DATE: JANUARY 24,2008 REAL ESTATE DIVISION

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1 Executive Director's Report to the Board of Harbor Commissioners DATE: JANUARY 24,2008 FROM: REAL ESTATE DIVISION SUMMARY: The proposed Agreement with Meridian Management Corporation (Meridian) provides for building operating engineering services for the Harbor Administration Building (HAB); the Liberty Hill Plaza Building (LHP); the Port of Los Angeles High School (POLAHS), located in San Pedro; and the Federal Customs Service Laboratory (Customs Service Lab), located on Terminal Island. The agreement also establishes services for regularly scheduled window cleaning, carpet cleaning, plant care services, and pest control treatment services. The agreement will allow the City of Los Angeles Harbor Department (Port) to add or delete facilities and/or services, as needed, and upon written approval by the Executive Director. The contract total for this agreement shall not exceed $2,256,408 for the three-year term. The regional office for Meridian is located in Santa Ana, CA. Corporate headquarters is located in Florida. RECOMMENDATION: It is recommended that the Board of Harbor Commissioners (Board): 1. Adopt the Order approving the Agreement with Meridian Management Corporation (Meridian); 2. Authorize the Executive Director to execute and the Board Secretary to attest to the proposed Agreement with Meridian for building operating engineering services for a period of three years, commencing upon execution by the Executive Director, for a notto-exceed amount of $2,256,408; and 3. Find that, in accordance with Charter Section 1022, it is more feasible and economical for services to be provided by an independent contractor than by City employees.

2 DATE: JANUARY 24,2008 PAGE 2 OF 5 CITY OF LOS ANGELES HARBOR DEPARTMENT AND NIERIDIAN DISCUSSION: 1. Building operating engineering services for HAB, LHP, POLAHS and the Customs Lab consist of overseeing day-to-day building systems operations, providing ongoing maintenance, repair and upkeep of all mechanical systems in the buildings which includes, but is not limited to, heating, ventilation, air conditioning, electrical, and plumbing. 2. In anticipation of the' upcoming expiration of the building maintenance contract at the Port-owned Customs Lab in 2006, the Real Estate Division explored the use of a civil service employee to perform these types of services. Through this process, which involved creating the required position and interviewing from a list of qualified civil service candidates, it was determined that the pool of candidates was not plentiful enough to guarantee consistent coverage required to properly manage a modem office building or lab facility. We made the decision at that time to extend the existing customs lab building engineer contract and to begin outreach through an external Request for Proposals (RFP) process for a new building engineer to maintain various Port-owned buildings. This contract also offers the added benefit of providing services for regularly scheduled window cleaning, carpet cleaning, plant care services, and pest control treatment services that could not be provided by City staff. 3. The RFP was advertised in newspapers by the Metropolitan News Company and on the Port's website on October 18, The Contracts and Purchasing Division also posted the RFP on the City's Los Angeles Business Virtual Network (LABVN). 4. A mandatory pre-proposal conference and walk-through was conducted on October 31, The conference was attended by facility service firms and local small businesses seeking an opportunity to promote their specific services to the primary proposers. Listed below are the prime proposers in attendance: Able Engineering Services ABM Engineering Services DMS Facility Services : L3 Builders, Inc. Linc Facility Services Meridian Management Corporation Powercon Facility Services a U.S. Metro Group, Inc.

3 DATE: JANUARY 24,2008 PAGE 3 OF 5 5. The selection committee consisted of representatives from Real Estate, Construction and Maintenance, and Engineering. The evaluation criteria was based on: Amount and level of work to be provided and compensation for services. Quality and level of services to be performed. Prior experience and references. Experience and qualification of staff assigned to the facilities. Ability to provide additional services. 6. Proposals were received from Meridian (Florida), Linc (Irvine, CA), DMS Facility Services (Monrovia, CA), and U.S. Metro Group (Los Angeles, CA). Meridian and Linc submitted the most comprehensive proposals and were short-listed for interviews. Meridian was selected primarily because of the depth of staff experience; positive feedback from references, and cost savings of approximately $100,000 per year. Meridian has extensive experience in this business and the types of facilities they currently service are comparable to the Port's facilities. Meridian has provided ongoing operating engineering services to the Customs Lab since their initial contract with General Services Administration. Meridian employs the existing onsite engineer, to the satisfaction of both the Customs Lab staff and the Port. Meridian also has qualified engineers who are available to provide assistance and relief to the onsite engineers. 7. Meridian will assign one operating engineer at HAB and one operating engineer at the Customs Lab during business hours, with on-call and emergency response and relief during absences. A general maintenance worker will provide assistance to the engineers. A Chief Operating Engineer will be assigned off-site to coordinate and provide oversight of Engineer's performances. Engineers assigned to this project will be crossed-trained to provide efficient operating services to all facilities. All Building Owners Management Association (BOMA) certified engineers assigned to the facilities are also certified in the proper handling, recovery, or recycling of CFC and HCFC refrigerant. 8. The Small Business Development level in the RFP was set at lo%, based on input received from the pool of proposers during the pre-bid meeting. Meridian has committed to an SBE level of 12.49'0, which includes sub-contracting opportunities for window cleaning and electrical testing. Meridian proposes 13.8% of sub-contracting opportunities to MBE and WBE businesses that will provide services such as carpet cleaning, plant care, and heating and cooling services. The remainder of the contract will be spent on building engineering labor costs and pest control services.

4 DATE: JANUARY 24,2008 PAGE 4 OF 5 CITY OF LOS ANGELES HARBOR DEPARTMENT AND NIERIDIAN ENVIRONMENTAL ASSESSMENT: The Director of Environmental has determined that the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with Article 11, Section 2(f) of the Los Angeles City CEQA Guidelines. FINANCIAL IMPACT: Approval of the proposed three-year Agreement with Meridian would commit the total not-toexceed amount of $2,256,408 for building operating engineering services for the HAB, LHP, POLAHS, and the Customs Service Lab. It is expected that funds will be expended as follows: Fiscal Year Building Total Harbor Admin. Bldg (1) $147,208 $356,633 $366,654 $218,254 $1,088,749 Liberty Hill Plaza (1) 13,469 31,700 31,367 18,740 95,276 POLA High School (2) 18,042 43,927 45,679 27, ,009 US Customs Lab (3) 66, , ,280 98, ,640 Reimbursables (4) 33,333 80,000 80,000 46, ,000 Other (5) 28,198 67,906 68,480 40, ,734 Total 306, , , ,394 2,256,408 (1) lncludes engineering, maintenance, window and carpet cleaning, plant care, and pest control services (2) lncludes outer perimeter and AIC maintenance services only (3) lncludes engineering, maintenance, window and carpet cleaning, and pest control services (4) Consists of parts, materials, etc. (5) lncludes window and carpet cleaning, plant care, and pest control services at various port facilities Funds have been budgeted in Center 0424, Real Estate, Program 000, Account 54010, to cover the anticipated expenditure for FY ' Funds for future fiscal years will be requested as part of the annual budget process. CITY ATTORNEY: The proposed Board Order and Agreement have been approved as to form by the Office of the City Attorney.

5 DATE: JANUARY 24,2008 PAGE 5 OF 5 ECONOMIC DEVELOPMENT: Under this agreement, the number of engineers will increase from two (2) to four (4). TRANSMITTALS: 1. Order 2. Agreement 3. Contract Breakdown Spreadsheet 4. Selection Process Information Sheet MICHAEL J.~ALVIN I1 Director of Real Estate ~ T H R YMCDERMOTT I ~ Deputy Executive Director,'. PPROVED: *& Executive Director MJG:JR:raw BL246raw ADP # I 54