DEPO - Demand Pooling Global Services

DEPO is the shortened name for Demand Pooling Global Services - "DE" for Demand; "PO" for Pooling. The Company is a Dallas, TX headquartered company whose principals have built their careers on advising or consulting with state and local governments. Its Advisory Board includes several former city managers, executive directors of transit and educational agencies and Mayors. Its business objective is to provide a platform which enables state and local government buyers to cooperatively buy their "high-ticket" capital equipment and selected commodities in order to obtain meaningful savings through volume discount pricing. Other cost-saving features will be incorporated to enhance the procurement cost-savings. (Close)

SLG is the acronym for State and Local Government, which includes cities, counties, states, school and hospital districts, airports, transit agencies and coops consisting of any of the above associations of governments, etc. More commonly referred to as the Buyer.

IFB, RFB and RFP are acronyms that describe the type of request being solicited. The DEPO platform is designed to follow the traditional sealed bid process that is familiar to most SLGs

	A Request for Proposal (RFP) is the invitation for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. The submitted proposal may be negotiated between the Buyer and the submitting Supplier, if selected.
	IFB is Invitation for Bids. It, like the other solicitations, provides the underlying information a supplier will require in order to understand the specifications of the commodity or service being purchased. The submitted bid is typically not subject to negotiation.
	RFB is Request for Bid used by SLG agencies to identify the scope and purpose of the bids requirements and specifications - it is essentially synonymous with IFB.

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DEPO provides a browser-based platform (no new software to load on your computer) that is modeled after the traditional sealed bid process and has been designed to intuitively support RFP/RFB/IFB functionality for large ticket purchases by SLG buyers. Buyers simply can use the platform free of charge and do not contract with, hire, or pay DEPO a fee for its use. DEPO does not sell or inventory any product and by registering, you are not joining a cooperative organization - you simply gain access to the DEPO tools to use on behalf of your organization.

DEPO is not the contracting entity for product products. It does not enter into contracts and permit you to "piggyback" off of those contracts. You remain the contracting entity and you cede no discretion to DEPO. DEPO simply provides the platform enables, you, the state and local government entity to combine your purchase requirements with the similar requirements of other public entities in order to achieve volume-discount pricing for products that otherwise would be purchased at a higher price in the volumes typically purchased. In many respects, it is similar to a well-known auction platform that facilitates buyers and sellers coming together to negotiate a deal on a neutral platform; however, the completely neutral DEPO platform adds value by proactively pooling the similar needs of SLGs nationwide, in order to achieve larger volumes and improved "volume-discount pricing."

While piggyback contracting is a viable option, under this approach, you typically may purchase the same product at the same price as the pre-negotiated contract price. Your additional volume does not impact the pricing. The DEPO platform, by contrast, ensures that your volume is taken into consideration in the pricing. Each additional unit should favorably impact the pricing for all participants. Moreover, it accomplishes this while allowing each SLG to maintain its own unique product specifications, store it's frequently used underlying documents and reuse and edit stored documents. The objective is to obtain pricing based upon the combined volume of SLGs nationwide. (Close)

DEPO receives fees which vary in amount (depending to the product), from the winning Supplier(s) as a "Platform Use" fee. The platform enables suppliers to come to one location in one time window and easily capture more volume than previously was practical. They improve their visibility of demand, enhance production scheduling and significantly reduce both inventory and marketing costs. Supplier Platform Use fees payable to DEPO are fully disclosed to the buyers. There are no other costs associated with the use of the platform. (Close)

While this feature is not yet being offered, DEPO will soon offer improvements to the buyer payment mechanisms that will enable suppliers to receive payment more rapidly than previously the case. More rapid payment will result in more bidders, more aggressive bidding, more inclusion of minority suppliers and a host of benefits to both buyers and suppliers.

Secondly, SLG suppliers recognize that small financings in the municipal market are less appealing to the investment groups that bid on these financing needs than larger financings. DEPO will facilitate the packaging of multiple issuers that have a need for financing their new purchases into larger financings that have "several, but not joint" obligations. Even the best credit municipal issuers have informed us that this would greatly improve their financing flexibility and reduce the negative budgeting effects of "off-cycle" purchases that often require tapping the current budget in order to cover the cost of capital asset or commodity purchases. (Close)

The DEPO platform is based upon the traditional sealed bid processes familiar to most SLGs. Since you do not contract with DEPO, hire us or pay us a fee and simply use our tools as an extension of your current procurement processes, whatever procurement laws you have in place should continue to apply. You use our tools as an alternative and more comprehensive method of issuing your IFBs, soliciting bids and evaluating those bids from nationwide suppliers. You do not cede discretion to DEPO, but rather you retain full control in evaluating your bids and accepting or rejecting bids as you have in the past. If you award a contract or multiple contracts, those will be solely between your entity and the suppliers to which you awarded contracts. The bidders (Suppliers) must comply with all applicable government procurement laws for each entity receiving bids including all requirements you specify, in the same fashion as they would without cooperative purchasing. In fact, suppliers are not allowed to submit bids unless and until they have downloaded and accepted each and every underlying document that you have posted on our platform as integral parts of your IFBs.

