HomeMy WebLinkAboutStaff Report 2309-20537.Approval of General Services Agreement Contract C24185703A with SWA Services Group,
Inc. for a five-year term in an Amount Not-to-Exceed $19,327,547 for Janitorial Cleaning
and Maintenance Services, and Approval of a Fiscal Year 2024 Budget Amendment in the
General Fund; CEQA status – Not a Project.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: November 6, 2023
Report #:2309-2053
TITLE
Approval of General Services Agreement Contract C24185703A with SWA Services Group, Inc.
for a five-year term in an Amount Not-to-Exceed $19,327,547 for Janitorial Cleaning and
Maintenance Services, and Approval of a Fiscal Year 2024 Budget Amendment in the General
Fund; CEQA status – Not a Project.
RECOMMENDATION
Staff recommends that Council:
1. Approve and authorize the City Manager or their designee to execute Services
Agreement C24185703A with SWA Services Group, Inc. for a five-year term in an
amount not-to-exceed $19,327,547 (including $18,407,188 for Basic Services and
$920,359 for Additional Services); and
2. Amend the Fiscal Year 2024 Budget Appropriation for the General Fund (requires a
2/3 vote) by:
a. Increasing the Public Works Department Public Services Division ongoing
contract expense appropriation by $200,000; and
b. Decreasing the Budget Stabilization Reserve by $200,000.
EXECUTIVE SUMMARY
The recommended Janitorial Services contract1 marks the first time a collective bargaining
agreement with a union representing custodians has been required for the City’s janitorial
services, in accordance with Council’s January 30, 2023 direction. This requirement, coupled
with new wage and benefits standards, new scope of work for several new and existing City
facilities, and increased service frequency at some City facilities, increased the cost of janitorial
services by 39 percent from costs in the current janitorial services contract. In the January 30,
1 C24185703A SWA Services Contract; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/public-
services/contracts/c24185703a_swa_gsa_10.25.2023_partially-executed.pdf
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2023 staff report, staff had estimated the increased cost of the contract with the new
requirements to be 44 percent.
BACKGROUND
The City’s current janitorial services contract with SWA expires on November 15, 2023. This
contract was initially for a five-year term beginning in 20172 and has been amended four times.
The first amendment added contractor services for the Police Department in December 2018.3
The second and third amendments were six-month extensions approved by Council in June
20224 and December 2022,5 respectively. And the fourth amendment was a two and one-half-
month extension approved by the City Manager in August 2023.6
As part of the 2023 procurement for a janitorial services contractor, staff included the collective
bargaining agreement requirement and wage and benefits requirement that evolved from the
Responsible Contracting Standards Colleague’s Memo (Vice Mayor Stone and Councilmember
Burt) in January 2023.7 On January 30, 2023, City Council directed Staff to include in the next
Janitorial Services bid solicitation a requirement that the contractor’s employees be covered
under a Collective Bargaining Agreement and be paid per the job classification and hourly wage
rate table, below, and no less than the prevailing wage and benefits established for janitorial
services pursuant to the California Public Utilities Code Section 465 and as set forth by the
Department of Industrial Relations. Should the wage rates described in the wage table below
and the collective bargaining agreement’s wages and benefits and the prevailing wage and
benefits differ, the higher wage rates and/or benefits will be paid.
Job Classification Employee Pay Rate ($/hour)
2 City of Palo Alto. City Council Staff Report ID#8323, August 14, 2017;
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2017/id-8323.pdf
3 City of Palo Alto. City Council Staff Report ID#9514, December 17, 2018
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2018/janitorial-amendment-staff-report-sr-9514.pdf
4 City of Palo Alto. City Council Staff Report ID#14161; June 20, 2022,
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/2022/staff-report-14161-amendment-2-first-6-month-extension.pdf
5 City of Palo Alto. City Council Staff Report ID#14820, December 19, 2022;
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/2022/id.-14820-approval-of-amendment-no.-3-with-swa-services-group-inc.-swa.pdf
6 City of Palo Alto. City Council Staff Report ID#14932, November 14, 2022;
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports-
cmrs/2022/id.-14932-janitorial-services-rfp-discussion-and-direction.pdf
7 C18168154 SWA Services Contract; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/public-
services/c18168154-swa-services-amend-4-fully-executed-003.pdf
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Custodian Hourly wage rate for Custodian job classification of PUC Prevailing Wage or
Collective Bargaining Agreement Wage rate (whichever is higher).
Parking Garage
Custodian
11.4% more than the Custodian hourly rate.
Parks Custodian 11.4% more than the Custodian hourly rate.
Utility Custodian 22.9% more than the Custodian hourly rate.
Lead Custodian 28.6% more than the Custodian hourly rate.
Police Department
Custodian
45.7% more than the Custodian hourly rate.
Supervisor 74.3% more than the Custodian hourly rate.
