Thursday, July 21, 2011

Dunwoody competitive bid process nets over $3 million in savings in contracts for government services

In a move indicative of its “Smart People - Smart City” culture, the City of Dunwoody has found a way to drive down the cost of services provided to its citizens by more than $3 million while increasing the level of service.

With existing contracts for Community Development, Finance and Administration, and Public Works concluding their initial term in December, earlier this year, the City issued a Request for Proposals based on the Split Contract Service model the City pioneered in 2008 which strategically outsources government services to different vendors of key service areas for a fixed fee.

A committee of four staff members and three members of the City Council appointed by Mayor Ken Wright have completed recommendations for the award of contracts in the areas of Information Technology, Public Relations and Marketing, Finance and Administration, Public Works, Parks and Recreation, Planning and Zoning, Permits and Inspections and Code Compliance. The review committee’s recommendation of award of contracts for the provision of each professional service area will be considered by City Council at its July 25th meeting.

The committee is recommending that the City partner with four vendors to provide services in the following seven categories:

  • JAT and Calvin Giordano & Associates for Finance and Administration services
  • Clark Patterson Lee for Public Works, Parks and Recreation, Planning and Zoning and Permits, Inspections and Code Compliance services
  • InterDev for Information Technology services
  • Jacobs for Public Relations and Marketing services

If the recommendations for contracts are approved by the Council, the City will save more than $3.1 million dollars over the life of the contracts (three years with a city-option for a fourth year) including the strategic move to bring three positions into direct City employment. This provides the City with an extra $780,000 a year to spend on infrastructure, public safety and parks, all of which have been identified by citizens as top priorities.   Press Release.

19 comments:

DunwoodyTalk said...

John,

Can you point me (and your readers) in the right direction to see the RFQ for "public relations and marketing"?

I must have missed that bid proposal. With a well funded CVB I'm curious to see what the needs of the city are in regards to public relations and marketing.

Thanks in advance.

Rick

John Heneghan said...

Here you go Rick.

http://www.dunwoodyga.gov/Files/RFP%2011-02%20inv.pdf

All services were in one master RFP and the information you are looking for starts on page 39.

John Heneghan said...

Rick here is the memo from Warren for Monday's City Council Meeting.

http://jkheneghan.com/city/meetings/2011/Jul/07252011_RFP_Gov_Services.pdf

The Council/Staff committee recommends the City Council award 3 year contracts (with a 4th year option at the city’s discretion) to the following firms for the final negotiated fee:

Clark Patterson Lee – $8,325,600*
Planning and Zoning, Public Works, Parks and Recreation and Permitting/Inspections (and Code Compliance)

JAT/CGA - $4,999,986
Finance and Administration

Jacobs - $762,152
Public Relations and Marketing

InterDev - $1,245,929
Information Technology

*Total discount for multi-contract pricing = $1,027,700

Bob Fiscella said...

John,
Thanks for posting. I haven't had a chance to read through it yet, but what are the 3 positions the city is adding?
As always thx,
Bob

Chip said...

John:

Here we go! City of Dunwoody figures out how to save some $$$ and the first thing they want to do is add "permanent" staff.

Exactly how large does the Council intend to let Warren build his empire? It wouldn't surprise me if Chris Pike and Mike Smith somehow "magically" got hired to perform the functions of Director of Finance and Director of Public Works.

Seems to me we're adding costs unnecessarily solely to give the City Manager a big staff.

You all promised that Dunwoody would be "lean". Since incorporation, you've added 6 police positions, and 3 more staff positions. This would make it six.

You obviously haven't been paying too much attention to the problems DeKalb County has with reducing headcount, have you?

Chip

Robert Wittenstein said...

Chip,
We aren't "adding staff". As part of our review of the existing contracts we determined that our two court clerks operated independently and that where was no inherent advantage to having them provided through an outsource contract (with a markup).

In all the other areas we could point to value added advantages to the city associated with having these services provided by a competitive contract.

As a result of the analysis, we decided to exclude court clerk services from the Administrative RFP and will be hiring the two court clerks we are currently contracting for.

I hope that makes sense.
Robert

Robert Wittenstein said...

Oops, typo. Meant "there" rather than "where" in, "that there was no inherent advantage..."

NotTheOtherDunwoody said...

Robert,
Thanks for the explanation. Considering the cost of benefits (all items in addition to salary)how much money is saved by hiring the two clerks? I thought a good thing about contracting out was the savings on current and future benefits.

Robert Wittenstein said...

NTOD,
I don't recall the exact number, but I can get it for you. It was a modest amount, but it saved money even when we factored in benefits and annual pay increases. As a footnote, we offer a 401(k) style retirement plan so we don't incur any future liabilty for a pension plan.

Chip said...

Councilman W: I know you've been in office almost three years, but "snap out of it!" You're explanation borders on "gobbledegook"

You say "We're not adding staff" on the one hand, but then on the other hand "we'll be hiring the two clerks we are currently contracting for."

The change in absolute positions may not be "adding staff" but there are two new names on the Dunwoody payroll, two new permanent employees with benefits, two employees who have to be managed by the City. Anyway you slice it, these people now report, de facto, to the City Manager as he is the chief operating officer of the city.

