Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
SEPTEMBER 16, 2015
Subject/Action
SUBJECT: GENERAL LIABILITY CLAIMS ADMINISTRATION SERVICES
ACTION: EXERCISE THE FIRST THREE-YEAR OPTION
Heading
RECOMMENDATION
Title
AUTHORIZING the Chief Executive Officer to execute Contract Modification No. 4 to Contract No. PS05312717, with Carl Warren & Company, for general liability claims administration services, to exercise the first three-year option in the amount of $7,721,051 increasing the total contract value from $10,307,876 to $18,028,927 and extending the contract term from October 31, 2015 to October 31, 2018.
Issue
ISSUE
Contract No. PS05312717 currently provides public liability and property damage third-party claims administration (TPA) services. The contract consists of a four-year base period and two, three-year options for a combined total of $25,896,641.
On August 4, 2011, the Board authorized the CEO to award the ten year and two month fixed-price contract to CWC in an amount of $25,896,641 for all ten years inclusive of two, three-year options. CWC was awarded the contract with a base term from September 1, 2011 to October 31, 2015. CWC was the lowest priced proposer at the time and based on our assessment of industry conditions and regional economic growth occurring since the contract award in 2011, pricing has hardened in the interim. Staff conducted a market price assessment in August 2015 by contacting four of the original proposers. The two proposers who responded to our inquiry have increased their original proposed price of claims administration services by 3-5%.
The Board approved a motion at the June 26, 2014 Board meeting requiring all requests to exercise contract options exceeding $500,000 annually to be approved by the Board. This motion effectively rescinded the CEO's authority to execute a contract modification to exercise the options under this contract.
We are returning to the Board for aut...
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