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HomeMy WebLinkAbout2016-08-23; City Council; ; Adopt Ordinance No. CS-307 amending Municipal Code Title 3 Chapter 3.28 to authorize job order contracts, clarify formal bidding, reduce notice period for bids and clarify delegation of authority to execute change ordersCA Review_'---'-_ CITY COUNCIL Meeting Date To: From: Staff Contact: Subject Report August 23, 2016 Mayor and City Council V Kevin Crawford, City Manage'# Heather Stroud, 760-434-2946 Craddock Stropes, 760-602-2726 Adopt Ordinance No. CS-307 amending Carlsbad Municipal Code Title 3, Chapter 3.28 (Purchasing) to authorize job order contracts, clarify the dollar threshold where formal bidding is required, reduce the notice period inviting formal bids for construction projects to 15 days, and clarify the city manager may delegate authority to execute change orders Recommended Action Adopt Ordinance No. CS-307 amending Carlsbad Municipal Code Title 3, Chapter 3.28 (Purchasing), to add Section 3.28.087 (Job order contracts), amend Sections 3.28.050 (Procurement of Goods), and 3.28.060 (Procurement of professional services and services) to clarify the dollar threshold where formal bidding is required, amend Section 3.28.080 (Construction projects) to reduce the notice period inviting formal bids to 15 days, and amend Section 3.28.090 (Execution of change orders and amendments) to clarify the city manager may delegate authority to execute change orders. Executive Summary City Council introduced and first read Ordinance No. CS-307 on July 26, 2016. The second reading allows City Council to adopt the ordinance, which will become effective 30 days after adoption. The proposed amendments to the purchasing provisions of the Carlsbad Municipal Code are intended to increase the flexibility and efficiency of the city's procurement practices. Discussion Four changes are proposed to Carlsbad Municipal Code Title 3, Chapter 3.28 (Purchasing): (1) The addition of Section 3.28.087 to allow the city to enter into job order contracts. Job order contracting is a procurement method designed to streamline the process of awarding small, repetitive construction contracts. Job order contracts may be used for minor or recurring tasks, such as repair and renovations involving minimum design requirements. Job order contracts are competitively bid based on a fixed unit price with indefinite quantity, so that the contractor who is awarded the contract is available on an on-call basis as projects arise. City staff anticipates using job order contracts for repair work to city facilities such as heating, ventilation, and air conditioning systems, generators, and traffic signals and street lights. Section 404 of the Carlsbad City Charter provides City Council with authority to establish procedures and regulations for contracts for construction of public improvements that differ Item #12 August 23, 2016 Page 1 of 11 from those in the California Public Contract Code, which does not authorize cities to use job order contracts. Other charter cities using job order contracting include San Diego and Vista. The proposed amendment would limit each job order contract to a dollar amount not to exceed $1 million total over a maximum five-year term. The city manager or designee would be authorized to issue task orders under a job order contract up to the formal bid threshold in the Public Contract Code, which is currently set at $175,000. (2) Amendments to Sections 3.28.050 (Procurement of goods) and 3.28.060 (Procurement of professional services and services) to clarify the dollar threshold where formal bidding is required. The proposed amendments would clarify that the $30,000 threshold for formal bidding for goods, services, and professional services is per agreement year, not the total contract amount. These amendments would ensure that the Carlsbad Municipal Code is consistent with past practice of requiring formal bidding only when the contract amount exceeds $30,000 per agreement year. (3) An amendment to Section 3.28.080 (Construction projects) to reduce the notice period inviting formal bids from 30 days to 15 days. California Public Contract Code section 22037 was amended in 2010 to require only 15-day notice of advertisement of formal bids. The proposed amendment would be consistent with state law and result in streamlined contract award timeframes. (4) An amendment to Section 3.28.090 (Execution of change orders and amendments) to clarify that the City Manager may delegate his or her authority to execute change orders. The proposed amendment is desirable because it would result in a streamlined change order process. Fiscal Analysis There is no direct fiscal impact. Next Steps Public Works staff will develop administrative procurement procedures consistent with the proposed amendments. Environmental Evaluation (CEQA) Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. Climate Action Plan Consistency The Climate Action Plan is not applicable to this action. Public Notification The city clerk will publish the ordinance or a summary of the ordinance within 15 days, if adopted. Exhibits Item #12 August 23, 2016 Page 2 of 11 1. Ordinance No. CS-307 of the City Council of the City of Carlsbad, California, to amend Title 3, Chapter 3.28 of the Carlsbad Municipal Code to: Add Section 3.28.087 (Job Order Contracts); Amend Sections 3.28.050 (Procurement of Goods) and 3.28.060 (Procurement of Professional Services and Services) to Clarify the Dollar Threshold Where Formal Bidding is Required; Amend Section 3.28.080 (Construction Projects) to Reduce the Notice Period Inviting Formal Bids to 15 Days; and Amend Section 3.28.090 (Execution of Change Orders and Amendments) to Clarify the City Manager May Delegate Authority to Execute Change Orders. 