SR-11-12-2013-7CID
tmm
City of City Council
Santa Monica'
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Introduction and First Reading of an Ordinance Amending Santa Monica
Municipal Code Chapter 2.24, Purchasing System
Recommended ,fiction
This report recommends that the City Council introduce for first reading an ordinance
amending Santa Monica Municipal Code Chapter 2.24 to:
1) Increase the dollar limit for convenience purchase orders to $10,000;
2) Increase the dollar limit for formal bidding procedures to $175,000;
3) Change the wording of certain sections to reflect current purchasing
practices; and
4) Increase the dollar limit threshold for approval of professional services
agreements by the City Manager to $80,000.
Executive Summary
The changes to the convenience purchase orders and formal bid limits that are
recommended in this report would significantly streamline the procurement process for
small construction project contracts, vehicle purchases, and material /supply purchases.
Competitive procurement procedures would continue to be followed. Staff would solicit
three or more informal bids for purchases below $175,000, as they do now for
purchases below $100,000.
Pursuant to the City Charter, Section 608, the City Council may, by ordinance, increase
the dollar threshold for approval of professional services agreements by an amount no
greater than the cumulative percentage increase in the Consumer Price Index, provided
that such adjustment shall occur only once in any five -year period. The dollar threshold
was increased to $70,000 on May 22 2007. Staff recommends that the threshold be
increased, pursuant to the attached Ordinance, to $80,000. There is no budget impact
associated with this report.
1
Background
The City's procurement process is administered by the Purchasing Manager in
compliance with Santa Monica Charter Sections 608, 1507 and 1508, Santa Monica
Municipal Code Chapter 2.24, and internally administered policies and procedures.
Santa Monica Charter Section 1507 specifies duties of the Purchasing Agent, duties
that are assigned to the Purchasing Manager, as the following:
(a) Establish and enforce specifications with respect to supplies, materials, and
equipment required by the City government;
(b) Supervise the inspection of all deliveries and determine conformance with
specifications;
(c) Have charge of such general storerooms and warehouses as are established by
the City Council; and
(d) Sell or transfer to or between offices, departments or agencies, surplus, obsolete,
or unused supplies, materials or equipment.
All ordinances, policies and procedures are adopted and implemented to facilitate these
duties; ensure the fair, competitive procurement of goods and services; ensure
transparency in the procurement process; and ensure that goods and services are
procured in a manner that assures the most efficient and effective delivery of goods and
services.
The most recent significant changes to the City's current procurement process was
adopted by Council on January 9 22001. At that time, Council adopted an ordinance that
increased the dollar limit threshold for formal bidding procedures from $25,000 to
$100,000, increased the dollar limit threshold for professional services contracts from
$50,000 to $55,000, increased the dollar limit for convenience purchase orders from
$1,000 to $5,000, changed the wording of certain sections to reflect current purchasing
practices, and clarified the selection criteria by implementing the "best bidder" criteria.
2
Since 2001, Council has incrementally increased the dollar limit threshold for formal
procurement of professional services as provided for in Santa Monica Charter Section
608. The limit can be adjusted once every five years in an amount equal to the
Consumer Price Index (CPI). The most recent adjustment was to $70,000 on Ma 22
2007.
In 2012, an interdepartmental team of City staff reviewed business systems associated
with core business activities in the City. Staff recommended establishing guidelines,
and centralizing and standardizing the process for procuring services. Increasing the
dollar limit for convenience purchase orders to $10,000 would streamline the process
for individual purchases related to the City's maintenance requirements for projects and
make them exempt from competitive bid requirements. During the services
procurement process review, staff noted an opportunity to reduce the administrative
work related to Council approval of services by increasing the dollar threshold for formal
bidding procedures to $175,000, and by increasing the dollar threshold of professional
services agreements requiring Council approval from $70,000 to $80,000, as is allowed
by the City Charter.
Discussion
The City's procurement process would be strengthened by following the best practices
that the State of California has successfully adopted, such as increasing dollar
thresholds and formalized protest procedures. The procurement of goods and services
is one of the key staff activities that impacts quality and timeliness related to the delivery
of goods and services. Increased efficiency and cost - effectiveness can be achieved by
reducing the amount of time and administrative expense necessary to obtain those
goods and services. It would result in improved productivity, quality, reduced costs and
increased customer service.
Dollar Limits
The proposed ordinance would update the various dollar limit thresholds implemented in
2001 to increase the efficiency and effectiveness to deliver goods and services.
3
Formal Bidding & Public Works Contracts
On January 9 2001, the Santa Monica City Council adopted Ordinance 1998 (CCS)
raising the limit for formal bidding procedures to $100,000 for the purchases of goods
and services, matching the then current California Public Contract Code (Section
22032). Since that time, the California Public Contract Code has recognized the
benefits of a higher limit by raising its threshold for formal bidding procedures to
$175,000 for general law cities. Many California charter cities, including Ventura,
Thousand Oaks, and Costa Mesa, have significantly increased their formal bidding
threshold in the past few years.
