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F I L E D -OFFICE O K T HE ClTT ClEM*O A K L A N DCITY OF O AKLAND 20I2SEP13 PM 2: 32 GEND REPORT

T O : D E A N N AJ.S A N TA N A F R O M : Vitaly B .Troyan. P.EC I T Y A D M I N I S T R A T O RS U B J E C T : Zero Waste Technical Assistance Contract D A T E : August 31, 2012Amendment

C O U N C I L D I S T R I C T : Citv-WideRE COM M E NDAT IONStaffrecommends thatthe City Counciladopta Resolution authorizing the CityAdministrator toamend anagreementwithR3Consulting Group (R3) to provide zerowastesystem technicalassistanceservices increasing theamountnot to exceed by six hundred thousand dollars($600,000.00) for a total contractamountnot to exceed one millionone hundred thousand dollars($1,100,000.00) andwaivingthe advertising and competitiverequestfor proposal/qualificationrequirements.Maintainingthe integrity ofthe work and the confidentiality of theprocessto successfullycomplete the Zero Waste Services Request for Proposals(RFP)processnecessitatescontinuingthe work withR 3. Section2.04.051B of the OaklandM unicipalCode permits the CityC ouncilto waive the competitive selectionprocessrequirement ifitfindsthatit is in thebestirilerest ofthe City.OUT COM EApproval ofthe resolutionw i llprovide continued specialized, technical consulting services fromR3Consulting Group, which areneededto:

Ensure completiono fthe Zero Waste ServicesR F Pproposal evaluationprocessin athorough and timelymanner,and at the level ofanalyticaldetailneededfor optimalselectionAccomplishnegotiations with top-ranked proposers, and approval and execution of newservice contracts, sothatnewcontractsand services are in place when current serviceagreementsend inJune2015

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DeannaJ.Santana,CityAdministratorSubject:ZeroWasteTechnicalAssistance ContractDate:August31,2012 Page 2

Maintainthe continuity and integrity ofworkon the R F Pprocurement, and theconfidentialityof the process

BACKGROUND/LE GISLAT IV EHISTORYIn2009 the City Councilapproved a four-yearProfessionalServices Agreement (Agreement) forzerowastesystem technicalassistancewithR 3,in an amount not to exceedthreehundredthousand dollars ($300,000.00). The Agreement was awarded through theCity'scompetitiverequestforproposals process, to provide technicalassistanceand subjectmatterexpertisesupporting staffindesigning a new Zero Waste system and procuring newwastereduction andrecyclingservices. In February 2012 City Councilapproved anamendmentto the R3Agreement, increasing the Agreement's not to exceed amount by two hundred thousand dollars($200,000.00), for a total amount not to exceedfivehundred thousand dollars ($500,000.00), andextending the termofthe Agreement by twoyearsto September 1, 2015.Whenthe Agreement was amended in February 2012,staffdidnot anticipate the fullscope andcomplexityof the issues raised duringCity Council R F Ppolicydeliberations, nor thecorresponding consultant technicalassistancethatwouldbe required to supportstaffresponsetoCouncildiscussion, and to incorporateCityCouncil'spolicydirection intoR F Pand contractdocuments. Additionally,thefinal R F Pand contract provisions incorporatingpolicydirectionswere customized to thoroughly and accuratelyrepresenttheCity'sspecific policiesin aprocurement projectthatis uncharted territory for the City. TheR F Pand contractprovisionsaremore complex than initiallyexpected. This alsocreatesagreaterneedfortechnicalassistancetoconduct the proposal evaluation process andfinalizerecommendations forCouncilconsiderationinSpring2013. Finally,staffnowexpects to need additional consultant technicalassistancetosupport City Councilauthorization of top-ranked proposals, contract negotiationswithtop-ranked proposers, andCityC ouncil finalapproval ofthreenew service contracts.ANALYSISSincethe Agreement was amended in February 2012, R3 has completed research and technicalassistanceformultipleissues raised duringCity Council R F Ppolicydeliberationsincludingeconomic benefits,lienoptions for delinquent billpayment, andrecyclingoptions. R3 produceda.fullR F Ppackagethatincludesfivesignificantdocuments: twoR F P sandthreedraft contracts.TheR F P sinclude instructionsforproposers, demographic and existing service account data,evaluationcriteria,evaluation process description, and cost formsforproposers to complete.Thethreecomplete service contracts incorporate performance metrics, servicespecifications,andcontractmanagementadvancements and innovations. Incompletingthe R F Pand contractdocuments, R3 workedclosely withstaff,Officeof the CityAttomey,and theCity'soutsidecounsel to incorporate City Councilpolicydecisions, recommendations developed by

