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HomeMy WebLinkAbout02/16/1988, 4 - AWARDING THE FURNISHINGS CONTRACT FOR 955 MORRO REMODELING PROJECT IIII MEETING DATE 41101I11111 city of San lU OBISpo February16 ITEM NUMBER oft COUNCIL AGE OA REPORT FROM: David F. Romero [%/ Prepared by: Dave Elliott Public Works Director Administra ve al st SUBJECT: Awarding the furnishings contract for 955 Morro Remodeling Project CAO RECOMMENDATION: Adopt the resolution awarding the furnishings contract to L A Interior Systems BACKGROUND: (Attached is a document called "Questions and Answers About the 955 Morro Remodeling Project" . Originally prepared last fall and recently updated, it provides a good overview of the project, including a discussion of systems furniture and its advantages. ) On December 1, 1987 the city clerk opened the following bids on the furnishings contract for the 955 Morro Remodeling project: Group A Group B Furnishings Furnishings Total The Office Mart $104,424. 84 no bid $104 , 424 .84 (bid based on Steelcase Movable Walls (*) systems furniture) L A Interior Systems $116,783 .00 $ 9, 552 .47 $126, 335.47 (bid based on Haworth Unigroup systems furniture) The Office Mart $118, 696. 68 no bid $118, 696. 68 (bid based on Steelcase Series 9000 systems furniture) (*) an unqualified line of systems furniture After carefully evaluating the low bid from The Office Mart, staff and the City's interior designers recommended rejecting the low bid because it was not completely responsive to the City's specifications. Staff then recommended awarding the contract to L A Interior Systems, the second low bidder. The council considered awarding this contract at its meetings on January 19 and February 2, 1988. On both occasions the council felt it needed more information before awarding the contract. Particularly, the council asked two questions: 1) What makes the Unigroup line (bid by L A Interior Systems) more responsive and desirable than the Movable Walls line (bid by The Office Mart) ? 111111Qllllf�muil����1� city of s. . tuts OBISPO Ift All COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 2 2) Are the features of the Unigroup line worth $12 , 000 more than the Movable Walls line? UNIGROUP VS. MOVABLE WALLS To answer question 1: The Unigroup line is more responsive and desirable because it meets the City's explicit and implicit specifications. The Movable Walls line does not. The City's explicit specifications are the detailed performance standards listed in the procurement documents. For example, Section IV.D.6 on page 13 of the procurement documents states: "Each panel shall include a raceway that can accommodate the equivalent of at least five 25-pair data/telecom cables. " The City's implicit specifications lie in Section IV.B. 1 on page 10 of the procurement documents which states: "The City has qualified five lines of systems furniture which will meet the City's needs as shown on the plans and will meet the City's standards for durability, flexibility, variety, and value. The City will accept bids on only the following manufacturers and lines of systems furniture: a. Haworth - Unigroup b. Herman Miller - Action Office Encore c. Steelcase - 9000 Series d. Sunarhauserman - Design Option/Cameron e. Westinghouse - Wes-Group" These five lines are commonly referred to in the interior design profession as "Grade All systems furniture lines. Because they share a high level of design innovation, material quality and manufacturer reliability, they are cost effective choices for the long term. Other lines with an inferior level of innovation, quality and reliability are referred to "Grade B" system furniture lines. The Movable Walls line seems to fall somewhere between the "Grade All and "Grade B" lines -- maybe as a "Grade B+11 line. It offers the durability and value of the "Grade All lines but lacks their flexibility and variety. Because of the City's constantly changing office environment, the procurement documents contain explicit and implicit specifications to ensure a level of flexibility and variety common among the "Grade All lines. Following is a point by point discussion of where the Movable Walls line fails to meet these specifications. city Of San tu,., OBISp0 Nii% COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 3 1) The Movable Walls pedestals (the boxes suspended under worksurfaces which contain drawers) , worksurface supports and paper management components are righthanded and lefthanded. When offices are rearranged these components mounted on the righthand side of a worksurface or workstation cannot be switched to the left side. This feature limits flexibility and directly contradicts Section IV.J.2 of the procurement documents which states: "Drawers shall be generally interchangable from the righthand to the lefthand side of a workstation. " The Unigroup pedestals, worksurface supports and paper management components can be freely switched from one side to another. 