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HomeMy WebLinkAbout25E - AGMT - BROKER SERVICESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 17, 2012 TITLE: AGREEMENT WITH FIRETEC USED APPARATUS SALES FOR BROKER SERVICES (SURPLUS FIRE EQUIPMENT) C ct_? CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1st Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Authorize the City Manager and the Clerk of the Council to execute the attached agreement with Firetec Used Apparatus Sales as the broker to sell surplus fire equipment, subject to non- substantive changes approved by the City Manager and City Attorney. DISCUSSION The Santa Ana City Council approved the contracting of fire services to the Orange County Fire Authority in February of this year. As part of this transition, staff identified what equipment could be used by other City departments and what is to be sold as surplus. A Request for Proposal (RFP) was issued on May 21, 2012, soliciting proposals for fire equipment broker services. The City received four responses to the RFP. The responses were reviewed by an evaluation committee comprised of the Facilities-Fleet Maintenance-Central Stores Manager, Senior Fleet Supervisor, Heavy Equipment Fleet Supervisor, and Property Control Specialist, using the following criteria: qualifications in relation to specific project to be performed; specific experience in surplus fire equipment brokered sales; competence and capacity for performance; timeframe to complete proposed sale method; and price of service. The final scores and ranks are as follows: RFP Proposal Final Score Rank Firetec Used Apparatus Sales 90% 1 Brindle Mountain 77% 2 The Public Group 62% 3 Interscholastic Trading Company 59% 4 25E-1 Agreement with Firetec Used Apparatus Sales September 17, 2012 Page 2 Surplus fire equipment is a specialty item and staff recommends contracting with a specialty broker, rather than a conventional auctioneer that sells to the general public and multiple resellers. Generally, resellers and other third parties bid low in order to resell at a profit. In contrast, the specialty fire equipment market is more competitive and end-users bid closer to market price. Firetec specializes exclusively in fire equipment and sells to local fire agencies, municipalities and counties. Further, Firetec's proposal demonstrates both the greatest level of experience in fire equipment brokered sales and offers the lowest service fee. Based on the evaluation committee's review of the proposals and vendor reference checks, staff rated Firetec as the most qualified, responsible, and responsive proposer. The agreement with Firetec stipulates that the City retains the right to determine which items will be auctioned. Staff recommends approval of the agreement. FISCAL IMPACT Upon sale of the surplus fire equipment, the revenue Replacement Fund (no. 07510002 57972), except for program, as conditioned in the grant. Francisco Gutierrez o Executive Director Finance & Management Services Agency wn e will be credited to the Equipment amounts returned to a grant-funded 25E-2 AGREEMENT FOR PROVISION OF REAL ESTATE SERVICES THIS AGREEMENT, made and entered into this 20`h day of August, 2012 by and between FIRETEC Used Apparatus Sales, a general partnership (hereinafter "Broker"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "City"). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of fire equipment brokerage to provide listing and marketing services for surplus fire apparatus owned by City. B. Broker represents that Broker is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Broker represents that it is knowledgeable in its field and that any services performed by Broker under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Broker shall promote, advertise and complete the sale documents necessary to sell the inventory of surplus fire equipment owned by the City of Santa Ana, as set forth in Broker's Proposal, attached hereto as Exhibit A, and incorporated by reference. Said equipment includes: Year Make Model 2006 Freightliner Medic Van (2) 1988 LTI Ladder Truck 1989 Beck Pumper 1990 Beck Pumper 1992 Beck Pumper (2) 1998 BME -AMLAF Pumper 2000 Eagle Alf/Rescue 2000 Box Trailer WMD Trailer 2001 Ford Stake Bed Truck 2001 Ford F-150 XLT Super 2002 Ft/Liner Medic Van (3) 2003 Ft/Liner Medic Van (3) 2004 Freightliner Medic Van (2) 2007 Chevy Colorado Ext 2008 Chevrolet Colorado Suburban 2008 Chevrolet 2500 In providing such services, Broker acknowledges that the equipment belongs to City and that City retains absolute discretion to accept or reject any proposed transaction brought by Broker. City retains the right to transfer ownership to any entity based on City's surplus policy, of any fire 25E-3 apparatus listed above prior to the execution of an Agreement to sell that piece of equipment to a third party. In such case, Broker shall not be entitled to commission for that equipment. City shall notify Broker immediately if such transfer has occurred." REPRESENTATIVES For purposes of implementing this Agreement, the representative of City shall be the Executive Director of Finance and Management Services, or his designated representative, and the representative of the Broker shall be the Principal her designated representative. Except as may be otherwise stated herein, such representatives shall have the authority to act on behalf of their respective parties in carrying out the terms of this Agreement. 