REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Issue Purchase Orders and/or Negotiate and Execute an Agreement with Syserco, Inc. for Heating, Ventilation, and Air Conditioning Control Systems
Report
BACKGROUND
The Department of Public Works (DPW) Facility Services Division is responsible for maintenance and repair of approximately 1,100,000 square feet of City facilities. To continue providing services in a timely and efficient manner, the Division periodically uses qualified vendors to supplement its workload.
As part of its facility operations, the City has invested more than $1 million in Alerton heating, ventilation, and air conditioning (HVAC) control systems at numerous City facilities, including City Hall, the Police Station, Senior Center, Community Recreation Center, fire stations, and libraries. These controls provide a centralized interface that allows City staff to monitor and regulate HVAC operations, optimize building conditions, and manage energy performance.
Given the specialized nature of these systems, the City uses qualified vendor support for ongoing maintenance and repairs. Syserco, Inc. (Syserco) was selected to provide maintenance and repair services for the City’s Alerton HVAC control systems. In September 2021, the City Council authorized the City Manager to issue purchase orders for these services through September 30, 2026.
DISCUSSION
Pursuant to Santa Clara City Code Section 2.105.280(b)(2), staff recommends a sole source procurement with Syserco because the services are necessary to ensure the continued operation, compatibility, and support of the City’s existing Alerton HVAC control systems.
Syserco is the only factory-authorized Alerton dealer identified within 100 miles of the City in the manufacturer’s dealer locator, as verified by staff. Staff also determined that the required services involve manufacturer-authorized access to the City’s existing Alerton control-system software, controller firmware, technical support resources, and compatible replacement components. Based on this review, Syserco is the only known source reasonably available to provide the required services while maintaining operational continuity and system compatibility.
Staff recommends authorizing the City Manager or designee to issue purchase orders to Syserco or, if necessary, negotiate and execute an agreement with Syserco for a five-year service support program for maintenance, repair, and support of the City’s Alerton HVAC control systems. The term for the services would be October 1, 2026, through September 30, 2031.
The total not-to-exceed amount of $331,928 includes $181,928 for base preventive maintenance and scheduled support services and $150,000 for as-needed repairs, replacement parts, emergency response, additional programming, system modifications, and supplemental training. Base-service pricing is subject to an annual increase of approximately 3.75%. Table 1 below provides a summary of the costs for the five-year term.
Table 1 - Cost Summary
|
Description |
Amount |
|
Year 1 Base Services |
$33,757 |
|
Year 2 Base Services |
$35,023 |
|
Year 3 Base Services |
$36,336 |
|
Year 4 Base Services |
$37,699 |
|
Year 5 Base Services |
$39,113 |
|
Base Services Total |
$181,928 |
|
As-Needed Services/Parts (Estimated) |
$150,000 |
|
Total Not-to-Exceed Maximum Compensation |
$331,928 |
The base services include annual preventive maintenance activities, such as system diagnostics; review of alarms and schedules; software and controller firmware updates within the existing software platform; system backups; and system-health reporting. Base services also include one corrective-action service day annually and four pre-scheduled, owner-directed support days each year for services such as troubleshooting, limited system modifications, and supplemental training.
In addition to the base services, the purchase order or agreement will allow the City to authorize as-needed services on a time-and-materials basis, within the approved not-to-exceed amount of $150,000. These services may include repairs; replacement parts and thermostats; emergency response; additional programming; system modifications; and supplemental training outside the base-service scope. Syserco will provide the City with a 20% discount from its standard time-and-materials labor rates and a 60% discount from published list prices for Alerton parts.
Staff is currently negotiating revisions to the City’s standard purchase order terms and conditions with Syserco. If the parties reach agreement on acceptable purchase order terms, the City Manager or designee will issue purchase orders for the required services. If the parties are unable to reach agreement on acceptable purchase order terms, staff will negotiate and execute an agreement using the City’s standard services agreement terms and conditions, subject to review and approval as to form by the City Attorney. Any such agreement will be limited to the City Council-authorized scope of services, term, and maximum compensation.
Before the end of the five-year term, the Purchasing Division Manager will reevaluate the sole source determination, including whether additional authorized Alerton service providers are available to reasonably serve the City.
ENVIRONMENTAL REVIEW
The action being considered is exempt for the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 “Existing Facilities” as the activity consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities mechanical equipment or topographical features involving negligible or no expansion of use beyond that existing at the time of the lead agencies determination.
FISCAL IMPACT
The not-to exceed amount to be paid to the Contractor over the initial five-year term is $331,928. This amount is an estimate based on scheduled preventative maintenance tasks, additional services, and contingency for as-needed services. Most costs will be charged to the relevant departments based on the locations where the services are rendered. Sufficient budget is available to fund anticipated repairs to Alerton controls in FY 2026/27. Funding for out-years are subject to appropriation of funds by the City Council.
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 or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are exempt from CEQA pursuant to Section 15301 (Existing Facilities) of Title 14 of California Code of Regulations;
2. Authorize the City Manager or designee to issue purchase orders and/or negotiate and execute an agreement with Syserco, Inc. for preventive maintenance, as-needed repair, programming, technical support, and related services for the City’s existing Alerton HVAC control systems in an amount not to exceed $331,928, subject to the appropriation of funds and review and approval as to form by the City Attorney; and
3. Authorize the City Manager or designee to take all actions necessary to implement and administer the purchase orders and/or agreement, including adjusting rates and making de minimis changes, subject to the appropriation of funds and 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. Syserco Service Support Program Agreement