HomeMy WebLinkAboutOrd 1335 - Purchasing and PW Contracting RegsORDINANCE NO. 1335
MEETING DATE:
PREPARED BY:
REQUEST:
STAFF REPORT
CITY OF PALM DESERT
FINANCE DEPARTMENT
February 22, 2018
Janet M. Moore, Director of Finance
Ordinance No. 1335 , an Ordinance of the City Council of the City of
Palm Desert, California, replacing Chapter 3.30 in its entirety and
repealing Chapter 3.32 (rescinding Ordinances No. 224, 423, 586,
927, 928, 986, 1162, 1166, 1204, 1229, 1276, and 1317) relative to
the Purchasing System and Public Works Contracts
Recommendation
That the City Council:
1) Waive further reading and pass Ordinance No. 1335 to second reading, and
2) By Minute Motion, pursuant to Section 3.30.160(A), direct the City Manager to
establish the minimum dollar thresholds for the procurement of public projects,
contractual services, and materials, supplies and equipment, at $2,000; and for
professional services at $10,000.
Strategic Plan Obiective
The revision of the purchasing policies and procedures is included in the 2017 City Manager's
Financial Performance goals to improve efficiency and accountability utilizing best practices
for municipal governments.
Executive Summary
The last comprehensive update to the purchasing policies and procedures, codified in
Municipal Code (the "Code") Chapters 3.30 and 3.32, was in the year 2000. This
comprehensive revision combines the two chapters in to one to make the overall process of
procurement easier, and clearly identifies the City's purchasing objectives by clarifying the
procurement methods by purchasing category. (i.e., public projects, contractual services,
professional services, and materials, supplies and equipment)
The proposed revision also updates the City Manager's purchasing threshold to $50,000 and
sets the minimum procurement level at $2,000 for public projects, contractual services, and
materials, supplies and equipment, and $10,000 for professional services. This will help
ensure consistency, simplify the procurement process on routine/small purchases, and allow
for flexibility and efficiencies for the City's day-to-day operations.
February 22, 2018 - Staff Report
Ordinance No. 1335 - Purchasing System and Public Works Contracts
Page 2 of 3
Background Analysis
There are currently two Chapters in the Municipal Code that define the City's purchasing
policies and procedures, Chapter 3.30 entitled "Public Works Contracts and Bidding
Requirements", and Chapter 3.32 entitled "Purchasing Policies and Procedures". The
proposed Ordinance combines these two chapters into one for ease in application. The newly
revised Chapter identifies the purchasing objectives and categories, the methods of
procurement, and a baseline for monetary purchasing threshold authorities.
In drafting the proposed Ordinance, staff's goals were to help ensure consistency amongst
the City's departments and various entities, simplify the procurement process while
maintaining internal controls, and allow for flexibility and efficiencies. In doing so, staff
reviewed the City's current practices as well as the operations of all the City's departments
and facilities, including the City's day-to-day needs; practices in marketing; the management
of the City's recreational facilities and housing authority; and the public project process. Staff
also reviewed the best practices guidelines from Government Finance Officers Association
and purchasing policies from various cities throughout California.
Consistent with the current Code, the City Manager is designated as the Purchasing Officer.
The Purchasing Officer is tasked with ensuring purchasing methods are responsible,
accountable and in the City's best interests. This may include the establishment of additional
administrative and procedural policies.
To provide efficiency and flexibility, the City has a decentralized purchasing system. This
means that individual departments are authorized to initiate their own purchases in
accordance with the Ordinance and any policies and procedures established in connection
with the purchasing system. The proposed Ordinance allows for the continuation of this
practice by allowing the Purchasing Officer to delegate some or all of the duties as well as
recommend mid -point approval thresholds for designated staff.
The City Manager's current approval threshold is $25,000 with the exception of marketing
contracts and services, which is $40,000. The $25,000 threshold is less than 5% of our
average weekly accounts payable and has not been adjusted since the year 2000. This
amount is also low when compared to our neighboring city manager thresholds, which range
from $25,000 to $100,000. After reviewing our operational needs and for efficiency, staff is
recommending adjusting the threshold for all purchasing categories to $50,000.
The proposed Ordinance includes defined procurement methods and their applicability to
each of the purchasing categories. It also authorizes the City Manager to establish minimum
dollar thresholds by purchasing category.
The minimum dollar threshold is the point at which a defined procurement method is required.
The current minimum dollar threshold varies depending on the purchasing category but it has
been the City's practice to recognize the minimum at $1,000. This amount has also not
changed since the year 2000. Staff recommends that pursuant to Section 3.30.160(A), that
the City Council direct the City Manager to set the initial minimum dollar threshold at $2,000
for public projects, contractual services, and materials, supplies and equipment, and $10,000
for professional services. The City Manager will review these minimums from time to time and
make recommendations for any needed changes.
G:\Finance\Niamh Ortega\Staff Reports\Purchasing Ordinance and Staff Report\SR - Purchasing Ordinance 2-22-18 final nmo.docx
February 22, 2018 - Staff Report
Ordinance No. 1335 - Purchasing System and Public Works Contracts
Page 3 of 3
Current:
Dollar Limits
Minimum Threshold - No
quotes required
Staff with quotes or CM or
designated staff
Formal Bid - City Council
Public Projects
3.30, Services,
Supplies 3.32.050
through 3.32.070
$1,000
Up to $25,000
(Exception -
Marketing =
$40,000)
Over $25,000
Routine Service
3.32.110
$1,000
Up to $25,000
Proposed:
Dollar Limits
Minimum Threshold - No
quotes required
Staff with quotes or CM or
designated staff
Public Projects 3.30,080
Contractual Services 3.30.470
Supplies, Materials and
Equipment 3.30.090
$2,000
Professional
Services
3.30.080
$10,000
Up to $50,000 Up to $50,000
Over $25,000 Formal Bid - City Council Over $50,000 Over $50,000
For comparison purposes only. Some exceptions and/or procurement options (i e vendor lists, etc.) are not listed
Other exceptions to the purchasing ordinance include purchases for inventory held for resale,
disaster/emergencies and some mandated expenditures including utilities and other
governmental fees or permits, etc. These exceptions are consistent with the City's current
practices and are further defined in the proposed Ordinance for clarity.
