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HomeMy WebLinkAbout2020-01 - Bidding ThresholdsORDINANCE NO.2020-01 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REPEALING AND REPLACING ARTICLE 2 (PURCHASING) OF CHAPTER V (FINANCE) AND AMENDING ARTICLE 2 (POWERS AND DUTIES) OF CHAPTER IV (CITY MANAGER) OF TITLE 2 (ADMINISTRATION) OF THE COSTA MESA MUNICIPAL CODE WHEREAS, pursuant to California Government Code sections 54201 through 54203, local agencies are required to adopt, by ordinance, policies and procedures, including bidding regulations, governing the purchases of supplies and equipment by the local agency; and WHEREAS, the City of Costa Mesa ("City") adopted such policies and procedures via Ordinance No. 96-15 in 1996, codified at Article 2 (Purchasing) of Chapter V (Finance) of Title 2 (Administration) of the Costa Mesa Municipal Code ("Municipal Code"); and WHEREAS, Article 2 (Powers and Duties) of Chapter IV (City Manager) of Title 2 (Administration) of the Municipal Code establishes the powers and duties of the City Manager; and WHEREAS, the City currently requires informal bidding for procurements over five thousand dollars ($5,000.00), and formal bidding for procurements valued at over fifty thousand dollars ($50,000.00); and WHEREAS, the City has not adjusted the bidding limits since 2006; and WHEREAS, adjusting the bidding limits will enable staff to increase efficiency in the procurement process; and WHEREAS, the City Council desires to increase the informal bidding limit to twenty-five thousand ($25,000.00); and WHEREAS, California Government Code section 40602 generally requires the Mayor to execute all contracts on behalf of the City unless the City Council, by ordinance, gives signature authority to a city officer; and WHEREAS, the City Council believes that it is in the best interest of the City to grant authority to the City Manager and the Purchasing Officer to approve and execute certain contracts on behalf of the City; and WHEREAS, the City Council desires to repeal and replace Article 2 of Chapter V of Title 2 of the Municipal Code in order to increase the informal bidding limit and make other changes as set forth herein; and WHEREAS, the City Council desires to amend Article 2 of Chapter IV of Title 2 to authorize the City Manager to execute specified contracts; and WHEREAS, all legal prerequisites prior to the adoption of this Ordinance have occurred. Ordinance No. 2020-01 Page 1 of 11 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Amendment to Article 2 of Chapter V. Article 2 (Purchasing) of Chapter V (Finance) of Title 2 (Administration) of the Costa Mesa Municipal Code is hereby deleted in its entirety and replaced with the following: ARTICLE 2. PURCHASING 2-160. Establishment of purchasing system. A purchasing system is hereby established for the purpose of setting forth efficient procedures for the purchase of supplies, services and equipment, at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, and to clearly define authority for the purchasing function. The provisions set forth in this article do not apply to public projects subject to the provisions of Article 3 of Chapter V of Title 2 of this Code. 2-161. Definitions. Definitions. The following terms, whenever used in this article, shall be construed as follows: (a) Bidders list. A listing of names and addresses of suppliers from whom bids, proposals, or quotations can be solicited. The list is generally retained in a retrievable database. (b) City department or agency. Any department, agency, commission, bureau or other unit of the city government which derives its support wholly or in part from the city or an entity associated with the city for which separate financial statements are required. (c) Gratuity. A gift, payment, loan, advance, deposit of money, or service, presented or promised in return for or in anticipation of favorable consideration in the procurement process. "Gratuity" does not include the compensation paid by or due from the city or from a temporary service agency under contract with the city to an employee in connection with the employee's services for the city. (d) Lowest responsible bidder. In addition to price, the "lowest responsible bidder" will be determined after the following factors have been considered: (1) The ability, capacity and skill of the bidder to perform the contract or provide the service required; (2) The bidder has the facilities to perform the contract or provide the service promptly, or within the time specified, without delay or interference; (3) The character, integrity, reputation, judgment, experience and efficiency of the bidder; (4) The bidder's record of performance of previous contracts or services; (5) The previous and existing compliance by the bidder with laws and ordinances relating to the contract or service; Ordinance No. 2020-01 Page 2 of 11 (6) The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service; (7) The quality, availability and adaptability of the bidder's supplies, equipment or services to the particular use required; (8) The ability of the bidder to provide future maintenance and service called for or necessary to successfully complete the contract; (9) The number and scope of conditions attached to the bid. (e) Non -Professional Services. Any and all services not listed in subsection (f) of this section including but not limited to the repair or maintenance of equipment, machinery and other city owned or operated property, and other technical