2) The Unigroup pedestals are formed by stacking individual drawer modules which can be disassembled and reconfigured to meet different needs. Although this feature is not explicitly specified in the procurement documents, it is typical of the flexibility implied in qualifying the "Grade All lines. The Movable Walls pedestals are single rigid units which cannot be changed. 3) Systems furniture panels are linked and aligned with connecting devices. The Unigroup line uses a single, continuous universal hinge which can link panels of different heights and can link panels at almost any angle. Again, this feature- is not explicitly specified, but it provides a level of convenience and flexibility common among the "Grade All lines. The Movable Walls line uses several different bracket combinations for different applications. With Movable Walls if a particular bracket were not available in the City's parts inventory, an office reconfiguration would be delayed. Also, the Movable Walls brackets are rigid and do not allow minor changes in angle sometimes necessary to clear a column, post or other obstruction. 4) Often an office rearrangement becomes more practical when one panel can be linked to the middle area of a second panel. This procedure is called "T-mounting". Because the Movable Walls panels are not designed for T-mounting, it cannot be done without permanently damaging the panel surface. The Unigroup panels are designed for T-mounting without risk of damage. 5) The computers and communications equipment in City offices require protected electrical circuits which are dedicated for those uses. The Movable Walls line can provide dedicated circuits but switching circuits is cumbersome and requires a new receptacle. Maintaining and purchasing receptacles create �����►tiuI�IIIII�II��q��p11 city or s. . IUIS OBISpo COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 4 an inventory problem, particularly because receptacles must be ordered in cartons of six. The circuits in the Unigroup line are programmable through a switch next to the receptacle. Changing the Unigroup circuits requires simply sliding the switch to the correct circuit number. 6) The Movable Walls panels have certain load restraints which limit the size and weight of components suspended from them. Also, under certain conditions loads on one side of a panel must be balanced with loads on the opposite side. Obviously these conditions limit the possibilities for future office rearrangment. The Unigroup panels do not have such restrictive load restraints. 7) High-quality systems furniture can provide the best combination of openness and privacy while reducing noise distractions with acoustically absorptive materials. Because noise causes the ctreatest disruption to productivity, the procurement documents specify that tall panels be acoustical panels. Further, Section IV.C. 6 of the procurement documents states: "Acoustical panels shall be certified to meet or exceed a noise reduction coefficient of .75. " The optional acoustical panels in the Movable Walls line have a noise reduction coefficient of .65, substantially below the minimum specified. In the Unigroup line, acoustical panels are standard and have a noise reduction coefficient of .80, comfortably above the minimum specified. Another acoustical rating not specified in the procurement documents is the sound transmission class (STC) . The Movable Walls acoustical panels have an STC of .20, developing the bare minimum sound transmission loss which contributes to speech privacy. The Unigroup panels have an STC of . 29. VALUE OF THE FEATURES IN THE UNIGROUP LINE To answer question 2: The features of the Unigroup line are worth more than $12, 000. Would the City actually save $12, 000 cash on future systems furniture orders if the contract were awarded to L A Interior Systems? Maybe, maybe not -- it depends on the size and composition of the orders. But that is really the wrong question to ask here. The right question is: Will the features of the Unigroup line result in $12,000 worth of additional productivity? �����►�i►�1111111�PAli city of san tu.., oBispo COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 5 The question and answer document attached to this report illustrates the tremendous productivity leverage gained by using systems furniture. If the City realizes just average gains in productivity by using systems furniture at 955 Morro Street, the investment in systems furniture will be recovered in only 13 months. The point here is that even small investments in additional features and higher performance can return huge dividends in productivity over a very short time. That is why staff and the City's interior designers specified the features provided by the "Grade A" systems furniture lines. But the additional features and performance provided by the "Grade All lines, including Unigroup, aren't small -- they're substantial. WARRANTY AND SERVICE The representative from The Office Mart emphasized the following points: 1) The Movable Walls line has a 10-year warranty while other lines have only 1-year warranties. 