November 08, 2005 – Peters

November 8, 2005


Mr. John Gordon, Chairman

Illinois Committee of Blind Vendors
53 West Jackson Blvd, Suite 522
Chicago, IL 60604


Dear John,

I look forward to meeting you Thursday to finalize how the state’s proposed beverage agreement will support Illinois Blind Vendors by increasing their profits and opportunities for vending.


Our proposal, which was approved by the Procurement Policy Board on August 2nd, has the potential to generate millions of dollars of revenue for the state each year and increase revenue and vending opportunities for Illinois Blind Vendors.


In our discussions, you have acknowledged and clearly recognized the extent to which the state’s proposal will benefit Blind Vendors. I look forward to finalizing the terms with you Thursday, so that we can continue to improve statewide vending opportunities for Blind Vendors.


Based on our extensive discussions over the last few months, we have incorporated the following terms into our proposal to address what you named as primary objectives for Blind Vendors – (1) increase profits; and (2) increase vending positions:


· Up-front Revenue Generation: The State will provide the Blind Vendors a 10% commission on all up-front rights fees awarded to the State through the RFP process.
· Hold Harmless / Make Whole on Current State Contract. As you have explained to me, the Illinois Committee of Blind Vendors has a very similar contract to the one the state has proposed. Through the Illinois Committee of Blind Vendors current contract with Pepsi, you approximate your organization receives approximately $23,000 in annual payments for machines on state property. The state would guarantee any revenue that may be lost from this existing contract through the term of our agreement.
· No Blind Vendor Commission Fees: The State currently receives commissions for a handful of State beverage machines. Under the new program, the State will waive all current commissions being paid by Blind Vendors, and potential future revenues which will be applied to other State concessionaires and the RFP winning bidder.
· Lower Product Costs: By leveraging statewide purchasing power, the state will dramatically increase the Blind Vendors’ negotiating power with the beverage companies. This will result in reduced cost per can for the blind vendors, which equals higher profit margins. The Blind Vendors currently operate 460 machines, which are negotiated separately. Under this proposal, the vendors will get the negotiating power of 2,400+ machines.
· Product Pricing Extension: In addition to the competitive product pricing offered to Blind Vendors on State property, the new agreement requests that pricing terms extend to other Blind Vendor operations throughout Illinois, including federal, municipal and corporate machines.
· Current Machine Management Guarantee: As part of the RFP, the State has guaranteed that the Blind Vendors will maintain all 460 current operations they choose to manage.
· Increase Opportunities / Additional Vending Machines: This proposal can increase the overall number of machines operated on state property. Through a detailed vending machine assessment, more opportunities will be identified and provided to Blind Vendors.
· Support the State Randolph Shepard Act: The proposal recognizes ILCS 2420 “Blind Persons Operating Vending Facilities Act,” and reinforces the state’s commitment to support Blind Vendors demonstrated recently by the Governor through Administrative Order.
In addition to these points, I am aware that the Department of Human Services Business Enterprise Program (Blind Vendors Program) is planning to formalize a relationship with your organization to provide outreach and marketing for the Blind Vendor Program to ensure long-term growth and expansion.


The efforts we have made will continue the State’s support of the Blind Vendors Program, and help Illinois continue to be recognized as operating one of the best Blind Vendors Programs in the country.


I look forward to meeting with you Thursday to finalize how the new proposal will benefit blind vendors.



Louanner Peters
Deputy Chief of Staff
Governor’s Office