1. How to be Successful in Contracting Maintenance Services

2. Adapted from a presentation given by Michael R. Herron, CPRP, (ret) KCMO Parks and Recreation

3. Challenges Facing Maintenance Managers Reductions in Government Spending Flat Growth in Revenues/Resources – possible reductions Rising Cost of Labor, Equipment and Materials Aging Facilities & Amenities Increase in the Number of Users Demand for More & Better Services New Properties/Facilities Acquired

4. Park & Recreation Agencies Contract Most Often for the Following Services: Construction Purchase of Equipment & Materials Concessions Mowing, Campground operations, Officials (Wichita for general park maintenance as of 2010)

5. Benefits of Contracting To develop closer ties with neighborhood & community groups. To curb the rising cost & size of government. To provide services that may be beyond the capabilities of the existing in- house workforce. To increase the flexibility of the existing workforce. To achieve greater efficiencies. To support the private sector and develop a “Park & Recreation” business constituency. To avoid the purchase or rental of costly equipment that will be used on a limited basis, i.e. tree spade, drill seeders, street sweepers, etc. To shift Worker’s Compensation and general Liability Insurance costs to the contractor.

6. Best situations for contracting for maintenance: When travel time & other related costs can be saved by addressing maintenance in isolated or outlying areas on a contractual basis rather than by in-house crews. When equipment or specialized skills required will be infrequently used or underutilized. When there are short term needs or additional assistance is required by in- house staff in peak/seasonal periods When new technology is being tested and/or obsolescence is soon probable. When the smaller size of the agency cannot justify the expenditure for employees & equipment. Where the need for public contact is minimal. When the service may be targeted in future budget reductions.

7. Criteria for Determining which Services to be Contracted Measurability (accurate size: use GIS to assist you) Visibility Length of Need Ability to separate out the Service from others Conducive to Quality Control (If if is difficult to assess quality, it will be extremely difficult to determine if the contractor performed adequately).

8. Market Availability Are there service providers available in the area? What are the number of potentially qualified bidders willing to submit bids? Consider often overlooked groups capable of completing work, i.e. “not-for-profit” organizations, neighborhood associations and social service agencies.

9. Ability to Contract Union contracts (may make the process difficult) Sentiments of governing body Legal restrictions Community receptivity

10. Feasibility of Contracting Will the contract be cost effective? Assess any additional possible impacts upon the agency. Assess available alternatives: * Force account reorganization * Review of service levels * Revenue enhancements * Alternative cost cutting measures

11. Contract Development Identify the specific work activities to be contracted. Conduct an inventory and determine the total number of “units” in each activity to be contracted. Determine desired service level. Develop specifications for work result desired.

12. Specifications Should reflect service level desired. Must be clear, concise and accurate. Should contain listing of definitions for ambiguous terms. Must answer questions of “who, what, when & where”. Should clearly state special skills or expertise required. Should detail expected appearance of contractor’s on-site employees.

13. Specifications (continued) Should specify clean-up expected of contractor. Must list potential damage to guard against, i.e. trees, shrubs, edging, etc. Must identify situations which may pose potential health or safety hazards to users. Include instructions on how to avoid these situations. Should detail expected level of communication between agency and contractor. Detail procedures for reporting accidents and/or injuries.

14. Contract Development (continued) Develop a Work Order System Conduct a Legal Review Consider Affirmative Action – MBE/WBE – DBE Requirements Determine Bidding Schedule Address Local Tax and/or Licensing Requirements Determine Bonding Requirements, i.e. bid bonds, performance bonds and payment bonds.

15. Contract Development (continued) Determine a Method of Payment. Can affect quality, quantity and cost of work performed. Payment should be based on a measure of output or fixed price. Unit Cost vs. Time & Materials. Include penalties for non-performance, i.e. Fines vs. Liquidated Damages.

16. Contract Development (continued) Develop a “Notice to Contractors”. Specify date time,& location of pre-bid conference and bid opening. Detail exactly what must accompany bid. Provide agency contact to provide additional assistance or answer questions. Present subcontracting guidelines.

17. Soliciting Bids Advertise in newspapers and/or web pages for a minimum of five (5) days. Schedule at least two (2) weeks prior to pre-bid conference. Contact previous contractors capable of providing services. Talk with other agencies contracting for similar services. Meet with related professional associations. Contact Personnel or Human Relations agencies. Maintain an on-going list of potential contractors.

18. Bid Award Criteria Lowest and best bid Past Performance Level of expertise Suitability & sufficiency of equipment required. Possession of necessary licenses, certifications, etc. Insurability Ability to secure/provide necessary bonds. Demonstrated ability to meet all other governmental requirements

19. Contract Compliance Enforcement Procedures Requires competent inspections. Need regularly scheduled meetings with contractor. Frequent unannounced field inspections. Document all problems in writing. Photographic documentation desirable. Ensure that inspections are backed by cancellation and penalty clauses.

20. Poor Enforcement Consequences Deterioration of facility, amenity and/or program. Damage to Agency reputation. Lower bids each year by careless contractors who know they can get by without fulfilling contractual obligations. Future costs incurred to restore facilities, amenity and/or program to level of acceptability.

21. Determining Contract Costs Direct payments. Costs to prepare contract & write specifications. Costs for printing & advertising. Costs to administer, supervise & inspect contract. Costs for alternate plans should contractor fail.

22. Why may Contract Costs be Lower? Lower personnel costs Fewer regulations Greater flexibility & adaptability Economies of scale

23. Determining In-House Costs Develop work program & budget for all maintenance programs. Identify all direct labor costs, including wages, salaries, benefits and overtime. Identify costs for clerical support needed. Identify costs for training and/or licensing. Identify other operating costs which support service delivery, i.e. insurance, uniforms, equipment maintenance & repair, etc. Include equipment depreciation attributable to service.

24. Contractor Suggestions Avoid exposing contractor to in-fighting among public service agencies. Avoid surprising the contractor. Have clear descriptions on evaluation criteria. Wait until contract administration processes have been worked out before soliciting bids. Allow for a start-up period on new programs being prepared for bid.

25. Contractor Suggestions (continued) Describe results desired. Avoid specifying how results will be achieved. Regard yourself as a customer & shop for quality. Continually review & update specifications. Process payments in an efficient manner. Let contractors express their ideas for structuring program and improving recordkeeping.

26. Action Plan Lay the groundwork. Inform the agency’s governing body about contracting possibilities. Develop formal written policies covering the receiving of bids & awarding of contracts. Develop Contracting expertise. Seek training opportunities for in-house staff.

27. Action Plan (continued) Employ a contract specialist for start-up period. Start small. Allow in-house crews to compete & submit bids, if practical. Develop contingency plans in the event of a contractor failure and default. Prepare agency staff for contracting before advertising for first time.

28. Action Plan (continued) Consider need to reduce field contact between the contractor and agency staff. Evaluate results: * Was contract cost effective? * Need to revise specifications? * Impacts on other work activities? * Increase or decrease scope?

29. Pre-Bid Conference Two (2) weeks + notice through we site, advertisements, mailings emailings and phone calls. Schedule no longer than a half day. A.M. preference. Include food & refreshments – if possible. Introduce all staff. Invite representatives from other departments who may be involved with contract review & administration.

30. Pre-Bid Conference (continued) Walk everyone through the actual contract. Present slide show of “do’s & don’ts”. Review & emphasize bid submittal requirements. Encourage & schedule on-site field inspections before bidding. Answer all questions. Emphasize Quality!

31. Appendix Timeline Special Requirements Scope of Services Schedules Definitions Work Order Forms Bidding Schedule