HomeMy WebLinkAbout06-02-2015 B1 Purchasing Authority RevisionsCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Michael Codron, Assistant City Manager
Prepared by: James David, Principal Analyst
SUBJECT: REVISIONS TO CHAPTER 3.24 OF THE MUNICIPAL CODE:
PURCHASING POLICIES AND PROCEDURES
RECOMMENDATION
Amend the Municipal Code, Purchasing Ordinance (MC 3.24), Purchasing Guidelines and any
related internal policies by:
1. Revising purchasing authority and procedures for Public Works projects to be
more consistent with Public Contract Code;
2. Revising purchasing authority and procedures for consultant services to keep pace
with the current market; and
3. Adding language governing on-call professional services, environmentally
preferred purchases, and emergency purchasing.
DISCUSSION
Background
One of the City’s adopted Financial Plan objectives states that the City will link resources with
results by “proposing objectives for improving the delivery of program services” (2013-15
Financial Plan, Objective A5, Pg. H-4). Based on organization-wide feedback, it appears that
some of the existing policies and procedures that govern purchasing activities are hindering
staff’s ability to deliver services in an efficient and timely manner. With each required level of
purchasing authority comes additional time, resources and review before a purchase can be made
and related service delivered. In some circumstances, the additional levels of scrutiny do not
appear to create additional value in terms of ensuring proper conduct, compliance with
regulations, or other quality control benefits.
Staff has identified several opportunities to reevaluate purchasing authority levels or bidding
procedures to keep pace with the current market and streamline the delivery of program services.
This systematic review of operations is consistent with adopted Financial Plan budget policies
governing productivity, and specifically responds to guidance for “Analyzing system and
procedures to identify and remove unnecessary review requirements” (2013-15 Financial Plan,
#A, Pg. H-26).
On December 16, 2014, the Council adopted a new budget policy in the Productivity section (Pg.
H-26) of the 2013-15 Financial Plan that reiterates this commitment to efficient purchasing
policies and procedures (new language in italics):
06/02/15
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Purchasing System Changes Page 2
…the City will constantly monitor and review our methods of operation to ensure that
services continue to be delivered in the most cost-effective manner possible. This review
process encompasses a wide range of productivity issue, including…
H. Maintaining City purchasing policies and procedures that are as efficient and effective as
possible.
As part of this policy change, Council gave staff direction to return with analysis of existing
purchasing practices, including comparison with other benchmark cities, and provide
recommendations for improvement. The following sections describe this analysis and
corresponding recommendations.
Benchmark comparison
The City uses a set of benchmark cities when comparing municipal operations: Monterey, Santa
Cruz, Palm Springs, Napa, Santa Maria, Davis, Paso Robles and Santa Barbara. Research was
conducted to compare purchasing policies and procedures (Attachment 2, Benchmark Purchasing
Comparison). In general, San Luis Obispo’s purchasing policies and levels of purchasing
authority are aligned with most benchmark cities. There are a few cities that do things a little
differently, which has led to the recommendations that follow.
Allow more public projects to use informal bidding procedures per Public Contract Code
The cities of Davis and Santa Maria use the State’s Public Contract Code to establish alternative
bidding procedures governing Public Works projects (Section 22032):
(a) Public projects of forty-five thousand dollars ($45,000) or less may be performed by the
employees of a public agency by force account, by negotiated contract, or by purchase
order.
(b) Public projects of one hundred seventy-five thousand dollars ($175,000) or less may be
let to contract by informal procedures as set forth in this article.
(c) Public projects of more than one hundred seventy-five thousand dollars ($175,000) shall,
except as otherwise provided in this article, be let to contract by formal bidding
procedure.
San Luis Obispo elected to follow the Public Contract Code as well in 2003 (Attachment 3,
Council Ordinance 1435). Formal bidding procedure (noted as letter “c” above) is the Request
for Proposals (RFP) process, which requires notices inviting bids be published in the newspaper
at least thirty calendar days before the date of opening the bids (MC 3.24.150.B2). Informal
bidding procedure (noted as letter “b” above) is a streamlined process that allows notices inviting
bids to be mailed to a list of qualified contractors and construction trade journals at least ten
calendar days before bids are due (MC 3.24.150.B3).
A distinct departure from the Public Contract Code was made by the City in 2003 when the
purchasing guidelines were revised: instead of $175,000 or more being the criterion for formal
bidding procedures the City opted for criterion of $25,000 or more (Attachment 5, Purchasing
Resolution). This means that most public projects valued $25,000 or more are going through the
formal, and more time consuming, RFP process. Staff recommends the Council amend the
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Purchasing System Changes Page 3
purchasing guidelines to be more consistent with the Public Contract Code by raising the
threshold for informal bidding procedures to public projects valued $100,000 or less. This will
result in a streamlined process that reduces the calendar days for bidding periods, and reduces
staff time spent on the process of getting things constructed, which will enhance our service
delivery to the community.
Staff is also recommending that the Finance Director or their designee be given the authority to
award contracts for public contracts valued $45,000 or less. This is consistent with Public
Contract Code (letter “a” above) and will streamline the City’s internal processes for delivering
small-scale public projects.
Increase City Manager spending limit on consultants to keep pace with the market
The City continues to rely on consultants to augment staff resources. The City
Manager/Designee’s consultant services spending limit in Monterey ($35K), Santa Cruz
($100K), Davis ($50K), Santa Barbara ($35K) and Santa Maria ($75K) are all higher than San
Luis Obispo ($25K). The last change to San Luis Obispo’s City Manager/Designee consultant
services spending limit was in 2003. Organization-wide feedback indicated that consultant costs
often exceed $25,000 in today’s market.
Staff recommends the Council amend the purchasing guidelines to raise the purchasing authority
of the City Manager/Designee to procure consultant services to $50,000. This is a reasonable
increase consistent with other benchmark cities that will have a significant efficiency impact.
The result will be a streamlined process that reduces staff and Council time spent on the process
of hiring consultants to work on budgeted projects and programs.
Add purchasing language that enhances efficiency and environmental responsibility
There are three other areas the City could strengthen their purchasing policies and procedures:
(1) on-call professional services, (2) environmentally preferred purchases, and (3) emergency
purchasing. These are areas where the City has adopted best management practices but has not
formally included policy language in applicable sections of the Municipal Code and related
purchasing guidelines.
1. On-call professional services
Multiple City departments maintain lists of Council-approved qualified consultants that can
provide professional services on various projects. However, the Municipal Code does not
provide direction on how to create and maintain these lists. Staff recommends the Council amend
the Municipal Code to require a Request for Qualifications (RFQ) process be followed to solicit
on-call consultants at least every five years. This will enhance transparency and formalize the
process of establishing and maintaining these lists.
2. Environmentally Preferred Purchases
The City adopted a “Recycled product procurement policy” in 1990 (Council Ordinance 1178).
Many benchmark cities have expanded policies that include preference for equipment, supplies,
and services that cause less harm to the natural environment, and are not solely focused on
recycled products. Staff recommends the Council expand upon the City’s recycled product
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policy in the same manner to demonstrate a commitment to purchasing equipment, supplies and
services that use less harmful materials, employ recycled or recovered materials, and utilize
techniques intended to result in less impact on the environment that other available methods.
3. Emergency Purchasing
The Purchasing Ordinance contains minimal provisions for emergency purchasing (MC
3.24.060B). Staff recommends that Council amend the Municipal Code to define “emergency
purchasing” and set guidelines for when the City Manager/Designee can authorize an emergency
purchase that cannot be made through normal purchasing procedures.
Future direction on local vendor preference
Another purchasing policy found in many benchmark cities is a preference for local vendors.
Most benchmark cities adopted a separate ordinance that defines “local vendor” and indicates
what type of preference a qualifying local vendor is eligible to receive. In some cases a local
vendor’s bid is given an advantage up to five percent of their net bid amount, which means that a
local vendor does not necessarily have to be the lowest bidder to secure the contract. In other
cases local vendors are given an advantage equal to the amount of local sales tax that would be
generated if they were the winning bidder. In all cases a determination is made that the local
product is of the same quality as the lowest bidder.
Staff has received inquiries from Council members about a potential local vendor preference
policy. The City’s Purchasing Ordinance contains language that allows for local preference if
quality, price, service and all other relevant factors are equal (MC 3.24.130B, 3.24.190B). If the
Council majority desires to explore expanding local vendor preference to incorporate additional
advantages, staff will return with a separate item on a future agenda for Council review and
potential adoption.
CONCURRENCES
Administration staff conducted 11 brainstorming sessions with various City departments that
focused on existing process, issues and ideas. Each meeting was attended by analysts, program
managers, Department Heads, and other representatives. These meetings resulted in process
improvements to a variety of internal processes, and in almost every case the purchasing
authority limits and procedures were seen as an area where additional process improvements are
needed. The Finance Department is the lead on purchasing polices and their staff concurs with
the recommendations in this report as well.
FISCAL IMPACT
Streamlining purchasing procedures means less time spent on process. This will free up staff
time to focus on other projects and programs, which indirectly reduces overall staff costs because
less staff resources are needed.
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ALTERNATIVES
1. Do nothing. This is not recommended because the City’s purchasing policies and procedures
will continue to lose pace with industry and market practices. Furthermore, budget policies to
enhance productivity and efficiency will not be met.
2. Recommend different monetary limits for Public Works project bidding procedures
and/or City Manager/Designee spending limits on consultant services. This is not
recommended because the proposed changes are justified by benchmark analysis and have
been vetted internally by staff.
ATTACHMENTS
1. Existing and Proposed Purchasing System Overview
2. Benchmark City Purchasing Comparison
3. Ordinance 1435 (2003): Use Public Contract Code for Public Construction Projects
4. Measure L-02 Language and Voting Results (2002)
5. Resolution 9444 (2003): Update Purchasing Guidelines
6. Legislative Draft Financial Management Manual Sections
7. Draft Resolution: Update Purchasing Guidelines
8. Draft Ordinance: Amend Municipal Code Purchasing Ordinance
T:\Council Agenda Reports\2015\2015-06-02\Purchasing Authority Changes
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Purchasing System Overview Exhibit 201-B
Type Category Features
Over-the-Counter No specific requirements; competitive
bidding to be used whenever practical.
Less Than Bid award by department via voucher or
$7,500 purchase order.
Job Order Contract (JOC) Task Orders
by the City Engineer.
Open Market
Department solicits at least 3 proposals;
$7,500 to (may be verbal with written quotes).
$25,000 Bid award by Finance via purchase order or
contract (or JOC Task Order by the City Engineer).
GENERAL
PURCHASES
Formal Formal Bid or RFP documents.
Advertising for sealed bids or proposals.
Includes supplies, Greater Than (Mailed notice in the case of construction projects.)
equipment, operating or $25,000 City Manager approves soliciting for bids or
maintenance services proposals and awards the contract
and construction projects. (or approves JOC Task Order).
Same as above except the Council
approves Bid/RFP documents and soliciting
Greater Than for proposals; contract award generally
$100,000 delegated by Council to the City Manager.
City Manager authorized to approve all JOC Task
Orders, not to exceed Council-approved annual
limits.
No specific requirements;
Less Than proposals to be solicited whenever practical.
$7,500 Proposal award by Department via voucher
or purchase order.
Proposals solicited whenever practical.
CONSULTANT $7,500 to Contract negotiated by Department.
SERVICES $25,000 Contract award by City Manager via purchase order
or contract.
Includes advisory Formal
services from professionals Formal RFP document.
such as engineers, Greater Than Council authorizes staff to request
architects, attorneys and $25,000 proposals and generally delegates contract
other specialized award to the City Manager.
consultants. Note: These are general guidelines; the evaluation and
selection process for consultant services may vary on a
case-by-case basis.
Formal Bid or Proposal Process
201-5
Attachment 1
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GENERAL PURCHASES
Supplies, equipment,
operating or maintenance
services
Less than
$7,500
$7,500 to
$25,000
$25,000 to
$100,000
More than
$100,000
No specific requirements; competitive bidding when practical
Award by Department
Solicit 3 written quotations and submit summary
Award by Finance Director/Designee
Purchasing Authority authorizes advertising for sealed bids;
Request for Proposals (RFP)
Award by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated by Council to Purchasing
Authority
PURCHASING SYSTEM OVERVIEW1
2 Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly
owned, leased, or operated facility (Public Contract Code 22002c).
PUBLIC PROJECTS2
Less than
$7,500
$7,500 to
$45,000
$45,000 to
$100,000
More than
$100,000
No requirements; competitive bidding when practical
Award by Department
Job Order Contract (JOC) Task Order by City Engineer
Solicit 3 written proposals and submit summary
Award by Finance Director/Designee
JOC Task Order by City Engineer
Notice inviting informal bids from list of qualified contractors
Award or JOC Task Order by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated to Purchasing Authority
JOC Task Order by Purchasing Authority (within annual limits)
CONSULTANT SERVICES3
Less than
$7,500
$7,500 to
$50,000
More than
$50,000
No requirements; solicit proposals when practical
Award by Department
Solicit 3 written proposals and submit summary
Contract negotiated by Department
Award by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated to Purchasing Authority
3 Finance Director can execute purchase orders for approved on-call consultant services in an amount not-to-exceed the project budget (MC 3.24.070C).
