Title
MOTION TO APPROVE THE SEVENTH AMENDMENT TO THE CONTRACTUAL SERVICES AGREEMENT WITH SAFEGUARD SERVICES, INC. FOR JANITORIAL SERVICES AT THE CHARTER SCHOOLS AND EARLY DEVELOPMENT CENTERS (EDC’S) TO INCREASE THE ANNUAL AMOUNT NOT TO EXCEED FROM $1,719,000.91 TO $1,832,967.08, WHICH INCLUDES AN OWNER’S CONTINGENCY IN THE AMOUNT OF $24,500, AND REVISES THE SCOPE OF WORK RELATED TO THE CHANGES AT THE WEST CAMPUS CHARTER SCHOOL EFFECTIVE AUGUST 1, 2024, AND ALSO REMOVES THE CONTRACTOR’S OBLIGATION TO REPLACE DISPENSERS AND ACCOUNTS FOR A 5% INCREASE, EFFECTIVE OCTOBER 1, 2024.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinances is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.15 defines a Request for Proposals as “A written solicitation for competitive sealed proposals with the title, date and hour of the public opening designated. A request for proposals shall include, but is not limited to, general information, functional or general specifications, a statement of work, proposal instruction and evaluation criteria. All requests for proposals shall state the relative importance of price and any other evaluation criteria. The city may engage in competitive negotiations with responsible proposers determined to be reasonably susceptible of being selected for award for the purpose of clarification to assure full understanding of and conformance to the solicitation requirements. Proposers shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals and such revisions may be permitted after submissions and prior to award for the purpose of obtaining the best and final offer.”
- Section 35.18 of the City's Code of Ordinances is titled "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS.”
- Section 35.18(A) states, "A purchase of or contracts for commodities or services that is estimated by the Chief Procurement Officer to cost more than $25,000 shall be based on sealed competitive solicitations as determined by the Chief Procurement Officer, except as specifically provided herein."
- Section 35.19 of the City's Code of Ordinances is titled "SEALED COMPETITIVE BIDDING PROCEDURE."
- Section 35.19(A) states "All sealed competitive solicitations as defined in § 35.18 shall be presented to the City Commission for their consideration prior to advertisement."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $25,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
- Section 35.28 of the City's Code of Ordinances is titled "CHANGE ORDERS."
- Section 35.28(A) states, "City Managers authority. Subject to the restrictions contained in division (B) below, the City Manager or designee is authorized to approve and initial work on the following types of change orders determined in his or her judgment, to be in the public interest, as follows:"
- Section 35.28(B) states that "Notwithstanding the provisions of (A) above, the City Manager is not authorized to approve a change order without authorization of the City Commission where the initial purchase required the City Commission's approval and where the sum of all change orders issued under the contract exceeds 5% of the original contract amount or $25,000.”
SUMMARY EXPLANATION AND BACKGROUND:
1. On March 1, 2017, the City Commission authorized the advertisement of RFP # ED-17-02 “Janitorial Services for Charter Schools & Early Development Centers", which was advertised on March 30, 2017.
2. On June 21, 2017, the City Commission approved the findings and recommendation of the evaluation committee and awarded RFP # ED-17-02 “Janitorial Services for Charter Schools & Early Development Centers" to Safeguard Services, Inc. in the annual amount of $1,295,910.55 for an initial three-year period.
3. As a result, on July 20, 2017, the City entered into a contractual service agreement with Safeguard Services, Inc. for the initial three-year period through June 30, 2020, with the option to renew for two additional, three-year renewal terms, upon mutual consent, evidenced by a written Amendment.
4. On December 19, 2017, the parties entered into the First Amendment to add a contingency amount of $24,500.
5. On August 1, 2018, the City Commission approved entering into the Second Amendment to waive the requirement for payment and performance bonds based on Safeguard's excellent work history with the City, responsiveness to concerns, and performance ability, which was formalized when the parties executed the Second Amendment on August 7, 2018.
6. On December 4, 2019, the City Commission approved the Contract Database Report and the Department’s recommendation to enter into the Third Amendment for the first, three-year renewal term, extending the agreement to June 30, 2023.
7. On November 3, 2020, Florida voters approved Florida Amendment 2, which amended Florida's constitution to gradually increase the state's minimum wage from $8.56 an hour to $15 an hour by the year 2026, according to the following schedule:
Effective Date Minimum Wage Increase $ Increase %
Jan. 01, 2021 $ 8.65 $0.09 1.05%
Sep. 30, 2021 $10.00 $1.35 15.61%
Sep. 30, 2022 $11.00 $1.00 10.00%
Sep. 30, 2023 $12.00 $1.00 9.09%
Sep. 30, 2024 $13.00 $1.00 8.33%
Sep. 30, 2025 $14.00 $1.00 7.69%
Sep. 30, 2026 $15.00 $1.00 7.14%
8. On July 12, 2021, Safeguard Services, Inc. sent a letter to the City requesting an increase in the contract amount due to increasing labor costs attributed to the passage of Florida Amendment 2, which increases the minimum wage by 15.61% effective September 30, 2021.
Additionally, due to the Covid-19 pandemic, daily electrostatic spraying for the schools was being performed under an emergency order and with the decline of the pandemic this service was changed to once a week and requested to become a permanent part of the contract.
