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SHAMROCK SUPPLY COMPANY, INC. City of Santa Ana RFP No.: 20-019 VMI ProgramNalue-Added Service Proposal March 18, 2020 Pace 5 The City of Santa Ana General Stores Tiered Pricing Model (Proposed) Contract Materials For designated contract materials (e.g., actively -managed by SSC at COSA General Stores), a fixed unit price by item model is proposed, based upon application of a fixed margin applied to the manufacturer's/supplier's material cost to establish the fixed unit price. Based upon COSA's annual purchase volume of a contract SKU, a two-tier margin is proposed with different margin applied to SKU's reflecting an annual purchase volume less than or greater than $10,000, for example. Contract material pricing to be reviewed/updated semi-annually (January/.duly) with a 12-month look -back. This model provides the following advantages to COSA: material pricing stability, market - favorable pricing for COSA volume -intensive materials, diminished requirement for material pricing management/competitive analysis, etc. Non-Contract/Special Order Materials Similarly, for non-contract/special order materials, a fixed margin model is available, based upon COSA purchase order line value, given lack of annual demand data for one-off, project - related materials. This model provides the following advantages to COSA: enhanced job cost estimating, market -favorable pricing, automated PO pricing management, etc Contract Duration Shamrock Supply would like to extend the original proposed duration of the contract of 3 Years with 2 additional renewal periods to a 5 Year contract with 2 additional renewal periods.