Transcript The NRPA’s 27th. Annual Rocky Mountain Revenue Management

How to be Successful
in Contracting
Maintenance Services
Adapted from a presentation given by
Michael R. Herron, CPRP, (ret)
KCMO Parks and Recreation
Challenges Facing Maintenance
Managers
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Reductions in Government Spending
Flat Growth in Revenues/Resources – possible
reductions
Rising Cost of Labor, Equipment and Materials
Aging Facilities & Amenities
Increase in the Number of Users
Demand for More & Better Services
New Properties/Facilities Acquired
Park & Recreation Agencies
Contract Most Often for the
Following Services:
Construction
 Purchase of Equipment & Materials
 Concessions
 Mowing, Campground operations, Officials
(Wichita for general park maintenance as
of 2010)
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Benefits of Contracting
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To develop closer ties with neighborhood & community groups.
To curb the rising cost & size of government.
To provide services that may be beyond the capabilities of the existing inhouse workforce.
To increase the flexibility of the existing workforce.
To achieve greater efficiencies.
To support the private sector and develop a “Park & Recreation” business
constituency.
To avoid the purchase or rental of costly equipment that will be used on a
limited basis, i.e. tree spade, drill seeders, street sweepers, etc.
To shift Worker’s Compensation and general Liability Insurance costs to the
contractor.
Best situations for contracting for
maintenance:
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When travel time & other related costs can be saved by addressing
maintenance in isolated or outlying areas on a contractual basis rather than
by in-house crews.
When equipment or specialized skills required will be infrequently used or
underutilized.
When there are short term needs or additional assistance is required by inhouse staff in peak/seasonal periods
When new technology is being tested and/or obsolescence is soon
probable.
When the smaller size of the agency cannot justify the expenditure for
employees & equipment.
Where the need for public contact is minimal.
When the service may be targeted in future budget reductions.
Criteria for Determining which
Services to be Contracted
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Measurability (accurate size: use GIS to assist you)
Visibility
Length of Need
Ability to separate out the Service from others
Conducive to Quality Control (If if is difficult to assess
quality, it will be extremely difficult to determine if the
contractor performed adequately).
Market Availability
Are there service providers available in the
area?
 What are the number of potentially
qualified bidders willing to submit bids?
 Consider often overlooked groups capable
of completing work, i.e. “not-for-profit”
organizations, neighborhood associations
and social service agencies.
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Ability to Contract
Union contracts (may make the
process difficult)
 Sentiments of governing body
 Legal restrictions
 Community receptivity
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Feasibility of Contracting
Will the contract be cost effective?
 Assess any additional possible impacts
upon the agency.
 Assess available alternatives:
* Force account reorganization
* Review of service levels
* Revenue enhancements
* Alternative cost cutting measures
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Contract Development
Identify the specific work activities to be
contracted.
 Conduct an inventory and determine the
total number of “units” in each activity to
be contracted.
 Determine desired service level.
 Develop specifications for work result
desired.
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Specifications
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Should reflect service level desired.
Must be clear, concise and accurate.
Should contain listing of definitions for
ambiguous terms.
Must answer questions of “who, what, when &
where”.
Should clearly state special skills or expertise
required.
Should detail expected appearance of
contractor’s on-site employees.
Specifications
(continued)
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Should specify clean-up expected of contractor.
Must list potential damage to guard against, i.e.
trees, shrubs, edging, etc.
Must identify situations which may pose potential
health or safety hazards to users. Include
instructions on how to avoid these situations.
Should detail expected level of communication
between agency and contractor.
Detail procedures for reporting accidents and/or
injuries.
Contract Development
(continued)
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Develop a Work Order System
Conduct a Legal Review
Consider Affirmative Action – MBE/WBE – DBE
Requirements
Determine Bidding Schedule
Address Local Tax and/or Licensing
Requirements
Determine Bonding Requirements, i.e. bid
bonds, performance bonds and payment bonds.
Contract Development
(continued)
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Determine a Method of Payment.
Can affect quality, quantity and cost of work
performed.
Payment should be based on a measure of
output or fixed price.
Unit Cost vs. Time & Materials.
Include penalties for non-performance, i.e. Fines
vs. Liquidated Damages.
