City Council
Report
City Council Meeting: July 18, 2023
Agenda Item: 5.H
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Procurement Subject: Approval of Fifth Contract Modification with Gafcon for Citywide State and Federal labor compliance and certified payroll monitoring Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a fifth modification to agreement #10435 in the amount of $210,000 with Gafcon, Inc. to provide citywide State and Federal labor compliance and certified payroll monitoring on an as-needed basis, for an additional seven-month period. This will result in a seven years and seven months amended agreement with a new total amount not to exceed $1,710,000, with future year funding contingent on Council budget approval; and
2. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines
Summary
The City has a contract with Gafcon, Inc. (Gafcon) to provide certified payroll monitoring services for work that is subject to the State and Federal prevailing wage requirements mandated for all Public Works projects by State law. Gafcon is currently monitoring 145 active citywide projects. Project size and scope vary, from large projects with over 80+ contractors to smaller scale projects with one or two contractors. Gafcon services consist of job classification review at solicitation, certified payroll and apprenticeship compliance monitoring, on-site interviews of workers and if needed, enforcement of labor compliance laws. Gafcon has extensive experience and knowledge of labor laws, apprentice program requirements, and other requirements to ensure compliance with State and Federal regulations. Staff anticipates that the current approved contract 2 of 4
authority with Gafcon would not be sufficient to cover services while staff completes a Request for Proposal (RFP) process that is currently in progress. Therefore, staff seeks approval to increase the contract amount by an additional $210,000 to ensure continuity of these critical services through January 2024.
Discussion
Two 2014 California laws (SB 7 and SB 854) define prevailing wage requirements and establish responsibilities for prevailing wage payment on Public Works projects. City prevailing wage projects include construction and maintenance of public buildings, public works infrastructure and similar facilities, and projects funded in part or in whole by Federal or State grants. 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/ subcontractors register with the DIR and provide accurate and compliant certified payroll and other records to the Labor Commissioner.
State labor laws require prevailing wage payment for certain labor categories identified in the State of California Labor Code (commencing in Section 1770 et seq.) when employed for any work on or in the execution of a Public Works project. Gafcon ensures that the Prime Contractor and Subcontractors comply with all California Labor Codes as outlined by the DIR. During the span of a project, Gafcon assists with the following:
• Review and audit of certified payroll records to assure compliance with laws/regulations;
• Compliance review in accordance with apprenticeship laws/regulations and training fund contributions;
• Identification of labor compliance violations and resolution of issues and estimated calculation of potential penalties/fines;
• On-site inspections and worker interviews; and
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• Provide monthly withhold recommendations based on the contractor's compliance with labor laws/regulations through project close-out.
While the monthly payment amount fluctuates, the modification amount is based on a monthly spending average of $35,000 and an expected increase in projects, including larger projects that are being monitored, such as Arcadia Water Treatment Facility, and City Yards Modernization. Staff is currently conducting an RFP process and anticipates completing the process later this year, at which point staff would come back to Council to seek approval of a new contract prior to expiration of the proposed extended term.
Past Council Actions
Meeting Date Description
12/15/20
(Attachment A)
Third Modification to Gafcon Contract for Citywide Prevailing Wage and Labor Compliance
03/27/18
(Attachment B)
Second Modification to Gafcon Contract for Citywide Prevailing Wage and Labor Compliance
02/28/17
(Attachment C)
First Modification to Gafcon Contract for Citywide Prevailing Wage and Labor Compliance
Environmental Review
The modification to the contract with Gafcon is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The modification to the contract would provide administrative services for the City and therefore it can be seen with certainty that the activity would not result in a significant effect on the environment.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from various funds to increase the amount of agreement #10435 with Gafcon Inc. by $210,000 to provide citywide State and 4 of 4
Federal labor compliance and certified payroll monitoring on an as-needed basis.
Funds are available within existing budgets and would be charged to the appropriate Division or project account based on necessary and required oversight and labor compliance services.
Contract Modification Request
Agreement #
Current
Authorized
Amount
FY 2023-24 Modified
Request Amount
Dept/CIP
Account #
Total Revised
Contract
Amount
10435 $1,500,000 $210,000 Various $1,710,000
Future year funding is contingent on Council budget approval.
Prepared By: Oscar Santiago, Budget Manager
Approved Forwarded to Council
Attachments:
A. Gafcon, Inc. FY22-23 Oaks
B. Attachment C - Gafcon First Contract Modification - 2.28.17 C. Attachment B - Gafcon 2nd Contract Modification - 3.27.18 D. Attachment A - Gafcon 3rd Contract Modification - 12.15.20 E. Gafcon Contract#10435 agreement and modifications