REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute Amendments to the Agreement with Impec Group, Inc. for Citywide Janitorial Services
Report
BACKGROUND
The City contracts for janitorial services at multiple City facilities, including City Hall buildings, the Senior Center, Silicon Valley Power offices, the Police Station, Libraries, the Emergency Operations Center, multiple Fire Stations, and the Corporation Yard. Services provided under the agreement include vacuuming, mopping, restroom cleaning, window cleaning, surface and counter sanitization, deep cleaning, and other related custodial services necessary to maintain safe, clean, and operational public facilities.
On April 18, 2023, the City Council authorized the City Manager to execute an agreement with Impec Group, Inc. (Impec) for citywide janitorial services following a competitive Request for Proposals process (RTC 23-436, Attachment 1). The agreement includes an initial five-year term from April 19, 2023 through June 30, 2028, with up to three one-year options to extend the agreement through June 30, 2031 (Attachment 2). The City Council authorized maximum compensation of $7,118,803 for the initial five-year term, plus $711,880 contingency, for a total of not-to-exceed amount of $7,830,683.
DISCUSSION
Since the agreement with Impec was executed in 2023, the City’s janitorial needs have expanded to support additional facilities and increased service levels at existing locations. New facilities include the Nuttman warehouse and leased buildings for Silicon Valley Power (SVP) and the Water & Sewer Utilities Department located at 831 and 851 Martin Avenue. Service levels have also increased to include expanded janitorial services at SVP substations, day porter services at the Community Recreation Center and Senior Center, and restroom cleaning services at City parks.
As a result of these expanded service needs, staff anticipate that the current not-to-exceed amount will be exhausted early in the fifth year of the initial agreement term.
To ensure continuity of service and sufficient funding for the remainder of the initial term and all authorized option years, staff requests authorization to negotiate and execute amendments to the agreement with Impec to increase the total not-to-exceed amount from $7,830,683 (initial term) to $16,692,533 (initial term increase of $1,693,482 and $7,168,368 for option years and contingency). This increase would fund the remaining costs of the initial term, the City’s three one-year option terms, and the associated contingency. Table 1 below provides a summary of the costs under the agreement.
Table 1 - Cost Summary
|
Description |
Amount |
|
Initial Term (Years 1-5) |
|
Scheduled Services |
|
Initial Year 1 of 8 Scheduled Services (4/19/2023 - 6/30/2024) |
$1,387,334 |
|
Initial Year 2 of 8 Scheduled Services (7/1/2024 - 6/30/2025) |
$1,469,529 |
|
Initial Year 3 of 8 Scheduled Services (7/1/2025 - 6/30/2026) |
$1,717,460 |
|
Estimated Initial Year 4 of 8 Scheduled Services (7/1/2026 - 6/30/2027) |
$1,930,117 |
|
Estimated Initial Year 5 of 8 Scheduled Services (7/10/2027 - 6/30/2028) |
$2,007,322 |
|
Total for Initial Term Scheduled Services |
$8,511,762 |
|
As-needed Services (4/19/2023 - 5/31/26) |
$161,227 |
|
Contingency |
$851,176 |
|
Total Initial Term Scheduled Services and As-needed Services |
$9,524,165 |
|
Option Years (Years 6 - 8) |
|
Scheduled Services |
|
Estimated Option 1/Year 6 of 8 Scheduled Services (7/1/2028 - 6/30/2029) |
$2,087,615 |
|
Estimated Option 2/Year 7 of 8 Scheduled Services (7/1/2029 - 6/30/2030) |
$2,171,119 |
|
Estimated Option 3/Year 8 of 8 Scheduled Services (7/1/2030 - 6/30/2031) |
$2,257,964 |
|
Total Option Years Scheduled Services |
$6,516,698 |
|
Contingency |
$651,670 |
|
Total Option Years Scheduled Services and As-needed Services |
$7,168,368 |
|
REVISED NOT-TO-EXCEED MAXIMUM COMPENSATION |
$16,692,533 |
The cost of scheduled services for Years 5 through 8 assumes an annual price increase of 4%. Impec may request adjustments to the rates; however, Impec must demonstrate to the satisfaction of the City that an increase is warranted. All price adjustments are subject to the City’s written approval.
A contingency is included to account for unanticipated services requirements and potential rate increases exceeding the assumed amount. Staff will manage expenditures throughout the term of the agreement based on operational needs, provided the overall maximum compensation is not exceeded.
Upon City Council approval, staff will amend the contract to increase compensation for the remainder of the initial five-year term and to provide sufficient authority for the option years, if exercised.
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 amount to be paid to Impec over term of the agreement shall not exceed $16,692,533 ($9,524,165 for the initial five-year term and $7,168,368 for the option periods) which includes a contingency subject to budget appropriations.
Sufficient funding for the contract is budgeted in the FY 2026/27 Adopted Budget in the Facility Services Program of the Department of Public Works. Future years of funding are subject to the appropriation of funds.
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, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to negotiate and execute amendments to the agreement with Impec Group, Inc. for citywide janitorial services to increase the maximum compensation to an amount not to exceed $16,692,533, subject to the appropriation of funds and final review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to take any actions necessary to implement and administer the agreement with Impec Group, Inc., including exercising up to three one-year options to extend the term through June 30, 2031, and to negotiate and execute future amendment(s) to: (a) add or delete City facilities or related services, (b) adjust rates consistent with market conditions, and (c) make de minimis changes, subject to above maximum compensation amount and final review and approval as to form by the City Attorney.
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. RTC 23-436
2. Executed Agreement with Impec Group, Inc.