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RTC#03-161

May 6, 2003

SUBJECT:

Award of Contract for Used Modular Furniture (F0204-90) and Approval of Budget Modification No. 43 (RTC#03-161)

REPORT IN BRIEF

Approval is requested for the award of a contract to N2 Change, Inc., of Mountain View in an amount not to exceed $110,280 for used modular furniture for the Department of Parks and Recreation Facilities Management Division and Budget Modification No. 43. The Department will realize cost savings of $234,471, when compared to the cost of purchasing new modular furniture.

BACKGROUND

Currently, the City has standardized on two types of modular furniture, both of which are manufactured by Haworth, Inc., of Holland, Michigan. Historically, the City has purchased new furniture, as required for modular furniture replacement, through a U.S. Communities Master Agreement.

Last year, prompted by the Space Optimization Study and the City’s acquisition of property at 505 West Olive Avenue, staff sought to satisfy the City’s growing needs for modular furniture at the least cost and, for the first time, considered the purchase of used furniture. Staff located a large quantity of used Haworth modular furniture in excellent condition at a very favorable price; and on April 16, 2002, Council awarded a contract (RTC 02-129) in the amount of $126,542 to Northstar Acquisitions, a liquidator in Austin, Texas. As the result of this purchase, the City saved more than $450,000 (the difference between the cost of used versus new furniture). As the Short Term Space Implementation Project has progressed, much of this modular furniture has now been installed.

DISCUSSION

At this time, the Facilities Management Division maintains approximately 312 modular workstations throughout the City. Staff anticipates a need for an additional 100 workstations over the next 3-4 years due to the Short-Term Space Project, an already existing need in the Employment Development Department, and normal ongoing furniture replacement requirements.

Once again, staff has become aware of an opportunity to purchase 105 used Haworth modular workstations. Staff has inspected this furniture which is currently available from N2 Change, Inc., and has found that, not only is the product viable and clean, it is in excellent condition and less than two years old.

Staff has negotiated a purchase price of $110,280 for all 105 workstations and recommends the award of a contract to N2 Change in this amount. It is estimated that approximately 40 percent of these workstations will be needed to complete the Short Term Space Implementation Project, some can be used in the new Senior Center, and the remaining units could be held for future needs.

Section 2.08.070(b) of the Sunnyvale Municipal Code exempts from competitive bidding situations where the solicitation of bids or proposals would for any reason be impractical, unavailing or impossible. In this case, it would be impossible to bid due to the scarcity of good quality used Haworth furniture in the marketplace.

Fiscal Impact

Total cost of the 105 workstations, including sales tax and delivery costs, will be $110,280. This represents a savings of $234,471 over the cost of the workstations, if purchased new. Funds are available in Capital Project 823570 - Short-Term Office Space Solution and the Sunnyvale Senior Center Construction project. Due to the cost savings realized by purchasing used furniture, staff recommends reducing the Public Facilities (City) Space Issues budget by $199,477, and the Sunnyvale Senior Center Construction project by $35,000.

Staff recommends that the $234,471 savings be returned to the General Fund, as follows:

BUDGET MODIFICATION NO. 43
FISCAL YEAR 2002/2003

Current

 

Increase (Decrease)

 

Revised

 

Capital Projects Fund /
General Fund Assets Sub Fund

Expenditures:

821370 Sunnyvale Senior Center Construction

General Fund

Expenditures:

 $10,652,047

 

 ($35,000)

 

 $10,617,047

Public Facilities (City) Space Issues

$963,674

($199,477)

$764,197

Reserves:

20 Year RAP

$42,128,937

$234,471

$42,363,408

RECOMMENDATION

It is recommended that Council approve Budget Modification No. 43 and award a contract in the amount of $110,280 to N2 Change, Inc., for the purchase of used Haworth modular workstations and authorize the Purchasing Officer to issue a Purchase Order to that effect.

Prepared by:
Elaine Wesely
Purchasing Officer

Reviewed by:
Mary Bradley
Director of Finance

Robert Walker
Director of Parks & Recreation

Approved by:
Robert S. LaSala
City Manager

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