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Approval of (1) a Purchase Order with Konica Minolta for a Color Copier/Printing System in an Amount Not-to-Exceed $64,271; and (2) a Five-Year Maintenance Agreement with Konica Minolta at the Rate of $.05 Per Page (Click Charge).
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Meeting Date: April 11, 2017
Contact Person/Dept: David Vargas/Graphic Services
Phone Number: (310) 253-6090
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: []
Commission Action Required: Yes [] No [X]
Public Notification: Konica Minolta (Adriana Manzo, 03/29/17) (E-Mail) Meetings and Agendas - City Council (04/04/17);
Department Approval: Michele Williams (03/30/17)
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RECOMMENDATION
Staff recommends the City Council approve (1) a purchase order with Konica Minolta (Konica) for a color copier/printing system in an amount not-to-exceed $64,271; and (2) a five-year maintenance agreement at the rate of $0.05/page (click charge).
BACKGROUND
Graphic Services acquired a Konica Bizhub C6500 more than eight years ago to act as the central high speed, high capacity color copier/printer for the City. At the end of its lease the City purchased it and has used it under a maintenance agreement. The unit has now passed end of life with Konica. They continue to offer a maintenance contract on the unit, however local parts availability is no longer guaranteed meaning delays in repair can be experienced while they are shipped in from other parts of the country.
Maintenance is calculated based on what is called a “click charge” which is the cost the City pays per page produced by the unit. Each 8 ½” by 11” page is one “click”. An 11” by 17” page is two “clicks”. The present Bizhub C6500 is charged $0.098 per click; approximately 10 cents a page. Under the current agreement, that maintenance cost is subject to being raised each year by a maximum of 10% and has been escalating.
Presently the C6500 can be covered under maintenance. It is expected that Konica will end support for the unit once the parts stock drops past Konica’s ability to satisfy the conditions of its maintenance agreement, as no new parts are being manufactured for this model.
The City’s fleet of black and white copier/printers are also Konica units and are maintained through a separate contract for those models. Graphic Services has had excellent responsiveness and support from Konica’s service technicians and sales representatives for over 10 years.
DISCUSSION:
Color copying and printing have become much more common and a necessary part of the City’s business environment. Maps, forms, permits, flyers, and notices, to name a few items, are routinely produced in color. Large scale reproduction/production of colored materials created by City departments is done in Graphic Services. Graphics’ color unit can produce the materials more quickly and at a cost that is lower than standard color laser printers. The unit can also do two sided and other special handling that is not available on department printers.
The click charge method of maintenance used by Konica has the following advantages:
• Toner and staples are included in the maintenance price.
• Other supplies (except paper) and replacement parts are included in the price.
• On site repair and periodic preventive maintenance checks are covered in the price.
The present unit’s usage is approximately 220,000 clicks annually and has been going upward each year.
The proposed unit, the Konica Minolta Accurio Press c2070, will add several functions:
• Expanded booklet making capabilities (50 pages with cardstock covers) (Twice as large as before; including trimming the edges)
• Finishing options that allow more capabilities (three hole punch, 100 sheet corner stapler (twice the number of sheets as before))
• Dual scan document feeder (scans both sides at once; doubling speed of scanning)
• Special paper trays will run gloss and synthetic stock paper up to 13” x19” in size.
In addition, under the new Konica maintenance agreement for the c2070 page size 11” x 17” counts as one click where under the C6500 it had been two.
Based on the trends in types of requests coming in and the expected growth in types and numbers of print jobs coming up Graphic Services recommends the c2070.
Pursuant to Culver City Municipal Code § 3.07.045.G, this purchase is exempt from bidding requirements, as competitive bid procedures have already been utilized by Los Angeles County and the City is receiving the same pricing through the County’s contract MA-15-1640247-1.
FISCAL ANALYSIS
The average annual usage for the present C6500 unit is 220,000 clicks. With current click charge being $0.098 each the City is spending approximately $21,500 annually. Konica Minolta, under the current maintenance agreement, can increase that amount per click by up to 10% per year.
The new c2070 unit will have a 5 year maintenance Agreement with a fixed click charge rate of $0.05 per click. This will reduce the annual cost of maintenance by approximately $11,000 per year; based on current usage. In essence the unit pays for itself in approximately 5 ½ years through the reduced click cost. Since usage has been trending upward and the new unit will have additional capabilities that City departments can use the payoff point will probably come sooner than five and a half years.
Graphics also has the ability to run print jobs as an 11 x 17 page with two images on the page, and then cut the sheet in half. That will lower the effective cost per page by half. This strategy can be used to produce forms and one page jobs very quickly.
The Culver City Adopted Budget for Fiscal Year 2016/2017 includes sufficient funds in the Graphic Services Division account 10124200.732120 to cover this replacement. The $64,271 covers the unit, tax, delivery, and setup.
ATTACHMENTS
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MOTION
That the City Council:
1. Approve a purchase order with Konica Minolta for a color copier/printer system in an amount not-to-exceed $64,271; and
2. Authorize the Purchasing Officer to issue such purchase order; and
3. Approve a five-year maintenance agreement with Konica Minolta at a rate of $0.05 per click; and
4. Authorize the City Attorney to review/prepare any necessary documents; and
5. Authorize the City Manager to execute such documents on behalf of the City