Now, since we've already dealt with the clerks and the new assistant city manager, I read Mr. Heneghan's comments to mean that there are an additional 3 positions that will be "strategically" put on the full-time payroll.

Is John H. double-counting, or have you misunderstood the proposal?

It's not clear to me what's meant, here.

Chip

Robert Wittenstein said...

Chip,
Same three.

raggiemic said...

I think it was a great idea to do the initial staffing through consulting firms, but my question is why we would want to continue to staff through consulting firms and therefore continue to pay markups to those firms.
I have read statements from several on Council that we are happy with the consultants currently serving in these positions and it is hoped that they stay, so why wouldn’t we hire them directly? Consulting firms often have a 100% (or more!) markup, whereas I think the cost of benefits to an employer typically come in around 30%. Since Robert said the City employees have a 401k and not a pension, surely we could hire these people directly – even figuring in the cost of benefits – and realize quite a saving for the City taxpayers – money that could go toward roads or parks, or stay in our own pockets. Can you please post the analysis, broken out by each of the four consulting firms, showing how much it would cost if the City hired the same individuals directly? Even if this delays the final decision until a later Council meeting, I would rather know that the Council did their due diligence and shared it with the community.
Yhanks......

Robert Wittenstein said...

Raggiemic,
This requires more text than appropriate for a blog post, but let me try to highlight three areas where contracting makes more sense than hiring workers as city employees.

First, availability of flexible staffing. We don’t need a full-time arborist or a plumbing inspector on staff. During budget season we need some extra accounting staff; during the winter we need fewer Public Works folks—except on the one day that we get snow and ice. Using a firm allows us to “buy” just the level of service we need. The contracting firm can utilize those folks elsewhere when we don’t need them.

Second, profit motive. In my day job we are constantly working to keep our customers happy because we know that if they are unhappy they have the opportunity to go elsewhere. We are also working all the time to cut costs because we have to compete on price and we have to be as efficient as possible. That need for profit keeps us lean and focused on satisfying our clients. That paradigm is missing in government work. It is easy for government employees to take their jobs for granted and for costs to rise over time. A good city manager can create that sense of pressure to cut costs and strive for excellent service, but it is a bit artificial and may not last over time.

By contracting out with private vendors they must perform or we won’t consider them when their contract expires and they must keep their costs down because they will have to bid on the work.

Third, back-office “value add”. Our new marketing vendor, Jacobs, included in their proposal time each week from the senior partner in a local marketing firm. This person provides guidance, supervision and expertise to the city marketing staff person in a way that the City Manager cannot. Likewise, our new IT firm, InterDev, also provides services to Sandy Springs, and we can share backup facilities and the two staffs can provide backup for each other. Finally, Kevin McOmber, one of the principals of Clark, Patterson & Lee, is one of the most impressive community development professionals around. Our ability to get access to this type of expertise when we need it and to leverage the expertise of the vendor’s “back office” adds huge value.

I hope this makes sense.
Robert

NotTheOtherDunwoody said...

Robert,

What happened to Lowes? Were they called in negotiate? The Lowe staff seems to be quite competent.

Chip said...

I'd like to second NTOD's question.

Also, please clarify....is Chris Pike a City Employee or is he part of the Finance Department Consulting agreement as a contractor?

Chip

Chip said...

To Not The Other Dunwoody:

Check out Warren's Memo (2nd Heneghan blog post) for the details.

Clark Patterson Lee lost to Lowe's in overall quality by slim margins, but won the deal with substantial discounts for the three areas they picked up (bundling).

It's not clear to me why "The Committee" and the City Manager took the full 3-part bundle deal. In Public Works and Parks, Clark Patterson Lee were actually high-bidder by $150,000 (approx.) They were over $1MM higher in all other categories they bid (before discount).

Ultimately Clark Patterson Lee "bought" the contracts by deep discounts. I don't know about you all, but having been around construction bidding, I've always been suspicious of how the "high bidder" offers a steep discount to win the deal, and then delivers the service expected.

I wouldn't have been so willing to let Clark Patterson Lee re-negotiate their bid price with discounts, when they only led two out of four categories in the quality rankings, and were low bidder in one category by only $61K, and overall $1.1M higher than their competitors in the other three areas. This last minute "discount" that was surprisingly almost equal to the "high bid" status in three of four categories ought to raise the eyebrows and hackles of anyone who's ever participated in a bid like this.

I believe the City Manager has some explaining to do. CPL apparently offered a 15% discount for bundling. If the City hadn't bought the "whole package" CPL wouldn't have one any of the contracts, except the Public Works.

Is this what Rob Augustine means when he says that "local control" is best?

NewCouncilNeeded? said...

Chip,

Did you watch the meeting? AB asked WH no less than five times if everyone was called in to negotiate. Never really got a straight answer, did she? I think some council may have voted differently had they had Chip's breakdown of the events. I watched online so I am not aware if Lowe execs were there or not.

Chip said...

NCN?:

Watched the last 20 minutes of the video, sound quality was poor and I didn't catch all that was said.

I got the impression that Warren wasn't answering the questions, though.

Chip

Bhupendra Chahar said...

I must have missed that bid proposal. With a well funded CVB I'm curious to see what the needs of the city are in regards to public relations and marketing.