AGENDA REPORT
Meeting Date: January 9, 2025
Item Number:
To: Honorable Mayor & City Council
From: Michael Hensley, Deputy Director of Public Works-Operations Lucy Quiralte, Public Works Manager
Subject: AMENDMENT NO. 4 TO THE AGREEMENT WITH GAFCON PMCM LLC (FORMERLY GAFCON INC.) FOR LABOR COMPLIANCE CONSULTING SERVICES; AND
APPROVAL OF A CHANGE PURCHASE ORDER IN THE AMOUNT
OF $50,000 FOR A NOT-TO-EXCEED AMOUNT OF $150,000
FOR FISCAL YEAR 2024/25
Attachments: 1. Amendment No. 4
RECOMMENDATION
Staff recommends that City Council approve:
1. An amendment to an agreement between Gafcon PM-CM LLC (formerly Gafcon Inc.) for labor compliance consulting services; and
2. A change purchase order in the amount of $50,000 for a not-to-exceed amount of $150,000 for Fiscal Year 2024/25.
INTRODUCTION
California Senate Bill 854 (“SB 854”) of 2014 defines prevailing wage requirements and established responsibilities for prevailing wage payment. SB 854 requires cities to pay prevailing wages to receive or use State funding or financial assistance for construction projects, introduced a public works contractor registration program, and sets additional compliance requirements. Prevailing wage law applies to any public works project that exceeds $15,000 for repair and maintenance of public facilities and $25,000 for new construction. The law requires prevailing wage payment to labor categories identified in the California Labor Code (commencing in Section 1770, et seq.) when employed for any work on or in the execution of a public works project. For these projects, the City must (1) award public works bids in compliance with the law and report these bid awards to the California Department of Industrial Relations (DIR); and (2) ensure contractors BEVERL
HILLS
id
Meeting Date: January 9, 2025
and subcontractors register with the DIR and provide certified payroll records to the Labor Commissioner.
After an assessment of available resources, staff determined that contracting with a firm that specializes in labor compliance would help the City comply with SB 854 requirements.
DISCUSSION
Although the Beverly Hills Municipal Code (“BHMC”) Section 3-3-113(E) excludes formal bidding for this type of service, in 2019, staff completed an assessment of available firms in the area. Two firms that are often used by local municipalities in the region were interviewed. The initial agreement in the amount of $50,000 with one of those firms, Gafcon, Inc. (Gafcon), was executed on December 10, 2019.
As the need for labor compliance monitoring increased, the first contract amendment was approved by City Council on January 12, 2021, for a total not-to-exceed amount of $200,000. At the same time, City Council also authorized the City Manager to approve all change purchase orders. The second amendment was executed on September 27, 2023, approved by the City Manager, and increased the consideration by $100,000 for a total amount not to exceed $300,000.
On July 23, 2024, the third amendment was executed, approved by the City Manager, and added $100,000 per year to Fiscal Years 2024/25 and 2025/26, bringing the total not-to-exceed amount of the contract to $500,000. Since the annual not-to-exceed amount is currently limited to $100,000 per fiscal year, an amendment is now needed to restructure the consideration based on the increased number of projects monitored by Gafcon as well as several more complex projects. The proposed Amendment No. 4 allows for the flexibility to raise a purchase order over $100,000 without increasing the total contractual consideration.
Though the current total contract consideration is $500,000, the actual spending with Gafcon to date totals $176,899.14 as detailed below.
Fiscal Year Total
2019/20 $1,559.90
2020/21 $28,866.40
2021/22 $34,356.40
2022/23 $30,681.18
2023/24 $56,799.52
2024/25 (to date) $24,635.18
Total $176,899.14
Under the existing agreement, Gafcon provides labor compliance consulting services for projects and maintenance subject to State and Federal prevailing wage requirements.
Services provided consist of job classification selection, certified payroll compliance monitoring, on-site interviews of workers, and enforcement of penalties when necessary.
Gafcon currently monitors approximately 30 projects – a significant increase from the initial 10 projects identified for labor compliance monitoring. Over time, that number has increased as Public Works has more stringently adhered to the contractual requirement for payment of prevailing wages to comply with DIR requirements. Furthermore, Gafcon is now monitoring many projects managed by the Project Administration division in addition to Engineering and Facilities projects. Labor compliance costs per project vary Meeting Date: January 9, 2025
based on the scope, size, and duration of the project and the number of contractors and subcontractors involved. Contracts currently monitored by Gafcon include several with high dollar value and multiple subcontractors, so the current contractual spending limit of $100,000 per fiscal year is now insufficient.