The only two concessions we ask of buyers is that they adopt the specified time windows that we establish to accommodate the most number of buyers and that you incorporate a statement in your bid specifications/requirement informing the Suppliers that, regardless of how they capture your IFB, all bids must be submitted electronically through the DEPO platform. If you also require a "hard copy," you should include this information in your IFB, but should inform the suppliers that their hard copy submittal must match the bids submitted electronically through the DEPO platform. (Close)

Previous pooled transactions were for motor fuels and were fully executed, but conducted as beta-test pools. While these were successful, the principal purpose of those pools was to ascertain the best user interface, ease of use and the like for DEPO's primary target market, state and local governments. In the interim, we have been informed that some commercial enterprises may also use the platform. This may include the private sector trash haulers and other providers of services to state and local governments

DEPO received high marks on its pooling processes from both the buyers and the suppliers with specific comments on how easy the process was to understand and implement. However, DEPO is continually looking for ways to improve the input and the free exchange of information between DEPO and both the buyers and the suppliers has turned out to be welcome feedback that has resulted in meaningful improvements and expanded services. With each pool, both SLGs and Suppliers have asked for enhancements designed to simplify the input process and ways to more seamlessly use existing IFBs. To date, all requested enhancements have been made. (Close)

The results of the first motor fuel pool were probably the most significant. DEPO found that those entities that actually built their IFBs online through the platform or uploaded complete and current IFBs were taken far more seriously by the suppliers than those who simply input their volume requirements. The former received extraordinary bids. But those that input no IFBs or used expired IFBs were treated as curiosity seekers and received competitive but not extraordinary bids. In the initial motor fuel pool, which offered 450+ different fuel products, 13 entities participated from across the country with 10 receiving bids for more than 72 million gallons of fuel of which there were 23 motor fuel products including various diesel and bio-diesel fuels, gasoline and even jet fuel. (Close)

In effect, the only item that is aggregated is the demand volume. Each SLG entity is allowed to maintain its own unique product specifications and its underlying documentation always remains intact. By enabling each participating entity to store, retrieve, edit and activate all current and prior documentation online, DEPO's input platform serves as a data warehouse or repository for the storage of those documents you choose to employ and/or to store for future online access (only accessible by you).

As suppliers respond to the composite volume (i.e. bid response), they also must download and execute and/or acknowledge and accept the terms of each underlying documents of each entity for which they wish to submit a bid. In this respect, it's no different from the manner in which you currently conduct your solicitations since the Suppliers would have the same requirements if they were to bid individually on a number of different SLGs' volumes, except they would not have a central access point to capture IFB information. Suppliers can generate reports from DEPO that organize the bids into well defined, geographic segmentations that allow them to view the bids by product type, by aggregated volume, etc. enabling them to intelligently analyze the numbers to maximize volume-discount pricing. (Close)

DEPO schedules a pool and invites SLG buyers to join the pool. (i) The SLG securely self-registers only one time by inputting basic profile information. The system will remember them each time they return by their user name and password. (ii) The SLG simply selects the pool they wish to join and (iii) inputs their IFB general information, selects their product specifications and delivery requirements; (iv) the SLG can then attach their new documents or activate their previously stored underlying documents (including those that are informational, or those that must be accepted or executed by suppliers) and click to submit their IFB. It's that simple.

