Title
MOTION TO APPROVE THE AMENDED AND RESTATED AGREEMENT WITH CALVIN GIORDANO AND ASSOCIATES FOR THE OPERATION, MAINTENANCE, AND MANAGEMENT OF MUNICIPAL FACILITIES AND GROUNDS FOR AN INITIAL FIVE-YEAR TERM, THROUGH SEPTEMBER 30, 2028, IN THE BEST INTEREST OF THE CITY PURSUANT TO SECTION 35.18(C)(8) OF THE CITY’S CODE OF ORDINANCES.
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinances is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.18 of the City's Code of Ordinances is regarding "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(C) states that "Only the following situations are exempt from the competitive bid and competitive proposal requirements of this section:"
- Section 35.18(C)(8) states, “Best interest of the city. Purchases of and contracts for commodities or services are exempt from this section when the City Commission declares by a simple majority affirmative vote that the process of competitive bidding and competitive proposals is not in the best interest of the city. The City Commission shall make specific factual findings that support its determination, and such contracts may be placed on the City Commission consent agenda."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A) of the City's Code of Ordinances is titled "City Commission Approval."
- 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 35.29(C) states, "The City Manager or his or her designee is authorized to extend, for operational purposes only, and for a maximum of 180 days, any contract previously approved by the City Commission and entered into by the city. Any further extensions of the contract require the approval of the City Commission."
SUMMARY EXPLANATION AND BACKGROUND:
1. On February 28, 2013, the City Commission, during a workshop/retreat, requested that the City Manager explore function sourcing for the Utility System, Customer Service, Parks Maintenance, General Government Services, and Streets and Sidewalk Services.
2. On April 17, 2013, the City Commission approved the advertisement of RFQ# PSPW-13-09 "Operation, Maintenance and Management of Municipal Facilities and Grounds." The purpose of this Request for Qualifications (RFQ) is to solicit statements of qualifications from vendors capable of operating, maintaining, and managing the City's General Government Buildings and Grounds Maintenance.
3. On June 4, 2013, the City opened six sealed proposals from the following firms:
- Calvin, Giordano & Associates, Inc.
- Facilities Contract Services, LLC
- Gnostic Patriarchate The Great Basilica Inc.
- Municipal Business Management
- Roy Jorgensen Associates, Inc
- TKC Management Services
4. On June 12, 2013, the Evaluation Committee conducted their evaluation of the proposals, using to the criteria provided in the RFQ, which is also listed below, and determined Calvin, Giordano & Associates, Inc. ("CGA") to be the most responsive and responsible proposer.
- Company Background and Capabilities 20 points
- Relevant Operations and Maintenance Experience 30 points
- Financial Qualifications 20 points
- Other Management Experience 10 points
- Key Personnel Assigned to Project 15 points
- Local Vendor Preference 5 points
5. On June 19, 2013, Administration brought an item before commission recommending the City Commission approve the recommendation of the evaluation committee for PSPW-13-09 and award the project to Calvin Giordano & Associates and direct the City Manager to negotiate a contract for services to be brought back to Commission for final approval. The City Commission approved a substitute motion which included approving the recommendation of the evaluation committee and directing the City Manager to bring back a price for consideration by the City Commission rather than a contract for services.
6. City Administration began discussions with Calvin Giordano & Associates to provide sufficient information to the vendor in order for them to provide a price for services. As a result, Calvin Giordano & Associates proposed a price of $5,867,990, which provided the City with an opportunity to provide a significant savings while still being able to provide the residents with the same level of service. The price proposal included:
(A) Personnel and Management: Calvin Giordano & Associates will provide the labor, management, and oversight needed to efficiently operate and maintain the city's facilities and buildings. Calvin Giordano will provide all employees with a benefits package and a safety program that includes essential equipment and training.
(B) Operating Supplies: Calvin Giordano & Associates will procure and administer the acquisition of all tools, materials, chemicals, and other supplies needed to operate and maintain City Facilities and Buildings. This includes providing all necessary personnel with a vehicle, uniform, fuel, and tools needed to effectively complete the job. Calvin Giordano will utilize the City's heavy equipment such as the backhoe and skid steer as necessary and provide insurance and fuel for this equipment.
(C) City's Responsibilities:
i) Oversight of the contract and administrative support
ii) Capital improvements. Each year Calvin Giordano & Associates will assist City Administration in identifying the capital needs. The City will be responsible for budgeting and procuring those capital improvements approved by Administration and Commission.
iii) Office space for Calvin Giordano management.
iv) Providing utilities to the facilities such as electricity, land lines, internet access, and emergency power.
7. Calvin Giordano & Associates proposal included no elimination of City employees and they agreed to interview all current contract employees for employment within Pembroke Pines as well as other employment opportunities within Calvin Giordano & Associates.
