C7B-Accept Recommendation Audit Services Of Capital Improvement ProjectsCOMMISSION ITEM SUMMARY
Condensed Title:
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, Pursuant To
Request For Proposals (RFP)No. 0064-2013, For Audit Services Of Capital Improvement Projects.
Key Intended Outcome Supported:
Improve the City's overall financial health and maintain overall bond rating.
Supporting Data (Surveys, Environmental Scan, etc: N/A
Item Summary/Recommendation:
The proposed audit will focus primarily on the City's capital projects. It should cover the review of
the process the departments utilize to take a capital project from the beginning to final completion.
In addition, it should include a review of capital improvement projects under the administration of
the divisions within the Public Works Department. Internal controls over these processes should
be reviewed for adequacy and effectiveness. The audit(s) will cover a three year period from
October 1, 2009 through September 30, 2012.
On December 12, 2012, the Mayor and City Commission approved the issuance of Request for
Proposals (RFP) No. 064-2013 for Audit Services of Capital Improvement Projects. The RFP was
issued on February 22, 2013, with an opening date of April4, 2013. The solicitation was advertised
and notices were released to prospective proposers. Proposals were received from two (2) firms.
On February 20, 2013, the City Manager via Letter to Commission (LTC) No. 166-2013, appointed
an Evaluation Committee (the "Committee"). The Committee convened on June 12, 2013, to
consider proposals received and interview proposing firms and submit a recommendation to the
City Manager.
After considering the review of the recommendation of the Committee, the City Manager exercised
his due diligence and is recommending that the Mayor and the City Commission enter into
negotiations with Marcum LLP; and should the administration not be successful in negotiating an
agreement, authorizing negotiations with Resolution Management Consultants; and should the
administration not be successful in negotiating an agreement, authorizing negotiations with,
Crowe Horwath LLP.
RECOMMENDATION
ADOPT THE RESOLUTION
Advisory Board Recommendation:
Financial Information:
Source of Amoun
Funds: t
1 $85,000
! t 2
OBPI Total $85,000
Financial Impact Summary:
011-0330-000312
City Clerk's Office Legislative Tracking:
Alex Denis, Extension 6641
MIAMI BEACH 198
Account
City
JLM
AGENDA ITEM --=C.:..._7:.....8:::.-_
DATE ]-/7-/?;;
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,
www.miamibeachfl.gov
TO: Mayor Matti Herrera Bower and M
FROM: Jimmy L. Morales, City Manager
DATE: July17,2013
COMMISSION MEMORANDUM
SUBJECT: A RESOLUTION OF THE M OR AND CITY COMMISSION OF
THE CITY OF MIAMI BEAC , FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE CITY MANAGER PERTAINING TO THE
RANKING OF PROPOSALS, PURSUANT TO REQUEST FOR
PROPOSAS (RFP) NO. 064-2013, FOR AUDIT SERVICES OF CAPITAL
IMPROVEMENT PROJECTS.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
KEY INTENDED OUTCOME SUPPORTED
Improve the City's overall financial health and maintain overall bond rating.
FUNDING
Account Number: 011-0330-000312-Professional Services
BACKGROUND
The City has a Capital Improvement Plan which specifies financing and construction and/or
acquisition for projects and priorities that require significant capital investment for a five-year
period. This plan is updated annually and adopted by the City Commission. A capital project
is defined as capital expenditures of $25,000 or more, resulting in the acquisition,
improvement, or addition to fixed assets in the form of land, buildings, or improvements more
or less permanent in character, and durable equipment with a life expectancy of at least five
years.
The City handles a significant amount of capital improvement projects. The majority are
administered under the City's Capital Improvement Projects (CIP) Office. However, other
departments such as the Public Works Department (including the Property Management
Division), the Parks and Recreation Department, and the Convention Center also administer
capital improvement projects within the City.
