PURPOSE

The purpose of this report is to request City Council approval to enter into a five-year lease with OCE North America, Inc. (OCE) to lease a color copier and acquire DocWorks software that will strengthen the Management Services Departments ability to provide cost effective and efficient printing services to all City Departments.

BACKGROUND

The goal of Management Services� Reprographics Center is to provide the most cost effective and efficient printing services available to each department.  In an effort to accomplish this goal a gap analysis was conducted between customer needs and service provisions. 

The lack of in-house color printing services, as well as electronic submittal of job orders were several of the customer needs identified.  Each year over 240,000 color impressions are out sourced by the various City departments resulting in a cost of approximately $60,000 per year.  Management Services believed it could provide this service in-house in a more convenient and cost effective manner with the current staff.  Given the right resources and tools, the Reprographics Center could handle approximately 95% of all City color and black and white printing needs.  This would avoid having color work sent by City Departments to outside vendors.

As such, ten months ago staff started the process of looking into the purchase and/or lease of a color copier as well as software that would enable departments to submit their jobs electronically.  Staff began this process by working with a company called Image 2000.  They were very helpful in assisting staff to identify the types of printing projects that should be coming back in-house.  This process helped staff to understand that the Reprographics Center could be saving all City Departments a significant amount of money on an annual basis if they had the right resources.  In mid-2004, Image 2000 took staff from the Reprographics Center on a tour of facilities that were under contract with them.  It was quickly discovered that their preferred equipment was OCE.

Due to the fact that Reprographics already had a long-standing, good working relationship with OCE as they are the manufacturer of the City�s black and white copy machine, staff thought it was probably in the City�s best interest to deal directly with them, rather than work through Image 2000 to purchase/lease an OCE machine.  OCE has a proven stellar maintenance track record, and they have always been extremely responsive to Reprographics needs.  As such, staff began discussions with OCE and ultimately determined that a lease was a better option as it was more cost effective and would place the City in a better position to update the technology in a timely fashion, as this is an ever changing industry. 

ANALYSIS & CONCLUSION

The most economical route is to enter into a five-year fixed price lease with OCE to obtain a color copier that has been used in their main offices for demonstration purposes.  As part of the lease agreement, they have agreed to provide the City with a three-month free trial period and modify Burbank Water and Power�s (BWP�s) existing customer service OCE printer cost as follows: reduce monthly maintenance from $1,508.17 to $1,423.75, reduce excess copy charges from $.00972 to $.00892, and increase the average volume from 77,000 to 100,000.  Further, OCE has agreed to work with the City over the next year to see if an agreement can be reached to upgrade the black and white analog copier to a digital technology which will also enhance Reprographics ability to better serve their customers.

Not only will this lease agreement help Reprographics more efficiently, effectively and economically meet the City�s printing needs, staff is also looking into an ROP program with the Burbank Unified School District (BUSD) for printing.  OCE already has a proven curriculum in place that will be of great assistance in getting this worthwhile program implemented.  In addition, staff is in discussions with the BUSD to provide their printing services, because currently they do not have a centralized printing shop and are forced on many occasions to send their print jobs outside.  Under the proposed lease with OCE, the City will not only be in a position to provide black and white services, but also color printing services to the District at a reduced rate; this is a win-win situation for both the City and the BUSD.

Lastly, the purchase of DocWorks software which is provided by OCE will not only strengthen communication but will enable City departments, and potentially the BUSD, to utilize current printing technology by submitting their jobs electronically.  Typically, document output requires a user to specify a printer, have the correct device drivers installed on their workstation, understand how to use the device-specific interface to select the appropriate features, and then successfully connect to the printer.  Such strategies can be difficult for some users.  DocWorks does not require the user to be familiar with any of the devices attached to the network or their workstation.  The employee submits the jobs to any printer and the driver provides a job ticket on which users specify all requirements of the job (color, stapling, folding, etc.).  DocWorks automatically sends the job to a desktop printer, network printer, department copy machine, or the Reprographics Center depending on the job requirements and which avenue will produce the work in the most feasible and economic manner.  In addition, it provides an instant job ticket (details cost estimate and confirmation of job receipt), the ability to access the status of a job at any time, and automatically provides a detailed invoice and  management report so Departments can assess their usage and future needs, as well as track the real cost of their printing operations.     

The City Attorney�s Office has reviewed the attached lease agreement and the Information Technology Department has reviewed all DocWorks software requirements and specifications.   

FISCAL IMPACT

To lease the OCE color copier, it will cost the City approximately $48,300 annually.  This includes the pro-rata share of the five-year fixed lease agreement, as well as all machine maintenance, software, and supplies (excluding paper) for 240,000 impressions per year.  As such, this will produce an annual savings of approximately $11,700 by avoiding the need for City Departments to send their color work to outside vendors.  For each impression made over 240,000 (annually) it will cost an additional 7.6 cents as compared to 25 cents per impressions to send outside (average vendor cost).  As departments are currently spending over $60,000 annually for outside printing services, this money is already in the budget and will be used to pay the cost of the OCE by reallocating these funds in a manner similar to that used to pay for individual department copy machines (direct non-discretionary line item). 

Further, when the City begins providing black and white and color copying services to the BUSD (a pilot project will begin with the administrative offices), not only will the City help the District by offering them a lower per page cost than they can acquire with outside vendors, the City will also receive revenues from this joint venture, which will assist in defraying the cost of the annual lease payment.

To purchase DocWorks it will require a one-time allocation of $25,000.  This includes $20,000 for the software and $5,000 for a stand alone server � no other equipment or modifications to workstations are required.  These funds are available in the 535 Fund from accumulated capital recovery for Reprographic Center machinery that will not be replaced (i.e. Offset Press purchased in 1974 for which parts are no longer made and a photo film processor purchased in 1996 which is no longer necessary as a result of current technology) and will need to be transferred to the 537 Fund. 

RECOMMENDATION

It is recommended that the five year lease with OCE be approved in the amount of $129,061.20 (60 months� times $2,151.02 � includes all maintenance and supplies except paper) plus tax and copying charges of approximately $112,437.00.

This purchase award would be made in the �best interests of the City�.  Section 9-113 (J) of the Burbank Municipal Code provides that an exception to competitive bidding may be made �When deemed necessary for customer service or otherwise in the best interests of the City�.

Respectfully submitted,

Judie Sarquiz

Attachment

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