The proposed increase in Santa Monica's formal bidding threshold from $100,000 to
$175,000 would benefit the community by enabling staff to obtain equipment and other
resources needed in a more timely and efficient manner. This change would also
enable procurement staff to devote more time and energy to those citywide purchases
that exceed $175,000, thereby realizing greater cost savings where the cost savings
potential is the greatest.
Professional Services
On November 3, 1993 Santa Monica voters approved Proposition S, amending Section
608 of the City Charter, and increased the dollar limit for formal bidding procedures for
professional services contracts to $50,000, subject to future Consumer Price Index
(CPI) adjustments. Professional services contain an element of specialized expertise,
training in a professional field, or other developed skills such as an auditor, attorney,
doctor, architect, engineer, land surveyor, construction project manager, appraiser,
expert, or consultant. The City Council may, by ordinance, increase the dollar threshold
for approval of professional services agreements by an amount no greater than the
cumulative percentage increase in the Consumer Price Index, provided that such
adjustment shall occur only once in any five -year period. The dollar threshold was
increased to $70,000 on May 22, 2007. Staff recommends increasing the dollar limit for
professional services contracts to $80,000, consistent with the cumulative percentage
El
increase in the Consumer Price Index. This change conforms to Section 608 of the City
Charter and furthers the intent of Proposition "S" by increasing the efficiency of the
delivery of City services to the community.
Convenience Purchases
Convenience purchases are exempted from completing a competitive process and can
be initiated and approved at the department level. The limit for these purchases was
increased on January 9 2001. The proposed ordinance would increase the limit for
convenience purchases to $10,000.
Summary of Additional Proposed Changes
The following are changes to sections of the Code and reflect proposed procurement
practices and procedures:
1) Section 2.24.040 Additional Power of Purchasing Agent
(e) The proposed ordinance gives the authority to the Purchasing Agent
to declare, dispose, sell or transfer to or between offices, departments
or agencies, surplus, obsolete or unused supplies, materials or
equipment by bid, auction, negotiated sale, trade -in or exchange;
(f) The proposed ordinance gives the Purchasing Agent authority to sell
by bid, auction, negotiated sale, donation, trade -in or exchange,
surplus, obsolete, or unused supplies, materials or equipment valued
at under $10,000.
2) Section 2.24.070 Public Works Contracts
(a) Requires that all notices inviting bids for public works contracts be
posted on the City's online vendor portal website in addition to
publication in a newspaper of general circulation within the City.
(f) Currently allows the City Manager or the Manager of the Office of
Emergency Management to secure on the open market at the best
reasonable price, a public works contract upon a finding by either the
City Manager or the Emergency Services Manager that complying with
5
competitive bidding would cause unnecessary expense or delay in the
event of a declared state or local emergency. The proposed ordinance
maintains the authority of the City Manager and the Emergency
Services Manager, but delegates to the Purchasing Agent the authority
to procure such contracts when such a finding is made.
3) Section 2.24.073 Professional Services Contracts
(g) Allows the City Manager or the Emergency Services Manager to
secure on the open market at the best reasonable price, any
professional services or contracts upon a finding by either the City
Manager or the Emergency Services Manager that complying with
competitive bidding would cause unnecessary expense or delay in the
event of a declared state or local emergency. The proposed ordinance
maintains the authority of the City Manager and the Emergency
Services Manager, but delegates to the Purchasing Agent the authority
to secure professional services when such a finding is made.
4) New Section 2.24.074 Informal Professional Services Contracts
Adds a process for a competitive request for proposal, written or verbal
quotations for professional services which contain an element of specialized
expertise, training in a professional field, or other developed skills which are
not required to meet the formal bidding requirements.
5) New Section 2.24.075 Formal Professional Services Contracts
Adds a process for a competitive request for proposal, written or verbal
quotations for professional services which contain an element of specialized
expertise, training in a professional field, or other developed skills which are
required to meet the formal bidding requirements.
6) Section 2.24.080 Exceptions to Competitive Bidding
The proposed ordinance deletes the exception for professional services
contracts, and adds two exceptions as follows:
0
(c) Currently, this provision excludes items that are purchased for resale to
the public. The proposed ordinance includes services that are purchased
for resale to the public.
(d) Creates an exception for a situation created due to the inability to obtain
competition may result because only one vendor or supplier possesses
the unique ability or capability to meet the particular requirements of the
solicitation; good and /or service is copyrighted, patented or otherwise only
available from license holder.
7) Section 2.24.090 Informal Bidding Procedures
(c) (1) Increases the local vendor preference to 1.5% to match the portion of
the sales tax remitted to the City to reflect the increase in sales and use
tax resulting from the passage of Measure Y.
8) Section 2.24.100 Formal Bidding Procedures
(a) Requires that all notices inviting formal bids be posted on the City's online
vendor portal website in addition to publication in a newspaper of general
circulation within the City.
(c) Strikes certain inconsistent language related to City Council waiver of
bidding procedures in the event of urgent necessity.
