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HomeMy WebLinkAbout2002-24818 Reso RESOLUTION NO. 2002-24818 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER PERTAINING TO THE RANKING OF PROPOSALS RECEIVED PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 49-00/01, FOR THE ESTABLISHMENT OF A JOB ORDER CONTRACTING (JOC) SYSTEM; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH THE TOP-RANKED FIRM OF THE GORDIAN GROUP. WHEREAS, the Mayor and City Commission, at its December 20, 2000 meeting, referred to the Finance and Citywide Projects Committee, consideration of a Job Order Contracting (JOC) System for achieving timely and cost effective procurement of maintenance and construction services for capital projects; and WHEREAS, the Finance and Citywide Projects Committee, at its February 12, 2001 meeting, listened to a presentation from the Procurement Director relative to the JOC System and its benefits, and recommended that the Administration pursue the implementation of the JOC System for timely completion of minor construction projects; and WHEREAS, on February 21, 2001, Commissioner Simon Cruz provided the City Commission with a verbal report relative to the Finance and Citywide Projects Committee's recommendation; and WHEREAS, on July 18, 2001, the Mayor and City Commission adopted Resolution No. 2001-24524, which authorized the issuance of a Request for Proposal (RFP) No. 49-00/01 for the establishment of a Job Order Contracting (JOC) System for Achieving Timely and Cost Effective Procurement of Maintenance and Construction Services for Capital Projects; and WHEREAS, on July 26, 2001, RFP notices were issued by DemandStar by Onvia to 1,650 prospective national consultants, which resulted in 48 firms and/or individuals requesting copies of the RFP, and the submission of two responsive proposals from: 1) The Gordian Group; and 2) URS in association with RS Means; and WHEREAS, the City Manager, via Letter to Commission No. 253-2001, appointed an Evaluation Committee (the "Committee") on subject RFP; and WHEREAS, on January 25, 2002, the Committee convened and was provided with information relative to the project's goals and objectives, the RFP requirements, the City's Cone of Silence Ordinance, the Government in the Sunshine Law, and the Committee's role in the evaluation process; and WHEREAS, on January 28, 2002, the Committee listened to 20-minute presentations and engaged in 20-minute question and answer sessions with The Gordian Group and URS; and WHEREAS, the Committee unanimously agreed that The Gordian Group was the most qualified firm based on its experience and qualifications, and URS as the second-ranked firm; and WHEREAS, the Committee unanimously agreed that The Gordian Group was the most qualified firm based on their experience and qualifications, and URS as the second-ranked firm; and WHEREAS, The Gordian Group has successfully developed and implemented JOC systems for more than 70 Governmental Agencies; and WHEREAS, the City Manager concurs with the Evaluation Committee's recommendation. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, accepts the recommendation of the City Manager pertaining to the ranking of proposals received pursuant to Request for Proposals (RFP) No. 49-00/01, for the establishment of a Job Order Contracting (JOC) system; authorizes the Administration to enter into negotiations with the top-ranked firm of The Gordian Group.__, end shc'--'!d th~ /\, PASSED and ADOPTED this [0th //~y ~, ~,~?[ ,2002. V I Mayor ATTEST: City Clerk T:~AGENDA\2002~APR1002\REGULAR\ResoJOC.doc APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION City Attom~[' Da~. CITY OF MIAMI BEACH COMMISSION ITEM SUMMARY Condensed Title: ACCEPT THE CITY MANAGER'S RANKING OF PROPOSALS RECEIVED AND AUTHORIZE THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH THE TOP-RANKED FIRM OF THE GORDIAN GROOP FOR THE ESTABLISHMENT OF A JOB ORDER CONTRACTING (JOC) SYSTEM, Issue: WHETHER TO ACCEPT THE CITY MANAGER'S RECOMMENDATION AND AUTHORIZE THE ADMINISTRATION TO NEGOTIATE AN AGREEMENT. Item Summary/Recommendation: JOC IS A COMPREHENSIVE PROCUREMENT SYSTEM FOR OBTAINING CONSTRUCTION SERVICES. IT WAS SPECIFICALLY DESIGNED TO HELP PUBLIC AGENCIES COMPLETE ROUTINE CONSTRUCTION SERVICES MORE RAPIDLY AND AT A SIGNIFICANTLY LOWER COST THAN THE TRADITIONAL SYSTEM OF CONSTRUCTION CONTRACTING. A JOC SYSTEM HAS BEEN SUCCESSFULLY USED BY OTHER PUBLIC ENTITIES FACED WITH CONDITIONS SIMILAR TO THE CITY. ESSENTIALLY, JOC PROVIDES FOR CONTRACTORS BY ESTABLISHING UNIT PRICES AND TECHNICAL SPECIFICATIONS ACCORDING TO WHICH THE GENERAL CONTRACTOR WILL PERFORM ANY WORK STIPULATED BY THE CITY OVER THE TERM OF THE CONTRACT. THE BENEFITS ASSOCIATED WITH PROCURING MAINTENANCE AND CONSTRUCTION SERVICES UTILIZING JOC INCLUDE ALL OF THE FOLLOWING: SIGNIFICANT TIME SAVINGS - AN AVERAGE SAVINGS OF BETWEEN 60-180 DAYS PER PROJECT. LOWER OVERALL CONSTRUCTION COSTS- TYPICALLY IN THE RANGE OF 8-15%. · A CONSISTENT INCREASE IN THE LEVEL OF QUALITY. · AN INCREASE IN CONTRACTUAL CONTROL. · A SIGNIFICANT REDUCTION IN CLAIMS AND CHANGES. ADOPT THE RESOLUTION. Advisory Board Recommendation: I RECOMMENDED THAT THE ADMINISTRATION PURSUE THE IMPLEMENTATION OF THE JOC I I THE FINANCE AND ClTYVVlDE PROJECTS COMMITTEE AT ITS FEBRUARY 12, 2001 Mbb~ lNG, SYSTEM. Financial Information: Amount to be expended: Source of Funds: Finance Dept. ~ n-Offs: FB A6ENDA ITEM DATE CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 http:~\ci.rniami-beach .fl .us TO: FROM: SUBJECT: COMMISSION MEMORANDUM DATE: April 10, 2002 Mayor David Dermer and Members of the City Commission Jorge M. Gonzalez ~,.