Meeting Date: November 14, 2007

Subject:  Purchase Authorization - Supply of Currency Packaging Materials

Recommendation

It is recommended that the Commission authorize the award of a contract to Northern Specialty Supplies Ltd. in the upset limit amount of $840,000.00 for the supply of currency packaging materials for a three (3) year period from December 14, 2007 to December 13, 2010.

Funding

Sufficient funds have been included in the 2007 and 2008 TTC Operating Budget and will be included in future Operating Budgets as required.

Background

The intent of this Request for Proposals is to retain a supply of currency packaging materials for the Revenue Operations Department.  The currency packaging materials consists of coin and token wrappers, cartons, plastic bags, seals, tape and miscellaneous coin handling materials to process TTC tokens and coin denominations including pennies to two-dollar coins inclusive.

Discussion

Eight companies were invited to submit proposals in addition to the public advertisement on the TTC Website out of which two companies submitted a proposal as detailed on the attached spreadsheet analysis.
 
A Request for Proposal (RFP) was issued for the provision of Currency Packaging Materials for the Revenue Operations Department for a three-year period, with an optional 4th and 5th year to be exercised at the Commission’s sole discretion on the basis of the same terms and conditions subject to satisfactory performance of the company and negotiation of acceptable rates.  The RFP requested firm pricing for three-years.
 
The RFP requested pricing for a total of 22 items and these items were separated into four groups to allow bidders to bid on any or all of the groups:  (a) Cartons (7 items), (b) Wrappers (8 items), (c) Miscellaneous Supplies (7 items), (d) all 22 of the above.
 
The RFP indicated that the Commission would award a contract by group, separately or in any combination to one or more companies based on the bid results. 
The RFP indicated that all coin and token wrappers must be compatible with the coin rolling machines existing in the Revenue Operations Department. It also indicated that the successful proponent must be able to provide 24-hour delivery service from the time the order is placed.  The RFP also requested samples to be submitted with the bids for testing by the Revenue Operations Department.
 
Northern Specialty Supplies Ltd. (Northern) submitted the lower price and bid on group “(d)” and provided pricing for 19 of the 22 items. They did not provide pricing for three items, which is considered acceptable.  Subsequent to a contract award, staff will investigate other sources of supply for these three items.
 
Northern submitted the samples as per the RFP, which were tested and approved. They did not state any exceptions or qualifications to the Commissions General Terms and Conditions and are considered commercially and technically compliant and are recommended for award of a contract for a three year term.
 
Brinks Canada submitted the other bid and also bid on group “(d)”.  They provided pricing for 20 of the 22 items; however their pricing was not firm as they stated that their prices were subject to the currency fluctuation +/- 3%. Brinks also did not submit the Form of Proposal and therefore, their bid was considered non-compliant and unacceptable. 
 
The recommended upset limit amount includes an allowance of 15% to cover variation in usage during the 3-year term of the contract.
 
The price comparison with the current contract for the wrappers, revealed an overall increase of 0.3% in year one and a 3.2% increase in year 2 over year 1 and a 3.3% increase in year 3 over year 2. A price comparison could not be completed for the cartons due to changes in the specifications and the addition of new items. 
 
Inquiries were made to the other invited bidders as to why they did not bid and the following responses were received: one company did not feel that they would be able to fulfill the requirements; one company indicated that they do not have the space to stock the required products for quick release; therefore they would not be able to service the TTC account well; and another company indicated that they could not bid competitively at this time.

Justification

 
The availability of currency packaging materials will allow the Revenue Operations Department to deposit receipts in a regular and timely manner as well as make packaged currency available to internal distribution channels (i.e. Collectors Division, MDP Office).

November 14, 2007
48-03
Attachments

Appendix A

Supply of Currency Packaging Materials
 
Northern Specialties Supplies Inc. / $731,389.23 (Recommended for Award)
Brinks Canada Ltd. / $969,156.18 (Non Compliant and Unacceptable)