HomeMy WebLinkAbout8.4 Consultant & Professional Svcs Exemption
STAFF REPORT CITY CLERK
File # 380-10
CITY COUNCIL
DATE:March 15, 2016
TO:
Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Discussion of Exemption of Consultant and Professional Services Contracts from
Competitive Bidding Under Purchasing Ordinance (Chapter 2.36, Contracts and
Purchasing)
Prepared by John D. Bakker, City Attorney
EXECUTIVE SUMMARY:
At the February 2, 2016, the City Council requested, in response to a comment from Vice Mayor
Gupta during Item 9, that Staff bring back an item for discussion related to the City Purchasing
Ordinance (Chapter 2.36 of the Dublin Municipal Code) exemption of “consultant and
professional services” from competitive bidding.
FINANCIAL IMPACT:
None.
RECOMMENDATION:
Staff recommends that the City Council receive the report and provide direction on whether
changes should be made to Chapter 2.36, Contracts and Purchasing, relative to the existing
exemption of contracts for consultant and professional services from competitive bidding.
Reviewed By
Assistant City Manager
DESCRIPTION:
The purchasing ordinance (Chapter 2.36 of the Municipal Code, Contracts and Purchasing,
Attachment 1) governs the City’s purchase of services and supplies. State law requires local
agencies to have such policies, but otherwise leaves specific requirements to each local
agency. (Gov. Code, § 54202.) By contrast, contracts for construction are highly regulated by
state law. In particular, the City must award construction contracts to “lowest responsible
bidder” after providing notice in accordance with law. (Pub. Contract Code, §§ 20162, 20164.)
Dublin’s purchasing ordinance distinguishes between certain types of contracts as follows:
ITEM NO. 8.4
Page 1 of 3
1. Contracts for the supply of goods
2. Contracts for the purchase of services:
a. General services (includes all services rendered by independent contracts, and
specifically includes such things as maintenance and repair of facilities, grounds
and equipment, software licensing, and temporary personnel services.) (DMC, §
2.36.020.E.)
b. Consultant or professional services (specifically defined not to be “general
services”).
“Consultant or professional services” means:
services rendered by architects, attorneys, engineers, doctors, financial consultants,
planning or environmental consultants, investment advisors, bank or trustee officers, and
other professional or specialized consultants.
(DMC, § 2.36.020.A.)
The City Manager, or his or her designee, is authorized to enter into “consultant or professional
services” contracts without City Council approval, so long as monies have been appropriated
and the contract is for less than $45,000. (DMC, § 2.36.050.) Contract awards in excess of
$4,999 must generally be based on at least three quotations. (DMC, § 2.36.080.) Contracts
below $5,000 do not require quotations, contracts above $5,000 but less than $10,000 require
either verbal or written quotations; and those at or above $10,000 require written quotations.
(DMC, §§ 2.36.070-2.36.080.) Contracts for “general services” must be purchased from the
vendor that submits the lowest total cost. (DMC, § 2.36.080.) There is no such standard for
consultant or professional services contracts.
Contracts at or above $45,000 are subject to “competitive bidding” and must be approved by the
City Council. (DMC, § 2.36.090.) The competitive bidding process requires that notices inviting
bids be posted and provided to prospective suppliers appearing on the bidder’s list. The bids
are to be opened in public. (DMC, § 2.36.090.F.) The City Council may either reject all bids or
award “to the lowest responsive, responsible bidder,” unless otherwise permitted under Chapter
2.36.
The purchasing ordinance exempts contracts for “consultant or professional services” from
these competitive bidding requirements, but it makes them subject to certain other
requirements. (DMC, § 2.36.100.A.) In particular, such contracts that exceed $44,999 are
subject to City Council approval. In addition, the City Manager is required to develop
procedures that assure that certain specified professional services are “engaged on the basis of
demonstrated competence and qualifications.” This provision implements Government Code
section 4526. Government Code section 4526 (Attachment 2) is designed to prohibit such
professional services from being awarded solely based on price, but instead requires such
awards to be based on demonstrated competence.
The exemption from competitive bidding set forth in section 2.36.100 is somewhat broader than
the carve-out in Government Code section 4526. The City’s definition of consultant and
professional services is broader, including additional professions (doctors and lawyers),
consultants in specialized fields (financial consultants, investment advisors, bank or trustee
officers, and planning and environmental consultants), and a general exemption for “other
professional or specialized consultants.”
Page 2 of 3
In any case, both exemptions appear to reflect the policy view that when acquiring such services
the City does not necessarily receive the best value when it pays the lowest price. (See e.g.
Cal. Att’y Gen. Op. No. 94-819 (February 9, 1995) ). Staff believes that the existing exemption is
important to ensure that the City can hire competent and quality consultants that deliver the best
value to the City.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Chapter 2.36 of the Municipal Code, Contracts and Purchasing
2. Government Code section 4526
Page 3 of 3
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
Chapter 2.36
CONTRACTS AND PURCHASING
Sections:
2.36.010 Adoption of a purchasing system.
2.36.020 Definitions.
2.36.030 City Council approval of contracts and purchases.
2.36.040 Purchasing Agent designated.
2.36.050 Purchasing Agent authority for contracts and purchasesÑLess
($45,000).
2.36.060 Purchasing awardÑFactors to be considered for responsiveness
2.36.070 Contracts and purchases of general services, supplies and eq
thousand dollars ($5,000).
2.36.080 Contracts and purchases of general services, supplies, and e
to five thousand dollars ($5,000) and less than forty-five thous
2.36.090 City Council authority for contracts and purchasesÑ Greater
thousand dollars ($45,000)ÑCompetitive bidding.
2.36.100 Exceptions to competitive bidding.
2.36.110 Splitting orders prohibited.
2.36.120 Purchase orders.
2.36.130 Availability of sufficient funds.
2.36.140 Inspection and review.
2.36.150 Surplus supplies and equipment.
2.36.160 Public projects.
2.36.010 Adoption of a purchasing system.
A purchasing system is hereby adopted in order to establish effi
services, supplies and equipment at the lowest possible cost com
required, to exercise financial control over purchases, and to c
function. (Ord. 12-12 ¤ 2 (part))
2.36.020 Definitions.
For the purposes of this chapter, the words set out in this sect
A. ÒConsultant or professional servicesÓ means the services r
doctors, financial consultants, planning or environmental consul
officers, and other professional or specialized consultants.
B. ÒContractÓ means any agreement to do or not do a certain t
ÒcontractÓ and ÒagreementÓ are synonymous. The term ÒcontractÓ i
order; a contract for services; an addendum or change order, whi
executed contract; a letter of agreement; and a memorandum of un
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 1 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
C. ÒForce accountÓ is a term used by the Uniform Construction
account which is used to account for work performed on public pr
but not limited to labor, equipment, materials, supplies, and su
D. ÒEmergencyÓ means a sudden, unexpected occurrence that pos
requiring immediate action to prevent or mitigate the loss or im
public services.
E. ÒGeneral servicesÓ means and includes any work performed o
contractor, with or without the furnishing of materials, includi
1. Maintenance or nonstructural repair of city buildings, str
engineering plans, specifications or design, including, but not
window panes, fire extinguisher maintenance, minor roof repairs,
services and pest control, etc.;
2. Repair, modification and maintenance of city equipment and
3. Cleaning, analysis, testing, moving, removal or disposal (
equipment;
4. Replanting, care or maintenance of public grounds, includi
shrubbery, flowers, and lawns;
5. Providing temporary personnel services;
6. Providing other miscellaneous services to facilitate city
7. Performing repair, demolition or other work required to ab
8. Licensing software services;
9. Leasing or rental of equipment (personal property) for use
10. Maintenance of equipment owned or leased by the city.
ÒGeneral servicesÓ does not include consultant or professional s
project.
F. ÒGoods of a technical natureÓ means hardware, software, or
that is substantially similar to the foregoing as determined by
G. ÒPublic projectÓ shall have the meaning given that term by
20161 and the Uniform Construction Cost Accounting Procedures (Ò
Construction Cost Account Act (ÒThe ActÓ) and referenced in Sect2.36.160
.
H. ÒSupplies and equipmentÓ means and includes tangible goods
materials, and furniture and furnishings purchased on behalf of
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 2 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
2.36.030 City Council approval of contracts and purchases.
City Council approval is required for all contracts and purchase
or code, or by another provision of federal or state law. (Ord.
