SR-07-28-2015-3KI Council Report
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Santa Monica'
City Council Regular Meeting: July 28, 2015
Agenda Item:
To: Mayor and City Council
From: Martin Pastucha, Director, Public Works, Facilities Maintenance
Subject: Contractual Service Agreement for HVAC Contractor Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to exercise the first
year renewal option of Bid #4161 for HVAC contractor services and negotiate and
execute a contractual service agreement with two pre - qualified contractors: West Coast
Air Conditioning and L.E.C. Service Inc., both California -based companies, in a
cumulative amount not to exceed $200,000 for one year, with one additional one -year
renewal option in the amount of $200,000, on the same terms and conditions for West
Coast Air Conditioning and with a 3.5% increase for L.E.C. Service Inc., for a total
amount not to exceed $480,000 over a three -year period, with future year funding
contingent on Council budget approval.
Executive Summary
The City contracts out HVAC (heating, ventilating and air conditioning) work for various
City facilities and properties. In June 2014, the City solicited bids for such services.
After reviewing the four bids received, West Coast Air Conditioning and L.E.C. Service
Inc. were selected to form a pre - qualified vendor list to provide HVAC contractor
services during FY 2014 -15 in a cumulative amount not to exceed $80,000 which was
done under the Purchasing Services Manager authority. Staff recommends exercising
renewal options with West Coast Air Conditioning and L.E.C. Service Inc. as the best
qualified bidders to provide HVAC contractor services for the next two years through
June 2017 in an amount not to exceed $200,000 each year, for a total amount of
$480,000 for a three -year period from July 2014 to June 2017 which now requires City
Council authority.
Background
In June 2014, staff solicited bids for HVAC contractor services that included multi -year
renewal options. In the midst of the selection process, on August 26, 2014, staff was
directed by Council to review contracted services throughout the City and identify
situations where contracted services could be brought in- house. Because continuation
of the service was necessary during the review time; the bid was awarded by purchase
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orders for the first year under the authority of the Purchasing Services Manager,
pending the outcome of the study and Council action. On January 13, 2015 (attachment
B), Council adopted a Policy for Hiring Contracted or As- needed Staff for Non-
professional Services and approved to hire an additional HVAC technician and limit
outside HVAC contractor services to $80,000 per year with the exception of carrying out
special projects or work on proprietary equipment (such as Mitsubishi air conditioning
systems) that cannot be handled by City staff. With the renewal options, the total
expenditure for the three -year term (from July 2014 to June 2017) is $480,000 and, as a
formal bid, requires Council approval.
Discussion
City maintenance staff performs the majority of HVAC work at City facilities, but require
HVAC contractor services for larger jobs or jobs involving special equipment or
proprietary systems. Similar to several other types of contractual service bid awards
(e.g. door, electrical, paint, roof and waterproofing contractors) staff recommended
awarding the HVAC contractor services bid to a short list of pre - qualified vendors.
Establishment of a short list allows staff to work with contractors with expertise in a
variety of specialties, systems and equipment, while ensuring that individual jobs are
competitively bid as required by Municipal Code provisions. Prior to contracting for a
special HVAC job that meets the threshold of $10,000 for a competitive bid, staff would
solicit quotes from each pre - qualified contractor and award a contract to the best bidder
based on price, experience, response time and other relevant factors. For HVAC jobs
under the threshold of a competitive bid, City maintenance staff would select a pre -
qualified HVAC contractor in accordance with City Purchasing guidelines.
Approximately $35,400 was spent on HVAC contractor services in FY 2014 -15.
Method of Service
On January 13, 2015, Council adopted a Policy for Hiring Contracted or As- needed
Staff for Non - professional Services. This policy includes criteria under which
contracting for a public service is appropriate. Council approved contracted staff for this
service as an activity requiring technical expertise that City staff cannot or does not
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provide. The service has not changed substantially since that analysis. This renewal is
at the same price and terms as the initial agreement. Staff will re- review the service
according to the Policy following the end of this contract term.
On September 2014, the Purchasing Services Manager issued a pre - qualified vendor
list including West Coast Air Conditioning and L.E.C. Service Inc. to provide HVAC
contractor services through June 2015 not to cumulatively exceed $80,000. At the time
of issuance, the amount was below the threshold requiring Council authority. This action
incorporates the initial year award and the two one -year renewal options for a three -
year agreement not to exceed $480,000.
Vendor /Consultant Selection
In June 2014, the City published Notices Inviting Bids to provide HVAC contractor
services in accordance with City scope of work. The bid was posted on the City's on -line
bidding site, and notices were advertised in the Santa Monica Daily Press in
accordance with City Charter and Municipal Code provisions. A total of 480 vendors
were notified and 40 vendors downloaded the bid (Bid #4161). Four bids were received
and publicly opened on June 26, 2014 per Attachment A. Bids were evaluated based on
the criteria in SMMC 2.24.072, including price, previous experience, capacity and skill,
ability to deliver and provide future maintenance or service, and compliance with City
scope of work. A number of City facilities are being retrofitted with Mitsubishi air
conditioning units such as City Hall and they require all contractors working on their
equipment to be certified by them. West Coast Air Conditioning is not the lowest bidder,
but has provided the City with routine and specialized HVAC contractor services at
reasonable prices for several years. They offer the shortest response time of one hour
and have the largest manpower and fleet. West Coast Air Conditioning is also a
Mitsubishi diamond dealer. L.E.C. Service Inc. is not the lowest bidder, but has
provided the City with satisfactory HVAC contractor services at reasonable prices for
several years. L.E.C. Service Inc. is also a Mitsubishi certified dealer. Masters
Mechanical is the lowest bidder but upon verification with the Contractors State License
Board, staff determined their license is under suspension for failure to comply with a
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bond payment. Lee Capital Builders has performed a project with the City but did not
receive a favorable recommendation from City staff. Based on these criteria, West
Coast Air Conditioning and L.E.C. Service Inc. are recommended as best bidders to
provide HVAC contractor services for a total amount of $480,000 over three years.
Staff verified with the Contractors State License Board that licenses for West Coast Air
Conditioning and L.E.C. Service Inc. are current, active and in good standing.
Financial Impacts and Budget Actions
The renewal year to be awarded to pre - qualified vendors West Coast Air Conditioning
and L.E.C. Service Inc. is for an amount not to exceed $200,000 in FY 2015 -16, with
one additional one -year option to renew, for a total not to exceed $480,000 over a three
year period. Funds in the amount of $200,000 are available in various FY 2015 -16
department budgets and Capital Improvement Program budgets. Future year funding is
contingent on Council budget approval.
Prepared By: Shidan Adlparvar, Facilities Services Administrator
Approved Forwarded to Council
Martin Pastucha, Director 7/1712015
Attachments:
Elaine M Polachek, Asst. City MaHA@i2015
A. Bid #4161 Results - HVAC Contractor Services (PDF)
B. January 13, 2015 Contract and As- Needed and Staffing Review Report (web
link)
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Reference:
Agreement No. 10146
(CCS)
Agreement No. 10147
(CCS)