HomeMy WebLinkAboutAgenda - 06-28-1994-IX-D 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
-Q
ACTION AGENDA ITEM ABSTRACT Item No.
Meeting Date: June 28,1994
SUBJECT: BID AWARD/CONTRACT APPROVAL; FOOD STAMP ISSUANCE
DEPARTMENT:PURCHASING AND CENTRAL SERVICES PUBLIC HEARING:YES: NO: %
ATTACHMENT(S): INFORMATION CONTACT:
Pam Jones, ext.2650 or
Contract Marti Pryor-Cook,ext 2800
Telephone Number-
Hillsborough 732-8181
Chapel Hill 967-9251
Mebane 227-2031
Durham 688-7331
PURPOSE: To consider approving a contract for distribution of food stamps.
BACKGROUND: Food stamps are presently distributed in Orange County via direct mail through a
contract with Cost Containment,Inc. In anticipation of the June 30,1994 contract expiration date,
proposals were solicited from vendors certified by the State to provide such a service. Proposals were
received from Office World,Lima,Ohio and from Cost Containment,Inc.,Raleigh.
As the attached tabulation indicates,the lower bid for direct mail issuance was submitted by Office
World at a cost of$A27 per issuance plus postage(.448 for Cost Containment). However, Federal
regulations require a loss tolerance level for losses more than one half of one percent in direct mail
distribution. Orange County exceeded this tolerance level during the last two quarters of 1993 and
expects to be have to begin alternative distribution in the near future. H on-site distribution is
necessary ,the lower bid was submitted by Cost Containment,Inc.at a cot of$1.1146 per issuance
($1.20 for Office World).
Since it is likely that Orange County will have to move toward alternative distribution it seems prudent
to award the bid based on this scenario. It should be noted that there may be significant savings by
moving to alternative distribution since some of the processing cost would be eliminated. It is
anticipated that alternative distribution would include a combination of both on-site and direct mail
distribution. In the event on-site distribution is implemented,Cost Containment,Inc.will work with the
Social Services Departmod to set up a schedule and a site or sites which is acceptable to the Director
of Social Services. Any costs for facilities would be supported by Cost Containment,Inc.
The State has reviewed the attached contract and has given verbal approval.Written authorization from
the State is forthcoming.
RECOMMENDATION: The Manager recommends approval of a contract with Cost Containment,Inc.,
Raleigh,NC.; and authorize the Chair to sign on behalf of the Board,contingent upon written approval
of contract from the State.
J
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BID COMPARISON FOR FOOD STAMP ISSUANCE
:..........::......
..... ......
:.;:.;:.::.;;:.:....:
..................... ::.
COST FOR MAIL $A48 COST FOR MAIL $.427
ISSUANCE ISSUANCE
ANNUAL COST FOR MAIL $10,752.00 ANNUAL COST FOR $10,248.00
ISSUANCE MAIL ISSUANCE
ANNUAL COST FOR $26,750.00 ANNUAL COST FOR $26,750.00
POSTAGE POSTAGE
TOTAL ANNUAL COST $37,502.40 TOTAL ANNUAL COST $36,998.00
FOR MAIL ISSUANCE FOR MAIL ISSUANCE
ON SITE ISSUANCE
COST FOR ON SITE $1.1146 COST FOR ON SITE $1.20**
ISSUANCE ISSUANCE
ANNUAL COST FOR ON $26,750.00 ANNUAL COST FOR $28,800.00**
SITE ISSUANCE ON SITE ISSUANCE
NOTE: THE COST FOR ON SITE ISSUANCE IS BASED ON CCI'S QUOTE WHICH
STATES THE COST PER ISSUANCE WILL NOT EXCEED EXISTING
POSTAGE CHARGES. THE $1.1146 IS AN AVERAGE COST PER
ISSUANCE FOR THE LAST 3 MONTHS.
THE COST FOR SITE ISSUANCE FOR OFFICE WORLD IS BASED ON
EXACT QUOTE GIVEN IN THEIR PROPOSAL.
**BID DOES NOT INCLUDE COST OF SITE, COUNTY WOULD PAY FOR ALL SITE
COSTS UNDER THE OFFICE WORLD BID.
NORTH CAROLINA SERVICE AGREEMENT
ORANGE COUNTY
THIS SERVICE AGREEMENT entered into as of the 1ST day of JULY, 1994 by and
between COST CONTAINMENT, INC. a corporation incorporated under the laws
of the State of North Carolina with a place of business in Wake County,
North Carolina (308-B Sherwee Drive) Post Office Box 1661, Raleigh, NC
27602,, hereafter referred to as Contractor, and ORANGE County a body
corporate and politic , of ORANGE County, North Carolina, hereafter
referred to as County shall be valid for 12 months commencing the
effective date hereof unless terminated pursuant to this agreement.
FOR AND IN CONSIDERATION OF SERVICE PAYMENTS and to the mutual covenants
and agreements herein set forth , IT 1S STIPULATED AND AGREED:
I . SERVICE PAYMENTS: County agrees to pay to Contractor for service
and postage.
ISSUANCE FEE:
Cost Containment Inc. bids FORTY FOUR AND 8/10 CENTS ( $0. 448) per
envelope whether mailed in the regular mail , certified mail ,
registered andinsured mail or sent to the County or a site for
personal delivery. This fee is inclusive of all charges for whatever
reason for the life of the Contract.
POSTAGE FEES:
CCI defines postage cost as First Class postal rates and fees for
mailing envelopes regular, certified, registered and insured or sent
to the County or site for personal delivery as directed by the
County. Postage costs for security manifest mail will be charged
according to Postal Regulations
ALTERNATE SERVICE:
In times of losses above the tolerance level , CCI agrees to
complement the County' s plan for reducing losses by using methods to
by-pass certain post offices, to certify households suspected of
fraud , or to establish a County site or a CCI issuance site to
regulate losses. CCI agrees that whatever site expense is incurred
will not exceed the existing cost of postage for mailings at the
time the site is County ordered .
All calls to CCI are free on our toll free lines. If a separate line is
required for data transmission, CCI will also pay for the transmission
costs .
The Contractor agrees to insure the mailings against any replacement
losses that exceed the Federal tolerance level ( 0.5%) .
In the event the U.S. Postal Service increases the cost of the First Class
postage during the contract period , the increased costs of postage ( to the
Contractor ) will be borne by the County effective with the month such
increase occurs .
Page 2
NC SERVICE AGREEMENT
All monthly Service and Postal Payments shall be paid to Cost Containment ,
Inc. , C/O Paine Webber, Inc. , 4601 Six Forks Road Ste. 405, Raleigh, North
Carolina 27609 . Compensation at the rate set above to represent full and
complete compensation for services rendered under the terms of this
agreement with total cost to the County estimated not to exceed $9 ,516 .00,
plus postal costs for the 12 month period covered by this agreement.
Actual cost is determined by application of transaction fee plus postage.
II . SERVICES PROVIDED: Contractor agrees to provide following service to
the County:
A. Contractor will correctly mail , by First Class mail , food stamp
coupons (hereafter called coupons) to clients designated by the
County at the addresses furnished to the Contractor by the
County.
B. Contractor will , within 24 hours of receipt of the same from the
County, make any and all changes of the mailing lists to comply
with the applicable changes submitted to ensure the correct
mailing to clients at changed and corrected addresses.
C. The Contractor will complete and deliver a monthly FNS-250
report to the County for certnification and forwarding to the
State Office. Contractor shall also provide to the County the
information needed for the County to complete the FNS-101 ,
FNS-256 and quarterly FNS-259 reports and other reports as may be
required.
D. In order to deter thefts, Contractor will stagger the dates of
mailing of coupons by date and zip code according to instructions
from the County.
E. Performance of service will be conducted in a manner to ensure
the confidentiality of information, data, instruments, documents,
studies, and reports given to Contractor to use or prepare for
the County.
