased. During the previous 12 months the City spent $792,426.00 on
specialized industrial maintenance, repair, operating supplies/equipment and services.
PRICE ANALYSIS - The TXMAS contract pricing is based on the Western States Contracting
Alliance (WSCA) current Agreement which provides discounts ranging from 10 to 88 percent by
product category. Additional discounts of 10 percent will be offered on some product lines.
The Incremental Incentive Agreement will provide a five percent incentive paymenUrebate to the City
on expenditures exceeding the incentive baseline calculated each year from March 1 through
February 28. The projected net overall effect will be an additional one percent savings per year. Staff
has reviewed contract pricing and determined it to be fair and reasonable.
COOPERATIVE PURCHASE - State law provides that a local government purchasing an item under
a Cooperative Purchasing Agreement satisfies state laws requiring that the local government seek
competitive bids for purchase of the item. TXMAS Cooperative Contracts have been competitively bid
to increase and simplify the purchasing power of local government entities.
http://apps.cfwnet.org/council�acket/mc review.asp?ID=16880&councildate=l0/9/2012 5/31/2013
M&C F eview
�M/WBE - A waiver of the goal for MBE/SBE subcontracting requirements was requested by the
Purchasing Division and approved by the M/WBE Office because the purchase of goods is from
sources where subcontracting or supplier opportunities are negligible.
AGREEMENT TERM - Upon the City Council's approval, this Agreement will begin on October 10,
2012 and expire October 9, 2013.
ADMINISTRATIVE CHANGE ORDERS - An Administrative Change Order or increase may be made
by the City Manager in the amount of $50,000.00 and does not require specific City Council approval
as long as sufficient funds have been appropriated.
RENEWAL OPTIONS - The Purchase Agreement may be renewed for up to four additional one-year
terms at the City's option and in accordance with terms of the TXMAS Contract.This action does not
require specific City Council approval provided that the City Council has appropriated sufficient funds
to satisfy the City's obligations during the renewal term.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budgets, as appropriated, of the participating City departments.
BQN\12-0225\EJH
TO Fund/Account/Centers
FROM Fund/Account/Centers
Submitted for City Manager's Office bv:
Originating Department Head:
Additional Information Contact:
ATTACHMENTS
Susan Alanis (8180)
Lena Ellis (8517)
Jack Dale (8357)
E.J. Harbin (8356)
http://apps.cfwnet.org/council�ackedmc review.asp?ID=16880&councildate=l0/9/2012
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