For the Fourth Amendment, the requested changes were:
|
Description |
Amount |
|
Increase related to minimum wage changes |
$ 136,850.00 |
|
Increase for weekly electrostatic spraying |
$ 89,300.00 |
|
Decrease for elimination of Village EDC |
$ (50,390.00) |
|
Decrease for elimination of Bright Beginnings EDC |
$ (55,560.00) |
|
Adjustment for costs related to contingency |
$ (16.55) |
|
Total |
$ 120,183.45 |
As a result, on August 4, 2021, the City Commission approved entering into the Fourth Amendment to increase the scope of services to include electrostatic spraying services, and to increase the annual amount not to exceed from $1,320,410.55 to $1,440,594.00, which was formalized when the parties executed the Second Amendment on August 12, 2021.
9. On April 21, 2022, Safeguard Services, Inc. sent a letter to the City requesting an increase to the annual contract amount by $127,448.46 effective August 1, 2022 due to increasing labor costs attributed to the passage of Florida Amendment 2, which increased the minimum wage by an additional $1.00 (10%) effective September 30, 2022. Safeguard requested the increase to take effect on August 1, 2022, so that the janitorial staff working at the schools can start receiving increased rates at the start of the school year. The $127,448.46 requested increase is a 9% increase to the contract (not including contingency). The owner's contingency remained at $24,500, which would make the requested increase approximately an 8.85% increase when taking the total contract value into consideration.
As a result, on May 18, 2022, the City Commission approved entering into the Fifth Amendment to increase the annual compensation amount from $1,440,594.00 to $1,568,042.46, and on August 3, 2022 the City Commission approved the draft Fifth Amendment to be effective on August 4, 2022, which was formalized when the parties executed the amendment on August 10, 2022.
10. Safeguard Services, Inc. sent a letter to the City, dated February 10, 2023, requesting a 9.78% increase, stating that “there has been a 6.98% increase in the CPI for janitorial services, in addition to, an eighteen percent (18%) increase in all consumable supplies including paper, plastics and hand soap. Additionally, the Florida minimal wage amendment will mandate another eight percent (8%) increase in pay for all workers throughout the system”. The aforementioned rate increase will result in a total annual compensation increase from $1,568,042.46 to $1,719,000.91.
As a result, on April 19, 2023, the City Commission approved the Contract Database Report and the Department’s recommendation to enter into the Sixth Amendment for the second and final, three-year renewal term, extending the agreement from July 1, 2023 to June 30, 2026 and increasing the annual amount not to exceed from $1,568,042.46 to $1,719,000.91, which was formalized when the parties executed the Sixth Amendment on April 24, 2023.
11. For the 2024-2025 school year, the West Campus Early Development Center (EDC), located at 1600 SW 184 Ave, Pembroke Pines, FL 33029, which received janitorial services under this agreement, ceased to operate and the existing facility was repurposed to provide Kindergarten-grade level classrooms in order to alleviate increased enrollment in the West Campus Elementary Charter School.
As such, the conversion of the West Campus Early Development Center (EDC) to Kindergarten-grade level classrooms required amending the scope of services to support the facilities new role as part of the Charter School West Campus, including breakfast and lunch cafeteria services and nightly cleaning.
As a result, Safeguard Services, Inc. sent a letter to the City, dated August 6, 2024, proposing a change order to discontinue the services at the West EDC, reducing the monthly contract cost by $6,972.60 and to start servicing the converted facility at a cost of $9,758 per month, for a net monthly contract increase of $2,785.40 or $33,424.80 annually.
12. In addition, Safeguard Services, Inc. sent a letter to the City, dated September 30, 2024, requesting a 5% increase stating that “Increases in the economy, labor market, minimum wage increases, and consumer goods continue to rise, drastically forcing us to request a 5% increase. This increase will allow us to remain competitive and retain our hard working employees.”
Furthermore, the letter goes on to state “In addition, we would like to amend the contract to remove our obligation to provide dispensers. There is frequent vandalism by students making the number of dispensers we have to replace excessive. Dispensers are not expendable items, not cleaning supplies and we do not believe we should absorb the cost of vandalism. We will order replacement dispensers as requested and provide a copy of the invoice to be paid by the City of Pembroke Pines, with no mark-up.”
13. The Public Services Department is recommending that the City Commission approve the Seventh Amendment, which increases the annual compensation amount from $1,719,000.91 to $1,832,967.08. This amendment reflects revisions to the scope of work for changes at the West Campus Charter School, retro-actively effective for August 1, 2024. It also removes the contractor’s obligation to replace dispensers and accounts for a 5% increase, retro-actively effective for October 1, 2024, as requested by the contractor, addressing factors such as economic conditions, labor market changes, minimum wage increases, and rising costs of consumer goods.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: The Seventh Amendment would increase the total contract value from $1,719,000.91 to $1,832,967.08, which includes an owner’s contingency in the amount of $24,500.
b) Amount budgeted for this item in Account No: Funds are currently budgeted for this project in the Other Services Maintenance accounts (534950):
|
East Elementary |
170-569-5051-534950-7900-350-0000-00550 |
|
West Elementary |
170-569-5051-534950-7900-350-0000-00551 |
|
Central Elementary |
170-569-5051-534950-7900-350-0000-00552 |
|
West Middle |
171-569-5052-534950-7900-350-0000-00553 |
|
Central Middle |
171-569-5052-534950-7900-350-0000-00554 |
|
Academic Village |
172-569-5053-534950-7900-350-0000- |
|
FSU Elementary |
173-569-5061-534950-7900-350-0000- |
|
Central EDC |
001-569-5002-534950-0000-000-0000-00209 |
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: Not Applicable.
e) Detail of additional staff requirements: Not Applicable.
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Yes.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Estimated annual savings of $3,220,219.06 for year one and $3,145,396.50 for year two by Out-Sourcing these services vs. utilizing In-House Labor.