Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
6e
ACTION ITEM
Date of Meeting
May 8, 2018
DATE: April 30, 2018
TO: Stephen Metruck, Executive Director
FROM: Manette Moses, Director Health & Safety
Jeff Hollingsworth, Sr. Manager Risk Management
SUBJECT: Risk, Health and Safety System Contract Renewal
Amount of this request:
$600,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute contract documents
for the purpose of renewing the Port’s Risk Insurance and Management System, Origami Risk,
through May 31, 2023, at an estimated cost of $600,000.
EXECUTIVE SUMMARY
Approval of this request will allow the Port to continue using the Origami Risk system to
administer all aspects of our risk, safety, and industrial insurance programs; track leading safety
performance indicators; manage injury, damage, vehicle and bus, or lost and stolen property
claims; submit regulated data to Labor and Industries, and the Centers for Medicare and
Medicaid; and track recoveries from liable third parties.
The Origami Risk system, competitively procured in 2012, is a critical tool used by the Risk
Management and the Health & Safety organizations to manage their day-to-day operations. For
Health & Safety, the system must be used to comply with Industrial Insurance laws and
regulations, meet federal and state reporting requirements, and capture important hazard and
safety events critical for the development of safety improvements port-wide. For Risk
Management, the system is used to capture and track all information associated with claim
events, losses, litigation expense, and recoveries. The Origami system provides an online portal
for self-reporting which streamlines the intake process and increases the reporting rate.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Procured a new Risk Management system.
Cost Implications: The annual cost of a new system would depend on the system selected via a
competitive procurement. Implementation costs are estimated at $300,000.
COMMISSION AGENDA – Action Item No. 6e Page 2 of 3
Meeting Date: May 8, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Pros:
(1) While Origami Risk is the top risk management system as rated by several industry
studies, a competitive procurement could offer required features at a lower recurring
cost. System conversion costs and data loss risks from migration would need to be
included in the overall assessment.
Cons:
(1) The schedule for the procurement and implementation of a new system is estimated
at 18-24 months and would require significant resources from Risk Management,
Health & Safety, Information & Communication Technologies, and the Central
Procurement Office. Resources would be unavailable for other important programs
and operations.
This is not the recommended alternative.
Alternative 2 – Do not renew contract and drop the Port’s self-insurance programs. The Port
will be unable to maintain our self-insurance programs without system support.
Cost Implications: $2,400,000 per year
Pros:
(1) None
Cons:
(1) This alternative is significantly more expensive than the recommended alternative due
to an increase in insurance premiums and the cost for an insurance company or third-
party administrator to process the estimated number of annual claims.
(2) Electronic reporting and internal monitoring of claims has improved safety
performance resulting in a 31% reduction in the Occupational Injury Rate between
2014 and 2017. Reverting to a third-party administrator will reduce or eliminate the
gains from the past few years.
This is not the recommended alternative.
Alternative 3 – Renew the Origami Risk contract for the next five years.
Cost Implications: $600,000 (5 Year Cost)
Pros:
(1) Risk Management and Health & Safety have developed automated processes and
robust reporting for the efficient management of our claim processing and safety
programs using the Origami Risk system. With this recommended alternative, the Port
will be able to continue to self-insure and self-administer our worker’s compensation
and high-deductible insurance programs.
COMMISSION AGENDA – Action Item No. 6e Page 3 of 3
Meeting Date: May 8, 2018
Template revised September 22, 2016; format updates October 19, 2016.
(2) Data from electronic reporting and internal monitoring of events and claims help
identify loss and injury trends and areas for safety improvements resulting in the
reduction of future injury and loss. This work directly supports the Port’ s Long Range
Plan.
Cons:
(1) While Origami Risk is the top risk management system as rated by several industry
studies, a competitive procurement could offer required features at a lower recurring
cost. System conversion costs and data loss risks from migration would need to be
included in the overall assessment.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$0
$600,000
$600,000
AUTHORIZATION
Previous authorizations
0
0
0
Current request for authorization
0
$600,000
$600,000
Total authorizations, including this request
0
$600,000
$600,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
The annual cost of the license agreement is budgeted 50 percent in the Risk Management
expense budget and 50 percent in the Health & Safety expense budget.
Financial Analysis and Summary
Project cost for analysis
$600,000
Business Unit (BU)
Corporate
Effect on business performance
(NOI after depreciation)
n/a
IRR/NPV (if relevant)
n/a
CPE Impact
n/a
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
