Item 24 - Ordinance Amending City Manager’s Contracting Authority for Non/Public Works Contracts & Construction

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Amend City Manager Contracting Authority, Procurement Requirements for Non-Public Works and Public Works Contracts and Public Works Construction Rules and Regulations March 1, 2022 Page 4 2 4 6 4 If the City Manager had previously had the authority to sign contracts up to $250,000, staff identified 102 contracts, totaling $11.8 million (an average of $115,700 each), that could have been signed by the City Manager in FY 2020-21. The FY 2021-22 citywide budget is $758 million, with approximately $300 million subject to contracts for purchase of services, construction, and commodities. Formal and Informal Bid Threshold The City has a formal process to advertise for and collect bids and proposals for purchases of goods and services over $25,000, and public projects over $500. To ensure the City acquires goods and services at the best price, staff documents at least three informal quotes gathered via phone or email for purchases in excess of $5,000 and up to $25,000, unless unique circumstances dictate the goods or services are only available from less than three vendors. Staff recommends increasing the threshold requiring formal procurement procedures for all other purchases (non-public works contracts) to $50,000. It is time-consuming and costly for vendors to submit bids and proposals via a formal process. Increasing the threshold would enable more local small vendors to compete for the City’s business. The City does not have an informal procurement process for public works construction projects. Adopting the proposed informal bid procedure will streamline the process to execute public works contracts and agreements involving expenditures up to $250,000, thereby expediting delivery of maintenance, repairs and services to public assets such as streets, sewer, water facilities, parks, etc. Local Preference Most cities have a very limited local preference program. To support a significant preference or a preference for large contracts, a vendor would need to demonstrate a disadvantage by operating in the jurisdiction. At this time, staff does not recommend changes to the City’s current local preference program, as it is very competitive with other comparable cities. Furthermore, in November 2018 the State increased the local preference from five percent to seven percent, matching the City’s current preference amount awarded to Santa Ana based business. The recommendation to increase the threshold for formal bids will help small local vendors compete for City business. In addition, staff has developed an outreach program on the City’s website to educate local vendors about the City’s competitive procurement process and opportunities to participate.