TRANSMITTAL TO CATE COUNCIL FILE NO Deborah Flint. Executive Director Department of Airports
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1 TRANSMITTAL TO CATE COUNCIL FILE NO Deborah Flint. Executive Director Department of Airports 06/16/16 FROM The Mayor COUNCIL DISTRICT 6,11 Two Proposed First Amendments for Project Management and Construction Management i Support Services of the Capital Improvement Program for Contract No. DA-4834 and Contract No. DA-4835 and Request To Appropriate Funds to Continue Project Management and Construction Management Support Services at Los Angeles World Airports Transmitted for further processing, including Council consideration. See the City Admi/Xrhtive Officer report, attached. / YUik (Ana Guerrero) MAS:A\M:10i60103t CAO 649-0
2 REPORT from OFFICE OF THE CITY ADMINISTRATIVE OFFICER Date: J une 16, Council File No. Council District: 6,11 To: The Mayor From: Miguel A. Santana, City Administrative Officer" Reference: Communication from the Department of Airports dated May 25, 2016; referred by the Mayor for a report on May 31, 2016 Subject: TWO PROPOSED FIRST AMENDMENTS FOR PROJECT MANAGEMENT AND CONSTRUCTION MANAGEMENT SUPPORT SERVICES FOR CONTRACT NO. DA-4834 AND CONTRACT NO. DA-4835 AND REQUEST TO APPROPRIATE FUNDS TO CONTINUE PROJECT MANAGEMENT AND CONSTRUCTION MANAGEMENT SUPPORT SERVICES AT LOS ANGELES WORLD AIRPORTS SUMMARY The Executive Director of the Department of Airports (Airports, Department) requests approval to (1) execute two first amendments (Amendments) for Project Management (PM) and Construction Management (CM) support services and (2) appropriate funds to continue PM/CM support services for the Airports Capital Improvement Program (CIP). The proposed Amendments are for the following two contracts: (1) Contract No. DA-4834 with AVB Management Partners, a Joint Venture between AECOM, Vanir and BA, Inc. (AVB) and (2) Contract No. DA-4835 with Parsons Transportation Group, Inc. (Parsons). Due to the complexity of CIP projects, the Department hires the specialized support of qualified consultants on an as-needed basis to augment existing Airports and City personnel. Approval of the proposed Amendments will allow for implementation of the following changes within Contract No. DA-4834 and Contract No. DA-4835, for AVB and Parsons, respectively. The three-year term of the AVB agreement will be extended by 45 months, for a total of 81 months, and its budget, which is an amount not-to-exceed $87.5 million, will be increased by $39.3 million, for a total budget amount not-to-exceed $126.8 million. The three-year term of the Parsons agreement will be extended by 15 months, for a total of 51 months, and its budget will remain at an amount not-to-exceed $87.5 million. Additionally, approval of the proposed Amendments will result in the appropriation of $46.5 million, for a revised total of $181.5 million, for PM/CM support services work. The Board of Airport Commissioners (BOAC) approved the proposed AVB and Parsons Amendments at a meeting on June 2, The above-referenced Amendments and this report incorporate revised information received from the Department subsequent to the initial request submittal. Pursuant to Charter Section 373 and Los Angeles Administrative Code Section
3 (b)2, Council approval of the proposed Amendments is required because the cumulative term for each will exceed three years. Background The Airports staff, management, and development group work to consistently deliver capital improvement projects which benefit various aspects of airport operations and stakeholders--air carriers, passengers and the traveling public, neighboring community and businesses, contractors, consultants and City employees, to name a few. Due to the complexity of CIP projects and the absence of certain City job classifications, the Department hires specialized, qualified consultants to support and augment City employees. Examples of functions not readily available through in-house expertise are airport systems designers and engineers, project schedulers and baggage handling and screening system experts. These professional services are referred to as soft costs within a construction budget. Staff of the Airport Development Group (ADG) budget approximately 10.5 percent of CIP project costs for soft costs support. In addition, staff reports that approximately 70 percent of the Department s project consultants provide PM/CM support services for ADG work with CIP