DATE: April 9, 2024
TO: Board of Supervisors
SUBMITTED BY: Robert W. Bash, Director of Internal Services/Chief Information Officer
SUBJECT: Retroactive First Amendment to Agreement with Core Business Interiors
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute First Amendment to Agreement A-22-347 with CORE Business Interiors for modular furniture systems and installation services, effective retroactive to the Agreement effective date, August 22, 2022, not to exceed five consecutive years, which includes a three-year base contract and two optional one-year extensions, with corrections to pricing of certain chairs and ergonomic products, but no increase to the maximum compensation payable under the Agreement ($25,000,000).
REPORT
There is no additional increase in Net County Cost for the maximum compensation payable under A-22-347 (Agreement) if your Board approves the recommended retroactive First Amendment of the Agreement. However, the corrections to pricing of individual chairs and ergonomic products will increase if the recommended retroactive First Amendment is approved by your Board.
If your Board approves the recommended action, the correct pricing for chairs and ergonomic products that CORE Business Interiors (CORE) agreed to when executing the Agreement will replace the current pricing for such items. A Manufacturer Discount Matrix, showing the product discount that the County receives under the Agreement for additional items (i.e., not specifically listed in the Agreement) by 29 different manufacturers will also be included, because it was inadvertently omitted from the Agreement.
At the time that the then-proposed Agreement was being processed for the Board’s requested approval, County staff sent CORE the then-proposed Agreement (with the correct pricing attached) for approval, which CORE approved. (Also, the Manufacturer Discount Matrix, discussed above, was also inadvertently omitted from the then-recommended Agreement that went to the Board for its requested approval). But CORE only sent back a signed signature page (not attached to the proposed Agreement, including its pricing). Also at that time, County staff then inadvertently attached incorrect (and lower) pricing to the then-proposed Agreement (with CORE’s executed signature page) that went to the Board for requested approval, which was not the pricing that CORE agreed to when it signed the proposed Agreement. CORE billed according to the lower (incorrect) pricing until they discovered the pricing error and brought it to the attention of County staff, which eventually led to the recommended amendment.
Your Board’s approval of the recommended action will allow the County to correct this error on the part of the County and continue to purchase modular furniture and installation services from CORE. This item is countywide.
The Agreement, as approved by the Board, does have attached to it a correct list of Haworth discounts for modular furniture, including table systems, wood products, steel storage products, certain types of seating products, modular walls, desks, and other products not listed on the product pricing attached to the Agreement.
ALTERNATIVE ACTION(S):
To correct the error, there are no viable alternative actions. Alternatively, your Board could elect to terminate this Agreement and conduct a new RFP for these services. But in that case, there is the unresolved issue of purchases that the County made at the lower pricing.
RETROACTIVE AGREEMENT:
The recommended First Amendment is retroactive to August 22, 2022, the effective date of the Agreement, to correct the Agreement to reflect the terms of the Agreement as agreed to by CORE.
FISCAL IMPACT:
There is no additional increase in Net County Cost for the maximum compensation payable under the Agreement if your Board approves the recommended retroactive First Amendment of the Agreement.
The corrections to pricing of certain types of individual chairs and ergonomic products under the recommended First Amendment will increase as shown in Attachment A, but the maximum compensation payable remains $25,000,000 for the entire potential five-year term of the Agreement.
Sufficient appropriations and estimated revenues are budgeted by user departments in the FY 2023-24 Adopted Budget and included on an annual basis in the user departments’ budget requests.
DISCUSSION:
On August 9, 2022, your Board approved the Agreement between CORE and the County for the purchase and installation of modular furniture. The County obtained the pricing for the then-proposed Agreement in accordance with the Purchasing Manual that allows the County to utilize contracts that have been competitively bid by other government agencies and cooperative purchasing groups. This is commonly known as “piggybacking” onto other agreements. Haworth was awarded agreement #2020000606 by OMNIA Partners based upon Haworth’s response to OMNIA Partners’ competitive bid to RFP # 269-2019-105, which RFP was conducted by the City of Charlotte, North Carolina, and CORE is Haworth’s authorized dealer and installer for Haworth modular furniture in Fresno County. CORE agreed to provide pricing to the County equivalent or better to the pricing under the OMNIA Partner’s contract. For example, CORE agreed to grant the County a higher discount on certain Haworth products than was available through the OMNIA Agreement through April of 2023, which discount is reflected on A-3 of the Revised Attachment A. This discount page was correctly attached to the Agreement approved by the Board.
The then-proposed Agreement approved by your Board included the incorrect version of the pricing in Attachment A to the Agreement. The incorrect pricing attached to the then-proposed Agreement approved by your Board included pricing on chairs and ergonomic products, and is found on pages 16-18 of the Agreement. The average increase of the correct pricing over the incorrect pricing (which was on the version of the agreement approved by the Board) ranges from 5% to 26% for chairs and from 20% to 27% for ergonomic products. A Manufacturer Discount Matrix, showing the product discount that the County receives under the Agreement was also inadvertently omitted from the Agreement that went to the Board for approval. This Manufacturer Discount Matrix is used to apply to specific products not listed under the Agreement, so the County receives preferential pricing on those products, as well.
The then-proposed Agreement as approved by the Board did have a correct list of Haworth discounts for modular furniture, including table systems, wood products, steel storage products, certain types of seating products, modular walls, desks, and other products not listed on the product pricing attachment.
The recommended First Amendment will replace the incorrect Agreement pricing attachment, will add the Manufacturer Discount Matrix, and will rename the other two attachments (the sample requisition form and the Self-Dealing Transaction Disclosure Form) for consistency, so the Agreement attachments will be Revised Attachment A, Revised Attachment B, and Revised Attachment C. If your Board approves the recommended First Amendment, CORE will not seek reimbursement from the County for any paid invoices reflecting the lower pricing; this is memorialized in the recommended First Amendment.
REFERENCE MATERIAL:
BAI #41, August 9, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
Attachment A
Attachment B
On file with Clerk - Retroactive First Amendment to Agreement with CORE
On file with Clerk - Electronic Signature Verification
CAO ANALYST:
Ahla Yang