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BACKGROUND Administration of workers' compensation claims is complex due to the legal mandates governing these types of claims, as well as the multifaceted aspects of administering them. In addition to the strict time lines and myriad of required forms, administrators also interface with personnel in the medical and legal fields representing employees as well as the employer. Delays or inappropriate processing of claims may result in severe penalties. As a result, most municipalities hire professional third-party administrators to handle this specialized responsibility. The City of Pleasanton retained Innovative Claim Solutions (ICS) as their workers' compensation third-party administrator in 2001 to assess and revamp the City's program. The goals were to develop consistent and efficient procedures that comply with state requirements, while providing exceptional service to both the injured worker and City staff. ICS was able to streamline the case management process and provided excellent service in managing this program area for the City. DISCUSSION At present, ICS has developed a workers compensation program that operates smoothly. This third-party administrator engages in timely communications with injured workers. They provide City staff with comprehensive information regarding the injured employee's status, including the plan for care, ability to return to work, modifications in duties for those who are able to return prior to being fully recovered. Cases are settled with employees as appropriate and in a timely manner. ICS calculates permanent disability ratings and assists with disability retirements. Additional services include providing City staff with updates on legislative activities related to workers' compensation as well as new requirements as they are enacted. The City Purchasing Procedures Manual requires that three written proposals be obtained for consultant services contracts in excess of $20,000. As an alternative, a department may recommend selection of a consultant from a Managed Qualified Bid List (MQBL) provided the consultant was prescreened and was determined to be qualified to meet the project scope of work. Notwithstanding these two options, the policy also allows the extension of an existing consultant or service provider contract if it is determined that this action is in the best interest of the City. Further, this action must be approved at a City Council meeting so that any interested party has an opportunity to comment. Staff is recommending athree-year extension to the ICS contract based on the following factors. As noted above, worker's compensation management is a complex and detailed administrative process involving significant coordination between the City and the administrator. Because this coordination is developed over time, selection of a new administrator often involves a significant learning curve that may impact performance. With the cooperation of ICS, the City has fully implemented orderly, efficient and compliant worker's compensation procedures which are based in part, on relationships Page 2 of 3