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HomeMy WebLinkAboutNS-2742 - Santa Ana Amending Chapter 2 of the Santa Ana Municipal Code Relating to Contracts and Purchasing Uxs 03/20/07) ORDINANCE NO. NS-2742 AN ORDINANCE OF THE CITY OF SANTA ANA AMENDING CHAPTER 2 OF THE SANTA ANA MUNICIPAL CODE RELATING TO CONTRACTS AND PURCHASING THE CITY COUNCil OF THE CITY OF SANTA ANA DOES ORDAIN AS FOllOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. On May 2, 2005, the City Council created an Ad Hoc Committee to review the City's Charter and make recommendations for changes, if needed. B. On September 19, 2005, the City Council created the Charter Amendment Citizens' Task Force and directed members to review and comment on the Ad Hoc Committee's recommended changes. C. One of the changes proposed by the Ad Hoc Committee, and recommended by the Citizens' Task Force, was that the dollar threshold at which the City Manager is authorized to bind the City by contract be increased from $10,000 to $25,000. D. The suggestions by the Task Force relating to the thresholds for contracts were subsequently approved by the City Council and thereafter submitted to the voters at a special election that was consolidated with the General Municipal Election held on November 7,2006. E. The voters approved the proposed Charter changes found in Charter Section 421 pertaining to purchasing and reporting. The voters also approved the Charter amendments in Section 421 as they pertain to the city manager authority to bind the city for contracts up to $25,000 for materials, supplies, labor, equipment or services. F. The Charter amendments approved by the voters also called for the City Council to adopt, through ordinance, rules and procedures for the competitive bidding for purchase of, or contracts for materials, supplies, labor, equipment or services with the ultimate goal of obtaining the maximum quality of goods, services, or performance at a minimum cost. G. The amendments to Chapter 2, Article VII, "Purchasing Rules and Regulations," is consistent with the Charter Amendments approved by the voters on November 6, 2006 and provide for consistent application of the increased level of administrative authority as well as implements the new reporting requirements for contracts approved administratively. Ordinance No. NS-2742 Page 1 of 9 H. The amendments to Chapter 2, Article VII, "Purchasing Rules and Regulations," also further in a proactive manner the goal of maximizing value at a minimum cost by allowing the utilization of modern technology should the City wish to take advantage of fast changing technology. The ability to use electronic documents of all types may allow purchasing to perform its procurement processes electronically by allowing, for example, the interactive use of the City's web site for e-Procurement. The Code does not attempt to anticipate the specific technologies that may allow the procurement process to be performed electronically, but provides the City with the necessary flexibility to adopt regulations that do so. Section 2. The adoption of this ordinance is exempt from CEQA and a Notice of Exemption will be filed if this ordinance is adopted. Section 3. Section 2-1 of the Santa Ana Municipal Code is hereby amended such that it reads as follows: Sec. 2-1. City manager's authority to approve change orders. The city manager of the City of Santa Ana is hereby authorized to bind the City of Santa Ana on change orders to city contracts for materials, supplies, labor or equipment, or for public works construction as defined in Santa Ana City Charter section 421 and 422, without previous city council approval when such change order for any one (1) 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) per cent, or the amount of twenty five thousand dollars ($25,000.00), whichever is the greater. Section 4. Section 2-800 of the Santa Ana Municipal Code is hereby amended such that it reads 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; (2) Secure maximum quality goods, services or performance at minimum cost for the city; (3) Exercise positive financial control over the city's purchases; (4) Establish the necessary procedures for the selection of providers of all ranges of goods and services so as to avoid favor or prejudice; Ordinance No. NS-2742 Page 2 of 9 (5) To simplify, clarify, and modernize the law governing procurement by the City; (6) To provide for increased public confidence in the procedures followed in public procurement; (7) To ensure the fair and equitable treatment of all persons who deal with the procurement system of the City; (8) To foster effective broad-based competition within the free enterprise system; (9) To provide safeguards for the maintenance of a procurement system of quality and integrity, and (10) To obtain 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. Section 5. Section 2-802 of the Santa Ana Municipal Code is hereby amended such that it reads as follows: Sec. 2-802. Definitions. For purposes of this article, the following definitions shall apply: 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 means electrical, digital, magnetic, optical, electromagnetic, or any other similar technology. Materials, supplies, labor and equipment shall mean those goods or services, but excluding services 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. Public Notice means 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 of Santa Ana 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. Ordinance No. NS-2742 Page 3 of 9 Purchase order (PO) shall mean that standardized contract developed pursuant to subsection 2-8030) issued to the vendor of materials, supplies, labor and equipment. Services means the furnishing of labor, time, or effort by a contractor, 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 6. Section 2-803 of the Santa Ana Municipal Code is hereby amended such that it reads 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, 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 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-2742 Page 4 of9 (h) If required by Federal, State or other law, cause notices inviting bids to be published. (i) 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. 