HomeMy WebLinkAbout06/21/2011, C2 - AWARD OF COLLECTIONS SERVICES CONTRACT council '` June 21,2011
j acenaa RepoiA '®".6`
CITY OF SAN LUIS OBISPO
FROM: Mary Bradley, Interim Director of Finance& Information Technology
Prepared By: Jennifer Thompson, Revenue Supervisor
SUBJECT: AWARD OF COLLECTIONS SERVICES CONTRACT
RECOMMENDATION
Award the collection of delinquent accounts contract to Financial Credit Network and authorize
the City Manager to execute the agreement.
DISCUSSION
Background
The City uses a collection agency to collect on delinquent accounts where customers have
balances owing to the City. These delinquent accounts include, but are not limited to, water and
sewer accounts,business tax and license fees, and miscellaneous receivables.
In 2002, the City sent out requests for proposals with Medico-Dental Adjustment Bureau being
awarded the three-year contract with a two-year extension. The services provided by this agency
have been satisfactory. Medico-Dental's contract expired in August 2007 and since that time the
City has been operating on a month-to-month basis with it. Although the City would normally
have issued an RFP much sooner, the significant turnover within the Finance and IT department,
and the Revenue Division specifically, lead to a delay in the process. Once stability had returned,
staff recommended that a formal RFP process occur in order to assure that the City receive the
professional services required at a competitive rate. The City Manager approved this
recommendation on December 17, 2010.
With this new collection services contract, the City wishes to improve reporting and the
collection of delinquent accounts where possible. It is the City's intent to maintain all collection
services with one agency to maximize cash flow and minimize administrative costs.
Proposal Evaluation
The City issued the RFP on December 27, 2010 and additionally sent it to fourteen specific
vendors. The following eight vendors responded with proposals by the January 26, 2011 closing
date:
Vendor Commission Rate
Regular Collections Legal Collections Other
Medico-Dental 25% 40% First 20 days free
Adjustment Bureau
T:\Council Agenda Reports\Finmce&IT CAR\Finance\201 I\Award Contract-Collection of Delinquent
Accounts\Council Agenda Report,Collections Services Award.doc
C2-1
n
Award of Collections Services Contract Page 2
National Recovery Agency 25% First 10 days free
Access Capital Services 29% 39%
Inc
Credit Bureau of SLO & 33 1/3% 50%
Santa Barbara Counties
States Recovery Systems 20% 30%
Inc
Collection Bureau of 25% 35%
America
Penn Credit Corporation 23% 30%
Financial Credit Network 33%* 38%* First 10 days free
*This was Financial Credit Network's initial proposal. Staff was able to negotiate alower commission rate.
The eight proposals were reviewed and rated by a review team composed of the Principal
Administrative Analyst, Finance Manager, Revenue Supervisor and Utilities Senior
Administrative Analyst. As set forth in the RFP, the review team evaluated the proposals based
upon the following criteria:
1. Understanding of the work required by the City
2. Quality and responsiveness of the proposal
3. Demonstrated competence and professional qualifications necessary for satisfactory
performance of the work required by the City
4. Recent experience in successfully performing similar services
5. Proposed approach in completing the work
6. References
7. Proposed compensation
As reflected above, the contract award is not based solely on price, but on a combination of
factors. The review team compared the quality of the vendors' proposals, the proposed approach
to completing the work and their understanding of the work required by the City. Based on these
factors, the review team selected Medico-Dental Adjustment Bureau, States Recovery Systems,
and Financial Credit Network as finalists and invited them to provide a demonstration of their
services in person. Financial Credit Network emerged from the demonstrations as a clear "best
fit" for the City. All members of the review team chose Financial Credit Network as their first
choice based upon their professionalism, approach to collections and the unique training program
that will add value to the City in processing receivables for collection. Additionally, Financial
Credit Network received excellent comments from their provided references.
As seen in the table above, Financial Credit Network was one of the most expensive vendors in
the initial proposals. City staff was able to negotiate lower rates of 28% for regular collections
and 38% for legal collections. Although they were still not the least expensive vendor, Financial
Credit Network received the highest marks in the other six evaluation criteria.
In summary, after comprehensively evaluating the proposals, receiving demonstrations from
three vendors and negotiating a lower commission rate with Financial Credit Network, the
T:\Council Agenda ReportsTinance&IT CARTinance\2011\Award Contract-Collection of Delinquent
Accounts\Council Agenda Report,Collections Services Award.doc
C2-2
l i
Award of Collections Services Contract Page 3
review team recommends awarding the City's collection of delinquent accounts contract to
Financial Credit Network.