3. COMPENSATION a. City agrees to pay, and Broker agrees to accept as total payment for its services, a commission equal to five percent (5%) of the sales price of the apparatus. b. Broker will refer to City all qualified inquires regarding the specified apparatus. When a pricing agreement is reached, Broker will collect the full purchase price and transfer the balance, minus the five percent (5%) commission, to City. The remittance shall be accompanied by a sales receipt containing all terms and conditions of such sale. 4. TERM This Agreement shall commence on the date first written above and the Broker authorization shall terminate on August 31, 2013, unless terminated earlier pursuant to Section 13, below. The term of this Agreement may be extended by a writing executed by the Executive Director of Finance and Broker. 5. INDEPENDENT CONTRACTOR Broker shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Broker performs the services which are the subject matter of this Agreement; however, the services to be provided by Broker shall be provided in a manner consistent with all applicable standards and regulations governing such services. Broker shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Broker shall maintain and shall require its subcontractors, if any, to obtain and maintain Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Broker, if Broker has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Broker agrees to obtain and maintain any employer's liability insurance with limits required by law. 25E-4 7. INDEMNIFICATION Broker agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligence, recklessness or willful misconduct of the Broker or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement. 8. CONFIDENTIALITY If Broker receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Broker agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Broker disclosed in a publicly available source; (c) is in rightful possession of the Broker without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Broker without reference to information disclosed by the City. 9. CONFLICT OF INTEREST CLAUSE Broker covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 10. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 facsimile (714) 647-6956 With courtesy copy to: FMSA- Fleet Maintenance City of Santa Ana 215 S. Center Street Santa Ana, California 92703 facsimile (714) 647-3539 25E-5 To Broker: FIRETEC, Used Apparatus Sales P.O. Box 177 Randolph, Vermont 05060 Facsimile (802) 728-9206 A party may change its address by giving notice in writing to the other party. Th,,reafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 11. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Broker, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Broker. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Broker nor the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 12. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Broker, Broker may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 13. TERMINATION This Agreement may be terminated by either party upon thirty (30) days written notice of termination. In such event, Broker shall be entitled to compensation in accordance with Section 3.a., if the apparatus is sold by or through Broker prior to the date of termination. 14. DISCRIMINATION Broker shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Broker affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 25E-6 15. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 16. PROFESSIONAL LICENSES Broker shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Broker shall notify the City immediately and in writing of her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 17. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. Captions and headings in this Agreement, including the title of this Agreement, are for convenience only and are not to be considered in construing this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council CITY OF SANTA ANA PAUL M. WALTERS City Manager APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney FIRETEC By: Laura Sheedy Assistant City Attorney EXHIBIT A BARBARA BAUMANN Principal 25E-7 25E-8 BROKER PROPOSAL 25E-9 www.usedtiretrucks.com 1.800.1 ?R' TH . 