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12/19/2001 - STAFF REPORTS (27)
DATE: December 19, 2001 TO: City Council FROM: Assistant City Manager - Special Projects & Director of Procurement & Contracting NEW PROCUREMENT& CONTRACTING ORDINANCE It is recommended that City Council take action to introduce for first reading a new Procurement & Contracting Ordinance and adopt the State Uniform Public Construction Cost Accounting Procedures via Resolution. SUMMARY: This action would be the first step toward adopting a new Procurement&Contracting Ordinance to replace the current outdated model. BACKGROUND: One of the benefits available to Palm Springs as a Charter City which is unavailable to general law cities, is the ability to set contracting regulations which differ from State of California Public Contract Code. For example, the City has successfully gained the ability not to require the payment of prevailing wage for contracts, which are funded from local non-grant sources. Palm Springs has a long track record of utilizing innovative methodology to bring new infrastructure on-line in a cost effective and timely manner. Examples are the development of a two-step bid process, utilizing consultants from the National Institute of Governmental Purchasing to build the two co-generation plants in the early 1980's. Other examples include saving over one million dollars by removing and bidding separately the Furniture, Fixture and Equipment requirement from the construction contract for the original construction of the Convention Center, resulting in over $1.3 million dollars in documented savings and the use of a Construction Management model utilizing multiple independent trade contracts, the more sensitive of which were developed utilizing a pre-qualification process to build the new terminal building at Palm Springs International Airport. A current project that is an ideal candidate for once again utilizing innovative methodology is the downtown parking structure. That methodology, which is not new to the private sector, but is not available to general law cities in California, is called "design/build." Mr. Smoot reviewed the advantages of utilizing this methodology at the recent Study Session. The City's current Procurement Ordinance does not prohibit utilization of design/build nor does it authorize it. The term "design-build" did not exist when the current Ordinance was adopted in the 1970's. However, the State of California requires charter cities to pass legislation exempting themselves from the requirements of the State Public Contract Code pertaining to design build in order to proceed. Staff has been working for an extended period of time to develop a comprehensive new Procurement Ordinance that addresses not only the design build issues but other issues of at least equal importance. The task of writing a comprehensive procurement and contracting policy recommendation for 1?d December 19, 2001 Page Two presentation to City Council for review and approval is very demanding and there are many stakeholders. These stakeholders include the Assistant City Manager Special Projects-Interim Director of Aviation, Director of Public Works, Director of Parks and Facilities and the Director of Redevelopment as staff members along with the contractual relationships with the Director of Downtown Development and the Director of the Convention Center, all of whom have in common the need to have work done in a timely manner, often within a clearly defined window of opportunity. Effectively addressing their maintenance issues requires the approved lawful ability to implement timely or immediate response to protect public safety and to protect the City from perceived risk and litigation. In the current situation, these stakeholders are faced with a "lesser of evils" decision tree in which going outside the current overly restrictive rules is the only way to have a project proceed in a timely manner. One of the goals of the Ordinance is to provide for implementation of adequate controls within an environment which creates City Council approved and "monitorable" flexibility so department heads may respond to infrastructure related issues in a timely and cost-effective manner without having to stretch the rules. There is a multitude of other stakeholder concerns involving supply, material, equipment maintenance and service contracting of many descriptions. The Director of Procurement and Contracting has worked with many other agencies on national and state level regarding development of successful ordinances. One recurring piece of advice always heard is that development and implementation of an effective ordinance always includes meeting with all major stakeholders and reviewing proposed policies prior to making a recommendation to the governing body (i.e., City Council) to make sure all major issues are addressed. The other oft stated advice is to profile the ordinance to the complexity of the organization. There are indeed few models (Tucson, AZ is one) requiring the varied procurement strategies to deal with the procurement and contracting complexities of a full service city including an international airport, a convention center, a true downtown and a hospitality industry-based economy in which amenities, aesthetics, and quality of life