SR-08-12-2014-3JCity Council Meeting: August 12, 2014
Agenda Item: 3 --T
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Contractual Services Agreement with United Maintenance Company for
Interim Custodial Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a contractual services agreement with United Maintenance Company, an
Illinois -based company, in an amount not to exceed $266,038 to provide interim
custodial services at the Public Safety Facility, the Santa Monica Pier, the Animal
Shelter and 1730 4th Street on a month -to -month basis through December 31, 2014, or
until a formal contract is awarded and contractor is ready to start operations, whichever
comes first.
Executive Summary
On June 4, 2014, Diamond Contract Services, Inc., custodial services contractor for the
Public Safety Facility (PSF), Santa Monica Pier, Animal Shelter, and 1730 4th Street,
informed the City that all of their assets were to be sold to United Maintenance
Company on June 9, 2014. Subsequently, staff discovered that the acquisition did not
take place, but custodial contract services were assumed by United Maintenance
Company.
On July 9, 2014, the City Manager authorized payment up to $175,000 to United
Maintenance Company for custodial services performed at the locations mentioned
above as of June 9, 2014, and until a contractual services agreement is in place in order
to ensure uninterrupted custodial services. Staff recommends a contractual services
agreement with United Maintenance Company for a cumulative amount not to exceed
$266,038 for interim custodial services for the Public Safety Facility, the Santa Monica
Pier, the Animal Shelter and 1730 4th Street on a month -to -month basis through
December 31, 2014, or until a formal contract is awarded and a new contractor is ready
to start operations, whichever comes first. Including payments already authorized and
the recommended contract, the cumulative cost of contractual custodial services
provided by United Maintenance Company would be $441,038 for FY 2013 -14 and FY
2014 -15.
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Background
On August 10, 2010, Council awarded Bid #2980 for custodial services at the Santa
Monica Pier in an amount not to exceed $1,637,842 for a three and three quarter year
term, and Bid #2987 for custodial services at the Public Safety Facility (PSF) to
Diamond Contract Services, Inc. in an amount not to exceed $832,406 for a three and
three quarter year term, subject to living wage increases.
On April 8, 2014, Council authorized contract modifications with Diamond Contract
Services to extend contractual agreements 9255 -OS for custodial services at the Santa
Monica Pier and 9256 -OS for custodial services at the Public Safety Facility on a
month -to -month basis with a living wage increase from July 1, 2014, to December 31,
2014, or until a new contract is awarded and the contractor is ready to start operations,
whichever comes first.
On April 30, 2014, the City issued Bid #4150 for custodial services for various City
facilities was posted on the City's online bidding website. The bid closed on June 2,
2014. Staff is in the process of selecting custodial vendors and plans on making a bid
award recommendation to Council on August 26, 2014. The transition period usually
takes two to four months and involves establishing contractual services agreements,
providing 30 -day termination notice to current vendors, performing background checks,
purchasing equipment, and notifying existing employees of the opportunity to continue
employment with the new firm. Staff anticipates having new contractors in place by no
later than January 1, 2015.
Discussion
On June 4, 2014, Diamond Contract Services informed the City that all assets of
Diamond Contract Services, Inc. were expected to be sold to United Maintenance
Company, including all contracts and service agreements that Diamond Contract
Services had with the City. In order to ensure a seamless transition with zero
interruptions, the new company was to retain all existing janitorial staff who service the
City. The Finance Department and City Attorney's Office advised that an assumption
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agreement would be necessary in case of an acquisition. Diamond Contract Services
ceased operations on June 8, 2014, at midnight and United Maintenance Company took
over and assumed all assets effective June 9, 2014. When the City routed the
assumption agreement to United Maintenance Company for signature, the City was
informed that an acquisition never took place and that United Maintenance Company
was therefore not able to sign the assumption agreement. It appears that Diamond
Contract Services, Inc. ceased to exist as an operating company and, therefore, no
assumption agreement could be executed.
In order to ensure uninterrupted custodial services, the City Manager approved
$175,000, the limit of his authority, for custodial services performed by United
Maintenance Company as of June 9, 2014, and until a contractual services agreement
is in place. Staff recommends a contractual services agreement with United
Maintenance Company for $266,038 for interim custodial services for the Public Safety
Facility, the Santa Monica Pier, the Animal Shelter and 1730 4th Street on a month -to-
month basis through December 31, 2014, or until a formal contract is awarded and a
new contractor is ready to start operations, whichever comes first. The cumulative
amount to be paid to United Maintenance Company for custodial services is estimated
at $441,038 for FY 2013 -14 and FY 2014 -15.
Per SMMC 2.24.100(c) Contractual services may be made without advertising bids if
the contractual services are deemed by the Council to be of urgent necessity for the
preservation of life, health or property of residents, tourists and City employees at
locations where contract custodial services are performed, and due to its interim nature,
as staff is in the process of awarding a bid for custodial contract services. This action
requires at least five affirmative votes form the Council.
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Financial Impacts & Budget Actions
The contract to be awarded to United Maintenance Company is for an amount not to
exceed $266,038. The cumulative amount of contractual custodial services provided by
United Maintenance Company would not exceed $441,038 through December 31, 2014.
Funds in the amount of $41,194 were previously charged to FY 2013 -14. Funds in the
amount of $133,806 will be processed on a purchase order in FY 2014 -15. Funds in the
amount of $266,038 will be processed on contractual payments in FY 2014 -15 and are
available in the FY 2014 -15 budget in divisions 014522, 30455 and 01306 as follows:
30455.555010
$171,387
014522.55501F
$81,937
01306.533220
$3,770
014522.55501G
$8,944
Total:
$266,038
Prepared by: Sybille Moen, Sr. Administrative Analyst
Approved:
Martin Pastucha
Director of Public Works
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Forwarded to Council:
Rod Gould
City Manager
Reference:
Agreement No. 9948
(CCS)