Item - 2016.AU6.10

City Council considered Items AU6.9 and AU6.10 together.

The Audit Committee recommends that:

1.  City Council request the General Manager, Facilities Management to ensure specifications, included in call documents to procure cleaning services, are based on accurate measurements of cleanable area.

2.  City Council request the General Manager, Facilities Management, in consultation with the Director, Purchasing and Materials Management Division, to ensure the labour estimates included in call documents for cleaning services are developed using benchmarked industry cleaning times.

3.   City Council request the General Manager, Facilities Management to compare current contracted cleaning service levels to the standard service level in the Custodial Standard Service Model and industry cleaning times to examine opportunities to reduce costs.

4.  City Council request the General Manager, Facilities Management to ensure the scope of work included in future procurement processes for contracted cleaning services is consistent with the Custodial Standard Service Model.

5.  City Council request the General Manager, Facilities Management, in consultation with the Director, Purchasing and Materials Management Division, to review the sourcing of consumables to determine the most economical and environmentally friendly procurement strategy for the supply of consumables to facilities where cleaning services are provided by a vendor.

6.  City Council request the General Manager, Facilities Management to implement appropriate controls to monitor the acquisition and use of consumables provided by contractors.

7.  City Council request the General Manager, Facilities Management, in consultation with the Director, Purchasing and Materials Management Division, to review the evaluation process for the procurement of cleaning contracts.  Such review to consider industry practices for evaluation criteria, scoring methodology, and weighting of criteria including the relative importance of price. 

8.  City Council request the General Manager, Facilities Management, in consultation with the Director, Purchasing and Materials Management Division, to ensure adequate analysis of the reasonability of the cost of contract changes is performed.  Documentation to support the cost of contract changes should be retained in the respective purchasing and contract files.

9.  City Council request the General Manager, Facilities Management, to implement controls to monitor actual services delivered and cleaning hours provided are in accordance with contracts.  Where services do not adhere to contracts, payments should be adjusted for any variances in actual cleaning hours provided.   

10.  City Council request the General Manager, Facilities Management, in consultation with the Director, Purchasing and Materials Management Division, to review the standard call documents for cleaning contracts to ensure that the pricing structure allows changes to be made where the actual services delivered significantly deviates from the award.

11.  City Council request the General Manager, Facilities Management to monitor and supervise all cleaning contracts to ensure compliance with contractual terms and obligations to maintain, and make available for review, the records related to the contract.

12.  City Council request the General Manager, Facilities Management to work collaboratively with the Fair Wage Office to provide any necessary contract related records required to strengthen the compliance reviews conducted to ensure fair wages.

13.  City Council request the City Manager, in consultation with the City Solicitor, to consider the City’s obligation to notify appropriate authorities about contractor business activities related to irregular contractor payroll records.

14.  City Council request the General Manager, Facilities Management to develop and implement a standard protocol for evaluating custodial contractor performance.  The protocol should include:

a.  A standard form for contractor performance evaluation

b.  Annual review cycles and a mandatory review prior to exercising a renewal option on a contract

c.  Documentation of the results of such performance evaluations to be retained within the contract file.

15.  City Council request the General Manager, Facilities Management to complete a service review of all current cleaning contracts including an analysis of their cost effectiveness.  The results of such review to be reported to Government Management Committee.

16.  City Council request the City Manager to request Division Heads and Chief Executive Officers of City agencies and corporations to review the issues and recommendations included in this report and consider the relevance to their respective operations.

The Audit Committee considered the following Items together:

- AU6.9, headed "Audit of City Cleaning Services - Part 1: Opportunities to Control Costs, Improve Productivity and Enhance Quality of Cleaning Services"; and

- AU6.10, headed "Audit of City Cleaning Services - Part 2: Maximizing Value from Cleaning Contracts".

Beverly Romeo-Beehler, Auditor General, and Ina Chan, Assistant Auditor General, gave a presentation to the Audit Committee on these Items.

This report presents the results of the audit of cleaning services provided by the Facilities Management Division.  The objective of this audit was to assess whether these services are effective, efficient and economical.

The audit results are presented in two separate reports:

·        Part 1, the management of overall cleaning services provided by Facilities Management, is contained in a separate report entitled Opportunities to Control Costs, Improve Productivity and Enhance Quality of Cleaning Services

·        Part 2, the procurement and administration of cleaning services obtained under contract, is contained in this report.

This report includes 16 recommendations to strengthen the procurement, management, and administration of cleaning contracts.  Addressing the recommendations in a timely manner presents an opportunity to achieve significant savings on current and future cleaning contracts by:

·        Ensuring cleaning specifications are data driven

·        Improving procurement of cleaning services

·        Strengthening contract monitoring to ensure value-for-money is achieved.