2) The Office Mart is a local firm with local service. First, the Movable Walls line does have a 10-year warranty for some fixed components, but there is a 5-year warranty for -operating components (drawers, doors, locks, keyboard pads, etc. ) and electrical components, and there is a shorter warranty for chairs, panel fabrics and casters. Also, as of the time this report was prepared, officials at Steelcase's Michigan headquarters could not confirm whether the warranty on Movable Walls includes parts only or includes parts and labor. If it pays for parts only, the customer must pay for any labor and ancillary costs to remove and replace defective parts. The Unigroup line has a general 5-year warranty on all parts and a shorter warranty for chairs, panel fabrics and casters. This warranty pays for parts and labor. Second, The Office Mart is a Santa Barbara firm with a small branch office in San Luis Obispo to serve office supplies customers. Any systems furniture service would probably be dispatched from Santa Barbara, not San Luis Obispo. On the other hand, L A Interior Systems will have a full-service office and warehouse in Camarillo, from where its systems furniture service would be dispatched. In any case, rapid response time here is not as important as it would be for computers, copiers, blueprint machines and other office equipment. city of s. tuts OBlspo COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 6 SUMMARY The City needs the durability, flexibility, variety, and value inherent in the "Grade All systems furniture lines. Buying those qualities now makes the best economic sense over the long term. Steelcase has a well-deserved reputation for manufacturing high-quality furniture products. The Steelcase Series 9000 line of "Grade An systems furniture sets a high standard in the industry, and in fact, the City's plans and specifications were based on Series 9000 features. Steelcase's Movable Walls line, though, was an obsolete and neglected product recently revived and upgraded to provide a low-cost alternative to the Series 9000 line. Its dated design has precluded incorporating many of the modern innovations which help systems furniture boost productivity and adapt to constantly changing office arrangements. While it might be cheaper than the "Grade A" lines to buy, it might be more expensive to own over the long term. Haworth's Unigroup line is a solid, well-conceived, well-designed product. It is durable and particularly well fits the City's needs for flexibility, convenience and variety. CONSEQUENCE OF NOT TAKING THE RECOMMENDED ACTION If the council decides not to award the contract to L A Interior Systems (to install the Haworth Unigroup systems furniture) , it can take two alternative actions: 1) Award the contract to The Office Mart (to install the Steelcase Movable Walls systems furniture) . Although $12,000 could be saved by taking this action, the council would have to waive substantial deviations from specifications. Dealers of "Grade B" systems furniture lines could construe this action as unfair because they might have been able to bid competitively with the same waivers. Also, The Office Mart bid a 95 day delivery and installation period. If it received the contract it would not be obligated to deliver and install the furnishings until at least two weeks after the construction contract was completed. 2) Readvertise the contract. This alternative presents potential schedule and financial problems. First, the construction contract now underway will be completed during the second week of May, and ideally the furnishings installation should be coordinated with the construction. Usually, eight to twelve weeks lead time is required by systems furniture dealers. (L A Interior Systems bid a 63 day delivery and installation period; �����i ►��IIIII���IIIUIII city of San tu,„ OBISp0 COUNCIL AGENDA REPORT Furnishings Contract - 955 Morro page 7 The Office Mart bid a 95 day delivery and installation period. ) Second, the city's experience in readvertising contracts shows that most of the time the bid prices come in higher. the second time around. STAFF RECOMMENDATION The original staff recommendation stands: Adopt the resolution awarding the furnishings contract to L A Interior Systems. attach: "Questions and Answers about the 955 Morro Remodeling Project" RESOLUTION NO. (1988 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO AWARDING A CONTRACT TO L A INTERIOR SYSTEMS FOR THE PROJECT TO PROCURE FURNISHINGS FOR 955 MORRO