services. The term does not include public works projects or services rendered by city officers or employees, or professional services exempt pursuant to section 2-165 and other contractual services which are in their nature unique or not subject to competition. (f) Professional services. Services that involve the exercise of professional discretion and independent judgment based on an advanced or specialized knowledge, expertise or training gained by formal studies or experience. Such services include, but are not limited to, those provided by accountants, appraisers, architects, attorneys, construction managers, economic and financial advisors, engineers, instructors, insurance advisors, physicians, surveyors and other specialized consultants. (g) Purchases. Purchases of supplies, equipment, personal property, and services shall include leases or rentals as well as transactions by which the city acquires ownership. (h) Responsible bid. An offer submitted by a responsible bidder to furnish supplies, equipment or services in conformity with the specifications, delivery terms and conditions and other requirements included in the invitation for bids. (i) Responsible bidder. A bidder who is not only financially responsible, but possesses the resources, judgment, skill, ability, capacity, and integrity requisite and necessary to perform the contract according to its terms and as set forth in subsection (d) of this section. (j) Responsive bid. A bid or proposal that fully conforms in all material respects to the solicitation and all of its requirements, including form and substance (k) Supplies and equipment. Any and all articles, things or personal property furnished to or used by the city department or agency. (1) Vendor sourcing. Lists of known vendors for services, supplies and equipment maintained by the purchasing officer. 2-162. Purchasing division; purchasing officer; powers and duties. (a) A purchasing division of the finance department is hereby created and authorized to purchase supplies, services and equipment for the city government, department or agency. Ordinance No. 2020-01 Page 3 of 11 (b) A position of purchasing officer is hereby created. The director of finance shall serve as the purchasing officer and may delegate purchasing duties as deemed necessary to carryout the duties included herein. (c) Except as provided by this Code, no city officer or employee shall order the purchase of any supplies, equipment, materials, or contractual services, or make any contract within the purview of this Code, other than in accordance with the provisions of this Code, the regulations and procedures established by the city manager and with the approval of the purchasing officer. Any purchase or contract made contrary to this Code shall be null and void. (d) The purchasing officer shall be the head of and have general supervision of the purchasing division. (e) The purchasing officer shall have the powers and duties as follows: (1) Purchase or contract for supplies, services and equipment required by any city department or agency in accordance with purchasing procedures prescribed by this article, such administrative regulations as the purchasing officer shall adopt for the internal management and operation of the purchasing division and such other rules, regulations or purchasing manual as shall be prescribed by the purchasing officer and approved by the city manager. (2) Negotiate and recommend execution of contracts for the purchase of supplies, services and equipment. (3) Act to procure for the city the needed quality in supplies, services and equipment at the least expense to the city. (4) Utilize vendor sourcing to obtain as full and open competition as possible on all purchases. (5) Prepare and recommend to the city council rules governing the purchase of supplies, services and equipment for the city. (6) Prepare and recommend to the city council revisions and amendments to the purchasing rules. (7) Keep informed of current developments in the field of purchasing, prices, market conditions and new products. (8) Prescribe and maintain such forms as are reasonably necessary to the operation of this article and other rules and regulations. (9) Supervise the inspection of all supplies, services and equipment purchased to ensure conformance with specifications. (10) Recommend the transfer of surplus or unused supplies and equipment between departments as needed and the sale of all supplies and equipment which cannot be used by any city department or agency or which have become unsuitable for city use. Ordinance No. 2020-01 Page 4 of 11 (11) Maintain a bidder's list, vendor's catalog file and records needed for the efficient operation of the purchasing division. (12) Such other powers as established by rules, regulations or purchasing manual as prescribed by the city manager and resolutions of city council. (13) Execute contracts and documents provided for in California Government Code section 40602 whenever such contracts and documents are within the purchasing officer's purchasing authority or have been approved by the city council for execution by the purchasing officer by resolution, motion, minute order or other appropriate action. Such power shall not be delegated. 2-163. Purchasing requirements. All city departments and agencies shall make purchases in accordance with the regulations and procedures established by the purchasing officer. 