The City established the CIP Office in 2001 to serve as a focal point for the planning and
construction management activities associated with the extensive capital projects work being
funded by the authorized General Obligation, Water and Sewer, and Storm Water Bonds
funding at the time. The total value of the City's capital improvement program has grown from
approximately $400 million to over $1.2-Billion, including about 300 completed projects. The
Cl P Office is presently managing over 170 active projects through their project life cycle.
Although the CIP Office has been supported in the past by Program Manager firms (H&S and
URS), those services were gradually reduced and eventually phased out during Fiscal Year
2008/09. With active projects valued at approximately $700M, the CIP Office will face its
biggest challenge, to advance the majority of these projects, including the recently acquired
Capital Renewal and Replacement projects, to completion within the next five years.
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Commission Memorandum-RFP #064-2013 Audit Services of Capital Improvement Projects
July 17, 2013
Page2
CIP staff is comprised of departmental administration, project managers with different levels of
experience and responsibility, financial managers, field inspectors, community information
coordinators and administrative personnel. Other City Departments also provide management
of some specialized projects. For example, the Public Works Department provides
construction management for environmental projects and some utility projects, while the Parks
and Recreation Department provides management of some landscaping projects.
The proposed audit will focus primarily on the City's capital projects. It should cover the
review of the process the departments utilize to take a capital project from the beginning to
final completion. In addition, it should include a review of capital improvement projects under
the administration of the divisions within the Public Works Department. Internal controls over
these processes should be reviewed for adequacy and effectiveness. The audit(s) will cover a
three year period from October 1, 2009 through September 30, 2012.
RFP PROCESS
On January 16, 2013, the Mayor and City Commission approved the issuance of Request for
Proposals (RFP) No. 064-2013 for Audit Services of Capital Improvement Projects (RFP).
RFP No. 064-2013 was issued on February 22, 2013, with an opening date of April 4, 2013. A
pre-proposal conference to provide information to the proposers submitting a response was
held on March 6, 2013.
Six (6) prospective proposers downloaded the solicitation from The Public Group. Additionally,
the Procurement Division notified 31 additional proposers via e-mail, which resulted in the
receipt of the following four (4) responsive proposals:
1. Crowe Horwath LLP
2. Marcum LLP
3. Resolution Management Consultants, Inc.
4. RW Block Consulting, Inc.
On May 7, 2014, the City Manager via Letter to Commission (LTC) No. 166-2013, appointed
an Evaluation Committee (the "Committee") consisting of the following individuals:
• Peter Savineau, Accountant, Resident and Neighborhood Leadership Academy
Graduate.
• Lea Reich, Accountant, Resident and Neighborhood Leadership Academy Graduate.
• Max Berney, Architect, Resident and Neighborhood Leadership Academy Graduate.
• Reyna Tamayo, Accountant, Resident and Neighborhood Leadership Academy
Graduate.
• Allison Williams, Chief Accountant, City of Miami Beach Finance Department.
• Laura Franco-Rubines, Assistant Internal Auditor, City of Miami Beach OBPI/Internal
Audit.
• Maria Cerna, Senior Capital Project Coordinator, City of Miami Beach CIP.
The following individuals were appointed as alternates:
• Douglas Seaman, Assistant City Engineer, City of Miami Beach Public Works.
• Christi Cvijanovic, Architect, Resident and Neighborhood Leadership Academy
Graduate.
Lea Reich and Max Berney, both residents, were not able to attend the meeting. Christi
Cvijanovic, also a resident, was added to the committee as a replacement. Laura Franco-
Rubines, Assistant Internal Auditor, City of Miami Beach OBPI/Internal Audit, was unable to
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Commission Memorandum -RFP #064-2013 Audit Services of Capital Improvement Projects
July 17, 2013
Page 3
attend the evaluation meeting and was replaced by James Sutter, Internal Auditor, City of
Miami Beach OBPI/Internal Audit.
The Committee convened on June 12, 2013, to consider proposals received. In addition to the
proposals received, the Committee was provided with an overview of the project, information
relative to the City's Cone of Silence Ordinance and the Government in the Sunshine Law.
The Committee was also provided with general information on the scope of services,
Performance Evaluation Surveys, and additional pertinent information from all responsive
proposers.
