HomeMy WebLinkAbout1997-07-15; City Council; 14265; AMENDMENTS TO THE PURCHASING SECTIONS OF THE CARLSBAD MUNICIPIAL CODEcr) * d
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i CITeOF CARLSBAD - AGENm BILL 87
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CITY k DEPT. PUR
CITY P PURCHASING SECTIONS OF THE MTG. /)H15c47
DEPT. TITLE: AMENDMENTS TO THE
RECOMMENDED ACTION:
CARLSBAD MUNICIPAL CODE
Introduce Ordinance No. Ai.$- 413 , amending Carlsbad Municipal Code Chapter ;
revke the open market and formal bidding limits and the limits for execution of change
by the City Manager.
ITEM EXPLANATION:
Phase I of the Financial Information System project included a review of the purchasir
accounts payable procedures by a team of City employees. Over a period of several m
the Business Process Review (BPR) team developed new procedures for purchasing s
paying for goods and services. The recommended procedures encompass the function;
the new software system and some shifts in department responsibility. The changes tt-
proposed are the result of the team's study and involve six sections of the Purcl
Ordinance.
The following is an explanation of the present procedures and the proposed changes:
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1, BIDDING
The first proposed amendment involves the bidding process. Under the p'
Ordinance, bidding is not required when the amount of an item purchased is les!
one thousand dollars. When the BPR team reviewed the Purchase Orders issl
1995-96, the number issued for less than $5,000 was 1,878. This represented 8
the total of 2,117 Purchase Orders issued. The dollar amount ($7,388,249) wa:
10% of the total $14,501,065 expended. Based on the large number of Purchase (
issued and the relatively small dollar amount, the recommended action will not rl
bids when the estimated amount involved is less than five thousand dollars.
2. FORMAL BIDDING PROCEDURE
The present Ordinance requires Formal Bidding procedures to be used whe
purchase of supplies, services and equipment is of an estimated value greater
twenty-five thousand dollars. The recommended amendment will adjust the
amount in $5,000 increments in response to changes in the Consumer Price I
appropriately indexed to 1997 dollars.
3. OPEN MARKET PROCEDURE
The Open Market Procedure section of the Ordinance requires purchases to be I
upon at least three bids, if possible, when the estimated value is less than twen,
thousand dollars (the present Formal Bidding limit). The proposed changes in thc
for formal bids will necessitate a change in the limit for the Open Market Procr
When the estimated value of the supplies, services and equipment is less than the
amount established for Formal Bidding, the Open Market Procedure will be utilized.
4. AWARD AND EXECUTION OF CONTRACTS
The present Ordinance requires city council to award all contracts for supplies, sei
and equipment in an estimated amount of twenty-five thousand dollars or I
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Contracts for less than twenty-five thousand dollars are awarded by the city m;
The proposed amendment will link the requirement for city council approval to thc
Formal Bidding will be awarded by the city manager.
In an effort to avoid duplicate approvals required for purchase of capital outlay itel
BPR team recommended that the city manager award contracts for capital outla
that have already been approved by the City Council during the budgetary proce:
amount up to a limit of $100,000.
amount established for Formal Bidding. Awards for less than the dollar amo
5. EXECUTION OF CHANGE ORDERS AND AMENDMENTS
Presently, the Award and Execution of Change Orders and Amendments Sectiol
Ordinance is divided into two categories -- 1) one dealing with contrac
agreements with a value from twenty-five thousand dollars to seventy-five th
dollars and 2) the other for contracts and agreements over seventy-five th
dollars. In an effort to simplify and streamline the Change Order process, the pr
Amendment will authorize the city manager to execute the following:
1) Change Orders to public works contracts that previously have been awarder city council in an amount equal to the contingency set at the time of the bid awa
contingency amount is usually ten (IO) percent of the Engineer's estimate
construction costs.
2) Change Orders to procurement contracts or amendments to agreemer
previously have been awarded by the city council in a cumulative amount up to
five percent of the original contract or agreement up to a limit of $100,000.
At the time the city council awards a bid for a large complex public works proje
may by resolution authorize the city manager to approve change orders in exces
cumulative limit to an amount determined appropriate by the council.
6. EXEMPTIONS FROM CENTRALIZED PURCHASING
The proposed change in the bidding requirements will make this section
ordinance unnecessary. Since bids will not be required when the estimated
involved is less than five thousand dollars, periodic reports will no longer be requi
The above recommended amendments to the Purchasing Ordinance will insure the i
of the procurement process. With these proposed changes in place, the purchasi
contracting transactions will continue to be conducted according to professional stanc
practice.
FISCAL IMPACT:
The changes in the Purchasing Ordinance will allow the departments some flexibilit
purchasing process, which may result into a savings in time, effort or money.
EXHIBITS:
1. Summary of Chapter 3.28 showing amendments
2. Ordinance No. /va T Lj13
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CHAPTER 3.28
PURCHASING
Exhibit 1.
3.28.090 Bidding
Purchases of supplies, services and equipment shall be by bid procedures
pursuant to this chapter. Bidding may be dispensed with:
(2) When the amount of an item purchased is less than 8~ce
dollars;
3.28.120 Formal bidding procedure.
Except as otherwise provided in this chapter, purchases of supplies,
services and equipment of an estimated value greater than twenty-five thousand
dollars shall be by written contract with the lowest responsible bidder who
submits a responsive bid pwsuaH& !!E -.
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3.28.130 Open Market Procedure.
(a) Notwithstanding Section 3.28.120, the purchasing officer may
purchase supplies, services and equipment in the open market pursuant to the
procedures established in this section. The open market procedure may be
utilized when the estimated value of the supplies, services and equipment to be
purchased is less than -xLckW
when no bids are received pursuant to bid
procedures established by this chapter or when all bids received substantially
exceed the city's estimated cost for the purchase. Further, the city council may
designate types or classes of supplies, services and equipment costing more
which may be purchased through the use of open market procedures
whenever the city council finds that use of open market procedures is
economically advantageous to the city.
3.28.170 Award and Execution of contracts.
(a) Except In emergency situations pursuant to subsection (1) of Section
3.28.090 all contracts for supplies, services and equipment in an-
or
more, shall be awarded by the city council. Contracts for supplies, services and
equipment in an estimated amount of less than hewty4w th-
shall be executed by the city manager.
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All contracts for public projects of more than h
shall be awarded by the City
Council.
3.28.172 Awd-and Execution of change orders and amendments..
(b) The city manager shall have the authority to execute change orders
or amendments within the authority granted by Section 3.28.170 provided the
amount as revised is within the limits of that authority.
(c) Provided #ha4 the funding for an agreement or a contract has been
previously approved and the expenditure of such funds authorized by the city
council, the city manager shall have authority to award and execute change
orders or amendments for any such contract or agreement as follows:
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council may by resolution authorize the city manager to approve change orders
or amendments in excess of the cumulative limit to an amount determined
appropriate for such project by the council.
(d) All other change orders shall be approved by the city council.
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E:
ORDINANCE NO. J NS-413 L
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, AMENDING TITLE 3,
CHAPTER 3.28 OF THE CARLSBAD MUNICIPAL
CODE BY THE AMENDMENT OF SECTIONS 3.28.09,
3.28.120, 3.28.130, 3.28.470, 3.28.172 AND 3.28.180 TO REVISE THE PURCHASING PROCEDURES.
The City Council of the City of Carlsbad, California, does ordain as fo
Section 1: That Title 3, Chapter 3.28 of the Carlsbad Municipal
amended by the amendment of Sections 3.28.090, 3.28.120, 3.28.130, :
3.28.172 and 3.28.1 80 to read as follows:
3.28.090 Bidding.
(2) When the amount of an item purchased is less than five
dollars.
3.28.120 Formal Bidding Procedure.
Except as otherwise provided in this chapter, purchases of
services and equipment of an estimated value greater than twenty-five
dollars shall be by written contract with the lowest responsible bidder who
responsive bid. The twenty-five thousand dollar bid limit shall be reviewec
and adjusted in response to the San Diego-All Urban Consumers Consu
Index. The purchasing officer shall calculate the effect of the cumulative 1
this Index to twenty-five thousand dollars in 1997 dollars. Adjustments to tt-
will be made in five thousand dollar increments whenever the calcula
exceeds a previously set bid limit by more than two thousand five hundrc
The formal bidding procedures are pursuant to the following:
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3.28.130 ODen Market Procedure.
(a) Notwithstanding Section 3.28.120, the purchasing offic
purchase supplies, services and equipment in the open market pursuan
procedures established in this section. The open market procedure may be
when the estimated value of the supplies, services and equipment to be p~
is less than the dollar amount established for formal bidding, when no
received pursuant to bid procedures established by this chapter or when
received substantially exceed the city's estimated cost for the purchase. Fur
city council may designate types or classes of supplies, services and ec
costing more than the dollar amount established for formal bidding which
purchased through the use of open market procedures whenever the ci!
finds that use of open market procedures is economically advantageous to t
3.28.170 Award and Execution of Contracts.
(a) Except in emergency situations pursuant to subsectic
Section 3.28.090, all contracts for supplies services and equipment in ar
established for formal bidding or more shall be awarded by the city
Contracts for supplies, services and equipment in an estimated amount of I
the amount established for formal bidding shall be executed by the city man
(c) The city manager may award contracts for capital outlay it
I have been approved by the city council during the budgeting process in an
i up to a limit of $100,000.
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(d) The city manager shall have authority to act for the I
aspects of public projects less than the dollar amount established for form;
and cause them to be performed by the employees for the city by force ac
negotiated contract, or by purchase order. All contracts for public project!
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than the dollar amount established for formal bidding shall be awarded by
council.
3.28.172 Execution of Change Orders and Amendments.
(a) No change in an agreement or a contract shall be madc
the issuance of a written change order or amendment and no payment for i
change shall be made unless a written change order or amendment has f
approved and executed in accordance with this section designating in adv
work to be done and the amount of additional compensation to be paid.
(b) The city manager shall have the authority to execute
orders or amendments within authority granted by Section 3.28.170, pro!
amount as revised is within the limits of that authority.
(c) Provided the funding for an agreement or a contract I
previously approved and the expenditure of such funds authorized by
council, the city manager shall have the authority to execute change (
amendments for any such contract or agreement as follows:
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(1) Change orders to public works contracts in ar
equal to the contingency set at the time of the bid award.
(2) Change orders or amendments to contracts or ag
in an amount not to exceed twenty-five percent of the original price up to
one hundred thousand dollars. After reviewing a large complex projeci
council may by resolution authorize the city manager to approve change
amendments in excess of the cumulative limit to an amount determined a1
for such project by the council.
(d) All other change orders shall be approved by the city cou
1 EFFECTIVE DATE: The Ordinance shall be effective thirty days after its
and the city clerk shall certify to the adoption of this Ordnance and cau:
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published at least once in a newspaper of general circulation in the city with
days after its adoption.
INTRODUCED AND FIRST READ at a Regular Meeting of the Carls
Council on the 15th day of July , 1997, and thereafter
PASSED AND ADOPTED at a regular meeting of said City Council he1
day of , 1997, by the following vote, to wit:
AYES:
NOES
ABSENT:
APPROVED AS TO FORM AND LEGALITY
Ronald R. Ball, City Attorney Claude A. Lewis, Mayor
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Attest:
Aletha L. Rautenkranz, City Clerk
(SEAL)
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