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APPROVE A COOPERATIVE PURCHASE AGREEMENT WITH ARAMARK UNIFORM AND CAREER APPAREL LLC THROUGH THE CITY OF MODESTO TO OBTAIN UNIFORM RENTAL AND LAUNDRY SERVICES
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RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Authorize the City Manager to execute a cooperative purchase agreement with Aramark Uniform and Career Apparel LLC (“Aramark”) to provide uniform rental and laundry services through a cooperative contract with the City of Modesto, for a not to exceed amount of $204,171.76 for an initial two-year term and a not to exceed amount of $459,386.46, should all three (3) one-year options to extend be exercised.
2. Approve findings pursuant to Stockton Municipal Code Section 3.68.070 in support of an exception to the competitive bidding process.
3. Authorize the City Manager to exercise three (3) one-year extensions if necessary. Options to extend shall be contingent on the extension of the cooperative contract by the City of Modesto.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the motion.
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Summary
The City provides rental uniforms and laundry service to authorized personnel under the terms of its various bargaining agreements. Some departments require other supplies such as anti-fatigue floormats provided through rental and laundry services. The City is currently out of contract for uniform rental and laundry services. To ensure regular service at a reasonable cost, the City’s criteria and requested scope of service was sent to six uniform and laundry service providers with known cooperative agreements. The City of Modesto’s agreement with Aramark best meets the City’s needs.
It is recommended that Council approve a motion authorizing the City Manager to execute a Cooperative Purchase Agreement with Aramark for a two-year term cost of $204,171.76, with additional options to extend not to exceed $459,386.46 over the full-term of the contract including optional one-year extensions.
DISCUSSION
Background
The City of Stockton underwent a formal competitive solicitation in 1989 and Council approved contracts with the same provider under Resolutions 89-0779, 96-0003, and 99-0009 for two contract cycles and its maximum extensions. That contract expired December 20, 2001. Since then, Public Works and Municipal Utilities obtained uniform rental and laundry services on a month-to-month basis. The City expended approximately $124,000 annually.
Present Situation
A recognized best practice for local governments is to utilize cooperative agreements that leverage the combined purchasing power of many entities. Cooperative agreements are established through a formal competitive bidding process that meets City requirements and thus fulfills the City’s procedural requirements for full and open marketplace competition.
Administrative Services contacted six uniform rental and laundry service providers with known cooperative agreements - Service Wear Apparel, Prudential Overall, Aramark, Unifirst, Cintas, and Mission Linen. Two vendors chose not to respond, including the City’s current provider. Staff review of the cooperative agreements showed that the City of Modesto’s agreement with Aramark (Attachment A) best meets the City’s needs.
The City of Modesto/Aramark cooperative agreement initial term started on August 14, 2018, and will expire on June 30, 2020, with the option for three (3) one-year extensions. The City intends to conduct a formal solicitation at the conclusion of the initial two-year term, unless the City of Modesto exercises the optional extensions in 2019. If the City of Modesto extends the current contract, staff recommends the City also extends its contract term.
The not-to-exceed amount on the quote is based on current staffing levels and historical expenditures. The calculated estimated annual cost is $102,085.88, and the not-to-exceed amount of this agreement for the initial term and optional years is $459,386.46. Compared to the historical average cost of $124,000 annually, the proposed agreement will save the City approximately $22,000 annually. The proposed agreement also has more favorable indemnification requirements that reduce risk to the City compared to the current month to month arrangement.
Aramark offers an optional insurance program (Easy-Care) for damaged and lost items. After reviewing the associated costs and historical data related to prior uniform use, staff does not recommend the insurance program.
Findings
Stockton Municipal Code section 3.68.070 provides an exception to the City’s competitive bidding requirement in cases where City Council has approved findings that support and justify the exception. The findings are as follows:
1. The Aramark contract with the City of Modesto was established through a formal competitive solicitation process.
2. The City of Modesto’s scope and criteria meets the City’s needs.
3. Utilization of leveraged procurement agreements will save the administrative expense of City staff and is in the public interest.
4. Execution of the Cooperative Purchase Agreement with Aramark will provide time for the City to conduct its own formal solicitation in the future.
FINANCIAL SUMMARY
The not-to-exceed amount on the quote is based on current staffing levels and historical expenditures. The calculated estimated annual cost is $102,085.88 and the not-to-exceed amount of this agreement for the initial term and optional years is $459,386.46. The City currently spends approximately $124,000 for these services annually, and this contract is estimated to save $22,000 annually.
Sufficient funds are available in the various departmental uniform provision accounts to cover the cost of this service agreement.
Attachment A - Cooperative Participation Agreement - Aramark