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HomeMy WebLinkAboutItem 16 - Agreement Amendment with Pitney Bowes Presort Services, LLC for mail processing servicesFinance and Management Services www.santa-ana.org/finance Item # 16 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report March 1, 2022 TOPIC: Agreement Amendment with Pitney Bowes Presort Services, LLC for mail processing services AGENDA TITLE: Approve a First Amendment to Agreement with Pitney Bowes Presort Services, LLC for mail processing services for an amount not to exceed $40,000 and exercise an optional renewal extension from April 1, 2022 through February 1, 2024 (Non -General Fund) RECOMMENDED ACTION Authorize the City Manager to execute a First Amendment to Agreement with Pitney Bowes Presort Services, LLC for mail processing services and exercise a renewal option for a term commencing April 1, 2022 through January 31, 2024 for a total amount not to exceed $40,000, subject to non -substantive changes and approved by the City Manager and City Attorney. DISCUSSION The Finance and Management Services Agency's Central Services Division ("Central Services") currently utilizes Pitney Bowes Presort Services, LLC ("PBPS") to pick up and process City mail. PBPS is a presort house that barcodes and presorts the mail by zip code. When mail is barcoded and presorted, PBPS delivers the items to the local United States Postal Service ("USPS") processing facility. In addition to standard mail, the City mails out various bulk mailings for City functions, including, but not limited to, Business Tax and Dog Licensing. These mailings require the use of envelopes with a pre-printed permit imprint. PBPS is permitted for this service with the USPS and processes these large mailings on behalf of the City. By approving the First Amendment to Agreement with PBPS, the following changes and rate increases will be reflected: 1. As a result of the USPS raising their rates, PBPS has updated the fee schedule (see table below). 2. Change the postage date of presort mail from same day to next day. Currently, City mail is postmarked with the date it is processed by Central Services, typically the same day. Due to PBPS processes and the time of day that we request a pickup (4:30 p.m.) PBPS has requested we postmark all presort mail with the next business date. Pitney Bowes — First Amendment to Agreement March 1, 2022 Page 2 3. Change in ancillary fees. These fees would apply if the City's mail is non -compliant with the mail specifications as stated in the agreement. The City of Santa Ana has not been charged any non -compliant fees in recent years. Current Fees Type Proposed New Fees $0.0267/per piece Presort Mail $0.0341/per piece $0.0298/per piece Permit Mail $0.0341/per piece PSBS is a global shipping and mailing company that provides technology, logistics, and financial services. Small businesses, retail, enterprise, and government clients around the world rely on PBPS to remove the complexity of sending mail and parcels. Therefore, staff recommends approving the First Amendment to Agreement and exercising the optional renewal term from April 1, 2022 through February 1, 2024 with PBPS, to ensure City business mail is processed at a cost effective and timely manner. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT FY Accounting Unit - Account No. Fund Description Maximum Amount 2021-22 07110100-62300 Central Services- Contract Services $5,000 2022-23 07110100-62300 Central Services- Contract Services $20,000 2023-24 07110100-62300 Central Services- Contract Services $15,000 Grand Total: $40,000 EXHIBIT 1. Amendment to Agreement Submitted By: Kathryn Downs, FMSA Executive Director Approved By: Kristine Ridge, City Manager EXHIBIT 1 FIRST AMENDMENT to the MASTER SERVICES AGREEMENT This First Amendment (the "Amendment") is entered into by and between Pitney Bowes Presort Services, LLC ("PBPS") and City of Santa Ana ("Client"), as of March 1, 2022. PBPS and Client may be referred to collectively as the "Parties." WHEREAS, Pitney Bowes Presort Services, Inc., and Client entered into a Master Services Agreement on February 1, 2019 ("Agreement"); and WHEREAS, on February 26, 2019, Pitney Bowes Presort Services, Inc. converted its business entity and name to Pitney Bowes Presort Services, LLC; and WHEREAS, the Parties desire to amend some terms of the Agreement. NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows: Unless otherwise defined herein, all capitalized terms used herein shall have the same meaning as set forth in the Agreement. 