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DeannaJ.Santana,CityAdministratorSubject:ZeroWasteTechnicalAssistance ContractDate:August31, 2012 Pa e 3

Stop Waste. Org's Franchise TaskForce,the latest contractingtermsand standards, and lessonslearned in Oakland and otherjurisdictions.

However,the scope andcomplexityoftechnical assistancethatwas required to support staffresponse toCity Council RFP policydeliberations and decisions, and to developR FPandcontract documents incorporatingthosepolicydecisions, exceeded initialstaffexpectations forthe current Agreement. Therefore, a second amendment to the R3Agreement, increasing the notto exceed amount byfivehundred thousand dollars ($500,000.00),witha one hundred thousanddollar($100,000.00) contingency, is necessary to maintain R3'sspecializedand technicalconsultingservices to complete the entire R FP procurement process forestablishing newcontracts before current serviceagreementsend in June 2015. Under this six hundred thousanddollar($600,000.00) increase, the amended Agreement amount not to exceedwouldbe onemillionone hundred thousand dollars ($1,100,000.00)

Underthe proposed amended Agreement, R3's focus and majority ofwork wil lbe dedicated topreparingR FP addenda and conducting detailed technical andfinancialreview,analysis, andevaluationof submitted proposals. R3 alsow i llsupport staffs presentation of top-rankedproposals toCity C ouncil,staffresponsesto any questions or issues raised duringCity Councilauthorizationoftop-ranked proposers, and adjudication ofany protestsfiledby proposers.Finally, R3 willassistwithcontract negotiations andfinalizingand executing contractdocuments,includingsupportingstaffresponse to any questions or issues raised duringCityCouncil finalapproval ofnew contracts.R3's RFP evaluation workw i llinclude analysisthatidentifiesthe optimal combination of wastereduction performance and ratepayervalue. The analysisw i llconsolidatepricing fromthreeseparateproposals into one set of customerrates,and evaluate service alternatives and costsreceived inresponse to the options required in the RFP. These options includecallcenterlocation, lienprocess for delinquent billpayment, andmulti-family dwellingorganicscollection.R3's RFP evaluation workw i llinclude:

Evaluatingfinancialviab ilitymetrics pertaining to proposers and any partner entities, andto the operational andfiscalelements of proposals

Assessingoperational proposals,includingprocessingfacilitytonnagethroughput andvehicleroutingefficiencies,andverifyingrepresentations made in proposals throughfacilityvisitstoconfirmoperational capabilities

Evaluatingyear-by-year available permitted landfilldisposal capacity, andconfirmingtechnical andfiduciaryadequacy oflandfillpermitting compliance and closure/post-closure maintenance

Finally,withassistance of theOfficeoftheCityAttorney and theCity'soutside counsel, R3w illassistwithcontract negotiations andfinalizeservice contracts, transition plans, and exhibits

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DeannaJ .Santana,CityAdministratorSubject: Zero WasteTechnicalAssistance ContractDate:August31,2012 Page 4

