Loading...
HomeMy WebLinkAboutItem 24 - Ordinance Amending City Manager’s Contracting Authority for Non/Public Works Contracts & Construction Finance and Management Services Agency www.santa-ana.org/cm Item # 24 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report March 1, 2022 TOPIC: Ordinance Amending City Manager’s Contracting Authority for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations AGENDA TITLE: Ordinance Amending City Manager’s Contracting Authority for Non-Public Works and Public Works Contracts Under Chapter 2, Article VII and Public Works Construction Rules and Regulations Under Chapter 33, Article VIII of the Santa Ana Municipal Code RECOMMENDED ACTION Approve first reading of an ordinance amending City Manager’s contracting authority for non-public works and public works contracts under Chapter 2, Article VII, Sections 2-748, 2-800 to 2-808 and public works construction rules and regulations under Chapter 33, Article VIII, Sections 33-200 to 33-203 of the Santa Ana Municipal Code as follows: i) Amending Section 2-748 of Chapter 2, Article VII concerning the City Manager’s contract authority: (1) non-public works contracts to increase from $50,000 to $250,000; (2) emergency public works construction to increase from $100,000 to $750,000; (3) non-public works and public works contracts change orders authority increase from 10 percent or $25,000, whichever is greater, to 15 percent or $50,000, whichever is greater; and (4) add language codifying contract limits will be applied on a fiscal year basis by departments. ii) Amending Section 2-800 to 2-808 of Chapter 2, Articles VII.II concerning the Purchasing Rules and Regulations: (1) clarifying language administrative in nature; (2) extending local vendor preference to increase from procurement involving $5,000 and one $100,000 to procurement involving $10,000 and $100,000; (3) for reporting requirements to increase from $500 to $1,000; (4) for administrative contracts to increase from $5,000 to ten $10,000; (5) for informal contracts to increase from $5,000 and $25,000 to $10,000 and $50,000); (6) for formal contracts to increase from $25,000 to $50,000; (7) add language to coincide with current practices for awarding services contracts; and Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 2 2 4 6 4 (8) for non-bid purchases add City-owned software upgrades, maintenance, or additional licenses. iii) Amending Sections 33-200 to 33-203 of Chapter 33, Article VIII concerning the Public Works Construction Rules and Regulations: (1) housekeeping language administrative in nature; and (2) for non-emergency public works construction incorporate informal procurement process: a) administrative contracts up to $50,000 b) informal construction bid for contracts between $50,000 and $250,000 c)formal for bid for contracts in excess of $250,000 Executive Summary Revisions to both the City Manager’s contract authority and purchasing requirements regarding its informal and formal bidding process is recommended to modernize the City’s procurement process, while increasing the pool of companies who bid on City projects, including local vendors. If approved, the City Manager will have authority to enter into non-public works and public works contracts up to $250,000. Bidding requirements will increase (formal bid process) to $50,000 for both non-public works and public works contracts. If approved, revisions to both the City Manager’s contract authority and bidding requirements will closely align the City’s purchasing requirements with newly enacted federal and state guidelines. Quarterly report of contracts will continue to be required to be submitted and include contracts entered into that exceed $1,000, an increase from the current requirement of contracts that exceed $500. Revisions to the City’s local preference is not recommended at this time. The City’s current local preference of seven percent matches the State’s local preference percentage amount. DISCUSSION Background The City’s Municipal Code includes authority for the City Manager to bind contracts, purchasing thresholds for informal bids and formal bids, and local preference allowances. The City Council last updated the City Manager’s contracting authority in March 2019, increasing it from $25,000 to $50,000 for non-public works contracts, and from $25,000 to $250,000 for public works contracts. The City Council last updated the purchasing (i.e. informal and formal bid requirements) thresholds in 2012. Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 3 2 4 6 4 Comparison to Other Cities and Proposed Thresholds The following table summarizes the contracting and purchasing authority for charter cities in Southern California with populations from 300,000 to 500,000. The table includes the current and proposed thresholds for Santa Ana. City CM Authority Informal Bids Formal Bids Local Preference Anaheim All: Up to $200,000 Public Projects: $10,000-$50,000 require up to 3 quotes All Other: >$500-$20,000 Public Projects: Over $100k All Other: >$20,000 5% maximum $2,000 Irvine All: Up to $1,000,000 Public Projects: >$60,000-$200,000 All Other: $10,000 – $45,000 Public Projects: >$200,000 All Other: $45,000-$200,000 5% maximum $2,000 Long Beach All: Up to $200,000 None Required Public Projects: $25,000 All Other: >$100,000 10% maximum $10,000 Riverside All: Up to $50,000 Public Projects: Up to $25,000 All Other: Up to $50,000 Public Projects: >$50,000 All Other: >$50,000 5% Santa Ana Current Public Works Contracts: Up to $250,000 All Other: Up to $50,000 Public Works Construction: Not Applicable All Other: >$5,000-$25,000 Public Works Construction: >$500 All Other: >$25,000 7% small Santa Ana business or 4% Orange County business, for purchases up to $100,000 Santa Ana Proposed Public