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PALM DESERT REDEVELOPMENT AGENCY/
PALM DESERT HOUSING AUTHORITY
STAFF REPORT
REQUEST: AUTHORIZATION TO CEASE NEGOTIATIONS WITH KTGY
GROUP, INC. FOR ARCHITECTURAL SERVICES FOR THE
CARLOS ORTEGA VILLAS
SUBMITTED BY: Catherine Walker, Senior Management Analyst
CONTRACTOR: KTGY Group, Inc.
17922 Fitch Street
Irvine, CA 92614
DATE: March 11, 2010
CONTENTS: Letter Memorializing Declination
Recommendation
By Minute Motion: Authorize staff to cease negotiations with KTGY Group Inc.
for architectural services for the Carlos Ortega Villas.
Executive Summary
Approval of the recommendation authorizes staff to cease negotiations with KTGY Group
Inc. ("KTGY") for architectural services for the Carlos Ortega Villas. Both KTGY and the
Palm Desert Redevelopment Agency ("Agency") were unable to reach mutually acceptable
terms for the Professional Services Agreement ("Agreement") as it is currently conceived.
With the formal acceptance of KTGY's declination, staff will commence interviews to select
an alternate architectural firm.
Backaround
On June 11, 2009, the Agency Board authorized the Palm Desert Redevelopment Agency
to solicit Statements of Qualifications and Fee Proposals from qualified architects and
architectural firms for the preliminary: design, engineering, landscape design, and
entitlements for the Carlos Ortega Villas. Through the Request for Proposals (RFP)
process, the Agency sought qualified architectural firms to assist in taking the project from
its current conceptual design through preliminary design and entitlements for the project. As
part of the RFP process each potential respondent was issued a copy of the Palm Desert
Redevelopment Agency's Agreement for Professional Services. Each firm was made fully
aware of the terms of the Agreement during the Request for Information process. The
response was extensive with 31 proposals received for consideration. Each of the
responses received from the firms was objectively evaluated on the basis of the
qualifications of the firms including: location, history of work experience on similar projects
Staff Report
Professional Services for the Carlos Ortega Vilas
March 11, 2010
Page 2 of 2
in size and nature, responsiveness to the proposal, rates and estimated fees, special
considerations including experience with LEED, and sustainable "green" construction.
A committee of staff members from four departments participated in an objective review
process, evaluating all responses to the RFP, and recommended that the top four ranked
firms be invited to interview. The second portion of the review was based on interviews
specifically related to the firms' understanding of the conceptual project and the process by
which they would complete it. The interview panel consisted of representatives from
Planning, Redevelopment, Housing, and the Housing Sub -Committee.
On December 10, 2009, the Agency Board authorized staff to enter into negotiations with
KTGY, and finalize the Agreement for professional services for the Carlos Ortega Villas. As
per the attached letter memorializing KTGY's declination of the contract, KTGY is unwilling
to enter into the Agreement as it is currently conceived, specifically objecting to the
indemnification provision. The City Attorney has reviewed this issue, and has had contact
with KTGY staff regarding all questions and concerns. It is the City Attorney's
recommendation that the Agreement language remains, and all negotiations with KTGY
cease. Once negotiations have terminated, staff will conduct interviews from the remaining
list of proposers and select an alternate firm for the project.
Fiscal Analvsis
The Carlos Ortega Villas project was budgeted as part of Fiscal Year 2009-2010, the cost of
this contract has been taken into consideration within that budget. Therefore, the budgeted
cost of the project is the immediate fiscal impact; however, upon completion of the entire
project there will be the requirement to operate this property.
Submitted By: )V&44�
Catherine Walker, Sr. Management Analyst
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Paul S. Gibson, Director of Finance
Imuth, Executive Director
Maffin Alvarez, Redevelopment Manager
Janet Moore, Director of Housing
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PALM DESERT, CALIFORNIA 9226o-2578
TEL:76o 346—o6iI
FAX: 76o 30-6372
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February 24, 2010
Mr. Chris Texter
Mr. Keith Labus
KTGY Group
17922 Fitch Street
Irvine, California 92614
Dear Mr. Texter and Mr. Labus
Re: Professional Services Agreement ("Agreement")
The purpose of this letter is to confirm the declination of the contract between the Palm
Desert Redevelopment Agency "Agency' and KTGY, in relation to architectural services
for the Carlos Ortega Villas. As per our phone conversation Friday, February 12, 2009,
KTGY takes exception with the indemnity provision, as stated in the Agreement, and is
unwilling to enter into contract with the Agency for design services for the Carlos Ortega
Villas.
The Agency, at the direction of the City Attorney, will not amend the Professional
Services Agreement, and the indemnity provision is to remain as currently stated. This
letter confirms that KTGY and the Agency have ceased all negotiations and the
associated contract has been declined.
If our understanding is in error, please notify the Agency in writing by Monday, March
1, 2010. if you have any questions, please feel free to contact me at (760) 346-0611,
Extension 415.
Regards,
Catherine Walker
Senior Management Analyst
KeoantMPAI