SARATOGA CITY COUNCIL

MEETING DATE: May 15, 2019

DEPARTMENT: Finance & Administrative Services

PREPARED BY: Robby Balbuena, IT Technician Gina Scott, Accounting Technician

SUBJECT: Award of Multi-Function Peripherals Lease Agreement

RECOMMENDED ACTION: Approve resolution to authorize the City Manager to enter into a five-year lease agreement with Business Solutions for the City’s fleet of Multi-Function Peripherals.

BACKGROUND: Over the past five years print technology has evolved rapidly, successfully transforming the separate functions of printers, scanners, and copy machines into a combined high-quality Multi- Function Peripheral (MFP) device. Over a network connection, MFPs can print documents directly from the computer, as well as copy and scan documents, create booklets, print heavy-stock covers, brochures and pamphlets, and modify output. Today’s generation of MFPs produce higher quality documents, provide more functions, are more economical, and more efficient than those available even a few years ago. This quick evolution in print technology has led to the phasing out of most of the City’s separate equipment and leasing rather than purchasing the devices.

The City first entered into an MFP lease agreement for its fleet of five devices in 2014, which expired in March 2019. The City now owns the machines and has continued to use the MFPs under a month-to-month maintenance service agreement, however increasing equipment failures and deteriorating print quality has prompted the replacement of the fleet. Improved technology features led to a review of usage and needs, and the issuance of a Request for Proposal (RFP) for an MFP lease renewal agreement.

Request for Proposal The RFP for the new fleet lease agreement requested bids for two large-capacity devices to be in the Administrative Services Lobby and the Community Development Copy Room, and two mid- size devices for the Public Works Mail room and Corporation Yard. Reorganization changes have eliminated the need for an MFP device in the Community Center.

Results The City received four proposals. All four of the proposals met all the requirements outlined in the RFP – Caltronics Business Systems, Business Solutions USA, MRC/ Smart Technology Solutions, and Toshiba Business Solutions. Staff evaluated all proposals and attended demonstrations for the top three qualified vendors – , MRC/Xerox, and Toshiba. Further evaluation determined that Toshiba’s proposal provided the best overall response for meeting the City’s needs. All key evaluation criteria were satisfied regarding the clarity of the proposal, experience with similar projects, proposed scope of work, and technical ability.

Cost Comparison Although the Konica Minolta proposal offers the lowest annual equipment lease, Toshiba’s MFP devices and overall proposal offers significant benefits that outweigh cost alone. These benefits include ease of use, uncomplicated menu design, excellent print quality and performance, and quality customer service. As illustrated in the annual lease and usage cost summary matrix below, usage costs between Konica Minolta and Toshiba are comparable. Operating costs are based on estimated actual usage and are used for comparison purposes only.

Konica Minolta Toshiba MRC / Xerox Lease Cost Annual Lease Total $ 6,007.68 $ 10,189.32 $ 10,420.80

Usage Cost Aproximate Annual Usage B&W 288,000 288,000 288,000 Color 372,000 372,000 372,000

Cost Per Copy (CPC) Rate B&W $ 0.0039 $ 0.006 $ 0.0055 Color $ 0.035 $ 0.0342 $ 0.055

Aproximate Annual Usage x CPC B&W $ 1,123.20 $ 1,728.00 $ 1,584.00 Color $ 13,020.00 $ 12,722.40 $ 20,460.00 Total Usage Cost $ 14,143.20 $ 14,450.40 $ 22,044.00

Combined Cost Lease + Usage Annual Lease + Usage $ 20,150.88 $ 24,639.72 $ 32,464.80

Ease of use Toshiba devices were clearly labeled with user-friendly simplicity in mind. Daily physical operations such as loading paper, changing out empty toners, and clearing paper jams were straight-forward with clear color-coded labels and diagrams throughout their devices. Since Toshiba devices are currently in use at all staff locations, these devices would also require the least amount of training and transition due to over five years of hands-on experience accumulated from current staff.

During Konica Minolta’s demonstration, staff noted several areas that may cause unnecessary complications for daily physical operations due to the device’s paper tray design. Konica Minolta did offer devices with a more traditional paper tray design on higher performance models, but the increased device output and cost could not be justified by current staff needs. Additionally, Konica Minolta devices relied heavily on user training to diagnose clearing paper jams due to unmarked regions that do not appear in the device’s display screen and inconsistent color-coded labels and diagrams.

Menu Navigation Toshiba had the easiest and most user-friendly onscreen menu navigation interface over the Konica Minolta and MRC/Xerox devices. Toshiba’s interface also featured a unique “simple mode” which significantly reduced the number of steps needed to perform walk-up copy or scan jobs. In most cases, Toshiba’s print options and overall interface features provided clear intuition for staff to understand and operate.

Print Quality and Performance Staff tests showed that Toshiba consistently produced the highest quality copies and prints. The Toshiba devices accepted the widest variety of paper stocks (up to 140lbs cover stock) and paper dimensions (up to 12” x 47” banner stock). Toshiba devices also had the highest monthly duty cycle capable of producing 540,000 pages without any errors or jams. All vendor proposals offered devices with production speeds matching staff’s current production environment.

Maintenance and Customer Service Both Konica Minolta and Toshiba had comparable maintenance service agreements which operate within a user initiated 4-hour same business day service response policy. Staff noted that Toshiba also implements an analytics-based maintenance service strategy for managing service territory resources. Toshiba’s analytics strategy is reviewed monthly to proactively address customer trends based on data from technicians in the field and actual device usage patterns.

References were able to confirm that Toshiba’s response time and the quality of service offered exceeded expectations for their operations. Staff from the City of Oakland said “[Toshiba] customer service is very responsive. They are great, they do what they are supposed to do, and we have no complaints. Their machines are easy to fix as they have a clear paper path. The support is good and having dedicated technicians is nice. They go above and beyond.”

Based on the evaluation of the proposals and feedback received from references, staff recommends Toshiba Business Solutions’ proposal for the City’s MFP lease renewal agreement.

FISCAL STATEMENT: The proposed agreement with Toshiba calls for an annual lease fee of $10,189 for the four machines. The estimated usage for maintenance and supplies is approximately $14,450 per year (based on estimated actual usage) for a total approximate cost of $24,600 per year. The total contract amount for five years is approximately $123,000. The proposed MFP lease and maintenance services agreement will be substantially less than the current agreement. Funding for the MFP lease is included in the annual operating budget.

ATTACHMENTS: Attachment A – Resolution for Copier Lease Attachment B – Toshiba Contract