(d) (1) Increases the local vendor preference to 1.5% to match the portion of
the sales tax remitted to the City to reflect the increase in sales and use
tax resulting from the passage of Measure Y.
9) New Section 2.24.105 Protest Procedures
Specifies a process for a challenge to the award or proposed award of a
contract for procurement of goods and /or services or a challenge to the terms
of a solicitation for such a contract.
10)Section 2.24.120 Emergency Purchases
Currently allows the City Manager or the Emergency Services Manager to
secure on the open market at the best reasonable price, any such supplies,
materials, equipment, contractual services, professional services or contracts
for public works or any other city projects in emergency situations. The
7
proposed ordinance maintains the authority of the City Manager and the
Emergency Services Manager, and delegates to the Purchasing Agent the
authority to perform these services.
11)Section 2.24.150 Forwarding of Purchase Order
The proposed ordinance changes the wording of the section to reflect current
procurement practices, eliminating certification of Purchase Orders by the
City Controller.
12)Section 2.24.160 Receipt of Goods
The proposed ordinance changes the wording of the section to reflect current
procurement practices and which staff person performs various duties.
13)Section 2.24.170 Review of Invoice
The proposed ordinance changes the wording of the section to reflect current
procurement practices, clarifying that departments receiving the good or
service review and approve payment of the invoice.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action. Staff will return to Council if specific budget actions are required
in the future.
Prepared by: Araceli Esparza, Purchasing Services Manager
Approved:
ODecav Gig i alles -HO es
Director of Finance
Attachments:
A. Ordinance
tt
Forwarded to Council:
Rod Gould
City Manager
City Council Meeting: 11 -12 -13
Santa Monica, California
ORDINANCE NUMBER (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING PORTIONS OF MUNICIPAL CODE CHAPTER 2.24 TO
INCREASE THE THRESHOLD DOLLAR LIMITS FOR CONVENIENCE PURCHASE
ORDERS, FORMAL BIDDING PROCEDURES, AND PROFESSIONAL SERVICES
CONTRACTS APPROVED BY THE CITY MANAGER; ESTABLISH STANDARD
BIDDING PROCEDURES FOR PROFESSIONAL SERVICES CONTRACTS;
DELEGATE CERTAIN AUTHORITY TO THE PURCHASING AGENT; AND
ESTABLISH A STANDARD PROTEST PROCEDURE FOR CERTAIN PURCHASES
WHEREAS, Section 608 of the Charter of the City of Santa Monica (the "City
Charter ") provides that the City of Santa Monica (the "City') shall, by ordinance, adopt
procedures and requirements for the purchase of supplies and equipment, for the
provision of professional services, and for the award of bids for public works projects;
iTT
WHEREAS, Section 608 of the City Charter further provides that such ordinance
should preserve public confidence in the integrity and openness of the City's contracting
process, protect public funds, and insure that the City obtains materials or service of
appropriate quality; and
WHEREAS, Section 1507 of the City Charter provides that the City shall have a
centralized purchasing system for all City departments and agencies, under the control
of the City Manager, who shall recommend to and the City Council shall consider and
adopt by ordinance, rules and regulations governing the contracting for purchasing,
1
storing and distribution of all supplies, materials and equipment required by an office,
department or agency of the City; and
WHEREAS, Section 1507 of the City Charter further establishes certain non-
exclusive powers and requirements of the Purchasing Agent; and
WHEREAS, Section 1508 of the City Charter provides that before making any
purchase of, or contract for, supplies, materials or equipment, the Purchasing Agent
shall give ample opportunity for competitive bidding, under such rules and regulations
and with such exceptions as the City Council may prescribe by ordinance; and
WHEREAS, on November 3, 1993, City voters approved Proposition S,
amending Section 608 of the City Charter and increasing the dollar limit threshold for
professional services contracts approved by the City Manager to $50,000, subject to
future Consumer Price Index ("CPI') adjustments; and
WHEREAS, in accordance with the provisions of Sections 608, 1507 and 1508 of
the City Charter, the City Council of the City of Santa Monica (the "City Council') has, by
ordinance, established a purchasing system as set forth in Chapter 2.24 of the Santa
Monica Municipal Code ( "Chapter 2.24 "); and
WHEREAS, the City desires to strengthen its purchasing system by enhancing
efficiency and cost - effectiveness; and
WHEREAS, such increased efficiency and cost - effectiveness can be achieved by
reducing the amount of time and administrative expense necessary to obtain goods and
services; and
WHEREAS, such increased efficiency and cost - effectiveness would also result in
improved productivity, quality, reduced costs and increased customer service; and
E
WHEREAS, in the interest of furthering efficiency and cost - effectiveness in the
City's purchasing system, the City desires to amend Chapter 2.24 increase the dollar
limit threshold for convenience purchase orders to $10,000; and
WHEREAS, the City further desires to increase efficiency and cost - effectiveness
by amending Chapter 2.24 to increase the dollar limit thresholds for formal bidding
procedures to $175,000, an amount in line with State practice as well as many charter
cities throughout the State; and
WHEREAS, such an increase will benefit the community by enabling staff to
obtain equipment and other resources needed in a more timely and efficient manner as
well as allowing staff to devote more time and energy to those citywide purchases that
exceed $175,000, thereby realizing greater cost savings where the cost savings
potential is the greatest; and
WHEREAS, the City also desires to amend Chapter 2.24 to increase the dollar
limit threshold for award of professional services contracts by the City Manager to
$80,000, consistent with the cumulative percentage increase in CPI as allowed under
Proposition S; and
WHEREAS, such an increase promotes the intent of the City Charter as well as
Proposition S by increasing the efficiency of the delivery of City services to the
community; and
WHEREAS, the City also desires to establish standard bidding procedures for
professional services contracts in order to strengthen the City's centralized purchasing
system and advance the goals of Section 608 of the City Charter by preserving public
confidence in the integrity and openness of the City's professional services contracting
KI
process and insuring that the City obtains professional services of appropriate quality;
"1
WHEREAS, the City desires to further strengthen the City's centralized
purchasing system as contemplated under Section 1507 of the City Charter by
delegating certain additional authority to the Purchasing Agent; and
WHEREAS, in order to enhance transparency and fairness in, and preserve
public confidence in the integrity and openness of the City's contracting process, the
City desires to adopt a standard protest procedure for certain City purchases; and
WHEREAS, the City wishes to make additional minor changes to Chapter 2.24 to
reflect current and proposed procurement practices.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 2.24.040 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.040 Additional powers of Purchasing Agent.