CONCURRENCES
The review team concurs with the recommendation
FISCAL IMPACT
The City's current collection agency receives between 25 and 90 accounts per month, which is
not considered a large volume. If Financial Credit Network is able to collect the account within
10 days the City will receive 100% of the collection. Otherwise, the City will receive 72% of the
delinquent amount collected. It is anticipated that collection activity will remain consistent with
prior years resulting in a net revenue of$29,000.
ALTERNATIVES
Stay with current Collections Agency. Given Financial Credit Network's approach to
collection, its superior reporting, and training, this alternative is not recommended.
ATTACHMENTS
1. Collection Services Agreement
2. City Manager Report approving the RFP
3. RFP for Collection of Delinquent Accounts
T:\Council Agenda ReportsTinance&IT CARTinance\2011\Award Contract-Collection of Delinquent
Accounts\Council Agenda Report,Collections Services Award.doc
C2-3
Aftachm®n
FORM OF AGREEMENT
AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this
day of , by and between the CITY OF SAN
LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and Financial Credit Network
hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on December 27, 2010 City requested proposals for the collection of delinquent
accounts per Specification No. 91048.
WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City
for said collection services.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained,the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from the date this Agreement is made and
entered, as first written above, for a period of three years. City may elect to extend this agreement for one
additional two year term, on the same terms and conditions. At the end of the term, Contractor will be
allowed to increase prices, not to exceed the cost of living increase as published in the Consumer Price
Index, all urban consumers, for the Los Angeles-Riverside-Orange Co area at the end of the prior year. In
all cases,City may cancel the contract if a requested price increase is not acceptable.
2. INCORPORATION BY REFERENCE. City Specification No. 91048 and
Contractor's proposal dated January 26,2011 are hereby incorporated in and made a part of this Agreement.
3. CITY'S OBLIGATIONS. For providing delinquent account collection services as
specified in this Agreement, City will pay Contractor 25% on all regular collections that are less than 60
days old at the time of placement, 28% commission on all regular collections 61+ days old at time of
placement and 38% commission on all legal collections. The age of the accounts will be determined by
comparing the date the debt was incurred to the date the account is entered into the Contractor's collection
system Additionally, Contractor will not charge any contingency fee for monies collected during the first
10 days after being entered into their collection system(10-day grace period).
4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and
agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do
C2-4
Attachment.
everything required by this Agreement in the collection of delinquent accounts assigned to the Contractor
by the City as described in the contractor's proposal.
5. AMENDMENTS. Any amendment, modification or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the Council of the City.
6. COMPLETE AGREEMENT. This written Agreement, including all writings
specifically incorporated herein by reference, shall constitute the complete agreement between the parties
hereto. No oral agreement, understanding, or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or
representation be binding upon the parties hereto.
7. NOTICE. All written notices to the parties hereto shall be sent by United States mail,
postage prepaid by registered or certified mail addressed as follows:
City Director of Finance and Information Technology
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
Contractor [
[
8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant
that each individual executing this agreement on behalf of each party is a person duly authorized and
empowered to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day
and year first above written.
ATTEST: CITY OF SAN LUIS OBISPO
By:
City Clerk City Manager
7OVED;TO FORM- CONTRACTOR
By:
Ci ttomey
C2-5
city of Attachment
san tuts omspo
CITY MANAGER
REPORT• v
Final City Manager Approval Approver Name Date Approved
City Administration Michael Codron for KL December 17 2010
Reviewer Routing List Reviewer Name Date Reviewed
City Attorney Christine Dietrick 12/7/2010
December 7,2010
FROM: Mary Bradley, Director of Finance&Information Technology
Prepared by: Jennifer Thompson, Revenue Supervisor
SUBJECT: REQUEST FOR PROPOSALS FOR COLLECTION OF DELINQUENT
ACCOUNTS
RECOMMENDATION
Approve request for proposals(RFP) for collection of delinquent accounts.
DISCUSSION
Background
The City uses a collection agency to collect on delinquent accounts where customers have balances
owing to the City. These delinquent accounts include, but are not limited to, water and sewer
accounts,business tax and license fees and miscellaneous receivables.
