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REPORT RAPPORT
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REPORT RAPPORT
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DATE:
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22 July 2013 |
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TO/DEST:
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Executive Director, Ottawa Police Services Board |
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FROM/EXP:
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Chief of Police, Ottawa Police Service |
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SUBJECT/OBJECT: |
PURCHASE OF 2014 AND 2015 AMMUNITION
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That the Ottawa Police Services Board approve:
1. An ammunition purchase of up to $340,000, excluding taxes, through the Police Co-operative Purchasing Group.
2. A pre-commitment of $170,000, excluding taxes, against both the 2014 and the 2015 operating budgets for the purchase of ammunition.
Through the Police Co-Operative Purchasing Group (PCPG), the OPS acquires 665,000 rounds of ammunition each year for training and duty requirements. The majority of the ammunition is used by officers in a variety of training scenarios and to meet provincial training requirements. The remainder is issued as duty ammunition throughout the year.
As a result of recent global events, the supply, price and timeline for delivery of ammunition has changed markedly. Manufacturers are unable to keep up with current demands.
It is important that the OPS consider strategies to ensure it can acquire future ammunition purchases in a timely manner. This report outlines the strategy for the police service to secure a supply of ammunition by placing orders now for the 2014 and 2105 requirements. This strategy requires the commitment of future year budgets, a practice which is permitted under the Financial Accountability Procedures (FAP) Manual.
Mitigating Delivery and Price Risk
The impact of increased global demand for ammunition is apparent in sharp increases in both delivery times and price. In 2010, the OPS was able to place an order for ammunition and receive it in full within three (3) months. The wait times are expected to increase this year to twelve (12) to eighteen (18) months. Ordering the 2014 and 2015 supply now will mitigate the risk of an interrupted supply of ammunition. It will ensure a mid to late year delivery for 2014 and a timely delivery for 2015.
Ammunition prices are also increasing dramatically. In the 2009 – 2011 contract period training and duty ammunition increased by $4.10/unit and $6.70/unit respectively. For the 2012-2013 contract the increase was $28.33/unit and $59.10/unit. Prices have not been announced for the 2014 – 2015 period but they are expected to rise. Placing the 2014 and 2015 order now will enable the Board to take advantage of the 2013 PCPG pricing and avoid the risk of a price increase. This is a cost avoidance of $20.5k, should the price increases be of the same order as the last contract period.
Pre-Commitment of Budget Funds
Section 3.1.2.3 of the FAP Manual provides a mechanism for the Service to enter into a contract involving the pre-commitment of future year budget funds. Approval of the Board must be obtained.
CONSULTATION
Consultation has taken place with law enforcement services across Ontario and with PCPG partners.
The ammunition purchase for 2014 and 2015 is estimated to cost $340,000, excluding taxes. It will be apportioned equally to the 2014 and 2015 budgets, and recorded as a pre-commitment, subject to Council approval during the Annual Budget process.
The annual amount for each year is $170,000, excluding taxes. The operating budget includes funds on this order for the purchase of ammunition.
By pre-committing these funds the Board is supporting a best practice approach to purchasing ammunition that will meet our operational and training needs for the next two years. It is one that will generate financial savings for the organization and provide a secure source of supply for this important operational requirement.
(original signed by Acting Chief Keeley on behalf of)
Charles Bordeleau
Chief of Police
Responsible for report: Director General Debra Frazer
