As of November 2014, the Department of General Services has added assembly/installation/construction services options when piggybacking on COSTARS-14 contract for recreation and fitness equipment.
When COSTARS was created in 2004, it included installation and related services. In 2012 the installation provision was discontinued. Since that time, the Department of General Services has responded to Costars members’ and vendors’ concerns about the increased cost to purchase the same products and services through traditional bidding and construction contracts. The Department of General Services has revised the ancillary services section within the COSTARS-14 Contract. The COSTARS-14 Contract now allows, without monetary limit; ancillary assembly, installation, and construction activities in conjunction with COSTARS-14 purchases for materials. Prevailing wage rates do apply to all projects that include labor and are in excess of $25,000 in total, including projects that are completed using the COSTARS-14 contract.
This comes as welcome news to many customers who had to put entire projects out to public bid that had previously been completed using the COSTARS-14 contract. Purchasers can now gain more control over the quality, brands and types of materials that are actually purchased. It is estimated that municipalities save as much as 16% to 28% on the equipment cost alone when utilizing the COSTARS-14 contract for the purchase of materials, rather than purchasing those same materials through a general contractor in a public bid situation.
How COSTARS-14 saves money
When a contractor purchases most recreation equipment for governmental projects, they are required to pay sales tax. This is true even though they are purchasing for public entity projects. Although the contractor can not charge “sales tax” to a municipal or school client, they do need to include the sales tax they pay on the materials into their costs for the project, increasing the overall cost to the buyer by 6% to 8%. In Pennsylvania, the tax exemption of the owner is not transferable to the purchaser on recreational equipment purchases.
Also, in order to finance the cost of the materials purchased and to manage that purchase, bidders or contractors usually need to mark-up the cost of the materials. This can increase the cost as much as an additional 10% to 20% to the buyer.
Contact General Recreation, Inc. at 800-726-4793 or email@example.com for more information or to learn more about how to benefit from the use of the COSTARS contract.
For more information about COSTARS, visit https://www.dgs.pa.gov/COSTARS/Pages/default.aspx