ADMINISTRATIVE REPORT Date: September 6, 1995 Division File D837-N33 TO: Vancouver City Council FROM: Manager of Non-Market Housing SUBJECT: Food Services Contract, Evelyne Saller Centre CONSIDERATION A. THAT City Council authorize negotiation of a five year contract with Versa Services with terms and conditions satisfactory to the Director of Legal Services. OR B. THAT City Council authorize formal notice be given to Versa Services to terminate the current contract and, in consultation with the Manager of Purchasing Services, go to proposal call for selection of a contractor and report back to Council. GENERAL MANAGER'S COMMENTS The General Manager of Community Services notes that Versa Services is providing satisfactory food service at the Evelyne Saller Centre, as well as at Cordova House and Taylor Manor. Its charges are competitive and Versa has kept the cost of food at 1991 levels without compromising quality. The service was last tendered in 1991 and market conditions have not changed appreciably in that time. There are costs associated with a proposal call to the City, as well as to the bidders. There would be an undesirable disruption to employees should a different contractor be hired. Negotiation with Versa is acceptable to the Province which funds this service, and would be preferred by Evelyne Saller management. Accordingly, I RECOMMEND approval of "A". COUNCIL POLICY The policy of Council is to award contracts for the purchase of equipment, supplies and services that will give the highest value based on quality, service and price, except where an allowance of a maximum of 5% is given to those bidders whose tender reflects local content. Contracts with a value over $200,000 are referred to Council for award. PURPOSE The purpose of this report is to seek Council's direction in extending the current food service contract with Versa Services or calling for proposals. BACKGROUND The Evelyne Saller Centre is a community resource centre located at 320 Alexander Street in the downtown eastside of Vancouver. The Centre is operated by the City of Vancouver under shared provincial, federal and City funding agreements. The cafeteria operation is 100% funded by the provincial government (Ministry of Social Services). There is no direct cost to the City for the food service operation. Currently the Centre's cafeteria averages 1,094 meals per day, the 1995 food service budget is $1,101,435.00, and the profit to Versa is 2% or $22,100.00. Versa Services has managed the food services at the Evelyne Saller Centre since September, 1990. In 1990, a Request for Proposal was put out for food services, and an evaluation was done with the objective of providing a good, high volume food service at a reasonable cost. Versa was selected as the company which had the most extensive experience in the health field, and which would provide the best food service for an institutional food operation requiring large volume production. The province accepted the City's recommendation. In the 5 years since Versa Services began operations, a number of initiatives have been jointly undertaken by Versa and the Centre. 1. A continuous quality improvement program has been implemented with audits being done regularly, checking such items as food temperature, sanitation, occupational health, and menu planning. 2. Versa staff sit on the Centre's joint OH & S committee to ensure uniformity in addressing health and safety issues in the Centre. 3. Versa has supported hiring personnel from the Downtown Eastside where their skills and abilities meet qualifica-tions to work in the food service industry. 4. Policies and procedures have been developed to ensure that all staff perform to a standard and conduct themselves in an appropriate manner. Policies and procedures developed by the Centre to meet required standards of service are supported by Versa management and staff. 5. Versa introduced and maintains Food Safe Level I certifi-cation for its staff. 6. Versa has provided expert advice to the Centre in develop-ing the kitchen equipment replacement program which has enhanced food preparation, and servicing. Over a five- year period, 12 large equipment items have been acquired. 7. Versa has consistently been under budget for food opera-tions by making cost-effective purchases from a network of food suppliers. 8. Menus have been routinely upgraded to supply a wide variety of selections, as well as nutritious and hearty meals. A recent Centre survey indicated client response to the cafeteria services was positive. Options for Evelyne Saller Centre Two options are advanced for Council's consideration: A. Negotiate the contract with Versa Services or B. Issue a Request for Proposal. With option A, the City would not go to proposal call but continue with Versa Services, which has proven to be effective in providing a high volume of meals to the Centre on a daily basis. Food costs, excluding labour, have remained stable for the past five years. Versa Services, management and staff, has worked well with the Centre's management in serving a difficult clientele by co-operating in the implementation of fair policies and practices to support disadvantaged people. Versa Services has responded positively to requests for changes that improve the meal service to clients. Versa will even cater to a home- bound client with special needs. Versa also provides frequent supervisory inspections and consultation to the management of the Evelyne Saller Centre. The Ministry of Social Services which funds 100% of the Centre's meal service operations supports negotiation of the contract with Versa Services. With option B, Council would be authorizing notice to terminate the current contract with Versa Services and go to proposal call. Versa Services would, in turn, notify their employees of possible layoffs and or transfers, where qualification and seniority permits. * * * * *