Staff proposes to continue using Gafcon for labor compliance services. Throughout the term of the contract, Gafcon has provided excellent service and response time to labor compliance questions. Gafcon’s familiarity with many of the contractors that operate in the region has reduced the education time at the beginning of projects. Gafcon also notifies the City of any contractors that do not comply with the labor compliance regulations.
Based on the number of projects and interactions with Gafcon, staff recommends approval of the fourth amendment to the current agreement to restructure the consideration to remove the fiscal year spending limit while holding the total consideration at amount not to exceed $500,000. The flexibility will allow for new projects and contracts to be added to purchase orders through Fiscal Year 2025/26.
Purchase orders issued to Gafcon under this engagement are blanket purchase orders that are opened and then closed for each respective fiscal year. Each fiscal year, the collective total of purchase orders issued to Gafcon in excess of $100,000 will continue to be presented to the City Council for approval. Staff recommends that City Council approve Amendment No. 4 with Gafcon and a change purchase order in the amount of $50,000 for Fiscal Year 2024/25 raising the total not-to-exceed purchase order amount to $150,000.
FISCAL IMPACT
Funds are available in the capital improvement program funds and operating budgets of the programs requesting labor compliance monitoring services.
Shana Epstein,
Director of Public Works
Approved By
Attachment 1
B0785-0001\3045041v3.doc
AMENDMENT NO. 4 TO THE AGREEMENT BETWEEN THE
CITY OF BEVERLY HILLS AND GAFCON PM-CM LLC
(FORMERLY GAFCON INC.) FOR LABOR COMPLIANCE
CONSULTING SERVICES
NAME OF CONSULTANT: Gafcon PM-CM LLC (formerly Gafcon Inc.) RESPONSIBLE PRINCIPAL Robin Duveen, Vice President
OF CONSULTANT:
CONSULTANT'S ADDRESS: 10301 Meanley Drive, Suite 225
San Diego, CA 92131
Attention: Robin Duveen, Vice President
CONSULTANT’S E.I.N./TAX I.D. NO.: 99-0555624
CONSULTANT'S ADDRESS: City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210
Attention: Director of Public Works
COMMENCEMENT DATE: December 1, 2019
TERMINATION DATE: June 30, 2020 (original termination date) June 30, 2021 (as extended pursuant to
Section 2 by letter dated June 29, 2020)
June 30, 2022 (as extended pursuant to
Section 2 by letter dated April 13, 2021)
June 30, 2023 (as extended pursuant to
Section 2 by letter dated June 2, 2022)
June 30, 2024 (as extended pursuant to
Section 2 by letter dated March 24, 2023)
June 30, 2026 (amended pursuant to
Amendment No. 2)
CONSIDERATION: Original Agreement:
Not to exceed: $50,000.00
Amendment No. 1:
Not to exceed $150,000.00
Amendment No. 2:
Not to exceed $100,000.00
Amendment No. 3:
Not to Exceed per CITY Fiscal Year (“FY”):
FY 2024-2025: $100,000.00 (additional)
FY 2025-2026: $100,000.00 (additional)
Amendment No. 4:
No additional consideration
Total Not to Exceed:
Not to exceed $500,000.00 for all CITY Fiscal
Years that the Agreement remains in effect
Docusign Envelope ID: 529031EA-5A4D-4586-A8CE-D469992BE356 2 B0785-0001\3045041v3.doc
AMENDMENT NO. 4 TO THE AGREEMENT BETWEEN THE
CITY OF BEVERLY HILLS AND GAFCON PM-CM LLC
(FORMERLY GAFCON INC.) FOR LABOR COMPLIANCE
CONSULTING SERVICES
This Amendment No. 4 is to that certain Agreement between the City of Beverly Hills (hereinafter called "CITY") and Gafcon PM-CM LLC (formerly Gafcon Inc.) (hereinafter called "CONSULTANT"), dated December 10, 2019, and identified as Contract No. 655-19, as amended by Amendment No. 1, dated March 25, 2021, and identified as Contract No. 79-21, as amended by Amendment No. 2, dated September 27, 2023, and identified as Contract No. 550- 23, as amended by Amendment No. 3, dated July 23, 2024, and identified as Contract No. 396- 24 (“Agreement”).
RECITALS
A. CITY entered into a written agreement with CONSULTANT to provide labor compliance consulting services, which was previously amended.
B. CITY and CONSULTANT desire to further amend the Agreement in order to restructure the Consideration for ongoing services and remove the amounts per Fiscal Year and to amend the Time of Performance.
NOW, THEREFORE, the parties agree as follows:
Section 1. The Consideration shall be amended as set forth on the cover page to remove the amounts per Fiscal Year and include a total not-to-exceed amount for the entire term of the Agreement.