STREET WHEREAS, the City of San Luis Obispo advertised for bids on a contract for the project to procure furnishings for 955 Morro Street (City Plan No. M50D) ; and WHEREAS, L A Interior Systems submitted the lowest responsive bid at $126,335.47; and WHEREAS, the architects estimate for this contract work was $253,000.00; NOW THEREFORE BE IT RESOLVED by the Council of the City of San Luis Obispo to: 1. award the contract to L A Interior Systems for the project to procure furnishings for 955 Morro Street; 2. authorize the mayor to execute the contract documents; and 3. direct the finance director to transfer $136,000.00 from the capital outlay fund CRP appropriation to account number 040-9422-091-573 . On motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this day of , 1988. MAYOR ATTEST: CITY CLERK APPROVED: CITY AX�MINISTRA OFFICER CITY A ORNE .FINANCE DIRECTOR PUBLIC WORKS DIRECTOR ¢ Q / o QUESTIONS AND ANSWERS ABOUT THE 955 MORRO REMODELING PROJECT Q: Why are we doing this project? A: To provide additional short-term office, meeting and storage space for city hall activities. There are serious overcrowding problems at city hall, notably in finance department, personnel department and the engineering division of public -works department, and this overcrowding hurts productivity. Long-range solutions to these problems are at least three or four years away, but the people in finance and engineering particularly can't wait that long; they need relief as soon as possible. Q: Did we consider other alternatives for short-term space? A: Yes, but either the cost was too high or we couldn't develop the property fast enough. For example, the upstairs portion of the Pacific Bell building at Mill and Osos was available, but only for lease at $1.20 per square foot per month. Leasing 6, 000 square feet (equivalent to the area available at 955 Morro) for four years would cost $345,600. Q: The construction contract for this project will cost $253 , 000. What's included at that price? A: The whole building needs a thorough refurbishment to make it usable for permanent occupancy. Proposed improvements include: 1) replacing the roof 2) installing a new electrical service and major circuits 3) installing a heating, ventilation and air conditioning system 4) installing new rough plumbing, including waste lines 5) installing new toilets 6) sandblasting the interior brick 7) cleaning up and painting the exterior 8) installing new floor coverings 9) installing window treatments Q: The furnishings contract will cost $126,000. What's included there? A: Some of it is for items like steel shelves, flat plan files, drawing cabinets and a light table, but most of it is for systems furniture. 4 Q&A - 955 Morro Street page 2 Q: What exactly is systems furniture? A: Systems furniture uses panels of various sizes which can be linked together to form office and meeting spaces. These panels are far more than the flimsy room dividers we often see in offices, though. The panels in high-quality systems furniture lines are designed to: 1) support work stations, files and shelves off the floor. 2) acoustically absorb and deaden sound 3) incorporate ambient and task lighting 4) protect and route all communication and power cables through built-in conduits and raceways Q: What are some typical systems furniture components? A: Panels are the vertical surfaces of various heights which form "walls" and define office and meeting spaces. Power Panels contain built-in power cables and receptacles to carry electrical power to the spaces. Worksurfaces are horizontal surfaces like desktops which are usually suspended from panels. Overhead Shelves are suspended from panels and may have racks, organizers or doors attached. Pedestals contain drawers of various sizes and are usually suspended underneath worksurfaces. Q: This systems furniture sounds pretty expensive. What are the benefits and are they worth the cost? A: The chief benefits of systems furniture are flexibility, efficiency and productivity. Let's talk about each one in turn. 1) Flexibility. Nothing is static at city hall, and as organizations change and grow, new office arrangements are needed. Right now every time we want to rearrange space (and it seems to happen every year or two) we call in contractors to tear down old walls, punch out new doorways, put up new walls, install new cabinets and counters and install new electrical conduits, phone lines and computer links. Each time we do it, it costs thousands of dollars and disrupts work for a week or two. With systems furniture, we could instead call in Phil Leo and Dave Smith, who could disassemble and reassemble panels in 41-/o Q&A - 955 Morro Street page 3 a few hours with little more than a couple of allen wrenches. Because the electrical wiring and communications conduits are built into the panels, there would be no demolition and no complicated rewiring tasks. Also, a complete move to a new location could be planned and accomplished in days rather than weeks and months, because everything is self-contained in the systems furniture. 