~Af~ City Manager A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER PERTAINING TO THE RANKING OF PROPOSALS RECEIVED PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 49-00101, FORTHE ESTABLISHMENT OF A JOB ORDER CONTRACTING (JOC) SYSTEM; AUTHORIZING THE ADMINISTRATION TO ENTER INTO NEGOTIATIONS WITH THE TOP-RANKED FIRM OF THE GORDIAN GROUP, AND SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN AGREEMENT WITH THE TOP-RANKED FIRM; AUTHORIZING THE ADMINISTRATION TO NEGOTIATE WITH THE SECOND-RANKED FIRM OF URS. ADMINISTRATION RECOMMENDATION Adopt the Resolution. ANALYSIS: Achieving timely and cost effective procurement of maintenance and construction services is one of the most difficult and challenging facility related tasks facing the City of Miami Beach. Complying with the standard procurement regulations required for traditional construction services contracts, combined with the necessary technical component of defining the requirements (i.e. architectural and engineering drawings and specifications) for bidding, makes it difficult to be responsive to facility users in a timely manner. The City's dynamic environment has created a need for facility managers to have a more responsive contracting technique for the accomplishment of maintenance, repair and minor construction projects. Constraints imposed by the existing supply, contracting and personnel systems limit the facility manager's ability to respond to urgent and time sensitive requirements. JOC is an innovative contracting system that was developed to enhance responsiveness while providing a higher level of quality work at a lower cost. JOC is a comprehensive procurement system for obtaining construction services. It was specifically designed to help public agencies complete routine construction services more rapidly and at a significantly lower cost than the traditional system of construction contracting. A JOC System has been successfully used by other public entities faced with conditions similar to the City. Essentially, JOC provides for contractors by establishing unit prices and technical specifications according to which the General Contractor will perform any work stipulated by the City over the term of the contract. Once the contract is in place, individual projects are identified and the scope is developed jointly with the JOC contractor. An automated system provides for preparation of a cost proposal and issuance of the work order. The contractor is responsible for preparation of design plans and obtaining permits, if necessary. The system is analogous to issuing a series of small design/build projects at a price that has been pre-established through a competitive bid process. Utilizing a traditional bid process, a "typical" construction project would required 10-12 weeks for procurement of services and design by a consultant, 4-6 weeks for the solicitation process (i.e. advertisement, pre-bid, bid opening, evaluating, tabulating, recommending), and 4-6 weeks for contract award - all for a project which may require as little as two weeks to actually construct. Furthermore, the design, administrative and advertisement costs associated with these types of projects can be 15-25% of the construction cost especially for smaller projects. What are the benefits of JOC? The benefits associated with procuring maintenance and construction services utilizing JOC include all of the following: · Significant time savings - an average savings of between 60-180 days per project. · Lower overall construction costs- typically in the range of 8-15%. · A consistent increase in the level of quality. · An increase in contractual control. · A significant reduction in claims and changes. · A substantial increase in the utilization of local, minority and women-owned businesses. How Does It Work? The Job Order Contract is a specially designed indefinite quantity contract that is awarded on a periodic basis to one or more contractors. Each JOC is competitively procured using either a sealed bid or a request for proposal and has a pre-established minimum and maximum dollar amount. Work is accomplished by the issuance of a series of individual work orders to the contractor. This continuing incentive allows the contractor to be continually rewarded for providing quality and responsive work. The Job Order Contract package consists of three major documents: · A location specific Unit Price Book containing over 140,000 construction tasks. Each task contains a task description, unit of measurement, and a unit price. Each unit price contains locally developed direct costs for material, equipment, and labor. The construction tasks encompass all aspects of construction work. · A set of detailed technical specifications for each of the 140,000 construction tasks. The specification set incorporates the City's own specifications. · The terms and conditions that contain the specific contract language concerning the execution of the contract. The general guidance given to potential