2. Redline/strikeout version of Ordinance. Item #12 August 23, 2016 Page 3 of 11 2 3 4 5 6 7 8 9 10 11 ORDINANCE NO. CS-307 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING CARSLBAD MUNICIPAL CODE TITLE 3, CHAPTER 3.28 (PURCHASING) TO: ADD SECTION 3.28.087 (JOB ORDER CONTRACTS); AMEND SECTIONS 3.28.050 (PROCUREMENT OF GOODS) AND 3.28.060 (PROCUREMENT OF PROFESSIONAL SERVICES AND SERVICES) TO CLARIFY THE DOLLAR THRESHOLD WHERE FORMAL BIDDING IS REQUIRED; AMEND SECTION 3.28.080 (CONSTRUCTION PROJECTS) TO REDUCE THE NOTICE PERIOD INVITING FORMAL BIDS TO 15 DAYS; AND AMEND SECTION 3.28.090 (EXECUTION OF CHANGE ORDERS AND AMENDMENTS) TO CLARIFY THE CITY MANAGER MAY DELEGATE AUTHORITY TO EXECUTE CHANGE ORDERS 12 WHEREAS, the City of Carlsbad, as a charter city, has plenary authority to 13 legislate matters of local concern notwithstanding general laws to the contrary; and 14 WHEREAS, Carlsbad City Charter section 404 provides City Council with 15 authority to establish procedures and regulations for contracts including contracts for 16 construction of public improvements; and 17 WHEREAS, job order contracts are a procurement method designed to 18 streamline the process of awarding small, repetitive construction contracts for minor or 19 recurring tasks, such as repair or renovations involving minimum design requirements, that 20 the California Public Contract Code does not authorize cities to use; and 21 WHEREAS, clarifications to the dollar thresholds where formal bidding is 22 required for procurement of goods, professional services, and services, are desirable; and 23 WHEREAS, reducing the notice period for invitation of formal bids from 30 24 days to 15 days is desirable to maintain consistency with Public Contract Code section 22037 25 and to streamline construction contract award timeframes; and 26 WHEREAS, clarifying that the City Manager may delegate his or her authority 27 to execute change orders is desirable; and 28 WHEREAS, the City Council of the City of Carlsbad has determined that it is in Item #12 August 23, 2016 Page 4 of 11 1 the best interests of the City of Carlsbad to adopt an alternative procurement method 2 allowing job order contracts, to clarify that the dollar threshold where formal bidding is 3 required for procurement of goods, professional services, and services is $30,000 per 4 agreement year, to reduce the notice period for invitation of formal bids from 30 to 15 days, 5 and to clarify that the City Manager's designee may execute change orders. 6 NOW, THEREFORE, the City Council of the City of Carlsbad ordains as follows 7 that: 8 1. The above recitations are true and correct. 9 2. That Section 3.28.087 is added to the Carlsbad Municipal Code to read as follows: 10 3.28.087 Job order contracts. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 100 of the Charter of the City of Carlsbad provides that the city council shall have full power and authority to adopt laws with respect to municipal affairs. Section 404 provides that the city council shall have the power to establish procedures and regulations for contracts for the construction of public improvements. As an alternative to the bidding process set forth in this chapter and the California Public Contract Code, and when recommended by the city manager in writing, there is hereby established a job order procurement and contracting approach. A. Purpose and Intent. The purpose of this section is to provide definitions and guidelines for the award, use, and evaluation of job order contracts. B. Definitions. For the purposes of this section, the following definitions apply: "Job order contract" means a construction contract for minor or recurring construction tasks, including repair, with a firm, fixed price, and indefinite quantity awarded on a unit price basis for all necessary labor, materials, and equipment. "Task order" means an authorization to perform construction work under a job order contract. C. Job Order Procurement. 1. Except as specifically set forth in this section, job order contracts are subject to Section 3.28.080. 2. Job order contracts shall have a term no longer than five years, including all modifications. 3. The advertisement for bids and specifications shall contain a maximum dollar amount of the job order contract not to exceed $1,000,000. Any cumulative change orders to a job order contract shall not result in a contract exceeding $1,000,000. 4. The advertisement for bids and specifications shall include unit prices and detailed technical specifications for each construction task to be performed under the job order contract. Item #12 August 23, 2016 Page 5 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. Contractors submitting bids on a job order contract shall state in their bids an adjustment on a percentage basis either increasing or decreasing the unit prices for all construction tasks set forth in the bid documents. D. Issuance of Task Orders. 1. Each task order shall include a detailed scope of work and time certain for completion of work. The task order price shall be no more than the sum of the applicable unit prices with the bid adjustment factor. 2. The city manager or designee shall have authority to issue task orders less than the dollar amount specified in Section 3.28.080(8). 