Transcript www.massrpa.org

The New Norm: Contracting
and Outsourcing
2013 Massachusetts Parks
and Recreation Annual
Conference
Hyannis, MA
Chris Nunes, CPRE
Director of Parks and Recreation
The Woodlands Township
Session Objectives
• Outline the use and
development of
contracts for services,
programs and
maintenance.
• Identify and recognize
how to minimize risks
in contract
development
• Identify the benefits of
contracting
Background Information
Contracting &
Outsourcing Defined:
• Assigning
responsibility for all or
a portion of the
activity and tasks
involved in developing
and/or running and
maintaining a system
to a contractor outside
of the organization
Background Information
• IRS – “A general
rule is that you,
have the right to
control or direct
the result of the
work done by an
independent
contractor, but
not the means
and methods of
accomplishing
the result.”
Background Information
Pro’s
Con’s
Employee
Contractor
Dedicated Loyalty
Multiple Roles
Reduced Overhead
Improved Work Flow
No Health Benefits
Work On Demand
Highly Specialized Staff
Benefits
Professional
development
Overhead
Lack of Control
No Fixed Rates
Lack of Loyalty
“Apples to Apples”
Administrative /
Personnel Issues
Background Information
Types of services that can be contracted
• Facility
–
–
–
–
–
–
–
Lifeguards
Pool Maintenance
Security
Laundry
Equipment Maintenance
Pest Control
Concessions
–
–
–
–
–
Instruction
Advertising
Programs
Marketing/Promotion
Event Management
–
–
–
–
Electrical
Plumbing
Janitorial/Custodial
Landscape/Forestry
• Program Management
• Trades
• If you are already
doing it, can you
expand on the
current scope?
Challenges of Contracting
• Communication
• Relationships
• Specifications vs
Outcome
• Control
• Poorly written contract
• Poor performance and
responsiveness
• Monitoring
• Liability/
Indemnification
• Low Bid Mentality
• Workplace Restrictions
• Local Marketplace
Benefits of Contracting
• Is it more economical
to contract out?
– Price DifferentialSelf Bid
– Staffing Limitations
– Service Trade-Offs
– Capital Investment
– Technical Expertise
Benefits of Contracting
Self Bid- Janitorial
Staffing Costs
Days Service Is Needed
Parks with restrooms
Minutes per restroom
Travel time per park
Open/Close
Total Minutes
Total Work Hours
Staff Cost-$17 with benefits
Truck Cost
Miles Per Day
Miles Per Gallon
Per Gallon
Days Per Year
Truck Cost Operation
Insurance
Oil Change-$25 per 4000 miles
Truck Capital Cost
3 Years/$20000
Total Self Bid
Actual Bid
365
20
13
5
2
189895
3164.9167
53803.583
100
17
2
365
4294.1176
300
225
6666.6667
$65,289
$55,000
Benefits of Contracting
• Self-Bid Weekend Trash
Weekend
Trash
# of Parks
Cost per
day
In House
27
$500
Contract
13
Sat- $1000
Sun- $1200
Key Point- Staff on weekends are able to handle
additional duties required-fix toilet, graffiti, etc
Benefits of Contracting
• Staffing limitations
–
–
–
–
Inability to hire staff
Time constraints
Work load balance
Length of time of project
Need vs Capacity
250
200
150
Need
100
50
0
Capacity
Benefits of Contracting
Capital Investment
• How often do you use?
•Floor Scrubber/Polisher
•Laundry Equipment
•Food Service Equipment
•Paint Sprayer
•Aerial Lift
•Aerator
Floor Scrubber Need vs Capacity
250
Hours
200
150
Aereation Need
100
Capacity
50
0
Month
Benefits of Contracting
• Does your organization have the following
expertise?