Works Contracts: Up to $250,000 All Other: Up to $250,000 Public Works Contracts: >$50,000-$250,000 All Other: >$10,000-$50,000 Public Works Contracts: >$250,000 All Other: >$50,000 No Change City Manager Contracting Authority Staff publishes a quarterly report of all contracts issued by the City Manager in excess of $500, as required by SAMC 2-804, to ensure full transparency and accountability. The quarterly report includes vendor name, issuing department, and description of items or services, and amount of the contract. The only recommended change to the quarterly report is to increase the reporting threshold from $500 to $1,000. Agenda process time is the primary reason behind the recommended change to the City Manager’s contract authority. Departments must submit proposed City Council staff reports two weeks prior to the City Council meeting, then execution of City Council approved contracts is coordinated with the Mayor’s schedule. The proposed ordinance would increase efficiency, reduce staff time, and allow the City Manager to issue small contracts up to three weeks faster. Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 4 2 4 6 4 If the City Manager had previously had the authority to sign contracts up to $250,000, staff identified 102 contracts, totaling $11.8 million (an average of $115,700 each), that could have been signed by the City Manager in FY 2020-21. The FY 2021-22 citywide budget is $758 million, with approximately $300 million subject to contracts for purchase of services, construction, and commodities. Formal and Informal Bid Threshold The City has a formal process to advertise for and collect bids and proposals for purchases of goods and services over $25,000, and public projects over $500. To ensure the City acquires goods and services at the best price, staff documents at least three informal quotes gathered via phone or email for purchases in excess of $5,000 and up to $25,000, unless unique circumstances dictate the goods or services are only available from less than three vendors. Staff recommends increasing the threshold requiring formal procurement procedures for all other purchases (non-public works contracts) to $50,000. It is time-consuming and costly for vendors to submit bids and proposals via a formal process. Increasing the threshold would enable more local small vendors to compete for the City’s business. The City does not have an informal procurement process for public works construction projects. Adopting the proposed informal bid procedure will streamline the process to execute public works contracts and agreements involving expenditures up to $250,000, thereby expediting delivery of maintenance, repairs and services to public assets such as streets, sewer, water facilities, parks, etc. Local Preference Most cities have a very limited local preference program. To support a significant preference or a preference for large contracts, a vendor would need to demonstrate a disadvantage by operating in the jurisdiction. At this time, staff does not recommend changes to the City’s current local preference program, as it is very competitive with other comparable cities. Furthermore, in November 2018 the State increased the local preference from five percent to seven percent, matching the City’s current preference amount awarded to Santa Ana based business. The recommendation to increase the threshold for formal bids will help small local vendors compete for City business. In addition, staff has developed an outreach program on the City’s website to educate local vendors about the City’s competitive procurement process and opportunities to participate. Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 5 2 4 6 4 During April 2021, staff called 400+ Santa Ana businesses registered with Planet Bids. Businesses were invited to participate in the upcoming virtual workshop, which included training on how to register in the City’s bid management system. On July 22, 2021, the City conducted a virtual workshop to show Santa Ana businesses how to submit bids to the City. Staff also expanded the information presented on the “Doing Business with the City” webpage on the City’s website to include the video and updated FAQs. The City’s bid platform, Planet Bids, allows the City to solicit bids by invitation only based on geographic location, with direct communications going to those vendors. The City’s Buyers encourage departments to solicit informal bids from local vendors whenever practical. When departments ask the Buyers where to procure goods or services, the Buyers respond with Santa Ana vendors first. Finally, as part of the formal bid process, Buyers use Planet Bids to contact local vendors if they have not submitted a bid three days prior to bid closing. Housekeeping Adjustments Revisions are proposed to Section 2-748 and Section 2-800 thru 2-803 (Article VII.11 Purchasing Rules and Regulations of the Santa Ana Municipal Code clarifying the City’s current practice and additional clean-up language, which is administrative in nature. Specifically, additional language regarding how the City Manager’s contract authority is applied on both a fiscal year and department basis. Multiple Departments can enter into a contract with the same vendor who may or may not be providing different type of services. Splitting of contracts for avoiding the City purchasing requirements is prohibited. The rationale is the City Council authorizes a new budget each Fiscal Year and through that budget provides policy direction on the work it desires the City Manager to complete. FISCAL IMPACT There is no quantifiable fiscal impact associated with the proposed ordinance. However, the City would be able to utilize staff resources more efficiently for other public services. Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 6 2 4 6 4 EXHIBIT(S) 1. Ordinance including Santa Ana Municipal Code Chapter 2, Article VII, Sections 2- 748 and 2-800 to 2-808 and Chapter 33, Sections 33-200 to 33-203, red-line Submitted By: Kathryn Downs, Executive Director Finance and Management Services Approved By: Kristine Ridge, City Manager Ordinance No. NS-XXX Page 1 of 15 ORDINANCE NO. NS-XXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING ARTICLES VII AND VII.II OF CHAPTER 2 OF THE SANTA ANA MUNICIPAL CODE REGARDING CITY MANAGER’S CONTRACTING AUTHORITY AND CITY PURCHASING RULES AND REGULATIONS, AND ARTICLE VIII OF CHAPTER 33 OF THE SANTA ANA MUNICIPAL CODE REGARDING PUBLIC WORKS CONSTRUCTION RULES AND REGULATIONS THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines, and declares as follows: A. Sections 421 and 422 of the Santa Ana City Charter provide that the City Council may by ordinance authorize the City Manager to bind the City on non-public works contracts and public works contracts for such amounts as may be established from time to time. B. Sections 421 and 422 also provide that the City Council may by ordinance establish rules and procedures for competitive bidding for non-public works contracts and public works contracts. C. On March 19, 2019, the City Council adopted Ordinance No. NS-2963, by which the City Manager’s contracting authority was increased to $50,000 for non-public works contracts and to $250,000 for public works contracts. D. The City Council is regularly presented with a voluminous amount of contracts and agreements for approval annually. The process to obtain City Council approval can be lengthy and requires a substantial amount of City staff time. This process can also adversely impact the City’s ability to provide efficient and timely delivery of services to its constituents and businesses. E. Further increasing the City Manager’s contracting authority for both non- public works and public works contracts and other housekeeping changes to the City’s procurement rules and procedures are desirable because they will free staff time to devote to other necessary public services and facilitate participation of small local vendors for the City’s business, as the formal process can be time-consuming and costly. F. Further increasing the City Manager’s contracting authority for both non- public works and public works contracts and change orders to such contracts will also further streamline the process to execute Public Works Agency contracts and agreements for the construction, rehabilitation, maintenance, testing and inspection of public EXHIBIT 1 Ordinance No. NS-XXX Page 2 of 15 infrastructure, thereby improving the delivery of services necessary for the continued enhancement and preservation of such public infrastructure. Section 2. Section 2-748 of Article VII (City Manager’s Contracting Authority) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-748. – City manager’s contracting authority. (a) Non-public works contracts. (1) The city manager is authorized to bind the city on a fiscal year basis by department to any one (1) or more written non-public works contract, per vendor, in an amount or amounts not exceeding the sum of fifty thousand dollars ($50,000) two hundred fifty thousand dollars ($250,000). For purposes of this section, a non-public works contract shall mean any contract not deemed to be a public works contract under subsection (b)(1). (b) Public works contracts. (1) The city manager is authorized to bind the city on a fiscal year basis by department to any one (1) or more written public works contract, per vendor, in an amount or amounts not exceeding the sum of two hundred and fifty thousand dollars ($250,000.00). For purposes of this section, a public works contract shall be deemed to mean a project for the erection, improvement, and/or maintenance, inspection, testing and repair of public buildings, streets, drains, sewers, or parks. (2) The city manager is authorized to bind the city to any one (1) written contract for emergency public works construction in an amount not exceeding the sum of one hundred thousand dollars ($100,000.00) seven hundred fifty thousand dollars ($750,000). (3) The city manager is hereby authorized to bind the city on change orders to any one (1) public works contract, per vendor, without previous city council approval when such change order for any one (1) public works contract, together with any previously approved change orders for said contract, do not cumulatively amount to an increase of the city's expenditure obligation under said contract of more than ten (10) percent of the original contract amount, or the amount of twenty-five thousand dollars ($25,000.00), whichever is the greater. (c) Change Orders (1) The city manager is hereby authorized to bind the city on change orders to any one (1) non-public works or public works contract, per vendor, without previous city council approval when such change Ordinance No. NS-XXX Page 3 of 15 order for any one (1) non-public works or public works contract, together with any previously approved change orders for said contract, do not cumulatively amount to an increase of the city's expenditure obligation under said contract of more than fifteen (15) percent of the original contract amount, or the amount of fifty thousand dollars ($50,000.00), whichever is the greater. Section 3. Section 2-800 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-800. Purposes of purchasing system. These purchasing rules and regulations are hereby adopted in order to: (1) Establish efficient procedures for purchasing of materials, supplies, labor and equipment for non-public works contracts and public works contracts; (2) Secure maximum quality goods, services or performance at minimum cost for the city; (3) Exercise positive financial control over the city's purchases; and (4) Establish the necessary procedures for the selection of providers of all ranges of goods and services so as to avoid favor or prejudice.; (5) To sSimplify, clarify, and modernize the law governing procurement by the City; (6) To pProvide for increased public confidence in the procedures followed in public procurement; (7) To eEnsure the fair and equitable treatment of all persons who deal with the procurement system of the City; (8) To fFoster effective broad-based competition within the free enterprise system; (9) To pProvide safeguards for the maintenance of a procurement system of quality and integrity, and (10) To oObtain in a cost-effective and responsive manner the materials, services, and construction required by City agencies in order for those agencies to better serve the City's businesses and residents. Ordinance No. NS-XXX Page 4 of 15 Section 4. Section 2-802 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-802. Definitions For purposes of this article, the following definitions shall apply: Agency shall mean the executive director of the city agency or department which has responsibility for awarding a contract for services. Agreement or contract shall mean a legal contract which complies fully with the provisions of Section 421 of the City's Charter and this article. The words agreement and contract may be used interchangeably in this article. Electronic shall mean electrical, digital, magnetic, optical, electromagnetic, or any other similar technology. Local business shall mean a business certified by the state department of general services as a small business, which has a substantial presence through either a headquarters or branch office within the geographical boundaries of the city, and which headquarters or branch office was established prior to the city inviting bids for the respective procurement. Said business must possess a current business license and certificate of occupancy. For purposes of this article, a post office box address within the city shall not qualify as a valid business location. Materials, supplies, labor and equipment shall mean those goods or services, but excluding services as defined below and public works construction, that are readily ascertainable and measurable by an objective standard in terms of quantity or quality so as to be susceptible to competitive bidding. Orange County business shall mean a business certified by the state department of general services as a small business, which has a substantial presence through either a headquarters or branch office within the geographical boundaries of Orange County, and which headquarters or branch office was established prior to the city inviting bids for the respective procurement. Said business must possess a current business license to perform work in Santa Ana. For purposes of this article, a post office box address within the county shall not qualify as a valid business location. Public notice shall mean the distribution or dissemination of information to interested parties using methods that are reasonably available. Such methods can include publication in newspapers of general circulation, electronic or paper mailing lists, and web site(s) designated by the city and maintained for that purpose. Purchasing manager shall mean that city employee or official so designated by the city manager and authorized to carry out the responsibilities under this article, including the promulgation and enforcement of administrative procedures. Purchase order (PO) shall mean that standardized contract developed pursuant to subsection 2-803(j) issued to the vendor of materials, supplies, labor and equipment. Ordinance No. NS-XXX Page 5 of 15 Services shall mean the furnishing of labor, time, or effort by a contractorfirm or individual, not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. Services are of an advisory nature, provide a recommended course of action or personal expertise, have an end product comprised of a transmittal of information, written or verbal, and that is related to the governmental functions of administration, management, program management or innovation. The product may include anything from answers to specific questions to design of a system or plan, and includes provision of workshops, seminars, retreats, and conferences for which expertise is necessary. This term shall not include employment agreements or collective bargaining agreements. This term shall not include contracts for the construction, alteration, improvement, repair, or maintenance of real or personal property. Section 5. Section 2-803 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-803. Powers and duties of the purchasing manager. The city manager is directed to establish and maintain a centralized purchasing system, and in connection therewith, the city manager shall designate a purchasing manager for the city whose duties shall include, but not be limited to, the following: (a) Act to procure for the city the needed quality in materials, supplies, labor, and equipment, and services including professional services, at the least expense to the city. (b) Recommend execution of contracts. (c) Endeavor to obtain as full and open competition as possible on all purchases. (d) Keep informed of current developments in the field of purchasing procurement, prices, market conditions and new products. (e) Establish rules and procedures governing the purchase of materials, supplies, labor, equipment and services, for the city through the preparation and adoption of an administrative code policy which shall provide for the review of such alternative sources of supply or performance as may be available in competition with one another and selection therefrom on the basis of obtaining maximum quality at minimum costs. (f) Prescribe and maintain such forms as are reasonably necessary for the operation of this article. (g) Keep or cause to be kept an inventory of all municipal property in his or her custody. Ordinance No. NS-XXX Page 6 of 15 (hg) If required by federal, state or other law, cause notices inviting bids to be published. (ih) Endeavor to establish standards in the variety of articles, materials, supplies, labor, and equipment, commonly used by the various departments and agencies, as will make possible uniform purchases, when consistent with efficiency. (ji) Prepare, with the approval of the city attorney as to form, a pre-printed purchase order to be utilized in contracts for materials, supplies, labor and equipment. Section 6. Section 2-803.1 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-803.1. Local preference in contracts for materials, supplies, labor and equipment. Except for those contracts for which the Charter of the City of Santa Ana prohibits the provision of a local preference, and/or those contracts funded through programs or partners which prohibit the use of a local preference, the city council authorizes the purchasing manager to extend a preference to local business and Orange County business as set forth herein. (a) In the procurement of material, supplies, labor and equipment involving expenditures a contract award between five thousand dollars ($5,000.00) ten thousand dollars ($10,000.00) and one hundred thousand dollars ($100,000.00), the purchasing manager shall extend a preference to each local business and each Orange County business, which preference shall be applied to the bid which provides maximum quality at minimum price. Said preference shall be set by resolution of the city council. (b) If the bidder submitting the maximum quality at minimum cost bid is not a local business or an Orange County business, and if a local business or an Orange County business has submitted a responsive and responsible bid, and with the benefit of the applicable preference, the bid submitted by local business or Orange County business is equal to or less than the original maximum quality at minimum cost bid, the contract shall be awarded to the local business or the Orange County business at its submitted bid price. If two (2) or more low bids received are equal after the application of the preference, the contract shall be awarded in the following order: (1) To a local business. Ordinance No. NS-XXX Page 7 of 15 (2) To an Orange County business. (3) To the bidder submitting the maximum quality at minimum cost bid. The city shall reserve the right to reject any or all bids. (c) In order for the preference to apply, a bidder must certify under penalty of perjury, that the bidder qualifies as a local business or Orange County business. The preference is waived if the certification does not appear on the bid. Section 7. Section 2-804 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code hereby is amended to read in its entirety as follows: Sec. 2-804. Reporting requirements The city manager reporting requirements mandated by Section 421 of the City Charter shall only include contracts let that exceed five hundred dollars ($500.00)one thousand dollars ($1,000),. aAll other contracts let by the city manager under five hundred dollars ($500.00) one thousand dollars ($1,000) shall be provided to the city council if requested by a councilmember. Section 8. Section 2-805 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-805. Procurement of materials, supplies, labor, and equipment between five hundred dollars ($500.00) and twenty-five thousand dollars ($25,000.00) up to fifty thousand dollars ($50,000). (a) For those agreements exceeding five hundred dollars ($500.00) but not exceeding five thousand dollars ($5,000.00), tThe city manager may bind the city on contracts for materials, supplies, labor, and equipment in amounts not exceeding five thousand dollars ($5000.00)ten thousand dollars ($10,000) in any one contract or in the aggregate with any one vendor or service provider. These contracts can be entered into administratively without the need for informal or formal bidding. (b) Unless exempt from bidding pursuant section 2-807, all contracts involving an expenditure between five thousand dollars ($5,000.00) ten thousand dollars ($10,000) and twenty-five thousand dollars ($25,000.00) fifty thousand dollars ($50,000) for materials, supplies, labor, and equipment shall be let on the basis of obtaining maximum quality at minimum cost in accordance with procedures established by the purchasing manager. Those procedures shall provide for at a minimum the following: Ordinance No. NS-XXX Page 8 of 15 (1) There shall be a written or verbal invitation for bid which shall include the following information: A general description of the things to be purchased or project specifications, the time and place for bid opening when applicable, bid instructions, and the terms and conditions of the bid and any resulting contract. The purchasing manager shall make a good faith effort to notify all businesses engaged in providing such materials, supplies, labor, and equipment located within the boundaries of the city of the opportunity to bid. (2) Where required by state or federal law or regulations, or upon request by a bidder, the bids shall be opened, if sealed, and declared in public at the time and place stated on the "Invitation for Bid." Section 9. Section 2-806 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-806. Procurement of materials, supplies, labor, and equipment in excess of twenty-five thousand dollars ($25,000.00) fifty thousand dollars ($50,000). Unless exempt from bidding pursuant to section 2-807, all contracts involving an