City Council
Report
City Council Meeting: December 15, 2020
Agenda Item: 3.E
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Procurement Subject: Approval of Third Modification to Gafcon Contract to Provide Citywide State and Federal Labor Compliance and Payroll Monitoring
Recommended Action
Staff recommends that the City Council authorize the Interim City Manager to negotiate and execute a third modification to agreement #10435 with Gafcon, Inc. that would extend the contract by two years and add $600,000 to provide citywide State and Federal labor compliance and certified payroll monitoring on an as-needed basis. This will result in a seven-year agreement with a new total amount not to exceed $1,500,000, with future year funding contingent on Council budget approval.
Summary
In May of 2016, staff executed an agreement #10435 with Gafcon Inc. to provide certified payroll monitoring services that were subject to the State and Federal prevailing wage requirements mandated for all Public Works projects by State law.
Gafcon is currently monitoring 142 active projects citywide. Their services consist of job classification selection at time of solicitation, on-site interviews of workers, certified payroll compliance monitoring and, if needed, enforcement. Gafcon has extensive experience and knowledge of labor laws, apprentice program requirements, and other requirements to ensure compliance with State and Federal regulations. Staff recommends a third modification to extend agreement #10435 for two additional years with up to $600,000 in additional funding to provide citywide State and Federal labor compliance and certified payroll monitoring on an as-needed basis for a new not to exceed $1,500,000 seven-year agreement. The two-year term extension would ensure that staff has ample time to go through the RFP process and continue its labor compliance and reporting, activities disrupted this year by the COVID pandemic. 2 of 3
Discussion
Two 2014 California laws (SB 7 and SB 854) define prevailing wage requirements and establish responsibilities for prevailing wage payment. City prevailing wage projects include construction and maintenance of public buildings, housing, public work infrastructure and similar facilities, and could include 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 certified payroll records to the Labor Commissioner.
The laws require prevailing wage payment to 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:
• Audit of certified payroll records to assure compliance with laws/regulations; • Compliance with apprenticeship laws/regulations and training fund contributions; • Identifies labor compliance violations and resolves issues and calculates applicable penalties/fines;
• Conducts on-site inspections and worker interviews;
• Provides the City progress payment and withhold recommendations based on the contractor's compliance with labor laws/regulations through project close-out.
Gafcon has agreed to honor their pricing for the two additional years. The modification amount is based on a monthly spending average of $25,000 by Departments and Divisions for a number of City prevailing wage projects. The recommended contract modifications would enable the City to continue prevailing wage and labor compliance for current Public Works projects and COVID-19 related projects throughout the City.
Past Council Actions
3 of 3
Meeting Date Description
03/27/18
(attachment A)
Second Modification to Gafcon Contract for Citywide Prevailing Wage and Labor Compliance in the amount of $600,000
02/28/17
(attachment B)
First Modification to Gafcon Contract for Citywide Prevailing Wage and Labor Compliance in the amount of $220,000
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 $600,000 to provide citywide State and 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 request for oversight and labor compliance services. Future year funding is contingent on Council budget approval.
Contract/Agreement/Purchase Order Modification Request
Agreement #
Current Authorized
Amount
FY 2020-21 Budget Modified
Request Amount
Dept/CIP
Account #
Total Revised
Contract Amount
10435 $900,000 $600,000 Various $1,500,000
Prepared By: Araceli Esparza, Purchasing Services Manager Approved Forwarded to Council
Attachments:
A. 2nd Modification to Gafcon Contract (Weblink)
B. 1st Modification to Gafcon Contract (Weblink)
C. Gafcon Oaks Initiative