1 All monetary limits shown are for the cumulative value of the purchase, project or contract.
Attachment 1
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Benchmark Cities Purchasing Policy Comparison 04/07/15
Item Limit Staff Procedure
San Luis Obispo
All 7,500$ Department Head No requirements
General Purchases (Incl. PW projects)25,000$ Finance Director 3 quotes
General Purchases (Incl. PW projects)100,000$ City Manager RFP
General Purchases (Incl. PW projects)100,000+Council RFP
Consultant Services 25,000$ City Manager No requirements
Consultant Services 25,000+Council RFP
Monterey
All 3,500$ Department Head No requirements
Purchases, Services 35,000$ Finance Director 3 written quotes
Purchases, Services 35,000+Finance issue, Council award RFP
CIPs and Fleet 60,000$ Finance Director 3 written quotes
CIPs and Fleet 60,000+Finance issue, Council award RFP
Napa
Non-Budgeted Purchases 5,000$ Purchasing Officer Request for Quotes
Non-Budgeted Purchases 50,000$ City Manager Request for Quotes
Budgeted Purchases 75,000$ CM/Purchasing Officer Request for Quotes
Budgeted Purchases 75,000+CM/Purchasing Officer RFP
Personal Services 25,000$ City Manager Request for Quotes
Personal Services 25,000+Council Quotes/RFP
Palm Springs
All 2,500$ Department Head No requirements
All 5,000$ Procurment Director No requirements
All 25,000$ City Manager 3 quotes
Professional Services 25,000+Council (or delegate)On-call list
Public Projects 100,000$ Council (or delegate)On-call list
Non-Professional Services, Supplies 100,000$ Council (or delegate)6 quotes
All 100,000+Council RFP
Santa Cruz
All 10,000 Purchasing Manager (or designee)No requirements
All 100,000$ Purchasing Manager (or designee)3 quotes
All 100,000+Council RFP
Attachment 2
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Benchmark Cities Purchasing Policy Comparison 04/07/15
Davis
Supplies, Services, Equipment 1,000$ Department Head No requirements
Budgeted Supplies, Services, Equipment 50,000$ City Manager (or designee)Written quotes
Supplies, Services, Equipment 50,000+Council RFP
Public Projects (Public Contracts Code)45,000$ City Manager No requirements
Public Projects (Public Contracts Code)175,000$ City Manager On-call list
Public Projects (Public Contracts Code)175,000+Council RFP
Paso Robles
All 5,000$ Department Head No requirements
All 10,000$ CM/Designee 3 quotes
All 20,000$ CM/Designee RFP
All 20,000+Council RFP
Santa Barbara
Goods, services 2,500$ Department Head No requirements
Goods, services (except consultants and
construction projects)10,000$
Department Head with Gen. Svcs.
Concurrence 3 quotes
Goods, services (except consultants and
construction projects)25,000$ General Svcs Manager 3 quotes
Maintenance and repair of City equipment
and facilities 75,000$ General Svcs Manager 3 quotes
Goods, services (except consultants and
construction projects)25,000+General Svcs Manager RFP
Consultant Services and Construction
projects 35,000$ City Manager 3 quotes
Consultant Services and Construction
projects 35,000+City Manager RFP
Santa Maria
All 10,000$ Department Head No requirements
Purchases, Services 75,000$ Department Head 3 quotes
Budgeted Purchases, Services 75,000+Admin Svcs Manager RFP
Non-Budgeted Purchases, Services 75,000+CM issue, Council award RFP
Public Projects (Public Contracts Code)45,000$ CM/Designee, PW Director No requirements
Public Projects (Public Contracts Code)175,000$ CM/Designee, PW Director On-call list
Public Projects (Public Contracts Code)175,000+Council RFP
Attachment 2
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ORDINANCE NO . 1435 (2003 Series)
AN ORDINANCE OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP O
AMENDING CHAPTER 3 .24, ARTICLE III OF THE MUNICIPAL COD E
TO PROVIDE FOR THE USE OF JOB ORDER CONTRACTING AND
ALTERNATIVE BIDDING PROCEDURES FOR PUBLIC CONSTRUCTIO N
PROJECT S
WHEREAS, the citizens of San Luis Obispo approved Measure L-02 on November 5 ,
2002, which amended the City Charter to authorize the use of job order contracting fo r
maintenance-related projects as provided under Section 20128 .5 of the Public Contract Code an d
alternative bidding procedures as provided under Section 22000 of the Public Contract Cod e
("Uniform Public Construction Cost Accounting Act") for public construction projects ; an d
WHEREAS, Section 901 (E) and (F) of the City Charter states that the Council shal l
establish by ordinance guidelines for the use of such contracts and procedures .
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obisp o
as follows :
SECTION 1 . Article III of Chapter 3 .24 of the Municipal Code of the City of San Lui s
Obispo is hereby amended as set forth in Exhibit A .
SECTION 2 . A summary of this ordinance, approved by the City Attorney, together wit h
the names of the Council members voting for and against it, shall be published at least five day s
prior to its final passage, in The Tribune, a newspaper published and circulated in this City . Thi s
ordinance will go into on effect at the expiration of thirty (30) days after its final passage .
INTRODUCED on April 15, 2003 AND FINALLY ADOPTED by the Council of th e
City of San Luis Obispo on May 6, 2003 on the following roll call vote :
AYES :
Council Members Ewan, Schwartz, and Settle, Vice Mayor Mulholland, an d
Mayor Romero
NOES :
None
ABSENT :
None
The foregoing ordinance was adopted this 6 `h day of May 2003 .
Mayor David F . Romero
i
Lee Price,.M .C.
City Clerk
0 1435
Attachment 3
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Ordinance No . 1435 (200Series)S
Page 2
APPROVED AS TO FORM
filbert A .Trujillo,Acting City Attorney
Attachment 3
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Ordinance No . 1435 (2003 Series )
Exhibit A
Amendment To Formal Contract Procedure s
Chapter 3 .24 of the Municipal Cod e
ARTICLE III . FORMAL CONTRACT PROCEDUR E
3 .24.140
Requirements for purchase .
Except as otherwise provided in this chapter, purchases and contracts for supplies ,
services, equipment and construction projects, which are equal to or in excess of the bi d
requirement amount specified by council resolution, shall be by written contract with the lowes t
responsible bidder pursuant to the procedures prescribed in this article .
3 .24.145
Job order contracting .
As provided in Section 901 (E) of the Charter, the city may perform maintenance-relate d
construction projects for repair, remodeling or other repetitive work under a unit-price contrac t
for all necessary labor, materials and equipment, subject to the following conditions :
A.Such contracts are secured on a competitive basis in accordance with the procedure s
set forth in this Article ;
B.No new construction will be performed under such contracts ;
C.The specifications for such contracts provide for unit-price terms for all work that wil l
typically be performed under individual Task Orders ;
D.The specifications for such contracts establish any limits on the amount of individua l
Task Orders to be issued under the contract ; or on any minimum or maximum cumulative
amounts of Task Orders to be issued under the contract .
E.The council will specify limits on the authority to approve individual Task Orders b y
resolution .
3 .24.150
Bids - Notice of invitation and submission .
A . Notices inviting bids shall include, but not be limited to, the following :
1.A general description of the item(s) or service(s) to be purchased, or the publi c
work to be constructed or improved ;
2.The location where bid blanks and specifications may be secured ;
3.The time and place assigned for the opening of sealed bids ;
4.The type and character of bidder's security required, if any ; an d
5.The location and deadline for submission of bids .
B . Notices inviting bids shall be made as follows :
1 . For supplies, services and equipment, notices inviting bids shall be published a t
least once in the official newspaper of the city, with the first publication occurring at least te n
calendar days before the date of opening the bids .
Attachment 3
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Ordinance No . 1435 (2003 Series )
Exhibit A
Amendment To Formal Contract Procedure s
2.For construction projects below an amount specified by council resolution ,
notices inviting bids shall be mailed to a list of qualified contractors, identified according t o
categories of work, at least ten calendar days before the bids are due . The City Engineer i s
responsible for developing and maintaining this list based on the criteria determined by th e
California Uniform Construction Cost Accounting Commission (hereinafter referred to a s
Commission in this Chapter). Notices shall also be mailed within ten calendar days before th e
bids are due to all construction trade journals as required by the Commission . If the city does no t
have a list of qualified contractors for the particular type of work to be performed, notice s
inviting bids will only be sent to the construction trade journals as required by the Commission .
If the product or service is proprietary in nature and can only be obtained from a certai n
contractor or contractors, notices inviting bids will only be mailed to such contractor o r
contractors .
3.For construction projects above an amount specified by council resolution ,
notices inviting bids distinctly describing the project be published at least once in the officia l
newspaper of the city, with the first publication occurring at least fourteen calendar days befor e
the date of opening the bids . Notices inviting bids distinctly describing the project shall also b e
mailed at least thirty calendar days before the date of opening bids to all construction trad e
journals as required by the Commission .
4.The city may also give such other notice as it deems appropriate .
C . Sealed bids shall be identified as bids on the envelopes and shall be submitted to th e
purchasing authority .
3.24.160
Bids - Security requirement .
Bidder's security may be required when deemed necessary by the purchasing authority .
Bidders shall he entitled to return of bid security . However, a successful bidder shall forfeit hi s
bid security upon refusal or failure to execute a contract within fifteen days after notice of awar d
of that contract, unless the city is responsible for the delay . The contract may be awarded to th e
next lowest responsible bidder upon the refusal or failure of the successful bidder to execute th e
contract within the time herein prescribed .
3 .24 .170
Bids - Opening and retention .
Sealed bids shall be opened in public at the time and place stated in the notice invitin g
bids . A tabulation of all bids received shall be made available for public inspection until th e
award of a contract . All bids shall be retained on file for a period of not less than two years .
3 .24 .180
Bids - Rejection .
The purchasing authority may reject :
A . Any bid that fails to meet the bidding requirements in any respect ; or
Attachment 3
B1 - 14
Ordinance No . 1435 (2003 Series )
Exhibit A
Amendment To Formal Contract Procedure s
B.All bids, for any reason whatsoever, and may readvertise for new bids or abandon th e
purchase .
C.In the case of construction projects, the council may, by passage of a resolution by a
four-fifths vote, declare that the project can be performed more economically by employees o f
the city and may have the project done by force account .
3 .24.185
Bids — None received .
If no bids are received, the purchase may be made through negotiated contract or othe r
process approved by the purchasing authority, including, in the case of construction projects ,
performing the work by employees of the city by force account .
3 .24.187
Bids for construction projects — In excess of limit.
In the event that all bids received for a construction project are more than the maximu m
allowed under Section 22034(f) of Public Contract Code, and bids were invited pursuant to th e
provisions of Section 3 .24.150(B .2), the Council may, by adoption of a resolution by four-fifth s
vote, award the contract, in an amount not to exceed the maximum set forth in Section 22034(f )
of Public Contract Code, to the lowest responsible bidder, if it determines that the cost estimat e
was reasonable . Otherwise, the bids shall be rejected ; and if the agency decides to go forwar d
with the project, shall be re-bid in accordance with the procedures set forth in Sectio n
3 .24.150(B .3).
3 .24 .190
Contract award .
Subject to the prior approval of the city administrative officer, contracts shall be awarde d
by the purchasing authority to the lowest responsible bidder, except as follows :
A.If, at the time of bid opening, two or more bids received are for the same total amoun t
or unit price, quality and service being equal, and if in the discretion of the purchasing authorit y
the public interest will not permit the delay of readvertising for bids, then the purchasin g
authority may accept the one she or he chooses or the lowest bid obtained through subsequen t
negotiation with the tie bidders .
B.Sellers, vendors, suppliers and contractors who maintain places of business locate d
within the limit of the city shall be given preference if quality, price, service and all other factor s
are equal .
3 .24 .200
Requiring bond of successful bidder .
The purchasing authority may require as a condition to executing a contract on behalf o f
the city, a performance bond or a labor and material bond, or both, in such amounts as th e
purchasing authority shall determine appropriate to protect the best interests of the city . The
form and amounts of such bond(s) shall be described in the notice inviting bids .
Attachment 3
B1 - 15
Ordinance No. 1435 (2003 Series)
Exhibit A
Amendment To Formal Contract Procedure s
3 .24 .210
Determination of lowest responsible bidder .
In addition to the bid or quotation price, criteria for determining the lowest responsibl e
bid or quotation, for the purposes of the Charter and this chapter, shall include, but not be limite d
to, the following :
A.The character, integrity, reputation, judgment, experience and efficiency of the bidde r
(this may include an analysis of previous work performed for the city);
B.The ability of the bidder to perform the contract, or provide the supplies, equipment o r
services required, within the time specified, without delay or interference ;
C.The ability of the bidder to provide future maintenance, repair parts and replacemen t
of purchased equipment or supplies ;
D.Compliance by the bidder with federal acts, executive orders and state statute s
governing nondiscrimination in employment ; an d
E.The results of any evaluation relating performance and price, such as testing, life-cycl e
costing, and analysis of service, maintenance and technical data .
Attachment 3
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CERTIFICATE OF THE COUNTY CLERK
RESULTS OF CANVASSOF ALL VOTES CAS T
NOVEMBER 5,2002 CONSOLIDATED GENERAL ELECTION
CITY OF SAN LUIS OBISPO MEASURE L-02
STATE OF CALIFORNI A
COUNTY OF SAN LUIS OBISP O
I, JULIE L .RODEWALD,County Clerk-Recorder of the County of San Luis Obispo, d o
hereby certify that pursuant to law I did canvass the returns of the votes cast at the above reference d
election in the City of San Luis Obispo on November 5, 2002, and that a photocopy of the Statemen t
of Votes Cast to which this certificate is attached, shows the number of votes cast in said city for an d
against Measure L-02 and that the totals shown for and againstsaid measure in said city and in eac h
of the respective precincts therein, are full, true and correct .
MEASURE L-02 : Shall City Charter Section 901 be amended to allo w
maintenance related projects to be performed using a uni t
price contract awarded on a competitive bid basis consisten t
with the provisions for unit price contractscontained i n
Section 20128 .5 of the Public Contract Code ; and other publi c
works contracts to be awardedconsistent with the Uniform.
Public Construction Cost Accounting Act, Section 22000, e t
seq of the Public Contract Code ?
WITNESS, my handand Official Seal this 2 0th day of November, 2002 .
3
i JU IE L . RODEWALD, County Clerk-Recorde r
ss
Attachment 4
B1 - 17
Statement of Votes Cas t
GENERAL ELECTION HELD NOVEMBER 5, 200 2
SOVC For Jurisdiction Wide, All Counters, All Race s
OFFICIALET 1 ' U :. OTS
Reg .