based on the results of negotiationswiththe selected proposers and any service options selectedduringthe evaluation and award process.Staff have conferredwithprofessional colleagues in other BayAreajurisdictionsthathaveimplementedsimilarprojectscombiningmajorsolidwaste system redesign and an associatedR F P process,includingthe C i t yofSan Jose and the South Bayside Waste ManagementAuthorityin San Mateo County. Thesejurisdictionshave incurred consultant costs similarto therangethe C i t ywouldexpendwiththis contract amendment.Since2009 the C i t yand R3 have investedsignificanteffort in developing ahigh-functioningworkingrelationship, strong command ofcomplexissues, and adeepleveloftrustandconfidencenecessary to complete the R F P processsuccessfully. R3's work under the amendedAgreementwouldprovidecriticalsupport for completing the R F P process,includingtheevaluation ofproposals and completion of contract documents.Maintainingthe integrity of the work and theconfidentialityof the process tosuccessfullycomplete the R F P processnecessitatescontinuing the workwith R 3. Section 2.04.051 B of theOakland M u n i c i p a lCode permits the C i t y C o u n c i lto waive the advertising and competitiveR F Q / R F Pselection requirement if it findsthatit is in thebestinterest of the C i t y .AmendingR 3 ' s existing contract requireswaivingthe advertising and competitive selection requirement.Duringthe implementationphasefor the new contracts, the C i t y w i l lmost l ikelyneed additionalconsultingservices. These services w i l lbe selected through theCity'srequestfor proposalsprocess.PUBLIC O U T R E A C H / I N T E R E S TThisitem did not require any additional public outreach other than the required posting on theCity'swebsite.COORDINATIONPublicWorks staff has coordinatedwiththeOfficeof the C i t yAttomey,and the D i v i s i o nofContractCompliancefor this report.C O S T SUMMARY/IMPLICATIONSTh e amended Agreementwouldincrease the not to exceed amount by six hundred thousanddollars($600,000.00). Funding is availablewithin RecyclingPrograrii Fund(1710).

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Deanna J. Santana, CityAdministratorSubject: Zero WasteTechnicalAssistance ContractDate: August31,2012 Page 5

PAST P E R F O R M A N C E E V A L U A T I O N ANDF O L L O W - U PR 3 is one of the top firms in thestateassisting cities withR F P procurements forrecycling,composting, and disposal services. During thepastfiveyears, R3 has assisted over 60Californiacities withR F P s. R3's performanceto-dateunder the Agreement has met or exceeded staffexpectations, and the R3team'sexpertise and experience has beencriticalin helping the C i t ydesign a new system and develop R F P and contract documents.SUSTAINABLE OPPORTUNITIESEconomic: Expanding and actively supporting use of discarded materials drives localeconomicand workforce development with 'green collar'jobs and value added production.Environmental: Waste reduction and recycling conserves natural resources, reducesair andwaterpollution,protectshabitat, andreduces greenhousegas ( G H G ) emissions.S o c i a lEquity: The Zero Waste Systemw i l lhelp provide newliving-wagejobs for thecommunity.

For questions regarding this report, pleasecontact Susan Kattchee, Environmental ServicesManager, 510-238-6382.

Respectfullysubmitted.

V I T A L Y B.T R O Y A N ,P.E.Director, Public Works AgencyReviewedby:BrookeA .Levin,Assistant DirectorReviewedby:Susan Kattchee, Environmental Services ManagerReviewedby:BeckyDowdakin,RecyclingProgram SupervisorPrepared by:Mark Gagllardi,SeniorRecyclingSpecialistEnvironmental ServicesDivision Item:

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CITY COUNCILRESOLUTIONNO C M S

RESOLUTIONAUTHO RIZING T HECITY ADMINISTRATOR TO AMENDAN AGRE E M E NT WITHR3CONSULTINGGROUP TO PROVIDE ZEROWASTE SYSTEM TECHNICALASSISTANCESERVICESINCREASINGTH E AMOUNT NOT TOE XCE E D BY SIXHUNDRED THOUSANDDOLLARS(5600,000.00)FOR AT O T A L CONTRACT AMOUNT NO TTOE XCE E D ONE MILLION ONE HUNDRED THOUSAND DOLLARS( 1,100,000.00)AND WAIVINGT H E ADVERTISING AND COMPETITIVEREQUEST FOR PROPOSAL/QUALIFICATION REQUIREMENTS