In addition to the above enumerated powers, the Purchasing Agent shall have
the power to:
(a) Contract for all public utility services and all other contractual services,
such as towel and cleaning services;
(b) Negotiate all leases for grounds, buildings, office, or other space required
by any agency of the City government;
12
(c) Contract for the rental, repair or maintenance of equipment, machinery,
and city -owned personal property;
(d) Negotiate the leasing by any agency of the City, of any personal property
to be leased by or from said City;
(e) Declare supplies materials or equipment as surplus, obsolete or unused
and transfer same to or between offices departments or agencies of the City;
(f) Sell by bid auction negotiated sale donation trade -in or exchange,
surplus obsolete or unused supplies materials or equipment valued at less than ten
thousand dollars.
SECTION 2. Section 2.24.071 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.071 Public works contracts.
(a) Every contract involving an expenditure of more than one - hundred
seventy -five thousand dollars for public works projects including, but not limited to, the
construction of public buildings, streets, drains, sewers, utilities and parks shall be let to
the best bidder after notiGe by publication of a notice inviting bids therefor. The
publication shall be in a newspaper of general circulation in the City of Santa Monica, by
two or more insertions, the first of which shall be published at least ten days before the
time for opening bids. All notices inviting bids issued under this subsection (a) shall
also be posted on the City's online vendor portal website.
(b) Public works contracts of one-hundred-seventy-five thousand dollars or
less may be let to contract by informal purchasing procedures as set forth in Section
2.24.090(b).
(c) For public works projects estimated to exceed one million dollars in cost or
for public works projects with unique or complex characteristics, the City Manager may
authorize a phased selection process for determining the best bidder —+t if the
characteristics of the project, including, but not limited to its size, complexity,
uniqueness or potential impact on the City, are such that a phased process would best
effectuate the public interest. The phased selection process shall solicit, review and
evaluate the qualifications of prospective bidders in accordance with the criteria set forth
in Santa Monica Municipal Code Section 2.24.072, with project specifications and with
such administrative instructions, rules and regulations as may be issued by the City
Manager. The best bidder shall be competitively selected from those prospective
bidders who have been determined as qualified to responsibly complete the project in
accordance with applicable City criteria. The City Manager is authorized to issue
administrative instructions, rules and regulations as necessary for the purpose of
satisfying the requirements of this subsection.
(d) The City Council may reject any and all bids received whenever in the
opinion of the City Council:
(1) The bid or bids do not comply with the bid notice and specifications;
(2) The proposed project or purchase should be abandoned or delayed;
(3) The materials or services may be purchased more reasonably on the open
market or the work done less expensively by City personnel;
(4) The bids are higher than anticipated and a new call for bids would result in
savings to the City;
0
(5) The best interests of the City would be served by a rejection of any or all
..
(e) By two - thirds affirmative vote of its membership, the City Council may
forego the bidding procedures otherwise required by this Section if the City Council
finds that:
(1) The goods or services can be purchased more economically on the open
market;
(2) There exists no competitive market for the provision of the goods or
services necessary to construct the public works project; or
(3) Due to urgent necessity, the public health, welfare or safety would be
jeopardized if the bidding procedures of this Section were followed.
During any period of declared state of local emergency, the City Manager,
or the - Director -ef Emergency Services Manager, or the Purchasing Agent is authorized
to implement such practices, policies and procedures for the construction, maintenance,
or repair of public works projects as are necessary to protect the public health, welfare
or safety without otherwise complying with this Section, if the City Manager or the
Direster of Emergency Services Manager finds that complying with this Section would
cause unnecessary expense or delay. The City Manager or Director of Emer,° ^c,
Services shall report all such findings at a regular meeting of the City Council no later
than thirty days after+wakir;g the finding is made.