2-164. Methods of procurement; award of contract. (a) Micro -purchase. Procurements with an estimated annual value of $25,000.00 or less may be made using simplified and cost effective operational procedures and forms established by the purchasing officer without use of formal or informal bids. The city manager, assistant city manager or the purchasing officer may award contracts awarded pursuant to this subsection. (b) Informal bidding. Procurements with an estimated annual value between $25,001.00 and $50,000.00 may be made in accordance with the informal bidding procedures set forth in section 2-166. The city manager, assistant city manager or the purchasing officer may award contracts awarded pursuant to section 2-166. (c) Formal bidding. Procurements with an estimated annual value of $50,001.00 or more shall be made in accordance with the formal bidding procedures set forth in section 2-167. The city council shall award contracts awarded pursuant to section 2-167. 2-165. Bidding required; exceptions. (a) Purchase of supplies, services, equipment and the sale of personal property shall be by bid procedures as set forth in sections 2-166 and 2-167. (b) Notwithstanding subsection (a), bidding procedures for the purchases of supplies, services and equipment shall not apply to the following situations: (1) An emergency requires that an order be placed with the nearest available source of supply; (2) The amount involved is twenty-five thousand dollars ($25,000.00) or less; (3) The commodity or service can be obtained from only one (1) vendor; (4) Professional services contracts; (5) The purchase of supplies, equipment, or services through a cooperative purchasing agreement or program, or by using a competitively awarded agreement of another local, state, or federal government agency or joint powers authority made up of government agencies to obtain the same supplies, equipment or services at the same or lower prices Ordinance No. 2020-01 Page 5 of 11 (commonly referred to as "piggybacking"). Such programs and agreements include, but are not limited to, the California Multiple Award Schedules Program (CMAS), the U.S. General Services Administration (GSA) Multiple Award Schedule Program, Sourcewell, and the U.S. Communities Government Purchasing Alliance; (6) When the city council determines, by minute action or resolution, that compliance with the bidding requirements and procedures is inefficient, impractical, or not in the best interest of the city, based on specifically identified conditions and supported by substantial evidence in the recordi (7) Goods and/or services obtained from or through agreement with any governmental, public or quasi -public entity; and (8) Procurements funded by grants, donations or gifts when the special conditions attached to the grants, donations or gifts require the procurement of particular goods and/or services. 2-166. Informal bidding procedure. Except as provided in this article, purchases of supplies, equipment, contractual services and sales of personal property of an estimated annual value in the amount of fifty thousand dollars ($50,000.00) or less may be made by the purchasing officer in accordance with informal bidding procedures as follows without observing the procedure prescribed in section 2-167: (a) Minimum number of bids. Informal bidding purchases shall, whenever possible, be based on at least three (3) bids and shall be awarded to the lowest responsible bidder. (b) Request for bids. The purchasing officer shall solicit bids by written requests, facsimile or electronic mail, to prospective vendors. (c) Written bids. Written bids shall be submitted to the purchasing officer who shall keep a record of all informally bid orders and bids in accordance with the city's records retention schedule. This record, while so kept, shall be open to public inspection. 2-167. Formal bidding procedure. Except as provided in this article, purchases of supplies, services, equipment and the sale of personal property of estimated value of fifty thousand one dollars ($50,001.00) or more shall be by written contract pursuant to the following procedures: (a) Notice inviting bids. Notices inviting bids shall include a general description of the articles to be purchased or sold, state where bid documents and specifications may be obtained, and the time and place for opening bids. (1) Published notice. Notice inviting bids shall be published at least ten (10) days before the date of opening of the bids. Notice shall be published at least once in a newspaper of general circulation, printed and published in the city, or if there is none, it shall be posted in at least one (1) public place in the city that has been designated as the place for posting public notices. (2) Bidder's list. The purchasing officer shall also solicit sealed bids from all responsible prospective suppliers whose names are on the bidder's list and other qualified suppliers. Ordinance No. 2020-01 Page 6 of 11 (3) Bulletin board. The purchasing officer shall also advertise pending purchases or sales, by a notice posted on a public bulletin board in the city hall and on the city's website. (b) Bidder's security. When deemed necessary by the purchasing officer, bidder's security may be prescribed in the public notices inviting bids. Bidders shall be entitled to return of bid security, provided that a successful bidder shall forfeit the bid security upon refusal or failure to execute the contract within ten (10) days after the notice of award of contract has been mailed, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the city council awards the