For many years, the City has contracted with temporary personnel placement agencies to enhance and supplement its regular workforce.

In January 1996, Council awarded a contract to Interim Personnel, Inc., to provide the majority of the City's temporary personnel. This contract was the result of a competitive proposal process which included a requirement that the selected agency establish an office on-site at the Sunnyvale Community Center with a full-time staff dedicated to the supervision of Sunnyvale's temporary agency workforce. This was accomplished in Spring 1996.

In 1998, a second Request for Proposals was issued; and staff again recommended that Council award a contract to Interim Services, Inc. On December 15, 1998, Council awarded the second contract.

On July 7, 2000, Interim Services, Inc. merged with Norell, and a new corporation, named Spherion Corporation, was formed. On November 1, 2000, the contract was assigned to Spherion Corporation.

On November 7, 2001, Spherion Corporation notified the City that it would be closing the on-premise site effective January 16, 2002, and further indicated that Spherion would be leaving this market.

In order to provide time to evaluate the City’s use of temporary staffing and to develop alternatives for Council’s consideration, in December 2001, staff requested a four-month extension of the existing contract with Spherion. Spherion agreed to this extension, and on December 17, 2001, Council authorized an extension of the Spherion contract through April 30, 2002.

On January 8, 2002, Council authorized a similar extension of an existing contract with Corestaff Services CA, Inc., the City's backup temporary personnel placement agency.

Over the years, the City's reliance on temporary personnel increased until temporary employees represented as much as twenty percent (20%) of the City's workforce. In addition, over the course of the past few years, significant changes have occurred in the temporary staffing marketplace, and issues surrounding co-employment needed to be reviewed.

The largest use of temporary staffing typically occurred during the spring and summer months when the use of temporary employees provided the City with the ability to be adequately staffed during seasonal workload peaks without being overstaffed at other times of the year. In addition, grant- or fee-funded departments often met their staffing needs with temporary employees due to the uncertain nature of their funding and for pilot projects with an uncertain future.

Staff has now completed its re-evaluation of the City's staffing needs and recommends that approximately one-half of the positions previously filled by agency temporary employees be converted to City positions, effective July 1, 2002. Staff has determined that the remaining positions should continue to be filled by agency temporary personnel, and such assignments will be reviewed for conformance with work hour limitations. Temporary agency placements remain a viable and effective means of staffing certain service needs.

Because of the recommended reduction in agency temporary staffing, it will no longer be necessary for the City's primary agency to have an on-site office. The elimination of an agency on-site office will free up approximately 165 square feet of office space at the Community Center for City employees.

In early 2002, specifications were prepared by Finance and Human Resources staff; and Request for Proposals No. F0202-42 for temporary personnel placement services was issued on February 15, 2002. The RFP was distributed to twenty-three agencies who had expressed interest in providing these services to the City. It was also advertised to other potential proposers through the DemandStar by Onvia public procurement network.

Proposals were received from the following agencies:

1. Act 1 of Sunnyvale.
2. Adecco of Sunnyvale.
3. Advanced Technical Resources of Sunnyvale.
4. Alternate Staffing Group of Oakland.
5. Corestaff Services of Santa Clara.
6. Crossroads Staffing Services of San Jose.
7. Echo Outsourcing of San Jose.
8. Kelly Services of San Jose.
9. Manpower, Inc., of Sunnyvale.
10. Nelson Staffing Solutions of San Jose.
11. Nesco Resources of Campbell.
12. Personalized Placement Agency of Mountain View.
13. Randstad North America of Santa Clara.
14. Silicon Valley Staffing Group of Sunnyvale.
15. Spherion Corporation of Santa Clara.
16. Superior Staffing Services, Inc., of San Jose.
17. The Plus Group of San Jose.
18. Westaff USA, Inc., of San Jose.
19. Working Partnerships Staffing Services of San Jose.

Proposals were reviewed by an evaluation team, consisting of staff from the Departments of Finance and Human Resources.

Evaluation criteria included:

1. Completeness of the proposal and adherence to the specified format.
   
2. Qualifications and Experience of the Proposer.

• Ability to provide an adequate number of qualified and competent personnel in the required categories in a timely manner.
• Familiarity with the needs of public agencies, preferably municipalities.
• Experience providing temporary employees to a large client organization.
• Staff experience and turnover rate at local office.
• Input from references.
• Financial status and stability.
• Quality of employee benefit plan and ability to retain employees.

3. Customer Service

• Ability to be flexible in response to the City's immediate needs as described in the RFP and to remain flexible and willing to adapt should the City's needs change during the term of this contract.
• Willingness to accept transfer of current temporary employees from existing contract agencies without employee loss of benefits established with those agencies.
• Technological competency and willingness to use this competency to assist the City in process improvements relative to this contract, such as maintaining statistics, paying invoices, etc.
• Quality of proposer's plan for contract implementation and proposer's ability to implement the required services by May 1, 2002.

4. Proposed pricing structure (markup rates).

Following a review of all written proposals, three firms were asked to meet with the evaluation team to discuss their proposals with emphasis on certain issues provided to them prior to the meeting.

As the result of this process, the evaluation team unanimously selected Randstad North America as the temporary personnel placement agency offering the best value to the City. Staff, therefore, recommends award of contract to Randstad North America as the City's primary temporary personnel placement agency. Areas in which Randstad exceeded the abilities of other proposers include, but are not limited to, its exceptional level of technological competency, including web-based requisitioning, invoicing and reporting; its well-developed implementation plan; and its ability to be flexible to meet the City's requirements. Randstad also indicated strong municipal experience.

In the past, Council has also awarded a contract to a second agency as the City's backup agency. Instead, staff recommends that Randstad enter into a subcontract with Adecco of Sunnyvale to provide services as the City's backup agency. This will allow the City to obtain the services of Adecco while leveraging the benefits to be achieved through Randstad's advanced requisitioning, invoicing and reporting capabilities. Both Randstad and Adecco have agreed to this arrangement.

It is anticipated that the cost of the Spherion contract from January 1 through June 30, 2002, will not exceed $3.5 million.

Since the recommendations included in this report represent significant change from previous contracts, it is impossible to accurately predict costs for the new contract with Randstad North America. Costs will, however, be much less than in the past due to the great reduction in the number of agency temporary employees.

It is recommended that Council:

1. Authorize an extension of an existing contract with Spherion Corporation through June 30, 2002, with a total 2002 cost not to exceed $3.5 million; and
2. Award a three-year contract (with an option to extend for two additional two-year periods) to Randstad North America of Santa Clara to provide temporary personnel placement services.

Reviewed by:
Mark Gregersen
Director, Human Resources