4i 3r3;' fAX ? tl? r/.? 9,,611 PO 8OX 177, RAHOOLPH, Vf 05060 DATE:. 5/30/12 MESSAGE: Re: RFP 12-040 City Of Santa Ana Purchasing Division 20 Civic Center Plaza 4th Floor - Purchasing -- Room 429 Santa Ana, CA 92701-4058 Attn: Eva Goods Thank you for giving us the opportunity to submit a proposal to provide brokerage services to the City of Santa Ana. Firetec® has been in business for nearly 30 years and is a leader in the used fire apparatus market. The following pages set forth our qualifications, experience, fees and references. We feel we are ideally suited to promote, advertise and handle the sale of the city's surplus inventory of fire equipment. Please feel free to contact us with any questions or concerns. Res ectfully Submitted, Firetec Used Apparatus Sales Barbara W Baumann, Principal 25E-10 USED APPARATUS SALES Barbara W. Baumann YRIN!,-!r AL bbaumann@firetec.com COMPANY PR.OFILE 1. Statement of Company Background. Firetec has been brokering the safe of used fire apparatus since 1983. We are essentially the marketing agent for surplus emergency response vehicles, with-the mission to match buyers and sellers of used equipment and facilitate sales at fair market value. We utilize a variety of well- established methods to promote the availability of units and our name is well known in the industry. Firetec has thousands of repeat sellers and repeat buyers. We sell directly, department-to-department, generating market value for sellers, and a fair deal for buyers. All units are sold as-is, where-is. As of May 30, we have sold 87 units in 2012. In the last 10 years, Firetec has sold over 3,500 vehicles. Firetec is the only full time apparatus broker in America. Unlike when a fire apparatus is placed onto an auction side, selling for highest bid, which is usually low, Firetec works more like a real estate agent. We help to establish a fair asking price, and market to waiting departments. Firetec provides information and photos to potential buyers, who ultimately inspect the units and make offers. The city always retains the right to accept, reject or counter any offers. 2. Supplier Facilities: We are located in an office in Randolph, Vermont. We reach departments across America, and beyond. We sell within the U.S, and Canada only. Sometimes units are purchased for export. 3. Supplier Organization and Staffing: The duo which will work on selling Santa Ana's fleet are Principals of the firm: Barbara Baumann and Jennifer Baumann. Barbara began with the company in 1997 as Advertising Coordinator and ultimately Publisher of Fire Apparatus Magazine, when the two companies (Fire Apparatus Magazine and Firetec) were under the same management. Jennifer joined the company In 1998 as CFO and Apparatus Sales Manager. Owners/ Principals of Firetec since 2002, both have participated in every sales transaction since. 25E-11 4. Account Management: Barbara Baumann, Principal, will be key contact on the overall account management. Jennifer will handle the transferring of funds from the sales of the apparatus. Brief resumes above. Firetec is a marketing firm, catering to the very specific niche market of fire departments and ambulance squads. To reach these clients, we employ the following methods and professionals: 1- CATALOG: Production and mailing of a Used Apparatus Catalog (enclosed) which is mailed nationally. Firetec is the only used fire apparatus company which publishes its own product, This is produced by a graphics design professional who has been working with us for 15 years. 2- ADDITIONAL PRINT: Supplemental regional and national print advertising as deemed appropriate. 3- WEBSITES: Firetec owns 13 fire-related domain names which feed into our main websites of usedfire trucks. com and Firetec.com. 4- INTERNET MARKETING: Firetec contracts with a "Google Ad Nlnja" who produces sponsored Google ads, bringing buyers to our website(s). 5- TECHNOLOGY: Firetec contracts with an IT professional who transfers apparatus inventory updates directly from our desktops to the websites within minutes. This means that buyers get real-time updates on new listings and price changes and keep coming back to see what's new. Our website is never stale. 6- MOBILE APP: Firetec has the only used Fire Apparatus Mobile APP In the Industry. Users may search inventory 24/7 from their Phone, IPad and Android devices. Users get Instant alerts each time a new unit is listed with Firetec. The app may be downloaded for free at app.firetec.com. 7- TRADE SHOWS: Firetec exhibits at major and regional industry trade shows. Our customers know us In person, they trust us, appreciate our service, and seek us out at these events. 