3. That Title 3, Chapter 3.28, Section 3.28.050(C)(1) is amended to read as follows: Formal bidding procedures shall be utilized when the anticipated cost of the goods is greater than $30,000.00 per agreement year. The bid limit shall be reviewed annually and adjusted in response to the San Diego-All Urban Consumers Consumer Price Index. The purchasing officer shall calculate the effect of the cumulative change in the index to $30,000.00 beginning in fiscal year 2009. Adjustment to the bid limit will be made in $5,000.00 increments whenever the calculated value exceeds a previously set bid limit by more than $2,500.00. The bid limit adjustment will be made effective at the beginning of a fiscal year by memorandum from the purchasing officer. 4. That Title 3, Chapter 3.28, Section 3.28.050(D)(3) is amended to read as follows: The city manager shall be the awarding authority for procurement of goods for which the cost to the city is $100,000.00 per agreement year or less. 5. That Title 3, Chapter 3.28, Section 3.28.050(D)(4) is amended to read as follows: The city council shall be the awarding authority for procurement of goods for which the cost to the city is more than $100,000.00 per agreement year and have not been previously approved as capital outlay items in the budget process. 6. That Title 3, Chapter 3.28, Section 3.28.060{A)(2) is amended to read as follows: Procurements of professional services where the total cost of services are $30,000.00 or less per agreement year shall be made using simplified and cost effective operational procedures and forms approved by the city manager. If the cost of needed professional services is expected to exceed $30,000.00 per agreement year, at least three proposals should be solicited for the professional service needed whenever possible. The purchasing officer may waive the requirements for solicitation of multiple proposals if only one individual or firm can reasonably provide the professional services, and it is in the best interest of the city to waive the requirement. Ill Item #12 August 23, 2016 Page 6 of 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 7. That Title 3, Chapter 3.28, Section 3.28.060(D)(1) is amended to read as follows: Formal bidding procedures shall be utilized when the anticipated cost of the services is greater than $30,000.00 per agreement year. The bid limit shall be reviewed annually and adjusted in response to the San Diego-All Urban Consumers Consumer Price Index. The purchasing officer shall calculate the effect of the cumulative change in the index to $30,000.00 beginning in fiscal year 2009. Adjustment to the bid limit will be made in $5,000 increments whenever the calculated value exceeds a previously set bid limit by more than $2,500.00. The bid limit adjustment will be made effective at the beginning of a fiscal year by memorandum from the purchasing officer. 8. That Title 3, Chapter 3.28, Section 3.28.080(G)(1) is amended to read as follows: The purchasing officer, or delegate, shall mail notice inviting formal bids for construction projects to construction trade journals at least 15 calendar days before the bid opening date. The notice inviting formal bids shall be published at least 14 calendar days before the bid opening date in a newspaper of general circulation in the city. In addition to the newspaper, the notice inviting formal bids may be advertised in any manner which will permit the information to be widely disseminated. 9. That Title 3, Chapter 3.28, Section 3.28.090(8) is amended to read as follows: The city council may by resolution authorize the city manager or designee to approve change orders on a project to an amount it determines appropriate for a large, complex project. 18 EFFECTIVE DATE: This ordinance shall be effective thirty days after its 19 adoption; and the city clerk shall certify the adoption of this ordinance and cause the full text 20 of the ordinance or a summary of the ordinance prepared by the City Attorney to be 21 published at least once in a newspaper of general circulation in the City of Carlsbad within 22 fifteen days after its adoption. 23 INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City 24 Council on the 26th day of July, 2016, and thereafter 2s I I I 26 I I I 27 I I I 28 I I I Item #12 August 23, 2016 Page 7 of 11 PASSED AND ADOPTED at a Regular Meeting of the City Council of the City of 2 Carlsbad, California, on the 23rd day of August , 2016, by the following vote, to wit: 3 AYES: Hall, Wood, Schumacher, Blackburn, Packard. 4 NOES: None. 5 ABSENT: None. 6 7 8 9 APPROVED AS TO FORM AND LEGALITY: 10 11 12 CELIA BREWER, City Attorney 13 14 15 ATIEST: 16 17 18 19 20 21 22 23 24 25 26 27 28 Item #12 August 23, 2016 Page 8 of 11 Exhibit2 Chapter 3.28 PURCHASING 3.28.050 Procurement of goods. A. -B. [No change] C. Formal Bidding for Goods. 1. Formal bidding procedures shall be utilized when the anticipated cost of the goods is greater than $30,000.00 per agreement year. The bid limit shall be reviewed annually and adjusted in response to the San Diego-All Urban Consumers Consumer Price Index. The purchasing officer shall calculate the effect of the cumulative change in the index to $30,000.00 beginning in fiscal year 2009. Adjustment to the bid limit will be made in $5,000.00 increments whenever the calculated value exceeds a previously set bid limit by more than $2,500.00. The bid limit adjustment will be made effective at the beginning of a fiscal year by memorandum from the purchasing officer. 