projects. On March 26, 2013, Department staff released a Request for Proposals (RFP) for project and construction management services to support the CIP projects at the Los Angeles World Airports. Six responses were received on May 2, One firm s documents did not meet the required minimum qualifications and that proposal was not transmitted for further evaluation. The Procurement Services staff reviewed the administrative documents of the five remaining submittals and evaluated each according to the administrative requirements. The five firms passed the administrative requirements and their written proposals continued through the competitive selection process to an Evaluation and Selection Panel. Five executive and management Department personnel were members of that panel and they reviewed the written proposals in accordance with the evaluation criteria outlined in the RFP. Staff report that, based upon the written evaluation scores, three of the five proposers were selected to be interviewed. On May 31, 2013 the Evaluation and Selection Panel interviewed the proposers from AVB, LA Aviation Solutions JV, and Parsons. The five written proposals, as well as the three oral interviews, were evaluated according to criteria detailed in the RFP and summarized below. Evaluation Criteria Criteria Weight Compliance with Administrative Requirements Pass / Fail 35 Experience - integrated team setting, innovative solutions, etc. Approach and Methodology Understanding of Project Scope Multiplier Proposal Total Points Department staff reports that of the 80 points possible, if the 20 points from the Multiplier Proposal are excluded, 40 percent were weighted to the written proposal and 60 percent were
4 weighted to the oral interview. The Multiplier Proposal was opened after the interviews and evaluated on a proportional basis. The multiplier score was then applied to each evaluator equally. Only the firms that qualified for an interview were included in the final ranking. The final ranking was Parsons first, AVB second, and LA Aviation Solutions JV third. On August 20, 2013, the BOAC awarded two three-year contracts for PC support services. Each contract was for an amount not-to-exceed $87,500,000. Furthermore, the BOAC appropriated capital funds in a combined amount of $60,000,000 for Year 1 services. Based upon the extensive PM/CM experience and commitment that AVB and Parsons each had demonstrated, staff recommended awarding two contracts to provide a way for the Department to attract the best industry talent and to select from and secure consultants for the numerous CIP projects anticipated in the ensuing years. On December 4, 2014, the BOAC appropriated $75,000,000 more to continue PM/CM support services for Year 2 of Contracts DA-4834 and DA There were sufficient funds to also cover part of Year 3 services. Proposed AVB and Parsons First Amendments for Project Management and Construction Management Support Services and Appropriation of Funds Currently staff in the Department s Planning and Development Group (PDG) is delivering $2.9 billion in 25 active projects to improve Airport facilities. Also, PDG provides coordination and oversight for more than $2 billion in tenant-managed construction projects to enhance the guest experience. Consultants provide professional expertise and specialty services as-needed to augment City staff work depending upon the complexity, number, and size of CIP projects underway. Both AVB and Parsons were awarded three-year contracts to provide Project Management and Construction Management support services such as, but not limited to, project planning, environmental reviews, evaluation of construction phasing plans, quality assurance and safety training. Since August 2013, AVB and Parsons consultants have provided PM/CM support services for over 20 ongoing CIP projects (enumerated by staff in the BOAC report) within the following five categories: Midfield Satellite Concourse, Airside Element, Terminal Element, Utilities and Landside Element, and Tenant Element. Approval of the proposed Amendments will extend the Parsons contract term by 15 months, extend the AVB contract term by 45 months, increase the AVB budget by $39.3 million, appropriate $6,500,000 to complete Year 3 services and appropriate $40,000,000 for Year 4 PM/CM support services. Department staff anticipates that the PM/CM services related to the noted CIP projects will be completed within the term of the Amendments, with