Section 2. Section 2, “Time of Performance,” shall be amended as follows:
“Section 2. Time of Performance. CONSULTANT shall commence its services under this Agreement upon the Commencement Date or upon a written receipt of a notice to proceed from CITY. CONSULTANT shall complete the performance of services by the Termination Date set forth above.
Docusign Envelope ID: 529031EA-5A4D-4586-A8CE-D469992BE356 3 B0785-0001\3045041v3.doc
The City Manager or her designee may extend the time of performance in writing for two additional one-year terms or such other term not to exceed two years from the date of termination pursuant to the same terms and conditions of this Agreement.” Section 3. Exhibit B, “SCHEDULE OF PAYMENT AND RATES,” shall be amended as attached hereto and incorporated herein.
Section 3. Except as amended by this Amendment and previous amendments, the remaining provisions of this Agreement shall remain in full force and effect.
EXECUTED the _____ day of __________________, 20___, at Beverly Hills, California.
CITY OF BEVERLY HILLS
A Municipal Corporation
LESTER J. FRIEDMAN
Mayor
ATTEST:
______________________(SEAL)
HUMA AHMED
City Clerk
CONSULTANT: Gafcon PM-CM LLC
(formerly Gafcon Inc.)
___________________________________
ROBIN DUVEEN
Vice President
___________________________________
PAUL NAJAR
SVP and General Counsel
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
_____________________________ _______________________________ LAURENCE S. WIENER NANCY HUNT-COFFEY
City Attorney City Manager
_______________________________
SHANA E. EPSTEIN
Director of Public Works
[Signatures continue]
Docusign Envelope ID: 529031EA-5A4D-4586-A8CE-D469992BE356 4 B0785-0001\3045041v3.doc
_______________________________
MICHAEL V. HENSLEY
Deputy Director of Public Works
ANTHONY RODSTEIN
Purchasing Services Manager
Docusign Envelope ID: 529031EA-5A4D-4586-A8CE-D469992BE356
SHARON L’HEUREUX DRESSEL
Risk Manager
5 B0785-0001\3045041v3.doc
EXHIBIT B
SCHEDULE OF PAYMENT AND RATES
CITY shall compensate CONSULTANT for the satisfactory performance of the work described in this Agreement in a total amount not to exceed Five Hundred Thousand Dollars ($500,000.00) for the term of the Agreement at the rates set forth in this Exhibit, including all labor, taxes and reimbursable expenses.
This amount shall include reasonable expenses incurred in the performance of services under this Agreement which shall be reimbursed at cost without markup. Reimbursement expenses over Five Hundred Dollars ($500.00) must be approved by CITY in writing in advance.
RATES
Labor Relations Manager $90.17/hour
Labor Relations Project Manager $84.87/hour
Labor Relations Coordinator $63.32/hour
CONSULTANT may submit new billing rates subject to the review and approval in writing by CITY which shall not take effect sooner than July 1, 2025.
CONSULTANT shall submit to CITY a detailed invoice, on a monthly basis or less frequently, for the services performed pursuant to this Agreement. Each invoice shall itemize the services rendered during the billing period and the amount due. Within 30 days of receipt of each invoice, CITY shall pay all undisputed amounts included on the invoice.
Docusign Envelope ID: 529031EA-5A4D-4586-A8CE-D469992BE356 Certificate Of Completion
Envelope Id: 529031EA-5A4D-4586-A8CE-D469992BE356 Status: Sent Subject: Complete with Docusign: Gafcon PM-CM (655-19) Amendment No. 4 Source Envelope:
Document Pages: 5 Signatures: 7 Envelope Originator:
Certificate Pages: 4 Initials: 0 Erin Justus
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.169
Record Tracking
Status: Original
12/30/2024 1:44:55 PM
Holder: Erin Justus
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Paul Najar
[email protected]
SVP and General Counsel
Imperial Hotel Acquisitions
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Robin Duveen
[email protected]
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Deborah R. Hakman for
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Anthony Rodstein
[email protected]
Purchasing Services Manager
City of Beverly Hills (Finance Department)
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? docusign
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Lucy Quiralte
[email protected]
Management Analyst
City of Beverly Hills
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Sharon L'Heureux Dressel
[email protected]
Risk Manager
Sharon Dressel
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Shana E. Epstein
[email protected]
Director of Public Works
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Anthony Rodstein
[email protected]
Purchasing Services Manager
City of Beverly Hills (Finance Department)
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Nancy Hunt-Coffey
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Lester J. Friedman
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Mitzi Barnes
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