REPORT TO COUNCIL
SUBJECT
Title
Authorize the Execution of an Updated Agreement with Otis Elevator Company in the Amount of $454,150 for the Repair and Modernization of the Department of Public Safety Headquarters Elevator (F26-229)
Report
REPORT IN BRIEF
Approval is requested to authorize an updated agreement with Otis Elevator Company of San Jose to incorporate various changes requested by Otis after the City Council’s authorization of the original agreement in November 2025.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code, City Council approval is required for goods and/or services exceeding $250,000 in any one transaction.
Pursuant to Sunnyvale Municipal Code Section 2.08.070(b)(4), the Purchasing Officer may authorize a purchase without competitive bidding when only one vendor is capable of providing the required goods or services due to the unique nature of the item or service. City Council approval is required for any sole-source purchase exceeding the City Manager’s purchasing authority.
ENVIRONMENTAL REVIEW
The action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15301 (Existing Facilities), which applies to the operation, repair, maintenance, and minor alteration of existing public structures and mechanical systems involving negligible or no expansion of use.
BACKGROUND AND DISCUSSION
The passenger elevator at the Department of Public Safety Headquarters is approximately 41 years old and recently stopped operating due to a mechanical failure. Over the past several months, staff attempted minor repairs but were unable to resolve the issue. The elevator’s hydraulic cylinder, which raises and lowers the elevator car, has failed and must be replaced. The proposed project will repair and modernize the elevator by replacing major components so that the system meets current code requirements and provides safe and reliable service for City staff.
On November 18, 2025, the City Council approved RTC No. 25-1016, authorizing a draft services agreement with Otis Elevator Company (Otis) in the amount of $454,150 for the repair and modernization of the Department of Public Safety Headquarters elevator.
Following Council approval, Otis requested several modifications to the City’s standard services agreement language. While the requested changes do not modify the scope of work or the contract amount, they revise certain contractual provisions. The requested changes include:
• Section 8 - Right of City to Inspect Records of Contractor: Clarifies that the City’s audit rights do not extend to Otis’ confidential, proprietary, or trade secret information.
• Section 11 - Indemnity: Revises the indemnification provision by removing the word “sole” from the clause addressing the City’s negligence, which broadens the exclusion from indemnification.
• Section 25 - Miscellaneous: Adds a force majeure provision addressing delays caused by events beyond the control of either party.
• Insurance Exhibit: Updates to the insurance requirements were reviewed and approved by the City’s Risk Manager
The elevator maintenance market is almost totally limited to only the manufacturers of the original elevator, in this case Otis. Staff is exploring other maintenance options on a go forward basis but for the purposes of this project recommends accepting these changes.
FISCAL IMPACT
There is no direct financial impact of the proposed modifications to the previously approved agreement.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Authorize the execution of an updated agreement with Otis Elevator Company of San Jose, in substantially the same form as Attachment 1 to the report, in the amount of $454,150 to repair and modernize the Public Safety Headquarters elevator at 700 All American Way;
- Authorize 10% contingency in the amount of $45,415, for a total not-to-exceed agreement amount of $499,565;
- Authorize the City Manager to execute the updated agreement when all necessary conditions have been met; and
- Authorize the City Manager to modify any terms or conditions of the agreement and/or change the scope of work so long as the contract amount is not affected.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Dennis Ng, Interim Director of Public Works
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Updated Draft Services Agreement
2. Redlined Draft Services Agreement