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AUTHORIZE THE EXECUTION OF A FIVE-YEAR CONTRACT WITH MGT OF AMERICA, INC. IN THE AMOUNT OF $230,602 FOR CONSULTING SERVICES RELATED TO THE COST ALLOCATION PLAN
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion:
1. Executing a contract with MGT of America, Inc. for consulting services related to a study of central services overhead costs to develop a Total Cost Allocation Plan, Indirect Cost Recovery Rates, and a Cost Recovery Allocation Plan that complies with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, now codified in the Code of Federal Regulations (CFR) part 200, to be used by the City;
2. Approving findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process; and
3. Authorizing the City Manager, or designee, to take appropriate and necessary actions to carry out the purpose and intent of the motion.
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Summary
The City requires the use of consulting services by a qualified consulting firm to complete a Total Cost Allocation Plan, Indirect Cost Recovery Rates, and a Cost Recovery Allocation Plan that conforms with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, located at 2 CFR Part 200. The purpose of the Cost Plan is to ensure that the City is using comprehensive cost allocation rates to accurately and reasonably account for the true costs of services.
DISCUSSION
Background
The City of Stockton should annually prepare both a Total Cost Allocation Plan and a 2 CFR 200 Cost Allocation Plan (CAP). Allocated costs identified in the two plans are combined to calculate the total cost of services for fee setting. These costs are then made part of the City’s annual budget and become costs in the City’s financial records, which are audited annually. The Total Cost Allocation Plan identifies central services that provide support to the City’s various other funds. This plan isolates central services costs provided to all City departments such as the City Manager’s Office, City Clerk’s Office, the Human Resources Department, and the Administrative Services Department. This plan ensures that the City is utilizing data-driven, defensible and comprehensive cost allocation rates to accurately and reasonably account for the true cost of providing central and other shared services to operate City programs.
2 CFR 200 “Cost Principles” provides principles and standards for determining both direct and indirect costs applicable to federal grants and contracts with state and local governments. To comply with the code, the City must annually complete a 2 CFR 200 CAP. Examples of grant programs requiring compliance with 2 CFR 200 CAP include Community Development Block Grant funds, U.S. Housing and Urban Development funds, and various other federally and state funded grant programs. This plan allows the City to distribute costs while maintaining compliance with 2 CFR 200 standards.
Present Situation
Request for Proposals (RFP) were sent electronically to firms, posted to the City’s web site, and advertised in The Record. Four consulting firms responded. The four responding firms were:
• Matrix Consulting Group
• MGT Consulting
• Maximus US Services
• Willdan Financial Services
No local firms submitted proposals. A selection committee was formed to review the responses to the RFPs received. The selection committee included representatives from Administrative Services and the Fire department. The committee met June 25, 2021 and August 6, 2021 to review proposals and sample cost allocation plans from the responding qualified consulting firms.
The selection committee reviewed the proposals and samples and agreed unanimously that the MGT proposal was the most responsive. Following the committee’s evaluation, a five-year contract was negotiated for performance of the cost allocation plan services (Attachment A). The City has negotiated a fixed price contract of $230,602 for the five-year contract term based on a defined scope of work for the development of the Cost Plans. This amount includes optional services that can be utilized on an “as needed” basis and upon the City’s request.
With Council approval, the Administrative Services Department will enter into a five-year contract with the selected firm. The total contract period is not to exceed five years.
FINANCIAL SUMMARY
Sufficient funds are available in account 0010-000-630006-100-000-10-00-000-000- for the first year’s annual cost of $43,435 for preparing the Cost Allocation Plan by MGT of America, Inc. In subsequent years, the contract will be funded as part of the annual budget development process. The total cost of this five-year contract will be $230,602, as shown:
|
FY 2020-21 |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
FY 2024-25 |
|
$43,435 |
$44,738 |
$46,080 |
$47,463 |
$48,886 |
Attachment A - Professional Services Agreement with MGT of America