In 2002, the City sent out requests for proposals with Medico-Dental Adjustment Bureau being
awarded the three year contract with a two year extension. While its services have been
satisfactory, Medico Dental's contract expired in August 2007. Although the City would normally
have issued an RFP much sooner, there has been significant turnover in the Revenue Supervisor
position, who would ordinarily take the lead on this project. Now that there is stability in the
Revenue Supervisor position, staff recommends that a formal RFP process occur so that the City
can be assured of receiving the professional services required for the best available price.
With this new collection services contract, the City wishes to improve reporting and make
improvements to the collection of delinquent accounts where possible. It is the City's intent to
maintain all collection services with one agency to maximize cash flow and minimize
administrative costs.
C2-6
Aft �fVt�11$®
Request for Proposals for Collection of Delinquent Accounts Page 2
Scope of Services
Prospective collection agencies must be able to provide to the City the scope of services detailed on
pages 1 and 2 of the RFP and summarized below.
1. Once an account has been assigned to the collection agency all customer contact is the sole
responsibility of the agency.
2. The agency will remit all monies due less the agency commissions to the City each month.
3. The collection agency shall provide monthly reports describing collection activity.
4. If legal action is required to obtain payment for past due accounts, all fees pertaining to such
action are the sole responsibility of the collection agency.
5. The selected collection agency, as a representative of the City, is required to be sensitive to
customer concerns and to maintain good public relations with City customers at all times.
In addition to the scope of required services, proposers may offer the City additional optional
services such as online access to City accounts and reviews of City collection practices.
Proposal Evaluation and Selection
The proposal evaluation factors and process are set forth in the RFP, which notes that the contract
award will not be based solely on price, but on a combination of factors as determined to be in the
best interest of the City. After evaluating the proposals and discussing them further with the
finalists or the tentatively selected contractor, the City reserves the right to further negotiate the
proposed work and/or method and amount of compensation.
We recommended that the review team be composed of the Principal Administrative Analyst,
Director of Finance&Information Technology,Finance Manager and Revenue Supervisor.
Next Steps
Issue RFP 12/27/10
Receive proposals 01/26/11
Complete proposal evaluation 02/25/11
Finalize staff recommendation 03/04/11
Award contract 03/11/11
Execute contract 04/01/11
Start work 04/01/11
FISCAL IMPACT
The City's current collection agency receives between 25 and 90 accounts per month, which is not
considered to be a large volume. Currently, if the collection agency is able to collect the delinquent
account within 10 days the City receives 100% of the collection, otherwise, the City receives 65%
of the delinquent amount collected. During an average year, the collection agency retains
approximately$10,000 and remits approximately$30,000 of the delinquent accounts assigned back
C2-7
oment®
Request for Proposals for Collection of Delinquent Accounts Page 3
to the City. While the fiscal impact of issuing an RFP may be minimal, it is in the best interests of
the City to obtain the best rate structure possible.
Ordinarily, City purchasing guidelines would not require a contract of this amount to be approved
by the City Manager. Since, in this case, the $10,000 per year is an estimate and could increase
depending upon the number and dollar amount of accounts sent to collections, staff believes it is
prudent for the City Manager to approve the issuing of the RFP and ultimately approve the contract.
ATTACHMENTS
■ Request for Proposals
■ Proposer's List
C2-8
llllllllll IIIIIIIIAttachment 3
'.1t Nll��'�I
City of
san Luis ollspo
990 Palm Street ■ San Luis Obispo,CA 93401
Notice Requesting Proposals for
Collection of Delinquent Accounts
The City of San Luis Obispo is requesting sealed proposals for the collection of delinquent accounts
pursuant to Specification No. 91048. All proposals must be received by the Department of Finance and
Information Technology by 3:00 P.M. on January 26, 2011 when they will be opened publicly in the City
Hall Council Hearing Room, 990 Palm Street, San Luis Obispo,CA 93401.
Proposals received after said time will not be considered. To guard against premature opening, each
proposal shall be submitted to the Department of Finance and Information Technology in a sealed
envelope plainly marked with the proposal title, specification number, proposer name, and time and date
of the proposal opening. Proposals shall be submitted using the forms provided in the specification
package.
Specification packages and additional information may be obtained by contacting Jennifer Thompson in
the Department of Finance and Information Technology at(805) 781-7129.
® The City of San Luis Obispo is committed to including disabled persons in all of our services,programs and activities.
Telecommunications Device for the Deaf(805)781-7410.