2.-7. [No change] D. Additional Responsibilities and Authorities. 1.-2. [No change] 3. The city manager shall be the awarding authority for procurement of goods for which the cost to the city is $100,000.00 per agreement year or less. 4. The city council shall be the awarding authority for procurement of goods for which the cost to the city is more than $100,000.00 per agreement year and have not been previously approved as capital outlay items in the budget process. E. [No change] 3.28.060 Procurement of professional services and services. A. Professional Services Procurement. 1. [No change] 2. Procurements of professional services where the total cost of services are $30,000.00 or less per agreement year shall be made using simplified and cost effective operational procedures and forms approved by the city manager. If the cost of needed professional services is expected to exceed $30,000.00..Q.fil agreement year, at least three proposals should be solicited for the professional service needed whenever possible. The purchasing officer may waive the requirements for solicitation of multiple proposals if only one individual or firm Item #12 August 23, 2016 Page 9 of 11 Exhibit2 can reasonably provide the professional services, and it is in the best interest of the city to waive the requirement. B. -C. [No change] D. Formal Bidding for Services. 1. Formal bidding procedures shall be utilized when the anticipated cost of the services is greater than $30,000.00 per agreement year. The bid limit shall be reviewed annually and adjusted in response to the San Diego-All Urban Consumers Consumer Price Index. The purchasing officer shall calculate the effect of the cumulative change in the index to $30,000.00 beginning in fiscal year 2009. Adjustment to the bid limit will be made in $5,000 increments whenever the calculated value exceeds a previously set bid limit by more than $2,500.00. The bid limit adjustment will be made effective at the beginning of a fiscal year by memorandum from the purchasing officer. 2.-5. [No change] E. [No change] 3.28.080 Construction projects. A.-F. [No change] G. The formal bidding procedures for construction projects shall include the following: 3.28.087 1. The purchasing officer, or delegate, shall mail notice inviting formal bids for construction projects to construction trade journals at least aG 15 calendar days before the bid opening date. The notice inviting formal bids shall be published at least 14 calendar days before the bid opening date in a newspaper of general circulation in the city. In addition to the newspaper, the notice inviting formal bids may be advertised in any manner which will permit the information to be widely disseminated. 2.-6. [No change] Job order contracts. Section 100 of the Charter of the City of Carlsbad provides that the city council shall have full power and authority to adopt laws with respect to municipal affairs. Section 404 provides that the city council shall have the power to establish procedures and regulations for contracts for the construction of public improvements. As an alternative to the bidding process set forth in this chapter and the California Public Contract Code, and when recommended by the city manager in writing, there is hereby established a job order procurement and contracting approach. Item #12 August 23, 2016 Page 10 of 11 Exhibit2 A. Purpose and Intent. The purpose of this section is to provide definitions and guidelines for the award, use, and evaluation of job order contracts. B. Definitions. For the purposes of this section, the following definitions apply: "Job order contract" means a construction contract for minor or recurring construction tasks, including repair, with a firm, fixed price, and indefinite quantity awarded on a unit price basis for all necessary labor, materials, and equipment. "Task order" means an authorization to perform construction work under a job order contract. C. Job Order Procurement. 1. Except as specifically set forth in this section, job order contracts are subject to Section 3.28.080. 2. Job order contracts shall have a term no longer than five years, including all modifications. 3. The advertisement for bids and specifications shall contain a maximum dollar amount of the job order contract not to exceed $1,000,000. Any cumulative change orders to a job order contract shall not result in a contract exceeding $1,000,000. 4. The advertisement for bids and specifications shall include unit prices and detailed technical specifications for each construction task to be performed under the job order contract. 5. Contractors submitting bids on a job order contract shall state in their bids an adjustment on a percentage basis either increasing or decreasing the unit prices for all construction tasks set forth in the bid documents. D. Issuance of Task Orders. 3.28.090 1. Each task order shall include a detailed scope of work and time certain for completion of work. The task order price shall be no more than the sum of the applicable unit prices with the bid adjustment factor. 2. The city manager or designee shall have authority to issue task orders less than the dollar amount specified in Section 3.28.080(B). Execution of change orders and amendments. A. [No change} B. The city council may by resolution authorize the city manager or designee to approve change orders on a project to an amount it determines appropriate for a large, complex project. Item #12 August 23, 2016 Page 11 of 11