Staff believes that the proposed Ordinance meets the current operational needs of the City
and creates needed efficiencies in the process.
Fiscal Analysis
There is no financial impact from the proposed Ordinance, however, staff believes there will be
time -saving efficiencies created by streamlining the process for all purchasing and procurement
on behalf of the City.
LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER
ert W. Hargreaves
City Attorney
)(,-tuit(4
Jsnet M. Moore
b'rector of Finance
(-Janet M. Moore
Director of Finance
Lauri Aylaian
City Manager
ATTACHMENTS: Ordinance No. 1335
Summary of Purchasing Authority, Limits and Procedures — Coachella
Valley municipalities
G:\Finance\Niamh Ortega\Staff Reports\Purchasing Ordinance and Staff Report\SR - Purchasing Ordinance 2-22-18 final nmo.docx
ORDINANCE NO. 1335
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, REPLACING CHAPTER 3.30 IN ITS
ENTIRETY AND REPEALING CHAPTER 3.32 (RESCINDING
ORDINANCES NO. 224, 423, 586, 927, 928, 986, 1162, 1166, 1204,
1229, 1276, AND 1317) RELATIVE TO THE PURCHASING
SYSTEM AND PUBLIC WORKS CONTRACTS
THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA DOES HEREBY
ORDAIN AS FOLLOWS:
SECTION 1. That Chapter 3.30 is hereby replaced in its entirety to read as follows:
Chapter 3.30 PURCHASING SYSTEM AND PUBLIC WORKS CONTRACTS
3.30.010 Purpose
The purpose of this to chapter is to prescribe efficient policies and procedures for
the procurement of public works projects, contractual services, professional services, and
materials, supplies, and equipment to better serve the city's residents. All purchasing will
be done with absolute integrity and equal opportunity will be provided to all, free of
discrimination.
3.30.020 Definitions.
The following terms, whenever used in this chapter, shall be construed as follows:
A. "Contractual services" mean all services, other than professional services,
including, but not limited to, repairs, maintenance work, and rental equipment. The term
does not include services rendered by city officers or employees.
B. "Department" or "agency" means a department, agency, or other unit of the
city government whose affairs and funds are under the supervision and control of the city
council.
C. "Designated position" means a city staff position authorized by the city
manager to make purchases consistent with this chapter subject to dollar limits set by the
city manager.
D. "Local business" means a vendor, contractor, or consultant who has a valid
physical business address located within one of the nine incorporated cities of the
Coachella Valley, or within an unincorporated area of Riverside County in the Coachella
Valley within the boundaries of the Coachella Valley Association of Governments, at least
six months prior to bid or proposal opening date, from which the vendor, contractor, or
consultant operates or performs business on a day-to-day basis, and holds a valid
Page 1 of 17
ORDINANCE NO.
business license by a jurisdiction located in the Coachella Valley. Post office boxes are
not verifiable and shall not be used for the purpose of establishing such physical address.
E. "Materials, supplies, and equipment" means any and all articles, things, or
property, other than real property, furnished to be used by any city agency.
F. "Professional services" means all services performed in a professional
occupation including, but not limited to, accounting, auditing, appraising, computer
hardware and software support, engineering, architectural, planning, environmental,
redevelopment, financial, economic, social services, legal, construction project
management, communications, land surveying and other similar professional functions
which may be necessary for the operation of the city.
G. "Public project" or "public works" means:
1. A project for the erection, improvement, painting, or repair of public
buildings and works;
2. Work in or about streams, embankments or other works for
protection against overflow; and
3. Street or sewer work except maintenance or repair.
H. "Prime contractor" means the contractor who contracts directly with the city.
"Purchasing" means the procurement of public projects, contractual
services, professional services, and materials, supplies, and equipment as needed by the
city.
J. "Subcontractor" means a contractor who contracts directly with the prime
contractor.
3.30.030 Purchasing Officer
A. The purchasing officer shall be the city manager or his or her designee. The
city manager may delegate some or all of the duties of that position to one or more
subordinate employees. The purchasing officer shall supervise the purchasing functions
of the city. The purchasing officer is authorized to establish methods and procedures for
efficient and economical purchasing.
3.30.040 Purchasing Officer — Powers and Duties
The purchasing officer, in accordance with this chapter and any written policies
and/or procedures approved by the city manager consistent with this chapter, shall have
the power to:
A. Purchase and Contract. Purchase or contract for public projects,
contractual services, professional services, and materials, supplies, and equipment
required by the city.
Page 2 of 17
ORDINANCE NO.
B. Purchasing Policies Procedures. Prepare and implement policies and
procedures governing the bidding, contracting, and purchasing of public projects,
contractual services, professional services, and materials, supplies, and equipment for
the city.
C. Forms. Prescribe and maintain such forms as may be reasonably
necessary to the implementation of this chapter and any other policies and procedures
approved by the city manager consistent with this chapter.