Voters
Vote For
Cas t
Ballots Tota l
Votes
Time s
Blan k
Voted
Time s
Over
Voted
Number
ofUnder
Votes
YES N O
CONGRESSIONAL DISTRIC T
23RD CONGRESSIONAL DISTRICT 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
22ND CONGRESSIONAL DISTRICT 0 0 0 0 0 0 0 0 -0 -
Multiple Districts 0 0 0 0 0 0 0 0 -0 -
Total 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
STATE SENATE DISTRIC T
15TH SENATORIAL DISTRICT 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02%
Total 24919 0 13774 10936 2836 2 0 8419 76.98%2517 23 .02 %
STATE ASSEMBLY
33RD ASSEMBLY DISTRICT 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
Total 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
STATE BOARD OF EQUALIZATIO N
STATE BOARD OF EQUALIZATION DIST 1 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
Total 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
SUPERVISORIAL DISTRICT S
1ST SUPERVISORIAL DISTRICT 0 0 0 0 0 0 0 0 -0
2ND SUPERVISORIAL DISTRICT 6160 0 3661 2910 751 0 0 2224 76 .43%686 23 .57 %
3RD SUPERVISORIAL DISTRICT 11911 0 68745528 1344 2 0 4279 77,41%1249 22 .59 %
4TH SUPERVISORIAL DISTRICT 541 0 365289 76 0 0 232 80 .28%57 19 .72 %
5TII SUPERVISORIAL DISTRICT 6041 0 2714 2080 634 0 0 1582 76 .06%498 23 .94 %
MultipleDistricts 266 0 160 129 31 0 0 102 79 .07%27 20 .93 %
Total 24919 0 13774 I0936 2836 2 0 8419 76 .98%2517 23 .02 %
CITIES
CITY OF ARROYO GRANDE 0 00 0 0 0 0 0 0 -
CITY OF GROVER BEACH 0 00 0 0 0 0 0 -0
CITY OF MORRO BAY 0 00 0 0 0 0 0 0 -
CITY OF PASO ROBLES 0 00 0 0 0 0 0 0 -_
CITY OF SAN LUIS OBISPO 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02 %
CITY OF PISMO BEACH 0 0 0 0 0 0 0 0 0
CITY OF ATASCADERO 0 0 0 0 0 0 0 0 -
UNINCOPORATED 0 0 0 0 0 0 0 0 -
No Matching District 0 0 0 0 0 0 0 0 -0 -
Total 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02%
Date :1 1121/0 2
Time :10 :32 :3 7
Page :104 of 124
L-02 SAN LUIS OBISPO CITY CHARTER AMENDMEN T
Attachment 4
B1 - 18
Statement of Votes Cas t
GENERALELECTION HELD NOVEMBER 5, 200 2
SOVCFor CITY OF SAN LUIS OBISPO, All Counters, CITY OF SAN LUIS OBISP O
OFFICIAL ELECTION RESULTS-ALL BALLOTS
L-02 SAN LUIS OBISPO CITY CHARTER AMENDMENT
Reg .
Voters
Vote For
Cas t
Ballots Tota l
Votes
Times
Blan k
Voted
Time s
Over
Voted
Numbe r
of Unde r
Votes
YES N O
Jurisdiction Wid e
CON 222-29 919 1 654 514140 0 0 399 77 .63%115 22 .37%
CON 223-29 1126 1 574 447127 0 0 342 76 .51%105 23 .49 %
CON 224-75 752 1 408 319 89 0 0 258 80 .88%61 19 .12 %
CON 225-30 923 1 480 387 93 0 0 294 75 .97%9324 .03 %
CON 226-31 1169 1 700 564 136 0 0 4I7 73 .94%147 26 .06 %
CON 227-31 1267 1 844 678 166 0 0 513 75.66%165 24 .34 %
CON 301-32 509 1 252 205 47 0 0 151 73 .66%5426 .34 %
CON 302-33 940 1 537 457 80 00 351 76 .81%106 23 .19%
CON 303-34 751 1 469378 91 00 274 72 .49%104 27 .51°/
CON 304-37 1134 1 610 502 108 00 359 71 .51%143 28 .49%
CON 305-37 1204 1 799 649 150 00 526 81 .05%123 18.95 %
CON 306-35 980 1 519 406 113 00 299 73 .65%107 26.35 %
CON 307-36 1148 1 776 625 149 2 0 511 81 .76%114 18 .24%
CON 308-35 1060 1 676 528 148 00 424 80 .30%104 19.70 %
CON 309-38 1226 1 661 526 135 0 0 398 75 .67%128 24.33 %
CON 310-38 1148 1 547 41 ,4 133 0 0 321 77 .54%9322 .46 %
CON 311-34 818 1 428 323 105 0 0 25278.02%7121 .98 %
CON 312-40 990 1 600 515 85 0 0 413 80.19%102 19 .81 %
CON 401-36 541 1 365 289 76 0 0 232 80.28%5719 .72%
CON 520-40 734 1 327 258 69 0 0 188 72.87%70 27 .13%
CON 521-73 1113 1 529 417 112 0 0 317 `76.02%100 23 .98%
CON 522-74 W96 1 632 490 142 0 0 391 79.80%99 20 .20%
CON 523-75 950 1 436 335 101 0 0 237 70.75%98 2925 %
CON 524-76 944 1 250 160 90 0 0 120 75 .00%4025 .00%
CON 525-77 592 1 159 114 45 0 0 93 81 .58%21 18 .42 %
CON 526-77 612 1 381 306 75 0 0 236 77 .12%70 22 .88 %
AVPCT BT 43160 0 1 0 0 0 0 0 0 -0
AVPCT BT 47 4 1 1 1 0 0 0 1 100.00%0 0 .00%
AVPCT BT 53161 266 1 160 129 31 0 0 102 79.07%2720 .93%0
AVPCT BT 56 3 1 00 0 0 0 0 -0
Total 24919 0 13774 10936 2836 2 0 8419 76 .98%2517 23 .02%.
Date :11 /2110 2
Time :14 :20 :2 3
Page :3 of 3
tk,
Attachment 4
B1 - 19
THIS PAGE IS INTENTIONALLY LEFT BLANK
B1 - 20
RESOLUTION NO. 9444 (2003Series )A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP OUPDATINGPURCHASINGGUIDELINESWHEREAS, in the course of conducting City operations it is necessary to purchase a broad range o fgoodsandservices ; andWHEREAS, the Council has adopted purchasing policies and procedures as set forth in Chapter3 .24 of the Municipal Code that require the Council to specify by resolution the dollar amount of purchase sandcontractsrequiringtheuseofeitheropenmarketorformalbiddingprocedures, and the level of authorit yrequiredtoauthorizeinvitationsforbids (or requests for proposals), award contracts or approve Job Orde rContractTaskOrders ; and
WHEREAS,the Council desires to update existing guidelines to reflect current conditions an d
implement improved procedures, including electing to become subject to the uniform construction cos t
accounting procedures set forth in the Public Contract Code, commencing with Section22010, a s
required by the State in order to use the alternative bidding procedures for construction projects set fort h
in Section22032 of the Public Contract Code .
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that :
SECTION 1 . Resolution No . 8239 (1993 Series) is hereby rescindedand the updated purchasin g
guidelines set forth in Exhibit A are hereby adopted .
SECTION 2 . The construction change order policy set forth in Exhibit B is hereby amended .
SECTION 3 . The City hereby elects to become subject to the uniform construction cos t
accounting procedures set forth in the Public Contract Code .
On motion of Council Member Settle, seconded by Council Member Ewan, and on the followin g
roll call vote :
AYES :Council Members Ewan, Settle and Schwartz, Vice MayorMulholland, and Mayo r
Romero
NOES :None
ABSENT :None
the foregoing resolution wasadopted on April 15, 2003 .
MayorDavid F . Romero
Lee Price, C .M .C .
City Clerk
Gilbert A . Trujillo, Acting City Attorney
R 9444
Attachment 5
B1 - 21
THIS PAGE IS INTENTIONALLY LEFT BLANK
B1 - 22
Exhibit AResolutionNo .. 9444 (2003 Series )PURCHASINGGUIDELINE SInaccordancewiththepolicyframework set forth in Chapter 3 .24 of the municipal code, Cit ypurchasesandcontracts (including those for rentals and leases, butexcluding those for realproperty) will be made pursuant to these guidelines . Applicable competitive bidding categories ,authorization limits or contract award procedures will be based on unit cost, total purchase cos tforconsolidatedbiditemsorfiscalyearaggregatesinthecaseofblanketpurchaseordersorsimilarongoingpurchasingarrangements . Staging of purchases in order to avoid thes ecompetitivebiddingproceduresorauthorizationlimitsisprohibited .
GENERAL PURCHASE S
Purchases and contracts for supplies, equipment, operating and maintenanceservices, an d
construction projects will be made pursuant to the following guidelines .
A .Over-the-Counter .Purchases of less than $5,000 may be authorized by the Departmen t
Head. Although no specific purchasingrequirements are established for thislevel o f
purchase, competitive bidding should be used whenever practical .
B . Open Market .Purchases between $5,000 and $25,000 $000 may be authorized byth e
Director of Finance (or designee) pursuant to the open market bidding proceduresestablishe d
in Chapter 3 .24 (Article II) of the municipal code.
C .Formal Bids or Proposals.Purchases in excess of S25000 $080 will be made pursuan t
to the formal bidding requirements established in Chapter 3 .24 (Article III) of the municipa l
code . Authority to approve specifications, invite bids or request proposals and awar d
contracts will be as follows :
1.For purchases with an approvedbudget and a costestimate of $100,000 $-50,000 or less ,
the City Administrative Officer is authorized to invite bids or request proposals, approv e
specifications and award the contract .
2.For purchases in excess of $100,000 $50,000, Council approval of the specifications an d
authorization to invite bids or request proposals is required . The Council may authoriz e
the City Administrative Officer to award the contract if the selected bid or proposal is les s
than or equal to the Council-approved costestimate and there are no substantive change s
to the specifications . Otherwise, Council award of the contract is required .
D .jobOrder Contracts :Construction Projects.Under the Job Order Contact provisions of
Chapter124 (Article jib of the municipal code formaintenance-related construction
protects,individualTask Orders up to $2.5,000 may be approved by the City Engineer .,
Individual Task Orders in excess of$25,000 requireapprovalby .the CityAdministrativ e
Officer .
CONSULTANT SERVICE S
Contracts for consultant services will be awarded pursuant to the following guidelines .
1 -
Attachment 5
B1 - 23
Exhibit AResolutionNo .. 9444 (2003 Series )PURCHASINGGUIDELINE SA.Contracts for consultant services estimated to cost less than $5,000 may be awarded by th eDepartmentHead . Although no specific purchasingrequirements are established forthi slevelofcontract, proposals should be solicited whenever practical .B.Contracts for consulting servicesestimated to cost between $5,000 and $25,000 $4-57000 maybeawardedbytheCityAdministrativeOfficer . Proposals from at least three firms should b esolicitedwheneverpractical .
C.Contracts for consultant services estimated to cost more than $25,000 $15,000 will generally
be awarded pursuant to the following guidelines ; however, it is recognized that the City's
need for consultant services will vary from situation to situation, and accordingly, flexibilit y
will be provided in determining theappropriate evaluation and selection process to be used i n
each specific circumstance .
1 . The Council should generally approve request for proposal (RFP) documents before the y
are issued . The Council may authorize the City Administrative Officer to award th e
contract if it is less than or equal to the Council-approved costestimate and there are n o
substantive changes to theapproved workscope . Otherwise, Council award of th e
contract is required .
2 . In theevent that the timely evaluation and selection of a consultant precludes Counci l
approval of theRFP before it is issued, theRFP may be approved and distributed byth e
City Administrative Officer ; however, award of the contract will bemade by the Council .
3 . Cost will not be the sole criterion in selecting the successful bidder. Consultant proposal s
will be evaluated based on a combination of factors that result in the best value toth e
City, including but not limited to :
a.Understanding of the work required by the Cit y
b.Quality and responsiveness of the proposa l
c.Demonstrated competenceand professional qualifications necessary for satisfactor y
performance of the work required by the Cit y
d.Recent experience in successfully performing similar service s
e.Proposed methodology for completing the wor k
f.Reference s
g.Background and related experience of the specific individualsto be assigned to th e
projec t
h.Proposed compensatio n
4 . If it is determined that it is in the best interest of the City for services to be provided by a
specific consultant with contract terms, workscope and compensation to be determine d
based on direct negotiations—contract award will be made by the Council .
2-
Attachment 5
B1 - 24
Exhibit BResolutionNo . 94442003 Serie sCONSTRUCTIONCONTRACTCHANGEORDERSOVERVIEWWhentheCityawardsaconstructioncontract, the need for contract change orders (CCO's) is no tunusual . CCO's are required whenever the scope of work changes from that in the origina lcontractoranunknownconditionofthesiterequiresachangeinthescopeofwork . Usually acontingencyamountisestablishedwhentheprojectbudgetisfinalizeduponcontractawardtoaccommodatelimitedCCO's . The purpose of this policy is to establish limits of authority fo rapprovingconstructionprojectCCO's .
GOALS
1.Ensure appropriate authority and accountability in the approval of change orders .
2.Minimize the time needed to approve a CCO in order to avoid project delays .
3.Establish a system under which the organizational level at which approval is given i s
commensurate with thesize of CCO andsize of project .
4.Eliminate the potential for approval of a CCO when contingency funds are insufficient.
POLICIE S
Conditions for Approvalof CCO's by Staf f
1.Sufficient contingencyfunds are budgeted and available in order for the Public Work s
Director or City Administrative Officer (or CAO-approved designees) to approve a CCO .
2.The nature of work in the CCO is not significantlydifferent from that in the contract .
3.Authorization limits are based on an individual CCO amount, not the aggregate amount of al l
CCO's .
4.Authorization limits apply to CCO's for increases in contract amounts only .
5.When the aggregate amount of CCO's reaches 75% of the contingency, the awardin g
authority shall be informed of the status of the project and the sufficiency of funding t o
complete the project .
6.Work will not be brokenup into multiple CCO's in order to circumvent this policy .
7.All CCO's must be in writing and approved by theappropriate contract parties consistent with
the authorized limits established in this policy .
1
Attachment 5
B1 - 25
O Exhibit BResolutionNo . 94442003 SeriesCONSTRUCTIONCONTRACTCHANGEORDERS8 . A copy of each approved CCO will be transmitted promptly to theFinance Department .9 . The CAO may grantapproval of CCO's in excess of $100,000 $50,000 under the followin gcircumstances (all three factors must be present):a.Immediateapproval of the CCO is necessary toavoid delay .b.The CCO is an integral and mandatory component of the project .
c.The costsassociated with delay of the project would be excessive .
The Project Manager is responsible for carrying out this policy.
10 .TheCAO .isalso authorized to approve CCO's inexcess of $1 00,000 relatedtoJobOrder
ContractTaskOrders.
Authorization Limits
1.PublicWorks Director/Approved Designee Notto exceed $25,00 0
2.City Administrative Officer Notto exceed $100,000 $50;000
3.City Council Greater than contract or $100,000*$50,000
See circumstances above where the CAO may approve CCO's in excess of $100,000 .
Originally Approved by the Council on August 3, 1993 ; Revised by theCouncil on April 15, 2003
Attachment 5
B1 - 26
Financial Management Manual
June5
Attachment 6
B1 - 27
Section 201
INTRODUCTION
OVERVIEW
The purpose of this chapter is to guide staff members in purchasing goods and services on behalf
of the City by establishing responsibilities and authorization levels, outlining statutory
requirements, and setting forth the policies and procedures that govern purchasing activities.
