REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Stadium Manager’s Request to Execute an Amendment No. 1 to the Agreement with Integrated Communication Systems to Increase the Not to Exceed Amount by $56,000, for a Total of $408,000 Over a Three-Year Term, for Fire Alarm Testing, Inspection, Maintenance, and Related Services at Levi’s Stadium
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
As the Stadium Manager, Forty Niners Stadium Management Company, LLC, is responsible for maintaining “the Stadium in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility” as required by the Stadium Management Agreement between the Stadium Authority, Stadium Manager, and Forty Niners SC Stadium Company, LLC (StadCo).
In 2023, the Stadium Manager conducted a Request for Proposals (RFP) Process. The highest-scoring proposer took exception to the terms and conditions agreed upon in their initial proposal response during the agreement execution stage. Representatives from the Stadium Manager and vendor attempted to resolve issues related to indemnity and liability provisions but could not mutually agree on the terms proposed by the vendor. The Stadium Authority Counsel reviewed the vendor’s proposed language and concurred with the Stadium Manager’s concerns. As such, the Stadium Manager recommended moving forward with the second-highest rated proposer in the Stadium Manager’s RFP process, Integrated Communication Systems (ICS). The Stadium Manager’s RFP provided the Stadium Manager the right to enter into an agreement with another proposer in the event the originally selected proposer defaults or fails to execute an agreement with the Stadium Manager.
On May 23, 2023, the Stadium Authority Board approved an agreement with Integrated Communication Systems (ICS) to provide fire alarm testing, inspection, maintenance, and related services at Levi’s Stadium (Agreement). The Agreement included an initial three-year term through March 31, 2026, with the option to extend the agreement for two additional one-year periods, in an amount not to exceed $115,000 for the first contract year, $117,000 for the second contract year, and $120,000 for the third contract year, for a total not to exceed amount of $352,000 over the three-year period. The Stadium Authority Board also authorized the Executive Director to approve the Stadium Manager’s exercise of the option to extend the agreement with the same basic terms and conditions for two additional one-year periods, subject to budget appropriations.
The Stadium Manager is requesting an approval of an Amendment No. 1 to the Agreement to increase the contract amounts for Years two and three in the amounts of $16,000 and $40,000, respectively, resulting in a total not to exceed agreement amount of $408,000 over the three-year term with the option to extend the agreement for two additional one-year periods. As Year 2 of the agreement concluded on March 31, 2025, approval of this request will also include retroactive approval from the Stadium Authority Board.
The recommendation memo submitted by the Stadium Manager contains additional details regarding the request.
DISCUSSION
Regular testing of the fire alarm system is critical to the safe operation of the stadium. To maintain a consistent and safe operating environment for Non-NFL and NFL events, the vendor performs regular inspections of the fire alarm system, performs corrective maintenance as issues arise, and provides on-site response and emergency services as needed. Spending on fire alarm and smoke detector repairs has increased and exceeds the anticipated projections that were included during the original RFP process.
As such, the Stadium Manager is requesting to increase the agreement amount based on increased service needs. For Year 2, the Stadium Manager incurred an additional $14,000 in costs for time-sensitive services that exceeded the original second contract year amount of $117,000 and is requesting an additional $2,000 to cover any late arriving invoices, for a total of $133,000. Due to increased expenditures, the Stadium Manager is also requesting an additional $40,000 for Year 3, for a total of $160,000.
Based on the documentation and information provided, staff recommends approval of the Stadium Manager’s request to execute an Amendment No. 1 to the Agreement to increase the contract amounts for contract years two and three in the amounts of $16,000 and $40,000, respectively, to ensure continuity of fire alarm system testing, inspection, and maintenance services at Levi’s Stadium. As noted in the background section, the Stadium Authority Board previously authorized the Executive Director to approve the Stadium Manager’s exercise of the option to extend the agreement with the same basic terms and conditions for two additional one-year periods, subject to budget appropriations.
The Stadium Authority Counsel’s Office has reviewed the Amendment No. 1 to the Agreement for comparison to the Stadium Authority’s customary language. Nothing in the proposed Amendment No. 1 or Agreement changes the Stadium Authority’s rights under the Management Agreement and specifically with respect to any dispute that may arise from the Stadium Manager’s obligations under the Management Agreement.
The Stadium Authority reserves all rights to confirm and dispute charges by and payments to the Stadium Manager during a fiscal year-end reconciliation/true-up, including but not limited to changes based on improper allocation, calculation, lack of support, or failure to comply with the Parties’ contracts or California law. The Stadium Authority may raise related questions before the fiscal year-end reconciliation/true-up, which the Stadium Manager agrees to assess and respond to in good faith.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
The proposed Amendment No. 1 increases the total not to exceed amount by $56,000, from $352,000 to $408,000.
The Stadium Authority Fiscal Year (FY) 2025/26 Budget contains Shared Stadium Expenses (Shared Expenses) such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. Shared Expenses are split between the Stadium Authority and StadCo per the Stadium Lease between Stadium Authority and StadCo. There are sufficient funds in the FY 2025/26 Shared Stadium Expenses Engineering line item to cover Stadium Authority’s portion (50%) of outstanding expenses for the second contract year (up to $41,778) and the agreement cost for the third contract year (up to $80,000).
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Offices.
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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Approve the Stadium Manager’s request to execute an Amendment No. 1 to the Agreement with Integrated Communication Systems (ICS) to increase the not to exceed amount to $133,000 for the second contract year and $160,000 for the third contract year, for a total not to exceed amount of $408,000 over the three-year period, with the option to extend the agreement for two additional one-year periods, subject to budget appropriations.
Staff
Reviewed by: Chuck Baker, Assistant Executive Director
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with ICS
2. Amendment No. 1 to the Agreement with ICS
3. Stadium Manager’s Recommendation Memo