issues are of such importance as to require infrastructure, maintenance and other services of a level of excellence far beyond what is typically and many times deservedly associated with the results of a "low bid" process. A proposed document was submitted to all department heads for review. A number of corrections and clarifications were brought forward and incorporated as a result of this review. The document was next submitted for City Attorney review and was assigned to Ms. Dawn Honeywell of Burke, Williams & Sorensen. Ms. Honeywell's review resulted in three pages of issues and questions, which were resolved. Ms. Honeywell made other significant improvements to the content and flow of the document and incorporated state regulations. After return of the document from Ms. Honeywell, it appeared the document was ready to go to City Council. 11ha December 19, 2001 Page Three In the review session with the City Attorney prior to the recent Study Session, he set forth the opinion that although the draft Ordinance was a good effort, it needed some reworking. There was indeed a need to clarify several definitions and correct some cross references. Thus, no document was available for presentation at the Study Session and the staff presentation was based on concepts it sought for inclusion. A draft rewrite was submitted to staff for comment. The Director of Procurement and Contracting was able to meet with Ms. Honeywell to submit comment and Mr. Smoot submitted written comment. Asecond rewrite was in staff's hands for review on December 11, 2001. Because of City Council's stated urgency to proceed with the process of approving a new procurement code, staff and City Attorney have met and worked through issues and offer the attached Ordinance. The Ordinance: • Encourages use of recyclables • Documents City endorsement of Disadvantaged Business Enterprise Programs • States the City's "Palm Springs Business First" preference program • Restates the prevailing wage exemption for locally funded projects • Streamline bid processes • Reduces the number of approvals and signatures for contracts under $25,000 • Requires reporting of all P.O.'s and contracts between $5000 and $25,000 • Allow for early completion incentives • Provides for flexible Change Order authorization • Provides for two-step bid process • Provides for"Best Value" bid analysis • Allows for "Sole Sourcing" of equipment and items in public works projects Provides for electronic noticing and allows electronic bidding • Provides "Design/Build" options Allows for the use of Procurement Cards • Sets new dollar limits for award authority • References the State Uniform Public Construction Cost Accounting Procedures (Note that by incorporating this procedure wheneverstate limits for formal vs informal bidding are raised so would the City's limits. This would NOT raise the authority limits outlined below.) The new proposed limits of authority are as follows: AMOUNT PROCESS AUTHORITY $0 - $2,500 Quotes or Discounted Vendor Department Head (small procurement) (Within budget) $2,501 - $25,000 Three quotes City Manager or (small procurement) Designee $25,001 - $100,000 Informal Bids City Council Over $100,000 Formal Bid City Council y th? December 19, 2001 Page Four The attached draft Ordinance leaves one item that could not be resolved prior to the agenda deadline. That one remaining open issue from a staff and City Attorney perspective is in Section 7.06.060 "Authorization To Execute Documents." The second sentence states, "All contracts over $25,000 shall be executed 'approved as to form' by the City Attorney...." This means all contracts smaller than $25,000 will not be reviewed by the City Attorney. Staff believes this is the appropriate level based on a cost vs actual risk of loss analysis. City Attorney has concerns that small contracts are still coming forward with issues. Staff believes this is a training/checklist/standardization issue which can be dealt with. The attached Ordinance, which would repeal the existing Ordinance and establish a new Ordinance, is offered for City Council consideration, as well as the Resolution adopting the Uniform Cost Accounting Procedures which would be effective with the effective date of the new Ordinance. ALLEN F. SMOOT, AAE HAROLD E. GOOD CPPO Assistant City Manager-Special Projects Director of Procurement & Contracting APPROVED '�. / City Manager ATTACHMENTS: 1. Ordinance 2. Resolution �gA y 7- ^ I ,,yr y_1 ;;'% PROOF OF PUBI.ZCATION`� This is space for County Clerhs Filing Stamp (2015.5-C.C.P) STATE OF CALIFORNIA County of Riverside 1 am a citizen of the United States and a resilient of Proof of Publication of the County aforesaid; I am over the age of eighteen _ . ----••-- __ years,and not a party to or interested in the No.02o3 CITY OF PALM SPRINGS above-entitled matter.I am the principal clerk of a SUMMARY OF ORDINANCE printer ofthe,DESERT SUN PUBLISHING AN ORDINANCL OF THE CITY OF r-nl_M SPRINGS CALIFORNIA, REPEALING IN ITT, EN- COMPANY a newspaper of general circulation, 'flgf7l' CHAPT[q 3.12-PURCHASES FOR Tll"LL' 3 REVENUE AND °INANCE AND ADCPI'ING A printed and published in the city of Palm Springs, NEW TITLE 7, ENTITLED 'PI9OCUREML=NT AND County of Riverside,and which newspaper has been NO PAL CODE.' TO 'I HE PALM SPRINGS MU- adjudged a