HomeMy WebLinkAbout5/1/2018 Item 14, Eriksson
City of San Luis Obispo, Council Memorandum
April 30, 2018
TO: City Council
FROM: Kristin Eriksson, Purchasing Analyst
VIA: Derek Johnson, City Manager DJ
SUBJECT: Item #14: Purchasing Policy Update
A Council Member has asked several questions regarding the recommended updates to the City’s
purchasing policy and guidelines. The questions and responses follow, with staff answers in
italics.
1. Will this new policy result in longer processes and more delay in making purchases?
Answer: There will potentially be some minor delay in making smaller purchases, which
previously did not require any process or entry into the financial system. However,
significant overall staff time is expected to be saved as the minor data entry required at the
outset of a purchase will be offset by the elimination of current, manual processes to track
and report on available funds as well as processing of budget adjustments required when
accounts are overspent. It is expected that staff will experience greater efficiency
throughout the process for medium and larger purchases, as approvals will be conducted
at lower levels, resulting in a shorter approval process.
2. Will this new policy result in increased costs for purchases?
Answer: It is anticipated that the new procedures will decrease costs. By increasing
visibility into purchases of less than $7,500, purchasing staff will be able to identify
opportunities for bulk purchasing and utilization of national cooperative agreements,
which often provide significant price discounts and rebates. Further, as mentioned above,
while there will be some additional staff time involved in making the purchase request, this
will be offset, and significant overall staff time will be saved by eliminating several manual
processes required by the current procedures.
3. Will there be an unfair advantage of out-of-town business due to the business license
requirement being waived?
Answer: The out-of-state exemption applies only to business license certification for
entities which have no other connection with the City other than that we ordered something
from them (no locations in the City/State and no performance in the city). In discussions
with the City Attorney’s office, it was determined that the City likely does not have a
Responses to Purchasing Policy Update Questions Page 2
sufficient nexus with such entities to have authority to levy a local tax under current law,
regardless of whether the policy change is adopted. Therefore, the certification does not
serve a purpose with regard to the tax.
The business license is also used as a zoning clearance for businesses. This does not apply
for businesses with no presence in the City.
4. Will more employees be required to administer these policy changes? Are the “Purchasing
Assistant” and “Purchasing Analyst” positions different people? How will these functions
be allocated?
Answer: The positions of “Purchasing Analyst” and “Purchasing Assistant” are already
filled by existing city staff. The Purchasing Analyst position was added in January of 2017
when the Purchasing Division was created per the recommendations of the Government
Finance Officers Association (GFOA). An Accounting Assistant was assigned to act as a
Purchasing Assistant in that Division at the same time. There is no hiring planned for the
Purchasing Division at this time.
5. On packet page 169 it is noted that there are different processes for basic IT vs large scale
IT, i.e. systems IT. How common are these systems purchases? Can you give me several
examples? Do we really need to create an entire category for them?
Answer: It is recommended that IT systems purchases be treated differently from General
Goods purchases, as these systems often have city-wide implications and require ongoing
maintenance and support in future years, unlike purchases of basic IT such as new
monitors. An example of such a purchase is the purchase of the new ERP system for the
City. This system will drastically change the way the City does business, will affect every
employee on some level and will require maintenance and support throughout the life of
the system. It is recommended that such purchases be given a higher level of scrutiny due
to the wide-ranging effect and ongoing costs associated with them.
6. On packet page 180, what is the difference between the terms “responsible bid” and
“responsive bids”. The workflow chart on the page, 181, uses “responsive” and other charts
use “responsible”.
Answer: Under the Municipal Code, the lowest “responsible bid” must be selected when
the formal contract procedure is required (Chapter 3.24, Article III). The lowest
responsible bid is determined by considering the bid price and several other criteria,
including the reputation of the bidder, the ability of the bidder to perform and provide
future maintenance and the results of any evaluation relating to performance and price.
(Section 3.24.210). However, for the informal quotation or quick quote process, only
Responses to Purchasing Policy Update Questions Page 3
pricing is requested. Therefore, the quotes must only be “responsive” in the sense that
they provide pricing for the items or basic service requested.
The flow chart describing the RFB workflow on page 181 of the Council packet uses the
term “responsive bidder”. This was a typographical error and has been replaced with
“responsible bidder” pursuant to the Municipal Code in Attachment A.
\\chstore7\Team\COUNCIL AGENDA REPORTS\2018\2018-05-01\Purchasing Policy\PurchasingPolicyUpdate_Council Memorandum.docx
Non-Construction RFP Package
The City’s template “Regular RFP Package” must be used to create the RFP document provided to
prospective vendors (See Section X of this Manual). When posting the RFP, the following should
also be included:
1)A general description of the desired goods or services to be purchased;
2)The desired qualifications of proposers;
3)The information or documentation required for submission of proposals;
4)The date, time and location of public opening of sealed Proposals;
5)The location and deadline for submission of Proposals;
6)The deadline for submission of questions (if applicable);
7)The date, time and location of the pre-bid conference (if applicable).
Non-Construction RFP Submission and Opening
All RFP submissions (proposals) must be sealed (whether in a sealed, unopened envelope for paper
bids or with electronic encryption for electronic bids) and must be opened publicly at a designated
location, date and time.
Proposals which are received after the date and time specified or in a different format than that
requested in the solicitation may not be considered.
Non-Construction RFP Evaluation/Bid Tabulation
The department in cooperation with Purchasing will first determine whether proposals are responsive
to the RFP. Then, a designated evaluation team (subject matter experts, department stakeholders) will
review responsive proposals using the criteria listed in Section 3.24.210 of the Municipal Code. The
lowest responsible proposal will then be recommended for award.
For professional services related to project management, construction management, design,
engineering, surveying, mapping, landscape architecture, or architectural related services are to be
evaluated based on demonstrated competence and qualifications for the type of professional services
203-4
Attachment A