the exception of the Midfield Satellite Concourse (MSC) project. The AVB consultants are expected to provide support services for the MSC project through final closeout phase, projected for 2020, and to the Department s Commercial Development Group for concessions and airlines improvement programs. The proposed AVB term and budget revisions may support these activities. The work through Contracts DA-4834 and DA-4835 also provides PM/CM support activities for Information Technology, Executive Management and other Department groups and reimbursable costs. The following table presents Department-provided information about the AVB and Parsons Project Management and Construction Management support services awarded contracts and
5 proposed Amendments. Project Management and Construction AVB, DA-4834 Parsons, Total Management Contracts DA-4835 Current Expiration Date September 25, 2016 September 25, 2016 Proposed Expiration Date June 2020 December 2017 Contract Amount $87,500,000 $87,500,000 $175,000,000 Commitments to Date $83,524,000 $51,450,000 $134,974,000 Remaining Balance $ 3,976,000 $36,050,000 $ 40,026,000 Awarded Contract Amount $ 87,500,000 $87,500,000 $175,000,000 Proposed Contract Increase $ 39,300,000 $ 39,300,000 Proposed Contract Amount $126,800,000 $87,500,000 $214,300,000 A request to appropriate funds for the PM/CM support services is made as a single combined amount rather than being listed separately by contract number. The BOAC has already appropriated $135,000,000 to AVB and Parsons since awarding the contracts in August Approval of the proposed Amendments will appropriate an additional $46,500,000 for use through the end of Year 3, which will be September 24, 2016, and throughout Year 4. Staff will return to the BOAC to request funds for subsequent years, if necessary. Project Management and Construction Management AVB Total Contracts and Parsons Proposed Total Contract Amount Appropriations Current Sum: Year 1, Year 2 and Partial Year 3 $214,300,000 $135,000,000 $214,300,000 $135,000,000 Request - Remaining Year 3 (to Sept. 24, 2016) $ 6,500,000 $ 6,500,000 Request - Year 4 $ 40,000,000 $40,000,000 Subtotal - Request for Appropriations $ 46,500,000 $46,500,000 Total Appropriations $181,500,000 $181,500,000 Department staff is soliciting proposals for successor contracts for PM/CM support services, as well as project controls support services, through a RFP released on April 21, Any new PM/CM work is expected to be assigned to the successor contracts. Alternatives to the Proposed Amendments Considered by Staff Department staff reports that alternatives considered were to (1) defer the proposed Amendments or (2) discontinue the PM/CM support services. However, each of those actions would severely limit or impair the delivery of the Airports' CIP. Staff reports that due to insufficient in-house resources to provide timely and adequate support, the Airports CIP may be adversely impacted within its operations, project costs and construction schedules should the proposed Amendments not be approved.
6 City Contract Compliance The proposed Amendments are subject to approval by the City Attorney as to form. Staff notes that the AVB and Parsons proposed Amendments must be determined by the Department of Public Works, Office of Contract Compliance, to be in compliance with provisions of the Equal Benefits Ordinance prior to their execution. Each of the proposed Amendments has an assigned Business Tax Registration Certificate number and approved insurance documents on file with the Department in the terms and amounts required. In addition, AVB and Parsons have submitted the Bidder Contributions City Ethics Commission Form 55 and will comply with its provisions pertaining to the City s contract bidder campaign contribution and fundraising restrictions (Charter Amendment H). Parsons and AVB have submitted the Contractor Responsibility Program Questionnaire and Pledge of Compliance and will comply with provisions of the Contractor Responsibility Program. Pursuant to the provisions of Charter Section 1022, Use of Independent Contractors, staff determined that the work specified in the proposed contracts may be performed more feasibly or economically by an independent contractor than by City employees. In accordance with the proposed Amendments, AVB and Parsons are required to comply with the following City standard contract provisions: the Affirmative Action Program, Child Support Obligations Ordinance, First