City Council
Report
City Council Meeting: September 12, 2017
Agenda Item: 3.C
1 of 6
To: Mayor and City Council
From: Susan Cline, Director, Public Works, Facilities Maintenance Subject: Contract Award for Citywide Custodial Services Recommended Action
Staff recommends that the City Council:
1. Award Bid #4272 to UNISERVE Facilities Services Corp., a California-based company, for custodial services for various City locations, as required by the Custodial Services Section; and
2. Authorize the City Manager to negotiate and execute an agreement with UNISERVE Facilities Services Corp. in an amount not to exceed $1,488,016 (including a 20% contingency) for one year, with four additional one-year renewal options for a total amount not to exceed $7,713,321 over a five-year period, with future year funding contingent on Council budget approval.
Executive Summary
Staff recommends an agreement with UNISERVE Facilities Services Corp. to provide custodial services for various locations in the City in an amount not to exceed $1,488,016 for one year with four additional one-year options for a total amount not to exceed $7,713,321. The contract award would ensure continuity of custodial services, Living Wage and health insurance for all eligible contract employees, and no displacement of any permanent City custodians.
Background
Historically, the City has adopted a hybrid service model of utilizing in-house and contract custodial services to clean various City-owned and City-leased locations in order to minimize service interruptions at busy locations and maximize workforce flexibility at sites with dynamic, seasonal demands. In addition to regular cleaning services such as vacuuming and emptying trash, the City also contracts out specialty cleaning services, including window cleaning, carpet cleaning, floor cleaning, and upholstery cleaning.
2 of 6
On November 25, 2014 (Attachment A), Council awarded a contract to Lee’s Maintenance Services to provide custodial services at various City facilities for an initial six-month period, pending the outcome of a citywide contract study, with five one-year renewal options for a total amount not to exceed $7,570,582 over a five-and-a-half-year period. The current contract, with all options to extend, runs through June 30, 2020.
On January 13, 2015 (Attachment B), staff presented to Council a Contract and AsNeeded Staffing Review: Policy, Practice, & Recommendations report. Council approved contracted staff for custodial services as part of the comprehensive report; custodial services have not changed substantially since that analysis.
Discussion
Currently, the City employs 55 permanent in-house custodians to provide cleaning services for City facilities that have stable demand of long stretches of hours, such as the Annenberg Beach House, City Hall, public libraries, public parks, the Santa Monica Pier, and the Santa Monica Swim Center.
The City also augments service by utilizing contract custodial staff at the Arcadia Water Treatment Plant, City TV, City Yards, Civic Auditorium administrative offices, Public Safety Facility, Santa Monica Airport, Santa Monica Animal Shelter, Santa Monica Pier and Police Substations on the Pier, as well as leased offices located at 1437 4th Street, 1717 4th Street, 1730 4th Street, 1660 7th Street, and 1901 Main Street. Some of the contract locations require consistent but limited number of service hours, where other sites, such as the Pier, require year-round in-house and contract staffing as well as additional contract staffing during peak seasons. Lee’s Maintenance Services (Lee’s) has been providing custodial services at the above contract sites since 2014.
Affordable Care Act
Signed into law in March 2010, the Affordable Care Act, or ACA, is a federal mandate that requires employers with at least 50 full-time equivalent employees to offer “affordable, minimum value health coverage” to their full-time employees. When Lee’s 3 of 6
first started providing custodial services to the City, no federal guidelines existed for small businesses to comply with the ACA.
Subsequently, the federal government released further ACA compliance instructions, and Lee’s began providing health insurance to its qualified custodians in March 2016.
The City agreed to reimburse Lee’s for the health insurance costs of its eligible custodians assigned full-time to City job sites using the contract’s contingency fund to cover the additional expenses. At the time of this report, $81,833 has been expended on ACA payments.
While Lee’s has been providing satisfactory services to the City and the current contract provides renewal options through June 2020, staff decided it would be prudent to evaluate custodial services options available in the current marketplace by going out to bid. The new formal bid requires that ACA and other mandated costs, including the City’s Living Wage, be included in an all-inclusive hourly rate cost proposal in order to simplify the administrative aspects of managing the contract.
Vendor Selection
In March 2017, the City published Notices Inviting Bids to provide custodial services for various City locations, as required by the Custodial Services Section, in accordance with City specifications. The bid was posted on the City’s online bidding site, Planet Bids, and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. A total of 52 vendors downloaded the bids.