D. Surplus Materials, Supplies, and Equipment. Establish policies and
procedures to sell or dispose of any materials, supplies, and equipment not needed for
public use or that are obsolete, damaged beyond repair, or may become unsuitable for
their intended use including establishing value thresholds for surplus.
E. Purchase for Resale. May, by adopting a procedure approved by the city
manager, authorize the purchase of materials, supplies, and equipment for resale from
such enterprises as the golf course, or visitor's center to obtain the best possible price for
the desired merchandise. Such purchases shall not be subject to the award limits noted
in this chapter, provided funding is available within the appropriated budget.
F. Bidder, Contractor and Vendor Lists and Catalogs. Develop and maintain
any bidder's list, contractor's list or vendor's list necessary to the operation of this chapter
and any other policies and procedures approved by the city manager consistent with this
chapter.
G. Recycled Product Procurement Policy. Establish and maintain procedures
and specifications for the purchase of paper and paper products that give preference
whenever feasible to the purchasing of recycled paper and paper products containing
recycled paper.
3.30.050 General Purchasing Regulations, Policies, and Procedures
A. Applicability of Chapter. The purchasing regulations contained in this
Chapter 3.30 shall apply to the procurement of public projects, contractual services,
professional services, and materials, supplies, and equipment required by the city.
B. Purchasing Limits, Authorizations and Awards. The city manager may
establish dollar limits for authorizations and awards, consistent with this chapter, by
designated positions, for the procurement of public projects, contractual services,
professional services, and materials, supplies, and equipment.
C. Subsequent Contract Awards, Amendments, Extensions or Renewals.
Notwithstanding anything herein to the contrary, the city manager or designated position
shall not award a subsequent contract to the same individual or entity for the same or
similar services on the same project, or amend, extend or renew such a contract, without
obtaining the next highest approval authority (e.g., the city council for the city manager),
when the award, amendment, extension or renewal will result in the city paying an
aggregate amount in excess of the approval authority of the city manager to the individual
Page 3 of 17
ORDINANCE NO.
or entity in any given fiscal year. For purposes of this section, the phrase "same project"
shall include an on -call or as -needed contract.
D. Rejection of Bids and Proposals. At its discretion, the city council may
reject any and all bids, proposals, quotations, or prices secured through procurement
methods consistent with this chapter and take any other action deemed appropriate for
the procurement of public projects, contractual services, professional services, and
materials, supplies, and equipment.
E. Appropriations Requirement. No contract or purchase shall be made
unless the director of finance shall have first confirmed that there is an unencumbered
appropriation in the fund against which such expenditure is to be charged sufficient to
cover the amount of purchase or contract, unless in cases of emergency.
F. Performance Bonds. The city shall have authority to require a performance
bond before entering a contract in such an amount as it shall find reasonably necessary
to protect the best interests of the city.
G. Confidentiality of Proposals. Contracts let pursuant to proposals permitting
negotiations shall be opened and their contents secured to prevent disclosure during the
process of negotiating with competing proposers. If proposals are opened publicly, only
the names of the proposers shall be revealed, while prices and other information
concerning the proposals shall not be disclosed until negotiations are complete and
before award is made by the city council.
3.30.060 Public Projects
A. $50,000 or Less. Public projects of fifty thousand dollars ($50,000) or Tess
may be awarded by the city manager pursuant to the Vendor Price Quotes Procedure
(3.30.120) or any exception consistent with this chapter. Public projects of up to twenty-
five thousand dollars ($25,000) may be awarded by a designated position, subject to the
limits and authorizations established under 3.30.050 (B). The contract shall be awarded
in the best interest of the city.
B. More than $50,000. Public projects of more than fifty thousand dollars
($50,000) shall, except as otherwise provided in this chapter, be awarded by the city
council pursuant to the formal bidding procedure (3.30.100) and to the lowest responsible
bidder. The city council may reject any or all bids received, and may waive any
irregularities in each bid received.
C. Review and Approval of Plans and Specifications. The director of public
works and city engineer, or their designees, are authorized to review and approve
engineering plans for all public projects. This shall include the working details, drawings,
plans and specifications prepared for every public project, including emergency and
change order work, which may affect the design or operation of public improvements and
which may bring into question the city's liability for dangerous conditions of public
property.
Page 4 of 17
ORDINANCE NO.
D. Municipal Projects. Except on locally funded public projects of twenty-five
thousand dollars ($25,000) or less when the project is for construction work, or fifteen
thousand dollars ($15,000) or less when the project is for alteration, demolition, repair or
maintenance work, all contractors performing work on city public projects shall be subject
to California Prevailing Wage Law, codified at California Labor Code Section 1720 et seq.,
as it may be amended from time to time, or otherwise proscribed by law. The only
limitation on the provisions of this subsection shall be in the event federal funding
requirements supersede state prevailing wage laws.
E. The city may, in its discretion for public projects, elect to follow the uniform
construction cost methods set forth in Section 22030 of the Public Contracts Code.
F. Applicability of State Provisions.
1. Sections 7100 through 7200 of the Public Contracts Code are
incorporated herein as if fully set forth and shall be applicable to city contracts.
2. Section 22300 of the Public Contracts Code is incorporated herein
as if fully set forth and shall be applicable to the retention of proceeds for city contracts.
3.30.070 Contractual Services
A. $50,000 or Less. Contractual services of fifty thousand dollars ($50,000) or
less may be awarded by the city manager pursuant to the Vendor Price Quotes
Procedure (3.30.120), Best Competitive Value Procedure (3.30.140), or any exception
consistent with this chapter. Contractual services of up to twenty-five thousand dollars
($25,000) may be awarded by a designated position, subject to the limits and
authorizations established under 3.30.050 (B).