Source Hiring Program for all non-trade Airport jobs, and Living Wage Ordinance. The Department s Procurement Services Division staff has reviewed this action (File No. 6188) and established a mandatory 20 percent Small Business Enterprise (SBE) goal for this project. Department staff reports that AVB has committed to a 20 percent SBE participation goal and has achieved 38.4 percent participation to date. Parsons has committed to a 20 percent SBE participation goal and has achieved 35.6 percent participation to date. Approval of the proposed Amendments, as a continuing administrative, maintenance and personnel-related activity, is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article II, Section 2.f. of the Los Angeles City CEQA Guidelines. Actions taken on this item by the BOAC will become final pursuant to Charter Section 373, Long Term Contracts Approved by Council, and Administrative Code 10.5, "Limitation and Power to Make Contracts. City Council approval is required because execution of the proposed Amendments will result in terms exceeding three years. RECOMMENDATIONS That the Mayor: 1. Approve proposed first amendments (Amendments) with (1) Contract No. DA-4834 with AVB Management Partners, a Joint Venture between AECOM, Vanir and BA, Inc. (AVB) and (2) Contract No. DA-4835 with Parsons Transportation Group, Inc. (Parsons) to continue providing Project Management (PM) and Construction Management (CM) support services for the Department of Airports Capital Improvement Program (CIP). Approval of the proposed Amendments will (1) extend the three-year term of the AVB agreement by 45 months, for a total of 81 months; (2) increase the AVB budget, that is for an amount not-to-
7 exceed $87.5 million, by an amount not-to-exceed $39.3 million for a total budget amount not-to-exceed $126.8 million; (3) extend the three-year term of the Parsons agreement by 15 months, for a total of 51 months, with no additional funding; and (4) appropriate a combined amount of $46.5 million, for a revised appropriation total of $181.5 million. The City Attorney must approve the proposed Amendments as to form. There is a requirement that prior to execution, the proposed Amendments must be determined by the Department of Public Works, Office of Contract Compliance, to be in compliance with provisions of the Equal Benefits Ordinance; 2. Authorize the Executive Director to execute the proposed Amendments; and 3. Return the request to the Department of Airports for further processing, including Council consideration. FISCAL IMPACT STATEMENT Approval of the proposed Agreements between the Department of Airports, AVB and Parsons will have no impact on the General Fund. Approval of the proposed Amendment with AVB will increase the not-to-exceed budget amount of $87.5 million budget by $39.3 million, for a total budget amount not-to-exceed $126.8 million. Approval of the proposed Amendment with Parsons will not revise the budget that is an amount not-to-exceed $87.5 million. Department staff reports the costs incurred through Contract No. DA-4834 and Contract No. DA-4835 will be capitalized and allocated to associated airport cost centers. Project costs will be recovered through terminal rates and charges or the Los Angeles International Airports landing fee as appropriate. Furthermore, staff recommends appropriating and allocating funds, in the combined amount of $46.5 million, for AVB and Parsons, from Los Angeles International Airport and Van Nuys Airport (VNY) Revenue Funds to WBS Element (Midfield Satellite Concourse), (Terminal Wide Improvements), GB-700 (Qantas Hangar Demolition), (VNY FlyAway ADA Improvements) and WBS elements of additional capital projects as may be required. The proposed Amendments comply with the Department of Airports adopted Financial Policies. TIME LIMIT FOR COUNCIL ACTION Pursuant to Charter Section 373, Long Term Contracts Approved by Council, and the Los Angeles Administrative Code Section 10.5, Limitation and Power to Make Contracts, unless the Council takes action disapproving a contract that is longer than three years within 60 days after submission to Council, the contract shall be deemed approved. MA S:A VM:
TRANSMITTAL 4/18/ S1
TO Deborah Flint. Executive Director Department of Airports TRANSMITTAL 0150-10638-0000 DAT t COUNC*. PU KO 4/18/16 15-1548-S1 "ROM The Mayor ' COUMCL OSTRJCT 11 I Approval to Award an Agreement to ABM
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