C2-9
Specification No. 91048 Attachment 3
TABLE OF CONTENTS
A. Description of Work I
B. General Terms and Conditions 3
Proposal Requirements
Contract Award and Execution
Contract Performance
C. Special Terms and Conditions 7
References
Proposal Content
Proposal Copies
Proposal Evaluation and Selection
Proposal Review and Award Schedule
Contract Term
Release of Reports and Information
Copies of Reports and Information
D. Agreement 9
E. Insurance Requirements 11
F. Proposal Submittal Forms 13
References
Statement of Proposer's Past Contract Disqualifications
C2-10
Section A Attal,%3hMsfit 3
DESCRIPTION OF WORK
I. INTRODUCTION
The City of San Luis Obispo (City) is requesting proposals to provide delinquent account collection
services. The need for services includes, but is not limited to, collection on delinquent water and sewer
accounts, business tax and license fees and miscellaneous receivables where former customers have
balances owing to the City.
II. BACKGROUND
The City is a community of approximately 44,000, situated on the Central Coast of California. It
provides high quality and dependable service to its residents and businesses. The Revenue Division of
the Finance and Information Technology Department ("F&I "') performs all City billing and collections
including water and sewer accounts, business license and tax certificates and other miscellaneous items.
It has five staff members dedicated entirely to billing and collection functions and one staff member that
participates in these activities part time.
The City forwards an average of 20 to 50 delinquent water and sewer accounts and 5 to 20 miscellaneous
receivables accounts per month to the collection agency. Annually, approximately 50 to 100 delinquent
business tax and license accounts are forwarded to the collection agency.
The City's collections relationship is currently with Medico Dental Adjustment Bureau. Medico Dental
was awarded the three year contract through the Request for Proposal (RFP) process in 2002. The
contract was extended in 2005. While their services have been satisfactory, it is now time to request for
proposals. If a new vendor is chosen, Medico Dental will continue collection of all accounts assigned to
them before the execution of this new agreement.
With this new collection services contract, the City wishes to create efficiencies, improve reporting and
make improvements where possible. It is the City's intent to maintain all collection services with one
institution however, the City reserves the right to award multiple collection services contracts if it is
deemed to be in the best interest of the City to do so.
III. SCOPE OF SERVICES
1. Customer Contact. Once an account has been assigned to a collection agency, all customer
contact, including notices, mailings, itemizations, small claims, bankruptcy filings, and
miscellaneous requests and inquiries, is the sole responsibility of the vendor. All requests for
information are to be strictly between the City and the collection agency. All notices, mailings,
collections, etc. shall bear the name,phone number and mailing address of the collection agency.
Customers shall be advised to deal directly with the collection agency from the time the account
has been assigned to legal collection.
2. Payment. The collection agency shall remit in full all monies due the City of San Luis Obispo
and shall deduct the amount owed to the agency for all commissions earned on the collection of
the delinquent accounts on a monthly basis.
3. Reporting. The collection agency shall provide the following reports on a monthly basis:
0241
A. A report listing all account assignments for verification.
B. An alphabetical listing of all customers making payments, their service address, the City's
customer account number(if applicable),and the amount of payment received.
C. An alphabetical listing of all outstanding customers on file with the following information:
I. Name
2. Assignment date
3. Amount owed
4. City account type
5. Client balance
6. Last payment
7. Account status(active,bankruptcy, etc)
8. Age of assignment
D. A report recapping total vendor activity as follows:
1. Total number of accounts assigned by month and by year
2. Average amount
3. Average age of the accounts
4. Total number of outstanding accounts by month and by year
5. Total number of accounts collected by month and by year
6. The recovery percentage by month and by year
4. Legal Proceedings. If legal action is required to obtain payment for past due accounts, all fees
pertaining to such action (attorney fees, marshal and court costs, etc.) are the sole responsibility
of the collection agency. The vendor shall inform the City of San Luis Obispo prior to initiating
legal action.
5. Public Relations. The City of San Luis Obispo is a public service agency and as such is
concerned with maintaining good public relations with City customers at all times. Accordingly,
the selected collection agency as the representative of the City is required to be sensitive to
customer concerns. In all cases where an error appears to have been made by the City, it will be
investigated to ensure that the collection action is correct and proper. Under no circumstances
will the City allow questionable collection practices or "strong arm" tactics in the collection of
monies due the City.
6. Additional Services. There are services not otherwise identified in the City's RFP that the
proposer may offer to the City. Proposals are not required to address any additional services in
order to be considered an acceptable proposal. However, final selection of the successful
proposer may be based on the desirability and cost of the additional services offered. Examples
of additional services are online account access and review of City collections practices.
