Agenda Item Wording:
title
Authorize the City Manager to amend and increase the existing Uniform and Laundry contract (C22056) awarded to Unifirst Corporation in the amount of $23,700 per year by $29,100, to a total not to exceed of $52,800 per year. The remaining term on the existing contract consists of four (4) one-year renewals.
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Deadline for Action: None
Submitting Department: Public Works
Contact Name and Phone Number: Jason Serpa, Public Works Manager, jason.serpa@visalia.city, 713-4533 Nick Bartsch, Public Works Director, nick.bartsch@visalia.city, 713-4052
Department Recommendation:
Staff recommends that the City Council authorize the City Manager to amend and increase the existing Uniform and Laundry contract (C22056) awarded to Unifirst Corporation in the amount of $23,700 per year by $29,100, to a total not to exceed of $52,800 per year. The remaining term on the existing contract consists of four (4) one-year renewals, with possible Consumer Price Index (CPI) increases in the following four years.
Background Discussion:
In late 2021, the City of Visalia Purchasing Department advertised RFB 21-22-15 for the annual contract for Uniform and Laundry Services. On February 2, 2022, City Council authorized the City Manager to award a one-year contract with four (4) one-year renewals to Unifirst Corporation for uniform and laundry service at the rate of $455.12 per week, comprised of a price per garment, and estimated quantities of each.
Shortly after fitting and equipping all departments with the new supplier, staff discovered that the calculated contract amount was not enough to cover the estimated annual cost. The calculated and awarded contract amount was too low due to a miscalculation by staff regarding the quantity of uniforms billed per week.
Standard practice in the uniform industry is such that each City employee is issued eleven (11) of each garment of which the City is charged a weekly rental fee. This service provides for the ability for five (5) garments to be picked up once per week for laundering while the other five (5) are delivered for use, with one extra uniform for emergencies. Instead, staff only considered the amount needed to be laundered each week and did not consider that the industry standard is to bill for the total set of rented garments (eleven) per employee, per week. Therefore, the executed contract amount was less than needed. Fortunately, because the bids were submitted with per item costs, the quantity increase needed would not affect the overall bid determination. The low bidder would not have been affected; only the awarded contract amount.
Fiscal Impact:
The total amount of the contract awarded to Unifirst Corporation was $23,700 annually, based on an estimated $455.12 weekly, rounded to the nearest hundred. This was based on the 143 employees that were estimated at the time to need uniform service. Currently, the City is being billed for 184 employees. Due to growth within certain departments, the proposed increase not only adjusts the quantity of garments per employee, but also accounts for the increase in the number of employees needing service. The increase being requested is based on 190 employees to allow for additional growth. The amounts billed will be based on actual quantities serviced.
Considering the calculation error of 5 garments per week versus the 11 that are required, and the increase of employees utilizing the uniform contract, Figure A below shows the increase needed to the existing contract:
*Items listed in the table above only include the items needing a quantity increase therefore affecting the overall net cost.
The costs for these services are paid out of the operating budgets within the various funds for each department/division for which the services are being rendered as outlined in RFB No. 21-22-15. These amounts are already included in the operating budgets of the various departments and are approved through the normal budget process.
After the increase amendment, the total cost for the first year will be $52,800 as shown in the figure below:
The remaining contract term consists of four (4) 1-year renewals. The total 5-year cost, with estimated CPI increases in the following four years, is shown in the following figure:
*Assumes an estimated 3% annual CPI increase.
Prior Council Action: February 22, 2022 - City Council authorized the City Manager to award a one-year contract with an additional possible four 1-year renewals to Unifirst Corporation per specifications of RFB 21-22-15.
Other: N/A
Alternatives: Alternative would be to solicit a new Request for Bids and re-evaluate with the new updated quantities. Staff does not recommend this option since the original bid stated unit prices bid for each item, and the quantity could be changed to ensure the extended price did not change the outcome of the bid.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to amend and increase the existing Uniform and Laundry contract (C22056) awarded to Unifirst Corporation to a total annual amount of $52,800 plus the estimated annual CPI increase.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Unifirst Contract executed on 5/4/22