ANALYSIS
The Request for Proposals (RFP) included the Council-directed new requirements for a Collective
Bargaining Agreement and wages and benefits. Additionally, the RFP included the following added
scope of work and increased cleaning frequencies compared to the previous contract:
New cleaning locations or services were added at the
•Airport: add 3 modular office trailers
•New Public Safety Building: add new building and increase cleaning from 5 to 7 days per
week
•Community Services Department: add five new park restroom buildings
•Libraries: add new services at various locations
•Water Quality Control Plant: add 3 modular office trailers
•Foothills Park: increase cleaning from 3 to 5 days per week
•Arastradero Preserve: increase cleaning from 3 to 5 days per week
Procurement Process
An RFP for Janitorial Services was posted on the City’s eProcurement system on April 3, 2023,
however, through the procurement process only 2 proposals were deemed responsive,
therefore the RFP was reissued on June 23, 2023 to ensure competitive pricing, resulting in 4
responsive proposals.
Proposals were evaluated by a four-person evaluation team of staff from the Public Works and
Community Services departments. Proposers were evaluated on 1) Quality of Proposal, 2)
Proposed Solution, 3) Experience, 4) Cost, 5) Financial Condition and Stability, 6) Timely
Performance, 7) Prior Record of Performance, 8) Ability to Provide Ongoing Services, and 9)
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Compliance
SWA had the highest aggregate score of all four evaluators. SWA’s cost proposal was the second
lowest. Their total aggregate score was also notably higher than the other proposers. SWA’s
proposal was clearly superior for quality, performance, effectiveness of the solution, and goods
and services.
Cost proposals for Basic Services ranged from a low of $17,606,690 to a high of $20,826,504 for
the five-year term of the contract. SWA’s cost proposal was $18,407,188. The cost increase of
requiring a collective bargaining agreement and following the wage table, above, is
approximately 39%. The increase was calculated by comparing the cost of janitorial services that
the City currently pays to the first-year cost of the new contract. However, the 39% increase is
not all due to the new wage/benefit requirements because some new scope of work and
frequency of work was added to the new contract. Staff had projected a 44% cost increase,
which was presented at the January 30, 2023 City Council Meeting in Table 2 of the City Council
discussion and direction regarding wage requirements (collective bargaining agreement) for the
contract for next janitorial services.There were no formal bid protests submitted by any of the
four responsive proposers.
Bid Summary for RFP 185703A
Proposed Length of Contract 5 years
Total Days to Respond to Bid 24
Pre-Bid Meeting Yes
Number of Responsive Bids Received 4
Bid Price Range $17,606,690 to $20,826,504
eProcurement Link https://procurement.opengov.com/portal/palo-
alto-ca/projects/49913/document
The current janitorial services contract expires November 15, 2023. Pending Council approval of
the recommended contract with SWA Services Group, Inc., the contractor can begin services
under the new contract on November 16, 2023. SWA is the current provider and will not
require a transition period that would be needed by a new contractor.
Basic Services include routine/regular janitorial services included in the scope of work of the
original contract. The contract includes five percent of the Basic Services amount for Additonal
Services, matching the approach taken in the previous contract. Additional Services covers
work not specified in the original scope of Basic Services and may include but is not limited to
emergency services, new service requests (for existing buildings or for new buildings coming
online), and special event services that may be required during the course of the five-year term.
Without Additional Services, each request for other janitorial servcies outside the contract basic
scope would require Council approval and additional funding.
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FISCAL/RESOURCE IMPACT
Funding for a portion of the first year of the five-year contract term is available in the Fiscal
Year 2024 Public Works Department operating budget. For the remaining portion, Staff
recommends increasing the Fiscal Year 2024 budget by $200,000 in the Public Works operating
budget and decreasing the Budget Stabilization Reserve (BSR) by the same amount. Together
with other recommended budget amendments in the current year, this action would bring the
FY 2024 Adopted BSR estimate of $54.3 million down to $53.4 million. Subsequent years of the
contract are subject to appropriation of funds through the annual budget process.
Janitorial Services Funding Breakdown
Year Dates Basic Service Cost
Additional
Service Cost Total Cost
1 11/16/23-11/15/24 $3,290,026.92 $164,501.35 $3,454,528.27
2 11/16/24-11/15/25 $3,495,995.16 $174,799.76 $3,670,794.92
3 11/16/25-11/15/26 $3,689,514.72 $184,475.74 $3,873,990.46
4 11/16/26-11/15/27 $3,875,058.84 $193,752.94 $4,068,811.78
5 11/16/27-11/15/28 $4,056,591.96 $202,829.60 $4,259,421.56
Grand Total $18,407,187.60 $920,359.38 $19,327,546.98
STAKEHOLDER ENGAGEMENT
Feedback was solicited from City Department stakeholders for new or additional and applicable
cleaning requirements for their facilities.
ENVIRONMENTAL REVIEW
This project is not a project for the purposes of the California Environmental Quality Act
(CEQA).
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer