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HomeMy WebLinkAbout2004-05-25 - AGENDA REPORTS - ORD AMEND MUNICODE PURCHASING (2)Agenda Item: & CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR City Manager Approval: Item to be presented by: Dennis Luppens DATE: May 25, 2004 SUBJECT: ORDINANCE AMENDING THE CITY OF SANTA CLARITA MUNICIPAL CODE IN RELATION TO PURCHASING DEPARTMENT: Administrative Services RECOMMENDED ACTION City Council introduce and pass to second reading an Ordinance Amending the City of Santa Clarita Municipal Code in Relation to Purchasing. BACKGROUND Overview Since modifications made to the Municipal Code in 1995 referring to Purchasing, the purchasing codes pertaining to bidding processes and thresholds have remained constant. After acquiring survey information conducted from fiscal years 1998-99 through 2002-03, provided by dozens of government entities and organizations (e.g., Municipal Finance Office, California Public Purchasers), staff identified a significant need to revise language in the Municipal Code to reflect current trends in bidding procedures. Staff recommends the consideration of four significant issues to enhance the current bidding process: Bid Award Process Currently, staff practices a "lowest bid" approach in determining award of a bid to a vendor. As a result of the "lowest bid" approach, staff primarily awards a bid to a vendor that offers the City the most economically efficient price for a specific service. This narrow focus solely on initial cost neglects a number of product and service characteristics that have a significant impact on overall costs. At this time, staff has identified a need to re-evaluate the City's current bid processes to include evaluation of items in addition to initial cost. Consequently, staff recommends utilizing the "multiple criteria" selection process, which will allow staff to evaluate bids and take into account various elements in addition to initial acquisition cost. Relevant factors in the analysis are dependent on the material or service purchased, but examples of additional factors to consider in the bid process are: operation costs, energy costs, maintenance costs, quality of product, scores on experience and reference checks, equipment dependability, and company guarantee. The criteria are determined as part of the solicitation development process and are included in the bid specifications to inform vendors of the appropriate information to provide in their bid package, as well as make vendors aware of the criteria used to evaluate those packages. Given the flexibility that the "multiple criteria" process provides, staff has determined that it is appropriate for the City to consider implementing the process as a customary practice regarding the bid awarding process. This action would not preclude awards based on the lowest cost, but it would give staff the opportunity to take into consideration a variety of factors for a procurement transaction when appropriate. Bid Threshold Staff would like to explore opportunities to adjust the existing formal bid threshold from $10,000 to $20,000. The existing threshold of $10,000 has remained constant since the City's incorporation in 1987. After surveying other public agencies (survey included as attachment A), staff concludes that the City's bid threshold is approximately 100% lower than the average threshold of $20,000. At this time, staff recommends increasing the City's bid threshold to $20,000 to more closely parallel current trends in bid thresholds. Electronic Bid Acceptance At present, the Municipal Code requires that responses to formal bids be submitted as correspondence in a sealed envelope to the City Clerk. However, recent software technology provides cities with the opportunity to accept formal bids via e-mail. The e-mail process reflects the traditional paper routing procedure, with the exception of delivery method. Electronic copies of bids would be transferred into an electronic lock box only accessible by the Purchasing Agent after the time specified in the bid. For vendors that are registered on the City's website, Purchasing is currently implementing an automatic e-mail notification system pilot program to analyze efficiency of the system. Surplus Donation Currently, the Municipal Code requires that after bids or proposals, surplus material be traded or disposed of by auction or sale. Frequently, local schools or non-profit organizations have use for the material. Staff recommends modifying current municipal code language to enable the City Manager, when in the best interest of the City, to donate items with a low -market value to schools or organizations. ALTERNATIVE ACTIONS 1. Do not pass ordinance to second reading. 2. Other action as determined by Council. FISCAL IMPACT No direct fiscal impact is expected as a result of this action. Implementation may result in lower overall costs for some procurements. ATTACHMENTS Ordinance ORDINANCE NO. 04 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, AMENDING THE MUNICIPAL CODE RELATING TO PURCHASING THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. That the Municipal Code is hereby amended at Section 3.12.030 relating to the Purchasing Agent, to read as follows: 3.12.030 Purchasing Agent. There is a created position of Purchasing Agent who shall report to the Director of Administrative Services and/or his/her designee. The Purchasing Agent shall have the authority to: A. Purchase or contract for supplies and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, such administrative regulations as the purchasing agent shall adopt for the internal management and operation of the purchasing function and such other rules and regulations as shall be prescribes by the City Council or City Manager. B. Negotiate and recommend execution of contracts for the purchase of supplies and equipment; C. Act to procure for the City the needed quality in supplies and equipment; D. Discourage uniform bidding, and endeavor to obtain as full and open competition as possible on all purchases; E. Through the Director of Administrative Services and the City Manager, prepare and recommend to the City Council rules governing the purchase of supplies and equipment for the City; F. Prepare and recommend revisions and amendments to the purchasing rules; G. Keep informed of current developments in the field of purchasing, prices, market conditions and new products; H. Prescribe and maintain such forms as are reasonably necessary for the operation of this chapter and other rules