HomeMy WebLinkAboutPRESENTATION - PROPOSED PURCHASING POLICY AMENDMENTS - ITEM 19PROPOSED
UPDATE -
PURCHASING
ORDINANCE
September 17, 2024
Purchasing Policy - Discussion Items:
Background
Best Practices — Comparison with Other OC Agencies
Potential Policy Amendment Categories and Options:
Bidding Thresholds
Council Approval
Reporting to Council
Recommendations
Next Steps
Purchasing Policy - Background:
September 19, 2023 — Policy review request from Council Member Gallagher and Mayor Lumbard; improving
clarity and transparency in competitive bidding, contract approval, and reporting; unanimously approved by the
Council.
October 17, 2023 - Approved a tentative process and timeline for policy update; delayed due to the Navy's North
Hangar Fire on November 7, 2023.
June 18, 2024 - Approved a new timeline for the project; step 2 of the project timeline.
Industry's best practice — periodic review of policy to stay current with laws and requirements.
Last Purchasing Ordinance Update - 2014.
Comparison
with Other
OC Agencies
COMPARISON WITH OTHER ORANGE COUNTY AGENCIES
No quotes
Informal quotes
Formal bids
City Council/Board Approval
Tustin current
1k goods only
1k-10k goods only
10k goods only
25k vehicle/heavy equipment only
50k others;
others 100k;
Anaheim
10k
10k-50k
200k professional
professional 200k
Brea
7k
7k-50k
50k
50k
Buena Park
30k
30k-100k
100k
80k
Costa Mesa
25k
25k-50k
50k
100k
Fountain Valley
3.5k
3.5k-50k
50k
50k
Fullerton
5k
5k-50k
50k
50k
service contracts approved with budget;
Huntington Beach
30k
n/a
30k
> $100k if not approved with budget
Irvine
60k
60k-200k
200k
1M
La Habra
500
500-35k
35k
35k
La Palma
1k
1k-25k
25k
25k
Laguna Beach
n/a
0-30k
30k
75k
Mission Viejo
5k
5k-50k
50k
50k
Newport Beach
3k
3k-75k
75k
120k
Orange
5k
5k-30k
30k
30k
Placentia
2.5k
2.5k-25k
25k
40k
Santa Ana
15k
15k-50k
50k
50k
Westminster
15k
15k-100k
200k
100k
Yorba Linda
2.5k
2.5k-75k
75k
75k
OCFA
n/a
0-50k
50k
goods/supplies approved with budget;
services > 100k; maintenance > 200k
100k other;
OC Sanitation Dist
25k
25k-100k
500k professional
250k
Average (approx.)
14k
14k-66k
66k
125k
Tustin proposed
40k
40k-65k goods
65k goods
65k vehicle/equip; other contracts approved with budget;
40k-100k services
100k gen. services
> $200,000 when not approved with budget
Purchasing Policy -Bidding:
NON-PUBLIC PROJECT CONTRACTS
Bidding
Current
Proposed
Bidding required
goods, materials, equipment
goods, materials, equipment, and all services
No bidding
$1,000
$40,000
Informal quotes
$1,000 - $10,000
$40,000-$65,000 goods, material, equipment
$40,000-$100,000 general services
Formal bids
more than $10,000
more than $65,000 goods, material, equipment
more than $100,000 general services
Professional services
RFP/quote when practical
one quote requested when less than $65,000;
three quotes/bids requested when over $65,000;
exempt from cost -based competitive bidding;
qualification -based selection at reasonable price;
selection process documented and retained.
NO CHANGE TO BIDDING OF PUBLIC PROJECT CONTRACTS
Purchasing Policy -
Contract Approval:
NON-PUBLIC PROJECT
Council approval
Current
Proposed
Vehicle/Equipment
vehicle/heavy equipment > $25,000
vehicle/equipment > $65,000
Supplies
not required if within budget
no change
Option 1:
List of service contracts (vendor, amount, and descriptions) approved with
adopted budget;
if a contract is not approved with budget, City Manager or designee
Services
not required if within budget
approval when < threshold;
Option 2: approve contract > threshold individually
Option 3: approve contracts for real property transaction and capital
improvement related design and engineering services > threshold. No
change to other service contract approval.
Option 4: no change
Options 1-3 Staff Recommended Threshold - $200,000
Purchasing Policy - Reporting:
REPORTING TO COUNCIL
Current
Proposed
service contracts
Option A: report executed contracts over a threshold via City Manager memo emailed to Council
not required to report
Option B: post executed contracts over a threshold on City website monthly or quarterly.
Option C: submit a quarterly agendized report to Council for executed contracts over a threshold.
Option D: Report service contracts within budget documents.
Options A-C Staff Recommended Threshold - $200,000
Summary of Options for Consideration
Bidding Thresholds
No bidding
$40,000
Informal quotes
$40,000-$65,000 goods; $40,000-$100,000 general services
Formal bids
goods over $65,000; general services over $100,000
Professional services
up to $65,000 one quote; over $65,000 three quotes
Council Approval
Option 1: approve contracts within budget. Service contract info provided with budget documents;
Service Contracts
if not approved with budget, City Manager or designee approval under threshold; Council approval over threshold.
Option 2: approve contract over threshold individually
Option 3: approve contracts for real property transaction and capital improvement related design and engineering services
over threshold. No change for other service contracts.
Option 4: no change
Contract Reporting
Option A: report executed contracts over a threshold via City Manager memo emailed to Council
Service Contracts
Option B: post executed contracts over a threshold on City website monthly or quarterly.
Option C: submit a quarterly agendized report to Council for executed contracts over a threshold.
Option D: same as Option 1 above. Report contracts within budget documents.
Staff Recommendations:
Potential Policy Amendment categories:
Bidding thresholds - no bidding $40,000, formal bidding $65,000 and
$1007000
➢Reporting to Council and Contract Approval -Contracts over $200,000 are
reported to and approved by Council; City Manager approval when under
$200,000.
Purchasing Policy - Next Steps:
Council discussion and direction — September 17, 2024
First Reading of Proposed Ordinance — October 1, 2024 (tentatively scheduled)
Second Reading of Proposed Ordinance — October 15, 2024 (tentatively scheduled)
Effective Date of Updated Ordinance — 30 days after the second reading.
/OOOOO—=MWO=
N UJII
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