These guidelines are not intended to address every issue, exception or contingency that may arise
in the course of purchasing activities. Accordingly, the basic standard that should always prevail
is to exercise good judgment in the use and stewardship of City resources.
PURCHASING SYSTEM OBJECTIVES
Along with three other key policy documents— the City Charter, purchasing ordinance (Chapter
3.24 of the Municipal Code) and purchasing resolution—the policies and procedures set forth in
this chapter form the City's purchasing system. This system has been developed in order to
achieve the following objectives:
Secure goods and services at the lowest cost possible commensurate with quality
requirements.
Establish authority, responsibility and accountability for purchasing activities conducted on
behalf of the City.
Ensure competition and impartiality in all purchasing transactions to the maximum extent
possible.
Standardize procedures where appropriate to ensure that organization-wide policies and goals
are achieved.
Maintain department responsibility, initiative and flexibility in evaluating, selecting and
purchasing goods and services.
Implement simple yet effective internal control procedures that appropriately support
planning, maximize productive use of public funds and protect City assets from unauthorized
use.
Coordinate organization-wide purchasing activities for commonly used items.
Communicate organization-wide purchasing goals, policies and procedures to departmental
staff involved in purchasing activities.
Decentralize decision-making to the maximum extent possible consistent with prudent
review and internal control procedures.
201-1
Attachment 6
B1 - 28
Introduction
PURCHASING AUTHORITY
The City's purchasing ordinance delegates purchasing authority to the City Manager as well as
any other representatives designated by her or him. Purchasing authority responsibilities
include:
Developing and prescribing such administrative policies, forms and files as may be
reasonably necessary for the internal management and operation of City purchasing policies
and procedures.
Purchasing or contracting for supplies, equipment, services and construction projects as
required by the operating departments in accordance with City purchasing policies and
procedures.
Negotiating and recommending execution of contracts.
Procuring needed quality in goods and services at minimum expense.
Ensuring as full and open competition as possible on all purchases.
Consolidating department orders for similar items, ensuring quantity discount pricing
whenever possible.
Developing and maintaining department awareness of purchasing and pricing principles,
marketing conditions and new products.
Inspecting supplies and equipment delivered, as well as contractual services performed, to
determine their conformance with the specifications set forth in orders and contracts; and, in
this connection, having the authority to require chemical, physical or other tests of samples
submitted with quotations or bids, or of delivery samplings, which may be necessary to
determine quality and conformance with specifications.
Establishing procedures for, and assigning duties to, staff engaged in receiving, storing and
issuing purchased supplies, ensuring that supply levels are consistent with usage
requirements.
Facilitating the transfer of surplus or unused supplies and equipment among departments as
needed.
Selling or exchanging surplus supplies and equipment (subject to Charter Section 906),
provided that they cannot reasonably be used by any department.
PURCHASING ORGANIZATION
As provided in the purchasing ordinance, responsibility and accountability for purchasing
activities has been delegated by the City Manager throughout the organization. As noted under
purchasing system objectives, maintaining department responsibility, initiative and flexibility in
201-2
Attachment 6
B1 - 29
Introduction
purchasing activities and decentralizing decision-making to the maximum extent possible, are
specific objectives of the City's purchasing system. However, this can only occur when
organization-wide guidelines are clearly set forth and then followed.
General responsibilities for setting and implementing purchasing system policies and procedures
are summarized in Exhibit 201-A.
PURCHASING SYSTEM OVERVIEW
Regardless of the type of item or service being acquired, virtually every purchase transaction
goes through seven distinct stages in varying degrees:
Assessing and determining resource needs.
Developing specifications.
Soliciting and evaluating quotations, bids or proposals.
Selecting the best proposal.
Awarding the contract or purchase order and authorizing work to proceed.
Receiving and inspecting goods or services to ensure they conform with specifications.
Paying the vendor when contract terms have been met.
The type of purchase as well as its estimated cost determine the formality with which each stage
is completed and documented. For this purpose, the City has identified two three basic types of
purchases:
General Purchases. Contracts and purchases for supplies, equipment, operating or&
maintenance services and construction projects.
Public Projects. Construction, reconstruction, erection, alteration, renovation, improvement,
demolition, painting, repainting, and repair work involving any publicly owned, leased, or
operated facility (Public Contract Code 22002c).
Consultant Services. Professional advice work provided to the City by specially trained and
experienced individuals or firms regarding economic, financial, engineering, planning,
architectural, environmental, legal or administrative matters.
Procedural categories, purchasing authority levels and features for each of these purchase types
are summarized in Exhibit 201-B.
201-3
Attachment 6
B1 - 30
Purchasing System Responsibilities Exhibit 201-A
Voters Approve City Charter
City Council
Adopt purchasing ordinance.
Adopt resolution setting purchasing guidelines.
Approve Invitation for Bid (IFB) and Request for Proposal
(RFP) documents for general purchases and public projects
with cumulative costs in excess of $100,000 and consultant
services with cumulative contract costs in excess of
$2550,000.
Delegate authority to award contracts if they are within
budget to the City Manager.
Award contracts if they exceed the budget.
City ManagerPurchasing
Authority
(City Manager/Designee)
Implement purchasing policies.
Delegate purchasing authority.
Award major contracts.
Approve IFB’s/RFP’s for general purchases with cumulative
costs between $25,000 and $100,000;, public projects with
cumulative costs between $45,000 and $100,000, and
consultant services with cumulative contract costs between
$7,500 and $2550,000.
Director of Finance &
ITFinance Director/Designee
Develop and implement purchasing guidelines.
Monitor and evaluate system performance.
Set payment schedule.
Approve purchase orders for general purchases with
cumulative costs between $7,500 and $25,000, and public
projects with cumulative costs between $7,500 and $45,000.
City Engineer
Approve Job Order Contract (JOC) task orders for public
projects with cumulative costs that are $45,000 or less.
Department Heads
Develop and implement departmental purchasing procedures.
Delegate departmental purchasing authority.
Approve major departmental purchases.
Authorized Employees
Purchase, receive and pay for goods and services in
accordance with City and departmental guidelines.
Maintain required purchasing records.
Manage departmental inventories.
201-4
Attachment 6
B1 - 31
GENERAL PURCHASES
Supplies, equipment,
operating or maintenance
services
Less than
$7,500
$7,500 to
$25,000
$25,000 to
$100,000
More than
$100,000
§ No specific requirements; competitive bidding when practical
§ Award by Department
§ Solicit 3 written quotations and submit summary
§ Award by Finance Director/Designee
§ Purchasing Authority authorizes advertising for sealed bids;
Request for Proposals (RFP)
§ Award by Purchasing Authority
§ Council authorizes advertising for sealed bids (RFP)
§ Award generally delegated by Council to Purchasing
Authority
PURCHASING SYSTEM OVERVIEW1
2 Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly owned, leased, or operated facility (Public Contract Code 22002c).
PUBLIC PROJECTS2
Less than
$7,500
$7,500 to
$45,000
$45,000 to
$100,000
More than
$100,000
§ No requirements; competitive bidding when practical
§ Award by Department
§ Job Order Contract (JOC) Task Order by City Engineer
§ Solicit 3 written proposals and submit summary
§ Award by Finance Director/Designee
§ JOC Task Order by City Engineer
§ Notice inviting informal bids from list of qualified contractors
§ Award or JOC Task Order by Purchasing Authority
§ Council authorizes advertising for sealed bids (RFP)
§ Award generally delegated to Purchasing Authority
§ JOC Task Order by Purchasing Authority (within annual limits)
CONSULTANT SERVICES3
Less than
$7,500
$7,500 to
$50,000
More than
$50,000
§ No requirements; solicit proposals when practical
§ Award by Department
§ Solicit 3 written proposals and submit summary
§ Contract negotiated by Department
§ Award by Purchasing Authority
§ Council authorizes advertising for sealed bids (RFP)
§ Award generally delegated to Purchasing Authority
3 Finance Director can execute purchase orders for approved on-call consultant services in an amount not-to-exceed the project budget (MC 3.24.070C).
1 All monetary limits shown are for the cumulative value of the purchase, project or contract.
Exhibit 201-B (Only new graphic shown)
201-5
Attachment 6
B1 - 32
Section 225
CONSTRUCTION CONTRACT CHANGE ORDERS
OVERVIEW
When the City awards a construction contract, the need for contract change orders (CCO’s) is not
unusual. CCO’s are required whenever the scope of work changes from that in the original
contract or an unknown condition of the site requires a change in the scope of work. Usually a
contingency amount is established when the project budget is finalized upon contract award to
accommodate limited CCO’s. The purpose of this policy is to establish limits of authority for
approving construction project CCO’s.
GOALS
1. Ensure appropriate authority and accountability in the approval of change orders.
2. Minimize the time needed to approve a CCO in order to avoid project delays.
3. Establish a system under which the organizational level at which approval is given is
commensurate with the size of CCO and size of project.
4. Eliminate the potential for approval of a CCO when contingency funds are insufficient.
POLICIES
Conditions for Approval of CCO's by Staff
1. Sufficient contingency funds are budgeted and available in order for the Public Works
Director or City Manager (approved designees) to approve a CCO.
2. The nature of work in the CCO is not significantly different from that in the contract.
3. Authorization limits are based on an individual CCO amount, not the aggregate amount of all
CCO’s.
4. Authorization limits apply to CCO’s for increases in contract amounts only.
5. When the aggregate amount of CCO’s reaches 75% of the contingency, the awarding
authority shall be informed of the status of the project and the sufficiency of funding to
complete the project.
6. Work will not be broken up into multiple CCO’s in order to circumvent this policy.
7. All CCO's must be in writing and approved by the appropriate contract parties consistent
with the authorized limits established in this policy.
225-1
Attachment 6
B1 - 33
Construction Change Orders
8. A copy of each approved CCO will be transmitted promptly to the Finance Division.
9. The City ManagerPurchasing Authority may grant approval of CCO's in excess of $100,000
under the following circumstances (all three factors must be present):
a. Immediate approval of the CCO is necessary to avoid delay.
b. The CCO is an integral and mandatory component of the project.
c. The costs associated with delay of the project would be excessive.
The Project Manager is responsible for carrying out this policy.
10. The City ManagerPurchasing Authority is also authorized to approve CCO’s in excess of
$100,000 related to Job Order Contract Task Orders.
Authorization Limits
1. Public Works Director/ Designee Not to exceed $2545,000
2. Purchasing Authority (City Manager/Designee) Not to exceed $100,000
3. City Council* Greater than contract or $100,000
* See circumstances above where the City ManagerPurchasing Authority may approve CCO’s in excess of
$100,000.
Originally Approved by the Council on August 3, 1993; Revised by the Council on April 15, 2003 and June 2,
2015
225-2
Attachment 6
B1 - 34
Section 255
AMENDMENTS TO AGREEMENTS
After contract award—whether by voucher, purchase order or formal contract—amendments
may be needed to reflect changes in the scope of goods or services to be provided. The
following summarizes what is required to authorize and document contract changes.
DOCUMENTING WORKSCOPE CHANGES
Attached is a sample “Amendment to Agreement” that can be used in approving contract
changes. It is applicable for almost all types of purchase agreements (supplies, equipment,
operation & maintenance services, consultant services) except construction contracts: as set forth
in Section 225, separate procedures have been established for managing construction change
orders. Amendments should be numbered.
This boilerplate document has been installed on the City Hall
“Everyone” (I) Drive as follows:
File Folder: Financial Management Templates and Forms
File Subfolder: Agreements
File Name: Amendment to Agreement
AUTHORIZING AGREEMENT CHANGES
Construction Contracts
Authorization levels for approving construction contract change orders are set forth in Section
225 of this manual.
Supplies, Equipment, Maintenance & Operation and Consultant Service Contracts
The specific authority for approving contract amendments is usually set forth in the agreement
itself (Section 5 of our standard agreement format). As a general rule, contracts where the bid or
Request for Proposal (RFP) documents were approved by the City ManagerPurchasing Authority
should be amended by the City ManagerPurchasing Authority; and contracts where the bid or
RFP documents were approved by the Council should be amended by the Council.
General Policy. Staff has the authority to amend agreements to the cumulative contract amount
that they are otherwise authorized to award contracts. In those cases where the original contract
was awarded by a higher purchasing authority, then they have the authority to amend those
contacts by a cumulative amendment amount that they are otherwise authorized to award
contracts.
Budget Constraints. In all cases, however, staff authorization to increase contract amounts is
subject to existing budget availability.
Staging of Contract Costs and Amendments. Using the amendment process in order to avoid
competitive bidding or higher authorization levels at the contract award stage is prohibited.
E-Access to City Hall
Everyone in the City,
regardless of location, has
easy access to the City
Hall “Everyone” Drive.
Call Information
Technology if you are
located at another facility
and you do not know how
to do this.
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Amendments to Agreements
The following provides general guidelines for authorization levels in approving changes to
purchase orders and agreements.
Department Heads
Contract originally awarded by the Department Head. Not to exceed a cumulative
amended contract cost of $5,07,500.
Contract originally awarded by a higher purchasing authority (Finance
ManagerDirector/Designee, City ManagerPurchasing Authority or Council). Not to
exceed a cumulative amendment cost of $5,07,500.
If amendments beyond these limits are needed, it will require the approval of either the Finance
ManagerDepartment, City ManagerPurchasing Authority or Council, depending on the type of
contract, the amount of the amendment and the cumulative cost of the contract. Moreover,
depending on the procedures used in awarding the original contract, amendments may not be
possible due to competitive bidding requirements.
Finance ManagerDirector or Designee
For supplies, equipment or operation & maintenance services:
Contract originally awarded by the Department Head or Finance
ManagerDirector/Designee. Not to exceed a cumulative amended contract cost of $25,000.
Contract originally awarded by a higher purchasing authority (City
ManagerPurchasing Authority or Council). Not to exceed a cumulative amendment cost
of $25,000.
If amendments beyond these limits are needed, it will require the approval of either the City
ManagerPurchasing Authority or Council, depending on the type of contract, the amount of the
amendment and the cumulative cost of the contract. Moreover, depending on the procedures
used in awarding the original contract, amendments may not be possible due to competitive
bidding requirements.
City ManagerPurchasing Authority (City Manager/Designee)
Contract or Bid/RPP package originally approved by the Department Head, Finance
Manager Director/Designee or City ManagerPurchasing Authority. Not to exceed a
cumulative contract cost (including amendments) of $100,000 for supplies, equipment and
operation & maintenance services; and $2550,000 for consultant services.
