BOARD MEETING DATE: March 2, 2007
AGENDA NO. 8

Execute Contract for Insurance Brokerage Services

SYNOPSIS:

The current contract for insurance brokerage services expires March 31, 2007.  On October 6, 2006, the Board approved release of an RFP to solicit proposals from firms interested in providing these services for the next three-year period.  This action is to execute a contract with Alliant Insurance Services through March 31, 2010, for an amount not to exceed $55,000 per year.  In addition, Alliant has agreed to conduct a review of Kaiser employee health insurance plans and premiums in the first year of the contract for an additional $2,500.  Funding for this contract has been included in the FY 2006-07 Budget and will be requested in successive fiscal years.

COMMITTEE:

Administrative, February 9, 2007; proposal slightly changed after Committee review

RECOMMENDED ACTION:

Authorize the Chairman to execute a three-year contract for the period April 2, 2007 through March 31, 2010, with Alliant Insurance Services to perform insurance brokerage services in an amount not to exceed $55,000 for each of the three years, and, in the first year of the contract, to conduct a review of Kaiser Permanent employee health plans and premiums for an amount not to exceed $2,500 (the latter review was added after Committee review).

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD currently contracts with Kaercher Campbell & Associates 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 March 31, 2007.  On October 6, 2006, the Board approved release of RFP #P2007-11 to solicit proposals from insurance brokerage firms interested in providing these services for the next three-year period.

Additionally, recent discussions with the SCAQMD Professional Employee Association have resulted in management’s agreement to conduct an independent review of Kaiser Permanente employee health plans and premiums.  Alliant Insurance Services has agreed to conduct this review as part of the insurance broker contract.  This addition to the original proposal occurred after the Administrative Committee’s review of this item.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP has been mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/ where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html).  Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Bid Evaluation

A total of 43 copies of the RFP were mailed to insurance brokerage firms.  Nine proposals, eight of which were responsive to the RFP, were received by the deadline for submittal at 5:00 p.m. on December 1, 2006.  The panel scored the eight responsive proposals based on criteria set forth in the RFP, which included firms’ understanding of the scope of work, technical insurance brokerage expertise, relevant public-sector experience, and cost.

The panel evaluating the proposals included a senior insurance analyst for the City of Glendale and three AQMD employees, including a Risk Manager, a Financial Analyst, and a Senior Deputy District Counsel.  Of these, two are Caucasian and two are Hispanic; one is female and three are male.

Alliant Insurance Services received the panel’s highest rating.  The firm demonstrated expertise in obtaining advantageous insurance coverage from national and international insurers at cost-effective rates, which would result in cost savings to AQMD.  The attachment lists the eight proposals and their ratings.

Proposal

This action is to execute a contract with Alliant Insurance Services for the period April 2, 2007, through March 31, 2010, to perform insurance brokerage services.  Under the contract, Alliant Insurance Services 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 premiums are included in AQMD’s budget each fiscal year under the District General – Insurance account.

In addition, in the first year of the contract, Alliant has agreed to conduct a review of Kaiser Premanente employee health plans and premiums.

Resource Impacts

Sufficient funding is available for the remainder of FY 2006-07, and funding in an amount not to exceed $55,000 will be requested in successive budget years.  The FY 2006-07 Budget also includes sufficient funding for the review of Kaiser Permanente employee health plans and premiums, at a cost not to exceed $2,500.

Attachment
Evaluation of Responsive Proposals to RFP #P2007-11

ATTACHMENT

EVALUATION OF RESPONSIVE PROPOSALS TO RFP #P2007-11

INSURANCE BROKERAGE SERVICES