1. The current contract between the Board and Xerox is set to expire in December of 2015.
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- Elvin Murphy
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1 REPORT TITLE: 2015 PHOTOCOPIER CONTRACT APPROVAL REPORT NUMBER: 6. 1) SP DESTINATION: Special Board Meeting #03 DATE: Thursday, July 9 th, 2015 AUTHOR OF REPORT: Peter J. Derochie, Associate Director of Education (Business & Finance), Pia Elston, Controller of Finance and Donna Kasper, Procurement Officer TYPE OF REPORT: ACTION Background: 1. The current contract between the Board and Xerox is set to expire in December of The Business and Finance Department recently finalized the review and the due diligence of the procurement process. 3. The Ontario Education Cooperative Marketplace (OECM) has completed a Broader Public Sector (BPS) procurement for photocopiers that allows the Board to piggyback on their agreement. 4. Xerox is the successful vendor in the OECM procurement, and they have agreed to implement a new contract effective September 1 st, 2015 with no penalties applied. 5. Due to the fact that the proposed photocopier contract is valued over $1 million, approval of the Board of Trustees is required in order that the work may proceed over the summer for completion targeted for August 31 st Comments: 6. The Purchasing Department has completed a review of our current photocopier and printer needs, which included the networked stand-alone printers (i.e., both colour and black ink). 7. Should the Board approve the recommendation to implement the new Xerox contract, the Board could realize savings of over $700,000 over the five-year term (i.e., print service agreement, software, and new photocopiers). Appendix #1 details this analysis (specifically Charts 8, 9, and 10). 8. The following are some of the highlights of the study: a. Networked independent printers represent 9% of the volume but 42% of the costs (per Chart 6 of Appendix #1); b. Removal of non-networked stand-alone printers, where possible; c. New software and licensing (Paper Cut) to allow improved efficiencies and economies. 9. It is anticipated that there will be some resistance to the removal of independent printers, however, it is not reasonable to ignore the savings, efficiencies and economies available. Depending on the condition of the disposed printers, there may be an opportunity to auction them off through an on-line auction facility used by other government entities. 10. The removal of the existing photocopiers is proposed to occur simultaneously with the installation of the new equipment. Training is anticipated to be minimal; however, Xerox will provide training videos that may be posted to the Board s website for reference. Page 1 of 2
2 11. A print policy and procedures will be required. RECOMMENDATION: That the Board approve the new Xerox contract as presented in the 2015 Photocopier Contract Approval report. RPE/DK/PJD/sap Attachment (1) BoardReports\2015SpecialBoardMeeting#03\2015PhotocopierContractApproval Monday, July 6, PHOTOCOPIER CONTRACT APPROVAL Page 2 of 2
3 REPORT TITLE: REPORT NUMBER: DESTINATION: DATE: AUTHOR OF REPORT: TYPE OF REPORT: Photocopier Contract Donna Kasper Background: Our current Xerox contract for photocopiers is expiring this year and Procurement has reviewed the OECM contract which is available for school boards and would be compliant with the Broader Public Sector Procurement Directive. The selected OECM vendor is also Xerox. In order to deploy the full fleet of new photocopiers over the summer ELC s approval is required to proceed with the new contract with Xerox. A secondary issue related to printing throughout the Board is that there are a large number of independent printers being used (both networked and non networked). These printers represent 9% of our volume but 42% of printing costs. Procurement is recommending implementation of a Xerox service contract on all non networked printers and extending the current investment of Paper cut software, beyond the secondary schools, to help control the costs associated with the non networked printers. Proceeding with a new Xerox contract for both the photocopier fleet and the service contract plus the implementation of Paper Cut has the potential to save the board in excess $700,000 over the five year life of the new contract. Comments: Chart #1 Total number of copiers and printers on the Board s network: Xerox Fleet (photocopiers) 115 Independent Printers 233 TOTAL 348 *** Note: The numbers presented above do not include printers that are direct connect, USB connected or parallel print. Page 1 of 5
