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HomeMy WebLinkAboutLetter of ClarificationJ 11 l�GRAINGER. August 29, 2005 Ms. Gail Burchett State of Nevada Department of Administration Purchasing Division 515 East Musser Street, Suite 300 Carson City, Nevada 89701 Exhibit B Re: Letter of Clarification Bid Number: 7066 A Multi -state Contract for Industrial Supplies & Equipment Dear Ms. Burchett: 100 Grainger Parkway Lake Forest, IL 60045-5201 Tel: 847.535.1000 Fax: 847.535.9243 www.grainger.com W.W. Grainger, Inc. ("Grainger") is extremely pleased to be responding to the State's request for bid for its multi- state contract for industrial supplies and equipment. Grainger has enjoyed supporting Nevada and the Western State's Contracting Alliance under the previous award, WSCA Contract number 6416. As you know, Grainger takes its contract compliance and customer satisfaction very seriously. To that end, Grainger respectfully requests the opportunity to clarify some of the terms of the enclosed offer. Grainger's acceptance of a bid award is conditioned upon WSCA's agreement to the following conditions as described below, unless they are otherwise negotiated between the parties. Section 3 "Scope of Work" Page 6; Subsection 3.2. Please add the following to the end of the fourth sentence: "provided that the shipping and billing terms requested do not conflict with the terms of this contract." Page 7; Subsection 3,6. Grainger is a publicly traded company and has some financial reporting requirements, which cause us to request a change to the FOB terms. Please replace all references to "FOB Destination" contained in this bid with "FOB Origin, standard ground freight paid by Grainger". As the term FOB incorporates 3 factors, freight charges, risk of loss and title transfer, Grainger has some clarifications to this Subsection, please add the following to this Subsection 3.6: "Freight and shipping fees will be prepaid for shipments to a Purchasing Entity Buyer's place of business anywhere in the contiguous United States and Alaska, using a carrier of Vendor's choice. Any extra charges incurred for additional services, such as customer's carrier, air freight or special handling by the carrier, must be paid by the Purchasing Entity Buyer. Items back ordered from an order qualifying for prepaid shipping charges will be shipped prepaid. Title and risk of loss pass to Purchasing Entity Buyer upon delivery of the products to the common carrier. However, if product is damaged or lost in transit, Purchasing Entity Buyer will notify Vendor, who will replace the product. Purchasing Entity Buyer will return any damaged product to Vendor. Vendor will manage all damage and loss claims for Purchasing Entity Buyer, and Purchasing Entity Buyer agrees to provide Vendor with the assistance and information required to file and pursue a claim against the carrier." 1 of 8 Effectually, Grainger's responsibilities and the freight costs for Purchasing Entity Buyers will remain the same as would apply with FOB Destination, but Grainger would appreciate being accommodated on this clarification for financial accounting purposes. • Page 7; Subsection 3.7. Grainger is proud of its excellent delivery record under the present WSCA Contract. Through Grainger's extensive branch and distribution center network, Grainger is able to guarantee that orders received by 5:00 p.m. will be shipped the same day. Due to Grainger's nationwide presence of over 413 locations, Grainger is able to provide delivery for in stock product to many Purchasing Entity Buyers in 24 hours. Out of stock items will usually be usually delivered in 3-10 days. In those instances where this is not possible, the customer is notified at time of order. Typically, Grainger's delivery schedule does not vary by location. Some locations are more remote which makes it difficult to guarantee a minimum delivery time for all customers in all cases. However, Grainger will guarantee that all orders received by 5:00 p.m. for product in Grainger's standard General catalog will be shipped the same day that the order is received. However, Grainger uses common carriers to make delivery and therefore it is difficult to always predict delivery times in all cases. For such a broad selection of product, we feel this is a significant value for our customers. • Page 7; Subsection 3.8. Under this offer, the following will apply to reports provided under the contract: "All reports and the information contained in the reports are considered confidential and may be used by WSCA or Purchasing Entity Buyer for purposes of this WSCA Contract Number 7066 and may only be shared with third parties including without limitation, consultants upon execution of a confidentiality agreement, mutually negotiated and approved by the parties, for the sole purpose of facilitating work under this contract." • Page 9; Subsection 3.15. It is Grainger's understanding that the use of the word "prices" in this Subsection 3.15 is limited to the prices of Market Basket items only. Grainger's prices for non -market basket items are subject to change and in all cases are those in effect at time of purchase. Please revise the first sentence as follows: "...provided any requested price increases do not exceed the increase in the Consumer Price Index for the previous 6 month period or as otherwise approved by WSCA". Please add the following to the end of the last sentence of this clause; "with the exception of those items which are subject to economically volatile market conditions. Grainger reserves the right to request price increases for these products." Please also note that Grainger is unable to include product number 4.85 R22, refrigerant, in the market basket as Grainger only offers regional pricing for this product due to the fact that it is subject to extremely volatile market conditions. Page 9; Subsection 3.17. Please revise this Subsection as follows: "Contract prices represents ceiling prices for the supplies and services priced in the award(s), The vendor shall report to the Lead State any price reduction or discount, or other more favorable terms, offered to any Purchasing Entity, and the awarded vendor agrees to negotiate in good faith to reestablish ceiling prices or other more favorable terms and conditions applicable to future orders. Vendors that engage in innovative procurement practices such as strategic sourcing, aggregate and volume purchasing, etc., with a Purchasing Entity at the request of the Purchasing Entity or through Purchasing Entity's formal bidding process are exempt from the reporting and price reduction requirements;" • Page 9; Subsection 3.18. Grainger understands the intent of this Subsection and recognizes that States and political subdivisions must comply with their procurement laws. Grainger presently has agreements in place with 22 States. These terms were negotiated at the time the State adopted the prior WSCA 6416 Contract. We anticipate that the States not represented in this bid will want to utilize the pre-existing negotiated State terms and conditions to the extent that these terms have not changed. In event that 2 of 8 these States wish to renegotiate their State terms and conditions, Grainger will do so, upon request, with each individual State at the time the agreement is adopted. Section 7 "Terms, Conditions and Exceptions" • Page 15; Subsection 7.19. Grainger is offering some additional options beyond its Grainger catalog product under this offer. These options are Grainger Parts and Grainger Product Sourcing. Please see the additional terms and conditions attached to the end of this letter, which will apply to these purchases made from Grainger Parts and Product Sourcing. Section 8 "Terms and Conditions for Purchase of Goods" • Page 15; Subsection 8.2; "Incorporated Documents". It is Grainger's understanding that the reference to Purchase Orders in this Subsection only includes the front of the purchase order, not the standard pre-printed terms and conditions often found on the back. All terms and conditions contained within a purchase order are superseded by the terms and conditions of this WSCA Contract 7066. Any conflict between terms and conditions of a purchase order and WSCA Contract 7066 will be resolved by giving first order of precedence to WSCA Contract 7066. • Page 17; Subsection 8.7; "Representations and Warranties". The following is the express warranty under this offer. Please delete Subsections "d" through "i" and replace these Subsections with Grainger's standard warranty language as stated below: GRAINGER LIMITED WARRANTY LIMITED WARRANTY. ALL PRODUCTS SOLD ARE WARRANTED BY GRAINGER ONLY TO CUSTOMERS FOR RESALE OR FOR USE IN BUSINESS OR ORIGINAL EQUIPMENT MANUFACTURE, AGAINST DEFECTS IN WORKMANSHIP OR MATERIALS UNDER NORMAL USE FOR ONE YEAR AFTER DATE OF PURCHASE FROM GRAINGER, UNLESS OTHERWISE