REPORT TO THE CITY COUNCIL
October 2, 2014
FROM: R. RENENA SMITH, Assistant City Manager
City Manager's Office
THROUGH: JANE SUMPTER, Budget Manager
Finance Department
BY: PEDRO RIVERA, Senior Budget Analyst
Finance Department
SUBJECT
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Approve a (3) three year requirements contract with the possibility of (2) two one-year extensions for Cost Allocation Plan (CAP) and Indirect Cost Rate Proposal (ICRP) services in the amount of $23,000 per year with MGT of America, Inc.
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RECOMMENDATION
Staff recommends that the City Council award a requirements contract for CAP and ICRP services in the amount of $23,000 per year for three years with the possibility of two one-year extensions and authorize the City Manager or his designee, in conjunction with the City Attorney, to finalize and execute the contract on behalf of the City.
EXECUTIVE SUMMARY
The Budget and Management Studies Division of the Finance Department initiated a request for proposal (RFP) for CAP and ICRP services. For the prior three years, the City has utilized the services of Maximus, Inc. for the preparation of the City's Cost Allocation Plan. For FY 2016, the City will pursue eligible federal reimbursement of indirect costs for federal programs and projects. Reimbursement of indirect costs will require the preparation and subsequent submission of both a central services CAP and programmatic/departmental ICRPs to the City's cognizant federal agency: the U.S. Department of Transportation - Federal Transit Administration (DOT-FTA). The increased demand for consultant services now merits a competitive bid and, as such, an RFP was issued. The City sent out 16 proposals and received one response. The submitted proposal was evaluated by a committee panel based on the criteria set forth in the RFP. The committee panel determined that the proposal met the criteria established in the RFP.
BACKGROUND
The purpose of a CAP is to accurately, fairly and reasonably distribute a City's central services costs (e.g. City Clerk, Personnel Services, Finance, Attorney, etc.) to operating departments in the City, in accordance with the Federal Office of Management and Budget's (OMB) 2 CFR Part 225, "Cost Principals for State, Local, and Indian Tribal Governments" (OMB A-87). Allocated overhead costs are then used to develop rates for City services including billing rates for grants and user fees. Once prepared, the CAP must be submitted to the City's cognizant agency, which is currently the DOT-FTA, for review six months prior to implementation. For FY 2016, the City of Fresno's CAP document must be submitted by December 31, 2014.
In addition to the CAP, the contract also includes the development of ICRPs for the following departments: Development and Resource Management; Fire; Parks, After Schools, Recreation and Community Services; Police; Public Utilities; Public Works; and Transportation. An ICRP is the means by which indirect costs are identified, analyzed and allocated to federal programs for federal reimbursement. The development of an ICRP is required prior to billing federal grants for indirect costs. ICRPs must also be submitted to the City's cognizant agency six months prior to implementation.
The RFP was advertised in the Business Journal on Friday, June 27, 2014. The RFP was posted on the City's Bids On-line website where it was downloaded by 16 potential proposers and only one proposal was received and publicly opened on Tuesday, August 12, 2014. Outreach was performed to identify why only one proposal was received, and proposer responses included: specialized services, internal staffing shortages and bond requirements. After careful review and analysis the committee concluded the MGT of America proposal would be the most beneficial to the City.
The Committee recommends awarding the contract to MGT of America as their proposal meets all the RFP requirements and offers the best value to the City. They demonstrated that their service would be the best value for the City and that they had the ability to meet the City requirements as set forth in the RFP. The evaluation was based on the size of the company, past performances, and their ability to meet the requirements of the contract. The City has maintained a contract for CAP services since 2011 and in 2013 included ICRP services for one program. The current contract expired and a bid was initiated to establish a requirements contract for both CAP and City-wide ICRP services. The current contract is held by Maximus, Inc., in the amount of $23,750 per year and expired on January 31, 2014. MGT of America's pricing is $23,000 per year, or approximately three percent below the previous contract pricing.
The proposal package was evaluated by a committee consisting of a facilitating Senior Buyer from Purchasing, six internal staff members and one external member. Based on the review of the proposal, the Evaluation Committee determined that the proposal submitted by MGT of America, Inc. met all of the criteria set forth in the RFP. In addition, the consulting firm has over 40 years of experience in governmental cost determination. The proposer provided three references and all were contacted. The reviews for the proposer's overall service were excellent. MGT of America, Inc. works with many California cities developing cost allocation plans and other cost service projects. Therefore, based on their reputable service and favorable pricing the committee recommends that MGT of America, Inc. be awarded the CAP and ICRP services contract.
The staff determination was posted on the City's website on Tuesday, September 16, 2014. The Council may adopt staff's recommendation which would award a requirements contract for three (3) years, with the possibility of two one (1) year extensions in the amount of $23,000 per year, or reject the submitted proposal. If the proposal is rejected, the project will be rebid resulting in a delay of approximately 90 days. In addition, if rejected, the City will not meet the federal deadline for CAP and ICRP submission and will need to request an extension from its cognizant agency. If an extension is not approved the result may be the loss of federal reimbursement. Proposals will expire within 120 days of proposal opening which is December 10, 2014.
ENVIRONMENTAL FINDINGS
By definition in the California Environmental Quality Act (CEQA) Guidelines Section 15378, the award of a consultant contract does not qualify as a "project" as defined by CEQA.
LOCAL PREFERENCE
Local preference not implemented because no "local business" submitted a bid.
FISCAL IMPACT
Appropriations of $23,800 were established in the General Fund per the FY 2015 Adopted Budget in the Finance Department and are sufficient enough to cover cost of the recommended consultant services. The contract will save the General Fund $750, or approximately 3 percent. The General Fund will recover the cost of CAP and ICRP services via the CAP.
Attachments:
Evaluation Committee Report
Matrix Summary