Title
Recommendation to Award Two Separate Three Year Contracts with up to Two Optional Three Year Extensions to Kaiser Permanente Medical Center in an Amount Not to Exceed $200,000 for City of Alameda Occupational Medical Services and to Preferred Alliance, Inc., in an Amount Not to Exceed $30,000 for Drug Testing Services in Conjunction with Services Provided by Kaiser Permanente Medical Center (Total Expenditure of $230,000). (Human Resources 2510)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Recommendation to Award Two Separate Three Year Contracts with up to Two Optional Three Year Extensions to Kaiser Permanente Medical Center in an Amount Not to Exceed $200,000 for City of Alameda Occupational Medical Services and to Preferred Alliance, Inc., in an Amount Not to Exceed $30,000 for Drug Testing Services in Conjunction with Services Provided by Kaiser Permanente Medical Center (Total Expenditure of $230,000)
BACKGROUND
In July 2014, the Human Resources Department published a Request for Qualifications (RFQ) seeking letters of interest from potential Occupational Medical Providers for the City of Alameda. The City is currently using services provided by Concentra Medical Center which provides Workers’ Compensation medical services, fitness for duty exams, Department of Transportation (DOT) Drug and Alcohol testing, medical screenings for public safety officers, and other duties for which a City physician is required. The City had not gone out for an RFP or an RFQ for these services for more than ten years.
DISCUSSION
To solicit the maximum number of bids and most competitive price, the RFQ was provided to the Oakland Tribune, the San Francisco Chronicle, and the Alameda Journal. A notice for the RFQ was published in late July through mid-August 2014 and put on the City’s website for two weeks. Five providers submitted letters of interest. Four of these were invited to participate in a panel interview which was held on October 21, 2014 and October 22, 2014, see below:
|
Provider |
Location |
|
Occu-Med |
Fresno, CA |
|
Concentra |
Oakland, CA |
|
Kaiser Permanente Medical Center |
Walnut Creek, CA |
|
US Health Works Medical Group |
Valencia, CA |
The Selection Committee consisted of representatives from several Departments that continuously require services in Occupational Medicine.
The Selection Committee gave consideration to the consultant’s experience working as a full service provider in Occupational Medicine, in addition to its experience working with local municipalities that provide public safety services. Other items considered were the provider’s physical location, as well as the cost for services in comparison to market value rates. The same questions were asked of all providers and they were individually rated by each committee member. The questions included the following areas:
- Information provided in the RFQ
- Qualifications and experience as an occupational medical provider
- Cost of services
- Service availability
- Public sector experience
The selection committee unanimously selected Kaiser Permanente (Kaiser) as its top choice based on Kaiser’s experience with the public sector, particularly public safety; accessibility to all City employees with various location options; and cost effectiveness. In addition, the Committee was impressed with Kaiser’s ability to provide full service occupational medicine that includes pre-employment physicals, drug and alcohol testing, fitness for duty exams, and services related to supporting a workers compensation program.
Kaiser outsources its drug and alcohol testing services to a third party administrator, Preferred Alliance, Inc., which is a Workplace Compliance Drug Alcohol Testing Administrator. As a result, if the City awards the contract to Kaiser, the City is also required to separately contract with Preferred Alliance. This company has several years’ experience administering programs in compliance with DOT drug testing protocols. Preferred Alliance contracts with a licensed laboratory that meets the requirements for DOT regulations, and also contracts with a Medical Review Officer (MRO) that will work closely with the City in situations where a test result shows positive traces of drugs or alcohol.
The separate contract with Preferred Alliance will be for three years and will cover the testing for all of our DOT-regulated employees as well as the administration of the random or post-accident drug testing for our non-DOT regulated employees. The contract will also include the cost of training provided by Preferred Alliance, which includes training of the Designated Employer Representative (DER) and Department Supervisors who are required to conduct random or reasonable suspicious drug testing. Preferred Alliance also provides various live workshops and online trainings that will be accessible to the City.
FINANCIAL IMPACT
Existing vendor services are charged to Alameda Municipal Power and the Fire Department for services provided to those Departments. The Human Resources Department pays for services provided to all other City departments. Under the new contracts, the funds are budgeted in the respective Departments and charged to the professional services account. Contract extensions will continue to be funded through existing budgeting practices. The total contract amounts for the three year period are $200,000 to Kaiser Permanente Medical Center and $30,000 to Preferred Alliance, Inc. (for a total expenditure of $230,000); however, the actual amount expended will be determined by the number occurrences requiring service under the contracts.
The cost for services under the new contracts will remain in effect for the three-year period. If the City decides to exercise the optional two three-year extensions, the cost for future services may be escalated. In that case, Kaiser Permanente Medical Center and Preferred Alliance will provide a revised service fee schedule to the City in advance of contract extension, allowing Human Resources staff to evaluate costs for reasonableness and affordability.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(4) of the CEQA guidelines, because it involves governmental fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Award two separate three year contracts with up to two optional three year extensions to Kaiser Permanente Medical Center in an amount not to exceed $200,000 for City of Alameda Occupational Medical Services and to Preferred Alliance, Inc., in an amount not to exceed $30,000 for Drug Testing Services in conjunction with services provided by Kaiser Permanente Medical Center (total expenditure of $230,000).
Respectfully submitted,
Jill Kovacs, Human Resources Manager
By,
Monica Selles, Human Resource Analyst
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Contract with Kaiser Permanente
2. Contract with Preferred Alliance, Inc.