2. In accordance with paragraph 7 ("Term") of the Agreement, the Term is hereby renewed for an additional period beginning on April 1, 2022 ("Effective Date") and such Renewal Term expiring on January 31, 2024. Paragraph 22 (Modification) of the Agreement shall be amended and replaced in its entirety to read as follows: a. This Agreement may be modified only by a written document signed by the parties hereto. b. The terms and conditions of this Agreement shall supersede any and all standard terms and conditions on either party's preprinted forms, including but not limited to Purchase Orders, Pickup Slips, and Invoices. c. USPS Changes. Notwithstanding any other language in this Agreement, in the event the USPS adopts any new/revised postal regulations, procedures, rates, or incentives that directly affect the cost or provision of the services contemplated by this Agreement, or its accompanying SOWs, resulting in the need for modification, any such modification may be executed administratively by a signed writing executed by the Client's City Manager and City Attorney. d. Absent City Council Approval, any modification to this Agreement is subject to the annual not to exceed amount identified in paragraph 7 of this Agreement. 4. Schedule 1.0 of SOW 41 is hereby amended and replaced in its entirety. The attached Schedule 1.0 replaces and supersedes any and all previous Schedule 1.0 versions. 5. Schedule 2.0 of SOW #1 is hereby amended and replaced in its entirety. The attached Schedule 2.0 replaces and supersedes any and all previous Schedule 2.0 versions. 6. Schedule 3.0 of SOW #1 is hereby amended and replaced in its entirety. The attached Schedule 3.0 replaces and supersedes any and all previous Schedule 3.0 versions. 7. Schedule 5.0 of SOW #1 is hereby amended and replaced in its entirety. The attached Schedule 5.0 replaces and supersedes any and all previous Schedule 5.0 versions. Page 1 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 S. Except as amended herein, the terms of the Agreement remain in full force and effect and are hereby ratified and affirmed. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Agreement as of the last date and year written below. ATTEST: DAISY GOMEZ Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney randon SaNatierra Deputy City Attorney RECOMMENDED FOR APPROVAL: KATHRYN DOWNS, CPA Executive Director Finance and Management Services Agency CITY OF SANTA ANA KRISTINE RIDGE City Manager PITNEY BOWES PRESORT LLC ,I 2By: L 1 Name; -Vinay Gandhi Title: Date: Chief Financial Officer -0/1Z�/'D2z SERVICES, Page 2 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 SOW #1 - SCHEDULE 1.0 ADDRESSES AND TIMES FOR MAIL PICK UP Upon mutual agreement PBPS and Client may add Client locations where the services will be made available. PBPS reserves the right to decline services at any Client location if the factors of Average Daily Volume and distance to the nearest PBPS facility make providing the services commercially unreasonable. For current locations, PBPS will pick up Client's mail at the address(es) specified below. Client shall assemble and make available for pick up its mail on such schedule as may be mutually agreed upon by the parties, in writing (e-mail is sufficient), with the initial schedule set forth below. Client Location Pick Up Time(s)' Pick Up Time(s)l Average Daily Same Day Dated Next Day Dated Volume' 20 Civic Center Plaza N/A 4:30 PM 1,000 Santa Ana, CA 92701 Notes: 1 — All pick up times are local time zone Monday through Friday, excluding holidays, unless otherwise noted. First Class Flat mail may be picked up at the same time as First Class letter mail; however, such Flat mail is always Next Day. Consolidated letter mail to certain commercial delivery points may be submitted to the USPS the following business day, but is then delivered using USPS priority mail. In the event that the mail is not ready at the agreed time and PBPS is able to wait for the mail, while PBPS will use reasonable efforts to meet the regular schedule, such delay may result in the mail being submitted to the USPS one business day later than scheduled. 