2.36.040 Purchasing Agent designated.
The City Manager is designated as Purchasing Agent. The Purchasi
of the contracting or purchasing duties to any city staff member
authority to:
A. Contract for or procure consultant or professional service
required by the city, in accordance with purchasing procedures o
B. Negotiate and recommend execution of contracts for the pur
services, general services, supplies and equipment;
C. Act to procure for the city the necessary quality in consu
supplies and equipment at the lowest cost to the city;
D. Prepare and recommend to the City Council revisions and am
E. Establish and maintain such forms as are reasonably necess
F. Supervise the inspection of all consultant or professional
equipment purchased to ensure conformance with specifications;
G. Pursuant to Section 2.36.150, arrange the sale or disposal of all supplies and equipment whi
be used by the city, or which have become unsuitable for city us
H. Maintain a bidderÕs list and other records necessary for t
professional services, general services, and supplies and equipm
I. Join with other governmental agencies in joint purchasing
conform to the provisions of this chapter and state law. (Ord. 1
2.36.050 Purchasing Agent authority for contracts and purchasesÑLess tha
thousand dollars ($45,000).
A. With the exception of public projects as defined in Sectio2.36.020, the Purchasing Agent is authorized
to enter into a contract on behalf of the city and approve a pur
the City Council, so long as the contract or purchase satisfies
1. The total cost is less than forty-five thousand dollars ($
2. The monies have been appropriated; and
3. The contract or purchase is for consultant or professional
equipment.
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 3 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
B. In an emergency the Purchasing Agent may authorize the exp
the emergency reserve fund, notwithstanding the fact that such m
such purpose, to the extent that said emergency funds have not b
unavailable therefor. (Ord. 12-12 ¤ 2 (part))
2.36.060 Purchasing awardÑFactors to be considered for responsiveness an
The following factors shall be considered in determining the res
purchases and the responsibility of vendors and bidders in accor
A. The amount of the contract or the purchase price;
B. The ability, capacity and skill of the bidder or vendor to
required;
C. The ability of the bidder or vendor to perform the contrac
time specified, without delay or interference;
D. The reputation and experience of the bidder or vendor;
E. The previous experience of the city with the bidder or ven
F. The previous and existing compliance by the bidder or vend
G. The sufficiency of the bidderÕs or vendorÕs financial reso
provide the service;
H. The quality, availability, and adaptability of the supplie
required;
I. The ability of the bidder or vendor to provide future main
contract or purchase;
J. The number and scope of conditions attached to the contrac
K. The purchase of supplies, whenever feasible, containing th
recovered materials practicable. In all cases, these products mu
and be readily available at a competitive price. In addition, al
wherever feasible, be compatible with the use of other recycled
L. Compliance with any administrative policies referencing Òg
M. In the event that two (2) or more potential contracts or b
vendors for the same total amount or unit price, quality and ser
the local vendor, or the City Council may accept the lowest bid
the Purchasing Agent. (Ord. 12-12 ¤ 2 (part))
2.36.070 Contracts and purchases of general services, supplies and equip
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 4 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
five thousand dollars ($5,000).
For purchases of general services or supplies and equipment of l
informal quotations should be obtained, but are not required. Co
lowest price. Negotiated pricing is allowed and departments are
from city-based businesses. (Ord. 12-12 ¤ 2 (part))
2.36.080 Contracts and purchases of general services, supplies, and equi
than or equal to five thousand dollars ($5,000) and less than fo
($45,000).
A. Purchases of general services, supplies and equipment grea
($5,000) and less than forty-five thousand dollars ($45,000) sha
three (3) quotations. For purchases greater than or equal to fiv
thousand dollars ($10,000), the quotations may be verbal or writ
ten thousand dollars ($10,000) and less than forty-five thousand
writing, which writings may include facsimile and electronic mai
documentation shall be submitted to the Finance Department for a
Negotiated pricing is allowed and departments are strongly encou
businesses. The purchase of any general services, supplies and e
thousand dollars ($5,000) and less than forty-five thousand doll
factors stated in Section 2.36.060
and shall be made from the vendor that submits the lowest total
B. At the discretion of the Purchasing Agent, the competitive
2.36.090 may be used for any acquisition of general services, supplies a
value. (Ord. 12-12 ¤ 2 (part))
2.36.090 City Council authority for contracts and purchasesÑ Greater tha
five thousand dollars ($45,000)ÑCompetitive bidding.