Bid/RPP package or contract originally approved by the Council. Not to exceed a
cumulative amendment amount from the original contract cost of $100,000 for supplies,
equipment and operation & maintenance services; and $2550,000 for consultant services.
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Amendments to Agreements
If amendments beyond these limits are needed, it will require the approval of the Council.
Moreover, depending on the procedures used in awarding the original contract, amendments may
not be possible due to competitive bidding requirements.
Council
Any amendment that cannot be approved by the staff as outlined above.
Exceptions
If greater discretionary authority at the Department Head or City ManagerPurchasing Authority
level is desired than indicated above, this should be clearly identified in the City Manager or
Council Agenda Report approving bid/RFP documents or awarding the contract.
DOCUMENTATION
Amendment requests (such as the City Manager or Council Agenda Report) should include a
cost summary of the original contract amount, any amendments to-date, the proposed
amendment and the revised contract total.
Revised September 2, 2003 to reflect changes in the City’s Purchasing Guidelines approved by the Council on
April 15, 2003, and again on June 2, 2015..
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Amendments to Agreements
AMENDMENT TO AGREEMENT NO.
THIS AMENDMENT TO AGREEMENT is made and entered in the City of San Luis Obispo on [date], by
and between the CITY OF SAN LUIS OBISPO, a municipal corporation, herein after referred to as City, and
[CONTRACTOR NAME], hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on [date] the City entered into an Agreement with Contractor for [generally describe the
original agreement workscope] per Specification No. [xxxxxx]; and
WHEREAS, the City desires to amend the scope of services to include [generally describe the proposed
change in the workscope] and Contractor has submitted a proposal for this purpose that is acceptable to the City.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter
contained, the parties hereto agree as follows:
1. The scope of services and related compensation is hereby amended as set forth in Exhibit A
attached hereto. [Attach proposal letter or other itemization of proposed work and agreed upon compensation
referencing the Amendment Number]
2. All other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
first written above.
ATTEST: CITY OF SAN LUIS OBISPO
____________________________________ By: ____________________________________
City Clerk Purchasing Authority (City Manager/Designee])
APPROVED AS TO FORM: CONTRACTOR
_____________________________________ By: ____________________________________
City Attorney
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Attachment 6
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Section 290
PURCHASING ORDINANCE
Chapter 3.24
PROCEDURES FOR PAYMENT OF
CLAIMS AND PURCHASES
Article I. General Provisions
3.24.010 Applicability of provisions.
3.24.020 Purpose of provisions.
3.24.030 Purchasing authority designated -
Powers and duties.
3.24.040 Purchasing manual.
3.24.050 Purchase documents.
3.24.060 Bidding procedures - Use of not
required when.
3.24.070 Authority to hire consultants.
3.24.075 Recycled product procurement
policy.
Article II. Open Market Purchase Procedure
3.24.080 Purchase authorization.
3.24.090 Quotations - Notice of invitation.
3.24.100 Quotations - Submission in writing -
Recordkeeping.
3.24.110 Quotations - Number required.
3.24.120 Quotations - Rejection.
3.24.130 Award of purchase orders.
Article III. Formal Contract Procedure
3.24.140 Requirements for purchase.
3.24.145 Job order contracting
3.24.150 Bids - Notice of invitation and
submission.
3.24.160 Bids - Security requirement.
3.24.170 Bids - Opening and retention.
3.24.180 Bids - Rejection.
3.24.185 Bids- None received.
3.24.187 Bids for construction projects – In
excess of limit.
3.24.190 Contract award.
3.24.200 Requiring bond of successful
bidder.
3.24.210 Determination of lowest responsible
bidder.
Article IV. Payment Procedure
3.24.220 Payment requirements.
3.24.230 Warrant preparation - Accounting
documents required.
3.24.240 Payment date.
3.24.250 Warrants - Director of Finance and
Information Technology (IT) to sign
- Payment.
3.24.260 Disbursement record inspection.
Article I. General Provisions
3.24.010 Applicability of provisions. All
expenditures by the city for supplies, services,
equipment and public works projects not
controlled by the Charter shall be made only in
accordance with and pursuant to the provisions
of this chapter. (Ord. 954 § 2(part), 1983: prior
code § 2950.1)
3.24.020 Purpose of provisions. A
purchasing control system for the city is adopted
in order:
A. To secure those items set out in Section
3.24.010 at the lowest possible cost
commensurate with quality requirements;
B. To ensure effective financial control over
expenditures;
C. To clearly define authority and
accountability for the purchasing function;
D. To minimize the written documentation,
administrative actions and expense of processing
purchase transactions;
E. To assure the quality of purchases made on
behalf of the city; and
F. To facilitate accurate forecasting and
planning of department needs and expenditures.
(Ord. 954 § 2 (part), 1983: prior code § 2950.2)
3.24.030 Purchasing authority designated -
Powers and duties. The city administrative
officer, or his designated representative(s), shall
be the purchasing authority whose functions
shall include the following powers and duties:
A. To develop and prescribe, for the
departments, such administrative policies, forms
and files as may be reasonably necessary for the
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Purchasing Ordinance
internal management and operation of these
purchasing procedures;
B. To purchase or contract for those items
listed in Section 3.24.010 and required by
departments in accordance with these purchasing
procedures;
C. To negotiate and recommend execution of
contracts for purchase of those items listed in
Section 3.24.010;
D. To procure the needed quality in supplies,
services, equipment and public works projects
not controlled by the Charter, at minimum
expense;
E. To ensure as full and open competition as
possible on all purchases;
F. To consolidate department orders for like
items, ensuring quantity discount pricing
whenever possible;
G. To develop and maintain department
awareness of purchasing and pricing principles,
marketing conditions and new products;
H. To inspect supplies and equipment
delivered, as well as contractual services
performed, to determine their conformance with
the specifications set forth in the orders and
contracts; and, in this connection, to have the
authority to require chemical, physical or other
tests of samples submitted with quotations or
bids, or of delivery samplings, which may be
necessary to determine quality and conformance
with specifications;
I. To establish procedures for, and assign
duties to, personnel engaged in receiving,
storing and issuing purchased supplies, thereby
ensuring that supply levels are consistent with
usage requirements;
J. To facilitate the transfer of surplus or
unused supplies and equipment among
departments as needed; and
K. Subject to Charter Section 906, to sell or
exchange surplus supplies and equipment;
provided, that the same cannot reasonably be
used by any department. (Ord. 954 § 2(part),
1983: prior code § 2950.3)
3.24.040 Purchasing manual. Pursuant to
the provisions of this chapter, the city
administrative officer shall approve and
implement a manual of purchasing policies and
procedures and shall make such manual
available to the Council for inspection. (Ord.
954 § 2(part), 1983: prior code § 2950.4)
3.24.050 Purchase documents. All
departments shall expend money for those items
set forth in Section 3.24.010 only in such
manner, at such times and by submission of such
purchase documents as the purchasing authority
shall prescribe. (Ord. 954 § 2(part), 1983: prior
code § 2950.5)
3.24.060 Bidding procedures - Use of not
required when. Purchase of those items listed
in Section 3.24.010 shall be by bid procedures
set forth in this chapter. Such procedures may
be dispensed with, at the discretion and
judgment of the purchasing authority as to the
best interests of the city, as follows:
A. When the amount to be expended is less
than the bid requirement amount which shall be
specified by resolution of the Council;
B. When an emergency requires that an order
be placed with the nearest available source of
supplypurchase is made to address a situation
that creates an immediate and serious need for
equipment, supplies, or services that cannot be
met through normal purchasing procedures and
where the lack of such equipment, supplies or
services would seriously threaten the functioning
of City government, the preservation of
property, or the health or safety of any person;
C. When the item(s) to be purchased can be
obtained from only one vendor or supplier;
D. When supplies or equipment have been
uniformly adopted in the city or otherwise
standardized;
E. When the purchase will be made
cooperatively with one, or more, other units of
government, or from a local dealer within the
city limits that can provide the same brand,
model and configuration of item(s) identified in
cooperative purchase agreement(s) at or below
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Purchasing Ordinance
the cooperative purchasing net cost within the
same terms and conditions;
F. When reasonably necessary for the
preservation or protection of public peace,
health, safety or welfare of persons or property;
or
G. When, given the indeterminate nature of the
city’s need, a request for proposal will result in a
more favorable and efficient comparison of
supplies, equipment and/or services. (Ord.
XXXX § X, 2015; Ord. 1608 § 1, 2014; Ord.
954 § 2(part), 1983: prior code § 2950.6)
3.24.070 Authority to hire consultants. The
restrictions and provisions of this chapter shall
not apply to contracts involving the acquisition
of professional or specialized services such as,
but not limited to, those rendered by architects,
attorneys, engineers and other specialized
consultants. Selection for such services will be
made using one of the following criteria:
A. An evaluation of proposals solicited from
capable professionals, and approved by the
purchasing authority, whenever the cost of the
work to be performed is of an estimated value by
an evaluation of proposals solicited from
capable professionals, and approved by the
Council, whenever the cost of the work to be
performed is of an estimated value in excess of
the amount specified by Council resolution.
This section shall not prohibit the purchasing
authority from requiring proposals for work with
an estimated cost of less than the Council
specified amount if, in the discretion of the
purchasing authority, selection based upon the
evaluation of proposals would better serve the
interest of the city.
B. by aAn evaluation of proposals solicited
from capable professionals, and approved by the
Council, whenever the cost of the work to be
performed is of an estimated value in excess of
the amount specified by Council resolution.
A.C. Selection from an approved list of on-
call consultants that is established by a formal
Request for Qualifications (RFQ) process. The
Council shall approve the RFQ, and the
Purchasing Authority is authorized to execute
agreements with selected consultants. The
Finance Director is authorized to execute and
amend purchase orders for individual consultant
services contracts in an amount not-to-exceed
the authorized project budget. On-call consultant
lists shall be renewed at least every five years by
a new RFQ process. ( Ord. XXXX § X, 2015;
Ord. 954 § 2(part), 1983: prior code § 2950.7)
3.24.075 Recycled product procurement
policyEnvironmentally Preferred Purchases.
A. It is the intent of the city Council that the
City of San Luis Obispo take a leadership role
not only in recycling its waste products but also
in the purchase of recycled products for use in
the delivery of city services. It is the purpose of
this section to provide direction to the city
administrative officer in the procurement and
use of recycled products. For the purpose of this
section, recycled materials are defined as any
materials (e.g., glass, paper, plastic, etc.) that are
separated by type, reprocessed by industrial
methods, and used as raw materials for the
manufacture of new products.
B. It is the policy of the City of San Luis
Obispo to purchase and use recycled products
whenever possible to the extent that such use
does not negatively impact health, safety, or
operational efficiency.
C. It is the policy of the City of San Luis
Obispo to encourage the purchase of products
which can be recycled or reused.
D. The City will purchase and use recycled
paper for masthead stationery, envelopes and
printing purposes. In addition, recycled paper
shall be purchased and used in all copy
machines which will accept it. City staff will
encourage the copier industry to develop high-
speed copiers which will accept recycled paper.
E. City departments shall examine their
purchasing specifications and, where feasible,
restructure them to encourage the use of
products which incorporate recycled materials in
their manufacture purchase equipment, supplies,
and services that result in less harm to the
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Purchasing Ordinance
natural environment. This involves the purchase
of equipment, supplies, and services in a manner
that uses less harmful materials, employs
recycled or recovered materials (where
appropriate and available), and utilizes
techniques intended to result in less impact on
the environment than other available methods..
F. A ten percent preference, not to exceed one
thousand dollars per contract, may be given to
recycled products. The fitness and quality of the
recycled product must be at least equal to
unrecycled products as determined by the city.
The preference percentage shall be based on the
lowest bid or price quoted by the supplier or
suppliers offering nonrecycled products.
G. Price preferences may be offered in excess
of the ten percent ceiling established in this
section, if it can be shown that purchase of a
recycled product or material will result in greater
long-term savings to the city. Award of a bid in
excess of the ceiling, however, requires the
approval of the city administrative officer or city
Council as established in the city’s purchasing
manual. (Ord. XXXX § X, 2015; Ord. 1178 § 1,
1990)
Ord. No. 1178 added § 3.24.080, which the
editor has renumbered § 3.24.075 since the
chapter already contained a § 3.24.080.
Article II. Open Market Purchase Procedure
3.24.080 Purchase authorization. Purchases
of supplies, equipment and contractual services,
except those controlled by the Charter, having
an estimated value less than that specified by
Council resolution for bid may be made by the
purchasing authority in the open market without
observing the formal contract procedures set out
in Article III of this chapter. (Ord. 954 § 2(part),
1983: prior code § 2951.1)
3.24.090 Quotations - Notice of invitation.
The purchasing authority shall invite, either by
verbal or written request, quotations from
prospective sellers, vendors, suppliers or
contractors. (Ord. 954 § 2(part), 1983: prior
code § 2951.2)
3.24.100 Quotations - Submission in
writing - Recordkeeping. Written quotations
shall be submitted to the purchasing authority,
who shall keep a record of open market
quotations and orders for a period of ninety days
after the receipt of such quotations. (Ord. 954 §
2(part), 1983: prior code § 2951.3)
3.24.110 Quotations - Number required.
Open market purchases shall be based, whenever
reasonably possible, on at least three quotations.
(Ord. 954 § 2(part), 1983: prior code § 2951.4)
3.24.120 Quotations - Rejection. The
purchasing authority may reject:
A. Any quotations which fail to meet the
specific purchase requirements in any respect; or
B. All quotations, for any reason whatsoever,
and may invite new quotations. (Ord. 954 §
2(part), 1983: prior code § 2951.5)
3.24.130 Award of purchase orders.
Purchase orders shall be awarded by the
purchasing authority to the person submitting
the lowest responsible quotation, except as
follows:
A. If two or more quotations are received for
the same total amount or unit price, quality and
service being equal, and if, at the discretion of
the purchasing authority, the public interest will
not permit the delay of inviting new quotations,
then the purchasing authority may accept the
lower quotation obtained through negotiation
with the persons submitting the tie quotations;
B. Sellers, vendors, suppliers and contractors
who maintain places of business located within
the limit of the city shall be given preference if
quality, price, service and all other relevant
factors are equal; or
C. If no quotations are received the purchasing
authority may make the required purchase
without further notice. (Ord. 954 § 2(part),
1983: prior code § 2951.6)
Article III. Formal Contract Procedure
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3.24.140 Requirements for purchase.