8. On September 18, 2013, the City Commission approved the award of RFQ# PSPW-13-09 "Operation, Maintenance and Management of Municipal Facilities and Grounds" to Calvin Giordano & Associates" in the amount of $5,867,990 which resulted in a total overall city savings of $504,405 for the 2014 fiscal year and directed the City Manager to negotiate a contract for services with Calvin Giordano & Associates to be brought back to Commission for final approval.
9. On October 16, 2013, the City Commission approved the contract with Calvin Giordano & Associates for Operation, Maintenance and Management of Municipal Facilities and Grounds for an initial five-year term, commencing on November 1, 2013, through October 31, 2018. The agreement included the option to renew for one additional five-year term, upon mutual consent and the execution of a written amendment. The original agreement also included an initial annual fee for services in the amount of $4,739,450, an initial Maintenance and Repair Limit of $1,128,540 and an Owner's Contingency in the amount of $166,854.
10. In 2014, the City Manager executed the first amendment to the agreement to extend the usage of the City-owned vehicles per Section 4.9 of the agreement until September 30, 2014 in which the Contractor will refund the City $400 per month for each vehicle that remains in the Contractor's control. In addition, the monthly fee was prorated to a daily rate for vehicles returned to the City prior to the end of the month. This amendment resulted in a $109,255.06 reimbursement from the contractor.
11. On December 3, 2014, the City Commission approved second amendment to the agreement to revise the Annual Fee to allow for the CPI increase and an increase in labor hours. The amendment resulted in the annual fee adjusting from $4,739,450 to $4,974,052. The Second Amendment also eliminated the maintenance and repair limit and instead included language to compensate Calvin at a rate equal to Calvin's Maintenance and Repair Costs plus 7.5% as a general overhead and administrative fee, and increased the owner's contingency by $33,146, resulting in a revised owner's contingency of $200,000 for year two of the agreement.
12. On February 17, 2016, the City Commission approved the third amendment which increased the annual fee by $397,924, which is 8%. Three percent (3%) of the request was to provide raises to the contract employees. Five percent (5%) of the request was to provide additional labor hours, as most of the contract employees were originally contracted and budgeted to work 36 hours; however, many of the jobs and assignments now require a 40-hour work week.
13. On February 21, 2018, the City Commission approved the Public Services Department recommendation on the contract database report to enter into the fourth amendment to renew the agreement for its final five-year term, commencing on November 1, 2018, and expiring October 31, 2023.
14. On September 20, 2023, the City Commission approved a change order in the amount of $185,000, increasing the annual amount, including owner's contingency, to a total amount not to exceed $6,792,159.40. This increase was done to cover additional overtime for various projects, including the additional weekend and night work needed to complete the security offices at the Charter School Campuses.
14. On October 3, 2023, the City Manager and Calvin Giordano & Associates executed the fifth amendment to the agreement to extend the agreement for 180 days from November 1, 2023 through April 29, 2024.
15. In lieu of going out to bid, the Public Services Department feels that it is in the best interest of the City to renegotiate the existing agreement with Calvin, Giordano & Associates, Inc. As a result, Administration is presenting an amended and restated agreement with Calvin, Giordano & Associates, Inc. for an initial five-year term through September 30, 2028, which has the option to renew for two (2) additional five (5) year terms upon mutual agreement of the parties unless notice of intent not to renew is provided more than 180 days prior to the expiration of the agreement. The re-negotiated agreement has been restructured to include:
A-1) 1.4094 multiplier for Straight Time Labor (including bonus), which includes employee wages, payroll taxes, medical, dental, vision, life, and 401(k), communication/cell phone expenses, holiday pay, sick pay, vacation pay, uniforms, insurance premiums, legal fees, etc.
A-2) 1.2697 multiplier for Overtime Labor, which requires pre-approval by the City for CGA employees working over 40 hours per week.
B) Cost plus 7.5% for the following items:
1) Payments made by CGA to Subcontractors/Vendors in accordance with the requirements of the subcontracts/purchase orders as directed by the City or their representatives.
2) Personal Protective Equipment (PPE)
3) Parts, tools, equipment, materials required to complete the tasks assigned by the City or their representatives
4) Increases in participation rate over historical in CGA’s 401k program as outlined in CGA’s benefit package by greater than .2%. Cost increases in required insurance at annual renewals of greater than 4%, City will be notified in writing of all annual renewals.
5) Any pre-approved expense not specifically mentioned in Section “A” above.
6) Costs, including transportation and storage, of materials and equipment incorporated or to be incorporated in the Work.
7) Costs of material and equipment suitably stored off the site at a mutually acceptable location, if approved in advance by the City.
8) Fees and assessments for the building permit and for other permits, licenses, and inspections for which CGA is required to pay.
9) Deposits lost for causes other than CGA negligence or failure to fulfill a specific responsibility to the City.
10) Other costs, including overnight stays and/or travel expenses, incurred in the performance of the Work if and to the extent approved in advance in writing by the City.
11) Training beyond CGA corporate requirements, i.e.: CDL, CAD, trade licenses/registrations, if pre-approved by the CITY.