and regulations; I. Maintain a vendors' list, vendors' catalog file and records needed for the efficient operation of the purchasing division. SECTION 2. That the Municipal Code is hereby amended at Section 3.12.120, relating to formal bid procedures, to read as follows: 3.12.120 Formal (sealed) Bid Procedures Except as otherwise provided herein, purchases of supplies, equipment and services (other than professional) of an estimated value greater than twenty thousand dollars ($20,000) shall be awarded to the lowest responsible bidder, or the highest scoring bidder of the multiple criteria award process, pursuant to the formal bid procedure hereinafter prescribed. Formal bids as used in this context includes any solicitation following the procedures prescribed below including, but not limited to, invitations to bid and requests for proposal. SECTION 3. That the Municipal Code is hereby amended at Section 3.12.180, relating to bid opening procedures, to read as follows: 3.12.180 Formal Bid Opening Procedure Sealed bids shall be identified as "bids" on the envelope. The Purchasing Agent, or designee, shall publicly open all bids at the time and place stated in the public notices. Electronic bids may be conducted in accordance with procedures established by the Purchasing Agent. Such procedures shall require, at a minimum, that electronic bids will be received only into an electronic time locked box that may only be accessed by the Purchasing Agent, or designee on the date and time specified in the bid. A tabulation of all bids received shall be available for public inspection in the Purchasing office during regular business hours for a period of not less than thirty (30) calendar days after the bid opening. SECTION 4. That the Municipal Code is hereby amended at Section 3.12.200, relating to award of formal bids, to read as follows: 3.12.200 Award of Formal Bid Contracts. Except as otherwise provided herein, formal bid contracts exceeding fifty thousand dollars ($50,000) shall be awarded by the City Council to the lowest responsible bidder or the highest scoring bidder of the multiple criteria award process. Formal bid contracts of fifty thousand ($50,000) or less may be awarded by the Purchasing Officer (or designee). SECTION 5. That the Municipal Code is hereby amended at Section 3.12.230, relating to the informal bidding process, to read as follows: 3.12.230 Open Market or Informal Bid Procedure Purchase of supplies, equipment and services (other than professional) of an estimated value in the amount of twenty thousand dollars ($20,000) or less may be made by the Purchasing Agent in open market pursuant to the procedure prescribed in Sections 3.12.120 through 3.12.215; provided, however, all bidding may be dispensed with for purchases of supplies and equipment having a total estimated value of less than one thousand dollars ($1,000). Quotes as used in this context include any solicitation following the procedures prescribed below including, but not limited to, requests for quote to bid and requests for proposal of twenty thousand dollars ($20,000) or less. SECTION 6. That the Municipal Code is hereby amended at Section 3.12.250, relating to notices inviting quotes, to read as follows: 3.12.250 Notice Inviting Ouotes. The Purchasing Agent shall solicit quotes by written and/or electronic requests to prospective vendors, or by telephone, or by public notice posted on a public bulletin board at the City offices. SECTION 7. That the Municipal Code is hereby amended at Section 3.12.270, relating to exceptions to competitive bidding requirements, to read as follows: 3.12.270 Exceptions to Competitive Bidding Requirements The Notwithstanding any provision of this chapter to the contrary, the competitive bidding procedures and requirements may be dispensed with in any of the following instances: A. When the estimated amount involved is less than one thousand dollars ($1,000.00); B. When the commodity can be obtained from only one vendor; C. The City Manager and/or his/her designee may authorize the purchase of materials, supplies, equipment and services where an emergency is deemed to exist and it is determined that service involving the public health, safety or welfare would be interrupted if the normal procedure were followed. All emergency purchases, which would otherwise require formal bidding procedures, made pursuant to this Section shall be submitted to the City Council for ratification at the next regular Council meeting after the purchase is authorized; D. Any request to waive competition for a procurement not covered by the exceptions herein must be approved by the City Council; E. Any agreement involving acquisition of supplies, equipment or service entered into with another governmental entity; F. In the event the City Council finds that it is in the public interest and necessity to purchase supplies, equipment or services without compliance with the formal contract procedures set forth in this section, the City Council may waive such procedures by declaring so in a motion or resolution. SECTION 8. That the Municipal Code is hereby amended at Section 3.12.330, relating to surplus donations, to read as follows: 3.12.330 Surplus Supplies — Donations The Purchasing Officer or Designee shall have authority to dispose of surplus or equipment by donation to local schools or non-profit organizations when the estimated market value of such surplus is less than one thousand dollars ($1,000). 3 SECTION 9. That the City Clerk shall certify to the adoption of this Ordinance and shall cause it to be published in the manner required by law. PASSED, APPROVED AND ADOPTED this _ day of 2004. MAYOR ATTEST: CITY CLERK I, Sharon L. Dawson, CMC, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Ordinance No.04- was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the x day of x, 2004. That thereafter, said Ordinance was duly passed and adopted at a regular meeting of the City Council on the x day of x, 2004, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK 1, STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) CERTIFICATION OF CITY COUNCIL ORDINANCE I, Sharon L. Dawson, City Clerk of the City of Santa Clarita, do hereby certify that this is a true and correct copy of the original Ordinance No. 04- , adopted by the City Council of the City of Santa Clarita, CA on 2004, which is now on file in my office. Witness my hand and seal of the City of Santa Clarita, California, this _ day of 2004. Sharon L. Dawson, CMC City Clerk By Susan Coffinan Deputy City Clerk 5