0
SECTION 3. Section 2.24.073 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.073 Professional services contracts.
(a) Except as established in subsection (f) of this Section, the City Council
shall approve every agreement involving an expenditure of more than-seve4* eighty
thousand dollars for professional services. The award of such contracts shall be made
to the best qualified person or firm.
(b) In determining the best qualified person or firm, the following criteria shall
be utilized:
(1) The training, credentials and experience of the person or firm;
(2) The demonstrated competence, ability, capacity and skill of the person or
firm to perform the contract or provide the services;
(3) The capacity of the person or firm to perform the contract or provide the
service promptly, within the time specified, and without delay;
(4) The sufficiency of the person's or firm's financial and other resources;
(5) The character, integrity, reputation and judgment of the person or firm;
(6) The ability of the person or firm to provide such future service as may be
needed; and
(7) The price which the person or firm proposes to charge, including whether
the price is fair, reasonable and competitive.
(c) The City Council may in its sole discretion reject any and all proposed
professional services agreo,;, contracts whenever in the opinion of the City Council:
0
(1) The agrees =; t contract does not comply with the City's specifications or
other requirements;
(2) The proposed service should be abandoned or delayed;
(3) The best interests of the City would be served by the rejection of the
proposed professional service services agreement contract.
(d) The City Manager is authorized to solicit requests for proposals or
qualifications or to proceed in such other fashion for professional services, whenever
the City Manager determines in his or her sole discretion that the best interests of the
City would be fully served by proceeding in such a manner.
(e) Professional service services contracts of °ty eighty thousand dollars
or less may be awarded without City Council approval in accordance with the
procedures established by Section 2.24.074.E Professional ---
services contracts involving the preparation of environmental documents and analysis
undertaken to meet federal or state environmental laws may be awarded without City
Council approval in accordance with procedures established by the City Manager which
ensure that the selection process is undertaken consistent with the criteria set forth in
subsection (b) of this Section.
(f) Professional serv'iGe services contracts for legal work undertaken in
conjunction with pending or anticipated litigation or a claim against the City may be
awarded without City Council approval in accordance with procedures established by
the City Attorney which ensure that the selection process is undertaken consistent with
the criteria set forth in subsection (b) of this Section.
E
(g) During any period of a declared state of local emergency, the City
Manager,-or the Director of Emergency Services Manager, or the Purchasing Agent is
authorized to implement such practices, policies and procedures for obtaining
professional services as are necessary to protect the public health, welfare or safety
without otherwise complying with this Section, if the City Manager or the Director- -e#
Emergency Services Manager finds that complying with this Section would cause
unnecessary expense or delay. The City Manager or D;reGteF of ErnergenGy SeFViGes
shall report such findings at a regular meeting of the City Council no later than thirty
days after making the finding is made.
SECTION 4. Section 2.24.074 of the Santa Monica Municipal Code is hereby
added to read as follows:
Section 2.24.074 Informal professional services contract procedures.
(a) Under ten thousand dollars.
(1) Professional services contracts of ten thousand dollars or less are
exempted from competitive bid requirements and may be awarded by the City Manager
in accordance with procedures established by the City Manager which ensure that the
selection process is undertaken consistent with the criteria set forth in subsection (b) of
Section 2.24 073 The City Manager may delegate his or her authority to award under
this subsection to the Purchasinq Agent with respect to any particular contract or
contracts.
(2) In the event that the savings potential clearly does not justify awarding a
contract under this subsection (a) open market requests- for - proposals procedures shall
be followed.
iG7
(b) Open market requests- for - proposals.
(1) All professional services contracts of less than eighty thousand dollars in
amount shall be made in the open market as requests- for - proposals, without the
requirement of formal newspaper advertising.
(2) All open market requests- for - proposals shall be based upon the
solicitation of not less than three competitive proposals and shall be awarded to the best
qualified person or firm.
(3) The Purchasinq Agent shall solicit proposals from prospective vendors by
direct mail,or electronic mail, or bV telephone and also bV public notice on the bulletin
board in the Purchasing Department. The Purchasing Agent shall keep records of all
open market requests- for - proposals and the proposals submitted in competition
thereon, and such records shall also be open to public inspection.
(c) (1) Notwithstanding anV other provisions of this Section, prior to awarding a
contract, the Purchasing Agent shall provide a one and one half percent price
preference to all City businesses submitting a proposal upon which will be levied a State
of California sales tax. The Purchasing Agent shall administer the bidding preference
so that proposal amounts received from City businesses are reduced bV one and one
half percent to determine the rank order of the proposals in the selection process. If
after the one and one half percent preference is applied a City business has submitted
a proposal which is equal to or lower than all other proposals the City Manager shall
award the contract to the City business so long it is otherwise the best qualified person
or firm.
11
(2) For purposes of this provision a City business shall be a business
licensed by the City of Santa Monica to conduct business in the City and which shall
have an actual place of business within the City and not just a mailing address.
