SR 01-24-2017 3E
Ci ty Council
Report
City Council Meeting : January 24, 2017
Agenda Item: 3.E
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To: Mayor and City Council
From: Susan Cline, Director , Public Works, Office of Sustainability & the
Environment
Andy Agle, Director, Housing and Economic Development
Subject: Purchase of Reusable Bags for the Office of Sustainability and the
Environmen t and Farmers Market
Recommended Action
Staff recommends that the City Council authorize the Purchasing Services Manager to
issue a purchase order with Special Operations Technologies , a California -based
company, for the purchase of City -branded reusable bags , hand -made in Los Angeles
from scrap material by veterans. This recommended award is made as an exception to
the competitive bidding process pursuant to Section 2.24.080(d ) and is for a total
amount not to exceed $199 ,000 with future year funding cont ingent on Council budget
approval.
Executive Summary
The Office of Sustainability and the Environment (OSE) and the Farmers Market have
both been purchasing reusable shopping bags from Special Operations Technologies
(S.O. Tech) since 2009. The City has reached its purchasing threshold with S.O. Tech
and seeks Council approval to continue doin g business with this unique company on a
sole source basis . The City purchases branded collateral for two reasons: to meet the
goals of the single -use plasti c carry out bag ban ordinance by continuing to reduce the
number of single -use bags utilized throughout Santa Monica on a daily basis and for
broader distribution at community events . OSE and the Farmers Market recommend
that the City Council authorize the Purcha sing Services Manager to issue a purchase
order for the purchase of assorted reusable bags with S.O. Tech for a not to exceed
amount of $199 ,000 over the next five years.
Background
On February 8, 2011 (Attachment A), Council approved an ordinance banning the use
of single -use plastic carryout bags in retail establishments and regulating the use of
paper carryout bags. The intent of the ordinance was to reduce the environmental
impacts related to single -use plastic and paper carryout bags, and to promote a shift
toward the use of reusable bags. At this time, concerns were raised about the durability
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of inexpensive reusable bags, constructed of poor quality materials . Additional
concerns were raised that imported reusable bags could be contaminated with h eavy
metals or other toxic contaminants. To address all of these concerns, S.O. Tech was
selected as the City’s reusable bag vendor.
S.O. Tech employs military veterans through The Department of Veterans Affairs West
Los Angeles campus to hand -make all o f its reusable bags. The City began purchasing
reusable bags from S.O. Tech on a sole source basis in December 2009 upon approval
from the City Manager. S.O Tech was selected due to the considerable environmental,
social and local economic benefits of its operation. It provid es local jobs, thus
addressing citizens’ concern s abo ut loss of jobs from overseas production. Its bags are
all hand -made from scrap material that otherwise would have gone to a landfill . Finally,
S.O. Tech tests its bags f or heavy metal content free of charge to the City, which
reduces the overall cost of the bags because outside testing does not need to be
procured. In addition, S.O. Tech provides a rehabilitation program to the local homeless
veterans who make these bags. The pr ogram provides job training allowing veterans to
re -enter the workforce , and has helped several veterans out of homelessness.
Procurement of reusable bags from S.O. Tech allows the City to provide reusable bags
that are consistent with the goals establish ed in the Sustainable City Plan.
Once the Carryout Bag Ordinance went into effect in 2011 , the City pledged to distribute
roughly 25,000 reusable bags, free of charge, to the public. This was done to support
the goal of the ordinance and encourage the p ublic to use high -quality reusable bags
rather than plastic or paper alternatives.
Discussion
To date the City has spent $200,268 to purchase roughly 40 ,000 reusable bags from
S.O. Tech since 2009. T he Farmers Market sells the bags to its customers at cost and
thereby recovers the purchase price of its bags. OSE offers the ba gs as giveaways in
support of the ban on plastic bags, and distributes them to residents at various meetings
and events throughout the year for use as alternatives to single use pa per and plastic
grocery bags . Attachment B provides a comprehensive list of over 100 events where
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reusable bags were given away during the course of four years.
Although the single -use bag ban has been in effect for more than five years, reusable
bags a re far from prevalent in the marketplace. Between 3.5 and 3.8 million paper bags
are still sold in Santa Monica every year. In addition, heavy -weight plastic carry out
bags are being offered for free at a growing number of establishments. Reusable bags
r emain in high demand as giveaways at events and customers continue to purchase
them at Farmers Markets. Although the culture has shifted, work is on -going to ensure
that customers select the environmental friendly alternative on an on -going basis.
OSE pr ovides these reusable bags free of charge because they are an effective
marketing tool and help meet the goals of the single -use carryout bag ban ordinance .
Branded collateral is given away at numerous City events each year . Reusable bags
are well -receiv ed giveaways because they are durable and useful. According to a 2016
Advertising Specialties Impressions study, 77% of people said that they would keep a
promotional item if it were useful t o them. Additionally, a 2009 study by Promotional
Products Asso ciation International concluded that 83% of those surveyed liked receiving
promotional products, 48% would like to receive them more often, and 69% typically
kept them. This same study also showed that logo bags offered a far better return on
investment t han most marketing tools. The cost -per -impression , which is the typical
amount of money spent on a campaign compared to the number of times a customer
sees the advertisement, is $0.002 for a logo bag . By comparison, the cost -per -
impression of a TV ad (be tween $0.007 and $0.019) and newspaper ad ($0.033) is
significantly higher.
Giving out multiple promotional items at a given event is not uncommon an d a reusable
bag is immediately useful for attendees . OSE’s Water Conservation Unit uses reusable
bags to put all of its water saving fixtures and outreach materials in one convenient
promotional package for residential and commercial customers.
S.O. Tech’s offers a variety of bags, but their standard shopping bag is priced at $4.50
per bag for a minimum ord er of 500 bags. A search for similar shopping bags made of
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comparable materials in similar quantities produces a price range of $4.06 to $4.71 per
bag, confirming that S.O. Tech’s prices fall within that range. While less expensive
bags are available, th e environmental, social, and local economic benefi ts of partnering
with S.O. Tech align directly with the goals of the Sustainable City Plan.
Over the next five years, the Farmers Market anticipates purchasing 2,800 r egular
shopping bags and roughly 600 he avy -duty sho pping bags ($14.25 per bag) from S.O.
Tech . The se purchases would total approximately $24,000. OSE anticipates ordering
approximately 5 ,00 0 shopping bags per year over the next five years , totaling roughly
$35,000 per year and a potential tot al cost of $175 ,000. Therefore, the combined
request for budget authority over the next five years is a total of $199 ,000.
Vendor Selection
Staff recommends Special Operations Technologies to furnish and deliver reusable
shopping bags as an exception to the competitive process per SMMC Section
2.24.080(d). The bags produced by S.O. Tech. are unique and there is no other similar
supplier, due to the fact that they are made locally, by veterans, from repurposed
materials, and are free from heavy metals.
F inancial Impacts and Budget Actions
The purchase order to be awarded to S.O. Tech is for an amount not to exceed
$199 ,000. Funds of $7,400 are available in the FY 2016 -17 budget in the Housing and
Economic Development Department. The purchase order will be charged to account
01268 2 .577550. Additionally, funds of $35 ,000 are available in the FY 2016 -17 budget
in the Public Works Department. The purchase order will be charged to account
014261.555850. Future year funding is contingent on Council budget approv al.
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Prepared By: Kevin Purcell, Principal Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. February 8, 2011 Item 7 -C
B. Reusable Bag Giveaway Events
C. Oaks Form