F. Issuance Documentation will include:
1. Daily issuance Control Register
2. Daily Drive Cards
3. Mass Mail Issuance Control Registers
4. Monthly Mass Mail Issuance Drive Cards
5. Cashiers Daily Reconciliation Report
6 . Notice of Mail Return
G. Contractor accomplishes daily balancing of vault and
maintains perpetual inventory records.
H. Contractor will place one stuffer per quarter at no charge to the
County. Any additional stuffers will be placed at five cents
( $0.05) each.
Page 3
NC SERVICE AGREEMENT
I . Approved vault storage for coupons while in the possession of
Contractor. The vault is equipped with electronic motion sensors
which are monitored 24 hours per day when facility is closed.
III . LIABILITY: In as much as the County is liable to the State of
North Carolina and U.S.D.A. for any unauthorized coupon issuances or
coupon thefts and for any coupon shortages or losses for whatever
cause, including, but not limited to, loss due to erroneous
mailings, the Contractor agrees that it shall be liable to the
County in like manner and amount and shall hold the County harmless
from claims of the State arising from any such cause; the Contractor
further agreess
A. That it will maintain in full force and effect during the
term of this contract, or any renewal or extension thereof,
such insurance or bond, and in such amount, as the County
may require to indemnify the County against any theft of
coupons while they are in the actual constructive possession
of the Contractor, its agents and employees, and against any
loss or shortage of coupons or other loss arising out of any
act or omission of the Contractor, its agents and employees.
B . That if the County suffers any loss of any shortage or
reduction in coupons by reason of any act or omission of the
Contractor, its agents or employees, the County, may recover
the value of its losses by requiring that the Contractor pay
the amount of such loss; but in no event shall the amount
recovered by the County hereunder exceed its losses.
C. In the event of cancellation or nonrenewal of the policy,
the County shall be given thirty (30) days prior written
notice.
IV. AUDITS AND PROCEDURES: As required the Contractor will allow
onsite reviews, audits, and inspections by County, State, or
Federal staff and comply with their procedural requirements. Any
deviations from Federal or State guidelines and procedures by
either Contractor or County must have both the State office and
FNS PRIOR approval .
V. DEFAULT AND TERMINATION:
A. Upon default by County, Contractor shall determine and
receive from County the sum due for services rendered . In
the event Contractor shall be required to institute a suit
to collect any unpaid service payments due under this
service agreement , Contractor shall be entitled to
reasonable attorney' s fees set by the Court which shall
not be more than 15 percent of the service payments so
recovered by the Contractor from County.
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Page 4
NC SERVICE AGREEMENT
B. Upon default by Contractor, County shall be entitled to immediate
termination of this agreement and, further, to liquidated damages
in an amount equal to the sum of service payments made by County
to Contractor for the first month of service rendered under this
agreement . The County, however, is not limited to the amount of
liquidated damages if the County suffers damages in excess of the
amount of liquidated damages determined as herein set forth . In
the event County shall be required to institute a suit to collect
any damages for any amounts due under this agreement , County
shall be entitled to reasonable attorney' s fees set by the Court
which shall not be more than 15 percent of any amount recovered
by County from Contractor.
C. Either party may terminate this agreement by giving to the other
party hereto a written notice of its intention to terminate this
agreement. This agreement shall be considered terminated upon
the date set forth for termination of the agreement which
shall be not less than 90 days from the service and delivery of
the notice. The parties hereto may agree to an earlier date of
termination of the agreement . Contract may be terminated because
of circumstances beyond control of Contractor - such as war,
strike, riot and/or natural disaster.
VI . SPECIAL PROVISIONS:
A. It is understood and agreed between the Contractor and the
County that the payment of compensation specified in this
agreement , its continuation or any renewal or extension thereof,
is dependent upon and subject to the allocation or appropriation
of necessary funds to the County by the Federal Government and
the State of North Carolina for the purposes set forth in
this agreement. Contract is valid only upon receipt of approval
from the appropriate District Office of North Carolina Dept . of
Social Services and the North Carolina Dept. of Social Services.