SECTION 5. Section 2.24.075 of the Santa Monica Municipal Code is hereby
added to read as follows:
2.24.075 Formal professional services contract procedures.
(a) All professional services contracts of more than eighty thousand dollars
shall be awarded to the best qualified person or firm after publication of requests -for-
proposals therefor. The publication shall be in a newspaper of general circulation in the
City of Santa Monica by two or more insertions the first of which shall be at least ten
days before the time for opening said proposals All requests- for - proposals issued
under this subsection (a) shall also be posted on the City's online vendor portal website.
At the time specified in the request- for - proposals such proposals shall be received and
declared publicly. The Purchasing Agent shall record all proposals received pursuant to
this Section and shall refer them to the City Manager for presentation to the City
Council which shall make the awards The City Council may reiect any and all
proposals presented and may re- advertise in its discretion.
(b) After rejecting proposals or if no proposals are received the City Council
may adopt a resolution by at least five affirmative votes declarinq and determining that,
in its opinion the professional services may be purchased under more favorable
circumstances in the open market The professional services may then be purchased in
the manner stated in Section 2.24.074(b) without further observance of the provisions of
this Section.
12
(c) Purchases of professional services may be made without advertising for
proposals if the purchase of such professional services shall be deemed by the City
Council to be of urgent necessity for the preservation of life, health or property and shall
be authorized by at least five affirmative votes.
(d) (1) Notwithstanding any other provisions of this Section prior to awarding a
contract the Purchasing Agent shall provide a one and one half percent price
preference to all City businesses submitting a proposal upon which will be levied a State
of California sales tax. The Purchasing Agent shall administer the bidding preference
so that proposal amounts received from City businesses are reduced by one and one
half percent to determine the rank order of the proposals in the selection process. If,
after the one and one half percent preference is applied a City business has submitted
a proposal which is equal to or lower than all other proposals the City Council shall
award the contract to the City business so long it is otherwise the best qualified person
or firm.
(2) For purposes of this provision a City business shall be a business
licensed by the City of Santa Monica to conduct business in the City and which shall
have an actual place of business within the City and not lust a mailing address.
SECTION 6. Section 2.24.080 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.080 Exceptions to competitive bidding.
The competitive bid procedure is not applicable in those instances where:
(a) Competition does not exist, such as membership in professional
organizations, meetings, conventions, travel, legal advertising, public utilities, and
13
proprietary items of original equipment manufacturers and /or their authorized exclusive
distributors;
(b) Competitive bid procedures have already been utilized, such as in
purchasing from Federal, State, County, City or special district government agencies, or
from cooperative purchasing agencies consisting of such agencies, and these materials
and services are supplied to the City at the same or better price, as was obtained
through competitive bid procedures of Federal, State, County, City or special district
government agencies, or cooperative purchasing agencies consisting of such agencies;
(c) Items for purchase are for resale to the public, such as but not limited to
the Civic Auditorium snack bar or cemetery services or- plat-mar k4g products;
(d) Competition does not exist because
only one vendor possesses the unique ability or capability to meet the particular
requirements of the solicitation such as a good or service that is copyrighted patented
or otherwise only available from one license holder;
(e) The work involved consists of maintenance or repair of public buildings,
public works, streets, drains, sewers, utilities, parks or playgrounds by City employees;
(f) Items to be purchased are circulating library materials, including books,
periodicals, films, and recordings.
Wj
SECTION 7. Section 2.24.090 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.090 Informal purchasing procedures.
(a) Convenience Purchase Orders.
(1) Individual purchases related to the City's maintenance requirements,
amounting to less than -five ten thousand dollars aggregate amount per purchase order
are exempted from competitive bid requirements;
(2) In the event that the savings potential clearly does not justify this
exemption, open market request- for - quotation procedures shall be followed.
(b) Open Market Orders.
(1) Except as provided in Sections 2.24.040, 2.24.071, 2.24.073, 2.24.074
2.24.075, 2.24.080 or 2.24.090, public works projects, all purchases of supplies,
materials, equipment or contractual services, and all sales of personal property of the
City which has been obsolete or unusable, or for any other reason is to be disposed of,
which are not more than one - hundred seventy -five thousand dollars in amount, shall be
made in the open market, without the requirement of formal newspaper advertising.
(2) All open market purchases, wherever posse ' °, shall be based upon the
solicitation of not less than three competitive bids and shall be awarded to the person
nrrsatr.Lemerr*a
(3) The Purchasing Agent shall solicit bids from prospective vendors by direct
mail or electronic mail request to prospective vendors, or by telephone, and also by
public notice on the bulletin board in the Purchasing Department. The Purchasing
15
Agent shall keep -a -- record records of all open market orders and the bids submitted in
competition thereon, and such records shall-also be open to public inspection.
