HomeMy WebLinkAboutIT16-444 - Change Order - #5 - Cannon Solutions America, Inc. - Multi-function Device Purchase Order Addendum - 10/20/2020ApprovalOriginator:Department:
Date Sent:Date Required:
Authorized to Sign:
o Director or Designee o Mayor
Date of Council Approval:
Budget? o Yes o No
Grant? o Yes o No
Type:Review/Signatures/RoutingDate Received by City Attorney:Comments:
Date Routed to the Mayor’s Office:
Date Routed to the City Clerk’s Office:Agreement InformationVendor Name:Category:
Vendor Number:Sub-Category:
Project Name:
Project Details:
Agreement Amount:
Start Date:
Basis for Selection of Contractor:
Termination Date:
Local Business? o Yes o No*
*If meets requirements per KCC 3.70.100, please complete “Vendor Purchase-Local Exceptions” form on Cityspace.
Notice required prior to disclosure?
o Yes o No
Contract Number:
Agreement Routing Form
For Approvals, Signatures and Records Management
This form combines & replaces the Request for Mayor’s Signature and Contract Cover Sheet forms.
(Print on pink or cherry colored paper)
Visit Documents.KentWA.gov to obtain copies of all agreementsadccW22373_1_20
Budget Account Number:
OK to sign 10/19/2020, TW.
DATE: October 6, 2020
TO: Kent City Council
SUBJECT: Change Order with Canon Solutions America, Inc. -
Authorize
MOTION: Authorize the Mayor to sign Change Order No. 5 with Canon
Solutions America, Inc. to extend the City’s lease of multi-function devices
through December 31, 2020; amend the budget to authorize an additional
$187,415.30 for the extended lease term and an additional $207,918.92
for approved but unbudgeted contract charges under the original lease
term; and ratify all acts consistent with the authority of Change Order 5
and this motion, subject to final terms and conditions acceptable to the
Information Technology Director and City Attorney.
SUMMARY:
In 2016, the City of Kent elected to replace its aging Multi-Function Devices (MFD)
by entering a 36-month lease. The City selected MFDs through Canon Solutions
America, Inc. (“Canon”) and utilized a cooperative purchasing agreement managed
by the National Intergovernmental Purchasing Alliance, under the terms of a Master
Agreement DuPage County, Illinois originally negotiated with Canon. Under the
agreement, lease charges are paid to Canon Financial Services.
The term of the City’s 36-month lease began on 2/1/2017, the date the last device
was deployed, and ended on 1/31/2020. The contract was subsequently amended
through two prior change orders to add additional equipment. A third change order
was approved on 9/20/2018 through which Canon agreed to separate the monthly
rental rate from the monthly maintenance charges, which are assessed through a
per page charge for every image or copy made on each MFD machine ($0.0059 per
page for black and white images, and $0.39 per page for color images), known as
“click charges.” Separation of the charges was necessary for IT to accurately bill
departments for their equipment charges. The lease charges are paid to Canon
Financial Services, Canon’s wholly owned leasing company, while the maintenance
click charges are paid to Canon Solutions America, Inc.
Although the City’s original contract with Canon provided for the assessment
against the City of click charges and personal property taxes due on the lease,
these charges were not originally budgeted and presented to Council at the time
the original contract was authorized. These charges have been reconciled and
budgetary approval and ratification are now sought for these click charges and
personal property taxes. These charges are explained in more detail below. While
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formal Council approval was not sought for these charges, they can be paid from
existing budget funds.
The City has negotiated a new contract with Canon to replace the existing MFDs,
which IT anticipates being able to bring forward to Council for approval within the
next month. However, even after a new contract is approved and signed, it will take
time for IT and Canon to determine each department’s equipment needs and to
plan deployment. The current contract needs to stay in place until new MFDs are
fully deployed and available for staff use. For that reason, IT seeks current approval
from Council to extend the expired contract through 12/31/2020, to authorize an
adjustment in the total contract price to account for additional lease and click
charges incurred through 12/31/2020, and to ratify all acts consistent with the
extended Agreement. If approved by Council, the extended contract may be
terminated prior to 12/31/2020 once the City is ready to proceed under a new
contract and that new contract is approved by Council.