B. More than $50,000. Contractual services of more than fifty thousand dollars
($50,000) shall be awarded by the city council pursuant to the Best Competitive Value
Procedure (3.30.140) or any exception consistent with this chapter.
C. Award. All contractual services shall be awarded in the best interest of the
city, determined in the sole discretion of the city council, city manager, or designated
position authorized to award the contract.
3.30.080 Professional Services
A. $50,000 or Less. Professional services of fifty thousand dollars ($50,000)
or less may be awarded by the city manager pursuant to the Proposal Procedure
(3.30.130), Best Competitive Value Procedure (3.30.140), or any exception consistent
with this chapter. Professional Services of up to twenty-five thousand dollars ($25,000)
may be awarded by a designated position, subject to the limits and authorizations
established under 3.30.050 (B).
Page 5 of 17
ORDINANCE NO.
B. More than $50,000. Professional services of more than fifty thousand
dollars ($50,000) shall be awarded by the city council pursuant to the Best Competitive
Value Procedure (3.30.140) or any exception consistent with this chapter.
C. Award. Contracts for Professional Services shall be awarded to the
consultant who will best serve the interests of the city, taking into account the
demonstrated competence, professional qualifications and suitability for the project in
general. The city may consider cost of professional services if determined to be a relevant
factor under the circumstances, but cost shall not be the sole determining factor.
3.30.090 Materials, Supplies, and Equipment
A. $50,000 or Less. Materials, supplies, and equipment of fifty thousand
dollars ($50,000) or less may be awarded by the city manager pursuant to the Vendor
Price Quotes Procedure (3.30.120), Best Competitive Value Procedure (3.30.140), or any
exception consistent with this chapter. Materials, supplies, and equipment of up to
twenty-five thousand dollars ($25,000) may be awarded by a designated position, subject
to the limits and authorizations established under 3.30.050 (B). The contract shall be
awarded in the best interest of the city.
B. More than $50,000. Materials, supplies, and equipment of more than fifty
thousand dollars ($50,000) shall, except as otherwise provided in this chapter, be
awarded by the city council pursuant to formal bidding procedures and to the lowest
responsible bidder. The city council may reject any or all bids received and may waive
any irregularities in each bid received.
3.30.100 Formal Bidding Procedure
A. Uses of Formal Bidding Procedure. This formal bidding procedure shall be
used whenever formal bidding is required.
B. Notice Inviting Formal Bids. Notice inviting formal bids shall be provided.
Notices shall state the time and place for the receiving and opening of sealed bids and
distinctly describe the project. At a minimum, the notice inviting formal bids shall: (1)
describe the project; (2) state how to obtain more detailed information about the project;
(3) state the date, time and place for the submission of sealed bids; and (4) include any
other information required by state or local law, as determined by the city attorney.
C. Published Notice. The notice shall be published at least ten (10) calendar
days before the date of opening the bids in a newspaper of general circulation, the city's
website, and on an electronic bulletin board or an Internet site that is a generally
recognized source of local public works contract information. Notice shall be published
at least twice not less than five days apart.
D. Bidder's Security. All bids shall be presented under sealed cover
accompanied by one of the following forms of bidder's security: (a) cash; (b) cashier's
check made payable to the city; or (c) a bidder's bond executed by an admitted surety
insurer made payable to the city. Such security shall be an amount at least equal to ten
Page 6 of 17
ORDINANCE NO.
percent of the amount bid. No bid shall be considered unless security in the form above
set forth is enclosed with the bid.
E. Forfeiture of Security. If the successful bidder fails to execute the contract,
the bidder's security shall be forfeited to the city. The city council may on refusal or failure
of the successful bidder to execute such contract award the contract to the next lowest
responsible bidder. If the city council awards the contract to the second 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 low bid. The surplus, if any, shall be utilized to offset
any and all costs of preparation and printing of plans, specifications, estimates of cost,
publication of notices, and any surplus remaining shall be returned to the lowest bidder
who fails to execute the contract.
F. Review of Bids. The city shall review all bids received for completeness,
accuracy, responsiveness to the invitation and bid documents, and the city's experience
with or knowledge of the qualification and reliability of each bidder and prepare a
recommendation for the city council. The city council may waive any irregularities in each
bid received.
G. No bids. If no bids are received, the city council may have the project done
in any manner that the city council may direct without further complying with this chapter.
H. Award of Contract. The contract shall be awarded in accordance with all
applicable sections. If two or more bids received are the same amount, the city council
may decide which bid to accept and award.
Rejection of Bids. The city council may, in its sole and absolute discretion,
reject all bids presented. After all bids are rejected, the city council shall have the option
of any of the following:
1. Abandon the project;
2. Readvertise for bids in the manner described in this chapter;
3. Perform the work by employees of the city; or
4. Have the project done by force account, or procure materials,
supplies, and equipment on the open market.
J. Relief of Bidders. No bidder shall be relieved of its bid unless by consent
of the city council nor shall any change be made in the bid because of mistake. Should
the city council determine to consent, the requesting party should provide to the council
in written form the facts that (a) a mistake was made, (b) written notice was given to the
city of that mistake within five days, excluding Saturdays, Sundays, and state holidays,
after the opening of the bids specifying how the mistake occurred, (c) the mistake made
the bid materially different than it was intended to be, and (d) the mistake was made in
filling out the bid and not due to error in judgment or to carelessness in inspecting the site
of the work, or in reading the plans or specifications.
Page 7 of 17
ORDINANCE NO.