Except as otherwise provided in this chapter,
purchases and contracts for supplies, services,
equipment and construction projects, which are
equal to or in excess of the bid requirement
amount specified by Council resolution, shall be
by written contract with the lowest responsible
bidder pursuant to the procedures prescribed in
this article. (Ord. 1435 § 1 (part), 2003: Ord.
954 § 2 (part), 1983: prior code § 2952.1)
3.24.145 Job order contracting. As
provided in Section 901(E) of the Charter, the
city may perform maintenance-related
construction projects for repair, remodeling or
other repetitive work under a unit-price contract
for all necessary labor, materials and equipment,
subject to the following conditions:
A. Such contracts are secured on a competitive
basis in accordance with the procedures set forth
in this article;
B. No new construction will be performed
under such contracts;
C. The specifications for such contracts provide
for unit-price terms for all work that will
typically be performed under individual task
orders;
D. The specifications for such contracts
establish any limits on the amount of individual
task orders to be issued under the contract; or on
any minimum or maximum cumulative amounts
of task orders to be issued under the contract;
E. The Council will specify limits on the
authority to approve individual task orders by
resolution. (Ord. 1435 § 1 (part), 2003)
3.24.150 Bids—Notice of invitation and
submission.
A. Notices inviting bids shall include, but not
be limited to, the following:
1. A general description of the item(s) or
service(s) to be purchased, or the public work to
be constructed or improved;
2. The location where bid blanks and
specifications may be secured;
3. The time and place assigned for the
opening of sealed bids;
4. The type and character of bidder’s
security required, if any; and
5. The location and deadline for
submission of bids.
B. Notices inviting bids shall be made as
follows:
1. For supplies, services and equipment,
notices inviting bids shall be published at least
once in the official newspaper of the city, with
the first publication occurring at least ten
calendar days before the date of opening the
bids.
2. For construction projects below an
amount specified by Council resolution, notices
inviting bids shall be mailed to a list of qualified
contractors, identified according to categories of
work, at least ten calendar days before the bids
are due. The city engineer is responsible for
developing and maintaining this list based on the
criteria determined by the California Uniform
Construction Cost Accounting Commission
(hereinafter referred to as Commission in this
chapter). Notices shall also be mailed within ten
calendar days before the bids are due to all
construction trade journals as required by the
Commission. If the city does not have a list of
qualified contractors for the particular type of
work to be performed, notices inviting bids will
only be sent to the construction trade journals as
required by the Commission. If the product or
service is proprietary in nature and can only be
obtained from a certain contractor or contractors,
notices inviting bids will only be mailed to such
contractor or contractors.
3. For construction projects above an
amount specified by Council resolution, notices
inviting bids distinctly describing the project be
published at least once in the official newspaper
of the city, with the first publication occurring at
least fourteen calendar days before the date of
opening the bids. Notices inviting bids
distinctly describing the project shall also be
mailed at least thirty calendar days before the
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Purchasing Ordinance
date of opening bids to all construction trade
journals as required by the Commission.
4. The city may also give such other notice
as it deems appropriate.
C. Sealed bids shall be identified as bids on the
envelopes and shall be submitted to the
purchasing authority. (Ord. 1435 § 1 (part),
2003: Ord. 1291 § 1, 1996; Ord. 954 § 2 (part),
1983: prior code §2952.2)
3.24.160 Bids—Security requirement.
Bidder’s security may be required when deemed
necessary by the purchasing authority. Bidders
shall be entitled to return of bid security.
However, a successful bidder shall forfeit his bid
security upon refusal or failure to execute a
contract within fifteen days after notice of award
of that contract, unless the city is responsible for
the delay. The contract may be awarded to the
next lowest responsible bidder upon the refusal
or failure of the successful bidder to execute the
contract within the time herein prescribed. (Ord.
1435 § 1 (part), 2003: Ord. 954 § 2 (part), 1983:
prior code § 2952.3)
3.24.170 Bids—Opening and retention.
Sealed bids shall be opened in public at the time
and place stated in the notice inviting bids. A
tabulation of all bids received shall be made
available for public inspection until the award of
a contract. All bids shall be retained on file for a
period of not less than two years. (Ord. 1435 § 1
(part), 2003: Ord. 954 § 2 (part), 1983: prior
code § 2952.4)
3.24.180 Bids—Rejection. The purchasing
authority may reject:
A. Any bid that fails to meet the bidding
requirements in any respect; or
B. All bids, for any reason whatsoever, and
may readvertise for new bids or abandon the
purchase;
C. In the case of construction projects, the
Council may, by passage of a resolution by a
four-fifths vote, declare that the project can be
performed more economically by employees of
the city and may have the project done by force
account. (Ord. 1435 § 1 (part), 2003: Ord. 954 §
2 (part), 1983: prior code § 2952.5)
3.24.185 Bids—None received. If no bids
are received, the purchase may be made through
negotiated contract or other process approved by
the purchasing authority, including, in the case
of construction projects, performing the work by
employees of the city by force account. (Ord.
1435 § 1 (part), 2003)
3.24.187 Bids for construction projects—In
excess of limit. In the event that all bids
received for a construction project are more than
the maximum allowed under Section 22034(f) of
Public Contract Code, and bids were invited
pursuant to the provisions of Section
3.24.150(B)(2), the Council may, by adoption of
a resolution by four-fifths vote, award the
contract, in an amount not to exceed the
maximum set forth in Section 22034(f) of Public
Contract Code, to the lowest responsible bidder,
if it determines that the cost estimate was
reasonable. Otherwise, the bids shall be
rejected, and if the agency decides to go forward
with the project, shall be re-bid in accordance
with the procedures set forth in Section
3.24.150(B)(3). (Ord. 1435 § 1 (part), 2003)
3.24.190 Contract award. Subject to the
prior approval of the city administrative officer,
contracts shall be awarded by the purchasing
authority to the lowest responsible bidder,
except as follows:
A. If, at the time of bid opening, two or more
bids received are for the same total amount or
unit price, quality and service being equal, and if
in the discretion of the purchasing authority the
public interest will not permit the delay of
readvertising for bids, then the purchasing
authority may accept the one she or he chooses
or the lowest bid obtained through subsequent
negotiation with the tie bidders.
B. Sellers, vendors, suppliers and contractors
who maintain places of business located within
the limit of the city shall be given preference if
quality, price, service and all other factors are
equal. (Ord 1435 § 1 (part), 2003: Ord. 954 § 2
(part), 1983: prior code § 2952.6)
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Purchasing Ordinance
3.24.200 Requiring bond of successful
bidder. The purchasing authority may require
as a condition to executing a contract on behalf
of the city, a performance bond or a labor and
material bond, or both, in such amounts as the
purchasing authority shall determine appropriate
to protect the best interests of the city. The form
and amounts of such bond(s) shall be described
in the notice inviting bids. (Ord. 1435 § 1 (part),
2003: Ord. 954 § 2 (part), 1983: prior code §
2952.7)
3.24.210 Determination of lowest
responsible bidder. In addition to the bid or
quotation price, criteria for determining the
lowest responsible bid or quotation, for the
purposes of the Charter and this chapter, shall
include, but not be limited to, the following:
A. The character, integrity, reputation,
judgment, experience and efficiency of the
bidder (this may include an analysis of previous
work performed for the city);
B. The ability of the bidder to perform the
contract, or provide the supplies, equipment or
services required, within the time specified,
without delay or interference;
C. The ability of the bidder to provide future
maintenance, repair parts and replacement of
purchased equipment or supplies;
D. Compliance by the bidder with federal acts,
executive orders and state statutes governing
nondiscrimination in employment; and
E. The results of any evaluation relating
performance and price, such as testing, life-cycle
costing, and analysis of service, maintenance
and technical data. (Ord. 1435 § 1 (part), 2003:
Ord. 954 § 2 (part), 1983: prior code § 2952.8)
Article IV. Payment Procedure
3.24.220 Payment requirements. All
purchases not otherwise provided for in the
Charter shall be made by requisition, or other
prescribed document, signed by the purchasing
authority and paid by warrant signed by the
Director of Finance and IT. Payment will only
be made upon the satisfaction of the Director of
Finance and IT that:
A. Sufficient moneys have been appropriated
for the purchase;
B. The expenditure is in accordance with
budget authority; and
C. The proposed expenditure is legal. (Ord.
954 § 2(part), 1983: prior code § 2953.1)
3.24.230 Warrant preparation -
Accounting documents required. The Finance
and IT Department shall prepare a warrant after
receiving properly completed accounting
documents as prescribed by the Director of
Finance and IT and the purchasing authority.
Such accounting documents include, but are not
limited to, purchase authorizations, purchase
orders, receiving reports and vendor invoices.
(Ord. 954 § 2(part), 1983: prior code § 2953.2)
3.24.240 Payment date. The Director of
Finance and IT shall determine and assign the
dates of warrant preparation, the frequency of
which shall be no less than twice each month.
(Ord. 954 § 2(part), 1983: prior code § 2953.3)
3.24.250 Warrants - Director of Finance
and IT to sign - Payment. The Director of
Finance and IT shall sign each warrant, which
shall be honored if there is sufficient money in
the city’s account. (Ord. 954 § 2(part), 1983:
prior code § 2953.4)
3.24.260 Disbursement record inspection.
Following each disbursement a copy of the
warrant register, including all warrant numbers
and dollar amounts, will be made available for
inspection by the Council and the City Manager.
(Ord. 954 § 2(part), 1983: prior code § 2953.5)
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Section 295
PURCHASING GUIDELINES
In accordance with the policy framework set forth in Chapter 3.24 of the municipal code, City
purchases and contracts (including those for rentals and leases, but excluding those for real
property) will be made pursuant to these guidelines. Applicable competitive bidding categories,
authorization limits or contract award procedures will be based on unit cost, total purchase cost
for consolidated bid items or fiscal year aggregates in the case of blanket purchase orders or
similar ongoing purchasing arrangements. Staging of purchases in order to avoid these
competitive bidding procedures or authorization limits is prohibited.
GENERAL PURCHASES
Purchases and contracts for supplies, equipment, operating and or maintenance services, and
construction projects will be made pursuant to the following guidelines:
A. Over-the-Counter. Purchases with cumulative costs of less than $7,500 may be authorized
by the Department Head. Although no specific purchasing requirements are established for
this level of purchase, competitive bidding should be used whenever practical.
B. Open Market. Purchases with cumulative costs between $7,500 and $25,000 may be
authorized by the Director of Finance & Information Technology (or designee) pursuant to
the open market bidding procedures established in Chapter 3.24 (Article II) of the municipal
code. A bid summary shall be submitted to the Finance Department.
C. Formal Bids or Proposals. Purchases with cumulative costs in excess of $25,000 will be
made pursuant to the formal bidding requirements established in Chapter 3.24 (Article III) of
the municipal code. Authority to approve specifications, invite bids or request proposals and
award contracts will be as follows:
1.For purchases with an approved budget and a cumulative cost estimate of $100,000 or
less, the Purchasing Authority (City Manager/Designee)City Manager is authorized to
invite bids or request proposals, approve specifications and award the contract.
2.For purchases with cumulative costs in excess of $100,000, Council approval of the
specifications and authorization to invite bids or request proposals is required. The
Council may authorize the Purchasing AuthorityCity Manager to award the contract if the
selected bid or proposal is less than or equal to the Council-approved cost estimate and
there are no substantive changes to the specifications. Otherwise, Council award of the
contract is required.
PUBLIC PROJECTS
Contracts for public projects are governed by the Public Contract Code including the
Uniform Public Construction Cost Accounting Act (Section 22000), which allows alternative
bidding procedures and job order contracting (Council Ord. 1435, 2003).
A. Over-the-Counter. Public projects with cumulative costs of less than $7,500 may be
authorized by the Department Head. Although no specific purchasing requirements are
established for this level of purchase, competitive bidding should be used whenever practical.
295-1
Attachment 6
B1 - 46
Purchasing Guidelines
B. Open Market. Public projects with cumulative costs of $45,000 or less may be authorized
by the Director of Finance & Information Technology (or designee) pursuant to the open
market bidding procedures established in Chapter 3.24 (Article II) of the municipal code. A
bid summary shall be submitted to the Finance Department.
C. Informal Bidding. Public projects with cumulative costs of $100,000 or less may be let to
contract by the Purchasing Authority pursuant to informal bidding procedures as set forth in
the Public Contract Code and Chapter 3.24.150.B2 of the municipal code.
D. Formal Bids or Proposals. Public projects with cumulative costs of more than $100,000
shall be let to contract by the Council pursuant to formal bidding procedure as set forth in the
Public Contract Code and Chapter 3.24.150.B3 of the municipal code.
Job Order Contracts. Under the Job Order Contact provisions of Chapter 3.24.145 of the
municipal code for maintenance-related construction projects, individual Task Orders with
cumulative costs up to $45,000 may be approved by the City Engineer. Individual Task Orders
with cumulative costs in excess of $45,000 require approval by the Purchasing Authority.
CONSULTANT SERVICES
Contracts for consultant services will be awarded pursuant to the following guidelines.
A. Contracts for consultant services estimated to cost less than $7,500 cumulatively may be
awarded by the Department Head. Although no specific purchasing requirements are
established for this level of contract, proposals should be solicited whenever practical.
B. Contracts for consulting services estimated to cost between $7,500 and $2550,000
cumulatively may be awarded by the Purchasing AuthorityCity Manager. Proposals from at
least three consultants shall be solicited whenever practicaland a summary submitted.
C. Contracts for consultant services estimated to cost more than $2550,000 cumulatively will
generally be awarded pursuant to the following guidelines; however, it is recognized that the
City’s need for consultant services will vary from situation to situation, and accordingly,
flexibility will be provided in determining the appropriate evaluation and selection process to
be used in each specific circumstance.
1. The Council should generally approve request for proposal (RFP) documents before they
are issued. The Council may authorize the Purchasing AuthorityCity Manager to award
the contract if it is less than or equal to the Council-approved cost estimate and there are
no substantive changes to the approved workscope. Otherwise, Council award of the
contract is required.
2. In the event that the timely evaluation and selection of a consultant precludes Council
approval of the RFP before it is issued, the RFP may be approved and distributed by the
Purchasing AuthorityCity Manager; however, award of the contract will be made by the
Council.