expenditure in excess of twenty-five thousand dollars ($25,000.00)fifty thousand dollars ($50,000) for materials, supplies, labor, and equipment shall be let on the basis of obtaining maximum quality at minimum cost, in accordance with procedures established by the purchasing manager. Those procedures shall provide for at least the following: (a) Public notices inviting bids shall include a general description of the things to be purchased or project specifications and the date, time and place for bid opening (if applicable). Adequate public notice of the invitation for bids shall be given a reasonable time prior to the date set forth therein for the opening of bids, in accordance with regulations established by the purchasing manager. To the extent that public notice is by way of publication in a newspaper of general circulation, such publication shall be for at least two (2) days, the first of which shall be at least ten (10) days before the date set for opening bids. (b) Invitation of bids shall be mailed or transmitted by other means established by the administrative codepolicy but not recited over the telephone or in person. Any interested bidder may obtain an invitation for bid. (c) All bids shall be submitted sealed in accordance with the instructions contained in the "Invitation for Bid" form. (d) The bids shall be opened in public, at the date and time and place stated on the "Invitation for Bid." All bids shall be publicly declared. Ordinance No. NS-XXX Page 9 of 15 Section 10. Section 2-807 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-807. Non-bid purchases. The following contracts may be exempted from competitive bidding through an open market purchase by the purchasing manager, and confirmed by the city council in the case of contracts for over twenty-five thousand dollars ($25,000.00)two hundred thousand dollars ($200,000), but shall nevertheless be entered into only after compliance with the rules established by the purchasing manager, which shall include the review of such alternative sources of supply or performance as may be available in competition with one another and selection therefrom on the basis of obtaining maximum quality at minimum costs: (a) Purchases of materials, supplies, labor, and equipment whenever it shall appear that there is only one (1) reasonably available source or where solicitation of bids would for any reason be an idle act. (b) Purchases of materials, supplies, labor, and equipment necessary for the preservation of life, health or property, following the declaration of a state of emergency or disaster in the city. A full written account of emergency procurements made during the declared emergency or disaster shall be submitted to the city council within thirty (30) days as soon as practical but no later than ninety (90) days after their procurement. (c) Situations where no bids are received or all bids are rejected and the city council determines, upon the affirmative vote of at least two-thirds (⅔) of its members, that the materials, supplies, labor or equipment can be obtained at a lower cost. (d) Purchases from vendors whose names are on current established lists and have been awarded the same type of purchase contract by a federal agency (including the general services administration), a state agency, county, city or other public agency after a competitive bidding process determined by the purchasing manager to be substantially equivalent to that prescribed by this article. (e) Contracts for services, which may be awarded on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required or other process established by administrative policy. (f) City-owned software upgrades, maintenance, and/or additional licenses. Ordinance No. NS-XXX Page 10 of 15 Section 11. Section 2-808 of Article VII.II (Purchasing Rules and Regulations) of Chapter 2 (Administration) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 2-808. Local preference in contracts for services. Except for those contracts for which the Charter of the City of Santa Ana prohibits the provision of a local preference, and/or those contracts funded through programs or partners which prohibit the use of a local preference, the city council authorizes the agency to extend a preference to local business and Orange County Business as set forth herein. (a) Contracts for services shall be awarded on the basis of demonstrated competence and on the professional qualifications necessary to for the satisfactory performance of the services required. In evaluating proposals for service contracts in amounts up to one hundred thousand dollars ($100,000.00), proposers which qualify as local business or Orange County business shall be eligible for preference points. The preference shall be added to the proposal to reach a final score in determining the most advantageous proposal. Said preference shall be set by resolution of the city council. (b) A non local proposer associating with a local business or Orange County business, shall be eligible for the local preference if a minimum of fifty (50) percent of the contract value will be performed by the local business or Orange County business. Section 12. Section 33-200 of Article VIII (Public Works Construction Rules and Regulations) of Chapter 33 (Streets, Sidewalks and Public Works) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 33-200. Purposes. (a) These rules and regulations for the contracting of public works construction services are to comply with section 421 422 of the city charter to: (1) Establish efficient procedures for construction of public works; (2) Distinguish between traditional public works construction and other more innovative modes of project management and project delivery which still comply with the city's charter; and (3) Establish