(c) (1) Notwithstanding any other provisions of this Section, prior to awarding a
contract the Purchasing Agent shall provide a one and one half percent price preference
to all City businesses submitting open market order bids upon which will be levied a
State of California sales tax. The Purchasing Agent shall administer the bidding
preference so that the bid amounts received from City businesses are reduced by one
and one half percent — solely to determine the rank order of the bids in the selection
process. If after the one and one half percent preference is applied, a City business has
submitted a bid which is equal to or is lower than all other bids, the Purchasing Agent
shall award the contract to the City business so long as it is otherwise the — lowest
respenslble -and best bidder.
(2) For purposes of this provision, a City business shall be a business
licensed by the City of Santa Monica to conduct business in the City and which shall
have -a an actual place of business within the City other than a pe&t4ffiGe_qqd not lust a
mailing -box address.
SECTION 8. Section 2.24.100 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.100 Formal bidding procedures.
(a) Except as otherwise provided, all purchases of supplies, material,
equipment or contractual services, other than professional services, which shall be
governed by— Section Sections 2.24.073 2.24.074 and 2.24.075, and all sales of
personal property of the City which has become obsolete or unusable, or is to be
iR
disposed of for any other reason, of more than one - hundred seventy -five thousand
dollars, shall be made to the best bidder after publication of notices inviting bids
therefor. The publication shall be in a newspaper of general circulation in the City of
Santa Monica, by two or more insertions, ^f RGtiGG° inviting bids therefeFe the first of
which shall be at least ten days before the time for opening said bids. All notices
inviting bids issued under this subsection (a) shall also be posted on the City's online
vendor portal website. At the time specified in the notice inviting bids, such bids, shall
be opened and declared publicly. The Purchasing Agent shall tabulate all bids received
pursuant to this Section and shall refer them to the City Manager for presentation to the
City Council, which shall make the awards. The City Council may reject any and all bids
presented and may re- advertise in its discretion.
(b) After rejecting bids, or if no bids are received, the City Council may adopt
a resolution by at least five affirmative votes declare declaring and deteFmi;e
determining that, in its opinion, the supplies, materials, equipment or contractual
services may be purchased under more favorable circumstances in the open market_;
and after the adeption of a resolution to this e#eGt by at least five affirmative votes, i
may prGGeed to have such Such supplies, materials, equipment or contractual services
may then be purchased in the manner stated in Section 2.24.090(b) without further
observance of the provisions of this Section.
(c) Purchases of supplies, materials, equipment or contractual services may
be made without advertising for bids if the purchase of such supplies, materials,
equipment or contractual services shall be deemed by the City Council to be of urgent
necessity for the preservation of life, health or property and shall be authorized by at
17
least five affirmative votes, or it shall be determined by such vote of the Gity Council that
to advertise for bids would be to no avail and would cause 6IRneGessary expense
delay.
(d) (1) Notwithstanding any other provisions of this Section, prior to awarding a
contract the Purchasing Agent shall award a one and one half percent price preference
when determining the best bid to all City businesses submitting formal bids upon which
will be levied a State of California sales tax. The Purchasing Agent shall administer the
bidding preference so that bid amounts received from City businesses are reduced by
one and one half percent sole! to determine the rank order of the bids in the selection
process. If, after the one and one half percent preference is applied, a City business
has submitted a bid which is equal to or lower than all other bids, the Purchasing Agent
City Council shall award the contract to the City business so long as it is otherwise the
best bidder.
(2) For purposes of this provision a City business shall be a business
licensed by the City of Santa Monica to conduct business in the City and which shall
have -a an actual place of business within the City other than a Pest office and not iust a
mailing-box address.
SECTION 9. Section 2.24.105 of the Santa Monica Municipal Code is hereby
added to read as follows:
Section 2.24.105 Protest procedure.
(a) Any bidder or proposer submitting a bid or proposal under Sections
2.24.073 2.24.074 2.24.075 or 2.24.100 or any bidder submitting a bid under
2 24 090 that is not for a public works project may file a written protest with the
in
Purchasing Agent no more than seven calendar days followinq the posting of award
recommendation on the City's online vendor portal website. The protest must include
the name address and telephone number of the protestor and /or the person
representing the protesting party. The written protest must set forth in detail, all
grounds for the protest including, without limitation all facts supporting documentation,
legal authorities and arguments in support of the grounds for the protest. All factual
contentions must be supported by evidence. Any matters not set forth in the written
protest shall be deemed waived. Any protest not conforming to the requirements of this
Section may be rejected as invalid.
(b) The Purchasinq Agent shall review the merits and timeliness of the protest
and issue a written decision to the protestant within ten calendar days of receipt of the
protest.
(c) Any protestant may appeal the decision of the Purchasing Agent to the
Finance Director by filing a letter of appeal within seven calendar days of the date of the
Purchasing Agent's decision The appeal must include the name address and
telephone number of the appellant and /or the person representing the appealing party.
The letter of appeal shall include the original protest and any additional supporting
information including without limitation all facts supporting documentation legal
authorities and arguments in support of the grounds for the appeal. All factual
contentions must be supported by evidence. Any matters not set forth in the letter of
appeal shall be deemed waived Any letter of appeal not conforming to the
requirements of this Section may be rejected as invalid.
