REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
June 22, 2021
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department-Facilities Management
SUBJECT
Title
Contract with Bernel Inc., dba VFS Fire & Security Services for Fire-Life Safety Systems Maintenance and Repair
End
RECOMMENDATION(S)
Recommendation
Approve a five-year contract with Bernel Inc., dba VFS Fire & Security Services in an amount not to exceed $2,138,650, including a base amount of $1,388,650 (monitoring, testing and maintenance), and a not to exceed amount of $750,000 (unforeseen repairs), for the period of July 1, 2021 through June 30, 2026, to provide monitoring, system testing and maintenance, and repair services for the fire-life safety systems at 66 County-owned locations.
(Presenter: Terry W. Thompson, Director, 387-5000)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote the Countywide Vision.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of the contract for the County-owned buildings will not require additional Discretionary General Funding (Net County Cost). The total cost of this five-year contract with Bernel Inc., dba VFS Fire & Security Services (VFS) is $2,138,650, including a base amount of $1,388,650 for monitoring, system testing and maintenance, and a not to exceed amount of $750,000 for unforeseen repairs. The total cost in 2021-22 is $277,730. Payments for the contract will be made from the Real Estate Services Department - Facilities Management (RESD-FM) budget (7302001000). Sufficient appropriation is included in the 2021-22 RESD-FM budget and adequate appropriation will be included in future recommended budgets. The annual contract costs are as follows:
|
Year |
Annual Cost |
|
July 1, 2021 - June 30, 2022 |
$277,730 |
|
July 1, 2022 - June 30, 2023 |
$277,730 |
|
July 1, 2023 - June 30, 2024 |
$277,730 |
|
July 1, 2024 - June 30, 2025 |
$277,730 |
|
July 1, 2025 - June 30, 2026 |
$277,730 |
|
Not-to-Exceed amount |
$750,000 |
|
Total Cost: |
$2,138,650 |
Costs for fire-life safety systems and equipment are included in maintenance charges reimbursed by County department occupants based on an average cost per square foot or billed as requisition work to County departments for facilities not charged a per square foot cost for maintenance.
BACKGROUND INFORMATION
The recommended action will provide for the monitoring, system testing and maintenance, and repairs for fire-life safety systems at 66 County-owned buildings. These are critically important services required by the County. It should be noted that in order to engage these services, the County will need to make significant concessions in the contract. In particular, the contract will have a limited indemnity clause (in favor of the County), and the County must agree to an Exculpatory Clause and a Limitation of Liability. Such provisions are an industry standard for companies providing fire life safety services. These companies provide services at a fairly low cost per building and are unwilling to be exposed to liability as a general principle and for insurance reasons. The contract as a whole has been negotiated to provide as much protection as possible for the County while still allowing it to obtain these critically important services. With regard to fire alarm equipment or related services, the County will be relying principally on its own insurance coverage for protection.
Nonstandard provisions included in the contract and the potential impact of each include the following:
§ Subcontracting: VFS may freely subcontract any services provided for under the contract and shall not be liable for any loss or damage sustained by the County and caused by the negligence of the subcontractor. Any disclaimer of warranties, limitation of liability etc., shall also benefit any subcontractor.
- Potential Impact: Standard County policy provides contractors must obtain the County’s written approval prior to entering into any subcontract, and the approved subcontractors shall be subject to the same terms and conditions. In this contract, the County does not have the right to pre-approve subcontractors; however, it retains its right to terminate with 30 days’ notice.
§ Indemnity: The contract contains a modified indemnity provision. VFS is required to indemnify the County from any and all claims, losses, etc., resulting from VFS’s negligent acts or omissions. VFS’s indemnity obligation applies only to personal and/or property damage caused by the negligence of VFS or its employees while working on County property, and is limited to the extent of the VFS’s insurance. VFS has agreed to comply with the County’s standard insurance requirements. Damage caused by the failure of the alarm equipment or alarm services is specifically excluded from VFS’s indemnity obligation.
- Potential Impact: Standard County policy requires contractors to indemnify the County for claims, losses etc., arising out of the contract from any cause whatsoever, excluding the County’s sole negligence or willful misconduct. Per County Policy 11-07, changes to indemnity language must be in a form approved by County Counsel and the County Risk Manager. Companies providing alarm services, including monitoring and testing, accept very little liability for reasons previously stated in paragraph one of this Background Information section. This is an industry standard. Indemnity has been negotiated to provide as much protection as possible for the County.