K. Bid Protests. Bidders may file a protest of a bid with the city. In order for a
bidder's protest to be considered valid, the protest must:
1. Be filed in writing within five (5) calendar days after the bid opening
date or any city determination or recommendation including city council action;
2. Clearly identify the specific irregularity or accusation;
3. Clearly identify the specific city staff determination or
recommendation being protested;
4. Specify in detail the grounds for protest and the facts supporting the
protest; and
5. Include all relevant, supporting documentation with the protest at
time of filing.
If the protest does not comply with each of these requirements, the city may reject
the protest without further review. If the protest is timely and complies with the above
requirements, the city shall review the protest, any response from the challenged
bidder(s), and all other relevant information. The city will provide a written decision to the
protestor in a reasonable amount of time.
The procedure and time limits set forth are mandatory and are the sole and
exclusive remedy in the event of a bid protest. Failure to comply with these procedures
shall constitute a failure to exhaust administrative remedies and a waiver of any right to
further pursue the bid protest, including filing a Government Code Claim or legal
proceeding.
3.30.110 Public Projects - Subletting and Subcontracting
A. Preservation of Rights and Remedies. Nothing in this chapter limits or
diminishes any rights or remedies, either legal or equitable, which:
1. An original or substituted subcontractor may have against the prime
contractor, his or her successors or assigns;
2. The city may have against the prime contractor, his or her
successors or assigns, including the right to take over and complete the contract.
B. Contents of Bids or Offers. Any person making a bid or offer to perform a
public project, shall, in his or her bid or offer, set forth: the name, the location of the
place of business, the California contractor license number, and public works contractor
registration number of each subcontractor who will perform work or labor or render
service to the prime contractor in or about the construction of the public project, or a
subcontractor licensed by the state of California who, under subcontract to the prime
contractor, specially fabricates and installs a portion of the public project according to
detailed drawings contained in the plans and specifications, in an amount in excess of
Page 8 of 17
ORDINANCE NO.
one-half of one percent of the prime contractor's total bid or, in the case of bids or offers
for the construction of streets or highways, including bridges, in excess of one-half of 1
percent of the prime contractor's total bid or ten thousand dollars ($10,000), whichever
is greater.
C. Failure to Specify or Specification of More Than One Subcontractor -
Performance by Prime Contractor. If a prime contractor fails to specify a subcontractor
or if a prime contractor specifies more than one subcontractor for the same portion of
work to be performed under the contract in excess of one-half of one percent of the prime
contractor's total bid, the prime contractor agrees that he or she is fully qualified to perform
that portion himself or herself, and that the prime contractor shall perform that portion
himself or herself.
D. Prime Contractor Whose Bid is Accepted — Prohibitions. A prime contractor
whose bid is accepted may not:
1. Substitute a person as subcontractor in place of the subcontractor
listed in the original bid, except that the city may, except as otherwise provided in this
section, consent to the substitution of another person as a subcontractor in any of the
following situations:
(a) When the subcontractor listed in the bid after having had a
reasonable opportunity to do so fails or refuses to execute a written contract, when that
written contract, based upon the general terms, conditions, plans and specifications for
the project involved or the terms of that subcontractor's written bid, is presented to the
subcontractor by the prime contractor;
(b) When the listed subcontractor becomes bankrupt or insolvent;
(c) When the listed subcontractor fails or refuses to perform his or her
subcontract;
(d) When the listed subcontractor fails or refuses to meet the bond
requirements of the prime contractor as set forth in this section;
(e) When the prime contractor demonstrates to the city, subject to the
further provisions set forth in this section, that the name of the subcontractor was listed
as the result of an inadvertent clerical error;
(f) When the listed subcontractor is not licensed pursuant to the
contractors license law;
(g) When the city determines that the work performed by the listed
subcontractor is substantially unsatisfactory and not in substantial accordance with the
plans and specifications, or that the subcontractor is substantially delaying or disrupting
the progress of the work;
Page 9 of 17
ORDINANCE NO.
(h) When the listed subcontractor is ineligible to work on a public works
project pursuant to Section 1777.1 or 1777.7 of the Labor Code;
(i) When the city determines that a listed subcontractor is not a
responsible contractor; or
(j) When there has been no bid shopping.
Prior to approval of the prime contractor's request for the substitution, the city shall
give notice in writing to the listed subcontractor of the prime contractor's request to
substitute and of the reasons for the request. The notice shall be served by certified or
registered mail to the last known address of the subcontractor. The listed subcontractor
who has been so notified shall have five (5) working days within which to submit written
objections to the substitution to the city. Failure to file these written objections shall
constitute the listed subcontractor's consent to the substitution.
If written objections are filed, the city shall give notice in writing of at least five (5)
working days to the listed subcontractor of a hearing by the city on the prime contractor's
request for substitution.
2. Permit a subcontract to be voluntarily assigned or transferred or
allow it to be performed by anyone other than the original subcontractor listed in the
original bid, without the consent of the city.
3. Other than in the performance of change orders causing changes or
deviations from the original contract, sublet or subcontract any portion of the work in
excess of one-half of one percent of the prime contractor's total bid as to which his or her
original bid did not designate a subcontractor.
E. Claim of Inadvertent Clerical Error in Listing Subcontractors —Notice --
Objection —Hearing. The prime contractor as a condition to assert a claim of inadvertent
clerical error in the listing of a subcontractor shall within two (2) working days after the
time of the prime bid opening by the city give written notice to the city and copies of that
notice to both the subcontractor he or she claims to have listed in error and the intended
subcontractor who had bid to the prime contractor prior to bid opening.
Any listed subcontractor who has been notified by the prime contractor in
accordance with this section as to an inadvertent clerical error shall be allowed six (6)
working days from the time of the prime bid opening within which to submit to the city and
to the prime contractor written objection to the prime contractor's claim of inadvertent
clerical error. Failure of the listed subcontractor to file the written notice within the six (6)
working days shall be primary evidence of his or her agreement that an inadvertent
clerical error was made.