STATED. ANY PART WHICH IS DETERMNED BY GRAINGER TO BE DEFECTIVE IN MATERIAL OR WORKMANSHIP AND RETURNED TO A GRAINGER BRANCH OR AUTHORIZED SERVICE LOCATION, AS GRAINGER DESIGNATES, SHIPPING COSTS PREPAID, WILL. BE, AS THE EXCLUSIVE REMEDY, REPAIRED OR REPLACED AT GRAINGER'S OPTION. WARRANTY DISCLAIMER NO WARRANTY OR AFFIRMATION OF FACT, EXPRESS OR IMPLIED, OTHER THAN AS SET FORTH IN THE UNITED WARRANTY STATEMENT ABOVE IS MADE OR AUTHORIZED BY GRAINGER GRAINGER DISCLAIMS ANY LIABILITY FOR PRODUCT DEFECT CLAIMS THAT ARE DUE TO PRODUCT MISUSE, IMPROPER PRODUCT SELECTION OR MSAPPUCATION, AND ANY DESCRIPTION DOES NOT EXPRESS OR IMPLYA WARRANTY THAT THE PRODUCTS ARE MERCHANTABLE OR FIT FORA PARTICULAR PURPOSE. UMTATION OF LIABILITY. ANY LIABILITY FOR CONSEQUENTIAL AND INCIDENTAL DAMAGES IS EXPRESSLY DISCLAIMED. GRAINGER'S LIABILITY IN ALL EVENTS IS UNITED TO, AND SHALL NOT EXCEED. THE PURCHASE PRICE PAID. Prompt Disposition. Grainger will make a good faith effort for prompt correction or other adjustment with respect to any product, which proves to be defective within warranty period. Before returning any product, write or call the Grainger branch from which the product was purchased, giving date and number of original invoice, and describing defect. Product Suitability. Many states and localities have codes and regulations governing sales, construction, installation, and/or use of products for certain purposes, which may vary from those in neighboring areas. While Grainger attempts to assure that its products comply with such codes, it cannot guarantee compliance, and cannot be responsible for how the product is installed or used. Before purchase and use of a product, please review the product application, and national and local codes and regulations, to be sure that the product, installation, and use will comply with them. 3 of 8 No Warranties to Consumers. Grainger makes no warranties to those defined as consumers in the Magnuson -Moss Warranty - Federal Trade Commission Improvement Act. Electronic and Photographic Cleaning Fluids Customers. It is a violation of federal law to sell, distribute, or offer to sell or distribute any chlorofluorocarbon or aerosol hydrochlorofluorocarbon containing cleaning fluid for electronic and photographic equipment to anyone who is not a commercial user of this product. The penalty for violating this prohibition can be up to $25,000 per sale. Individuals purchasing such products must present proof of their commercial status in accordance with 40 CFR 82.68(a) or (c). A "Commercial User," as defined in the regulation, means a person that uses the product in the purchaser's business, or sells it to another person and has one of the following identification numbers: Federal employer identification number; State sales tax exemption number; Local business license number; Government contract number. Refrigerant Customers. Effective November 14, 1994, in accordance with the Federal Clean Air Act, sale of Class 1 (CFC) and Class 2 (HCFC) refrigerant will be restricted to resale purchases and/or to certified professional service technicians. To purchase regulated refrigerant products, all customers must present a certification card or sign a statement of resale to complete the purchase. OSHA Hazardous Substance & California Proposition 66 Product Information. Material Safety Data Sheets (MSDS) for OSHA defined hazardous substances and a list of products known by the state of California to cause cancer or reproductive harm are available at your local Grainger branch, or by contacting Grainger, Dept. B2.C8, 100 Grainger Parkway, Lake Forest, IL 60045-5201 U.S.A. The information and recommendations contained on the MSDS supplied by the manufacturer are considered to be accurate and reliable. Grainger, however, makes no warranty with respect to the accuracy of the information or the suitability of the recommendations. Grainger disclaims any and all liability to any user. • Page 19: Subsection 8.8; "Delivery. Inspection, Acceptance. Title, Risk of Loss". Please revise the first sentence as follows: "Vendor agrees to deliver the goods as indicated in the Contract, and upon acceptance by tho Stato, title to the goods shall pass to the State at point of origin. • Pape 19; Subsection 8.11; "Breach; Remedies". Please note that consistent with applicable law, "breach" means material breach. Attachment B: WSCA Special Terms and Conditions • Paae 25: "Hold