2 - Client and PBPS agree that there is no minimum guaranteed volume required under this SOW; however, Client acknowledges that PBPS's pricing is based upon receiving the Client estimated volume. Client will provide the approximate average daily volume of mail set forth above for each location, for pick up and processing by PBPS. If the average daily volume submitted decreases by 20% or more during any calendar quarter, it may be presumed that a reasonable pricing adjustment is appropriate and the parties shall negotiate in good faith to agree upon such adjustment and issue an amended Schedule(s) to this SOW. Page 3 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 SOW #1- SCHEDULE 2.0 FEES FOR AUTOMATED PRESORT SERVICES For automated First Class® presort services provided by PBPS for mail meeting the Mail Specification requirements, read and accepted on the first pass through PBPS's mail processing equipment, Client shall pay to PBPS the following: 2.1 Postage and Presort Fee. 2.1.1 Metered/Permit Postage and Presort Fee. Client shall meter the First Class mail, or be charged for postage on First Class permit indicia mail, at the then current published USPS Discount Rate designated below for each mail type and shall pay the presort fee per piece as shown below for the applicable mail type and service level: Presort Fee Per Piece Mail Type USPS Discount Rate Name Same Day Next Da Letters — Metered Mixed AADC $N/A $0.0341 Letters — Permit Mixed AADC $N/A $0.0341 2.2 Special Handling: First Class mail otherwise meeting the Mail Specifications, but which requires additional handling due to the size or content, will be charged the Presort Fee as set forth above plus a Special Handling Fee for: 2.2.1 6"x9" of $N/A per piece. 2.2.2 #14 envelopes of $N/A per piece. 2.2.3 Negotiables (including checks, stock certificates, vouchers, or cash) of $N/A per piece. 2.2.4 Plastics (debit/credit/gift cards) of $N/A per piece. 2.2.5 Other: N/A of $N/A per piece. 2.3 Intelligent Mail Barcode Discount. PBPS will use its commercially reasonable best efforts to prepare Client's First Class letters in accordance with the then current USPS requirements for Full Service IMb processing. PBPS anticipates that it will be successful in such processing and will receive from the USPS, in addition to other workshare discounts, a discount on such Full Service IMb compliant and qualifying First Class mail ("1Mb Discount"). Accordingly, the IMb Discount is factored into the presort fee in paragraph 2.1 above. In the event that the USPS eliminates or reduces the IMb Discount, PBPS may adjust the presort fee following written notice to Client as provided in paragraph 7 of this SOW. 2.4 Exception Handling Fee. Mail that is rejected by the sorting equipment ("Machine Rejected Mail" or "MRM"), including mail that fails Delivery Point Validation ("DPVTM"), mail with a pre-printed barcode that is not Full Service Intelligent Mail Barcode ("Full Service Rvlb") compliant, mail that can't be barcoded, or which for any other reason PBPS cannot mechanically read and process as a Full Service IMb compliant mailpiece as a result of the way the mail was prepared by Client, including but not limited to poor print quality, incompatible fonts and incorrect addressing (collectively "Exception Mail'), will be charged the above Presort Fee plus any applicable Exception Handling Fee as set forth below. The per piece amount of each Exception Handling Fee is related to USPS rates and may be revised by PBPS upon USPS changes as provided in paragraph 7 of this SOW. While PBPS will make reasonable efforts to process Exception Mail the same day, such mail may be delayed because of the extra handling necessary to meet USPS preparation requirements. PBPS may re -date and submit such delayed mail the following business day. 2.4.1 Machine Reiected Mail (MRM) Fees: At the time of this SOW, based on the readability of Client's mail, the applicable MRM Fee will be applied to the determined percentage of Client's mail for each mail type and USPS discount rate set forth in the table below. The MRM Fee will be applied to such percentage regardless of the actual number of pieces of Exception Mail on any given day. MRM FEE