W H E R E A S ,the Cityof Oakland's Franchise Agreement forSolidWaste and YardWasteCollectionandDisposalServicesw ithWaste Management ofAlameda County,and theAgreement forResidential RecyclingServicew ith CaliforniaWaste Solutions expire onJune30,2015;andW H E R E A S ,inJune2012CityCouncilprovidedfinal policydirections regarding a Request forProposals(RFP) process forprocurement ofnew recycling,composting, and disposal services tobecomeeffectiveJuly 1, 2015;W H E R E A S ,in 2009 throughResolutionN o. 82175C . M . S .the City Councilapproved anAgreementwith R3ConsultingGroup to provide Zero Waste system technicalassistanceconsultingservices fora four-year term ending September 1, 2013, in an amount not to exceedthreehundred thousand dollars ($300,000.00); andW H E R E A S ,in February 2012 throughResolutionN o. 83698C . M . S .the City Councilapprovedanamendmentto the Agreementw ithR3Consulting Group,increasing the Agreement's not toexceed amount by two hundred thousand dollars ($200,000.00), fora total amount not to exceedfivehundred thousand dollars ($500,000.00), and extending the term ofthe Agreement by twoyearsto September 1, 2015; andW H E R E A S , R3ConsultingGroup is uniquelyqualifiedto provide specialized and technicalconsultingservices to complete the R FPprocurement process,includingthe evaluation ofproposals and completion of contract documents, and to maintain the integrity of the work andtheconfidentialityofthe process; andW H E R E A S , Section 2.04.040 B 5 and 2.04.051 A ,respectivelyofthe OaklandM unicipalCode(the O M C )require the Cityto conduct aformaladvertising and competitive Request ForQualifications/Proposals ( R FQ/ R FP )selection process forprofessionalservicesagreementsover $25,000.00; andW H E R E A S , Section 2.04.051 B of the O M Cauthorizes the City Councilto waive theadvertising and competitiveR F Q / R F Pselection requirement if itfindsthatitis in theC ity 'sbestintereststo do so: and

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W H E R E A S , staffrecommendsthatthe City Councilwaive the advertising and competitiveR F Q / R F Pselection requirement in order to amend the Agreementwith R3ConsultingGroup forspecializedand technical consulting serviceswhichis necessar\' to avoid project disruption anddelay, andensurethorough and timely completion of the R F Pprocurement process at thelevelofanalyticaldetail needed, sothatnew contracts and services are in place when current ser\'iceagreementsend in June 2015; andW H E R E A S , the City Councilfindsthatthe services provided pursuant to theagreementauthorized hereunder are ofaprofessional,scientificor technicalnatureand are temporar)' innature; andW H E R E A S , theCity Councilfindsthatthis contractshallnot resuh in the loss of employmentorsalary by any person having permanent statusin the competitive service; now therefore be itR E S O L V E D : pursuant toO M CSection 2.04.051 B ,the City Council herebyfindsanddeterminesthatit is in thebestinterests of the Cityto waive the advertising and competitiveR F Q / R F Pselection requirement of the O M Cbased on thereasonsset forth in thisResolutionandthe Report accompanying thisResolution;and be itF U R T H E R R E S O L V E D :That the CityAdministratoris hereby authorized to amend theAgreementwithR 3ConsultingGroup to provide Zero Waste SystemTechnicalAssistanceconsultingser\acesto increase the Agreement's not to exceed amount bysixhundred thousanddollars ($600,000.00), for a total amount not to exceed onem illionone hundred thousand dollars($1,100,000.00); and be itF U R T H E R R E S O L V E D : That the additional six hundred thousand dollars ($600,000.00)expenditure under the AgreementwithR 3ConsultingGroupwil lbe funded byRecyclingProgram Fund (1710); and be itF U R T H E R R E S O L V E D : That the CityAdministratoror his/her designee is hereby authorizedand empowered to approve anysubsequentamendments to or extensions ofsaidagreementwiththe exceptionofthoserelated to an increase in total compensation or theallocationofadditionalfunds, providedthatsuch amendments or extensions shall be reviewed by the CityAttorney andfiledwiththe CityClerk's Office;and be itF U R T H E R R E S O L V E D : That a copy of theagreementwil lbe onfilein the CityClerk'sOfficeandwil lbe approved by the Officeof the CityAttomey.

IN C O U N C I L , O A K L A N D , C A L I F O R N I A , 20PASSED BY THE FOLLOWINGVOTEA Y E S- B R O O K S , B R U N N E R , D E LAF U E N T E . K A P L A N , K E R N I G H A N , N A D E L , S C H A A F and P R E S I D E N TREIDN O E S-A B S E N T-A B S T E N T I O N -

A T T E S T : LaTonda S immonsCity Clerk and Clerkofthe Co uncilof the City of O akland, California