Harmless". Please add the following underlined language "... arising from the negligent acts or omissions of performance required under the contract of the contractor, his employees or subcontractors. • Page 25; "Delivery". Please refer to the exception requested for Subsection 3.6 on the first page of this letter. • Page 25; "Warranty". Please delete this Section and see Subsection 8.7 on page 3 of this letter. • Page 27; "Records Administration". Please replace "costs" with "prices charged to Participating Entity Buyers". Attachment D: Participating States' Terms and Conditions 4 of 8 Please note these States found in this Attachment D, Alaska, Colorado, Montana, Utah, and Washington all have negotiated contracts presently in effect. Grainger anticipates that these States will utilize the State's standard terms and conditions as already negotiated under the present WSCA contract, Therefore, under this offer the terms and conditions of these pre-existing agreements will be the terms and conditions to which will apply to any subsequent Agreements in the States of Alaska, Colorado, Montana, Utah, and Washington. In event that these States wish to renegotiate their State terms and conditions, Grainger will do so, upon request, with each individual State at the time the agreement is adopted. If these clarifications are not acceptable or if they cause Grainger to be deemed non -responsive, please contact me at 916-503-0229 so that we may discuss alternatives to our concerns. Sincerely, Vat Doug DAlessio Government Sales Manager 5 of 8 Grainger Parts ("Grainger Parts")Terms and Conditions 1. Shipping Charges. Freight is prepaid and add, collect from the Grainger Parts warehouse. A minimum handling charge is added to all shipments. A handling charge is not added to shipments of backordered items. Any extra charges incurred for additional services, such as shipment from point specified by Buyer, or Buyer's carrier, or special handling at the destination, must be paid by Buyer. At Grainger Parts' option, the freight policy for export orders may be subject to special terms and conditions. If any product is backordered on an order qualifying for freight prepayment, that product will be shipped prepaid. Title and risk of loss pass to customer on delivery to the common carrier. If product was damaged in transit, customer must file claim with carrier. 2. Grainger Parts Limited Warranty LIMITED WARRANTY. ALL PRODUCTS SOLID ARE WARRANTED BY GRAINGER PARTS, A DIVISION OF W.W. GRAINGER, INC., ONLY TO CUSTOMERS FOR RESALE OR USE IN BUSINESS OR ORIGINAL EQUIPMENT MANUFACTURE, AGAINST DEFECTS IN WORKMANSHIP OR MATERIALS UNDER NORMAL USE FOR ONE (1) YEAR AFTER DATE OF PURCHASE FROM GRAINGER PARTS, UNLESS OTHERWISE STATED. ANY PRODUCT WHICH 15 DETERMINED BY GRAINGER PARTS TO BE DEFECTIVE IN MATERIAL OR WORKMANSHIP AND RETURNED TO GRAINGER PARTS OR AUTHORIZED SERVICE LOCATION, AS GRAINGER PARTS DESIGNATES, SHIPPING COSTS PREPAID, WILL BE, AS THE EXCLUSIVE REMEDY, REPAIRED OR REPLACED, AT GRAINGER PARTS' OPTION. WARRANTY DISCLAIMER. NO WARRANTY OR AFFIRMATION OF FACT, EXPRESS OR IMPLIED, OTHER THAN AS SET FORTH IN THE LIMITED WARRANTY STATEMENT ABOVE IS MADE OR AUTHORIZED BY GRAINGER PARTS. GRAINGER PARTS DISCLAIMS ANY LIABILITY FOR PRODUCT DEFECT CLAIMS THAT ARE DUE TO PRODUCT MISUSE, IMPROPER PRODUCT SELECTION OR MISAPPLICATION. GRAINGER PARTS HAS MADE A GOOD FAITH EFFORT TO ILLUSTRATE AND DESCRIBE THE PRODUCTS AND ANY DESCRIPTION DOES NOT EXPRESS OR IMPLY A WARRANTY THAT THE PRODUCTS ARE MERCHANTABLE OR FIT FOR A PARTICULAR PURPOSE. 3, Returns - Grainger Parts will accept returns of new, damaged or defective product for a period of one year from the date of purchase. Grainger Parts will issue a credit for acceptable returns in the same form as payment of the original transaction. Grainger Parts requires proof of purchase (packing slip or invoice) to process returns. Credits will not be issued without proof of purchase. Grainger Parts will process returns of product purchased from Grainger Parts. Any items purchased from other Grainger businesses (e.g., Grainger Industrial Supply, FindMRO) must be returned to that business. Grainger Parts will credit freight and handling charges on returns only in the case of Grainger Parts' error or damaged/defective product. Grainger Parts may issue a call tag due to Grainger Parts' error and/or for damaged or defective product. All eligible product returns may be