Agenda - Council - 12/12/1989 - Laserfiche WebLink

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CASE TURN-OUT GEAR INVOICE FROM CLAREY'S SAFETY EQUIPMENT, INC. By: Sandra G. Ashley, Finance Officer Background: On June 29, 1989 the City's Purchase Order #2358 was mailed to Clarey's Safety Equipment, Inc. in Rochester, Minnesota. This purchase order detailed the sizes, quantities, and unit price of jackets and bib-overalls for a purchase order total of $2,027.19; the unit price used for this purchase order was the same as the contract price to the City for an order earlier this year. Clarey's shipped the turn-out gear for Purchase Order #2358 on October 4, 1989. On October 12, 1989 the City received Clarey's invoice for this shipment. The invoice reflected a 22% increase above the purchase order price - an additional cost of $446.00. Fire Chief Hoeke contacted Mr. Jay Clarey who stated that Clarey's sales price to the City had increased. Prior to our Fire Chief's call, the City was not notified of a price increase except by way of Clarey's invoice. On November 22, 1989 I wrote to Mr. Clarey and advised that Clarey's invoice exceeded our purchase order authorization and payment would be made according to our purchase order. This invoice is included in tonight's bills - to be paid at the purchase order price. Mr. Clarey has contacted our Fire Chief and reiterated that their firm could not honor the previous price as the order was too small - they would lose money. Mr. Clarey has not returned my phone calls. The following is a direct quote from the terms and conditions printed on our City's purchase orders: This order is not to be f'flled at a price ~eater than that stated on the obverse side of this order form. Observation: In addition to the terms and conditions printed on our purchase orders, common business practice dictates immediate resolution of price differences. Orders are not entered nor filled until all such differences are resolved. Mr. Ctarey did not notify the City of a price increase prior to filling and shipping the order; therefore, the City was denied an opportunity to seek competitive price quotations from other suppliers. In addition, the turn-out gear could not be returned to Clarey's as new - it was issued to our firefighters upon receipt at the City. Recommendation: Staff recommends Mr. Clarey's request for additional payment in the amount of $446.00 be denied. Review Checklist: CiD, Administrator X City Attorney X City Engineer . Community Development Director Public Works Supervisor Chief of Polic: Finance Officer "X Planning & Zoning Commission Park & Recreation Commission Fire Chief X //9