Seven bids were received and publicly opened on April 17, 2017, per Attachment C:
Company First Year Regular Service
Coastal Building Services $1,146,914
Executive Suite Services, Inc. $1,398,875
Huffman & Downs Maintenance $1,165,145
Lee’s Maintenance Services, Inc. $1,254,927
Professional Building Maintenance $1,289,911
4 of 6
Servicon System, Inc. $1,145,569
UNISERVE Facilities Services Corporation $1,131,464
Bids were evaluated based on the criteria in SMMC 2.24.072, including price, quality of service, experience, capacity, and reputation & judgment. Based on these criteria, UNISERVE Facilities Services Corp., the lowest bidder, is recommended as the best bidder. In addition to being the lowest bidder, UNISERVE has demonstrated superb industry experience and capacity as well as a strong commitment to employee training, service quality assurance, and established professional practices.
Founded in 1966, UNISERVE has been delivering custodial services to Fortune 1000 companies, airports, museums, and government entities for over five decades. The company has large, long-term custodial accounts, which includes FedEx, the Getty Center, the Getty Villa, and the City of Los Angeles. Specifically, the City of Los Angeles provided an excellent reference and attested to the company’s capability to handle a wide variety of job sites that are similar to those in the City of Santa Monica.
Additionally, the company provides ACA health insurance and the City’s current Living Wage of $15.87 per hour (adjusted annually per the Consumer Price Index) to all of its employees assigned to City sites. Finally, although not a bid requirement, UNISERVE’s proposal to provide a 100% dedicated account manager for the City illustrates the company’s commitment to customer care and quality assurance.
Based on these criteria, staff recommends that Council award bid #4272 to UNISERVE Facilities Services Corp. for custodial services at various City locations for a five-year amount not to exceed $7,713,321. The first contract year and first renewal option have a not-to-exceed amount of $1,488,016 per year. The subsequent three renewal options are subject to an increase based on the City’s Living Wage Ordinance.
Service Continuity and Sustainability
There will be no interruption of service during the transition period. Lee’s will continue to provide custodial services at all contract locations on a month-to-month basis with a 30- 5 of 6
day termination notice until the new contract with UNISERVE is in place. UNISERVE will comply with the California Displaced Janitor Opportunity Act and the City’s requirement to retain existing custodians employed by the previous contractor to ensure continuity in employment and service level. UNISERVE will continue to use environmentally sensitive, low toxicity cleaning products that are supplied by the City and pre-approved by Risk Management and the Office of Sustainability and Environment to ensure the health of staff, the public, and the environment.
Alternative
If the City were to provide the same level of custodial services using in-house personnel, staff estimates a cost difference of $3.65 million, or 56% more, in staffing costs alone over the course of five years compared with utilizing services from UNISERVE (Attachment D). Bringing custodial services in-house for the contract locations would incur additional salaries and benefits of $1.96 million in the first year (plus potential cost of living and benefit premium increases for subsequent years) and the hiring of an additional 22.4 FTE Custodians and 2 FTE Custodial Supervisors. This does not include significant initial investment for vehicles, tenant improvement for additional office spaces, office equipment, cleaning equipment, and uniform purchases, as well as ongoing expenses in City overhead, training, overtime incurred by backfilling vacation and sick leaves, and maintenance/replacement of vehicles, equipment, and supplies.
In addition to the fiscal impact, changing the current service model and creating additional permanent positions at this time would have a negative operational impact by:
A) reducing workforce flexibility at locations where service demand is seasonal, such as the Santa Monica Pier and the additional service level required during the popular Twilight Concert Series every summer; B) limiting the City’s options to redefine or adjust service levels when City staff currently working in leased office spaces move into the new City Services Building in the foreseeable future; and C) increasing administrative complications and the span of supervision for the Custodial Services Section, including recruitment, staff training, performance evaluations, disciplinary actions, and workers’ compensation risk.
6 of 6
Financial Impacts and Budget Actions
The contract to be awarded to UNISERVE Facilities Services Corp. is for an amount not to exceed $7,713,321. Funds of $1,488,016 are available in the FY 2017-18 budget in various departments. The contract will be charged to various accounts as needed (Attachment E). Future year funding is contingent on Council budget approval.
Prepared By: Yvonne Yeung, Senior Administrative Analyst Approved Forwarded to Council
Attachments:
A. November 25, 2014 Staff Report
B. January 13, 2015 Staff Report
C. Bid #4272 Summary
D. In-House vs. Contract Cost Analysis
E. Contract Budget
F. Oaks Initiative Disclosure Form - UNISERVE