newspaper of general circulation by the The purpose of this ordinance Is to provide in- Superior curt of the entity of Aivcrs'i e, tote of Y y p and to maximize to the fullest rxtont prachF:ablc California under the dare of March 24, 19W Case the po,chasing voluc of public monies or the City. The ordlnsnrr will furtnrr provide wu auihmity [or Number 191236;that the notice,of which the the city to adopt ik:awn plan lures for the oro- cugmcnt of su plies 2efuecz and construction annexed is a printed copy(set in type not smaller of public prolocta inoluding requ,ecmcros and pro- than non pariel,has been published in each regular cedures for competitive bidding and provide In- creased signatory autlionty for contracts to ou and entire issue of said newspaper and not in;my approva•dwithin IIv, monetary limits estobllshed byy the Clttyv Council. The new ordinance will sim- supplement thereof on the following dates,to wit: pllfy clanfy, csntrale:e• and modernize the -,un- agerrieni process rpr the City 5 procurem,.nt and contracting acmcea and public prolccl -- December ZAth - A full •^rr,++y Of ,li e i e Or.linarco-l•.-tin filt'Ula ty - -- ' — - -�-� Clerk Depanm,•nt ------ ^—""--- Inlmduced for first readmry on 12/I9/01 ADCPI ED as Ord No on PATRICIA A. SANDERS ----- -- --- Clyy Clerk PU6' Dsc,.rnbor 24 W I All in the year 2001 I certify(or declare)under penalty of perjury that the foregoing is true and correct. 31st Dated at Palm Springs,California this-------day December Hof -/ ----- 2001 5i not re i i SUMMARY OF ORDINANCE AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, REPEALING IN ITS ENTIRETY, CHAPTER 3.12. -PURCHASES OF TITLE 3, REVENUE AND FINANCE, AND ADOPTING A NEW TITLE 7, ENTITLED "PROCUREMENT AND CONTRACTING", TO TBE PALM SPRINGS MUNICIPAL CODE. The purpose of this ordinance is to provide increased economy in City procurement activities and to maximize to the fullest extent practicable the purchasing value of public monies of the City. The ordinance will further provide the authority for the city to adopt its own procedures for the procurement of supplies, services, and construction ofpublic projects including requirements and procedures for competitive bidding and provide increased signatory authority for contracts to be approved within the monetary limits established by the City Council. The new ordinance will simplify, clarify, centralize and modernize the management process for the City's procurement and contracting services and public projects. A full copy of the Ordinance is on file in the City Clerk's Department Introduced for first reading on: 12/19/01 ADOPTED as Ord No. on PATRICIA A. SANDERS City Clerk PUB: ORDINANCE NO. AN ORDINANCE OF THE CITY OF PALM SPRINGS CALIFORNIA, REPEALING IN ITS ENTIRETY, CHAPTER 3.12 - PURCHASES, OF TITLE 3, REVENUE AND FINANCE, AND ADOPTING A NEW TITLE 7, ENTITLED "PROCUREMENT AND CONTRACTING", TO THE PALM SPRINGS MUNICIPAL CODE. WHEREAS, the proposed new procurement and contracting ordinance will provide increased economy in City procurement activities and maximize to the fullest extent practicable the purchasing value of public monies of the City; and WHEREAS, the City Charter in Sections 913, 403, 312 and 318 provides the authority for the city to adopt its own procedures for the procurement of supplies, services, and construction of public projects; including requirements and procedures for competitive bidding and providing increased signatory authority for contracts to be approved within the monetary limits established by the City Council; and WHEREAS, the proposed new ordinance will simplify, clarify, centralize, and modernize the management process for the City's procurement and contracting services and public projects. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS; SECTION 1: CHAPTER 3.12 - Purchases, of Title 3, Revenue and Finance, is hereby repealed in its entirety from the Palm Springs Municipal Code, and the following Title 7, Procurement and Contracting, is added to the Palm Springs Municipal Code: TITLE 7 PROCUREMENT AND CONTRACTING CHAPTERS 7.01 General Provisions 7.02 Procurement Organization and Administration 7.03 General Method of Awarding Contract or Purchase Order 7.04 Special Circumstance Methods of Award of Contract or Purchase Order 7.05 Specifications for Purchase Order and Contract Procurement 7.06 Contract Provisions 7.07 Disposition of Surplus Property �S 7.08 Procedures for Bid Corrections, Objections and Appeals i1 i { '7.09 Special Programs 7.10. Ethics In Public Contracting me • [ W A3 1RV t#15395 v4 _I_ Ial 1" Zr/-� R /gh77R� CHAPTER 7.01 GENERAL PROVISIONS Sections 7.01.010 Purpose 7.01.020 Application of this Title 7.01.030 Exemptions to Provisions of this Title 7.01.040 Definition of Terms used in this Title 7.01.050 Public Access and Record Retention for Procurement Information 7.01.010 Purpose. The purpose of this Title is to: (1) Establish procedures for the procurement of supplies, services, and construction of public projects, including requirements and procedures for competitive bidding and identification of exceptions to competitive bidding requirements, such as sole source contracts and contracts undertaken in response to emergency situations, as recorded in Section 913 of the City Charter; (2) Set forth rules and regulations