City Council
Report
City Council Meeting: April 8, 2025
Agenda Item: 4.C
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To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Fleet Services Subject: Approval of First Modification to Agreement with Genuine Parts Company (dba NAPA Auto Parts) for Parts Room Inventory and Logistics Management Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to negotiate and execute a first modification to Agreement #11110 in the amount of $11,220,000 (including a 10% contingency) over five years with Genuine Parts Company, dba NAPA Auto Parts (NAPA), for Vendor Managed Inventory and Logistics Management Solution for the Public Works Department. This will result in a ten-year amended agreement with a new total amount not to exceed $19,470,000 (including a 10% contingency) with future year funding contingent on Council budget approval.
Summary
Fleet Management (Fleet) is responsible for ensuring the City’s diverse fleet of over 770 vehicles are available, dependable, and safe to operate. In November 2020 (Attachment A), staff recommended, and City Council approved, a five-year contract with Genuine Parts Company, dba NAPA Auto Parts (NAPA), in which the City contracted for NAPA’s services to stock and to run the Fleet Parts Room to improve the efficiency and effectiveness of Fleet Management in servicing and repairing vehicles. Over the past five years, this agreement has consolidated the numerous parts invoices into one monthly invoice, has enabled two full-time equivalent staff to resume servicing and repairing vehicles, and has streamlined the ordering and inventory management of Fleet’s Parts Room. Staff recommends that Council authorize a first modification to 2 of 5
Agreement #11110 with NAPA to supply parts, equipment, services, and onsite inventory management for the Fleet Parts Room in the amount of $11,220,000 over five years, for a new total amount not to exceed $19,470,000 (including a 10% contingency) and an extended total term of ten years, with future year funding contingent on Council budget approval. Staff is requesting 1) a first modification to extend the agreement, and 2) an exception to the competitive bidding process per SMMC 2.24.250(c) by using the Sourcewell cooperative agreement pricing (#090624-GPC) for the modification. The original contract was also executed via SMMC 2.24.250(c) by using NAPA – Sourcewell Contract #061015-GPC.
Discussion
NAPA has successfully managed the Fleet parts room in a cost-effective manner at a significant time-savings to staff since April 2021. During this time, Fleet has experienced supply chain issues in replacing various types of vehicles such as first responder vehicles, critical infrastructure maintenance vehicles, and sanitation vehicles. This has caused an increase in the volume of parts purchased to repair these aging vehicles well beyond their scheduled replacement date. As a result, Fleet projects that it will exceed its current contract authority by June 30, 2025 (six months before the end of the current contract with NAPA).
Staff recommends that Council authorize a first modification to agreement #11110 with NAPA in the amount of $11,220,000 (including a 10% contingency) over five years for Managed Inventory Services (e.g. parts, fluids, supplies for fleet vehicles and trucks; parts room management, operations, and staffing) and Logistics Management (e.g. procurement, shipment optimization, and freight management). This will result in a tenyear amended agreement with a new total amount not to exceed $19,470,000 (including a 10% contingency) over ten years. Staff would execute the modification as soon as possible to avoid a lapse in service as the City is reaching the end of the original contract authority early due to increases in the cost of parts and purchase volume increases due to the City’s aging fleet.
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The current agreement is for an amount not to exceed $8,250,000 over five years. This contract modification reflects a 36% increase in contract amount, due to the increase in cost of parts and equipment and a projected increase in the volume of purchases over the next two years while Fleet replaces aging vehicles with new, standardized vehicles that will require far fewer parts to maintain.
NAPA’s services would include on-site parts supply for the City fleet and an Inventory Monitoring Program responsible for maintaining an 80% fill rate. This would reduce vehicle turnaround time and increase productivity for the mechanics by putting parts in their hands with minimal disruption. NAPA would also be responsible for purchasing and supplying inventory and would only charge the City for parts that are used. This would minimize upfront costs as the City would no longer need to keep parts in stock and reduces the risk of parts becoming obsolete as the City’s fleet changes. The total amount spent in the agreement would fluctuate depending on the City’s needs, but NAPA’s operating costs (e.g. the salary of the Napa-employed staff running the parts room) would largely remain fixed at $192,000 per year through the contract term. Costs could incrementally change over the life of the contract due to adjustments in the costs for fringe benefits or overtime, with preapproval from the City.
Vendor Selection
Exception to Competitive Bidding
Staff recommends General Parts Company, dba NAPA Auto Parts (NAPA), to furnish and provide a Vendor Managed Inventory and Logistics Management Solution for the City’s Fleet Parts Room as an exception to competitive bidding per Muni Code
2.24.250 (c). On July 16, 2024, Sourcewell (formerly known as National Joint Powers Alliance (NJPA)), a government agency that establishes nationally leveraged and competitively solicited purchasing contracts for education, government, and non-profits issued a Request for Proposals (RFP) for fleet-related maintenance equipment, supplies, services, and inventory management solutions. Under the terms of the RFP and the resulting Sourcewell Agreement with Genuine Parts Company (Agreement #090624-GPC), similar nationally leveraged volume purchasing discounts are also 4 of 5
available to other government agencies.
NAPA currently provides Vendor Managed Inventory and Logistics Management Solutions for several municipalities and organizations in California, including the City of Sacramento, San Diego County, and Los Angeles World Airports. Fleet Management staff conducted outreach to these organizations, and they recommended NAPA for its reliability, inventory management, and effectiveness in providing parts. c. Competitive procedures were followed by a governmental agency, federal, state, county, city, joint powers agency, special district, or cooperative purchasing agency and the goods or services are supplied to the City at the same or better price;
Environmental Review
The modification to the agreement for Fleet Management services is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The modification is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The modification will continue to provide the City with management and inventory services of its fleet.
Therefore, it can be seen with certainty that the grant would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Past Council Actions
Meeting Date Description
11/24/2020
(Attachment A)
Award Contract to Genuine Parts Company for Integrated
Business Solutions for the City's Fleet Management Division Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Vehicle Management Fund to increase the amount of agreement #11110 with NAPA for Vendor Managed Inventory and Logistics Management Solutions for the Fleet Parts Room. The Vehicle Management Fund is an internal service fund that charges relevant funds, including the General Fund, for purchases and services rendered.
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Agreement Request*
(CT #11110 NAPA)
Department
Account #
Current
Authorized
Amount
FY 2024-25
Modification
Amount
Future
Years
Amount
Total
Modification
Amount
Total
Contract
Amount
70500001.529010 $1,210,000 $51,333 $1,594,267 $1,645,600 $2,855,600 70500001.529020 $5,610,000 $238,000 $7,391,600 $7,629,600 $13,239,600 70500001.529021 $110,000 $4,667 $144,933 $149,600 $259,600 70500001.521814 $220,000 $9,333 $289,867 $299,200 $519,200 70500001.550010 $1,100,000 $46,667 $1,449,333 $1,496,000 $2,596,000 Totals $8,250,000 $350,000 $10,870,000 $11,220,000 $19,470,000 *Amounts include a 10% contingency.
Future year funding is contingent on Council budget approval.
Prepared By: Ernest Kwong, Senior Administrative Analyst Approved Forwarded to Council
Attachments:
A. November 24, 2020 Staff Report
B. NAPA - Oaks Initiative
C. NAPA - Levine Act