procedures to allow for the efficient and fair construction of public works without favor or prejudice. (b) The city council finds that the city's charter, including but not limited to sections 200, and 421, and 422 conflict with existing state law set forth in the California Public Contract Code. Said charter provisions, this article Ordinance No. NS-XXX Page 11 of 15 and the administrative procedures adopted by the executive director of public works pursuant to section 33-204, are intended, and shall be interpreted, to constitute a complete statement of the city's public works construction rules and regulations. The city council declares there exists a fundamental conflict between the city's charter, ordinances, administrative rules and regulations, on the one hand, and the California Public Contract Code provisions regulating public works construction, on the other hand, both generally and specifically. This conflict infringes on the city's constitutional authority to govern its municipal affairs. The city council intends to and does hereby exempt public works construction from being subject to any provision of the California Public Contract Code, except to the extent that any such provisions may be expressly incorporated in applicable administrative procedures. Section 13. Section 33-202 of Article VIII (Public Works Construction Rules and Regulations) of Chapter 33 (Streets, Sidewalks and Public Works) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 33-202. Definitions. For purposes of this article, the following definitions shall apply: Construction manager shall mean an agent of the city who provides the city with professional services in the fields of technology, scheduling, ability to construct, and/or management of the fiscal aspects of a public works project. A construction manager shall be responsible for some or all of the following: (1) Overseeing a public works project through completion of construction; (2) Assumption of financial responsibility; (3) Hiring of an architect/designer, if necessary, through a qualification process consistent with procedures established pursuant to section 2-803; and/or (4) Contracting for actual construction work by award of a contract to the lowest and best bidder in conformance with section 421 422 of the city's charter. Design-build-bid shall mean a procurement process in which both the design and construction manager professional services for a public works project are procured from a single entity, while the actual construction work is awarded by the entity to the lowest and best bidder in conformance with section 421 422 of the city's charter. Professional services shall have the same meaning as in section 2-802 of this code. Public works shall have the same meaning as in California Labor Code sections 1720, 1720.2, 1720.3, and 1771 and as may be amended from time to time. Ordinance No. NS-XXX Page 12 of 15 Public works construction shall have the same meaning as in section 421 422 of the city's charter. Public works project shall mean the totality of a project, including both professional services and public works construction, which ultimately results in the erection or improvement of public buildings, streets, drains, sewers, parks or playgrounds. Purchasing manager shall have the same meaning as in section 2-802 of this code. Section 14. Section 33-203 of Article VIII (Public Works Construction Rules and Regulations) of Chapter 33 (Streets, Sidewalks and Public Works) of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 33-203. Procurement of public works construction. (a) Contracts involving expenditures not exceeding fifty thousand dollars ($50,000) may be entered into administratively without informal or formal bidding. (b) Contracts involving expenditures between fifty thousand dollars ($50,000) and two hundred fifty thousand dollars ($250,000) shall require informal bidding. The informal bidding process shall provide for at a minimum the following: (1) There shall be a written invitation for bid which shall include the following information: A general description of the public works construction, the place to obtain the plans and specifications, the date, time, and place for bid opening when applicable, bid instructions, and the terms and conditions of the bid and any resulting contract. (2) Where required by state law or federal law or regulations, or upon request by a bidder, the bids shall be opened, if sealed, and declared in public at the time and place stated on the “Invitation for Bid.” (c) The following procedure shall apply to every contract for which final plans and specifications are available involving an expenditure of more than five hundred dollars ($500.00) two hundred fifty thousand dollars ($250,000) for non-emergency public works construction: (a1) Notice inviting bids. Notice inviting bids shall include a general description of the public works construction, the place to obtain the plans and specifications, and the date, time and place for opening bids. The notice shall be published in a newspaper of general circulation in the city for at least two (2) days, the first of which shall be at least ten (10) days before the date set for opening bids. The city shall make a good faith effort to send a notice inviting bids to all Ordinance No. NS-XXX Page 13 of 15 businesses engaged in providing labor and materials for such construction located within the boundaries of the city. (b2) The bid. Included with the plans and specifications for a work of public works construction shall be the following documents: Instructions to bidder, proposal, bond samples and the contract. The bidder shall execute the proposal and contract, and submit them sealed with at least a ten (10) per cent bid bond, cashier's check or certified check. (c3) Award