Once the pool closes, (v) DEPO notifies the suppliers identified specifically by the SLGs, as well as those in our database, of the availability of the cooperative purchase. The supplier(s) then (vi) review and acknowledge the Buyers' general information and underlying documentation (DEPO requires the supplier to acknowledge each Buyer-uploaded document prior to being allowed to submit their bids). After analysis, (vii) the Supplier will submit their pricing bids via the system for review by the individual SLGs. DEPO then (viii) at a very specific time (synchronized with the official U.S. Time Clock) flips the pool access back to the Buyers for evaluation and acceptance or rejection. If a bid is accepted, Buyers can use our platform to award the contract to one supplier or allocate the award among between or among multiple suppliers. (Close)

A "Management" section now appears on the website. In addition, the Advisory Board, which consists of current City Managers, five former City Managers (two of whom were presidents of the ICMA), the former Lord Mayor of London, the former Executive Director of a major transit agency and the Executive Director of a statewide education association. Collectively, the members of the Advisory Board have more than 200 years of experience as senior SLG officials, many having had oversight responsibility for the Purchasing Departments that report to them. (Close)

DEPO utilizes a variety of formats for securing info regarding suppliers (vendors). (1) During the IFB input process, each SLG is encouraged to identify their traditional and prospective suppliers. DEPO will then notify those suppliers that they have been invited by you to come to the DEPO website and capture your IFB (and those furnished by other Buyers) for a pending pooled purchase. This way the primary recipients are those identified by each SLG. (2) For each product, DEPO will also identify suppliers with national distribution and/or sales capabilities and arrange for them to register and participate - this ensures that there are bidders for the entire national pooled volume requirements. (3) Based on the depth and capabilities of the identified suppliers DEPO may also use industry coding information to identify other suppliers for the respective products. (Close)

DEPO does not charge SLG buyers for the use of the platform. DEPO's fees are paid only by the winning supplier or suppliers as a "Platform Use" fee. Suppliers that have participated on the platform have recognized quantifiable and measureable benefits. They were able to significantly improve visibility of demand, lower their cost of customer acquisition, realize an enhanced ability to better plan their production scheduling and reduce both inventory and overall marketing costs.

There are no other costs to the winning supplier(s) for the use of the DEPO platform. Other suppliers pay no fee for the use of the platform. Typical fees will range from 1.5%-2% for configurable products and commodities. For motor fuels, the fee is 1/2 of $0.01 per gallon. (Close)

DEPO makes every effort to ensure that all qualified and all SLG-specified suppliers have access to the consolidating IFBs. DEPO is a completely neutral party and simply provides the consolidating or aggregating platform for use by the SLGs. Each Buyer provide its list of all suppliers from which, at a minimum, it wishes to receive bids. We add additional suppliers from our database, all of which will have to meet any certification or qualifications from the specific buyers. Since other buyers also provide their lists of suppliers, when DEPO adds your traditional suppliers to the database along with those provided by other buyers and those DEPO has otherwise identified through our various processes, the list should be comprehensive and inclusive of those suppliers identified in most outreach programs. Our goal is two-fold, to ensure that (i) there are national bidders; and (ii) the system accommodates the needs of all SLGs for local and regional bidder participation. (Close)

Prior to the close of the period for IFB submissions you may recall and update, modify and issue amendments as needed on the DEPO system. Once the bid solicitation period commences and up until the last day on which all bids must be submitted by the suppliers, you can still issue amendments or modify your IFB, but you must do so by contacting DEPO for administrative assistance in inputting the revisions or amendments on the DEPO system. Any modifications will then be distributed to all suppliers registered to bid on the on your IFB. Those that have yet to register will capture the original IFB and revisions and amendments when they select your IFB for bidding. The suppliers, in turn, can issue questions to you. Upon receiving your response, the system will automatically notify all suppliers that you have issued a clarification/response and they may capture your clarification/response by logging into the system. As a practical matter, it is recommended that amendments issued during the final week of bidding should be limited. (Close)

Schedules of both active and planned pools are listed on the web site. However; the initial scheduling of pools for products is usually in response to the requests from the state and local government (SLG) buyers. Currently, it is anticipated that the next pools after motor fuel, will be for water treatment chemicals, police cars, non-police vehicles, cutaway buses and various transit products. The system is designed to accommodate numerous overlapping pools. Notification for these next pools will first be sent to those SLGs that have already registered and then to others that we have reason to believe will have an interest. Moreover, for many products, we intend to schedule "repeat pools" on a periodic basis. For example, motor fuel pools will be scheduled three times during the year, police and other vehicles, two to three times, etc. In the near future, provision will be made for you to request specific pools. (Close)

No. We cannot post progress volumes for the obvious reason that early in the scheduling of each product, the volume will be small or zero and could lead a state or local government (SLG) buyer to reach erroneous conclusions regarding the progress of the pool. We are delighted to share the results of all pools; therefore, you will be able to compare the effect of volume-discount pricing versus the pricing you might receive on your individual solicitation. (Close)

Normally, 1-2 weeks prior to the scheduled commencement of a pooled transaction for a particular product, DEPO will notify registered state and local government (SLG) buyers, and those that have indicated their interest, of the scheduled commencement of the period in which buyers may join a pool. We also notify those that we have reason to believe will have an interest in participating in a cooperative purchase for the scheduled product as well as those that other SLGs have suggested we notify.