295-2
Attachment 6
B1 - 47
Purchasing Guidelines
3.Cost will not be the sole criterion in selecting the successful bidder. Consultant proposals
will be evaluated based on a combination of factors that result in the best value to the
City, including but not limited to:
a.Understanding of the work required by the City
b.Quality and responsiveness of the proposal
c.Demonstrated competence and professional qualifications necessary for satisfactory
performance of the work required by the City
d.Recent experience in successfully performing similar services
e.Proposed methodology for completing the work
f.References
g.Background and related experience of the specific individuals to be assigned to the
project
h.Proposed compensation
4.If it is determined that it is in the best interest of the City for services to be provided by a
specific consultant—with contract terms, workscope and compensation to be determined
based on direct negotiations—contract award will be made by the Council.
Adopted by the Council on September 4, 2007, Resolution No. 9926, and amended by Council on June 2, 2015, Resolution No.
XXXX.
295-3
Attachment 6
B1 - 48
GENERAL PURCHASES
Supplies, equipment,
operating or maintenance
services
Less than
$7,500
$7,500 to
$25,000
$25,000 to
$100,000
More than
$100,000
No specific requirements; competitive bidding when practical
Award by Department
Solicit 3 written quotations and submit summary
Award by Finance Director/Designee
Purchasing Authority authorizes advertising for sealed bids;
Request for Proposals (RFP)
Award by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated by Council to Purchasing
Authority
PURCHASING SYSTEM OVERVIEW1
2 Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly
owned, leased, or operated facility (Public Contract Code 22002c).
PUBLIC PROJECTS2
Less than
$7,500
$7,500 to
$45,000
$45,000 to
$100,000
More than
$100,000
No requirements; competitive bidding when practical
Award by Department
Job Order Contract (JOC) Task Order by City Engineer
Solicit 3 written proposals and submit summary
Award by Finance Director/Designee
JOC Task Order by City Engineer
Notice inviting informal bids from list of qualified contractors
Award or JOC Task Order by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated to Purchasing Authority
JOC Task Order by Purchasing Authority (within annual limits)
CONSULTANT SERVICES3
Less than
$7,500
$7,500 to
$50,000
More than
$50,000
No requirements; solicit proposals when practical
Award by Department
Solicit 3 written proposals and submit summary
Contract negotiated by Department
Award by Purchasing Authority
Council authorizes advertising for sealed bids (RFP)
Award generally delegated to Purchasing Authority
3 Finance Director can execute purchase orders for approved on-call consultant services in an amount not-to-exceed the project budget (MC 3.24.070C).
1 All monetary limits shown are for the cumulative value of the purchase, project or contract.
Note: Only new graphic shown
Attachment 6
B1 - 49
THIS PAGE IS INTENTIONALLY LEFT BLANK
B1 - 50
ATTACHMENT 7
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL UPDATING PURCHASING GUIDELINES
WHEREAS, in the course of conducting City operations it is necessary to purchase a
broad range of goods and services; and
WHEREAS, the Council has adopted purchasing policies and procedures set forth in
Chapter 3.24 of the Municipal Code that require the Council to specify by resolution the dollar
amount of purchases and contracts requiring the use of either open market or formal bidding
procedures, and the level of authority required to authorize invitations for bids (requests for
proposals), award contracts or approve Job Order Contract Task Orders; and
WHEREAS, the Council adopted Resolution No. 9444 (2003 Series) and Ordinance No.
1435 (2003 Series) electing to become subject to the Public Contract Code and Uniform Public
Construction Cost Accounting Act, which allows alternative bidding procedures and job order
contracting; and
WHEREAS, adopted budget policies in the Productivity section call for analyzing system
and procedures to identify and remove unnecessary review requirements; and
WHEREAS, on December 16, 2014 Council amended the Productivity section of the City
budget policies to include “Maintaining City purchasing policies and procedures that are as
efficient and effective as possible”; and
WHEREAS, the subject changes to the Purchasing Guidelines will streamline the
purchasing process for public projects and consultant services – while maintaining appropriate
checks and balances – thereby making delivery of services to the community more expedient and
efficient; and
WHEREAS, the City analyzed several benchmark cities’ purchasing procedures, and the
subject changes are consistent and keep pace with the current market.
NOW, THEREFORE, BE IT RESOLVED by the San Luis Obispo City Council that:
1. Resolution No. 9444 (2003) is hereby rescinded and the updated purchasing guidelines
set forth in Exhibit A are hereby adopted.
2. The updated Construction Change Order policy set forth in Exhibit B is hereby adopted.
Upon Motion of Council Member _________, seconded by Council Member _________, and on
the following roll call vote:
AYES:
NOES:
ABSENT:
B1 - 51
ATTACHMENT 7
The foregoing resolution was adopted this 2nd day of June, 2015.
____________________
Mayor Jan Marx
ATTEST:
____________________
Anthony J. Mejia, MMC
City Clerk
APPROVED AS TO FORM:
____________________
J. Christine Dietrick
City Attorney
B1 - 52
Section 295
PURCHASING GUIDELINES
In accordance with the policy framework set forth in Chapter 3.24 of the municipal code, City
purchases and contracts (including those for rentals and leases, but excluding those for real
property) will be made pursuant to these guidelines. Applicable competitive bidding categories,
authorization limits or contract award procedures will be based on unit cost, total purchase cost
for consolidated bid items or fiscal year aggregates in the case of blanket purchase orders or
similar ongoing purchasing arrangements. Staging of purchases in order to avoid these
competitive bidding procedures or authorization limits is prohibited.
GENERAL PURCHASES
Purchases and contracts for supplies, equipment, operating or maintenance services will be made
pursuant to the following guidelines:
A. Over-the-Counter. Purchases with cumulative costs of less than $7,500 may be authorized
by the Department Head. Although no specific purchasing requirements are established for
this level of purchase, competitive bidding should be used whenever practical.
B. Open Market. Purchases with cumulative costs between $7,500 and $25,000 may be
authorized by the Director of Finance & Information Technology (or designee) pursuant to
the open market bidding procedures established in Chapter 3.24 (Article II) of the municipal
code. A bid summary shall be submitted to the Finance Department.
C. Formal Bids or Proposals. Purchases with cumulative costs in excess of $25,000 will be
made pursuant to the formal bidding requirements established in Chapter 3.24 (Article III) of
the municipal code. Authority to approve specifications, invite bids or request proposals and
award contracts will be as follows:
1.For purchases with an approved budget and a cumulative cost estimate of $100,000 or
less, the Purchasing Authority (City Manager/Designee) is authorized to invite bids or
request proposals, approve specifications and award the contract.
2.For purchases with cumulative costs in excess of $100,000, Council approval of the
specifications and authorization to invite bids or request proposals is required. The
Council may authorize the Purchasing Authority to award the contract if the selected bid
or proposal is less than or equal to the Council-approved cost estimate and there are no
substantive changes to the specifications. Otherwise, Council award of the contract is
required.
PUBLIC PROJECTS
Contracts for public projects are governed by the Public Contract Code including the
Uniform Public Construction Cost Accounting Act (Section 22000), which allows alternative
bidding procedures and job order contracting (Council Ord. 1435, 2003).
A. Over-the-Counter. Public projects with cumulative costs of less than $7,500 may be
authorized by the Department Head. Although no specific purchasing requirements are
established for this level of purchase, competitive bidding should be used whenever practical.
295-1
Exhibit A
Attachment 7
B1 - 53
Purchasing Guidelines
B. Open Market. Public projects with cumulative costs of $45,000 or less may be authorized
by the Director of Finance & Information Technology (or designee) pursuant to the open
market bidding procedures established in Chapter 3.24 (Article II) of the municipal code. A
bid summary shall be submitted to the Finance Department.
C. Informal Bidding. Public projects with cumulative costs of $100,000 or less may be let to
contract by the Purchasing Authority pursuant to informal bidding procedures as set forth in
the Public Contract Code and Chapter 3.24.150.B2 of the municipal code.
D. Formal Bids or Proposals. Public projects with cumulative costs of more than $100,000
shall be let to contract by the Council pursuant to formal bidding procedure as set forth in the
Public Contract Code and Chapter 3.24.150.B3 of the municipal code.
Job Order Contracts. Under the Job Order Contact provisions of Chapter 3.24.145 of the
municipal code for maintenance-related construction projects, individual Task Orders with
cumulative costs up to $45,000 may be approved by the City Engineer. Individual Task Orders
with cumulative costs in excess of $45,000 require approval by the Purchasing Authority.
CONSULTANT SERVICES
Contracts for consultant services will be awarded pursuant to the following guidelines.
A. Contracts for consultant services estimated to cost less than $7,500 cumulatively may be
awarded by the Department Head. Although no specific purchasing requirements are
established for this level of contract, proposals should be solicited whenever practical.
B. Contracts for consulting services estimated to cost between $7,500 and $50,000 cumulatively
may be awarded by the Purchasing Authority. Proposals from at least three consultants shall
be solicited and a summary submitted.
C. Contracts for consultant services estimated to cost more than $50,000 cumulatively will
generally be awarded pursuant to the following guidelines; however, it is recognized that the
City’s need for consultant services will vary from situation to situation, and accordingly,
flexibility will be provided in determining the appropriate evaluation and selection process to
be used in each specific circumstance.
1.The Council should generally approve request for proposal (RFP) documents before they
are issued. The Council may authorize the Purchasing Authority to award the contract if
it is less than or equal to the Council-approved cost estimate and there are no substantive
changes to the approved workscope. Otherwise, Council award of the contract is
required.
2.In the event that the timely evaluation and selection of a consultant precludes Council
approval of the RFP before it is issued, the RFP may be approved and distributed by the
Purchasing Authority; however, award of the contract will be made by the Council.
3.Cost will not be the sole criterion in selecting the successful bidder. Consultant proposals
will be evaluated based on a combination of factors that result in the best value to the
City, including but not limited to:
295-2
Attachment 7
B1 - 54
Purchasing Guidelines
a. Understanding of the work required by the City
b. Quality and responsiveness of the proposal
c. Demonstrated competence and professional qualifications necessary for satisfactory
performance of the work required by the City
d. Recent experience in successfully performing similar services
e. Proposed methodology for completing the work
f. References
g. Background and related experience of the specific individuals to be assigned to the
project
h. Proposed compensation
4. If it is determined that it is in the best interest of the City for services to be provided by a
specific consultant—with contract terms, workscope and compensation to be determined
based on direct negotiations—contract award will be made by the Council.
Adopted by the Council on September 4, 2007, Resolution No. 9926, and amended by Council on June 2, 2015, Resolution No.
XXXX.
295-3
Attachment 7
B1 - 55
THIS PAGE IS INTENTIONALLY LEFT BLANK
B1 - 56
Section 225
CONSTRUCTION CONTRACT CHANGE ORDERS
OVERVIEW
When the City awards a construction contract, the need for contract change orders (CCO’s) is not
unusual. CCO’s are required whenever the scope of work changes from that in the original
contract or an unknown condition of the site requires a change in the scope of work. Usually a
contingency amount is established when the project budget is finalized upon contract award to
accommodate limited CCO’s. The purpose of this policy is to establish limits of authority for
approving construction project CCO’s.
GOALS
1.Ensure appropriate authority and accountability in the approval of change orders.
2.Minimize the time needed to approve a CCO in order to avoid project delays.
3.Establish a system under which the organizational level at which approval is given is
commensurate with the size of CCO and size of project.
4.Eliminate the potential for approval of a CCO when contingency funds are insufficient.
POLICIES
Conditions for Approval of CCO's by Staff
1.Sufficient contingency funds are budgeted and available in order for the Public Works
Director or City Manager (approved designees) to approve a CCO.
2.The nature of work in the CCO is not significantly different from that in the contract.
3.Authorization limits are based on an individual CCO amount, not the aggregate amount of all
CCO’s.
4.Authorization limits apply to CCO’s for increases in contract amounts only.
5.When the aggregate amount of CCO’s reaches 75% of the contingency, the awarding
authority shall be informed of the status of the project and the sufficiency of funding to
complete the project.
6.Work will not be broken up into multiple CCO’s in order to circumvent this policy.
7.All CCO's must be in writing and approved by the appropriate contract parties consistent
with the authorized limits established in this policy.
225-1
Exhibit B
Attachment 7
B1 - 57
Construction Change Orders
8. A copy of each approved CCO will be transmitted promptly to the Finance Division.
9. The Purchasing Authority may grant approval of CCO's in excess of $100,000 under the
following circumstances (all three factors must be present):
a. Immediate approval of the CCO is necessary to avoid delay.
b. The CCO is an integral and mandatory component of the project.
c. The costs associated with delay of the project would be excessive.
The Project Manager is responsible for carrying out this policy.
10. The Purchasing Authority is also authorized to approve CCO’s in excess of $100,000 related
to Job Order Contract Task Orders.
Authorization Limits
1. Public Works Director/ Designee Not to exceed $45,000
2. Purchasing Authority (City Manager/Designee) Not to exceed $100,000
3. City Council* Greater than contract or $100,000
* See circumstances above where the City Manager may approve CCO’s in excess of $100,000.
Originally Approved by the Council on August 3, 1993; Revised by the Council on April 15, 2003 and June 2,
2015
225-2
Attachment 7
B1 - 58
ATTACHMENT 8
O _____
ORDINANCE NO. _______ (2015 Series)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO AMENDING MUNICIPAL
CODE CHAPTER 3.24, ARTICLE I, TO ADD LANGUAGE TO PURCHASING
POLICIES GOVERNING EMERGENCY PURCHASING, HIRING ON-CALL
CONSULTANTS, AND ENVIRONMENTALLY PREFERRED PURCHASES
WHEREAS, the City Council adopted Ordinance No. 1178 (1990 Series) instituting a
recycled product procurement policy; and
WHEREAS, the Conservation and Open Space Element of the General Plan contains
goals, policies and programs that call for the City to use materials with reduced environmental
impacts; and
WHEREAS, adopted budget policies in the Productivity section call for analyzing
system and procedures to identify and remove unnecessary review requirements; and
WHEREAS, on December 16, 2014 Council amended the Productivity section of the
City budget policies to include “Maintaining City purchasing policies and procedures that are as
efficient and effective as possible”; and
WHEREAS, the subject changes to the Municipal Code will streamline the purchasing
process for hiring consultants – while maintaining appropriate checks and balances through a
formalized Request for Proposal process – thereby making accomplishing projects and related
delivery of services to the community more expedient and efficient; and
WHEREAS, the City analyzed several benchmark cities’ purchasing ordinances, and the
subject changes are consistent.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Article I of Chapter 3.24 of the Municipal Code of the City of San Luis
Obispo is hereby amended as set forth in Exhibit A.