The Committee was instructed to score and rank each proposal pursuant to the evaluation
criteria established in the RFP, which was as follows:
Evaluation Criteria/Factors: Weight
1. Firm's Experience in Auditing Services on Similar Type Projects 20 points
2. Qualifications of Project Team on Similar Type Projects 20 points
3. Methodology and Approach 20 points
4. References Provided by Prior Clients 15 points
5. Fees 25 points
Additional points, over the aforementioned potential points were to be allocated, if applicable
and in accordance to following ordinances.
LOCAL PREFERENCE: The Evaluation Committee will assign an additional five (5) points to
Proposers, which are, or include as part of their proposal team, a Miami Beach-based vendor
as defined in the City's Local Preference Ordinance. No proposer was eligible for Local
preference.
VETERANS PREFERENCE: The Evaluation Committee will assign an additional five (5)
points to Proposers, which are, or include as part of their proposal team, a small business
concern owned and controlled by a veteran(s) or a service-disabled veteran business
enterprise, as defined in the City's Veterans Preference Ordinance. One (1) proposer was
eligible for Veterans preference.
The Committee discussed the proposers' qualifications, experience, and competence, and
further scored and ranked the proposers accordingly. The Committee's preliminary rankings
are as follows:
PRELIMINARY
COMMITTEE
RAN KINGS
Resolution
Management
Consultants, Inc.
Marcum LLP
Crowe Horwath LLP
R W Block
Peter
Savinea
u
Consultin , Inc. 69
Reyna
Tamay
0
Christi
Cvijanovi
c
Maria
Cern
a
Allison
William
s
Jame
s
Sutter
Low
Aggregat
e Totals
After the all the scores were tallied, Resolution Management Consultants Inc., and Marcum
LLP, tied with twelve (12) low aggregate totals. In order to break the tie, the Committee
deliberated on the scores received and the qualifications of each firm. Following Committee
deliberations, a motion was presented by the Committee Chair, James Sutter, and seconded
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Commission Memorandum-RFP #064-2013 Audit Services of Capital Improvement Projects
July 17, 2013
Page 4
by Maria Cerna, that the committee recommend that the Administration enter into negotiations
with Resolution Management Consultants Inc.; and should negotiations not be successful with
the top-ranked proposer, authorizing negotiations with the second-ranked proposer, Marcum
LLP; and should the Administration not be successful in negotiating an agreement with the
second-ranked proposer, authorizing negotiations with the third-ranked proposer, Crowe
Horwath LLP. The motion presented by Mr. Sutter failed.
Following the failure of the first motion, the Committee discussed that: the proposed price
submitted by Resolution Management Consultants Inc., was subject to assumptions and
limitations which could result in the final proposed price to increase substantially; that
Resolution Management Consultants, is not registered to do business in the State of Florida,
meaning they might not know the laws of the state; and that Resolution Management
Consultants was proposing a subcontractor and the committee was not comfortable with this
arrangement as there was no indication in their proposal that they are previously work together
to provide similar services as both firms were located in different states.
A second motion was made by Committee member Peter Savineau, and seconded by Allison
Williams, that the Administration: enter into negotiations with Marcum, LLP; and should
negotiations not be successful with this firm, authorizing negotiations with Resolution
Management Consultants; and should negotiations not be successful with this firm,
authorizing negotiations with, Crowe Horwath LLP. The motion presented by Mr. Savineau
passed, with four (4) committee members in favor and two (2) against.
Following the successful motion presented by Mr. Savineau, Committee Member Christi
Cvijanovic presented a third motion, which was seconded by Maria Cerna, that the Committee
rescind the previous successful second motion and recommend that: that the Administration
enter into negotiations with Resolution Management Consultants Inc.; and should negotiations
not be successful, authorizing negotiations with, Marcum LLP; and should the Administration
not be successful in negotiating an agreement, authorizing negotiations with Crowe Horwath
LLP. The motion presented by Ms. Cvijanovic failed.
