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SR-11-24-2015-3A City Council Report City Council Regular Meeting: November 24, 2015 Agenda Item: 3.A 1 of 4 To: Mayor and City Council From: Edward King, Director, Big Blue Bus, Government & Community Relations Subject: Award Bid for Advertising Posting Services Recommended Action Staff recommends that the City Council: 1. Award Bid #4216 to Outdoor Service Providers, Inc., a California-based company for bus advertisement installation services; 2. Authorize the City Manager to negotiate and execute a contractual service agreement with Outdoor Service Providers, Inc., in an amount not to exceed $231,000 for one year, with two additional one-year renewal options in the amount of $468,945, on the same terms and conditions for a total amount not to exceed $699,945 over a three -year period, with future year funding contingent on Council budget approval. Executive Summary Big Blue Bus utilizes a contracted vendor to post revenue -generating advertisements on its bus fleet and on Culver CityBus fleet. The vendor also installs BBB informational interior car cards on BBB’s fleet. Currently, this program produces an average yearly revenue of approximately $2 million. Staff recommends that Outdoor Service Providers Inc. provide bus advertising installation services for Big Blue Bus and Culver CityBus at a cost not to exceed $699,945 for three years. Background In 2004, to help offset operational costs, Big Blue Bus (BBB) implemented a revenue- generating advertising program selling interior and exterior advertising space using in- house City staff for the advertising sales function. The installation function was previously performed by City staff. However, in an effort to improve efficiency and reduce costs, the City engaged an outside vendor to perform installation services. On August 28, 2007, the City Council awarded the bid to J. Perez Associates, Inc. to provide these services for a five-year term. 2 of 4 On June 14, 2011, the City entered into a Memorandum of Understanding (MOU) with the City of Culver City wherein Big Blue Bus became the advertising sales concessionaire for Culver CityBus. As required in that MOU, which expires on June 30, 2016, BBB staff coordinates the posting of ads on the Culver CityBus fleet of approximately 50 buses at its bus yard, along with BBB’s own fleet of 199 buses. Therefore, BBB is now responsible for coordinating the installation of advertis ing on approximately 250 buses between two separate properties. Currently, this program produces an average yearly revenue of approximately $2 million. On June 12, 2012, the City posted another request for bus posting services for both Big Blue Bus and the Culver CityBus. J. Perez Associates, Inc. was awarded the bid for a three-year term. The contract expired on June 30, 2015. To continue these services, on April 23, 2015, the City published Notices Inviting Bids to secure advertising posting services for one year, with an option for two additional years. Two vendors responded to the bid, Outside Services Providers, Inc. (OSP) and J. Perez Associates, Inc. OSP was selected as the lowest bidder based on rate per unit pricing. A Staff Report was submitted for the June 23, 2015 council meeting recommending that Council award Bid #4193 to OSP. However, prior to the June 23rd Council meeting, staff noted that the Request for Proposal’s fee schedule chart allowed for ambiguity as it requested bidders to provide pricing for three different options: Rate per Unit, Flat Monthly Fee for Entire Fleet, and Flat Yearly Fee for Entire Fleet. Although both bidders provided pricing as requested, it was difficult to determine which proposal was indeed “the lowest bid”. Staff recommended that Council reject the two bids and reissue a new Notice Inviting Bids in order to obtain the best bidder for this project. Additionally, in order to continue services in the interim, Staff entered into a Contractual Services Agreement No. 10142 with J. Perez Associates, Inc. for six months, to expire on December 31, 2015, in an amount not to exceed $85,680. Discussion Since the bus advertising posting bid award in 2012, BBB staff realized a significant change in the way customers access information aligned with the City’s own change in how it provided information; shifting away from paper consumption. As a result, BBB 3 of 4 decided to reduce the number of paper schedules placed on the buses. In 2013, BBB notified J. Perez Associates, Inc. that its installation services for bus schedules and take-ones were no longer needed. City staff now performs these installations as needed and by doing so has saved the City over $20,000 per year. Additionally, with the arrival of the Expo rail line, TAP mobile validators on board, real-time signs at bus stops, and other new technologies, it was determined that BBB will require more interior car card space to promote upcoming projects, and therefore would no longer sell interior car card space to advertisers. Currently, vendor installation services are only needed to post BBB interior car cards and exterior advertising on BBB buses and Culver City buses. Vendor/Consultant Selection On April 23, 2015, the City published Notices Inviting Bids to furnish and deliver bus advertising installation services as required by Big Blue Bus. The bid was posted on the City's online bidding site, and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. Of the 1,104 vendors that were notified, 43 vendors downloaded the bid. Two bids were received and publicly opened on September 9, 2015, 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. Staff recommends Outdoor Service Providers, Inc. (OSP). OSP’s price per unit cost is considerably lower than J. Perez Associates, Inc. for both inte rior and exterior postings. Additionally, their experience and a check of references proved favorable. Based on these criteria, Outdoor Service Providers, Inc., the lowest bidder, is recommended as the best bidder for the bus advertising installation services in accordance with City specifications. Financial Impacts and Budget Actions The contractual service agreement to be awarded to Outdoor Service Providers, Inc. is for an amount not to exceed $699,945. Funds in the amount of $231,000 are included in the FY 2015-16 budget in the Big Blue Bus Department. The agreement will be charged to the following accounts: 41643.522545 Ad Sales BBB $195,000 4 of 4 41643.522550 Ad Postings CCB $36,000 Total $231,000 Prepared By: Teri Plummer, Administrative Staff Assistant Approved Forwarded to Council Attachments: A. F4216 BUS AD INSTALLATION (Bid Results) B. August 28 2007 Council Meeting (Web Link) C. June 14, 2011 Council Meeting (Web Link) D. June 12, 2012 Council Meeting (Web Link) E. June 23, 2015 Council Meeting (Web Link) F. July 28, 2015 Council Meeting (Web Link) ATTACHMENT A BID #: 4216 BID CLOSE DATE:9/11/2015 PRICING EXTERIOR PRICE PER UNIT INTERIOR PRICE PER UNIT PERCENTAGE DISCOUNT ON ADDITIONAL SUPPLIES INTERIOR CAR CARD CLIPS PAYMENT TERMS ADDITIONAL CHARGES AND FEES NOT LISTED OTHER PERIOD 2 (FIRST ANNUAL RENEWAL OPTION) PERIOD 3 (SECOND ANNUAL RENEW AL OPTION) OAKS ARIZONA LIVING W AGE BUSINESS LICENSE Bid Results SAME PRICE, TERMS, AND CONDITIONS OFFERED EXPIRES 6/30/16 $ 28.00 $ 9.00 0% NET 30 2% INCREASE 2% INCREASE BID DESCRIPTION: PROVIDE BUS AD INSTALLATION SERVICE AS REQUIRED BY THE BIG BLUE BUS NONE NET 30 NONE OUTDOORS SERVICE PROVIDERS LONG BEACH, CA J PEREZ ASSOCIATES , INC CYPRESS, CA $ 18.00 $ 4.00 EXPIRES 6/30/16 SAME PRICE, TERMS, AND CONDITIONS OFFERED COMPLETE INCOMPLETE INCOMPLETE COMPLETE RESPONSE RESPONSE COMPLETE COMPLETE RESPONSE RESPONSE $0 / UNIT 0% $0.50/UNIT Reference:    Agreement No. 10219  (CCS)