Meeting Date: April 18, 2007

Subject: Procurement Authorization - Supply Of Recaro Seat Parts


It is recommended that the Commission authorize the award of a three-year inventory supply contract for the period from June 2007 to June 2010 for the supply of various Recaro seat parts to Recaro North America in the upset limit of $1,091,000 USD ($1,294,000 CAD) including applicable taxes.


Sufficient funds have been included in the 2007 TTC Operating Budget and will be included in future Operating Budgets as appropriate. These inventory materials will be charged to the appropriate budget at the time of issuance from Stores.


The subject Recaro parts are used for maintenance of the Commission’s revenue vehicle driver seats.


Recaro North America was invited to submit a proposal on January 23, 2007 on the basis of single source as they are the manufacturers of the subject parts and have agreed to supply these parts to the Commission directly rather than through distributors.

The proposal called for 79 pre-approved part types of which 67 are being recommended for award. Recaro North America submitted firm pricing on 67 part types. Their proposal was submitted in US dollars and was converted by staff to Canadian funds based on the published exchange rate of 1.1866. Their total proposed value is $865,567.22 USD. The 12 part types that are not being recommended for award were not quoted by Recaro North America. Staff will review these part types and they may subsequently be the subject of a future Request for Proposal.

Staff contacted Recaro North America to negotiate lower pricing but were advised that the Commission has been offered their best pricing and they could not reduce the prices any further.

This contract includes approximately 20% contingency for variances between forecasted and actual usage and new parts yet to be identified which may be added to the contracts during the contract term. In addition, another approximate 5% has been included in the upset limit amount to cover freight costs during the course of the contract.

The pricing for the new three-year inventory supply contract is approximately 4% lower in the first year of the contract compared to current pricing. The pricing is approximately 3% higher in year two compared to year one prices and approximately 3% higher in year three compared to year two prices.  Recaro’s proposed unit prices included both increases as well as decreases.  Recaro advised increases were primarily due to higher labour and energy costs as well as higher material costs, in particular due to higher crude oil prices for petroleum based parts (i.e. plastic, rubber and vinyl components).


These Recaro seat parts are required in order to support varying revenue vehicle driver seat maintenance needs.

April 4, 2007