B . County may, from time to time, require changes in the scope of
the services of the Contractor to be performed under this
agreement including but not limited to renewal or extensions
shall be incorporated in written amendments to this agreement .
C. Neither this agreement nor any part hereof which involves the
specialized skill or expertise of the Contractor shall be
assigned , subcontracted , or in any way transferred without the
prior approval of the Contract Administrator ( project
coordinator) and the State of North Carolina
PAGE 5
NC SERVICE AGREEMENT
D. The authorized County official , Pr-44f 9L P,
is designated as the Contract Administrator (protect coordinator)
for the County with responsibility for all matters relating to
this agreement including but not limited to invoice approval .
However, any CHANGES in the scope of the agreement which will
increase or decrease the Contractor' s compensation shall not be
effective until they have been approved by the Contract
Administrator and documented through a written amendment to this
agreement.
E. Contractor shall comply with all provisions of Executive Order
11246 , entitled "Equal Employment Opportunity" , as amended by
Executive Order 11375, and as supplemented in Department of Labor
regulations (41 CFR Part 60) .
F. County Officials, State Officials, Contract Coordinator, the
Federal Grantor Agency, the Comptroller General of the United
States, or any of their duly authorized representatives shall
have access to any books, documents, papers and records which are
in any way pertinent to this agreement for the purpose of making
audit explanation, excerpts, and transcriptions. Contractor
shall maintain all required records for three years after the
County makes final payments and .all pending matters are closed .
Contractor assures the County that the County, with other
officials and agencies mentioned in this item (F) , Section VI , of
this agreement, shall have access to any and all books,
documents, papers, and records of the Contractor for the
purpose of audit, examination, excerpts, and transcriptions.
G. Contractor agrees to comply with all bid specifications
regardless of whether or not individual items are specifically
addressed in contract format.
H. Contractor shall comply with mandatory standards and policies
relating to energy efficiency which are contained in the State
Energy Conservation plan issued in compliance with the Energy
Policy and Conservation Act (P. L. 94-165) .
I . The term of the contract shall be for one year with options for
the County to continue for 2 consecutive one year periods,
each with all the terms of the contract , including quality of
service, to remain constant for the duration of the contract .
J . In preparation for mail issuance, it is important to screen the
food coupon caseload for "problem" households which should
receive allotments by certified mail or by pickup at the DSS.
These households are usually known by Eligibility staff . These
households should be coded as outlined in #3 below .
Page 6
NC SERVICE AGREEMENT
K. Contractor agrees to establish the County Department of Social
Services as a "branch" of the Contractor' s issuance operation, in
order to meet the requirements for expedited services, in
accordance with State and Federal regulations.
L. In the event that site issuance is substituted for direct mail
issuance the sealed envelopes are escorted from the CCI vault
location to the County issuance center( s) by an independent
courier service or sent registered mail . According to County
needs authorized by the Agency Director, CCI will establish the
location( s) hire and train issuance personnel , and direct a mail
delivery system according to the following guide .lines.
1 . A completed issuance is the client presenting an approved
I .D. signing the issuance register and receiving their
sealed envelope containing their monthly allotment of food
stamps.
2. An operational unit is the smallest segment for issuance. It
has an armed guard for crowd control and for checking the
I .D. ( s) , a clerk who checks the I .D. and presents register
for signing, and a second clerk who receives the order for
release and presents the envelope to the client . This unit
can issue up to 4 clients per minute on established
performance but will issue in excess of 2 per minute. If
need be the guard and clerk can be one in the same.
3. Each County issuance center will use that many units as
deemed necessary to promptly issue the clients scheduled to
be served on any given day. The issuance schedule must
eliminate serious lines at all times.
4. The issuance centers are typically open from 10:00 A. M.
until 6 :00 P.M. This allows time for movement of the
envelopes from local bank storage to the center( s) and
allows for the working poor to come after normal working
hours. One unit can issue 120 per hour based on 2 per minute
or 960 issuances a day.