MARCUM LLP PROFILE
Marcum LLP was established in 1951 and is one of the largest independent public accounting
and advisory firms in the nation with over 1,100 professionals, including more than 125
partners, in twenty (20) offices throughout the United States. Their spectrum of services
include: assurance, advisory, and tax services along with information system capabilities.
Related services for governmental services include GFOA Certificate of Achievement for
Excellence in Financial Reporting Program; experience in financial and single audits; and
construction audit and assurance services. Marcum is proposing to complete the services in a
three (3) month period.
Marcum's public sector services' is one of its primary sectors and focuses on local
governments, not for profit organizations and other governmental entities. Marcum is a
premier provider of construction audit, tax and consulting services.
Marcum's fee proposal assuming a risk assessment of "high" (sample size = 102 contracts) is
$83,1 00; and their fee proposal assuming a risk assessment of "low" (sample size = 71
contracts) is $67,840.
Marcum listed the following audits related to construction projects:
• University of Connecticut, Audit Construction Expenditures, 2007 -2010
• Connecticut State University, Audit Construction Program, 2009-2011
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Commission Memorandum -RFP #064-2013 Audit Services of Capital Improvement Projects
July 17, 2013
Page 5
RESOLUTION MANAGEMENT CONSULTANTS, INC.
Resolution Management Consultants, Inc. (RMC) is a nationally consulting firm providing
services related to construction project management, construction claims avoidance, contract
compliance audit, forensic construction scheduling and claims analysis/dispute resolution to a
variety of clients in the construction industry. Founded in 1993 by veterans in the construction
contracting and engineering professions, RMC staff includes firm principals and senior staff
who are registered professional engineers, certified cost engineers, accredited LEED
professionals, certified forensic claims consultants, and established testifying experts who
have participated in settlement conferences, mediation, arbitration and trial. Their sub-
consultant, DavisWren CPA & Associates, Inc., is a full service CPA firm and a veteran owned
small business, domiciled in the State of Florida that offers an array of accounting and
consulting services. DavisWren professionals have extensive auditing experience (both
external and internal) and specific industry experience including government, construction,
transportation and distribution, manufacturing, publicly traded companies, and non-profit
organizations.
RMC is proposing an audit schedule to last nine (9) weeks from the kickoff meeting to the final
report assuming that documentation is made available and interviews are scheduled as outline
in their proposal.
They are proposing a fee of $74,300. Nevertheless, the proposed price is subject to the
numerous assumptions and limitations as outlined in their proposal such as: City to appoint a
primary point of contact who will work with their team to facilitate requests; that the work can
be completed within the allotted nine (9) week time frame; that there will be one draft, review
and finalization round for the report; additional rounds of review and modifications will be billed
on an hourly basis based upon the rates quoted; travel and expenses based upon the
approached outline in the scope of work. Should work extend beyond the 9 week schedule,
additional trips will likely prove necessary and will be reimbursed at cost with a 10% markup;
work in addition to scope described in their proposal or extending beyond the 9 week schedule
will be billed at the hourly rates included in the cost proposal.
MANAGER'S DUE DILIGENCE
After considering the review of the recommendation of City staff, the City Manager exercised
his due diligence and is recommending that the Mayor and the City Commission enter into
negotiations with Marcum LLP; and should the administration not be successful in negotiating
an agreement, authorizing negotiations with Resolution Management Consultants, Inc.; and
should the administration not be successful in negotiating an agreement, authorizing
negotiations with, Crowe Horwath LLP.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of Miami
Beach, Florida accept the recommendation of the City Manager pertaining to the ranking of
proposals, pursuant to request for proposals (RFP) No. 064-2013 for Audit Services of Capital
Improvement Projects; authorizing the administration to enter into negotiations with Marcum
LLP; and should the administration not be successful in negotiating an agreement, authorizing
negotiations with Resolution Management Consultants, Inc.; and should the administration not
be suc~sful in negotiating an agreement, authorizing negotiations with Crowe Horwath LLP.
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RESOLUTION TO BE SUBMITTED
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