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Vendor access debated in purchasing program

Posted on April 4, 2019 by Taber Times

By Trevor Busch
Taber Times

Town participation in a rural capital purchasing program would spark council debate over local vendor access to the municipality’s future equipment purchases.

Following lengthy discussion at the March 11 meeting, council voted 4-2 to approve the purchase of a 2019 Case-IH Maxxum 135 MC tractor from Rocky Mountain Equipment for $137,000 as per the guidelines established through the RMA Capital Purchasing Program. Councillors Louie Tams and Joe Strojwas opposed the motion.

Recently re-branded as the Rural Municipalities of Alberta, the RMA is the former Alberta Association of Municipal Districts and Counties (AAMDC).

“This seems like an excellent program to me,” said Coun. Garth Bekkering prior to the vote. “My question would be though are all of the local dealers eligible under this capital procurement program? For example the John Deere dealer in Taber. Was it eligible to bid on this particular product?”

According to administration, the RMA Capital Purchasing Program allows the town (as an RMA member) to take advantage of savings through national cooperative contract purchasing, established by following competitive tendering requirements, and “saving the town’s time and expense of duplicating the process.” RMA contracts are competitively solicited through the RFP process and advertised on Alberta Purchasing Connection (APC), resulting in “considerable volume discounts.”

“All vendors are actually eligible to participate in the trade program,” said procurement manager Louise Parsons. “They may not have been successful in terms of the capital purchasing program for this particular tender… (but) they would have had an opportunity to bid, absolutely.”

Tams would dispute this characterization of the program on the part of Parsons.

“That’s not how that program works… it’s not that all vendors are eligible. All vendors have the opportunity to join that program and to give a prescribed discount rate. That’s how that program works… not all venders choose to join that program, not all venders choose to participate in the program.”

Tams inquired if all local vendors had been informed at the time of the town’s move to the RMA’s Capital Purchase Program, and if local vendors are contacted prior to the municipality deciding on a purchase.

“My concern is that local venders are not actually informed that we’re doing this.”

Parsons indicated that the town did not contact local vendors prior to issuing the RFP.

To utilize the RMA purchase program, the town is required to advertise a Notice of Planned Procurement (NPP) on the APC noting the RMA program, and this was posted on Feb. 14, 2019. Upon posting the NPP, the town contacts “the vendor of our choice directly informing them of our membership with RMA and the desire to participate in the program.”

“I struggle with this as well, because we’ve got one bid, one quote here,” said Strojwas. “It may very well be a good quote. But what if I’m John Deere and I’m sitting overstocked on a bunch of these tractors? They might cut you a better deal. Is that putting them out of the ring then? Are we taking a price when there may be a better price out there? I’m just uncomfortable with just one bid. It’s not a case of toilet paper we’re buying here, it’s a tractor. I’m not totally comfortable with this process. I think it cuts out local dealerships from the bidding process.”

Council had approved the purchase of a tractor through the 2018 capital budget process, to be used primarily for mowing large drainage ditches and flat areas. The town currently owns implements and attachments for this piece of equipment. The purchase was allocated $140,000 in the 2019 capital budget.

“This was actually originally council’s direction for us to start using this program,” said CAO Cory Armfelt. “And so we have started utilizing this program, and brought you this as per council’s direction.”

Armfelt went on to mention that local vendors were notified and made aware of the change at the time it was implemented, but Parsons confirmed that local notifications are not posted on the town’s website.

“With everything that’s been discussed today, all things considered, it sounds to me like everyone is on an equal playing field — everyone has had that opportunity — so if they’ve chosen not to register, for whatever reason, I guess that’s up to them,” said Mayor Andrew Prokop.

Rocky Mountain Equipment is an RMA-approved vendor for the capital purchase program, and they provided a quote utilizing the RMA discount structure and volume discounts. According to administration, the pricing for the same tractor without the use of the RMA program would have been $153,500, saving the municipality $16,500 as well as the time and expense of duplicating the RFP process.

“I like the program, it’s a great program,” said Tams. “But I have some concerns when we’re spending a hundred-and-some thousand dollars on a tractor. My biggest concern is have we cut out the ability of a vendor in our town to participate? That’s my reservation. Do I like the program? Do I think there’s great benefits? I do. Does it save you a pile of time? I guarantee you it does, and I understand that fully. But we are representing the citizens of the town of Taber, also the businesses that operate in this town — in my mind we need to be assured that we have given our local vendors every opportunity to be involved.”

Coun. Jack Brewin pointed out whatever the process involved, the request was for a local purchase.

“This is a local vendor. We’ve found the best deal through this, I think it’s a good deal.”

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