SECTION 2. Effective Dates. A summary of this ordinance, together with the names of
Council members voting for and against, shall be published at least five (5) days prior to its final
passage, in The Tribune, a newspaper published and circulated in this City. This ordinance shall
go into effect at the expiration of thirty (30) days after its final passage.
SECTION 3. Severability. If any subdivision, paragraph, sentence, clause, or phrase of
this ordinance is, for any reason, held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the
remaining portions of this ordinance, or any other provisions of the city’s rules and regulations.
It is the city’s express intent that each remaining portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
B1 - 59
Ordinance No. (2015 Series) ATTACHMENT 8 Page 2
INTRODUCED on the 2nd day of June 2015, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ___ day of ___ 2015, on the following roll call
vote:
AYES:
NOES:
ABSENT:
Mayor Jan Marx
ATTEST:
Anthony Mejia
City Clerk
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
B1 - 60
Chapter 3.24
PROCEDURES FOR PAYMENT OF
CLAIMS AND PURCHASES
Article I. General Provisions
3.24.010 Applicability of provisions. All
expenditures by the city for supplies, services,
equipment and public works projects not
controlled by the Charter shall be made only in
accordance with and pursuant to the provisions
of this chapter. (Ord. 954 § 2(part), 1983: prior
code § 2950.1)
3.24.020 Purpose of provisions. A
purchasing control system for the city is adopted
in order:
A. To secure those items set out in Section
3.24.010 at the lowest possible cost
commensurate with quality requirements;
B. To ensure effective financial control over
expenditures;
C. To clearly define authority and
accountability for the purchasing function;
D. To minimize the written documentation,
administrative actions and expense of processing
purchase transactions;
E. To assure the quality of purchases made on
behalf of the city; and
F. To facilitate accurate forecasting and
planning of department needs and expenditures.
(Ord. 954 § 2 (part), 1983: prior code § 2950.2)
3.24.030 Purchasing authority designated -
Powers and duties. The city administrative
officer, or his designated representative(s), shall
be the purchasing authority whose functions
shall include the following powers and duties:
A. To develop and prescribe, for the
departments, such administrative policies, forms
and files as may be reasonably necessary for the
internal management and operation of these
purchasing procedures;
B. To purchase or contract for those items
listed in Section 3.24.010 and required by
departments in accordance with these purchasing
procedures;
C. To negotiate and recommend execution of
contracts for purchase of those items listed in
Section 3.24.010;
D. To procure the needed quality in supplies,
services, equipment and public works projects
not controlled by the Charter, at minimum
expense;
E. To ensure as full and open competition as
possible on all purchases;
F. To consolidate department orders for like
items, ensuring quantity discount pricing
whenever possible;
G. To develop and maintain department
awareness of purchasing and pricing principles,
marketing conditions and new products;
H. To inspect supplies and equipment
delivered, as well as contractual services
performed, to determine their conformance with
the specifications set forth in the orders and
contracts; and, in this connection, to have the
authority to require chemical, physical or other
tests of samples submitted with quotations or
bids, or of delivery samplings, which may be
necessary to determine quality and conformance
with specifications;
I. To establish procedures for, and assign
duties to, personnel engaged in receiving,
storing and issuing purchased supplies, thereby
ensuring that supply levels are consistent with
usage requirements;
J. To facilitate the transfer of surplus or
unused supplies and equipment among
departments as needed; and
K. Subject to Charter Section 906, to sell or
exchange surplus supplies and equipment;
provided, that the same cannot reasonably be
used by any department. (Ord. 954 § 2(part),
1983: prior code § 2950.3)
3.24.040 Purchasing manual. Pursuant to
the provisions of this chapter, the city
administrative officer shall approve and
implement a manual of purchasing policies and
procedures and shall make such manual
available to the Council for inspection. (Ord.
954 § 2(part), 1983: prior code § 2950.4)
3.24.050 Purchase documents. All
departments shall expend money for those items
290-1
Attachment 8
Exhibit A
B1 - 61
Purchasing Ordinance
set forth in Section 3.24.010 only in such
manner, at such times and by submission of such
purchase documents as the purchasing authority
shall prescribe. (Ord. 954 § 2(part), 1983: prior
code § 2950.5)
3.24.060 Bidding procedures - Use of not
required when. Purchase of those items listed
in Section 3.24.010 shall be by bid procedures
set forth in this chapter. Such procedures may
be dispensed with, at the discretion and
judgment of the purchasing authority as to the
best interests of the city, as follows:
A. When the amount to be expended is less
than the bid requirement amount which shall be
specified by resolution of the Council;
B. When an emergency requires that an order
be placed with the nearest available source of
supplypurchase is made to address a situation
that creates an immediate and serious need for
equipment, supplies, or services that cannot be
met through normal purchasing procedures and
where the lack of such equipment, supplies or
services would seriously threaten the functioning
of City government, the preservation of
property, or the health or safety of any person;
C. When the item(s) to be purchased can be
obtained from only one vendor or supplier;
D. When supplies or equipment have been
uniformly adopted in the city or otherwise
standardized;
E. When the purchase will be made
cooperatively with one, or more, other units of
government, or from a local dealer within the
city limits that can provide the same brand,
model and configuration of item(s) identified in
cooperative purchase agreement(s) at or below
the cooperative purchasing net cost within the
same terms and conditions;
F. When reasonably necessary for the
preservation or protection of public peace,
health, safety or welfare of persons or property;
or
G. When, given the indeterminate nature of the
city’s need, a request for proposal will result in a
more favorable and efficient comparison of
supplies, equipment and/or services. (Ord.
XXXX § X, 2015; Ord. 1608 § 1, 2014; Ord.
954 § 2(part), 1983: prior code § 2950.6)
3.24.070 Authority to hire consultants. The
restrictions and provisions of this chapter shall
not apply to contracts involving the acquisition
of professional or specialized services such as,
but not limited to, those rendered by architects,
attorneys, engineers and other specialized
consultants. Selection for such services will be
made using one of the following criteria:
A. An evaluation of proposals solicited from
capable professionals, and approved by the
purchasing authority, whenever the cost of the
work to be performed is of an estimated value by
an evaluation of proposals solicited from
capable professionals, and approved by the
Council, whenever the cost of the work to be
performed is of an estimated value in excess of
the amount specified by Council resolution.
This section shall not prohibit the purchasing
authority from requiring proposals for work with
an estimated cost of less than the Council
specified amount if, in the discretion of the
purchasing authority, selection based upon the
evaluation of proposals would better serve the
interest of the city.
B. by aAn evaluation of proposals solicited
from capable professionals, and approved by the
Council, whenever the cost of the work to be
performed is of an estimated value in excess of
the amount specified by Council resolution.
A.C. Selection from an approved list of on-
call consultants that is established by a formal
Request for Qualifications (RFQ) process. The
Council shall approve the RFQ, and the
Purchasing Authority is authorized to execute
agreements with selected consultants. The
Finance Director is authorized to execute and
amend purchase orders for individual consultant
services contracts in an amount not-to-exceed
the authorized project budget. On-call consultant
lists shall be renewed at least every five years by
a new RFQ process. ( Ord. XXXX § X, 2015;
Ord. 954 § 2(part), 1983: prior code § 2950.7)
290-2 B1 - 62
Purchasing Ordinance
3.24.075 Recycled product procurement
policyEnvironmentally Preferred Purchases.
A. It is the intent of the city Council that the
City of San Luis Obispo take a leadership role
not only in recycling its waste products but also
in the purchase of recycled products for use in
the delivery of city services. It is the purpose of
this section to provide direction to the city
administrative officer in the procurement and
use of recycled products. For the purpose of this
section, recycled materials are defined as any
materials (e.g., glass, paper, plastic, etc.) that are
separated by type, reprocessed by industrial
methods, and used as raw materials for the
manufacture of new products.
B. It is the policy of the City of San Luis
Obispo to purchase and use recycled products
whenever possible to the extent that such use
does not negatively impact health, safety, or
operational efficiency.
C. It is the policy of the City of San Luis
Obispo to encourage the purchase of products
which can be recycled or reused.
D. The City will purchase and use recycled
paper for masthead stationery, envelopes and
printing purposes. In addition, recycled paper
shall be purchased and used in all copy
machines which will accept it. City staff will
encourage the copier industry to develop high-
speed copiers which will accept recycled paper.
E. City departments shall examine their
purchasing specifications and, where feasible,
restructure them to encourage the use of
products which incorporate recycled materials in
their manufacture purchase equipment, supplies,
and services that result in less harm to the
natural environment. This involves the purchase
of equipment, supplies, and services in a manner
that uses less harmful materials, employs
recycled or recovered materials (where
appropriate and available), and utilizes
techniques intended to result in less impact on
the environment than other available methods..
F. A ten percent preference, not to exceed one
thousand dollars per contract, may be given to
recycled products. The fitness and quality of the
recycled product must be at least equal to
unrecycled products as determined by the city.
The preference percentage shall be based on the
lowest bid or price quoted by the supplier or
suppliers offering nonrecycled products.
G. Price preferences may be offered in excess
of the ten percent ceiling established in this
section, if it can be shown that purchase of a
recycled product or material will result in greater
long-term savings to the city. Award of a bid in
excess of the ceiling, however, requires the
approval of the city administrative officer or city
Council as established in the city’s purchasing
manual. (Ord. XXXX § X, 2015; Ord. 1178 § 1,
1990)
Ord. No. 1178 added § 3.24.080, which the
editor has renumbered § 3.24.075 since the
chapter already contained a § 3.24.080.
290-3 B1 - 63
Purchasing System Improvements
City Council
June 2, 2015
Presenting Staff: James David 1
Recommendation
Amend the Municipal Code and related policy documents by:
1.Revising purchasing procedures for Public Works projects to be more
consistent with Public Contract Code;
2.Revising purchasing procedures for consultant services to keep pace with the
current market; and
3.Adding language to policies governing on-call professional services,
environmentally preferred purchases, and emergency purchasing.
2
Continuous Improvement
City’s Financial Plan policies call for ongoing evaluation of processes:
1.Improve the delivery of program services
2.Analyze procedures to remove unnecessary review
3.Maintain purchasing policies that are as efficient and effective as possible
Background analysis
1.11 internal brainstorming sessions with City departments
a.Purchasing authority levels low
b.Asking for “yes” over and over
2.Benchmark Cities comparison
a.Ideas for efficiency
3.Purchasing system last updated 2003
3
Proposed Revisions: Public Projects
A shift towards more informal bidding procedures streamlines process
4
More
than
$100K
Formal Bidding (RFP)
Informal Bidding
Key:
Finance Director
City Manager
Council
Council
Department Head
City Manager
Finance Director
Department Head
Purchasing Revisions: Consultant Services
A shift towards higher City Manager authority streamlines process
5
More
than
$50K
Formal Bidding (RFP)
Informal Bidding
Key:
Department Head
City Manager
Council
Dept. Head
City Manager
Council
Additional Purchasing Language
1.Formalize on-call professional services
a.Request for Qualifications (RFQ) at least every 5 years
2.Expand upon recycled product procurement policy
a.Products and services that use low-impact materials and techniques
3.Define emergency purchasing
a.Immediate and serious need for equipment, supplies and or services
4.Council direction on local vendor preference?
6
Recommendation
Amend the Municipal Code and related policy documents by:
1.Revising purchasing procedures for Public Works projects to be more
consistent with Public Contract Code;
2.Revising purchasing procedures for consultant services to keep pace with the
current market; and
3.Adding language to policies governing on-call professional services,
environmentally preferred purchases, and emergency purchasing.
7
` Ei Newspaper of the Central Coast
3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 93406-0112 • (805) 781 -7800
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AFFIDAVIT OF PUBLICATION
AD # 1779067
CITY OF SAN LUIS OBISPO
OFFICE OF THE CITY CLERK
STATE OF CALIFORNIA
ss.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above entitled matter; I am now, and at
all times embraced in the publication herein mentioned
was, the principal clerk of the printers and publishers of
THE TRIBUNE, a newspaper of general Circulation,
printed and published daily at the City of San Luis
Obispo in the above named county and state; that notice
at which the annexed clippings is a true copy, was
published in the above -named newspaper and not in any
supplement thereof — on the following dates to wit;
JUNE 10, 2015 that said newspaper was duly and
regularly ascertained and established a newspaper of
general circulation by Decree entered in the Superior
Court of San Luis Obispo County, State of California, on
June 9, 1952, Case 919139 under the Government Code
of the State of California.
I certify (or declare) under the penalty of perjury that the
foregoing is true and correct.
MW_ �_ - -No-
n4/1l
(Signatu of Principal Clerk)
DATED: JUNE 10, 2015
AD COST: $165.00
ft
WWII 0M LM 0909PO
ORDINANCE NO. 1618 (2015 Series)
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SAN LUIS OBISPO,
CALIFORNIA. AMENDING MUNICIPAL
CODE CHAPTER 3.24, ARTICLE 1, TO
ADD LANGUAGE TO PURCHASING POL3-
CIES GOVERNING EMERGENCY PUR-
CHASING, HIRING ON -CALL CONSUL-
TANTS, AND ENVIRONMENTALLY PRE-
FERRED PURCHASES
NOTICE IS HEREBY GIVEN that the City
Council of the City of San Luis Obispo, Cali-
fornia, at its Regular Meeting of June 2,
2015, introduced the above titled ordinance
upon a motion by Vice Mayor Ashbaugh,
second by Council Member Christianson,
and on the following roll call vote:
AYES: Council Member Carpenter, Chrisb-
anson, Rivoire, Vice Mayor Ashbaugh, and
Mayor Manx
INOES: None
Ordnance Na. 1618 1201 5 Series - This is
a City Ordinance to amend Chapter 3.24,
Article 1, to add language to the Cityr's pur-
chasing policies related to the purchasing
authority and procedures for Public Works
projects to be more consistent with the Pub-
lic Contract Code, purchasing authority and
procedures for consultant services to keep
pace with the current market, and provi-
sions for on -call professional services, envi-
ronmentally preferred purchases, and emer
gency purchasing. 1
A full and complete copy of the aforemet�-
tionsd Ordinance is available for irspeciion
and copy in the City Clerk's Office, located I
at 990 Palm Street, San Luis Obispo, Cali-
fornia, or you may call (805) 781 -7100 for
more information.
NOTICE IS HEREBY FURTHER GIVEN
that the City Council of the City of San Luis
Obispo will consider adopting the afore-
mentioned Ordinance at its Regular Meet-
ing of June 16, 2015 at 6:00 p.m., which
will be held in the Council Chamber, locat-
ed at 990 Palm Street, San Luis Obispo,
cony J. Melia
Clerk
10.2015