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CPY Document , BOARD OF CIVIL SERVICE CITY OF LOS ANGELES PERSONNEL DEPARTMENT COMMISSIONERS PERSONNEL BUILDING CALIFORNIA 700 EAST TEMPLE STREET Room 360, PERSONNEL BUILDING LOS ANGELES, CA 90012 KAREN CHAPPELLE Margaret M. Whelan PRESIDENT GENERAL MANAGER RICHARD P. DAVIS VICE PRESIDENT LAURAGENAO CONNIE J. FRIEDMAN TIMOTHY J. YOO JAMES K. HAHN MAYOR VICTORIA SCHOOLS COMMISSION EXECUTIVE ASSIST ANT March 10, 2005 The Honorable James K. Hahn Mayor, City of Los Angeles Room 303, City Hall Los Angeles, California 90012 Attention: June Lagmay PROPOSED CONTRACT EXTENSION FOR MERCER HUMAN RESOURCE CONSULTING The City's Joint Labor-Management Benefits Committee (JL-MBC) voted at its February 17, 2005 meeting to recommend to the Personnel Department General Manager that a transmittal be submitted to the City Council for the purpose of extending the current Employee Benefits Consultant and Communications Services Contract with Mercer Human Resource Consulting for eight months beyond the 5-year contract that expires on April 26, 2005. The Second Amendment to the Third Supplemental Agreement to City Contract No. C-1 00324 will extend the term of the Contract from April 27, 2005 through December 31, 2005. A Request for Proposal (RFP) for the provision of these services was released in October 2004, but the JL-MBC was not able to reach a consensus regarding the selection of a vendor for the next three-year period. At the referenced meeting, the JL-MBC voted that it was in the best interest of the City to cancel the RFP and develop/release a new RFP. The extension of the existing Mercer contract is essential to provide continuity of employee benefits consulting services during this period. Should you have any questions regarding this matter, please contact Maryanne T. Keehn, Director of Employee Benefits at 847-5878. ') ,/ . 1 MARGA ET M. WHELAN Gene~ Manager MMW:MTK:ejh Attachments AN EQUAL EMPLOYMENT OPPORTUNITY EMPLOYER WWW.LACITY.ORG/PER TO: DATE: FEBRUARY 25, 2005 HONORABLE JAMESK.HAHN,MAYOR THE HONORABLE MEMBERS OF CITY COUNCIL REFERENCE: C-100324 COUNCIL FILE: SUBJECT: CONTRACT WITH MERCER HUMAN RESOURCE CONSULTING RECOMMENDATION The Joint Labor-Management Benefits Committee (JL-MBC) recommends that the City Council authorize the General Manager of the Personnel Department to: 1. Extend Contract C-1 00324 with Mercer Human Resource Consulting (Mercer) for the period to cover April 27, 2005 through December 31, 2005. This represents an extension of the current contract by an additional eight months beyond the five-year maximum that expires on April26, 2005; 2. Increase the amount payable by $202,620 for a new total contract amount not to exceed $2,881,870. BACKGROUND The Personnel Department's Employee Benefits Division administers the Civilian Modified Flex-Benefits-by-Request (Flex) Program in conjunction with the Joint Labor­ Management Benefits Committee (JL-MBC). As the benefits consultant, Mercer, assists the JL-MBC as it addresses plan design, changes, funding and communication of the FLEX Program. The contractor has a strong knowledge of the internal processes and administration of the FLEX Program, the JL-MBC and the Employee Benefits Division of the Personnel Department. In addition, the consultant provides a broad base of technical expertise and support to continue to effectively meet the needs of the JL-MBC, the Employee Benefits Division and ultimately, the City's civilian employees. Some of the services that Mercer provides include the following: • Review and recommend on proposed modification of the design and rates for existing employee benefit options/plans; • Negotiation with employee benefit plan providers on plan design and rates; • Development of Requests for Proposal (RFP's) for employee benefit plans and evaluation of proposals submitted by bidders; • Evaluation and recommendation of state and federal legislation that may impact the City's FLEX program; • Creation and tracking of budget projections for the Employee Benefits Trust Fund; and • Development, design and production coordination of FLEX communication materials that include Open Enrollment communication. In early October 2004, staff of the Employee Benefits Division by request of the JL-MBC released a Request for Proposal for the services rendered under this contract. A mandatory bidders' conference was held in mid-October and staff provided background information to the seven bidders who attended the meeting. The Request for Proposal was sent to sixteen potential bidders, advertisements were placed in six local newspapers and an electronic version of the RFP was placed on the Personnel Department website. The submission deadline was Friday, December 3, 2004. The RFP generated responses from three bidders: • Mellon Human Resources & Investor Solutions ("Mellon") • Mercer Human Resource Consulting ("Mercer") • Deloitte Consulting LLP ("Deloitte") It is the City's contracting policy that Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs) and all Other Business Enterprises (OBEs) are provided an equal opportunity to participate in the performance of City contracts greater than $100,000. Each proposer is required to make a Good Faith Effort to reach out to MBEs, WBEs, and OBEs. Failure to include supporting documentation of a Good Faith Effort and failure to achieve a minimum of 75 out of 100 Good Faith Effort evaluation points renders the affected bid non-responsive and results in its rejection. Based upon an evaluation by the Administrative Services Division of the Personnel Department and a second review by the City Administrative Office, Mellon was the only bidder to receive the sufficient number of Good Faith Effort evaluation points, and therefore, the only bidder determined to be responsive. Staff presented a summary of its findings at the January 2005 JL-MBC Meeting. The body requested that additional information be obtained and invited Mellon to its February 2005 Meeting. A consensus was not reach by the Committee at that meeting. A special meeting was held on February 17, 2005, at that meeting, the JL-MBC voted that it was in the best interest of the City to cancel the RFP, and develop and release an RFP. The extension of the existing Mercer contract is essential to provide continuity of employee benefits consulting services during this period. FISCAL IMPACT There is no fiscal impact to the General Fund. The contractor is paid from the Employee Benefits Trust Fund and has agreed not to increase consulting fees. The amount that the City will pay to Mercer during this extended period will not exceed $202,620. The City's total obligation under this contract shall not exceed $2,881,870 for the entire 5-year, 8- month period. .
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