C) Vehicles
1) CGA Leased Fleet Costs shall be reimbursed by the City. The lease payments of the 54 vehicle fleet will terminate as the leases come due per the schedule, as listed in Exhibit "C." The final month of lease payment shall include residual value payment, as listed on Exhibit "C." Upon termination of lease and final payments, lease payment reimbursement shall cease. If City directs CGA to obtain a new vehicle in writing, the lease payments and associated build out costs would then resume for the approved vehicle(s) at a pre-approved cost by the City. If the new vehicle is a replacement vehicle, the proceeds from the sale/trade-in of the current vehicle will offset a portion of the purchase price of the new vehicle.
2) In addition to the Lease Rates, the City shall pay a Flat Rate of $620.88 per month, per vehicle, for administrative expenses, insurance, and an agreed upon monthly maintenance including repairs, wear parts, oil, lube, etc. The Flat Rate shall increase on October 1st of each agreement anniversary year by 3%.
3) In addition, the City shall reimburse CGA for the following items:
a. License and tag fees and renewal management.
b. GPS tracker software, hardware, and management.
c. Inland Marine Insurance as outlined and limited to Article IX “Exhibit B CGA- Operated City Equipment”.
d. Non-Fleet vehicle insurance (City owned equipment) as outlined and limited to Article IX and “Exhibit B CGA-Operated City Equipment”.
4) Furthermore, the City shall provide fuel for on-road and off-road equipment, vehicles, etc.
15. As previously stated, the current contract annual contract amount is $6,792,159.40, which included a $200,000 contingency and a recent increase of $185,000 to cover additional overtime for various projects.
16. As a result of the negotiations, Administration anticipates an estimated annual cost for year 1 of the contract to be approximately $6,204,988, which is an approximate savings of $202,171.40 to $587,171.40, if taking into account the $200,000 contingency and the recent increase of $185,000 to cover overtime in the current contract amount.
17. Section 35.18(C)(8) "Best Interest of the City" of the City's Code of Ordinances states "Purchases of and contracts for commodities or services are exempt from this section when the City Commission declares by a simple majority affirmative vote that the process of competitive bidding and competitive proposals is not in the best interest of the City. The City Commission shall make specific factual findings that support its determination, and such contracts may be placed on the City Commission consent agenda."
18. Below are the factual findings:
- On April 17, 2013, the City Commission approved the advertisement of RFQ# PSPW-13-09 "Operation, Maintenance and Management of Municipal Facilities and Grounds" to solicit statements of qualifications from vendors capable of operating, maintaining, and managing the City's General Government Buildings and Grounds Maintenance.
- On June 12, 2013, the City's evaluation committee determined Calvin, Giordano & Associates, Inc. ("CGA") to be the most responsive and responsible proposer out of the six sealed proposals that were received through the competitive bidding process.
- On October 16, 2013, the City Commission approved the negotiated agreement with CGA for an initial five-year term, which resulted in a total overall city savings of $504,405 for the 2014 fiscal year, along with additional savings for future years.
- The agreement with CGA gave the City the opportunity to provide significant savings while still being able to provide the residents with the same level of service.
- Calvin, Giordano & Associates, Inc. has performed an excellent job in providing services to the City of Pembroke Pines throughout the term of the contract for the Operation, Maintenance and Management of Municipal Facilities and Grounds.
- On February 21, 2018, the City Commission approved the Public Services Department recommendation on the contract database report to renew the agreement for its final five-year term.
- The City of Pembroke Pines still currently has an agreement which is in effect and the re-negotiated agreement will provide terms that are more favorable to the City of Pembroke Pines.
- Administration estimates an annual savings of $202,171.40 to $587,171.40 under the re-negotiated agreement, when compared to the current contract.
- By continuing to utilize Calvin, Giordano & Associates, Inc., the CGA employees that have been providing services for a number of years would not need to worry about changes in their employment, including accrued time and benefits, if the City were to change service provider.
19. Request Commission to approve the amended and restated agreement with Calvin, Giordano and Associates for the Operation, Maintenance, and Management of Municipal Facilities and Grounds for an initial five-year term, through September 30, 2028, in the Best Interest of the City pursuant to Section 35.18(C)(C)(8) of the City’s Code of Ordinances.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: Estimated annual cost of $6,204,988 for the first year of the contract.
b) Amount budgeted for this item in Account No: Funds are budgeted in various divisions under object code # 534982 (Function Sourcing - Grounds).
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: Below are the estimated annual costs for the five year contract term, however costs may fluctuate based on changes made by the City.
|
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
Revenues |
N/A |
N/A |
N/A |
N/A |
N/A |
|
Expenditures |
$6,204,988 |
$6,069,787 |
$6,308,434 |
$6,556,503 |
$6,814,367 |
|
Net Cost |
$6,204,988 |
$6,069,787 |
$6,308,434 |
$6,556,503 |
$6,814,367 |
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? Based on the attached analysis, we anticipate a savings of approximately $12,113,267 over a five-year period by outsourcing these services in-lieu of utilizing in-house labor.