The city may, after a public hearing and in the absence of compelling reasons to
the contrary, consent to the substitution of the intended subcontractor.
Page 10 of 17
ORDINANCE NO.
F. Subletting or Subcontracting Portion in Excess of Certain Percent of Prime
Contractor's Total Bid to Which No Subcontractor was Designated in Original Bid.
Subletting or subcontracting of any portion of the work in excess of one-half of one percent
of the prime contractor's total bid as to which no subcontractor was designated in the
original bid shall only be permitted in cases of public emergency or necessity, and then
only after a finding reduced to writing as a public record of the city setting forth the facts
constituting the emergency or necessity.
G. Violations of Chapter and Contracts —Cancellation or Penalty —Notice and
Hearing. A prime contractor violating any of the provisions of this section violates his or
her contract and the city may exercise the option, in its own discretion, of (1) canceling
his or her contract or (2) assessing the prime contractor a penalty in an amount of not
more than ten (10) percent of the amount of the subcontract involved, and this penalty
shall be deposited in the fund out of which the prime contract is awarded. In any
proceedings under this section the prime contractor shall be entitled to a public hearing
and to five (5) days' notice of the time and place thereof.
3.30.120 Vendor Price Quotes Procedure
A. Vendor Price Quotes Procedure. Departmental staff shall solicit via posted
notice, telephone request, mail, email, fax or any other reasonable solicitation method,
price quotes documented in writing. If unable to obtain a minimum of three price quotes,
staff shall document that reasonable efforts were made to obtain price quotes including,
that a notice was posted for not less than seven (7) business days; that there were no
other vendors to solicit price quotes from; or that they solicited to other vendors and one
or more declined to provide a quote. In lieu of soliciting three price quotes, staff may
elect to procure by formal bidding procedures.
3.30.130 Proposal Procedure
A. Proposal Procedure. Departmental staff shall solicit via posted notice,
telephone request, mail, email, fax or any other reasonable solicitation method, proposals
documented in writing. If unable to obtain a minimum of three (3) proposals from
professional service firms, staff shall document that reasonable efforts were made to
obtain proposals including, that a notice was posted for not Tess than seven (7) business
days; that there were no other professional service firms to solicit proposals from; or that
they solicited to other professional service firms and one or more declined to provide a
proposal. In lieu of soliciting three proposals, staff may elect to procure by formal bidding
procedures.
3.30.140 Best Competitive Value Procedure
A. Best Competitive Value Procedure. Best Competitive Value means a value
determined by evaluation of criteria that may include, but is not limited to, price, features,
functions, life -cycle costs, experience, and past performance. This includes, but is not
limited to, Request for Qualifications ("RFQ") or Request for Proposals ("RFP"). A RFQ
Page 11 of 17
ORDINANCE NO.
and/or RFP defines the terms, conditions, and specifications for goods or services
required by the city.
3.30.150 Design Build
As an alternative to the formal bidding procedure set forth in this chapter, the city
may, for public projects, cause to be prepared estimates and documents for a solicitation
of bids on a design and build basis. "Design and build" means a method of procuring
design and construction from a single source. The selection of the single source occurs
before the development of complete plans and specifications.
A. The request for submittal shall include all of the following:
1. A clear and precise description of the services to be provided and
work to be performed;
2. A format for submittals to follow and the elements that shall be
contained therein including the qualifications and relevant experience of the design
professional and the contractor, the proposed cost of said project and the criteria that
shall be used in evaluating the submittal including the base bid; and
3. The date on which the submittals are due and the timetable that will
be used in reviewing and evaluating the submittals.
B. In addition to the information required in subsection A of this section
regarding the qualifications and experience, bidders shall submit their proposals with a
construction bid price and all cost information in a separate sealed envelope.
C. All submittals received prior to the closing time stated in the request for
submittal shall be reviewed to determine that they meet the format requirements and the
standards specified in the request for submittal.
D. The contract shall be awarded to the bidder best meeting, in the sole
judgment of the city council, the standards required and requested at said proposal.
3.30.160 Exceptions to Procurement Methods
A. Minimum Procurement Levels. When the city manager establishes a
minimum dollar threshold where the procurement of public projects, contractual services,
professional services, and materials, supplies, and equipment are not subject to any of
the required procurement methods in this chapter. The city shall work to procure these
items in the best interest of the city.
B. Disaster Relief. When in the case of a disaster, as further explained in
Chapter 2.48, the requirements of this chapter do not apply.
Page 12 of 17
ORDINANCE NO.
C. Emergency. While the need for occasional emergency purchases is
recognized, the practice must be curtailed as much as possible by anticipating needs so
that normal purchasing procedures may be used.
1. "Emergency" means a sudden, unexpected occurrence that poses a
clear, eminent danger requiring immediate action to protect the health and safety of the
public, including to prevent or mitigate the loss or impairment of life, health, property or
public services.
2. In the case of an emergency which requires the immediate
procurement of public projects, contractual services, professional services or materials,
supplies, and equipment, the city manager may authorize the purchasing officer to
procure these items without regard to the provisions of this chapter; provided that a written
public record shall be kept showing the nature of the emergency and the city manager's
authorization to proceed under the provisions of this section. The city manager shall
terminate the emergency action at the earliest possible date that conditions warrant.
D. No Competitive Market. When the city council determines that a
competitive market does not exist or that the city will not gain a competitive advantage by
using the formal bidding procedure, the city may use any other procurement method.
