REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute Amendments to Agreements for As-Needed Scaffolding Services with Unique Scaffold and Liberty Industrial Group, Inc. to Increase Maximum Compensations and Extensions to Contract Terms
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), operates two gas-fired power generation facilities within City limits, as well as remote power generation facilities and substations. These facilities require periodic scheduled maintenance and as-needed repair for unforeseen equipment failures. Scaffolding services are an essential component for accessing equipment during maintenance and repair work.
In March 2021, the City published a competitive Request for Proposals (RFP) for as-needed scaffolding services. On July 13, 2021, the City Council authorized the City Manager to execute service agreements with Ernie and Sons Scaffolding dba Unique Scaffold and Liberty Industrial Group, Inc. for as-needed scaffolding services with a maximum aggregate compensation amount not to exceed $1,250,000 for an initial five-year term and up to five one-year renewal options.
Unique Scaffold:
On October 1, 2021, the City Manager executed an Agreement with Ernie and Sons Scaffolding Services doing business as Unique Scaffold with a Maximum Compensation of $750,000 over a five-year term. On March 17, 2023, a Consent to Assignment Agreement was executed to assigning the agreement from Ernie and Sons Services dba Unique Scaffold to Unique Scaffold. On February 26, 2024, the City executed Amendment No. 1 to the Agreement with Unique Scaffold updating the rate schedule. On October 18, 2024, the City executed Amendment No. 2 to the Agreement with Unique Scaffold increasing the maximum compensation to one million dollars.
Liberty Industrial Group:
On August 31, 2021, the City executed an agreement with Liberty Industrial Group with a maximum compensation of $250,000. This agreement has not been amended.
DISCUSSION
The agreements with Unique Scaffold and Liberty Industrial Group ensure the City has access to essential scaffolding services, including erection and dismantling of scaffolding, shrink wrapping, netting, safety training, and inspection services. Unique Scaffold serves as the primary contractor, while Liberty Industrial Group, Inc. is the secondary contractor. Since the execution of the original agreements, there has been an increase in the demand for scaffolding services, primarily due to more frequent preventative maintenance requirements and extended project durations.
To address these increased demands and ensure uninterrupted support for SVP’s operations, staff is seeking City Council authorization for the City Manager to negotiate an execute amendments to the agreements to increase the aggregate maximum compensation by $3,750,000 for a revised aggregate maximum compensation of $5,000,000 over ten years (the initial five-year term plus the additional option periods of up to five years). Compensation for each service will continue to be based on the rates established in the agreements subject to reasonable increases to account for market labor and materials cost increases.
Staff also requests authorization for the City Manager to negotiate and execute amendments to the agreement to (a) add or delete services consistent with the scope of services, (b) adjust future rates to account for reasonable adjustments to labor and materials rates, and (c) extend the term for up to five additional years in increments to be determined by staff (modifying current City Council authorization to negotiate and execute five one-year options to extend). These actions reduce administrative time required to modify long-term contracts while still appropriately managing the costs and timelines associated with maintaining critical City assets.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the proposed actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to sections 15301 and 15302 of Title 14 of the California Code of Regulations as they involve work associated with (1) the operation, maintenance, and repair of existing mechanical equipment; and (2) the replacement of utility equipment with negligible or no expansion of capacity.
FISCAL IMPACT
The proposed amendments would increase the aggregate maximum compensation from $1,250,000 to $5.0 million over a ten-year period. Sufficient funds are available in SVP’s FY 2024/25 Adopted Operating or Capital Budget based on the services to be performed. Funding for future years will be requested through the normal budget process.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, or by email to: clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are exempt from CEQA pursuant to Sections 15301 (Existing Facilities) and 15302 (Replacement or Reconstruction) of Title 14 of the California Code of Regulations;
2. Authorize the City Manager or designee to negotiate and execute amendments to the agreements with Unique Scaffold and Liberty Industrial Group, Inc., to (a) increase the aggregate maximum compensation by $3,750,000 for a new aggregate maximum compensation of $5,000,000 over a ten-year period; (b) add or delete services consistent with the scope of services; (c) adjust future rates to account for reasonable adjustments to labor and materials rates; and (d) extend the term for up to five additional years in increments to be determined by staff subject to the appropriation of funds and the approval as to form by the City Attorney; and
3. Authorize the City Manager or designee to take any actions as necessary to implement and administer the amendments.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Agreement with Ernie and Sons Scaffolding Services dba Unique Scaffold
2. Consent to Assignment Agreement with Ernie and Sons Scaffolding and Unique Scaffold
3. Amendment No. 1 to the Agreement with Unique Scaffold
4. Amendment No. 2 to the Agreement with Unique Scaffold
5. Agreement with Liberty Industrial Group, Inc.