Title
[Contract Supplement] Workers’ Compensation Sub-Rosa Investigation Services
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FileID
File ID: 2026-001011
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Location
Location: Citywide
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Recommendation
Recommendation: Pass a Motion authorizing the City Manager or designee to execute a Supplemental Contract with APEX Investigation to increase the not-to-exceed (NTE) amount by $250,001 for Sub-Rosa Investigation Services.
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Contact
Contact: Natalie Dempsey, Risk Manager, (916) 808-8587, ndempsey@cityofsacramento.org, Department of Human Resources
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Apex Investigation Services Supplemental Contract
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Description/Analysis
IssueDetail
Issue Detail: On June 28, 2023, the City executed Contract No. PRC2428 with APEX Investigation to provide Sub-Rosa Investigation Services. Under this agreement, APEX conducts investigations related to claims, including surveillance, background research, and analysis to identify potential fraud or inconsistencies with workers’ compensation claims.
The initial contract term was for three years, with provisions for two one-year extensions. The total cost for the initial term was $200,000. The contract was recently extended through June 29, 2027, and the NTE was increased an additional $49,999. It has since been determined that funding required to support services for the additional year exceeds initial projections. As of April 6, 2026, $269,395 has been expended. Based on the current expenditure rates, the current NTE of $249,999 is expected to be depleted well before the end of the contract term. Therefore, an additional $250,001 is requested, which would increase the total NTE amount to $500,000.
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PolicyConsiderations
Policy Considerations: City Council approval is required to execute agreements for services if the amount to be expended under each such agreement is $250,000 or more. This recommendation is consistent with City Code section 3.56 and in accordance with Procurement Policy Number AP-4101 Section 1.1(b)
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): This report contains administrative activities that will not have a significant effect on the environment and that do not constitute a “project” as defined by the California Environmental Quality Act (CEQA) Guidelines Sections 15061(b)(3) and 15378(b)(2).
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: In accordance with City and State policies, as well as legal requirements, the Workers' Compensation Unit of the City of Sacramento is mandated to investigate and report potential Workers’ Compensation abuse and fraud. When an insurer or licensed rating organization knows or reasonably believes it knows the identity of a person or entity whom it has reason to believe committed a fraudulent act relating to a workers' compensation insurance claim, they shall notify the local district attorney's office and the Fraud Division of the Department of Insurance under Insurance code 1877.3(b)(1). Renewing this agreement will allow the City to ensure uninterrupted operation of the City’s investigation and state-mandated reporting requirements.
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FinancialConsiderations
Financial Considerations: The cost for the supplemental contract is funded through the Human Resources Department Workers’ Compensation Fund.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): LBE Preference was included in the sourcing event. APEX Investigation Services is located in Sacramento, CA.
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