South Coast Air Quality Management District

Execute Contract for Insurance Brokerage Services

SYNOPSIS:

On October 20, 2000, the Board approved the release of an RFP for Insurance Brokerage Services. This action is to execute a three-year contract with Aon Risk Services of Southern California for an amount not to exceed $50,000 per year. Funding for the remainder of this fiscal year has been included in the FY 2000-01 Budget.

COMMITTEE:

Administrative, February 9, 2001, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman of the Board to execute a contract for the period April 1, 2001, through March 31, 2004, with Aon Risk Services of Southern California to perform insurance brokerage services, to include the negotiation, subject to Executive Officer approval, of cost-effective, advantageous insurance coverage based on existing market conditions. For the period April 1 through June 30, 2001, the amount of the contract shall not exceed $8,750. For subsequent fiscal years of this contract, the amount of the contract shall not exceed $50,000 per year, and funding will be requested in each fiscal year's budget process.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD currently contracts with Aon Risk Services of Southern California to provide insurance brokerage services. These services include marketing AQMD’s property and liability insurance needs and representing AQMD’s interest in the negotiation and placement of various insurance instruments for loss exposures. Broker services also include data collection and analysis of properties subject to loss and their values, preparation of insurance proposal submissions, and the development of strategies for obtaining cost-effective coverage based on existing market conditions. The current contract expires on March 31, 2001.

RFP #2001-16 was released on October 20, 2000, to seek proposals from interested insurance brokerage firms. A total of 25 RFPs were mailed to insurance brokerage firms.

Outreach

In accordance with AQMD's consulting and contracting policies, a public notice advertising the RFP and inviting proposals were published in the following publications:

1.	Antelope Valley Press	10.	La Opinion	19.	Precinct Reporter
2.	Black Voice News	11.	La Voz	20.	Rafu Shimpo
3.	Chinese Daily News	12.	Los Angeles Daily News	21.	Riverside Press Enterprise
4.	Eastern Group Publications	13.	Los Angeles Sentinel	22.	San Bernardino Sun
5.	El Chicano	14.	Los Angeles Times	23.	Santa Clarita Signal
6.	The Excelsior	15.	M/W/DVBE Source	24.	State of California
7.	Inland Empire Hispanic News	16.	Orange County Register		Contracts Register
8.	Inland Valley Daily Bulletin	17.	Palm Springs Desert Sun
9.	Korea Central Daily	18.	Philippine News

Additionally, potential bidders were identified using the Los Angeles County MTA Directory of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Empire Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. RFP notices were mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce, and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon]; and on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

A panel of four AQMD employees, including the Affirmative Action Officer, Business Services Manager, and two Workers' Compensation and Safety Analysts, reviewed the proposals. The panel consisted of two males and two females and included one African-American, one Caucasian and two Hispanics.

Six proposals were received in response to the RFP by the deadline for submittal of 5:00 p.m. on December 1, 2000. The panel scored the proposals based on criteria set forth in the RFP. Firms' responsiveness to the RFP, their technical expertise in general insurance brokerage, and their public-sector experience were the major evaluation factors.

While the proposed contractor did not provide the lowest-cost-proposal, the panel believes the firm is significantly more qualified than the two lower-cost firms and their expertise will enable them to obtain advantageous insurance coverage from national and international insurers at lower annual premiums, ultimately resulting in cost savings to AQMD. The lowest-cost proposer is a wholly-owned subsidiary of a national insurance company, which could create a conflict of interest when seeking quotes for insurance coverages in markets in which their parent company is also a competitor. The proposed contractor quoted a price of $50,000; other proposals were for $60,000, $45,000 and $39,000.

Attachment A reflects the listing of all six proposals received and their final ratings.

Proposal

This action is to authorize the Chairman to execute a contract with Aon Risk Services of Southern California for the period April 1, 2001, through March 31, 2004, to perform insurance brokerage services. Under the contract, Aon would utilize its resources to negotiate, subject to Executive Officer approval, cost-effective and advantageous insurance coverage based on current market conditions. Funds for insurance purposes are included in AQMD’s Budget each fiscal year under the District General – Insurance account.

Resource Impacts

An amount not to exceed $8,750 for the period April 1 through June 30, 2001 has been included in the FY 2000-01 Budget. For FY 2001-02, an amount not to exceed $50,000 per year will be proposed in the annual budget. Board approval for funding in subsequent years of the contract, not to exceed $50,000 per year, will be requested in the budget process.

Attachment

Attachment A - Evaluation of Proposals for RFP #2001-16

ATTACHMENT A

EVALUATION OF PROPOSALS FOR RFP #2001-16

INSURANCE BROKERAGE SERVICES
 

* Non-responsive to RFP requirements.

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