Below is a summary of the budgetary adjustments needed concerning the City’s
contract with Canon:
Original contract budget approved by Council: $378,298.08
·MFD Lease through 1/31/2020 - $217,445.76
o Monthly rental rate of $10,508.28
· uniFLOW (secure print software) - $128,031.84
· Sales tax - $22,850.48
Additional Equipment added and approved through prior change orders
+$30,606.31
·Change Order 2 - increase monthly rental rate to $11,094.03 for 31 months
(add’l $18,158.25)
·Change Order 3 - increase monthly rental rate to $11,635.30 for 23 months
(add’l $12,448.06)
· Change Order 4 - split lease rate from maintenance rate, no net
increase/decrease
Click charges approved by contract, but not budgeted +$207,918.92
·Click charges for the full contract term of 2/1/2017 - 1/31/2020
Personal property taxes approved by contract, but not budgeted +$5,075.51
· Personal property taxes for the full contract term of 2/1/2017 - 1/31/2020
Extend contract term through 12/31/2020: +$187,415.30
·MFD lease from 2/1/2020 thru 12/31/2020
o Monthly rental rate of $11,683.23 for 10 months - $116,832.30
o Estimated maintenance click charges from 2/1/2020 thru 12/31/2020 -
$55,000.00
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o Estimated personal property taxes from 2/1/2020 thru 12/31/2020 -
$5,583.00
o Contingency for excess click charges and personal property tax
assessments - $10,000.00
Revised contract budget estimated through 12/31/2020: $809,374.12
BUDGET IMPACT: Budgeted in IT’s 2020 Operations Budget
SUPPORTS STRATEGIC PLAN GOAL:
Innovative Government - Delivering outstanding customer service, developing leaders, and
fostering innovation.
Evolving Infrastructure - Connecting people and places through strategic investments in physical
and technological infrastructure.
Thriving City - Creating safe neighborhoods, healthy people, vibrant commercial districts, and
inviting parks and recreation.
Sustainable Services - Providing quality services through responsible financial management,
economic growth, and partnerships.
ATTACHMENTS:
1.Kent WA (City of) Maintenance Renewal CSA (PDF)
09/22/20 Committee of the Whole RECOMMENDED TO
COUNCIL BY CONSENSUS
RESULT: RECOMMENDED TO COUNCIL BY CONSENSUS
Next: 10/6/2020 7:00 PM
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City of Kent Change Order #134942-005: Monthly Maintenance Renewal
September 10, 2020
Customer:
City of Kent
220 4th Ave S
Kent, WA 98032
Vendor:
Canon Solutions America, Inc
15004 Collections Center Drive
Chicago, IL 60693
City of Kent Purchase Order Numbers :
134942 OP, 134942-002, 134942-003
On December 22, 2016, the City of Kent and Canon Solutions America, Inc. entered into a Purchase
Order Addendum wherein the City of Kent agreed to lease equipment and obtain maintenance services
through a Master Agreement Canon Solutions America, Inc. had with the County of DuPage, Illinois,
under the terms provided for in the Master Agreement, referred to as CP-002-13, except as those terms
were amended through the December 22, 2016, Purchase Order Addendum specific to the City of Kent
and Canon Solutions America, Inc.
The Master Agreement terminated by its terms on December 14, 2019. Through this change order, the
City of Kent and Canon Solutions America, Inc., however, agree to continue the lease and maintenance
services, on a month to month basis, under the same terms, conditions, and pricing as referenced on
the original purchase orders, addendums, and prior change orders agreed to between the City of Kent
and Canon Financial Services, Inc. (and CSA, as CSA is now invoicing the maintenance, as per PO 134942-
004). The maintenance cost per page remains at $.0059 for BW copies, and $.039 for Color copies for
devices listed on CSA Maintenance Contracts 2433109, 2436756, 2450488, 2450873, 2454544,
2509543, 2517880, 2520852, 256592, 2638520. s. The parties agree this per page cost will remain at
this price until December 31, 2020. If a per page cost increase is necessary, a new change order will be
required.
Cok Purchase Order BW CPC Color CPC
134942 OP $.0059 $.039
134942-002 $.0059 $.039
134942-003 $.0059 $.039
This change order will become effective on the last date written below. All acts consistent with the
authority of this change order and prior to its effective date are hereby ratified and affirmed and the
terms of the Master Agreement, the prior change orders, and this current change order shall be
deemed to have applied.
1 of 2
______________________________________
City of Kent
_______________________
Date
______________________________________
Canon Solutions America, Inc
_______________________
Date
2 of 2
MJK
9.14.20
Dana Ralph, Mayor
10/20/2020