0) 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 7. Section 2-804 of the Santa Ana Municipal Code is hereby amended such that it reads 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 $500.00, all other contracts let by the City Manager under $500.00 shall be provided to the City Council if requested by a councilmember. Section 8. Section 2-805 of the Santa Ana Municipal Code is hereby amended such that it reads 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). (a) For those agreements exceeding $500.00 but not exceeding $5000.00, the city manager may bind the city on contracts for materials, supplies, labor, and equipment in amounts not exceeding five thousand dollars ($5000.00) in anyone contract or in the aggregate with anyone 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) and twenty five thousand dollars ($25,000.00) for materials, supplies, labor, and equipment shall be let to the lowest responsible bidder in accordance with procedures established by the purchasing manager. Those procedures shall provide for at a minimum the following: (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, 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. Ordinance No. NS-2742 Page 5 of 9 (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." (3) If two (2) or more bids received are the same and the lowest, the city may choose either one. The city shall reserve the right to reject any or all bids. Section 9. Section 2-806 of the Santa Ana Municipal Code is hereby amended such that it reads as follows: Sec. 2-806. Procurement of materials, supplies, labor, and equipment in excess of twenty five thousand dollars ($25,000.00). Unless exempt from bidding pursuant to section 2-807, all contracts involving an expenditure in excess of twenty five thousand dollars ($25,000.00) for materials, supplies, labor, and equipment shall be let to the lowest responsible bidder 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 and the time and place for bid opening. 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 code 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 time and place stated on the "Invitation for Bid." All bids shall be publicly declared. Section 10. Section 2-806.1 is added to Chapter 2 of the Santa Ana Municipal Code to read in full as follows: Sec. 2-806. 1. Acquisition of goods and services by reverse auctions; Posting on Internet; Registration and requirements; Inapplicability to construction contracts (a) Notwithstanding the bidding provisions of this chapter, reverse auctions may be utilized for the acquisition of goods and services. The reverse auction process shall include a specification of an opening date and time when real-time electronic bids may be accepted, and provide that the procedure shall remain open until the designated closing date and time. Ordinance No. NS-2742 Page 6 of9 (b) (c) (d) (e) All bids on reverse auctions shall be posted electronically on the Internet, updated on a real-time basis, and shall allow registered bidders to lower the price of their bid below the lowest bid posted on the Internet. The purchasing manager shall require vendors to register before the reverse auction opening date and time, and as part of the registration, agree to any terms and conditions and other requirements of the solicitation. The purchasing manager may require vendors to be prequalified prior to placing bids in a reverse auction. For purposes of this section, "reverse auction" means a competitive online solicitation process for fungible goodS or services in which vendors compete against each other online in real time in an open and interactive environment. The reverse auction process may not be used for bidding on any construction contract that is subject to Section 422 of the City Charter. Section 11. Section 2-807 of the Santa Ana Municipal Code is hereby amended such that it reads 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), 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 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 in the city upon the affirmative vote of at least two-thirds (2/3) of the members of the city council. (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 (2/3) of its members, that the materials, supplies, labor or equipment can be obtained at a lower cost. Ordinance No. NS-2742 Page 7 of 9 (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. Section 12. 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 anyone or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. ADOPTED this 7th day of Mav. 2007. APPROVED AS TO FORM: Joseph W. Fletcher, City Allorney AYES: Councilmembers Alvarez. Benavides. Bustamante. Martinez. Pulido. Sarmiento. Tinaiero (7) NOES: Councilmembers None (0) ABSTAIN: Councilmembers None (0) NOT PRESENT: Councilmembers None (0) Ordinance No. NS-2742 Page 8 of 9 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS-2742 to be the original ordinance adopted by the City Council of the City of Santa Ana on Mav 7,2007, and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: ~~)h,? Patricia E. Healy Clerk of the Council City of Santa Ana Ordinance No. NS-2742 Page 9 of 9