subject to a restocking charge (i.e., the customer will be credited for less than full purchase price) of up to 35% of the sale price, at the discretion of the Call Center Manager. "Special -Order" product cannot be returned. Order confirmations, packing slips, invoices, etc., containing special -order items will clearly designate them as non -returnable. Special -order Product includes product that is: • Drop -shipped from a vendor • Not carried in Grainger Parts' inventory (i.e., non -stock product) • Custom-built or proprietary in nature • Contains hazardous materials (HAZMAT). • Subject to an expiration date (e.g. sensors, batteries, etc.) 6 of 8 4. Qualified Product Lines. Manufacturers, and Specific Products All product lines, manufacturers, and products offered by Grainger Parts are included in this Agreement. 5. Volume Target For the above described price discounts, Buyer will make its best efforts to achieve $100,000 in incremental purchases from Grainger Parts during the initial twelve (12) months of this Agreement. During subsequent terms, Grainger Parts and Buyer will jointly make best efforts to achieve a minimum 25% increase over total purchases made during each prior term. To reach this goal, Buyer will purchase parts from any and all product lines and/or manufacturers. 6. Promotion of Agreement To support and promote this Agreement, Grainger Parts agrees to create a Buyer's National Account Parts Purchasing Agreement pamphlet. Any and all additional promotion and support of this Agreement by Grainger Parts is at the discretion of Grainger Parts. To support and promote this Agreement, Buyer agrees to facilitate distribution of any mass communication pieces developed by Grainger Parts by providing access to internal mail distribution channels, or a current membership mailing list, upon request. Any and ail additional promotion and support of this Agreement by Buyer is at the discretion of Buyer. 7 of 8 Grainger Product Sourcing Terms and Cogditions for Sourced Product Sourcing Services Seller will source products not available through the Grainger General Catalog, Seller does not source the following products: weapons, ammunition, explosives, aircraft products (including ground support equipment), products containing asbestos, nuclear -related products, products directly involved in production of final product (end unit), products with restricted distribution, or any product judged to be too great a liability risk by W.W. Grainger, Inc. Pricing The pricing model for sourced products is based on current market conditions and is competitive for spot buy situations on a per order basis. Static negotiated pricing may be available for customer volume sourcing commitments based on established ordering patterns and supplier price support conditions. Freight Freight is FOB shipping point, prepaid and billed to Customer to locations within the continental United States. Shipments to locations outside the continental United States is the responsibility of Customer. Any extra charges for additional services, such as hazardous materials, Customer's carrier, premium freight, or special handling at the destination are paid by Customer. Warranty SELLER'S STANDARD WARRANTY DOES NOT APPLY TO SOURCED ITEMS. SELLER, TO THE FULLEST EXTENT PERMITTED, PASSES THROUGH TO CUSTOMER ANY AND ALL MANUFACTURER AND SUPPLIER PRODUCT WARRANTIES. Warranty Disclaimer SELLER'S WARRANTY DISCLAIMER AND LIMITATION OF LIABILITY APPLY TO SOURCED PRODUCTS. Returns Special manufactured and custom engineered product is non -returnable. A RGA (Returned Goods Authorization) rnust be issued by Seller prior to returning sourced products; the RGA is good for 30 days after issuance. Returns will be sent directly to the sourced supplier, and not to a Grainger location, unless otherwise instructed in the RGA. Returned sourced products may incur a restocking fee of 35% of product sell price, freight prepaid and added, unless shipment was the result of Seller or manufacturer error. Stocking Sourced Product In the event that Seller agrees to stock an agreed upon quantity of sourced products for Customer, upon cancellation or termination of the National Account Agreement or this sourcing arrangement, Customer agrees to purchase all remaining stocked sourced product. Seller will invoice Customer for such product within (30) days of termination of the National Account Agreement or this sourcing arrangement. 8 of 8