•Sponsorships
•Media Relations
•Legal
•Specialty Programming
•Landscape
•Pool Operations
•HVAC
•Chemicals
•Concessions
•Planning
Keys to a Quality Bid Process
• Bid Documents
– Scope of Work
– Specifications
– Standards
– Expectations
Keys to a Quality Bid Process
• Scope of work:
– Custodial/Gate and
Facilities Maintenance
• Provide all labor,
materials, equipment,
licensing and
supervision necessary
for custodial
maintenance at twenty
community parks for 34
months.
• Length of contract will
have an impact on
capital investment
Keys to a Quality Bid Process
Development of SpecificationsAll cars get you from Point A to Point B, but
various features and other factors affect the
overall price.
Cadillac
Neon
Keys to a Quality Bid Process
• Scope to Specifications
– “Big Picture” ……………..
Keys to a Quality Bid Process
• Scope to Specifications
– ………….to Details
Keys to a Quality Bid Process
• Development of Specifications-Two
Methods
– Outcomes/Performance Based
Keys to a Quality Bid Process
• Development of Specifications-Two
Methods
– Required Services
Keys to a Quality Bid Process
• Specifications:
– Industry
Standards
– Best Practices
– User Needs
– Community Needs
– How would you do
the job?
– What else????
Keys to a Quality Bid Process
• How would you do the job?
Paint
Type
Primer
Painting
the
Gym
Clean
Up
Paint
Quality
Surface
Prep
Keys to a Quality Bid Process
• Standards and Specifications-Christmas
Tree Lights
Providing information on the
maintenance needs of the project
Providing specifications on the
type of lights, color, etc.
Keys to a Quality Bid Process
• Standards and Specifications-Janitorial:
Keys to a Quality Bid Process
• Specifications-Concessions:
Addressing responsibility for
trash in the park/facility
Addressing ability to place
signage in the park/facility
Keys to a Quality Bid Process
Background Information:
– What does a bidder need to know to
provide a quality bid and make a
profit???
• Historical information
• Units consumed
• Rate of use
• Limitations on work
• Rate of growth
Keys to a Quality Bid Process
• Background Information-Pool Chemical
Keys to a Quality Bid Process
• Background Information-HVAC
Keys to a Quality Bid Process
• Background Information-Christmas Trees
Keys to a Quality Bid Process
• Vendor Qualifications:
–
–
–
–
–
–
Financial
Bonding
Past law suites
Number of contracts
Expiration of current contracts
Bank information
Keys to a Quality Bid Process
• Bid Tabulation:
Keys to a Quality Bid Process
•
•
•
•
•
Pre-Bid Meeting
Bid Time Period
Bonds
Timeline
Conditioning
Period
Keys to a Quality Contract
• Contractor Responsibility and Liabilities
–
–
–
–
–
State and Federal Laws
Insurance-$1 million/$2 million
Required licenses, certifications
Image Standards
Reporting
• Detailed Monthly Invoicing
– Adherence to Safety of Users
– Limitations/Indemnification
Keys to a Quality Contract
• Contractor Responsibility and Liabilities
– Image Standards
Keys to a Quality Contract
• Contractor Responsibility and Liabilities
– Detailed Monthly Invoicing
Selecting the Right Contractor
• Do your homework: Check references &
previous work completed
• Professionalism in the bid
• Low bid contractors will create additional
work due to failure to provide “other
services.”
• Analyze all aspects of the bid
Managing the Contract
• Contract Compliance
– Dedicated employee
to manage the
contract (Cost!!!!)
– Monitoring tools
– Status meetings
– Reporting systems
– Develop and
maintain the
relationship
Final Thoughts
• What if bids are too far apart?
– Do you have good specifications
– Do you have an apples to apples
comparison?
– What type of business is it- small vs large?
– Is this their primary line of business?
– Use a third party to analyze
– Use industry standards to compare.
Thank you!!!!!
• For further questions or comments
Chris Nunes, Ph.D., CPRE,
Director of Parks and Recreation
The Woodlands Township
281-210-3906
[email protected]
Exercise …. 15 minutes
• Get in Groups of 5 people
• Chose a service that one of your cities does
by staff.
• Create a scenario for outsourcing that
service
• Present