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SR 11-22-2016 3E Ci ty Council Report City Council Meeting : November 22, 2016 Agenda Item : 3.E 1 of 6 To: Mayor and City Council From: Susan Cline, Director , Public Works, Architecture Services Subject: First Modification to the Agreement with Systems Source, Inc. for Citywide Knoll Furniture Procurement Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a first modification to purchase agreement #4231 in the amount of $1,107,000 with Systems Source, Inc., a California -based company, to provide Knoll systems furniture procurement, installation an d consulting services on an as -needed basis for City staff offices. This will result in a five year amended agreement with a new total amount not to exceed $1,282,000, with future year funding contingent on Council budget approval. Executive Summary In Ju ly 2016, s taff executed a customized purchase agreement in the amount of $175,000 with Systems Source, Inc. in order to complete pending office space furniture projects . This modification requests Council’s approval to increase the not -to -exceed amount to accurately reflect the City’s annual average spent to procure Knoll furniture for future office proje cts over a multiple year period in an effic ient and cost -effective manner. The majority of installed modular furniture systems at the City are from the fu rniture line Knoll Morrison. Staff recommends that the City Council authorize the City Manager to amend the agreement with Systems Source, Inc. to increase the amount by $1,107,000 for a new total amount not to exceed $1,282,000 over a five -year period. Background The City maintains approximately 170,000 square feet of leased and City -owned municipal office space dispersed in one primary (City Hall) and multiple satellite office building s. There are approximately 1,800 full time and 500 temporary City emp loyees. The City completes between 50 -80 Knoll office space projects per year ranging from single furniture purchases to complex and full interior workspace modifications . Knoll became the City’s standard modular system in order to re -use existing modular product as staff reorganized and moved. Over the past three years, the City has spent approximately $769,100 on Knoll office furniture , bid competitively , on an as -needed 2 of 6 basis. Therefore, the City’s annual average for office space purchasing is $256,400; or approximately $1,282,000 over a five -year period. Office modernizations, moves, staffing changes , reorganizations, ergonomic and workplace accommodation needs, and normal wear -and -tear drive the need for furniture procurement. Modular furniture allows flexibility to provide various workspace scenarios and an ability to readapt the same furniture later because of its long useable lifespan. Knoll’s components are easily refurbished for a second life and the Morrison product line is lifetime guaranteed, w hich is why the Knoll line populates a majority of the City’s workspaces. In 2013, the Architecture Services Division in the Public Works Department formalized its responsibility to consistently manage all staff office space projects, and implemented spa ce planning and office design standards for the City to guide ongoing development of occupied office space. The historical practice was for City Departments and Divisions to purchase various furniture pieces on their own, which created waste and could not meet evolving staff needs. To unify workspaces and to be cost effective , the Architecture Services Division specifies two furniture lines specializing in modular furniture: Knoll and Haworth. A facility’s e xisting furniture typically determines which furni ture line is procured. Surplus furniture parts and pieces are utilized before the procurement of new furniture is authorized. All furniture left over after a remodel is inventoried and stored in the City’s warehouse for future City use in order to increase sustainability and cost effectiveness. Knoll and Haworth only sell product through authorized dealers in order to preserve warranty protections and to ensure the product meets City specifications. There are three Knoll authorized dealers in the Greater L os Angeles region, two in Los Angeles County, and one in Orange County. Typical furniture procurement and consulting services most often fall into the following categories:  Workstation reconfigurations with existing furniture 3 of 6  Workstation reconfigurations with a blend of existing and new furniture  New workstations in existing office plans  Comprehensive office remodel with newly procured furniture utilizing minimal existing inventory  Complete office remodels with newly procured furniture only Office space projects vary in scope and size from two to eight work stations and vendors are typically contracted to build, refurbish, and move furniture for modifications to the interior space of a building and office space. Recent and pending furniture requests inclu de new furniture and office pieces like lateral files, overhead cabinets and desk reconfigurations for citywide locations like the Swim Center Offices, Memorial Park, Airport Administrative Building, Fire Department Conference Room, Community & Cultural Se rvices Administrative Office, and new chairs for Public Landscape . All projects are planned