C2-12
U
Section BR?� i���� 3
GENERAL TERMS AND CONDITIONS
PROPOSAL REQUIREMENTS
1. Requirement to Meet All Provisions. Each individual or firm submitting a proposal (proposer)
shall meet all of the terms, and conditions of the Request for Proposals (RFP) specifications
package. By virtue of its proposal submittal, the proposer acknowledges agreement with and
acceptance of all provisions of the RFP specifications.
2. Proposal Submittal. Each proposal must be submitted on the form(s) provided in the
specifications and accompanied by any other required submittals or supplemental materials.
Proposal documents shall be enclosed in an envelope that shall be sealed and addressed to the
Department of Finance and Information Technology, City of San Luis Obispo, 990 Palm Street,
San Luis Obispo, CA, 93401. In order to guard against premature opening, the proposal should
be clearly labeled with the proposal title, specification number, name of proposer, and date and
time of proposal opening. No FAX submittals will be accepted.
3. Proposal Withdrawal and Opening. A proposer may withdraw its proposal, without prejudice
prior to the time specified for the proposal opening, by submitting a written request to the
Director of Finance and Information Technology for its withdrawal, in which event the proposal
will be returned to the proposer unopened. No proposal received after the time specified or at
any place other than that stated in the "Notice Requesting Proposals" will be considered. All
proposals will be opened and declared publicly. Proposers or their representatives are invited to
be present at the opening of the proposals.
4. Submittal of One Proposal Only. No individual or business entity of any kind shall be allowed
to make or file, or to be interested in more than one proposal, except an alternative proposal
when specifically requested; however, an individual or business entity that has submitted a sub-
proposal to a proposer submitting a proposal, or who has quoted prices on materials to such
proposer, is not thereby disqualified from submitting a sub-proposal or from quoting prices to
other proposers submitting proposals.
5. Cooperative Purchasing. During the term of the contract, the successful proposer will extend
all terms and conditions to any other local governmental agencies upon their request. These
agencies will issue their own purchase orders, will directly receive goods or services at their
place of business, and will be directly billed by the successful proposer.
6. Communications. All timely requests for information submitted in writing will receive a
written response from the City. Telephone communications with City staff are not encouraged,
but will be permitted. However,any such oral communication shall not be binding on the City.
CONTRACT AWARD AND EXECUTION
7. Proposal Retention and Award. The City reserves the right to retain all proposals for a period
of 60 days for examination and comparison. The City also reserves the right to waive
non-substantial irregularities in any proposal,to reject any or all proposals,to reject or delete one
part of a proposal and accept the other, except to the extent that proposals are qualified by
specific limitations. See the "special terms and conditions" in Section C of these specifications
for proposal evaluation and contract award criteria.
C2-13
Achlment 3
8. Competency and Responsibility of Proposer. The City reserves full discretion to determine
the competence and responsibility, professionally and/or financially, of proposers. Proposers
will provide, in a timely manner, all information that the City deems necessary to make such a
decision.
9. Contract Requirement. The proposer to whom award is made (Contractor) shall execute a
written contract with the City within ten (10) calendar days after notice of the award has been
sent by mail to it at the address given in its proposal. The contract shall be made in the form
adopted by the City and incorporated in these specifications.
10. Insurance Requirements. The Contractor shall provide proof of insurance in the form,
coverages and amounts specified in Section E of these specifications within 10 (ten) calendar
days after notice of contract award as a precondition to contract execution.
11. Business License and Tax Certificate. The Contractor must have a valid City of San Luis
Obispo business license and tax certificate before execution of the contract. Additional
information regarding the City's business license and tax program may be obtained by calling
(805) 781-7134.
CONTRACT PERFORMANCE
12. Laws to be Observed. The Contractor shall keep itself fully informed of and shall observe and
comply with all applicable state and federal laws and county and City of San Luis Obispo
ordinances,regulations and adopted codes during its performance of the work.
13. Payment of Taxes. The contract prices shall include full compensation for all taxes that the
Contractor is required to pay.
14. Permits and Licenses. The Contractor shall procure all permits and licenses, pay all charges
and fees,and give all notices necessary.
15. Safety Provisions. The Contractor shall conform to the rules and regulations pertaining to
safety established by OSHA and the California Division of Industrial Safety.
16. Immigration Act of 1986. The Contractor warrants on behalf of itself and all subcontractors
engaged for the performance of this work that only persons authorized to work in the United
States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws
shall be employed in the performance of the work hereunder.
