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BACKGROUND Administration of workers' compensation claims is a complex process due in part to the numerous and constantly changing legal mandates and medical pieces in handling these types of claims. Workers' compensation claims personnel are expected to interface with medical and legal professionals representing a city and /or injured employees. Delays or mistakes in processing claims may result in severe penalties, financial liability and poor employer - employee relations. Therefore, it is common for municipalities to hire third -party administrators with the expertise and experience in handling the unique challenges and compliance requirements of the specialized field of workers' compensation administration. The City initially retained Innovative Claims Services, Inc. (ICS) in 2001 to provide third - party administration for the City's workers' compensation program. The current contract with ICS expired on June 30, 2015. Consistent with the City's purchasing policies, the Human Resources Department conducted a request for proposal process (RFP) for third -party administration services for the workers' compensation program. DISCUSSION The City of Pleasanton's Purchasing Procedures Manual requires that three written proposals be obtained for contracts for consultant services in excess of $20,000. A request for proposal process was initiated on May 27, 2015 to seek the services for a third -party administrator for the City's workers' compensation program. The City received three timely proposals which were reviewed by members of the Human Resources Department. One vendor quoted significantly higher fees for the same relative service and was not considered further. Two vendors, ICS and Tristar, were chosen to continue to the reference check phase and finalist interviews. Both vendors performed well in the process. Both firms provided quotes for a three year contract and included fees for an optional fourth and fifth year. In comparing the flat annual fees, ICS quoted fees that were slightly higher, by approximately 4.5% for the three -year term ($524,387 versus $501,680) and 5% higher for the five -year term ($900,722 versus $857,385). However, in analyzing the quotes for ancillary services such as bill review, (a service in which the City pays to have bills scrutinized for accuracy and appropriateness of charges), ICS was less costly than Tristar. This offset makes ICS slightly less expensive overall, although the difference between the two vendors is negligible. The City has worked closely with ICS over the years to monitor claims frequency, causes and types of injuries, types of claims (indemnity versus medical only), bill review savings, litigation rates and utilization and peer review findings and savings. In addition, providing exceptional customer service to both injured workers and City staff who perform a function in the workers' compensation program has been emphasized. ICS has performed well over the years to meet the needs and maintain the high standards set by the City. Third -party administrators must engage in timely communication with injured workers and Human Resources staff. They are required to maintain comprehensive and meticulous records regarding the status of injured employees, Page 2 of 3