City Council approval shall be required to authorize the contrac
professional services, general services or supplies and equipmen
five thousand dollars ($45,000).
City Council authorization for purchases of general services and
than or equal to forty-five thousand dollars ($45,000) shall com
forth in this section, except as provided in Section 2.36.100. Bids should be obtained from one (1) or more
vendors located within the city whenever possible.
A. Notices inviting bids shall include a general description
or sold, where bid blanks and specifications may be obtained, th
whether a bid deposit or bond and a faithful performance bond wi
B. Notices inviting bids shall be posted in at least three (3
designated by ordinance as the place for posting public notices,
the date of opening the bids.
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 5 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
C. The Purchasing Agent shall also solicit sealed bids from a
names are on the bidderÕs list and may advertise the notice invi
websites readily accessible to the public.
D. When deemed necessary by the Purchasing Agent or City Coun
submit a bid deposit or bond in an amount determined by the Purc
bidder (and his surety, if a bond is furnished) shall be liable
enter into a contract with the city or upon the bidderÕs failure
her bid.
E. When deemed necessary by the Purchasing Agent or City Coun
contract with the city may be required to furnish a faithful per
determined by the Purchasing Agent or City Council.
F. Bids shall be opened in public at the time and place state
received shall be open for public inspection during regular busi
(30) calendar days after the bid opening.
G. At its discretion, the City Council may reject all bids pr
H. Contracts shall be awarded by the City Council to the lowe
otherwise provided herein.
I. If two (2) or more bids received from responsible bidders
quality and service being equal, preference shall be given to th
the lowest bid made by negotiation with the tie bidders and the
opening. (Ord. 12-12 ¤ 2 (part))
2.36.100 Exceptions to competitive bidding.
A. Contracts or purchases involving the acquisition of consul
competitive bidding; however, the procurement of such services s
1. Contracts or purchases involving the acquisition of consul
equal to forty-five thousand dollars ($45,000) will require City
2. With respect to contracts for or procurement of profession
landscape architectural, engineering, environmental, land survey
firms, the Purchasing Agent shall establish administrative proce
engaged on the basis of demonstrated competence and qualificatio
performed and at fair and reasonable prices in compliance with G
successor.
3. The Purchasing Agent may utilize a request for quotation o
are matched with the needs of the city.
B. Any request for an exception under this subsection shall i
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 6 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
amount of the contract or purchase, and the reasons why competit
subject to City Council approval. The provisions of Section 2.36.090 subject to City Council approval shall
not apply to the following:
1. Where the cityÕs requirements can be met solely by a singl
2. Situations where no bids have been received following bid
provisions of this chapter;
3. When an emergency requires that an order be placed with th
4. When a contract or purchase involves goods of a technical
vendor to bid on a standard set of specifications, and the Purch
known products and a comparison of features which would most clo
cost;
5. For janitorial services for city buildings and facilities;
6. For maintenance and repair of buildings and facilities;
7. For maintenance and repair of public streets, including st
8. Public projects, pursuant to Section 2.36.160;
9. When another public agency has administered a competitive
agreement for the same or substantially similar consultant or pr
supplies or equipment;
10. When the City Council specifically waives the competitive
the purchase of vehicles by a four-fifths (4/5) vote. (Ord. 12-1
2.36.110 Splitting orders prohibited.
The purchasing dollar limits set forth in this chapter are deter
or separate into smaller orders the contract or purchase of gene
purpose of evading the competitive bidding provisions of this ch
2.36.120 Purchase orders.
Purchases greater than or equal to five thousand dollars ($5,000
prepared by the Purchasing Agent in accordance with adopted admi
(part))
2.36.130 Availability of sufficient funds.
No purchase shall be transacted until it has been ascertained th
the city for whose benefit such purchase is to be made, a suffic
unpaid obligations to defray the amount of such purchase. (Ord.