17. Contractor Non-Discrimination. In the performance of this work, the Contractor agrees that it
will not engage in, nor permit such subcontractors as it may employ, to engage in discrimination
in employment of persons because of age, race, color, sex, national origin or ancestry, sexual
orientation,or religion of such persons.
C2-14
lechment
18. Work Delays. Should the Contractor be obstructed or delayed in the work required to be done
hereunder by changes in the work or by any default, act, or omission of the City, or by strikes,
fire, earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or
labor due to federal government restrictions arising out of defense or war programs,then the time
of completion may, at the City's sole option, be extended for such periods as may be agreed upon
by the City and the Contractor. In the event that there is insufficient time to grant such
extensions prior to the completion date of the contract, the City may, at the time of acceptance of
the work, waive liquidated damages that may have accrued for failure to complete on time, due to
any of the above, after hearing evidence as to the reasons for such delay, and making a finding as
to the causes of same.
19. Payment Terms. The City's payment terms are 30 days from the receipt of an original invoice
and acceptance by the City of the materials, supplies, equipment, or services provided by the
Contractor(Net 30).
20. Audit. The City shall have the option of inspecting and/or auditing all records and other written
materials used by Contractor in preparing its invoices to City as a condition precedent to any
payment to Contractor.
21. Interests of Contractor. The Contractor covenants that it presently has no interest, and shall
not acquire any interest—direct, indirect or otherwise—that would conflict in any manner or
degree with the performance of the work hereunder. The Contractor further covenants that, in
the performance of this work, no subcontractor or person having such an interest shall be
employed. The Contractor certifies that no one who has or will have any financial interest in
performing this work is an officer or employee of the City. It is hereby expressly agreed that, in
the performance of the work hereunder, the Contractor shall at all times be deemed an
independent contractor and not an agent or employee of the City.
22. Hold Harmless and Indemnification. The Contractor agrees to defend, indemnify, protect
and hold the City and its agents, officers and employees harmless from and against any and
all claims asserted or liability established for damages or injuries to any person or property,
including injury to the Contractor's employees, agents or officers that arise from or are
connected with or are caused or claimed to be caused by the acts or omissions of the
Contractor, and its agents, officers or employees, in performing the work or services herein,
and all expenses of investigating and defending against same; provided, however, that the
Contractor's duty to indemnify and hold harmless shall not include any claims or liability
arising from the established sole negligence or willful misconduct of the City, its agents,
officers or employees.
23. Contract Assignment. The Contractor shall not assign, transfer, convey or otherwise dispose of
the contract,or its right, title or interest, or its power to execute such a contract to any individual
or business entity of any kind without the previous written consent of the City.
24. Termination. If, during the term of the contract, the City determines that the Contractor is not
faithfully abiding by any term or condition contained herein, the City may notify the Contractor
in writing of such defect or failure to perform. This notice must give the Contractor a 10 (ten)
calendar day notice of time thereafter in which to perform said work or cure the deficiency.
C2-15
` �gq��,p� 3
If the Contractor has not performed the work or cured the de C ifiPll� e[r'd3ys
specified in the notice, such shall constitute a breach of the contract and the City may terminate
the contract immediately by written notice to the Contractor to said effect. Thereafter, neither
party shall have any further duties, obligations, responsibilities, or rights under the contract
except, however, any and all obligations of the Contractor's surety shall remain in full force and
effect, and shall not be extinguished, reduced, or in any manner waived by the termination
thereof.
In said event, the Contractor shall be entitled to the reasonable value of its services performed
from the beginning date in which the breach occurs up to the day it received the City's Notice of
Termination, minus any offset from such payment representing the City's damages from such
breach. "Reasonable value" includes fees or charges for goods or services as of the last
milestone or task satisfactorily delivered or completed by the Contractor as may be set forth in
the Agreement payment schedule; compensation for any other work, services or goods performed
or provided by the Contractor shall be based solely on the City's assessment of the value of the
work-in-progress in completing the overall workscope.
The City reserves the right to delay any such payment until completion or confirmed
abandonment of the project, as may be determined in the City's sole discretion, so as to permit a
full and complete accounting of costs. In no event, however, shall the Contractor be entitled to
receive in excess of the compensation quoted in its proposal.
C2-16
Section C Attachment 3
SPECIAL TERMS AND CONDITIONS
1. References. References from at least three firms for whom you have provided similar services.
A form for this purpose is provided in Section F.
2. Proposal Content. Formatting of all information and documentation is left to the discretion of
the proposer. However,proposals should fully address the following issues:
A. Clearly describe all collection services you propose to provide to the City. As a part of the
description, identify the responsibilities of the City and the responsibilities of the Agency.