2) Efficiency. Efficiency here means efficiency in using space. Because work stations, files and shelves hang from the panels, they take up much less floor space than freestanding furniture does. Also, in order to ensure stability, freestanding furniture is often wider and deeper than it needs to be to accommodate a given task. Studies have demonstrated that systems furniture uses on average about it percent less floor space than other currently available freestanding furniture. (The percentage would be much higher if systems furniture were compared to older furniture, which is even less space efficient. ) The building and proposed improvements at 955 Morro are worth about $640, 000, so an 11 percent gain in space efficiency would be worth about $70,400. 3) Productivity. Systems furniture increases productivity by reducing noise, reducing visual distraction, providing better task lighting and providing the best combination of privacy and openness. Systems furniture also makes other productivity improvements work better. For example, the value of a computer terminal at a worker's desk is compromised if that terminal sits at an inconvenient location and at the wrong height. Systems furniture is designed to accommodate office equipment and systems to their best advantage. A report by the American Productivity Center demonstrated that high quality systems furniture coupled with good temperature control boosted work output among organizations surveyed by an average of 11. 6 percent. The annual direct payroll cost for the employees who will occupy 955 Morro Street is about $1, 000, 000. An 11. 6 percent increase in work output would amount to $116,000 worth of additional work per year. So -- are the benefits of systems furniture worth the costs? Assuming an initial cost of $126,000 for systems furniture and other furnishings and assuming average improvements in work output (annual gain of $116,000) , the calculated payback period for the furnishings would be only 13 months -- much, much less than their expected useful life. (And this calculation does not even consider average improvements in space utilitization. ) In addition we would gain unparalleled flexibility and small but demonstrated reductions in staffing requirements, work errors, absenteeism, and turnover. Q&A - 955 Morro Street page 4 Q: Haven't we already invested a lot of time, money and effort into improving employee productivity? A: Yes, and it's paying off, but there's more we can do. Productivity improvements can be directed toward three areas: people, tools and the work environment. Although good results can be gained by focusing on these areas individually, a synergistic effect occurs when all three are addressed. We've made several recent efforts to improve our workers and their tools, such as: -emphasizing team building -presenting the "Working" program -starting the wellness program -instituting performance pay for managers and mid-managers -purchasing a new phone system -purchasing personal computer networks with word-processing and data management software. -purchasing mini-computers for finance and records management The one area we've neglected is the work environment, and the signs of that neglect are most obvious in finance and engineering. Straightforward improvements such as systems furniture, adequate lighting, and temperature control can correct current problems, boost productivity and enhance existing productivity efforts. Q: What employees will occupy the new offices at 955 Morro Street? A: The utilities administration section and the engineering division of public works department. Q: What employees will occupy the space vacated upstairs at city hall by the utilities administration section? A: The data processing division of finance department. Q: What employees will occupy the space vacated downstairs at city hall by the engineering division? A: Part of the space will be used by four new employees in community development department. We would also try to set up another conference room downstairs for use primarily by finance department. 442 Q&A - 955 Morro Street page 5 Q: If the 955 Morro Remodeling is a short term solution to city hall space needs, what will be done with the building and furnishings in the long term? A: As long term solutions are implemented, the building can serve as temporary quarters for city employees during other remodeling or construction projects. After that, the building would be available to lease or sell. The systems furniture offices are designed to be dismantled and reassembled at new locations and in different configurations. They are part of the long term solution. �/s