From the commencement date of the pool, buyers will typically have 30 days during which they may join the pool by providing their requirements and specifications and uploading their IFB documentation. One important provision, which may necessitate a change in a buyer's traditional process, is that the buyers accept the scheduled dates for joining and receiving bids (i.e., the "pool schedule"). Your product specs may vary from buyer to buyer (you maintain your specs), but the Pool Schedule dates must coincide with those the system specifies.

Upon closing of the pool (for buyer participation), the system automatically notifies all identified suppliers of the availability of the pooled purchase IFBs and the Buyers' supporting documentation. The bidding period commences and the suppliers will typically have 30 days to submit their bids. Upon closing of the bid period, buyers will have full access to all submitted bids that were specifically submitted in response to their requirements. The total period for IFB posting to bid submission (and bid opening) normally is 60 days. (Close)

DEPO provides for any specifications you may require and if those specifications include Federal requirements (such as "Buy America"), those requirements remain intact for your portion of the pool. If suppliers are able to comply with those requirements, their bid(s) will reflect the compliance. If they are unable to comply, they may submit their "Alternative Solution" for your evaluation and acceptance or rejection. The key to our platform is that you can maintain your own unique product specification and all related requirements (Close)

The science is evolving. For motor fuels, the bid pricing can be compared to prices that were received by others (at or near the same time/date) that may have chosen not to participate in the pooled purchase. For other products, it is likely that the comparison will be based upon budgeted costs that are generally derived from historical purchases. We believe savings for certain non-commodity products will likely approximate the upper end of the projected range (12%-20%), though based upon test pools and indications from a variety of suppliers, we believe that for some products, the pricing advantage will be more. Savings obviously depend upon the product and the volume, but the good news is that it costs state and local government (SLG) buyers nothing to participate in a pool, even if they ultimately reject all bids. (Close)

Fuel pricing is very sophisticated and we attempt to make it as straightforward and comfortable as you have experienced in the past. Most state and local governments (SLGs) solicit bids on the basis of a specified index, for example, "OPIS 10:00 same day average," "Platts Gulf Coast" and a variety of other indices. We offer you the opportunity to select your index or even request a fixed price (non-indexed) bid. These types of bids will typically be shown as "OPIS same day 10:00 average plus or minus a fixed differential or markup/markdown" (or a Platts-based similar designation).

Some of these indices can be used to hedge your pricing and "hedge-able" indices should be selected from the list if you intend to hedge in the future. While DEPO does not provide hedging advice, there are a variety of highly experienced experts in the market who offer SLGs advice on how best to accomplish hedging. Hedging provides a tried and true method of stabilizing future fuel prices, which is critical if you need to "manage against a budget." We do not view fuel hedging as means of generating savings, but rather as a method of stabilizing fuel budgets. Hedging, in our view, if properly structured, is not speculating, but rather identifying and setting a price level that works within your budget. For more information on hedging, contact an experienced hedging expert.

In addition to the savings that can be generated in the pooling of traditional fuel purchases on an unguaranteed basis, DEPO offers SLGs the opportunity to further save by guaranteeing a portion of their fuel purchases. Not only do suppliers tend to offer superior pricing for guaranteed contracts, but those guaranteed contracts result in the buyers becoming "more ratable," which would improve their positions in the hierarchy of when they would receive fuel in the event of fuel shortages. (Close)

At your requests, we have provided for an easy method of allocating your awards among multiple suppliers. You may designate which suppliers are awarded your specified percentages of the awarded contract.

We now offer opportunities for SLGs to permit unbundled bids. For example, by permitting fuel suppliers to bid the "physical fuel" shipped to the storage racks along the pipeline and trucking companies to bid the fuel deliveries from the racks to your storage facilities, you not only permit more very large fuel suppliers (including refiners) to bid on the fuel itself, but you open the door to trucking companies that often are WBE/MBE-owned. The results should be more bids for the fuel itself and more bids for the trucking of the fuel to your storage facilities. Each party is allowed to bid on what is most compatible with its business model. More bids normally will result in improved pricing and certainly should result in more WBE/MBE company participation. Numerous examples are available to demonstrate the additional savings that may result from unbundling.

Additionally, DEPO will be offering payment options that will make winning of state and local government (SLG) contracts far more "affordable" by WBE/MBE and local all suppliers. (Close)