Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
OCTOBER 24, 2024
Subject
SUBJECT: METRO BRANDED AND SPECIALTY MERCHANDISE
Action
ACTION: APPROVE CONTRACT AWARD
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award a two-year, firm-fixed unit rate Contract No. PS120351000 to Cétera Marketing, LLC to provide Metro-branded merchandise, in the Not-to-Exceed (NTE) contract amount of $3,500,000, inclusive of item cost, set-up fee, sales tax and shipping, effective November 12, 2024, subject to the resolution of any properly submitted protest(s), if any.
Issue
ISSUE
As part of Metro’s ongoing communications and community outreach efforts, the agency creates Metro-branded items distributed to participants, attendees, and community-based organizations during community events, Metro events, Metro-sponsored events and meetings with external organizations or officials. These items are often co-branded with the Metro logo and the event or program, such as GoPass, LIFE, TAP, etc.
In accordance with Metro’s External Communications Policy (Attachment A), all External Communications Materials, which include all wearables and other promotional/specialty items, must be approved by the Marketing Communications department to ensure consistent use of design, logos, slogans, and factual information.
Background
BACKGROUND
Historically, departments within Metro ordered their own branded merchandise, resulting in a lack of cost control, consistency and lack of compliance with brand standards. In 2017, Metro’s External Communications Policy established the requirement that all branded merchandise must be centrally ordered through the Marketing Communications department.
A centralized ordering process was established, but it was very manual. Representatives from Metro departments had to submit their request to the designated person in Marketing Communications, who would review the request, select a vendor, identify a proposed item, work with the vendor on the design, and do a quality check on the item delivered and then coordinate invoice payment with the department that ordered the item. Orders from different departments would come at random intervals, and the order size varied from fewer than 10 pieces to several thousand pieces, depending on the event or whether the requesting department was stocking up on commonly ordered items. Because these items were ordered inconsistently, there was a missed opportunity to leverage economies of scale.
Metro previously did not have a centralized branded merchandise contract. In FY23, 30 departments placed 75 promotional item orders with a total quantity of 88,083 pieces of promotional items, and in FY24, 31 departments placed 92 orders with a total quantity of 103,651 pieces of promotional items. Since FY22, Metro has spent $1,179,419 on promo items and info materials.
Discussion
DISCUSSION
Branded merchandise is a cost-effective strategy to drive brand awareness, recognition and affinity, and to keep a brand top of mind with its customers and prospects. Branded merchandise empowers a brand’s fans to express their love for a brand’s product or service - and to share their passion for the brand with others. This is especially true for employees, contractors and business partners who can share their pride in working with or for a brand with others through specialty branded merchandise. In fact, the cost per impression of a promotional item is often pennies - or a fraction thereof. That is why businesses small and large, as well as public transit agencies and other public agencies across the country and LA County, utilize branded items to build their brands and strengthen their connections with their employees, customers and constituents.
Branded items help support Metro in a variety of ways. For example, clear tote bags approved for stadium use reinforce to attendees of sporting and entertainment events that they can Go Metro next time - key as Metro continues to grow its leisure ridership leading up to the World Cup, Super Bowl and Olympic and Paralympic Games. School-age-focused items (such as pencils, pencil cases, etc.) reach students enrolled in the GoPass program and remind them to use their pass. Lapel pins, branded with Metro projects reinforce a wearer’s support for Metro’s ambitious capital project plan. And t-shirts, hats, jackets and other items enable employees to share their pride for working at Metro - which supports our goal to be an employer of choice in Los Angeles.
Metro participates in an average of 20-30 in-person events each month throughout the year, which are a mixture of external meetings, community events attended by Metro to Metro-sponsored/hosted events. These events range in size from smaller settings (approximately 25-50 people) to larger events that draw 1,000 or more people. The average cost per item distributed during non-Regional Connector-related events in FY24 was $2.92.
When Metro staff sets up tables at community events, the level/quality of promotional items on their table attracts event attendees to the table. From there, Metro staff is able to educate the attendees on Metro transportation and resources and sign them up for programs, such as LIFE or GoPass.
As Metro continues to expand its rail and bus network, expand use of fare program offerings including LIFE and GoPass, and works to increase brand awareness and affinity among core and leisure riders, the demand for branded items has steadily grown and is expected to continue to increase with the opening of Metro’s Airport Transit Center, phase one of the Purple Line Extension, and the Gold Line Extension, and ESFV groundbreaking during the contract period.
If approved, this contract will allow Metro to centralize ordering across all Metro departments with a branded merchandise vendor with a set catalog of items and an accompanying fixed unit rate for those items that will allow Metro to leverage the economies of scale across all Metro orders, even for those departments placing smaller orders. The selected North Hollywood-based vendor will create an online portal solely for the use of verified Metro employees, where authorized staff from various departments can inquire, order and manage their requests on their own while still ensuring consistency in brand standards, overseen by Metro’s Creative and Brand team.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of this item has no impact on safety.
Financial_Impact
FINANCIAL IMPACT
There is potentially a cost savings for the Agency due to leveraging economies of scale across smaller purchases. Each department is responsible for managing and determining how much they need to purchase to fulfill their promotional item needs. The 2-year contract for the agency is not to exceed $3.5 million for all departments’ needs combined and that value is inclusive of the branded merchandise, taxes and shipping costs. The contract also allows the possibility for the contract to be extended if there is value remaining on the contract. The Public Relations department will be monitoring the orders to ensure overall spending is within the limit.
The FY25 Budget includes $889,538 in Account 50443, M/S Promo and Info Materials, across various departments to support this effort.
Since this is a multi-year contract, the responsible cost center managers and cabinet chiefs will be accountable for budgeting the cost in future years.
Impact to Budget
The sources of funding depend on the projects that the promotional materials support, which could include Enterprise Funds and sales tax revenues eligible for bus and/or rail operating and/or capital expenses, federal, state and local grants, and Prop A, C and TDA Admin Funds.
Equity_Platform
EQUITY PLATFORM
The Diversity & Economic Opportunity Department (DEOD) established a Disadvantaged Business Enterprise (DBE) goal of 27% for this procurement. Cétera-Marketing, LLC, a DBE prime, exceeded the goal, making a 100% commitment.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The awarding of this contract fulfills Metro’s Strategic goal to provide responsive, accountable, and trustworthy governance within the Metro Organization. This will be accomplished via the relationship created with the vendor and the implementation of an efficient online ordering portal. The vendor will be available to Metro staff and respond to all inquiries within a 24-hour window.
Alternatives_Considered
ALTERNATIVES CONSIDERED
If the Board does not approve this request for award, Metro will cancel this procurement, and individual departments will need to order promotional items as needed through separate contracts. Each Cabinet Chief must designate a point of contact for their departments and order promotional items after securing approval from the creative and brand team. In this model, Metro would not receive the cost benefit of having one centralized ordering system or vendor which creates the opportunity for departments to develop and distribute products that do not meet Metro’s high-quality standards.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract No. PS120351000 with Cétera Marketing LLC to provide Metro branded and specialty promotional items, effective November 12, 2024.
Attachments
ATTACHMENTS
Attachment A - External Communications Policy
Attachment B - Procurement Summary
Attachment C - DEOD Summary
Prepared_by
Prepared by: Monica Bouldin, Deputy Chief of Customer Experience, (213) 922-4081
Pam Krebs, Executive Officer, Communications (Public Relations) (213) 922-6931
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer (Interim), (213) 922-4471
Reviewed_By
Reviewed by: Jennifer Vides, Chief Customer Experience Officer, (213) 922-4060
