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SHAMROCK SUPPLY COMPANY, INC. <br />City of Santa Ana <br />RFP No.: 20-019 <br />VMI Program/Value-Added Service Proposal <br />March 18, 2020 <br />Page 5 <br />The City of Santa Ana <br />General Stores <br />Tiered Pricing Model (Proposed) <br />Contract Materials <br />For designated contract materials (e.g., actively -managed by SSC at COSA General Stores), a <br />fixed unit price by item model is proposed, based upon application of a fixed margin applied to <br />the manufacturer's/supplier's material cost to establish the fixed unit price. Based upon <br />COSA's annual purchase volume of a contract SKU, a two-tier margin is proposed with <br />different margin applied to SKU's reflecting an annual purchase volume less than or greater <br />than $10,000, for example. Contract material pricing to be reviewed/updated semi-annually <br />(January/July) with a 12-month look -back. <br />This model provides the following advantages to COSA: material pricing stability, market - <br />favorable pricing for COSA volume -intensive materials, diminished requirement for material <br />pricing management/competitive analysis, etc. <br />Similarly, for non-contract/special order materials, a fixed margin model is available, based <br />upon COSA purchase order line value, given lack of annual demand data for one-off, project - <br />related materials. This model provides the following advantages to COSA: enhanced job cost <br />estimating, market -favorable pricing, automated PO pricing management, etc <br />Contract Duration <br />Shamrock Supply would like to extend the original proposed duration of the contract of 3 Years <br />with 2 additional renewal periods to a 5 Year contract with 2 additional renewal periods. <br />25D-41 <br />