City of Houston Printing Services Contract Budget and

City of Houston Printing Services Contract Budget and Fiscal Affairs Committee July 6, 2010 Slide 1

Background • The COH purchases between $1. 3 M and $2 M in general commercial printing per year. • Nov 2004: COH signed a printing services contract with HISD. • Feb 2005: COH signed a printing services contract with a second vendor. This contract includes facilities management of Image Solution. • The contracts ran concurrently and Departments could purchase printing from either vendor. Slide 2

Current Vendor Issues Accounting is problematic: q 2007 Review by F&A: “(the vendor) has not fully satisfied its obligations to the City of Houston, especially by its failure in providing proper reconciliation. …would continually require the interventions of COH with the injection of expertise to resolve problems. ” q 2009 Review by ARA: “The city may need to take over the accounting function and charge (current vendor) for the labor cost incurred since (the current vendor) did not fulfill its record keeping and reconciliation obligations. ” Slide 3

Current Vendor Issues Percentage of subcontracts is too high: Vendors Average per Month FY 10 Estimate Image Solutions $ 12, 637. 80 $ 151, 653. 57 1 $ 49, 077. 60 $ 588, 931. 17 HISD $ 27, 159. 09 $ 325, 909. 03 3 $ 9, 782. 66 $ 117, 391. 88 4 $ 5, 441. 98 $ 65, 303. 81 5 $ 2, 040. 46 $ 24, 485. 53 6 $ 76. 30 $ 915. 62 7 $ 107. 82 $ 1, 293. 82 8 $ 49. 75 $ 597. 00 $ 106, 373. 45 Total $ 1, 276, 481. 42 Slide 4

Remove the Middleman Reduce City of Houston Cost by 18% Outsourced Slide 5

HISD Capabilities Slide 6

HISD Capabilities On-Line Ordering and Tracking: Check Status Accounting Slide 7

HISD Capabilities Slide 8

Utilize Taxpayer Funded Assets INTERLOCAL COOPERATION CONTRACTS Sec. 791. 001. PURPOSE. The purpose of this chapter is to increase the efficiency and effectiveness of local governments by authorizing them to contract, to the greatest possible extent, with one another … to purchase goods and services. HISD’s printing assets are already owned by the taxpayer. This contract will increase utilization of those assets and reduce costs. Slide 9

Customers Boy Scouts of America Lone Star College Rice University Spring ISD Port of Houston Tomball ISD City of Houston Harris County Department of Education Katy ISD Klein ISD Houston Bar Associates Slide 10

Benefits 1. Image Solutions will continue to operate a store front in the tunnel. 2. Total COH printing costs will be reduced by 18% ($230 K - $360 K). 3. Accounting problems will be resolved. 4. We will cut out the middleman on most orders. 5. Users will be able to place, proof, and track orders online. 6. HISD puts Houston first – the current vendor is large Dutch Public company. HISD is a perfect fit: large enough to handle our business and small enough to need it. 7. HISD has six years experience servicing external customers. 8. HISD’s MWBE utilization is over 24%. 9. The taxpayer’s assets will be used more efficiently. Slide 11