Also, describe the coordination required between the customer, the City, and the Agency
before and after the account is assigned.
B. Provide information to show the overall rate of success of your agency in collecting
delinquent accounts and the method used to make the collection.
C. Provide a list of three to five references preferably located on the Central Coast. Proposer's
reference form is provided in Section F.
D. Provide an organization chart, financial statement, list of officers or owner, number of
offices, number of employees locally and nationally, and telephone number and address of
the agency headquarters with the name of a contact person.
E. Clearly describe and outline your fees for the services to be provided by hour, by account,
percent of delinquent amount recovered,or whatever method used by your agency.
F. Provide overall information to show the average number of days and payroll hours required
by your agency to complete a collection and forward the monies to your customer.
G. Samples of the reports described in Section A, Scope of Services.
3. Proposal Copies. Four copies of the proposal must be submitted. Each proposal shall be limited
to fifteen(15)pages in length.
4. Proposal Evaluation and Selection. Proposals, which must be sealed and submitted prior to
3:00 p.m. on Wednesday October 13, 2010 will be evaluated by a review committee based on the
following criteria:
A. Understanding of the work required by the City
B. Quality and responsiveness of the proposal
C. Demonstrated competence and professional qualifications necessary for satisfactory
performance of the work required by the City
D. Recent experience in successfully performing similar services
E. Proposed approach in completing the work
C2-17
F. References Attachment 3
G. Proposed compensation
As reflected above, contract award will not be based solely on price, but on a combination of
factors as determined to be in the best interest of the City. After evaluating the proposals and
discussing them further with the finalists or the tentatively selected contractor, the City
reserves the right to further negotiate the proposed work and/or method and amount of
compensation.
5. Proposal Review and Award Schedule. The following is an outline of the anticipated schedule
for proposal review and contract award:
Issue RFP 12/27/10
Receive proposals 01/26/11
Complete proposal evaluation 02/25/11
Finalize staff recommendation 03/04/11
Award contract 03/11/11
Execute contract 04/01/11
Start work 04/01/11
The City will endeavor to administer the proposal process in accordance with the terms and dates
outlined in the RFP; however, the City reserves the right to modify the activities, time line or any
other aspect of the process at any time, as deemed necessary by City staff.
6. Contract term. The term of the contract shall be for a period of three years at which time the
performance of the agency will be evaluated prior to extending the contract for another period of
two years.
7. Release of Reports and Information. Any reports, information, data, or other material given
to, prepared by or assembled by the agency as part of the work or services under these
specifications shall be the property of the City of San Luis Obispo and shall not be made
available to any individual or organization by the Contractor without the prior written approval
of the City.
8. Copies of Reports and Information. If the City requests additional copies of reports, or any
other material in addition to what the agency is required to furnish in limited quantities as part of
the work or services under these specifications, the agency shall provide such additional copies
as are requested, and the City shall compensate the agency for the costs of duplicating such
copies at the agency's direct expense.
C2-18
Section D ,4tachiyie It 3
FORM OF AGREEMENT
AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day
of , by and between the CITY OF SAN LUIS OBISPO, a municipal
corporation,hereinafter referred to as City,and[CONTRACTOR'S NAME],hereinafter referred to as Contractor.
WITNESSETH:.
WHEREAS, on October 13, 2010 City requested proposals for the collection of delinquent accounts per
Specification No. 91048.
WHEREAS, pursuant to said request, Contractor submitted a proposal that was accepted by City for said
collection services.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter
contained,the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from the date this Agreement is made and entered,as
first written above,for a period of three years at which time the performance of the Agency will be evaluated prior to
extending the contract for another period of two years.
2. INCORPORATION BY REFERENCE. City Specification No. 91048 and Contractor's
proposal dated December 21,2010 are hereby incorporated in and made a part of this Agreement.
3. CITY'S OBLIGATIONS. For providing delinquent account collection services as specified in
this Agreement,City will pay Contractor in accordance with compensation set forth in contractor's proposal.
4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements
hereinbefore mentioned to be made and performed by City,Contractor agrees with City to do everything required by
this Agreement in the collection of delinquent accounts assigned to the Contractor by the City as described in the
contractor's proposal.
5. AMENDMENTS. Any amendment, modification or variation from the terms of this Agreement
shall be in writing and shall be effective only upon approval by the Council of the City.