§ Insurance: VFS has agreed to comply with the County’s standard insurance requirements; however, there are limitations regarding applicability. VFS’s insurance would be available for claims relating to personal or property damage caused by the negligence of VFS while working on County property. With regard to fire alarm equipment and related services, VFS requires County to waive its right of subrogation against VFS and/or its subcontractors, and to look to its own insurance only for damages arising from failure of the fire alarm equipment, system or related services.
- Potential Impact: Standard County policy requires contractors to comply with its standard insurance requirements. With regard to this contract, VFS agrees to do so; however, it limits the application of its insurance, depending on the nature of services and damages at issue, as previously stated. For any claims or damages resulting from failure of fire alarm equipment, system or related services, the County will need to look to its own insurance.
§ Equipment Limited Warranty: VFS has agreed to provide a one year warranty; however, that warranty is limited to repair or replacement of defective equipment. The warranty excludes loss caused by electrical, plumbing or construction activities, electrical surge and misuse. VFS otherwise makes no warranties, including those related to merchantability and fitness for a particular purposes, and is not the manufacturer of the equipment. VFS will not be responsible for consequential damages resulting from equipment failure.
- Potential Impact: Standard County policy requires contractors to fully warrant its services and products. The warranty negotiated for this contract is more limited; however, it is industry standard, given the services provided, for the reasons stated above in paragraph one of this Background Information section.
§ Exculpatory Clause: VFS declares it is not an insurer, and its services are designed to reduce risks of loss, but not guarantee against loss. VFS therefore disclaims all liability resulting from equipment failure, human error, fire, smoke, water or any other cause. The exculpatory clause does not apply to VFS’s sole negligence or willful misconduct. As previously stated, VFS remains liable for personal or property damage caused by the negligence of VFS while working on County property, to the extent of its insurance.
- Potential Impact: Exculpatory provisions are not standard to County contracts; however, they are legally enforceable if not unconscionable. This provision is industry standard in regards to fire alarm equipment and services, including monitoring and testing, for the reasons stated above in paragraph one of this Background Information section.
§ Limitation of Liability: If any liability arises on the part of VFS, as a result of its negligent performance or negligent failure to perform, VFS’s liability shall be limited to $150,000, excluding VFS’s indemnity obligations, gross negligence, willful misconduct and violations of law. This limitation also does not apply to VFS’s liability for personal or property damage caused by the negligence of VFS while working on County property.
- Potential Impact: Standard County policy provides a contractor may not limit its liability in performance of the contract; however, with approval of Risk Management and County Counsel, this contract allows for a limitation of liability appropriate for the services provided and excluding the contractor’s indemnification obligations, gross negligence, willful misconduct and violations of law. With regard to this contract, the amount of the limitation is in compliance with industry standard, and exclusions required by County policy have been included.
RESD-FM is operating in a fiscally responsible manner by maintaining the efficiency of fire-life systems in County-owned buildings.
PROCUREMENT
In January 2021, RESD-FM issued a Request for Proposal (RFP No. FMD121-FM-4051) for Fire-Life Safety System monitoring, testing, maintenance and repair services, which was posted on the San Bernardino County Electronic Procurement Network. Mandatory job walks were completed on January 26, 2021 and February 2, 2021. Three contractors attended the job walks and RESD-FM subsequently received two proposals.
An evaluation committee composed of three staff from RESD-FM reviewed the proposals received. The proposals were evaluated based upon cost, technical proficiency and references. VFS rated the highest in technical proficiency, system testing, and was the one of the lowest for cost for service and their labor rate was the lowest for service and repairs.
After a thorough review, the evaluation committee recommends a contract be awarded to Bernel Inc., dba VFS Fire & Security Services as the most responsive to provide fire-life safety system services based on the best value and service to the County, while the County continues to evaluate the most effective way to provide centralized monitoring services. The County may terminate this agreement in whole or in part upon thirty calendar days written notice.
County Policy No. 11-04 requires the Board of Supervisors approval of contracts for services exceeding $200,000 and for services obtained without a competitive process.
REVIEW BY OTHERS
This item has been reviewed by County Council (Scott Runyan, Supervising Deputy County Counsel, 387-5437) on June 15, 2021; Purchasing Department (Bruce Cole, Lead Buyer, 387-2148) on May 26, 2021; Finance (Carl Lofton, Administrative Analyst, 387-5404) on June 7, 2021; and County Finance and Administration (Matthew Erickson, County Chief Financial Officer, 387-5423) on June 7, 2021.