HomeMy WebLinkAbout2004-06-08 - AGENDA REPORTS - SECOND READING ORD PURCHASING (2)Agenda Item:
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Dennis Luppens
DATE: June 8, 2004
SUBJECT: SECOND READING OF ORDINANCE AMENDING THE CITY
OF SANTA CLARITA MUNICIPAL CODE IN RELATION TO
PURCHASING
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council conduct second reading and adopt an ordinance entitled, "An Ordinance of the City
of Santa Clarita, California, Amending Section 3.12 of the Santa Clarita Municipal Code
Regarding Purchasing."
BACKGROUND
Overview
Since modifications were 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
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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, 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 adopt 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