Item - 2022.GL29.9

The General Government and Licensing Committee recommends that:

1. City Council authorize the General Manager, Fleet Services to:

a. negotiate and enter into a non-competitive Agreement with Ford Motor Company of Canada Limited to obtain access to their network of dealers through the Ford Fleet Care program and Original Equipment Manufacturer parts discounts through their National Fleet Parts Pricing program; and

b. negotiate and enter into non-competitive Agreements with any individual Ford Motor Company of Canada Limited Dealers through the Ford Fleet Care program for procurement of proprietary Ford Original Equipment Manufacturer parts and services and Original Equipment Manufacturer parts discounts through the National Fleet Parts Pricing program;

on the following terms and conditions:

i. each Agreement shall be for an initial term of five (5) years from the date of award, with the option to extend the Agreements for one (1) optional extension term of five (5) years, with the extension of the Agreements being at the sole discretion of the General Manager, Fleet Services and subject to budget approval(s);  

ii. the cumulative contract price for all of the non-competitive Agreements with Ford Company of Canada Limited Dealers will be $19,453,203 net of Harmonized Sales Tax ($19,795,579 net of Harmonized Sales Tax recoveries) for the entire term, including extensions;

iii. on the condition that Ford Motor Company of Canada Limited continues to be the exclusive manufacturer and distributor of proprietary Original Equipment Manufacturer parts and services for Ford vehicles, and that access to Ford network of dealers is available through the Ford Fleet Care program; and

iv. each Agreement is on terms and conditions satisfactory to the General Manager, Fleet Services and in a form satisfactory to the City Solicitor.

The purpose of this report is to seek Council authority for the General Manager, Fleet Services to negotiate and enter into a non-competitive Agreement with Ford Motor Company of Canada Limited to obtain access to their network of dealers through their Ford Fleet Care program to supply and deliver proprietary Ford Original Equipment Manufacturer parts and services, and Original Equipment Manufacturer parts discounts through their National Fleet Part Pricing program, and negotiate and enter into non-competitive Agreements with any individual Ford authorized dealer under both the Ford Fleet Care program and National Fleet Part Pricing program.

The Agreement with Ford Motor Company of Canada Limited and the Agreements with the Ford Dealers will each be for a period of five (5) years commencing from the date of award, with the option to extend the Agreements for one (1) optional extension term of five (5) years, at the sole discretion of the City, and subject to budget approvals for a cumulative total amount of $19,453,203 net of Harmonized Sales Tax ($19,795,579 net of Harmonized Sales Tax recoveries), inclusive of the extension term for all of the Agreements.

Fleet Services estimates that by adopting this manufacturer-direct service delivery model with Ford Motor Company of Canada Limited, a cost avoidance of $290,539 can be realized over the ten (10) year period. This does not include cost avoidance from manufacturer-direct procurement for assets already in place or realizing internal cost process savings from reduced procurement activities and payment efficiencies. 

City Council approval is required in accordance with Municipal Code Chapter 195-Purchasing, where the current request exceeds the Chief Purchasing Official's authority of the cumulative five (5) year commitment for each vendor, under Article 7, Section 195-7.3 (D) of the Purchasing By-Law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code Chapter 71-Financial Control, Section 71-11A.