E. Competitive Bidding Already Completed. When the purchasing officer, with
the approval of the city manager, determines that: (1) a competitive bid procedure has
been conducted by another public agency, including, but not limited to, another local
agency, the State through the California Multiple Award Schedule (CMAS), the federal
government through the General Services Administration (GSA), or a joint powers
agency, authority or alliance that procures competitive contracts; and (2) the price to the
city is equal to or better than the price to that public agency.
F. State Purchase. When the purchase is made on behalf of the city by the
State Department of General Services.
G. Mandated Expenditures. When expenditures are mandated by law or
regulation, such as county booking fees, utilities, postage (for delivery charges through
the U.S. Postal Service), waste disposal fees or other non-negotiable permit, use or
application fees.
H. Shared Services. When the city council or city manager authorizes the
award and execution of contracts for services, subject to the dollar limits consistent with
this chapter, that are provided by another government, public entity, joint powers
authority, quasi -governmental entity, special district or non-profit entity that will maximize
efficiency, increase cost effectiveness, increase range of services, minimize duplication,
provide training or education encourage collaboration or standardize efforts, or leverage
government resources.
Best Interest of City. When the city council or city manager authorizes the
award and execution of contracts, subject to the dollar limits consistent with this chapter,
Page 13 of 17
ORDINANCE NO.
without competitive bidding provided that the city council or city manager finds that such
award is in the best interest of the city, or of the public health, safety, and welfare.
J. Sole Source. When the city manager determines that there is only one
source that provides the needed public project, contractual service, professional service
or materials, supplies, and equipment or a product to ensure compatibility with other city
products and equipment, the city shall work to procure these items in the best interest of
the city.
K. Authorized Vendor List. The City or any of its departments may create an
open vendor list for the purposes of providing recurring and routine contractual services,
professional services, and materials, supplies, and equipment for the fiscal year. Prices
from each vendor shall be obtained in a manner to ensure competitive pricing, in the best
interest of the city. The threshold for each vendor may be determined by the city council,
at the recommendation of the city manager. A vendor list may be approved by the city
council as often as necessary but not less than once every twenty four (24) months.
L. Purchase for Recurring Charges. By adopting a procedure approved by
the city manager, subject to the dollar limits consistent with this chapter, an agent, one
who has authority from the city to act on its behalf, contracted by the City may purchase
contractual services, professional services, and materials, supplies, and equipment for
ongoing cleanup, maintenance and different routine items that are of a continuing
nature provided the agent's contract allows for such purchases.
M. Otherwise Authorized. When otherwise authorized by this chapter or
applicable law.
3.30.170 Change Orders
A. The city manager or his or her designee shall have authority to approve
change orders for public projects, contractual services, professional services, and
materials, supplies, and equipment previously awarded by the city manager, provided that
change orders aggregated with the original contract do not exceed fifty thousand dollars
($50,000), subject to an unencumbered appropriation in the fund against which such
expenditure is to be charged. During the award of a contract by the city council, the
council may give the city manager the authority to approve change orders, specific to that
contract, based on either a percentage of the contract or a specific dollar amount. If no
specific authority is given by the city council, the city manager may approve change orders
for a city council awarded contract subject to the dollar limits consistent with this chapter,
provided such change orders are within the approved contingency.
B. Change orders in excess of the city manager's authority may be approved
by the city manager and submitted to city council for ratification under the following
circumstance:
1. The failure to immediately issue a change order may result in
significant project cost increases or an unacceptable project delay due to work stoppage
or other inefficiencies;
Page 14 of 17
ORDINANCE NO.
2. A special meeting or a regularly scheduled meeting of the city council
is not scheduled within a reasonable period of time to sufficiently remedy the problem;
and
3. Funding for the change order is currently available within the
appropriated budget.
3.30.180 Local Business Preference Program
A. Statement of Policy. It is the policy of the city to promote employment and
business opportunities for local residents and firms on all contracts and give preference
to local residents, workers, businesses, contractors, and consultants to the extent
consistent with the law and interests of the public.
B. Local Preference in Purchasing. In the bidding of, or letting for procurement
of, supplies, materials, and equipment, as provided in this chapter, the purchasing officer
may give a preference to local businesses in making such purchase or awarding such
contract in an amount not to exceed five percent of the local business' total bid price.
Total bid price shall include not only the base bid price but also adjustments to that base
bid price resulting from alternates requested in the solicitation. In order for a local
business to be eligible to claim the preference, the business must request the preference
in the solicitation response and provide a copy of its current business license from a
jurisdiction in the Coachella Valley.
C. Local Preference in Professional Services. In awarding contracts for
professional services, including consultant services, preference to local business shall be
given whenever practicable pursuant to this chapter consistent with the statement of
policy in subsection A. The contractor or consultant will also, to the extent legally possible,
solicit applications for employment and proposals for subcontractors and sub -consultants
for work associated with the proposed contract from local residents and firms as
opportunities occur and hire qualified local residents and firms whenever feasible. In order
for a local business to be eligible to claim the preference, the business must request the
preference in the solicitation response and provide a copy of its current business license
from a jurisdiction in the Coachella Valley.
D. Exceptions to Local Business Preference Policy. The preference set forth
in this section shall not apply to the following purchases or contracts:
1. Goods or services provided under a cooperative purchasing
agreement;
2. Purchases or contracts which are funded in whole or in part by a
governmental entity and the laws, regulations, or policies governing such funding prohibit
application of that preference;
3. Purchases made or contracts let under emergency or
noncompetitive situations;
Page 15 of 17
ORDINANCE NO.
