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SR-6-E (127) PURCH:PW:DH:br:f:\finance\purch\stfrpts\srbd2537 6E - Council Meeting: August 8, 1995 Santa Monica, CA AUG 0 8 1995 TO Mayor and City Council FROM: City Staff SUBJECT: Recommendation to ReJect Bids to Furn~sh and Del~ver M~scellaneous Recycled Paper, Bid #2537 and Adopt a Resolutlon Authorizing Clty Manager to Negotiate and Execute a Contract for the Purchase of Miscellaneous Recycled Paper Introduction ThlS report concerns reJectlon of bids to furnish and deliver m~scellaneous recycled paper at spec~fied unit pr~ces, plus applicable sales tax. Backqround In response to published Notices Invlting Bids (published May 25 and 26, 1995 ) to furnish and deliver m~scellaneous recycled paper 1n accordance with Clty specifications, bids were received and publlcly opened and read on June 12, 1995. Proposal forms were malled to fifteen vendors and notices were advertised in accordance with City Charter and Municipal Code provisions. Nine proposals were rece1ved. City specifications requested price protection for a period of one year Due to the current volatile paper market, none of the nlne bldders offered guaranteed prlclng beyond a s~xty (60) day period. Most offered only a thlrty (30) day prlce guarantee, after Wh1Ch time prevailing prlces would apply at time of shipment. - 1 - 6E - AUG 0 8 1995 Reason for Volatile Paper Market In the late 1980's and early 1990's the paper industry was experiencing a severe slump 1n orders due to the depressed economy. ThlS resulted in the closure of a number of major paper plants across the country. As the economy lmproved in 1994, the demand for paper products of all types began to rise. Coupled w~th grow~ng demand overseas, particularly ln China and Latin Amer1ca, the remaining paper manufacturers are running at full capaclty, but the demand lS exceeding the supply. As a result, paper manufacturers are allocatlng paper products to thelr dlstrlbutors and are not willing to enter into any long-term agreements for pricing untll th1S situation stab1llzes. Relief from the upward trend ln prlclng is expected to occur in late 1996 or early 1997 as new equipment and mllls become operatlonal. Budqet/Financial Impact This recommendat1on does not have a budget or financial impact. Recommendation It is recommended that all blds be rejected as non-responsive and that the attached resolution be adopted allow~ng the City Manager to negotlate prices for the purchase of miscellaneous recycled on the open market. Prepared By: Pam Wortham, Purchasing Agent Diane Howell, Buyer 8/1/95 - 2 - - . PW.DH:br:f;\purch\stfrpts\res2537 1 Clty Councll Meeting: 8/8/95 Santa Monlca, Californla RESOLUTION NO. 8928 (CCS) (Clty Councl1 Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA TO AUTHORIZE THE CITY MANAGER TO NEGOTIATE AND EXECUTE A CONTRACT FOR THE PURCHASE OF MISCELLANEOUS RECYCLED PAPER WtIEREAS, the Clty sent out Notices Invltlng Bids to furnish and dellver ffilscellaneous recycled paper and to guarantee prices for one year; WHEREAS, nlne responses were received, but all were non- respons~ve Slnce the prlces were only guaranteed for short periods of tlme; WHEREAS, staff has determined that the formal bldding procedures are not conduclve to the flexibillty needed to obtaln the lowest poss~ble pr~ce for mlscellaneous recycled paper because of the rapld change In market prices for the mlscellaneous recycled paper, WHEREAS, an open market purchase will permit the City to act ln a timely manner to purchase miscellaneous recycled paper at an acceptable cost and perm~ t the City to obtain the most envlronmentally favorable products which meet City specificatlonsi and -1- "- - ~- ~ --- -- - -- -~~ - . l Adopted and approved thIS 8th of August 1995 A'wc f~~ I (.., Mayor Pro Tempore I hereby certify that the foregomg ResolutIon 8928 (CCS) was (iuly adopted at a meetmg of the City Council held on the 8th of August, 1995 by the followmg vote Ayes Council members Abdo, Ebner, Genser, Greenberg, Holbrook, O'Connor Noes Council members None Abstam CounCIl members None Absent CounCil members Rosenstelll ATTEST I&M~ CIty Clerk