Title
Workers' Compensation Third Party Administration Claims Management Services Contract (Ordinance S-43372)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with Cannon, Cochran Management Services, Inc. (CCMSI) to provide third party administration of claims management services for the City's Workers' Compensation Program. Further request authorization for the City Controller to disburse all funds related to this item throughout the life of the contract, as necessary.
Report
Summary
The City of Phoenix has been self-insured since April 1, 2003. Workers' compensation claims are administered and managed through a contracted third party administrator. The City's initial term with the current third party administrator for claims management administration services is set to expire on June 30, 2017. This contract was not automatically extended due to changes to the service delivery method, scope of work, and fee structure.
Procurement Information
A Request for Proposals (RFP) was issued on Nov. 23, 2016, with a deadline of Jan. 9, 2017, to submit responses. Five responses were received and forwarded to a seven-member selection committee which consisted of: two representatives from the Human Resources Department; one representative from the Police Department; one representative from the Public Works Department; one representative from the Phoenix Law Enforcement Association (PLEA); one representative from the Phoenix Fire Fighters Association (IAFF Local 493); and one representative from the American Federation of State, County, and Municipal Employees (AFSCME 2960). Proposals were scored on the following criteria as outlined in the RFP: qualifications and experience; method of approach; and pricing. The top two vendors were invited to an interview process held on Feb. 17, 2017. The final scores (out of 1,000 available points) for the top two bidders, noted below, reflect the consensus of the selection committee:
CCMSI: 836 points
Tristar: 797 points
One protest was received and reviewed by the Human Resources Department in conjunction with the Law Department. The protesting vendor's request was denied and that vendor has indicated they will not be appealing the decision.
Contract Term
The initial contract term will be three years, effective July 1, 2017, with the option to renew for two additional years in one-year increments, which may be exercised by the City Manager or his designee.
Financial Impact
Funding for this contract is available in the Workers' Compensation Program Trust Account. The annual contract cost is expected to be $1,750,000; not to exceed $8,750,000 over the five-year life of the contract.
Department
Responsible Department
This item is submitted by Assistant City Manager Milton Dohoney, Jr. and the Human Resources Department.