governing the contracting for, purchasing, storing, distribution, or disposal of all supplies, materials and equipment required by any office or department of the City government as provided in Section 403, of the City Charter; (3) Clearly define the authority for the procurement function including signatory authority for purchase orders and written contracts which bind the City for the acquisition of equipment, supplies, labor or services within the budget approved by the City Council and within the monetary limits established by the City Council; as provided in Section 318 of the City Charter; (4) Establish standards or pre-qualifications for the screening of contractors or providers of goods and services by a pre-qualification process as provided in Section 913 of the City Charter; (5) Provide a method for the sale or exchange of personal property not needed in City service or not fit for the purpose for which intended and for the conveyance of Title thereto, as authorized in Section 318, of the City Charter; (6) Simplify, clarify, centralize, and modernize the Ordinance governing procurement and contracting by the City; (7) Streamline the procurement process by establishing electronic transfer of procurement information authorizing and identifying electronic methods of procurement as preferred when lawful and practicable; (8) Permit the continued development of procurement policies and practices; IRV#15395 v4 _2_ Draft of 12/13/01 IFA Z (9) 43Ensure the fair and equitable treatment of all persons who deal with the procurement system of the City; (10) Provide increased economy in City procurement activities and maximize to the fullest extent practicable the purchasing value of public monies of the City; (11) Foster effective broad-based competition within the free enterprise system; (12) Provide safeguards for the maintenance of a procurement system of quality and integrity. (13) Obtain in a cost-effective and responsive manner the materials, services and constriction required by City departments in order for those departments to better serve the City's businesses and residents. 7.01.020 Application of this Title. (1) General Application This Title applies only,to purchase orders and contracts solicited or entered into after the effective date of this Ordinance. (2) Compliance with Federal Requirements. Where a procurement involves the expenditure of federal assistance or contract funds, the Director of Procurement and Contracting shall comply with such federal law and authorized regulations which are mandatorily applicable and which are not presently reflected in this Title. (3) Compliance with California Uniform Public Construction Cost Accounting. It is the City's intent to meet the standards set forth in the Uniform Public Construction Cost Accounting procedures (California Public Contract Code Section 22000 et seq.) with respect to awarding contracts or utilizing its own forces to perform public projects projects. (4) Application to City Procurement and Contracting. This Title shall apply to every expenditure of public funds irrespective of their source, including federal assistance monies, (except as otherwise specified in Paragraph (2) above), by this City, under any contract, except that this Title shall not apply to those exemptions specified in Section 7.01.030 below. It shall also apply to disposal of City property. Nothing in this Title or in regulations promulgated hereunder shall prevent compliance with the teens and conditions of any grant, gift, bequest or cooperative agreement. 7.01.030 Exemptions to Provisions of this Title. The provisions of this Title are not applicable to: IRV#15395 v4 -3- Draft of 12/13/01 !$433 (1) Contracts for professional witnesses if the purpose of such contracts is to provide for professional services or testimony relating to an existing or probable judicial proceeding in which the City is or may become a party to contracts for special investigative services for law enforcement purposes. (2) Agreements negotiated by the City Attorney or Risk Manager in settlement of a dispute, claim or litigation or threatened litigation. (3) Worker's compensation payments for medical and related expenses; (4) Contracts for the purchase of works of fine art and performing art entertainment; (5) The award of financial participation agreements; owner participation agreements; disposition and development agreements; development agreements; real estate purchase or lease agreements; covenants; easements; encroachment agreements; memoranda of understanding; or other similar agreements. Such contracts shall be awarded in accordance with applicable legal requirements and/or administrative directives of the City; (6) The purchase of miscellaneous books, magazines, newspapers, subscriptions, on- line library reference services, film, videos and assorted materials for library customer check-out purposes for which contracts by competitive bid solicitation are not practicable, or which are exempted from bidding requirements by State Code; (7) Intergovernmental payments, purchases and agreements; (8) Cooperative purchasing programs in accordance with Chapter 7.10; (9) Public utility purchases of water, power and related services when no competition is available; (10) Specialized seminar, training and educational classes; (11) Magazine and media advertisement; (12) Contracts for election services; (13) Contracts for Legal Services which shall be developed consistent with the Palm Springs City Charter, Section 407; or (14) Contracts for employment and public employee labor agreements. 