HomeMy WebLinkAboutIR 7940 INFORMAL REPORT TO CITY COUNCIL MEMBERS . No. 7940
&A-RTE To the Mayor and Members of the City Councli August 8, 1995
VX
subject: New Five-Year Rental Contract for City Copiers
1873
In 1990, the City of Fort Worth entered into a five-year contract to rent 140 copiers
from Xerox Corp., utilizing the State of Texas Rental Agreement, to place walk-up
copiers, in city buildings. As a cost savings two years later, the number of copiers was
reduced to 121. In the 1994-95 budget year, the Reprographics Division, which
manages the walk-up copier network, reduced the cost of copies to departments as an
additional cost-savings measure. The current budget and the proposed 1905-96
department budgets are based on continuation of current copier charges.
The Xerox machines and the services have been good during the five-year contract.
But, because of the 15 million copies produced annually, more frequent machine
problems are occurring. Replacement of the current machines is required to ensure
the heavy demand can be sustained.
In preparation for the expiration of the Xerox.contract on August 31, the
Reprographics Division conducted an intensive study over the last year of the City's
walk-up copier needs. It was concluded that the present number and mix of copiers
are needed to carry out the work of the City. Recently, a comprehensive review of the
state copier rental agreement, which begins September 1,*was conducted to compare
the new prices of various copiers. The goal was to identify the best equipment
F
available on the state contract, still ensuring good service, at the least cost to the city.
Cost of copier rentals is emerging as an extremely important element in the City's
budget for coming years because of the escalating cost of paper. The City's current
paper contract with Western Paper was a year-long, firm price agreement. Even
though seven paper price increases have occurred during the current paper contact,
the City's price has not changed. A new paper contract goes into effect in November.
Western Paper Co. predicts no company will bid prices that will be in effect for any
longer than three months. Western predicts at least a 45 percent increase in paper
prices in the first quarter, with 8 to 10 percent additional increases in the second
through fourth quarters no matter which paper company gets the contract. One price
for the year will not be available from any vendor.
If the City maintains the current copier mix, the equivalent new Xerox copiers will cost
6 percent more than in the last rental contract. If copier cost rises and the cost of
paper is passed on, the per copy cost to user departments will have to increase at
least one-half cent and possibly one cent per copy. The annual increase for the Police
Department, with 30 copiers, could be $22,000 or more. Citywide the added cost to
stay with Xerox would be an estimated $330,000, whereas the contract with Canon
would result in a citywide savings of $480,000.
0'FF11,'1AL
RR 9 zw
CITY
TARY
T w RT11
wm
ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 794o
T To the Mayor and Members of the City Council August 8, 1995
Page 2 of 3
IN_X Subject: New five-Year Rental Contract for City Copiers
18T3
Since paper costs are skyrocketing, the Reprographics Division analysis focused on
reducing copiers costs.
In considering the new rental contract, three companies on the state contract were
identified with the capacity to provide the variety of machines needed by the City.
PITNEY BOWES--All but one of Pitney Bowes copiers were used machines at a
competitively-priced level. City users run 15 million copies each year and the City must
have new equipment at the beginning of a five-year contract to ensure high
productivity throughout the contract. Used equipment installed by the City in the 1980s
was removed after six months because of unreliability.
XEROX--The cost of renting new Xerox machines on -the new state contract is more
than with the current contract because Xerox has increased prices 6 percent. At the
conclusion of the current contract, the city will have paid $2,161 ,998 for rental of
Xerox machines. The cost of a new five-year contract with Xerox is $2,435,040.
Xerox's contract would have to include remanufactured machines for the two larger
copiers. The company does not offer new models of the two machines on the state ARN
contact. Small Xerox machines, used in fire stations, recreation centers and other
remote locations, cost $162 per month and do not have the features of other
manufacturers' smaller models that rent for less.
CANON--Canon placed a wide selection of machines at reasonable prices on the state
contract. The selection and pricing of small machines is more attractive than Xerox's.
Canon has a small tabletop copier that will average less than $40 per month over the
contract period on the government purchase contract. Xerox's small tabletop on
purchase contract would average $75 per month. The lower price is attractive because
38 of the current 123 copiers do not make enough copies to pay for themselves
because they must be located in the low volume, remote city facilities. For instance,
Fire Stations run as few as 250 copies per month, which means they pay one-twelfth
of the rental cost of the current machines. All Canon copiers available on the rental
contract are new and meet or exceed the capabilities of current copiers.
The five-year cost of the contract with Canon is $1,894,321, which includes a variety
of six separate models. The Canon rental cost is $540,719 less than the current
contract price. Therefore, staff recommends contracting with Canon.for the City's
copier services. By contracting with Canon, the City retains the current level or better,
in some cases,.of walk-up copier service. A Canon contract allows the City to absorb
the upcoming paper price increase while maintaining the current copy fee to City
departments.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
~
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 794_0
To the Mayor and Members of the City Council August 8, 1995
Page 3 of 3
Subject: New. Five-Year Rental Contract for City Copiers
The maintenance will be provided by a local Canon dealer, Innovative Office Systems.
Innovative is an affiliate of the Fortune 100 corporation ALCO. It has 14 sales and
services locations in the South with a 29 percent growth rate. Innovative Office
Systems has 72 service personnel in the Metroplex--1 6 work exclusively out of the
501 Jones St. location. Innovative plans to hire two additional service people
exclusively for the City. To give the City first-hand knowledge of the quality of
remanufactured machine performance, one machine recommended in the new
contract is remanufactured. If the machine performance is unacceptable, the contract
allows the City to replace them with new machines.
Because service is an important element of a copy contract, three Canon and Fort
Worth Innovative Office System customers were contacted to ask about the machines
and the service. Fort Worth Independent School District has had about 100 Canons
throughout the school system for four years. Representatives report the machines and
service are good. The Federal Aviation Administration has 65 Canon-machines that
are described as highly productive and complimented Innovative with "great" service
over the past two years. The third client, the Texas Department of Transportation, has
34 machines. The state agency likes the Canons so much that as some of the older
machines that are different brands wear out they are replaced with Canons. The DOT
purchases their machines rather than rents. Innovative service for four or five years is
rated "superb." Two city representatives visited the DOT and returned with a high
comfort level about the Canon copiers and service.
A Canon 6060 was purchased,for the City f�anager`s Office about two years ago. The
machine is productive and not prone to breaking down. The most common service
provided was cleaning the tires that pull paper through the copier. A year ago,
Innovative was awarded the annual maintenance contract on Reprographics' Canon
color copier. The service has been very good, not only are service personnel quick to
respond, but trainers have droppedin occasionally to see if staff needs additional
All figures given were based on no copiers making more copies than the manufacturer
allows within the rental price. The $2.02 million maximum on the M&C takes additional
copies and new machines, if needed, into consideration.
Bob TtMell OFFICIAL RECORD
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS