SR-205-003 (229)
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Santa ilonica, California
July
8, 1981
TO.
11ayor & City Council
b-)<
JUL 1 4 1981
FROM: R. N. Aronoff, Director of Purchasing
SUBJECT. Bid # l428 awarded March 1979 to North Anerican
Maintenance Corporation for Custodial Haintenance
of the Six Iowntovm parking Structures.
Introduction
This is a request for City Council to authorize the City Manager
to modify the purchase order(s) subsequently issued under the
award of Bid # 1428. These oodifications would involve the
waiver by the City of the requirement of North American Haintenance
to maintain a faithful perfo~ance bond. In return for this
waiver by the City, the vendor would waive an escalation of the
charges which would otherwise be due to the City for the services.
Background
North ilinerican Maintenance CorTIoration has been awarded several
multi-year contracts for the custodial maintenance of the six
do~~to,vn parking structures for approximately the past ten years.
The last time the City bid the service was in February 1979 for a
three-year contract with a three-year option (City's Option). Part
of the specifications for that bid require the vendor to provide
the City a 100% faithful performance bond. The specifications
also allowed an escalation of price for the service equal to the
percentage increase in the ConsULlers Price Index annually.
In IIarch of this year the surety providing the bonding for North
American withdrew its bond effective with the next renewal date
of the purchase order, April 1, 1981.~orth American has been
trying, unsuccessfully since then to procure a bond.
In our efforts to reach a nutually satisfactory resolution of the
situation, the following arransement has been negotiated:
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JUL 1 4 19Bt
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Mayor & City ~ncil
Page Two .
July 8, 1981
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The City would waive the faithful perforoance bond requirement in
light of its long association with North Anerican ~n return for
which North American would waive its increase for the period
cornnencingMa%ch 14,1981 and ending March 15, 1982. If the City
elects to exercise its 3-year option at that tine the escalator
clause would be reinstated without retroactivity. The increase
due North American due to CPI movement effective April l, 1981
would be 11.8% or $420.18 per month. I have conferred with and gotten
the c,oncurrence of the City Attorney for this settlement.
RecomD.endation
It is recocrmended that the City Council authorize the City Manager
to walve the faithful performance bond requirement under Bid No.
1428 in return for an agreement from North American to perform the
serVlces according to specification without involking an escalation
of the costs due April 1, 1981.
PREPARED BY
R.
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