4. Purchases with an estimated cost of twenty-five thousand dollars or
more;
5. Application of the local business preference to a particular purchase,
contract, or category of contracts for which the city council is the awarding authority may
be waived at the city council's discretion;
6. Public works projects;
7. Bids that are nonresponsive.
E. Quality and Fitness. The preferences established in this section shall in no
way be construed to inhibit, limit or restrict the right and obligation of the purchasing officer
to compare quality and fitness for use of supplies, materials, equipment, and services
proposed for purchase and compare the qualifications, character, responsibility, and
fitness of all persons, firms, or corporations submitting bids or proposals. In addition, the
preferences established in this section shall in no way be construed to prohibit the right
of the city council or the purchasing officer from giving any other preference permitted by
law or this chapter.
F. Verification of Local Business Preference Eligibility. Any vendor or
consultant claiming to be a local business, shall so certify in the bid. The purchasing
officer shall not be required to verify the accuracy of any such certifications, and shall
have sole discretion to determine if a vendor or consultant meets the definition of "local
business."
G. Enforcement.
1. The information furnished by each bidder requesting a local business
preference shall be under penalty of perjury.
2. No person or business shall knowingly and with intent to defraud,
fraudulently obtain, retain, attempt to obtain or retain, or aid another in fraudulently
obtaining or retaining or attempting to obtain or retain certification as a local business for
the purpose of this section.
3. No person or business shall willfully and knowingly make a false
statement with the intent to defraud, whether by affidavit, report, or other representation,
to a city official or employee for the purpose of influencing the certification or denial of
certification of any entity as a local business.
4. A business which has obtained city certification as a local business
by reason of having furnished incorrect supporting information or by reason of having
withheld information, and which knew or should have known the information furnished
was incorrect or the information withheld was relevant to its request for certification, and
which by reason of such certification has been awarded a contract to which it would not
otherwise have been entitled, shall:
Page 16 of 17
ORDINANCE NO.
(a) Pay to the city any difference between the contract amount and what
the city's costs would have been if the contract had been properly awarded;
(b) In addition to the amount described in subsection (G)(4)(a), be
assessed a penalty in an amount of not more than ten percent of the amount of the
contract involved; and
(c) Be subject to debarment from future award of contracts from the city.
5. The penalties identified in subsection (G)(4) shall also apply to any
business that has previously obtained proper certification and, as a result of a change in
its status would no longer be eligible for certification, fails to notify the purchasing officer
of this information prior to responding to a solicitation or accepting a contract award.
SECTION 2. That Chapter 3.32 is hereby repealed in its entirety.
SECTION 3. The City Clerk of the City of Palm Desert, California, shall certify the
adoption of the Ordinance and shall cause the same to be published once in The Desert
Sun, a newspaper of general circulation, published and circulated within the City of Palm
Desert, California. It shall be in full force and effect thirty (30) days after its adoption.
PASSED, APPROVED AND ADOPTED this day of , 2018 by
the City Council of the City of Palm Desert, California, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
APPROVED AS TO FORM:
SABBY JONATHAN, MAYOR
ROBERT W. HARGREAVES, CITY ATTORNEY
BEST, BEST & KRIEGER, LLP
Page 17 of 17
City
Palm Desert (CC)
Indian Wells (CC)
La Quinta (CC)
Indio
Cathedral City
COACHELLA VALLEY MUNICIPALITIES
Quick Summary of Purchasing Authority, Limits, and Procedures
Supplies & Equipment
Dollar Limits
Less than $1,000
$1,000 to $10,000
$10,000 to $25,000
Over $25,000
$100 or Less
$5,000 or less
$5,001 to $25,000
$25,001 or more
$100 or Less
$101 to $5,000
$5,001 to $15,000
$15,000 to $50,000
Over $50,000
Up to $5,000
$5,000 to $75,000
Over $75,000
Less than $1,000
$1,000 to $5,000
More than $5,000
Up to $25,000
Palm Springs (CC). $25,000 to $100,000
Coachella
Rancho Mirage
(CC)
Greater than $100,000
Authority
Purchasing Officer or
Department Head as
Authorized by City
Manager
City Council
Department Head as
Authorized by City
Manager and Finance
Director
City Council
Department Director
City Manager
City Council
Department Director
City Manager
City Council
Purchasing Agent or
Dep't
Purchasing Agent or
Dep't Head
City Council
City Manger or delegated
City Council
"City Manager can promulgate guidelines"
$50 or less
$2,499 or less
$2,500 to $25,000 (PO)
Below $25,000
(Contract)
$25,000 or more
For quick reference only.
Department Head
Authorized Dept
Purchaser
ADP and DH
City Manager
CM and City Council
Public Works
Dollar Limits
Over $10,000 (At its
discretion, City can
elect to follow the
UPCCAA (PCC §
22030))
$5,001 to $25,000
$25,001 to $100,000
$100,001 or more
Same
$125,00 or less
Over $125,000
More than $10,000
Less than $75,000
(Under PCC 22000)
Same
Less than $15,000
$15,000 and above
Authority
City Council
DH
CC
CC
City Manager
City Council?
Professional Services
Dollar Limits
Authority
See Gov't Code § 4525
None
Same
Over $50,000
Up to $5,000
DH
City Council
Department
Director
$5,000 to $75,000 City Manager
Over $75,000 City Council
City Council Less than $10,000 City Manager
Less then $5,000
- City Manager
City Council
More than $10,000 City Council
See Gov't Code § 4525
City Manager I Less than $15,000
City Council $15,000 and above
Less than $25,000
$25,000 to $100,000
Over $100,000 City Council
City Manager
City Manager
City Council
Follows Supplies and Equipment but
procurement based on demonstrated
competence and professional
qualifications