contract to the next lowest bidder, the amount of the lowest bidder's security shall be applied by the city to the difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. (c) Rejection of bids. The purchasing officer may recommend to the city manager the rejection of any and all bids and readvertisement for bids. (d) Notice of intent to award. The purchasing agent or purchasing officer shall post a "notice of intent to award" on the public bulletin board located in the first floor of city hall fifteen (15) working days prior to awarding any formally bid contract or purchase order. (e) Award of contracts. Contracts shall be awarded to the lowest responsive and responsible bidder. Contracts with an annual value great than fifty thousand one dollars ($50,001.00) shall be awarded by the city council. (f) Performance bonds. The city shall have authority to require a performance bond before entering into a contract in such amount as it find reasonably necessary to protect the best interests of the city. If the city requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids. (g) When in the best interest of the city, and when necessary to adhere to timelines established by other agencies, the purchasing officer may recommend to the city manager to bypass the formal bid process for the purchase of surplus property. City council will be advised by the purchasing officer, or city manager, of procurements over fifty thousand dollars ($50,000.00) which were exempted from the formal bid process. 2-168. Bid award appeal procedure. (a) Any bid awarded pursuant to the formal bidding procedure set forth in this chapter may be appealed in accordance with the following procedure: (1) The appellant shall file the written notice of appeal with the purchasing officer at least ten (10) working days prior to bid award date specified in the notice of intent to award. (2) The written notice of appeal must include specifics as to the nature of the appeal. (3) The appellant must provide any and all documentation to support the appeal. (4) The purchasing officer will respond in writing to the appellant within five (5) working days. Ordinance No. 2020-01 Page 7 of 11 (5) In the event the appeal is denied by the purchasing officer, the appellant may appeal the purchasing officer's ruling to the city council at the next available council meeting. (b) Any appeal to city council shall comply with the requirements of Chapter IX of this title. 2-169. Inspection and testing. (a) The purchasing officer or the city department or agency may inspect supplies and equipment delivered and contractual services performed to determine their conformance with the specifications set forth in the order or contract. The purchasing officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. (b) Any supplies, equipment or services not in conformance with the specifications in the order or contract may be rejected by the purchasing officer. 2-170. Disposition of surplus supplies and equipment. (a) All city departments shall submit to the purchasing officer, at such times and in such form as the purchasing officer shall prescribe, reports showing all supplies and equipment which are no longer needed or which have become obsolete or worn out. The purchasing officer shall have authority to sell all supplies and equipment which cannot be used or which have become unsuitable for city use, or to exchange the same for, or trade in the same on, new supplies and equipment. Such sales shall be made pursuant to section 2-167, or section 2-168, whichever is applicable. If there are no bids, the property may be sold at private sale. (b) The amount received for any property sold pursuant to this Code shall be deposited in the general fund or other fund so designated by the purchasing officer. (c) Except as provided by state code, the purchasing officer shall determine the disposition of unclaimed or abandoned property in the possession of the police department. 2-171. Emergency purchases. (a) Conditions. While the need for occasional emergency purchases is recognized, the practice must be curtailed as much as possible by anticipating needs so that the normal purchasing procedure utilizing bidding may be used. An emergency shall be deemed to exist if: (1) There is a great public calamity. (2) There is immediate need to prepare for national or local defense. (3) There is a breakdown in machinery or an essential service which requires the immediate purchase of supplies or services to protect the public health, welfare and safety. (4) An essential departmental operation affecting the public health, welfare and safety would be greatly hampered if the prescribed purchasing procedure would cause an undue delay in procurement of the needed item or service. (b) By purchasing officer. In case of an emergency which requires immediate purchase of supplies, equipment or services, the city manager may authorize the purchasing officer to secure, by informal bidding procedure, as prescribed in section 2-166, at the lowest Ordinance No. 2020-01 Page 8 of 11 obtainable price, any supplies, equipment or services regardless of the amount of the expenditure. (c) By department head. (1) Purchases between $25,001.00 and $50,000.00. In case of an emergency which requires immediate purchase of supplies, equipment or services, the head of any department may, with approval of the purchasing officer or the purchasing agent, purchase directly any supplies, equipment or services in the amount of $25,001.00 to $50,000.00. The head