6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically
incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral
agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of
C2-19
�.aachmenj 3
any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon ee pates
hereto.
7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage
prepaid by registered or certified mail addressed as follows:
City Director of Finance and Information Technology
City of San Luis Obispo
990 Palm Street
San Luis Obispo,CA 93401
Contractor [ ]
8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each
individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute
Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
first above written.
ATTEST: CITY OF SAN LUIS OBISPO
By:
City Clerk City Manager
APPROVED AS TO FORM: CONTRACTOR
By:
City Attorney
C2-20
Section E
INSURANCE REQUIREMENTS
The Contractor shall procure and maintain for the duration of the contract insurance against claims for
injuries to persons or damages to property that may arise from or in connection with the performance of
the work hereunder by the Contractor, its agents,representatives,employees or subcontractors.
Minimum Scope of Insurance. Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage(occurrence form CG 0001).
2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code
1 (any auto).
3. Workers'Compensation insurance as required by the State of California and Employer's Liability
Insurance.
Minimum Limits of Insurance. Contractor shall maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property
damage. If Commercial General Liability or other form with a general aggregate limit is used,
either the general aggregate limit shall apply separately to this project/location or the general
aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Employer's Liability: $1,000,000 per accident for bodily injury or disease.
Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared
to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such
deductibles or self-insured retentions as respects the City, its officers, officials, employees and
volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related
investigations,claim administration and defense expenses.
Other Insurance Provisions. The general liability and automobile liability policies are to contain, or be
endorsed to contain,the following provisions:
1. The City, its officers, officials, employees, agents and volunteers are to be covered as insureds as
respects: liability arising out of activities performed by or on behalf of the Contractor; products
and completed operations of the Contractor; premises owned, occupied or used by the
Contractor; or automobiles owned leased, hired or borrowed by the Contractor. The coverage
shall contain no special limitations on the scope of protection afforded to the City, its officers,
official, employees, agents or volunteers.
2. For any claims related to this project, the Contractor's insurance coverage shall be primary
insurance as respects the City, its officers, officials, employees, agents and volunteers. Any
insurance or self-insurance maintained by the.City, its officers, officials, employees, agents or
volunteers shall be excess of the Contractor's insurance and shall not contribute with it.
3. The Contractor's insurance shall apply separately to each insured against whom claim is made or
suit is brought,except with respect to the limits of the insurer's liability.
4. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be
suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty
(30) days' prior written notice by certified mail, return receipt requested, has been given to the
City.
C2-21
-`achment 3
Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating of
no less than ANN.
Verification of Coverage. Contractor shall furnish the City with a certificate of insurance showing
required coverage. Original endorsements effecting general liability and automobile liability coverage
are also required by this clause. The endorsements are to be signed by a person authorized by that
insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City
before work commences.
Subcontractors. Contractor shall include all subcontractors as insured under its policies or shall fumish
separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be
subject to all of the requirements stated herein.
C2-22
Section F Attachnae alt 3
REFERENCES
Number of years engaged in providing the services included within the scope of the specifications under
the present business name:
Describe fully the last three contracts performed by your firm that demonstrate your ability to provide the
services included with the scope of the specifications. Attach additional pages if required. The City
reserves the right to contact each of the references listed for additional information regarding your firnt's
qualifications.
Reference No. 1
Customer Name
Contact Individual
Telephone&FAX number
Street Address
City,State,Zip Code
Description of services provided
including contract amount,when
provided and project outcome
Reference No.2
Customer Name
Contact Individual
Telephone&FAX number
Street Address
City,State,Zip Code
Description of services provided
including contract amount,when
provided and project outcome
Reference No.3
Customer Name
Contact Individual
Telephone&FAX number
Street Address
City, State,Zip Code
Description of services provided
including contract amount,when
provided and project outcome
C2-23
STATEMENT OF PAST CONTRACT DISQUALIFICATIONS
The proposer shall state whether it or any of its officers or employees who have a proprietary interest in
it, has ever been disqualified, removed, or otherwise prevented from bidding on, or completing a federal,
state, or local government project because of the violation of law, a safety regulation, or for any other
reason, including but not limited to financial difficulties, project delays, or disputes regarding work or
product quality, and if so to explain the circumstances.
■ Do you have any disqualification as described in the above paragraph to declare?
Yes ❑ No ❑
■ If yes, explain the circumstances.
Executed on at under penalty
of perjury of the laws of the State of California,that the foregoing is true and correct.
Signature of Authorized Proposer Representative
C2-24