5 . The last names of the client determines on which alpha day a
client will be served : a client can come after their "day"
but never before. The number of issuances will determine the
number of issuance days. One or two days will be added as
"MAKEUP" days. Mail left over after the last issuance day
will either be mailed to the clients or returned to the
local agency for client pickup and review.
Direct mail will be used for all daily issuances for the
balance of the month after the center has closer' .
,:,.. Page 7 . .
NC SERVICE AGREEMENT
The Contractor will be responsible for all County losses under
.r.
the U.S.D.A. regulations for replacements for an
g p y quarter as long
� = as the County abides by the following conditions:
i. All allotments of $300.00 and over and known problem cases
will be sent to the DSS for pickup or by certified mail .
2. The County agency will assign participating households
for either mail pickup at the DSS (or issuance office)
or certified mail issuance upon the event of one
replacement loss. The County may elect to use mail
pickup or certified issuance for reasons other than
replacement losses.
3. The County agency agrees to log such households at risk
with a "3" or a "7" respectively, on the State Computer
(FSIS) .
4. County agrees to adjust methods of issuances by planning
with the Contractor in the event of indications of
significant postal theft or client fraud.
5. When losses exceed the USDA tolerance level ( now . 5% of
total quarterly issuance) , effective immediately, all
issuances of $200.00 and over will be sent either certified
mail or to the County for recipient pickup.
6 . The County agency agrees that the contractor. will not be
obligated to insure or share in the replacement losses
of those households at risk when conditions 1 ,2,3,4 & 5
listed above have not been met by the County agency.
7 . The County shall provide to the Contractor, as proof of
loss, a photocopy of all signed replacement affidavits which
are to be applied to the Federal tolerance level , on or
about the fifteenth ( 15th) of the following month .
8. Claims will be accepted by the Contractor at the time the
loss is established by the State based on written notice to
the County agency. To file a claim, the County agency will
forward to the Contractor copies of the letter of notice
from the State and form FNS-259 for the appropriate period .
Losses are not to be deducted from the service invoice. The
County agency is protected against losses by private
insurance, paid by Contractor. Losses will be filed with
the insurance carrier and reimbursement will be sent to the
County agency when received by CCI , usually within 90 days .
%d
Page 8
NC SERVICE AGREEMENT
VIII . AUTHORITY OF COUNTY: The official executing this agreement
covenants that he or she has authority to execute this agreement on
behalf of the County of v , and approves the proposal
submitted by the Contractor 4or the services to be rendered as set
forth in Section II of this agreement .
IX. INDEPENDENT CONTRACTOR: Conformity with The Laws
A. For all purposes of this agreement , the Contractor shall be
deemed an independent Contractor, and neither the Contractor
nor its agents or employees are or shall be deemed to be agents
or employees of the County agency or the State of North Carolina
and the Contractor shall hold and save harmless the County and
the State of North Carolina_ from the claims of third parties
arising out of any act of omission of the Contractor, its
agents or employees, in performance of this agreement .
B. The Contractor shall pay all taxes, assessments, premiums and
fees and shall file all reports and returns required by law and
arising out of its operations under this agreement .
C. The Contractor shall perform its obligations under this agreement
in conformity with all applicable laws and regulations, Federal ,
State, or local .
I
Page 9
NC SERVICE AGREEMENT
IN WITNESS WHEREOF, the parties through their duly authorized
representative, have caused this agreement to be executed in their
respective names on the day and year first above written.
CHAIRMAN, BOARD OF COUNTY COMMISSIONERS OR
AUTHORIZED COUNTY OFFICIAL
Sworn and subscribed to before me this the
day of 19
NOTARY PUBLIC
ATTEST: COST CONTAINMENT, INC.
by
�K.�r,•�
B ARD MEM ER-D NAL MORRISON ADMINISTRATIVE MANAGER-DORIS L. CONKLIN
( CORPORATE SEAL)