of such department shall, not later than the next regular business day thereafter, submit to the purchasing officer a requisition, a tabulation of bids received, if any, a copy of the delivery record and a full written report of the circumstances of the emergency. (2) Purchases of $50,001.00 or more. In case of an emergency which requires immediate purchase of supplies, equipment or services in an amount of $50,001.00 or more, the city manager may authorize the department head to purchase directly any supplies, equipment or services, provided the department head submits a full report of the circumstances of all emergency purchases in excess of fifty thousand one dollars ($50,001.00) with the purchasing officer not later than the next regular business day thereafter. As soon as practicable following such purchase, the department head shall provide a report to the city council detailing the emergency purchase. 2-172. Local vendor preference. City of Costa Mesa vendor preference. The city shall extend a bidding advantage to Costa Mesa vendors in the form of a five percent (5%) preference in the evaluation of bids when the city purchases supplies, equipment or services. A "Costa Mesa vendor' is a business entity with one or more fixed offices and/or locally taxable distribution points within the boundaries of the City of Costa Mesa which holds a current and valid city business license with a Costa Mesa business street address. 2-173. Professional services. In procuring professional services, all city departments are to comply with the provisions of sections 4526 through 4529.5 and 37103 of the Government Code, the administrative regulations by the city manager, and the purchasing manual of the purchasing officer or other policies adopted by resolution of city council. All persons or entities to render professional services to the city shall render such services pursuant to a professional services agreement in a form approved by the city attorney. All persons or entities under agreement with the city to render professional services shall not be subject to Chapter VI of this title and shall be considered independent contractors and not an employee of the city. 2-174. Ethics. (a) Statement of Policy. City employees shall discharge their duties impartially so as to ensure fair competitive access to city procurement opportunities by responsible contractors. Moreover, they shall conduct themselves in such a manner as to foster public confidence in the integrity of city procurement activities. (b) Gratuities. No person shall offer, give or agree to give any city employee any gratuity or offer of employment in connection with a procurement by the city. The purchasing officer and every officer and employee of the city are expressly prohibited from soliciting, demanding, Ordinance No. 2020-01 Page 9 of 11 accepting, directly or indirectly, or agreeing to accept, from any person, company, firm or corporation to which any purchase order or contract is, or might be awarded, any gratuity, offer of employment or anything of value whatsoever as set forth in Chapter X of this title in connection with a procurement by the city. Section 2. Amendment to Article 2 of Chapter IV. Article 2 (Powers and Duties) of Chapter IV (City Manager) of Title 2 (Administration) of the Costa Mesa Municipal Code is hereby amended to add a new subsection 2-129 to read as follows: 2-129. Execution of contracts. The city manager shall have the power and authority to execute contracts and documents provided for in California Government Code section 40602 whenever such contracts and documents are within the city manager's purchasing authority or have been approved by the city council for execution by the city manager by resolution, motion, minute order or other appropriate action. The city manager may delegate in writing the authority to sign any contract or agreement to the assistant city manager or a deputy city manager. Section 3. Environmental Compliance. This Ordinance has been reviewed for compliance with the California Environmental Quality Act (CEQA), the CEQA Guidelines, and the City's environmental procedures, and has been found to be exempt pursuant to Section 15061(b)(3) (General Rule) of the CEQA Guidelines because it can be seen with certainty that there is no possibility that the passage of this Ordinance will have a significant effect on the environment. Section 4. Inconsistencies. Any provision of the Costa Mesa Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. Section 5. Severability. 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 Costa Mesa 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 6. Effective Date. This Ordinance shall take effect thirty (30) days after its final passage. Section 7. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. Ordinance No. 2020-01 Page 10 of 11 PASSED AND ADOPTED this 4th day of February, 2020. ATTEST: Brenda Green, dity Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: " Kimberly Hag Barlow, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing Ordinance No. 2020-01 was duly adopted at the regular meeting of the City Council of the City of Costa Mesa held on the 41h day of February, 2020, by the following roll call vote, to wit: AYES: COUNCILMEMBERS: CHAVEZ, MANSOOR, MARK, REYNOLDS, STEPHENS,FOLEY NOES: COUNCILMEMBERS: GENIS ABSENT: COUNCILMEMBERS: NONE IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 5" day of February, 2020. aw(4 jrff4- Brenda Green, C to Clerk Ordinance No. 2020-01 Page 11 of 11