the new norm: contracting and outsourcing 2013 massachusetts parks and recreation annual conference...
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The New Norm: Contracting and Outsourcing
2013 Massachusetts Parks and Recreation Annual Conference
Hyannis, MA
Chris Nunes, CPREDirector of Parks and RecreationThe Woodlands Township
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
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
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.”
Background InformationEmployee Contractor
Pro’s Dedicated LoyaltyMultiple RolesImproved Work Flow
Reduced OverheadNo Health BenefitsWork On DemandHighly Specialized Staff
Con’s BenefitsProfessional developmentOverhead Administrative / Personnel Issues
Lack of ControlNo Fixed Rates Lack of Loyalty“Apples to Apples”
Background Information
• 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?
Types of services that can be contracted
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
Benefits of Contracting
• Is it more economical to contract out?– Price Differential-
Self Bid– Staffing Limitations – Service Trade-Offs– Capital Investment – Technical Expertise
Benefits of ContractingSelf Bid- JanitorialStaffing Costs
Days Service Is Needed 365Parks with restrooms 20Minutes per restroom 13Travel time per park 5Open/ Close 2Total Minutes 189895Total Work Hours 3164.9167Staff Cost-$17 with benefits 53803.583
Truck CostMiles Per Day 100Miles Per Gallon 17Per Gallon 2Days Per Year 365Truck Cost Operation 4294.1176Insurance 300Oil Change-$25 per 4000 miles 225Truck Capital Cost 6666.6667
3 Years/ $20000Total Self Bid $65,289Actual Bid $55,000
Benefits of Contracting
• Self-Bid Weekend Trash
Key Point- Staff on weekends are able to handle additional duties required-fix toilet, graffiti, etc
Weekend Trash
# of Parks Cost per day
In House 27 $500
Contract 13 Sat- $1000Sun- $1200
Benefits of Contracting• Staffing limitations
– Inability to hire staff– Time constraints – Work load balance – Length of time of project
0
50
100
150
200
250
Need vs Capacity
Need
Capacity
Benefits of ContractingCapital Investment• How often do you use?
•Floor Scrubber/Polisher•Laundry Equipment•Food Service Equipment
•Paint Sprayer•Aerial Lift•Aerator
0
50
100
150
200
250
Ho
urs
Month
Floor Scrubber Need vs Capacity
Aereation Need
Capacity
Benefits of Contracting• Does your organization have the following
expertise?•Sponsorships•Media Relations•Legal•Specialty Programming•Landscape •Pool Operations•HVAC•Chemicals•Concessions•Planning
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
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
Keys to a Quality Bid Process
• Development of Specifications-Two Methods– Outcomes/Performance Based
Keys to a Quality Bid Process
• Specifications:– Industry
Standards– Best Practices– User Needs– Community
Needs– How would you
do the job?– What else????
Keys to a Quality Bid Process
• How would you do the job?
Painting the Gym
Paint Type
Paint Qualit
y
Surface Prep
Clean Up
Primer
Keys to a Quality Bid Process• Standards and Specifications-Christmas
Tree Lights
Providing information on the maintenance needs of the project
Providing specifications on the type of lights, color, etc.
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
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
Keys to a Quality Bid Process• Vendor Qualifications:
– Financial– Bonding– Past law suites– Number of contracts– Expiration of current contracts– Bank information
Keys to a Quality Bid Process
• Pre-Bid Meeting• Bid Time Period• Bonds• Timeline• Conditioning
Period
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
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
Managing the Contract • Contract Compliance
– Dedicated employee to manage the contract (Cost!!!!)
– Monitoring tools– Status meetings – Reporting systems – Develop and
maintain the relationship
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.
Thank you!!!!!
• For further questions or comments
Chris Nunes, Ph.D., CPRE,Director of Parks and RecreationThe Woodlands Township281-210-3906cnunes@thewoodlandstownship-tx.gov
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