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 7 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
2.36.140 Inspection and review.
The Purchasing Agent shall require the inspection of supplies an
services performed, to determine their conformance with the spec
purchase order or contract. (Ord. 12-12 ¤ 2 (part))
2.36.150 Surplus supplies and equipment.
The Purchasing Agent shall establish administrative procedures f
and equipment which are no longer used or which have become obso
Agent shall have the authority to sell, trade, exchange, dispose
equipment. Such sales may be made by auction, negotiated sale, o
proposals that provide the maximum return to the city, as determ
The Purchasing Agent shall have the authority to recommend to th
equipment for donation, which donation shall be subject to City
appropriate findings, including the requisite public purpose for
At such times as determined by the Purchasing Agent, but at leas
submitted to the City Manager showing the disposition of surplus
contain itemized information on the disposition of any item that
capitalization threshold established by the City Manager or his
the city financial records. (Ord. 12-12 ¤ 2 (part))
2.36.160 Public projects.
Public projects as defined by the Uniform Public Construction Co
the California Public Contract Code) shall follow the purchasing
seq. of the Public Contract Code.
A. The purchase or contract for public projects less than for
performed by the employees of a public agency by force account,
order (Public Contract Code Section 22032).
B. The purchase or contract for public projects less than one
let to contract by informal procedures as set forth in Section 2
1. A list of contractors shall be developed and maintained in
22034 of the Public Contract Code and criteria promulgated from
Construction Cost Accounting Commission.
2. Where a public project is to be performed, a notice inviti
contractors for the category of work to be bid, as shown on the
section, and to all construction trade journals as specified by
Accounting Commission in accordance with Section 22036 of the Pu
contractors and/or construction trade journals may be notified;
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 8 of 9
Chapter 2.36 CONTRACTS AND PURCHASING2/22/16, 524 PM
a. If there is no list of qualified contractors maintained by
performed, the notice inviting bids shall be sent only to the co
California Uniform Construction Cost Accounting Commission.
b. If the product or service is proprietary in nature such th
contractor or contractors, the notice inviting informal bids may
contractors.
3. All mailing of notices to contractors and construction jou
not less than fourteen (14) calendar days before bids are due.
4. The notice inviting informal bids shall describe the proje
information about the project, and shall state the time and plac
5. The Purchasing Agent is authorized to award informal contr
C. The purchase or contract for public projects greater than
($100,000) shall be authorized by City Council and shall comply
forth in Section 2.36.090. (Ord. 12-12 ¤ 2 (part))
The Dublin Municipal Code is current through Ordinance 10-
15, passed October 20, 2015.
Disclaimer: The City Clerk's Office has the official version of
Dublin Municipal Code. Users should contact the City Clerk's
Office for ordinances passed subsequent to the ordinance cited
above.
http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0236.html#2.36Page 9 of 9
STATE OF CALIFORNIA
State of California
GOVERNMENT CODE
TITLE 1. GENERAL
DIVISION 5. PUBLIC WORK AND PUBLIC PURCHASES
Chapter 10. Contracts with Private Architects, Engineering, La
Surveying, and Construction Project Management Firms
§ 4526
4526. Notwithstanding any other provision of law, selection by a state
head for professional services of private architectural, landsca
engineering, environmental, land surveying, or construction proj
®rms shall be on the basis of demonstrated competence and on the
quali®cations necessary for the satisfactory performance of the
order to implement this method of selection, state agency heads
architectural, landscape architectural, professional engineering
surveying, and construction project management services shall ad
and local agency heads contracting for private architectural, la
professional engineering, environmental, land surveying, and con
management services may adopt by ordinance, procedures that assu
services are engaged on the basis of demonstrated competence and
the types of services to be performed and at fair and reasonable
agencies. Furthermore, these procedures shall assure maximum par
business ®rms, as de®ned by the Director of General Services pur
14837.
In addition, these procedures shall speci®cally prohibit practic
in unlawful activity including, but not limited to, rebates, kic
consideration, and shall speci®cally prohibit government agency
participating in the selection process when those employees have
a person or business entity seeking a contract under this sectio
those employees to the prohibition of Section 87100.
(Amended by Stats. 1991, Ch. 314, Sec. 2.)