REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Authorize Ongoing Payments for the Existing Agreement with LCPtracker, Inc. for Labor Compliance Software and to Negotiate and Execute Future Agreements and Amendments
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On June 21, 2018, the City Manager executed a Software Service Agreement with LCPtracker, Inc. (LCPtracker) to provide a cloud-based, software-as-a-service (SaaS) solution for tracking certified payroll information in compliance with the California Department of Industrial Relations (DIR) prevailing wage reporting requirements. The State of California mandates that contractors pay prevailing wages for construction, alteration, demolition, installation, or repair work performed under contracts paid in whole or in part by public funds and this program is managed by DIR.
The City uses the LCPtracker system to verify that contractors are paying the required prevailing wages to their employees based on scope performed by the employee. This system is a critical tool for City staff to monitor contractor compliance with prevailing wage laws.
The LCPtracker agreement is renewed annually and fees are based on the value of projects loaded in the system. Currently, the system includes more than $250 million in active projects, largely due to the significant number of projects associated with Silicon Valley Power’s system expansion plan. As a result, the total cost of the agreement is projected to exceed $250,000. Since 2018, the City has paid $240,000 for the LCPtracker system.
DISCUSSION
The Purchasing Division Manager has determined that this procurement is exempt from the sole source prohibitions under 2.105.280(b)(2) of the Santa Clara City Code as this renewal of LCPtracker is necessary to ensure continued operation and function of existing systems currently in use by the City. The LCPtracker system is integral to the City’s prevailing wage compliance efforts and has been in use since 2018. Staff is requesting authorization to increase the total maximum compensation under the agreement to $700,000 for the period of June 2018 through July 31, 2030. This is based on future needs including Silicon Valley Power’s system expansion plan totaling over $500 million, as well as those Citywide projects supported by the voter-approved bond measure. This amount includes approximately $240,000 already paid to date and an estimated $460,000 in projected costs through July 31, 2030.
Of the estimated $460,000 in future costs, approximately $318,000 is allocated for annual subscription fees based on the current annual cost of approximately $53,000 per year. The remaining $142,000 is contingency funding for training, special technical support services, and additional increases in software subscription fees due to additional projects loaded into the system. Staff regularly reviews project entries to remove completed or inactive projects to help manage subscription costs.
A breakdown of the compensation is provided in Table 1 - LCP Tracker Compensation Summary below.
Table 1 - LCPtracker Compensation Summary
|
Description |
Amount |
|
Amount Paid to Date (2018 - 2024) |
$240,000 |
|
Estimated Annual Subscription Fees (2025 - 2030) |
$318,000 |
|
Contingency for Training, Support, and Additional Subscription Fees (2025 -2030) |
$142,000 |
|
Maximum Compensation Amount (2018-2030) |
$700,000 |
While no specific action is required on the underlying agreement, which renews automatically, LCPtracker may request to update the terms of the agreement in the future. As a cloud-based technology solution, updates may be necessary to address evolving system functionality and security standards. Therefore, staff is also requesting authorization to amend the existing agreement or enter into a new agreement with LCPtracker, provided that the total not-to-exceed compensation of $700,000 is not exceeded.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulation in that it can be seen with certainty that there is no possibility that the proposed actions may have a significant effect on the environment.
FISCAL IMPACT
The cost for the LCPtracker solution is shared between Silicon Valley Power, Public Works, Sewer Utility, and Water Utility. Sufficient funds for the LCPtracker and associated services are available in the FY 2025/26 and FY 2026/27 Operating Budget for all impacted departments. Cost for future years will be addressed in the applicable budget process.
COORDINATION
This report has been coordinated with the Finance Department and 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, email clerk@santaclaraca.gov.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to authorize ongoing payments under the agreement with LCPtracker, Inc. for labor compliance software and related services, for a total maximum compensation of $700,000 for the period of June 2018 through December July 31, 2030, subject to the appropriation of funds and the review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to take any actions necessary to implement and administer the existing agreement with LCPTracker, Inc. and negotiate and execute amendments to (a) add or delete services, (b) adjust future rates based on market conditions, and (c) make de minimis changes, subject to budget appropriations and the review and approval as to form by the City Attorney; and
3. If required to maintain the service, authorize the City Manager or designee to negotiate and execute a new agreement with LCPtracker, Inc., provided the total maximum compensation of $700,000 is not exceeded, subject to budget appropriations and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan D. Grogan, City Manager
ATTACHMENT
1. Software Service Agreement with LCPtracker