Agenda Item Wording:
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Authorize the award of a Contract for Veterinary Supplies to Patterson Veterinary Supply Inc, for a 1-year initial period with 4 additional 1-year renewal options not to exceed $30,000.00 per year for a possible 5-year term and total of $150,000.
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Deadline for Action: 3/15/2021
Submitting Department: Finance and Technology Services
Contact Name and Phone Number:
Melody Murch, 559-713-4379, melody.murch@visalia.city <mailto:melody.murch@visalia.city>
Department Recommendation:
That Council approve the award of a Veterinary Supply contract to Patterson Veterinary Supply, Inc. for a 1-year period with 4 additional 1-year renewal options, not to exceed $30,000 per year for a total of 5 years and $150,000
Background Discussion:
The Visalia Animal Care Center (VACC) spent approximately $25k in the 2021-2022 fiscal year, and prices are rising quickly along with inflation. Most of these purchases were from Patterson Veterinary Supply, located in Phoenix, Arizona. This volume of annual purchases from a single vendor has required staff to issue an RFB pursuing a contract with fixed pricing. To allow for a competitive contract to be properly bid, an emergency purchase order (PO) was issued to Patterson Veterinary Supply, Inc which will expire March 31, 2023. Staff has conducted an extensive search for piggy-back opportunities which might prevent the need for an RFB for these services, however, finding none, staff issued RFB 22-23-18 in November 2022, and received no valid bids. Having received no valid bids, and for the reasons discussed below, staff is recommending the City continue to purchase veterinary supplies from Patterson.
In the time since the Visalia Animal Care Center (VACC) was opened in 2016, there has not been a successful City of Visalia (COV) bid for the purchase of veterinary medications and supplies. The lack of a successful bid appears to be because pricing of Veterinary medications and disinfectants is tightly controlled by the manufacturers. These products are marketed to the veterinary community through suppliers who are committed to accepting the pricing and profit margins set by the manufacturers industrywide. Even though this sets the same price industrywide, this makes contracting with veterinary suppliers for fixed pricing difficult, if not impossible. Staff has found that prices increase in a rolling quarterly pattern, with companies coordinating their increases so they don’t all hit at the same time. So, a portion of the pricing on veterinary supply items changes every 3 months, making a fixed price contract impractical.
Information obtained by staff from other animal care facilities during the search for piggy-back opportunities has confirmed that industry practice for shelters and rescues is to work with suppliers to access “shelter pricing” offered by the manufacturers to non-profit and government run animal facilities. While there is no way to contract for a specific price, shelter pricing guarantees the lowest available price and represents a significant savings over the prices charged to for-profit veterinary practices. Under the current PO with Patterson Veterinary Supply the City has secured shelter pricing for the VACC on items where it is available.
RFP 22-23-18 for Veterinary Supplies was released with proposed options giving suppliers the opportunity to identify items with pricing controlled by manufacturers, and treat those items specially within a contract, in hopes this would attract some bids. One bid was received from Mid-West Veterinary, however, it listed current pricing and failed to identify which items could not be contracted for a fixed price. In addition, Mid-West made clear they could not sign a fixed price contract for more than a 3-month period. For these reasons, the bid has been thrown out as non-compliant. This bid did, however, provide pricing which can be compared to the most recent prices paid to Patterson Veterinary Supply for the items purchased most often by the VACC in the 2021-22 year. Although no bid was submitted by Patterson, staff has used Patterson’s current price for the comparison items. Upon comparison, the prices bid by Mid-West were 3.9% higher than the current prices available from Patterson. The variance is due to smaller uncontrolled items like latex gloves, syringes, etc.
Based upon the comparison of current pricing, staff is convinced there is no savings to be achieved by switching veterinary supply vendors and recommends the City continue to purchase from Patterson. To comply with City purchasing procedures, it is recommended that a PO be issued to Patterson Veterinary Supply, Inc. not to exceed $30,000 annually for up to 5 years. The contract will be renewed annually through mutual consent which allows the City to pursue a different course should circumstances change prior to the end of the 5-year period.
Fiscal Impact:
Veterinary Supplies are included in the current City budget and there will be no fiscal impact from the issuance of the recommended PO.
Prior Council Action: None.
Other: N/A
Alternatives: None recommended
Recommended Motion (and Alternative Motions if expected):
recommendation
I move that Council approves the award of a Veterinary Supply contract to Patterson Veterinary Supply, Inc. for a 1-year period with 4 additional 1-year renewal options not to exceed $30,000 per year, for a total of 5 years and $150,000.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
Attachment A: RFB 22-23-18
Attachment B: Price Comparison Mid-West Vet vs Patterson Veterinary Supply