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Home My WebLink AboutPurchasing Presentation - Transparency in Contracting - Stud 11/2/2015 PURCHASING PRESENTATION Study Session November 2, 2015 City of Huntington Beach Finance Department Summary On 10/4/2015 Council Members Posey, Peterson and O'Connell submitted items regarding transparency in contracting and the City Council directed the City Manager to agendize a Study Session to discuss the City's procurement/purchasing and contracting policies and procedures and determine options for increasing transparency SUPPLEMENTAL COMMUNICATION Meeting Date: // —f-z -6� r` i Agenda Item No. )'s u/z/2015 PURCHASING • Administers the procurement of goods and services; coordinates the competitive bidding process; maintains list of qualified vendors; manages office supply orders, and manages the citywide procurement card program. • Fair and Open competition is the fundamental principle of purchasing utilizing best practices: Organized Processes (RFI, RFQ, RFP) Competition Fairness Legal/Ethical Best Business Practice - Procedures Transparency in Contracting State laws and regulations (including the Public Contract Code) related to procurement, purchasing and contracting in public sector agencies; Sections 6100-6615; 20100-20103.7; 20103.8 Existing Charter provisions that regulate procurement, purchasing and contracting processes; Article VI, Sections 613 and 614. Existing Municipal Code sections and provisions related to procurement, contracts and purchasing; and, Chapters 3.02 and 3.03 Existing Administrative Regulations related to procurement, contracts and purchasing. Administrative Regulations 119, 205, and 228 2 11/2/2015 Planet Bids website Contract Types Professional Service Agreements In general,a professional service requires that the company use professional discretion and judgment based on advanced skill or specialized knowledge,expertise or training. • Goods and Services Agreements Goods-articles moveable at the time of sale,including but not limited to equipment,supplies and materials. services-Work performed or labor,time and effort expended by an independent contractor. • Maintenance and Repair Services Agreements Services intended to preserve and/or restore a public work to a clean,safe,efficient and/or continually usable condition.Maintenance and repair services may include,but am not limited to: carpentry,electrical,painting,plumbing,glazing and other crailwork to preserve a facility in the condition for which it was intended;repairs,cleaning and other operations on machinery and other equipment permanently attached to a facility as fixtures;the mowing,pruning,and trimming of lawns,grass,trees,shrubs,bushes and hedges;and the regular removal or relocation of by-products or waste products accumulated al City facilities as the result of ongoing environmental processes. • Public Works Contracts The construction or improvement(excluding maintenance&repair)of public buildings,works, streets,drains,sewers,utilities,parks&playgrounds,and each separate purchase of material for the same where the expenditure shall exceed the amount set by ordinance($25,000),shall be let to the lowest responsible bidder. 3 ii/2/2015 The Process - Professional Services Controlling Documents: City Charter Section 613 Municipal Code Chapter 3.03 Administrative Regulation 228 Key steps to the process 1 Preparation of Scope of Work 2. Publication of Solicitation 3 Vendor Evaluation & Selection 2 ContractAward and Management Services under$30,000 may be obtained through informal bidding. Over$30,000 requires formal bid process. NNIV The Process - Professional Services City Signature Authority Professional Services under$50,000 • Department Head may authorize. Professional Services from $50,000 -$100,000 City Manager may authorize. Professional Services over$100,000 . City Council approval required. During the budget process, staff identifies future PSA needs and City Council approves with the budget All PSA agreements not approved in the budget must be approved by City Council during the year 4 ii/2/2015 The Process — Goods & Services • Controlling Documents: City Charter Huntington Beach Municipal Code 3.02 • Bid Processes Purchases of equipment, materials, and non-professional services under$30,000 shall be made using cost effective methods. Purchases more than $30,000 shall be formally bid Interagency procurement Sole Source Procurement • over$50,000 requires City Council approval Public Work Contracts Public Works ConstructionContract Process V Controlling Documents: -City Charter Section 614 "I -Administrative Regulation 119 All projects over$25,000 require a public notice. All contracts over$25,000 must be approved by City Council. 5 1 1/2/2015 Current Transparency in Purchasing • Planet Bids web based procurement service. • All formal solicitations for goods, services and professional services are posted publicly online with Planet Bids. • Registered vendors are notified of any city procurement immediately upon posting to the web site. • Vendors can see prospective bidders and awards. • City's record management software, SIRE, is a searchable database of contracts. Local Vendor Preference Local Vendor Preference The city currently awards a 5% local preference to Huntington Beach based vendors up to$100,000 for goods&services per Municipal Code Chapter 3.02.180 Recent survey of 20 California public agencies resulted in: • 9 with a 1%preference on goods and services • 1 with a 3%preference on goods and services • 8 with a 5%preference on goods and services • 1 with a 7%preference on goods and services • 1 with a 10%preference on goods and services Benefits Encourages business to locate and remain in Huntington Beach Helps keep tax dollars in Huntington Beach Demonstrates commitment to local business Stimulates the local economy 6 11/2/2015 Local Vendor Preference Options Cont. Establish local vendor preference with removal of current cap of$100,000. Formal Bid Procedure-with Local Preference �� Preference � Non-Local1 $160.000 Non-Local1 $160,000 Local $150,000 $145.000 Non-Local2 $140,000 Non-Local2 $140.000 Lowest $140,000 Bidder Local $150,000 $133,000 $150,000 Proposed Outreach Enhancements Outreach to business community: • Provide greater awareness of procurement opportunities • Chamber of Commerce workshops • Regular updates with Auto Dealers • Outreach through business license mailing Updated web site 7 11/2/2015 Buy America Program Summary Any purchasing policy mandating "Made in America" would be subject to legal challenges. Sample of 10 Largest Suppliers by Department Fire' Total Public Works*" Police 4040 ` Domestically Produced ` Foreign Produced "Includes one-time purchases of an ambulance. "Includes one time purchase of sewer truck,water meters,and a dump truck. 8 Zi/z/z015 Recommendations City staff to conduct"How to do Business with the City Workshops" and develop a"How to do Business with the City" brochure Utilize business development to increase outreach with local vendors regarding bid opportunities Hold annual workshops with the Chamber of Commerce Work with Chamber of Commerce to establish a link to City bid opportunities Redesign the Purchasing web page to enhance transparency and include upcoming bid opportunities Establish a single point of contact in each department for contracts Enhance current 5% local vendor preference ordinance by removing the $100,000 cap on goods and services Questions?/Discussion 9