pending funding availability by the requesting City Department and/or Division, and overall procurement varies based on City staff needs and organizational staffing changes . Discussion The City completes between 50 -80 Knoll office space projects per year. Furniture orders require long lead times due to customized manufacturing practices and comprehensive design services (necessary to measure, design and specify prod ucts and quantities). Prior to 2014, each office project was bid out independently . This process contributed to significant delays due to the time required to obtain competitive quotes from each of the three authorized Knoll dealers in the Southern Cali fornia market ; the time required to establish a purchase order with the selected vendor; a nd the time required for the vendor to initiate the order with their manufacturer. In order to reduce delays and streamline this process, Architectur e Services staff worked with Finance to revise the process and establish a customized purchase agreement that could apply to multiple office projects . A customized purchase agreement eliminates vendor fatigue, reduces staff time and costs for managing small office project work, and allows for smoother transitions as City staffing needs evolve. 4 of 6 On February 11, 2014 (Attachment A), Council authorized professional services agreement #9873 (CCS) with Western Office Interiors, a California -based company, to provide Knoll furnit ure and consulting services for three years in an amount not to exceed $620,000. As of December 2015, Western Office Interiors became non - responsive and the decision was made by City staff to terminate the contract. For half of calendar year 2016, Knoll furniture procurement was managed by staff per the competitive bidding/purchase order process. In June 2016, s taff issued a Request for Proposals (RFP) with the intention to secure two authorized Knoll furniture vendors under contract to share total work l oad related to the management of new Knoll furniture procurement and consulting services. Staff solicited competitive proposals on the City’s online bidding portal PlanetBids, and staff invited the three authorized Knoll dealers in the area to participate. In July 2016, t he City entered into a five -year purchase agreement with Systems Source, Inc. in the amount of $175,000 , below Council threshold, in order to accommodate current projects under time restraints . Analysis of Knoll furniture procurement ove r the past three fiscal years shows that the City purchased approximately $769,100 in office furniture with an approximate annual average of $256,400 from authorized Knoll dealers . Staff recommends that Council approve a first modification to purchase agre ement #4231 in the amount of $1,107 ,000 with Systems Source, Inc. to provide Knoll furniture procurement and consulting services for a total amount not to exceed $1,282 ,000 over five years. The modification amount is based on average annual spending by Dep artments and Divisions for City staff office space projects between FY 20 13 -14 through FY 20 15 -16. Purchases will be made over the contract term on an as -needed basis. Vendor/Consultant Selection On June 16, 2016, the City published a Request for Propos als (RFP) to contract over a five -year term at least two authorized Knoll dealers to provide Knoll furniture procurement and consulting services for staff offices in accordance with City specifications. The RFP was posted on the City's on -line vendor porta l web site, and notices were advertised in the Santa Monica Daily Press in accordance with City 5 of 6 Charter and SMMC 2.24.100(a). 260 vendors were notified, 17 vendors downloaded the proposal. S taff additionally reached out to notify each of the three (3) autho rized Knoll dealers in the Southern California market and encouraged them to participate in the RFP. One (1) proposal was received on July 6, 2016. The proposal was evaluated based on the criteria listed in the RFP, including price, satisfactory work perf ormance in California on similar work required within the past five years, references, requirement to be an authorized Knoll dealer, and ability to take measurements for proposal development and for final installation . Staff conducted additional outreach t o the other two authorized Knoll dealers in the Southern California market. One vendor was non - responsive and did not reply to staff’s request for information, and the second vendor was not interested to contract with the City based upon their history of s maller projects that require extensive oversight and detail. Based on the RFP criteria and in accordance with SMMC 2.24.07 2 , Systems Source, Inc. is recommended as the best qualified firm . Financial Impacts and Budget Actions The agreement modification to be awarded to Systems Source, Inc. is $1,107,000, for an amended agreement total not to exceed $1,282,000. Furniture procurement, installation and consulting services are funded from budgets in various departments and will only be purchased if funds are a vailable in the appropriate account. Future year funding is contingent on Council budget approval. Prepared By: Erin Hamant, Senior Administrative Analyst Approved Forwarded to Council 6 of 6 Attachments: A. February 11, 2014 Staff Report Reference:    Agreement  No. 10394    (CCS)