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SR-205-003 (229) '- ~ _..-5--' '"' . 2-0 S-'--~03. 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: 6'-~ JUL 1 4 19Bt -' Mayor & City ~ncil Page Two . July 8, 1981 . 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. of