contractors during the advertisement phase is that the City cannot give any specific information regarding individual projects or types of projects. No commitment is made with regard to which specific tasks will be used or in what quantities. Since the contract value ranges from some nominal minimum to a maximum amount the intending bidders are advised that the City is only obligated to award the minimum amount during the term of the contract. Intending bidders are required to submit a "bid" on all work contained in the unit price book by quoting a single adjustment factor that would be applied for work accomplished during normal working hours and a single adjustment factor for work to be accomplished during other than normal working hours. These two adjustment factors represent the contractor's only adjustment to the prices published in the unit price book and must include all indirect cost such as overhead, profit, bonds, insurance, design and contingency costs. For example, an adjustment factor of 25% would be bid as 1.25. During the execution of the contract the unit price of a specific construction task is multiplied by the appropriate adjustment factor to obtain the final price to be paid for the specific task. JOC represents a competitively bid, firm fixed price contract since all the prices and the adjustment factors are established before the contract is awarded. The actual JOC execution process begins with joint review of the scope of work between the City and the contractor. This review will include an on-site inspection. After the scoping conference the City provides the contractor with a formal scope of work. The level of detail and design included in the scope of work is a function of the difficulty of that particular project. The contractor breaks the scope of work down into individual tasks and prepares his pricing proposal using the unit price data contained in the unit price book. The total price is achieved by multiplying the specific construction task by the appropriate quantities for that task and then multiplying by the adjustment factor. As part of the pricing proposal, the contractor also develops a schedule and assembles any technical data requested by the City. The proposal is then evaluated against the City's in-house estimate and any differences in scope or quantities are verified. If the client is satisfied that the contractor's proposal represents a fair and reasonable price for the work, then a firm fixed priced, lump sum work order can be issued to the contractor. This work order is the contractor's notice to proceed. Inspection and acceptance of work are accomplished in the normal fashion. What's the Major Advantage of JOC? The major advantage of the Job Order Contracting System is that the individual work orders give the contractor a "continuing incentive" to do timely and high quality work. The incentive is generated because each work order only represents a small portion of the total possible contract. By doing responsive and high quality work, the contractor can expect follow on work orders. Other Significant advantages of JOC include: Increased Responsiveness Independent studies have shown that JOC can save between 75-85% in the time it takes to engage construction contractors over the more traditional contracting methods. Lower Costs JOC can save the City between 8-15% in actual costs as compared to traditional contracting methods. These cost savings occur from reduced design costs, lower procurement costs, lower project costs and reduced post award costs. Design costs are reduced since a majority of the typical JOC projects can be described without having to develop full design documents. In those cases where some design is required, the design only needs to be completed to the point of being "priceable" and "biddable". For every project the specifications are already developed as part of the basic JOC contract. Design savings range from 2-6%. Lower Procurement costs will be realized since the public agency will not have to develop, advertise, and award individual firm fixed priced contracts for every small to medium sized project. The cost of reproducing the contract documents alone can range from .5% to 2% of the cost of construction. The average procurement cost using the traditional methods for medium sized projects is $0.40 per thousand, for JOC the cost drops to $0.16 per thousand. Typical overall procurement savings can range from 2-4%. Studies have shown that when analyzing comparable work JOC is 4-8% cheaper because of reduced indirect costs and the absence of large contingencies. For example, if you consider a single project that is being advertised under the traditional system, intending bidders will include in their bid anticipated overhead costs for the full duration of the project. These costs will represent field as well home office costs. Under JOC, the contractors spread their anticipated overhead cost over the entire contract and therefore, the individual overhead allocation against any one project is a small percentage of the total overhead. Other studies have shown that contractors, when developing their JOC bid, will lower the contingency cost because he/she will have the opportunity to inspect each project prior to developing his cost for that specific project. What about Change Orders and