Mail Type USPS Discount Rate Name MRM Fee Per Piece Determined Percentage Letters Mixed AADC $0.00 0% In the event the readability of Client's mail (or a specific mail type or job) has degraded and Client has not been successful in restoring the readability as provided in paragraph 6.4 of this SOW, PBPS may revise the MRM Fee and/or applied percentage upon fifteen (15) days advance written notice. The revised MRM Fee will be applied to a Page 4 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 percentage of Client's mail representing the Exception Mail, as determined by the most recent readability report attached to the notice. If Client has taken steps to improve the mail readability, Client may request a more recent readability report be used to determine the Exception Mail percentage applied. 2.4.2 BAb Downgrade: If Client pre-barcodes its mail with a barcode that is not Full Service A4b compliant or presents mail on which PBPS cannot print a Full Service IMb, Client may be charged an IMb Downgrade based upon any penalties, postage assessments or forfeiture of discounts (collectively, "Downgrade") which may be imposed by the USPS on PBPS, based upon PBPS' calculation of Client's pro-rata share of such non -compliant mail. 2.5 Default Pricing Terms. In the event Client fails to make timely payment of invoices or required postage payments, PBPS may elect to continue processing Client's mail, but will no longer accept any permit mail or meter any mail on behalf of Client, and Client will pre -meter all of its mail. Any mail that has not been metered will be returned to Client. Further, Client shall not pre -meter First Class mail at the rates specified in paragraph 2.1 above, and instead shall pre -meter all First Class mail at a higher USPS Discount Rate as designated by PBPS ("Substitute Rate"). PBPS will rebate back to Client the difference between the pre -metered Substitute Rate and the rates specified in paragraph 2.1 above for mail processed at the Substitute Rate, after setting off against such rebate amount any sums then due from Client to PBPS pursuant to this Agreement. If Client fails to pre -meter the mail at the designated Substitute Rate, PBPS may pursue other options as permitted under the Agreement. Page 5 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 SOW #1 - SCHEDULE 3.0 FEES FOR OTHER SERVICES For other services identified herein, Client shall pay to PBPS the following: 3.1 Ancillary Fees. PBPS reserves the right to charge the applicable fee for services performed to correct Client's mail not in compliance with the Mail Specifications. The ancillary services described below may also be performed upon request of Client. While PBPS will make reasonable efforts to process mail requiring additional services according to the scheduled service level, the required additional handling may result in the mail being delayed and submitted to the USPS on the following business day. Client will pay the applicable Ancillary Fee, as well as reimburse PBPS for any additional postage required. Charges for the ancillary services listed below are as follows: Service Fee Per Piece (unless otherwise indicated Meter Date Correction $0.03 Missing Endorsement $0.03 Metering Fee — Letters/Postcards $0.04 Metering Fee — Flats $0.10 Meter Strip $0.15 +$30.00 per hour, perperson) (LMLM) $0.15 +$30.00 per hour, perperson) -Labeling Sticky Mail / Billable Hourly Work $30.00(per hour, per person — minimum 1 hour) Excessive Waiting Time at Pickup: Straight truck or van $75.00 per hour (minimum 1/2 hour after 30 minutes) Excessive Waiting Time at Pickup: Tractor trailer $125.00 per hour (minimum 1/2 hour after 30 minutes) 3.2 Transportation. For the mail transportation services described in paragraph 1 of the SOW, Client shall pay PBPS a fee of $0.00 per pick up, which shall be invoiced and payable according to paragraph 4 of the Agreement. 