HomeMy WebLinkAboutR-10621 Updated Purchasing GuidelinesRESOLUTION NO. 10621 (2015 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, 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 Resolution No. 9444 (2003) is hereby rescinded and the updated purchasing guidelines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.
R 10621
Resolution No. 10621 (2015 Series)
Page 2
Upon motion of Vice Mayor Ashbaugh, seconded by Council Member Christianson, and on the
following roll call vote:
AYES: Council Members Carpenter, Christianson and Rivoire,
Vice Mayor Ashbaugh and Mayor Marx
NOES: None
ABSENT: None
The foregoing resolution was adopted this 2" d day of June 2015.
a o Jan Marx
ATTEST:
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this 16-1 " - day of
thony J. �
City Clerk
Resolution No. 10621 (2015 Series)
Page 3
Section 295
Exhibit A
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.
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Resolution No. 10621 (2015 Series)
Page 4 Exhibit A
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 11) 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 3.24.150.132 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.
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:
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Resolution No. 10621 (2015 Series)
Page 5
Purchasing Guidelines
Exhibit A
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 detennined
based on direct negotiations— contract award will be made by the Council.
Adopted by the Council on September 4, 2007, Resolution No. 9926, and untended by Council on June 2, 2015, Resolution
No. 10621.
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Resolution No. 10621 (2015 Series)
Page 6 Exhibit B
Section 225
CONSTRUCTION CONTRACT 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.
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Resolution No. 10621 (2015 Series)
Page 7 Exhibit B
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 gf'$100,000,
Originally Approved by the Council on August 3, 1993; Revised by the Council on April 15, 2003 and June 2,
2015
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