Claims? Post award costs primarily include change orders and claims. Under JOC the contractor jointly scopes the work with the client and any misunderstanding or confusion is openly discussed and resolved. If a question arises during the proposal development the contractor is free to contact the City's representative and get the appropriate answers. This non-adversarial relationship eliminates the underlying cause of most claims and changes. Another key issue is that since JOC is a series of individual work orders it is generally not in the contractors' best interest to submit claims. Change orders arising from changes in the scope of work, or as a result of differing site conditions, are handled as separate work orders. Post award cost savings have been shown to be 1-3% of the cost of construction. Enhanced Opportunities for Small Business Owners JOC has been designed to enhance the participation of small business owners. Since no commitment is made to the JOC contractor regarding specific projects or items of work, the contractor cannot profitably develop an in-house work force and is forced to maximize the use of subcontractors. Over the past 5 years, more than 40% of all JOC work has been subcontracted to small or minority-owned businesses. JOC Produces Higher Quality Construction Since the structure of the JOC is a series of sequential work orders, the contractors have an on-going financial incentive to produce quality projects. If the contractor fails to maintain the desired level of quality, the City can elect to give future projects to other JOC contractors or to accomplish the projects in the traditional manner. The "contractual motivation" under JOC is the complete reverse of the traditional system where the contractor has been awarded a one time, fixed price contract. With the traditional system the contractor must make as much money as she/he can off that one opportunity. The contractor typically increases their profit by cutting corners and submitting requests for claims and change orders. This sort of contractual behavior is not found with JOC since it would only serve to diminish future opportunities. City of Miami Beach Success Story If approved, the City of Miami Beach will be the first municipality in the State of Florida to implement a JOC system. Both the City's Public Works Director and Procurement Director as Contracting Officers for the U.S. Navy and U.S. Air Force respectively, have managed or administered a JOC system. JOC has been approved for use by the General Accounting Office The General Accounting Office (GAO) has fully reviewed the JOC concept and found it to be consistent with all Federal procurement laws and policies. Therefore, any federal funds received by the City can be obligated through the JOC process. The JOC concept was designed with internal controls as an integral part of the check and balance process. The JOC concept relies on automated software, which provides an excellent audit trail of all JOC work orders and transactions as well as various verification programs to ensure the integrity of the JOC database. The JOC System provides for procurement of an "annual General Contractors" through a traditional bid process. An indefinite quantity contract is established with fixed unit prices, against which work orders are issued for individual projects. The RFP Process The Mayor and City Commission at its December 20, 2000 meeting, referred to the Finance and Citywide Projects Committee - Job Order Contracting (JOC) System for Achieving Timely and Cost Effective Procurement of Maintenance and Construction Services for Capital Projects up to $500,000 in Total Cost. The Finance and Citywide Projects Committee at its February 12, 2001 meeting, listened to a presentation from the Procurement Director relative to the JOC System and its benefits, and recommended that the City Administration pursue the implementation of the JOC system for timely completion of minor construction projects. On February 21,2001, Commissioner Simon Cruz provided the City Commission with a verbal report relative to the Finance and Citywide Projects Committee's recommendation as stated above. On July 18, 2001, the Mayor and City Commission adopted Resolution No. 2001-24524, which authorized the issuance of a Request for Proposals (RFP)for the establishment of a Job Order Contracting (JOC) System for Achieving Timely and Cost Effective Procurement of Maintenance and Construction Services for Capital Projects up to $500,000 in Total Cost. On July 26, 2001, RFP notices were issued by DemandStar by Onvia to 1,650 prospective national consultants, which resulted in 48 firms and/or individuals requesting copies of the RFP, and the submission of two responsive proposals: The Gordian Group, and URS in association with RS Means. The City Manager via Letter to Commission No. 253-2001, appointed the following individuals to serve on the Evaluation Committee (the "Committee") on subject RFP: Fred Beckmann, Director, Public Works Timothy Hemstreet, Interim Director, Capital Improvement Projects Office Marty Hyman, Member of the General Obligation (GO) Bond Oversight Committee Laura Jamieson, Member of the General Obligation (GO) Bond Oversight Committee Lazaro Martinez, Member of the Parks and Recreational Facilities Board Alexandria Rolandelii, Redevelopment