3.3 Fuel Surcharize. In addition to the transportation fee set forth above, Client shall pay PBPS a fee of $0.00 per mail pick up on account of fuel costs associated with performing the services described in this SOW. Page 6 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 SOW #1 - SCHEDULE 5.0 MOVE -UPDATE REOUIREMENT 5.1 Move -Update Option. Client will complete a Certification of Move Update Compliance form as may be reasonably requested by PBPS from time to time in order to confirm the Move Update Option selected by Client on a job by job basis. Client's selections include the following move -update option(s): Indicate the selected option for Move Update Solution by placing an "X" in each column under the mail category type indicated. Option First Class First Class First Class Letter Mail Postcard Mail Flat Mail Not Applicable X X A USPS approved Move Update Solution provided and X utilized by Client on all Client mail of this type PBPS Move Update Solution (an MLOCR-based software application such as Siemens UMove®) provided by PBPS on all Client mail of this type A USPS approved Move Update Solution provided and utilized by Client on all Client mail of this type, except for designated jobs within the mail type as agreed by the parties on which PBPS shall utilize the PBPS Move Update Solution The USPS uses a census method of testing to determine if a mail owner's addresses are being updated as required by USPS Move Update Compliance regulations. Mailpiece compliance is measured per calendar month and results are reported on the USPS Mailer Scorecard. Mailer Scorecards are available for individual mail owners and for PBPS, the mail presenter. The LISPS will assess penalties or postage assessments against PBPS as the eDoc submitter associated with the mailing if the total Move Update failures submitted by PBPS per operating center under its USPS Customer Registration ID (CRID) is over the USPS established threshold for the month. If Client has its own USPS Mailer ID (MID), Client agrees that it will monitor its own failure rate for performance on the USPS Mailer Scorecard by the MID/CRID, which can be accessed through the USPS Business Customer Gateway. The parties will cooperate to identify and resolve failures involving Client's mail if either party has reasonable concerns about meeting the Mailer Scorecard threshold requirements. The parties shall also cooperate to promptly appeal any penalty or assessment by the USPS if there are reasonable grounds to advocate an appeal. 5.1.1 As to each job(s) for which Client elects to rely on its own application of a USPS Move Update Solution, Client will reimburse PBPS for any penalties or postage assessments imposed by the USPS against PBPS due to, or caused in part by, Client's mailpiece Move Update failures which exceed the Mailer Scorecard threshold, based upon PBPS's calculation of Client's pro-rata portion of such penalty or assessment for that month. 5.1.2 As to each job(s) for which Client elects the PBPS Move Update Solution applied by PBPS, Client will not be charged for such Move Update penalties or postage assessments imposed by the USPS against PBPS, on mailpieces processed by PBPS under those jobs even if the Move Update failures on those jobs exceed the Mailer Scorecard threshold. 5.2 Physical Requirements for PBPS Move Update Solution: PBPS can only spray barcodes on mail pieces that are non -glossy with a sufficient clear zone in the lower right quadrant. Client will be required to use another approved Move Update method for non -conforming mail pieces. 5.3 PBPS Move Update Solution - Fee: Client shall pay the following Application Fee per each piece of mail scanned using the PBPS Move Update Solution: Mail Tvoe Application Fee Per Piece Letters $N/A Page 7 of 7 Proprietary and Confidential Information PBPS Contract Management — Jan 2021 City of Santa Ana_A2019038_PBPS_AMND 1_pbps signed 02142022 (003) Final Audit Report 2022-02-14 Created: 2022-02-14 By: Kristin Andrade (kandrade@santa-ana.org) Status: Signed Transaction ID: CBJCHBCAABAAbs4lgVHIvHI15hrXx2fgZI9RrAkpw7Sj "City of Santa Ana_ A2019038_PBPS_AMND 1_pbps signed 021 42022 (003)" History Document created by Kristin Andrade (kandrade@santa-ana.org) 2022-02-14 - 10:50:25 PM GMT- IP address: 98.153.69.210 Document emailed to Kathryn Downs (kdowns@santa-ana.org) for signature 2022-02-14 - 10:50:53 PM GMT Email viewed by Kathryn Downs (kdowns@santa-ana.org) 2022-02-14 - 11:10:07 PM GMT- IP address: 98.153.69.210 dp Document e-signed by Kathryn Downs (kdowns@santa-ana.org) Signature Date: 2022-02-14 - 11:10:15 PM GMT - Time Source: server- IP address: 98.153.69.210 Agreement completed. 2022-02-14 - 11:10:15 PM GMT Q Adobe sign