of contract. Upon opening the bids at on the date, time and place stated in the notice, the aggregate bid of each bidder shall be publicly declared. Following the determination of the lowest and best bidder, the proposal and agreement from this bidder shall be sent to the city attorney for approval as to form. The documents shall then be presented to the city council for approval and authorization for execution. If two (2) or more bids received are the same and the lowest, the council may accept the one it chooses. (d4) Notification of award. A notification letter, a request for bonds, when necessary, and a copy of the fully executed contract shall be delivered to the successful bidder. (e5) Performance bonds. To secure faithful performance of the contract, the city manager is authorized to require security in the form of cash, cashier's check, certified check or corporate faithful performance bonds, in the following percentages of the aggregate amount bid: One hundred (100) per cent bond for faithful performance, and fifty (50) per cent contractor's payment bond. (f6) Rejection of bids. The right to reject all bids is expressly reserved to the city council. After rejecting such bids, or if no bids are received, the city council may determine and declare that, in its opinion based on estimates submitted by the city manager, the public works construction may be performed better or more economically by the city with its own employees, and after the adoption of a motion to this effect by the affirmative votes of at least two-thirds (⅔) of the members of the city council, the council may proceed to have said work done in the manner stated without further observance of the provision of this article. Section 15. The City Council finds and determines that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the State CEQA Guidelines because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, as there is Ordinance No. NS-XXX Page 14 of 15 no possibility it will have a significant effect on the environment and it is not a "project", as defined in Section 15378 of the CEQA Guidelines. Section 16. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Section 17. This Ordinance shall become effective thirty (30) days after its adoption. Section 18. The Clerk of the Council shall certify the adoption of this ordinance and shall cause the same to be published as required by law. ADOPTED this _______ day of ___________, 2022. _________________________ Vicente Sarmiento Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By:_________________________ John M. Funk Sr. Assistant City Attorney AYES: Councilmembers ______________________________________ NOES: Councilmembers _______________________________________ ABSTAIN: Councilmembers _______________________________________ NOT PRESENT: Councilmembers _______________________________________ Ordinance No. NS-XXX Page 15 of 15 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Daisy Gomez, Clerk of the Council, do hereby attest to and certify the attached Ordinance No. NS-____________ to be the original ordinance adopted by the City Council of the City of Santa Ana on _______________, and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: ________________ ____________________________________ Clerk of the Council City of Santa Ana New City Website Project City Manager’s Office December 1, 2021Slide1 Contracting Authority and Bid Thresholds March 1, 2022 agenda item #24 New City Website Project City Manager’s Office December 1, 2021Slide2 The Procurement Framework City Manager Contract Authority Requires City Council approved budget Requires a report of all transactions to City Council current $500+ proposed $1,000+) Informal Bids A faster, less formal process Must solicit at least 3 bids Allows us to solicit only Santa Ana vendors Formal Bids Significant increase in administrative process Bid opening date/time, protest period Open to all vendors New City Website Project City Manager’s Office December 1, 2021Slide3 SoCal Charter Cities 300-500k pop City Manager Contract Authority Up to: Informal Bids Public Projects Informal Bids All Other Anaheim $200,000 $10,000-$50,000 $500-$20,000 Irvine $1,000,000 $60,000-$200,000 $10,000-$45,000 Long Beach $200,000 None <$25,000 None <$100,000 Riverside $50,000 $25,000 $50,000 Santa Ana Current Public Works: 250,000 All Other: 50,000 None <$500 $5,000-$25,000 Santa Ana Proposed $250,000 $50,000-$250,000 $10,000-$50,000 Formal bids required for all amounts greater than the informal bid thresholds New City Website Project City Manager’s Office December 1, 2021Slide4 Benefits Perform work faster, without lengthy administrative process and agenda preparation time Would have saved time for 102 contracts totaling 11.8 million (1% of the City’s budget) during FY20-21 Extends existing contract authority for public projects to all other projects Aligns City thresholds closer to peer cities, and state and federal guidelines Enhances our ability to do business with Santa Ana vendors and contractors New City Website Project City Manager’s Office December 1, 2021Slide5 Doing Business Locally Santa Ana has a competitive local preference of 7% for Santa Ana and 4% for Orange County We contacted 400+ local businesses to participate in a July 2021 virtual workshop for education to do business with the City The virtual presentation video, FAQs and other expanded info to help local vendors is on the City’s website Planet Bids allows the City to solicit bids by invitation only based on geographic location with direct communications going to those vendors We contact qualified local vendors if they have not submitted formal bids three days prior to the bid window closing New City Website Project City Manager’s Office December 1, 2021Slide6 Questions?