8- E-BLASTS: Firetec sends a weekly e-blast to notify customers of newly listed apparatus and recent reductions. Our website traffic doubles in the 12 hours following each e-blast. 9- SOCIAL MEDIA: Firetec utilizes Facebook, Twitter and Linkedin for networking and enhanced marketing. 25E-12 SERVICE CAPABILITIES In 2001-2002, Firetec sold over 20 units for the City of Las Vegas, Jennifer was account manager, and the sales garnered over $1,5 million. Fairview Valley FD in Apple Valley, CA has been utilizing our service in 2011/2012. To-date, we have sold 5 units for a total of $347,000. This Is on-going, Generally speaking, large governmental agencies do not have the awareness or willingness to strive for fair market value on their fleets. The easy way Is to send them to auction, and that is what tends to happen. Firetec's sales of approximately 200 annually, represent single sales for close to 200 different municipalities or VFDs each year, It is not often that we see entire fleets on the market. Normally, departments retain us to sell individual units or pairs as they become available. We recognize that Santa Ana's situation is somewhat unique and believe we can help. To place apparatus from fleets, our intent is to sell the most desirable units directly to departments, for top dollar, and while remaining open to offers from dealers on multiple units. Dealers will readily recognize the city's apparatus on our website and will call us, or may even try to reach city directly, to find out what kind of deal they can get. We have the ability to assess the value of the pieces, the likelihood of sale, and will advise the city accordingly when offers are presented, The arrangements are simple: an agreed upon commission is established, and we find the buyers. 2. Firetec is the only full time used apparatus broker in America, with the sole mission of blanketing the market with news of available apparatus and selling it for fair market value as fast as possible, if Firetec cannot place a piece with a fire department, it is not likely salable to a fire department. The timefrome involved depends on the condition of and demand for the apparatus, as well as whether the asking price is reasonable, given those two factors. 3. Firetec has not been privy to enough details on the apparatus to be able to establish a timeline for each. We welcome the opportunity to discuss each piece in greater detail. Desirable apparatus sells fast, Less desirable apparatus takes time. A very rough average would be four months. It is notable that the city is permitted to cease advertising through Firetec at any point, and unload via auction. Or, if some apparatus is difficult to move, Firetec could set a deadline for offers, but that is not recommended as the ideal first strategy. 4 25E-13 1 4. Firetec will receive payment in full for the apparatus. Our commission would be subtracted, and the net profit sent via wire or check to the city. No apparatus is to be released to any buyer until payment in full has been received. It Is the buyer's responsibility to insure the vehicle prior to taking possession at the city's facility, and the buyer is responsible for transportation back to their station. 5. The title for each vehicle shall be transferred directly from the city to the buyer, Firetec will not be taking over ownership of the units at any point. A copy of the title will be required prior to the sale of each, so that the buyer may obtain insurance. 6, Firetec's normal commission is 10% of the final sales price of apparatus, when we sell one-at-a-time for fire departments. We propose a 5% rate for the City of Santa Ana, given there are multiple units and only one brokerage firm will be utilized for the liquidation of assets. There are no other , ems. Firetec incurs the cost for all promotion, as details a ove, and earns commission at the time of sale of each piece, There are no hidden fees, taxes, or any other costs associated with our service. We require access to a person within the city, ideally the Fleet Department, who can answer detailed questions about the apparatus, and arrange to show the unit(s) to prospective buyers. We also ask for a contact person, if different from above, who will determine the acceptance of offers. If, in fact, the resale value of the apparatus is $1.5 million, and it sells for that, the total fees due to Firetec would be $75,000. While we understand that auctions charge a buyer fee, and It does not seem like the city incurs a cost for this service, it is worth noting that the resale price of apparatus is 30-60% of fair market value when sold with this method. The city nets more when the units are sold for fair market value through Firetec, even though the commission is paid by the seller. Firetec does not charge buyer fees, which is part of the reason we have so many buyers! 25E-14