19
(d) The Finance Director shall review the merits and timeliness of the letter of
appeal and issue a written decision to the appellant within ten calendar days of receipt
of the letter of appeal.
(e) The Finance Director shall have final authority to sustain or deny a protest.
The Finance Director's decision shall constitute the City's final determination on the
protest.
(f) Once a protest has been filed with the Purchasing Agent no contract shall
be awarded until the Purchasing Agent has issued his or her decision on the protest, or
if the Purchasing Agent's decision is appealed the Finance Director has issued his or
her final determination.
(g) For bids or proposals awarded under Sections 2.24.075 and 2.24.100, the
Director of Finance shall, at the time the bids and /or proposals are presented to the Cit
Council for award submit to the City Council a written report on the protest, including
the Purchasing Agent's decision or, if the Purchasing Agent's decision is appealed, the
Finance Director's final decision on the protest.
SECTION 10. Section 2.24.120 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.120 Emergency purchases.
In case an emergency shall arise which is so urgent as to preclude action by the
City Council and which requires the expenditure of funds for supplies, materials,
equipment, contractual services, professional services, public works and other City
projects, or whenever a resolution is adopted by the City Council, or the n'�,.eGter ef
Emergency Services Manager, declaring the existence of a local emergency, the City
20
Manager,--G�r the DiGtor of Emergency Services Manager, the Purchasing Agent or
their +�t„o;TZea representatives may then the D rGhasin gent are authorized to
secure in the open market at the best reasonable price, any such supplies, materials,
equipment, contractual services, professional services, or contracts for public works or
other City projects, even though the amount thereof shall exceed one - hundred seventy-
five thousand dollars. During any period of local emergency, the City Manager,-Of the
Diree#er -e# Emergency Services Manager, the Purchasing Agent or their representatives
are further authorized to negotiate or execute such contracts, agreements, applications
or other documents with such other Federal, State or local agencies or other groups and
organizations as are necessary to provide or to obtain emergency aid, assistance or
services to the City of Santa Monica and to contract for the immediate expenditure of
public funds to safeguard life, health or property, including when necessary to protect
public health, welfare and safety to expedite such contracts by shortening all required
notice periods or waiving competitive bidding procedures for, the purchase of supplies,
material, equipment, contractual services, professional services contracts, public works
and other City projects. In each such instance, the City Manager or the DireGter „f
€4nergeriGy Services shall submit within thirty days to the City Council in writing, a full
explanation of the circumstances of such emergency which shall become a part of a
regular meeting of the City Council and shall be open to public inspection.
21
SECTION 11. Section 2.24.150 of the Santa Monica Municipal Code is hereby
amended to read as follows:
2.24.150 Forwarding of purchase order.
The Purchasing Agent shall forward the original purchase order,,or
the City Contro4er-, to the vendor or contractor, retaining one copy for his or her
numerical purchase order file. —He The Purchasing Agent shall likewise forward one
copy of the purchase order and the reGeiving report to the City department or agency for
whose benefit the purchase is being made.
SECTION 12. Section 2.24.160 of the Santa Monica Municipal Code is hereby
amended to read as follows:
Section 2.24.160 Receipt of goods; request for payment.
Upon receipt by any City department or agency of supplies, materials and
equipment, the department - -head or agency shall be responsible for the making of a
careful check of the quality, condition and the quantity received as against his --its copy
of the purchase order and the packing lists. If all of the supplies, materials and
equipment referred to in a purchase order have been received, the department head or
agency shall fill out the reGeivi ^^ F^^^ * a payment request form, attaching thereto the
packing lists, if any, and return the same to the City Controller Accounts Payable for
payment.
If delivery represents only a partial delivery of supplies, materials and equipment,
the department -head or agency receiving same shall set forth on thepon
payment request form only the items actually received. Subsequent deliveries on the
WA
same purchase order shall be reported on a supplementary receiving per payment
request form showing the original purchase order number.
The Purchasing Agent shall inspect or supervise the inspection of all deliveries of
supplies, materials, equipment or contractual services to determine their conformance
with the specifications set forth or referred to in the purchase order or contract.
The Purchasing Agent shall have authority to require chemical and physical tests
of samples submitted with bids and samples of deliveries with are necessary in his or
her opinion to determine their quality and conformance with the specifications.
SECTION 13. Section 2.24.170 of the Santa Monica Municipal Code is hereby
amended to read as follows:
Section 2.24.170 Review of invoice.
The City Controller department or agency receiving a purchase, upon receipt of
vendor's invoice, shall compare the same with the copy of the purchase order and the
eaaim. -44e The department or agency shall check the invoice for correctness of unit
prices, discounts, transportation allowances, etc.,
SECTION 14. Any provision of the Santa Monica 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 15. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
23
remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 16. The Mayor shall sign and the City Clerk shall attest to the
passage of this Ordinance. The City Clerk shall cause the same to be published once
in the official newspaper within 15 days after its adoption. This Ordinance shall
become effective 30 days from its adoption.
APPROVED AS TO FORM:
24