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The New Norm: Contracting and Outsourcing

The New Norm: Contracting and Outsourcing. Chris Nunes, CPRE Director of Parks and Recreation The Woodlands Township. 2013 Massachusetts Parks and Recreation Annual Conference Hyannis, MA. Session Objectives.

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The New Norm: Contracting and Outsourcing

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  1. The New Norm: Contracting and Outsourcing Chris Nunes, CPREDirector of Parks and Recreation The Woodlands Township 2013 Massachusetts Parks and Recreation Annual Conference Hyannis, MA

  2. Session Objectives • Outline the use and development of contracts for services, programs and maintenance. • Identify and recognize how to minimize risks in contract development • Identify the benefits of contracting

  3. Background Information Contracting & Outsourcing Defined: • Assigning responsibility for all or a portion of the activity and tasks involved in developing and/or running and maintaining a system to a contractor outside of the organization

  4. Background Information • IRS – “A general rule is that you, have the right to control or direct the result of the work done by an independent contractor, but not the means and methods of accomplishing the result.”

  5. Background Information

  6. Facility Lifeguards Pool Maintenance Security Laundry Equipment Maintenance Pest Control Concessions Program Management Instruction Advertising Programs Marketing/Promotion Event Management Trades Electrical Plumbing Janitorial/Custodial Landscape/Forestry If you are already doing it, can you expand on the current scope? Background Information Types of services that can be contracted

  7. Challenges of Contracting • Communication • Relationships • Specifications vs Outcome • Control • Poorly written contract • Poor performance and responsiveness • Monitoring • Liability/ Indemnification • Low Bid Mentality • Workplace Restrictions • Local Marketplace

  8. Benefits of Contracting • Is it more economical to contract out? • Price Differential-Self Bid • Staffing Limitations • Service Trade-Offs • Capital Investment • Technical Expertise

  9. Benefits of Contracting Self Bid- Janitorial

  10. Benefits of Contracting • Self-Bid Weekend Trash Key Point- Staff on weekends are able to handle additional duties required-fix toilet, graffiti, etc

  11. Benefits of Contracting • Staffing limitations • Inability to hire staff • Time constraints • Work load balance • Length of time of project

  12. Benefits of Contracting Capital Investment • How often do you use?

  13. Benefits of Contracting • Does your organization have the following expertise?

  14. Keys to a Quality Bid Process • Bid Documents • Scope of Work • Specifications • Standards • Expectations

  15. Keys to a Quality Bid Process • Scope of work: • Custodial/Gate and Facilities Maintenance • Provide all labor, materials, equipment, licensing and supervision necessary for custodial maintenance at twenty community parks for 34 months. • Length of contract will have an impact on capital investment

  16. Keys to a Quality Bid Process Development of Specifications- All cars get you from Point A to Point B, but various features and other factors affect the overall price. Cadillac Neon

  17. Keys to a Quality Bid Process • Scope to Specifications • “Big Picture” ……………..

  18. Keys to a Quality Bid Process • Scope to Specifications • ………….to Details

  19. Keys to a Quality Bid Process • Development of Specifications-Two Methods • Outcomes/Performance Based

  20. Keys to a Quality Bid Process • Development of Specifications-Two Methods • Required Services

  21. Keys to a Quality Bid Process • Specifications: • Industry Standards • Best Practices • User Needs • Community Needs • How would you do the job? • What else????

  22. Keys to a Quality Bid Process • How would you do the job?

  23. Keys to a Quality Bid Process • Standards and Specifications-Christmas Tree Lights Providing specifications on the type of lights, color, etc. Providing information on the maintenance needs of the project

  24. Keys to a Quality Bid Process • Standards and Specifications-Janitorial:

  25. Keys to a Quality Bid Process • Specifications-Concessions: Addressing responsibility for trash in the park/facility Addressing ability to place signage in the park/facility

  26. Keys to a Quality Bid Process Background Information: • What does a bidder need to know to provide a quality bid and make a profit??? • Historical information • Units consumed • Rate of use • Limitations on work • Rate of growth

  27. Keys to a Quality Bid Process • Background Information-Pool Chemical

  28. Keys to a Quality Bid Process • Background Information-HVAC

  29. Keys to a Quality Bid Process • Background Information-Christmas Trees

  30. Keys to a Quality Bid Process • Vendor Qualifications: • Financial • Bonding • Past law suites • Number of contracts • Expiration of current contracts • Bank information

  31. Keys to a Quality Bid Process • Bid Tabulation:

  32. Keys to a Quality Bid Process • Pre-Bid Meeting • Bid Time Period • Bonds • Timeline • Conditioning Period

  33. Keys to a Quality Contract • Contractor Responsibility and Liabilities • State and Federal Laws • Insurance-$1 million/$2 million • Required licenses, certifications • Image Standards • Reporting • Detailed Monthly Invoicing • Adherence to Safety of Users • Limitations/Indemnification

  34. Keys to a Quality Contract • Contractor Responsibility and Liabilities • Image Standards

  35. Keys to a Quality Contract • Contractor Responsibility and Liabilities • Detailed Monthly Invoicing

  36. Selecting the Right Contractor • Do your homework: Check references & previous work completed • Professionalism in the bid • Low bid contractors will create additional work due to failure to provide “other services.” • Analyze all aspects of the bid

  37. Managing the Contract • Contract Compliance • Dedicated employee to manage the contract (Cost!!!!) • Monitoring tools • Status meetings • Reporting systems • Develop and maintain the relationship

  38. Final Thoughts • What if bids are too far apart? • Do you have good specifications • Do you have an apples to apples comparison? • What type of business is it- small vs large? • Is this their primary line of business? • Use a third party to analyze • Use industry standards to compare.

  39. Thank you!!!!! • For further questions or comments Chris Nunes, Ph.D., CPRE, Director of Parks and Recreation The Woodlands Township 281-210-3906 cnunes@thewoodlandstownship-tx.gov

  40. Exercise …. 15 minutes • Get in Groups of 5 people • Chose a service that one of your cities does by staff. • Create a scenario for outsourcing that service • Present

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