Coordinator Kevin Smith, Director, Parks and Recreation Ms. Rolandelli and Mr. Martinez were not able to participate due to prior commitments. Mr. Kent Bonde, Redevelopment Coordinator, was added to the Committee. The City Manager selected Mr. Beckmann as the Committee Chair based on his experience in working with JOC contracts at the Federal level. On January 25, 2002, the Committee convened and was provided with information relative to the project's goals and objectives, the RFP requirements, the City's Cone of Silence Ordinance, the Government in the Sunshine Law, and the Committee's role in the evaluation process. The Committee scheduled a subsequent meeting to listen to oral presentations from URS and The Gordian Group, On January 28, 2002, the Committee heard 20-minute presentations and engaged in 20- minute question and answer sessions with The Gordian Group and URS. During deliberations, the Committee members discussed their individual ranking of the two firms and arrived at the following Committee ranking of the firms: The Gordian Group URS Fred Beckmann 94 64 Kent Bonde 97 73 Timothy Hemstreet 97 54 Marty Hyman 93 71 Laura Jamieson 99 53 Kevin Smith 98 43 Why The Gordian Group The Committee unanimously agreed that The Gordian Group was the most qualified firm based on their proposal and presentation, which consisted of the following: Experience · The Gordian Group Has Developed and Implemented JOC systems for More than 70 Public Agencies Automated Tools · CTC TrackerTM · PROGEN® · eGordianTM Proven Track Record · 100% Successful · 100% On Time Development and Implementation Plan · On Site Presence throughout the initial set-up and implementation · Program Development · Document Development · Procurement Support · Software Development and Testing · Program Implementation · Follow-on Technical Support Methodology and Approach · Scope Development and Documentation · Independent Cost Estimate · · · · · · · · · · · · · · · · · Proposal Review and Validation Negotiation of Non Priced Tasks Job Order Approval Process Project Close Out Procedures Payment Process Integration with other City Systems & Processes Catalog of Construction Tasks Identify Tasks to be Priced Develop Task Descriptions Develop Prices using Local Labor, Material and Equipment Costs Developed Using CTC Tracker Software Technical Specifications Based on Miami Beach Standards Specify Quality of Materials, Testing and Workmanship Linked to the Catalog of Construction Tasks Contract and General Conditions Pre-Bid Seminars -- Greater Understanding=Lower Risk=Lower Prices Marketing Program [] Internal Marketing Program -- JOC Orientations to Miami Beach Staff and Departments [] External Marketing Program -- "Sell" the JOC Program to the Local Contracting Community · Training Program -- City Staff & Contractors · Hands-On Training · Follow on Technical Support Phase Historical Overview · introduced in the United States in 1985 by US Army Corps of Engineers · In Use by all Federal Agencies · Over 1000 Job Order Contracts in Use · Over $1 Billion of Construction Placed Annually · JOC Has Been Implemented by Major Cities, Counties, School Districts & Universities Nationwide JOC - Why It Works · JOC is A Series Of Individual Small Projects Contractor Is Guaranteed Only a Small Minimum Amount of Work · Contractor Has A Continuing Financial Incentive To Provide: Responsive Services Quality Work Lower Cost · Future Job Orders Tied to Contractor Performance No Obligation To Give A Specific Project To JOC Contractor Additional JOC's May Be Bid And Awarded If the City is Not Satisfied With Contractor's Performance JOC Does Not Replace Traditional Methods For Accomplishing Work Lower Costs · Actual Cost of Construction Contractor bids $3 Million Contract - Not a $25,000 project Greater Maximum Value=Lower Adjustment Factors=Greater Savings · Lower Procurement and Administrative Costs JOC Eliminates the Need to Use the Full Procurement Cycle for Small Projects · No need to pay for advertisements & reproduction of documents · Fewer Change Orders and Claims - Joint Scoping Process Eliminates Misunderstandings About Scope - Contractor Develops the Cost Proposal - Responsible for Errors and Omissions - Reduction of Architect/Engineer Fees Greater Participation · JOC Increases the Number of Opportunities for Small, Local & Emerging Businesses No Pre-established quantities inhibits trade staffing by Prime Contractor Responsiveness forces Prime Contractor to use multiple local subcontractors · Review & Approval of Sub-Contractor Plan Prior to Issuance of Each Job Order Ensures Compliance with Expectations · Advantages for Small & Emerging Business Contractors Expanded business opportunities No bonding requirement for the sub-contractor Fast Payment Less Red Tape In summary, the Job Order Contracting System will enable the City to achieve its primary objective of being able to "more rapidly engage contractors" while lowering costs and strengthening internal controls. JOC does not replace any of the existing contracting systems including program management services. JOC is just an efficient and effective tool for the City to use in accomplishing its facilities maintenance and construction program. JOC is a proven system that can offer immediate as well as long-term benefits. JMG:RCM:FB:TM:GL