CTR059320_Price_Increase_Determination.pdf

PROCUREMENT DETERMINATION

PRICE INCREASE

Cc: File Rev. 04/2020

Procurement

Sections 1 through 3 MUST be completed Use Attachments as Necessary

1) Name: Tom Kornell

Title: Senior Procurement Officer

Date: May 15, 2024

Contract Number: CTR059320

Contract Description: New Vehicles Purchases

Contractor Name: Midway

2) Line Item Pricing:

See attached spreadsheet.

3) Provide justification:

Midway Chevrolet is requesting price increases on all phase one (1) vehicles. Recently, all major manufacturers have made changes regarding dealer incentives. These incentives have dropped across all models from 35-90%. As a result of reducing these incentives, it has forced the dealerships to decrease the discount offered to the state for phase 1 vehicles. This was not a foreseeable price change at the time of the contract award.

ADOT Procurement has reviewed and researched the request. It was determined that Procurement IQ reports that passenger vehicle prices have exhibited high volatility during the last three years due to heavy fluctuations in the supply chain and price increases for manufacturing due to inflation and wage increases. Procurement IQ shows pricing continuing to grow annually at 5.1%. Additionally, the overall price level as measured by the Consumer Price Index (CPI) has also increased 18% since January 2021.

ADOT Procurement has determined the increase would be fair and reasonable and in the best interest of the State, based on the information above. Therefore, ADOT grants the increase as listed in the table below.

To Be Completed by Procurement Authority:

APPROVAL

Request Authorized Pursuant to A.A.C. R2-7-604A

Request Denied

Request Returned for Additional Information

See Comments

Comments:

Approved by:

Signature:

Title:

Date:

DocuSign Envelope ID: 44BB79C5-030D-48A2-9775-6F5066BC7DE0

Procurement Manager

X

5/15/2024

New vehicle added

Discontinued

Contract

Line Item #

Vehicle make and Model Current % off

MSRP

Agreed to

Pricing Difference

1 Bolt 5% 5% 0%

2 Bolt EUV 5% 5% 0%

3 Camaro

32 Malibu 20% 11% 9%

5 Spark

6 Trax 4% 4% 0%

33 Trailblazer 15% 9% 6%

34 Equinox 18% 10% 8%

35 Equinox EV 0% 0%

36 Blazer 17% 10% 7%

37 Blazer EV 0% 0%

38 Traverse 23% 12% 11%

39 Tahoe 21% 10% 11%

40 Suburban 20% 10% 10%

13 Colorado 3% 3% 0%

41 Silverado 1500 17% 10% 7%

42 Silverado 2500 22% 12% 10%

43 Silverado 3500 19% 10% 9%

44 Silverado EV 0% 0%

45 Express Passenger 30% 15% 15%

46 Express Cargo 30% 15% 15%

47 Versa 7% 2% 5%

48 Kicks 8% 2% 6%

49 Sentra 8% 3% 5%

50 Altima 12% 6% 6%

24 Maxima

51 Leaf 13% 5% 8%

52 Frontier 9% 3% 6%

27 Titan

53 Rogue 9% 3% 6%

54 Murano 11% 8% 3%

55 Pathfinder 7% 4% 3%

56 C4500/ C5500 Silverado 10% 0%

57 Low Cab Forward (LCF) 20% 0%

Discount Pricing 2024 for Contract CTR059320

Midway Chevrolet

Discontinued

Discontinued

Discontinued

Discontinued

“Looking back to the beginning of our three year period, automobile prices have both risen sharply and declined somewhat sharply, especially for used vehicles. The price of new vehicles in January 2024 is

19.6% higher than in January 2021. The price of used vehicles has gone through more volatile movements but, in January 2024, are 20.1% higher than in January 2021. The overall price level as measured by the CPI has increased 18% since January 2021. So, overall, car prices have risen relative to the average of all consumer prices, but in the end their increase is only one or two percentage points higher than the average increase in price of other goods and services in the economy. Price Trends for

New and Used Cars February 20, 2024.” by Dennis W. Jansen, Somali Ghosh Sinha TEXAS A&M

UNIVERSITY Private Enterprise Research Center