4 Chart #2 The total number of copies generated monthly: Total Copies Black Copies Colour Copies Xerox Fleet (photocopiers) 1,908,716 1,903,585 4,961 Independent Printers 186, ,859 6,702 TOTAL 2,095,045 2,082,444 11,663 *** Note: The numbers presented above do not include printers that are direct connect, USB connected or parallel print. Chart #3 Print Breakdown by Copier/Printer and Black/Colour: Copier/Printer Totals Black Colour % Xerox Fleet 91% 91% 43% % Independent Printers 9% 9% 57% Total: 100% 100% 100% *** Note: The numbers presented above do not include printers that are direct connect, USB connected or parallel print. Costs Allocation Analysis Chart #4 Costs for Photocopiers (Cost per Copy) XEROX Black Colour price/page (new xerox: 2015 oecm pricing) $ $ monthly cost Xerox $ 18, $ 18, $ *Using the total number from Chart #2 Chart #5 Costs for Independent Printers Independent Printers Blk Printers Colour Printers Notes: printer quantities consumables/page $ 0.04 $ 0.15 average 3-5 cents/page black; cents/colour service/month $ 4.17 $ 4.17 one call per 3 years at $150/call / 36 months capital cost/month $ $ avg $1000 / 5 year life monthly costs to produce prints $ 7, $1, monthly cost service $ $ monthly cost capital $ 3, $ Total: $13, $ 12, $1, Total Spend Monthly Xerox + Independent Printers (Chart 4 + Chart 5) $31, $ 30, $1, Page 2 of 5
5 Chart #6 Percentage of Spend Cost Analysis Summary % of total spend % of total volume % of total devices Xerox 58% 91% 33% Independent Printers 42% 9% 67% **9% of our printing volume is 42% of total spend! Chart #8 New Agreement Savings Summary Current Xerox Fleet Spend: Black Fleet volume / month (10 months) 1,903,585 pages current cost per page $ Cost / month $ 21, New Xerox Fleet Spend: Black Fleet volume / month (10 months) 1,903,585 pages current cost per page $ Cost / month $ 18, Savings per Month $ 3, Savings Annually $ 30, Savings 5 yr contract $ 152, Chart #9 Implement Xerox Print Service Agreement of Networked Printers (Service/Supplies/Proactive Monitoring) non Xerox printers $ 8, * Fleet Rate $ Black $ * Fleet Rate $ Colour $ 8, * Total Connected Printer Savings Annual Savings $ 82, (total connected X 10 months) 5 Year Contract Savings $ 411, * Information from Chart #7. The savings would be greater should a ban of all independent printers be enforced. Page 3 of 5
6 Chart #10 Implement PaperCut OECM Roll Out to entire board, all devices, MFP licensing: Includes Implementation support, 5 years licensing and service. Unlimited Networked Printer monitoring (all brands) Cost assignment and chargeback to all printers and Multi-Functional Printers (MFP) Coincides with Xerox Print Services Agreement for chargebacks to schools Xerox Print Service (XPS). Cost per Xerox MFP $17.07 monthly Cost per month at 130 Xerox mfp fleet $2, monthly Enables Monitoring and Behavioural coaching to migrate volume from Network printers to Xerox Assumption: PaperCut enables migration of Half of the Network Printer Volume to Xerox MFP Assumption: Savings below based on SMCDSB already saving with XPS above (otherwise save even more!) (savings if Xerox print services not in play: $ per month) Savings on Network Printers $ 4, half of network volume moves to Xerox Cost to produce on Xerox $ cost to produce this volume on Xerox Monthly Savings $ 3, Savings to SMCDSB Annual Savings $ 31, (Assumes 10 month year) Savings 5 years $ 159, Summary of Potential Savings: The Board has a potential to save $723, total over the next 5 years (new contract) by replacing a significant number of our fleet with new copiers and including a colour copier in each of our secondary schools. In order to help us realize our potential savings, some of our lower volume existing copiers will be kept in the fleet. The new contract also includes the cost of all staples for the copiers which has not been factored into the potential savings. Although not significant, this will provide additional savings to the Board. Further savings could be recognized with the removal of as many independent printers as possible. Page 4 of 5
7 Conclusion: The new fleet of copiers can be rolled out during July and August should approval be received for the new Xerox contract. Banning of all independent printers is an unrealistic endeavour, so the next best solution would be to remove as many printers as possible and network the majority of the remaining, along with implementing the Xerox Service Agreement and the installation of the Paper cut software. Further savings will be achieved should the Board develop and implement a print policy. Recommendation: 1) Approve the new Xerox contract for photocopiers, effective September 1, ) Approve the Xerox Service Agreement effective September 1, ) Approve the purchase of additional licensing for Paper cut software. 4) Develop and implement a Print Policy. Page 5 of 5
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