Contract Development
(continued)
Develop a “Notice to Contractors”.
 Specify date time,& location of pre-bid
conference and bid opening.
 Detail exactly what must accompany bid.
 Provide agency contact to provide
additional assistance or answer questions.
 Present subcontracting guidelines.
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Soliciting Bids
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Advertise in newspapers and/or web pages for a
minimum of five (5) days. Schedule at least two
(2) weeks prior to pre-bid conference.
Contact previous contractors capable of
providing services.
Talk with other agencies contracting for similar
services.
Meet with related professional associations.
Contact Personnel or Human Relations
agencies.
Maintain an on-going list of potential contractors.
Bid Award Criteria
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Lowest and best bid
Past Performance
Level of expertise
Suitability & sufficiency of equipment required.
Possession of necessary licenses, certifications,
etc.
Insurability
Ability to secure/provide necessary bonds.
Demonstrated ability to meet all other
governmental requirements
Contract Compliance
Enforcement Procedures
Requires competent inspections.
 Need regularly scheduled meetings with
contractor.
 Frequent unannounced field inspections.
 Document all problems in writing.
 Photographic documentation desirable.
 Ensure that inspections are backed by
cancellation and penalty clauses.
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Poor Enforcement
Consequences
Deterioration of facility, amenity and/or
program.
 Damage to Agency reputation.
 Lower bids each year by careless
contractors who know they can get by
without fulfilling contractual obligations.
 Future costs incurred to restore facilities,
amenity and/or program to level of
acceptability.
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Determining Contract Costs
Direct payments.
 Costs to prepare contract & write
specifications.
 Costs for printing & advertising.
 Costs to administer, supervise & inspect
contract.
 Costs for alternate plans should contractor
fail.
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Why may Contract Costs be
Lower?
Lower personnel costs
 Fewer regulations
 Greater flexibility & adaptability
 Economies of scale
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Determining In-House Costs
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Develop work program & budget for all
maintenance programs.
Identify all direct labor costs, including wages,
salaries, benefits and overtime.
Identify costs for clerical support needed.
Identify costs for training and/or licensing.
Identify other operating costs which support
service delivery, i.e. insurance, uniforms,
equipment maintenance & repair, etc.
Include equipment depreciation attributable to
service.
Contractor Suggestions
Avoid exposing contractor to in-fighting
among public service agencies.
 Avoid surprising the contractor. Have clear
descriptions on evaluation criteria.
 Wait until contract administration
processes have been worked out before
soliciting bids.
 Allow for a start-up period on new
programs being prepared for bid.
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Contractor Suggestions
(continued)
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Describe results desired. Avoid specifying how
results will be achieved.
Regard yourself as a customer & shop for
quality.
Continually review & update specifications.
Process payments in an efficient manner.
Let contractors express their ideas for
structuring program and improving
recordkeeping.
Action Plan
Lay the groundwork.
 Inform the agency’s governing body about
contracting possibilities.
 Develop formal written policies covering
the receiving of bids & awarding of
contracts.
 Develop Contracting expertise.
 Seek training opportunities for in-house
staff.
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Action Plan (continued)
Employ a contract specialist for start-up
period.
 Start small.
 Allow in-house crews to compete & submit
bids, if practical.
 Develop contingency plans in the event of
a contractor failure and default.
 Prepare agency staff for contracting before
advertising for first time.
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Action Plan (continued)
Consider need to reduce field contact
between the contractor and agency staff.
 Evaluate results:
* Was contract cost effective?
* Need to revise specifications?
* Impacts on other work activities?
* Increase or decrease scope?
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Pre-Bid Conference
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Two (2) weeks + notice through we site,
advertisements, mailings emailings and phone
calls.
Schedule no longer than a half day.
A.M. preference.
Include food & refreshments – if possible.
Introduce all staff.
Invite representatives from other departments
who may be involved with contract review &
administration.
Pre-Bid Conference (continued)
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Walk everyone through the actual contract.
Present slide show of “do’s & don’ts”.
Review & emphasize bid submittal requirements.
Encourage & schedule on-site field inspections
before bidding.
Answer all questions.
Emphasize Quality!
Appendix
Timeline
Special
Requirements
Scope of Services
Schedules
Definitions
Work Order Forms
Bidding Schedule