7.01.040 Definitions of Terms used in this Title. As used in this Title the following terms have the meanings indicated which are applicable to both the singular and plural thereof: (1) "Architectural and Engineering Services" means: ❑RV#15395 v4 4- Drab of 12/13/01 /g/9 Y (a) professional services of an architectural or engineering nature, as defined by State law which are required to be performed or approved by a person licensed, registered, or certified to provide such services as described in this Subsection; (b) professional services of an architectural or engineering nature performed by contract that are associated with research, planning, development, design, construction, alteration, or repair of real property; and (c) such other professional services of an architectural or engineering nature, or incidental services, which members of the architectural and engineering professions (and individuals in their employ) may logically or justifiably perform, including: studies, investigations, surveying, mapping, tests, evaluations, consultations, comprehensive planning, program management, conceptual designs, plans and specifications, value engineering, construction phase services, soils engineering, drawing reviews, preparation of operating and maintenance manuals, and other related services. (2) "Awarding Authority" means the City Council, the City Manager or his delegee who has been given the authority to award under this Title. (3) "Business"means a corporation, partnership, individual, sole proprietorship,joint stock company,joint venture, or any other private legal entity. (4) "Change Directive" means a written order signed by the Contract Administrator which directs the contractor to make changes that the "changes" clause of the contract authorizes the Contract Administrator to order without the consent of the contractor. (5) "Change Order" means any written modification to an existing contract authorizing changes within the scope of work, additions or deletions to the work or an adjustment to any other provision of the contract. (6) "Construction" means the process of building, altering, repairing, improving, or demolishing any public stricture or building, or other public improvements of any kind to any public real property. It does not include the routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property. (7) "Construction Project Management" means those services provided by a licensed architect, registered engineer, or licensed general contractor which meet the requirements for management and supervision of work performed on City construction projects. (8) "Contract" means all types of City agreements, regardless of what they may be called, for the procurement of services or construction. Contract shall not mean an agreement for procurement of supplies or goods which shall be identified in this Title as a "purchase order". (9) "Contract Administrator" means any person duly authorized to manage, supervise and monitor the execution of the terms and conditions of a contract. (10) "Contractor" means any person having a contract or purchase order with the City or a using department thereof. IRV#15395 0 _5_ Draft of 12/13/01 /s A5- (11) "Cost-reimbursement Contract" means a contract under which a contractor is reimbursed for costs which are allowable and allocable in accordance with the contract terms and provisions of this Title, and a fee, if any. (12) `Data" means recorded information regardless of form or characteristic. (13) "Design-Bid-Build" means a project delivery method in which the City sequentially awards separate contracts, the first for architectural and engineering services to design the project and the second for construction of the project according to the design. (14) "Design-Build" means a project delivery method in which the City enters into a single contract for design and construction of an infrastructure facility. Design Build includes projects where in addition to design and construction, other functions may be added including, but not limited to, financing, operating and/or maintenance. (15) "Design requirement" means the written description of the infrastructure facility or service to be procured under this Subsection, including: (a) required features, functions, characteristics, qualities, and properties that are required by the City; (b) the anticipated schedule, including start, duration and completion, and (c) estimated budgets, (as applicable to the specific procurement) for design, construction, operation and maintenance. The design requirements may, but need not, include drawings and other documents illustrating the scale and relationship of the features, functions, and characteristics of the project. (16) `Designee"means a duly authorized representative of a person holding a superior position. (17) "Director" means the designated head of the City's Procurement and Contracting Department, unless otherwise specified. (18) "Electronic" means electrical, digital, magnetic, optical, electromagnetic, or any other similar technology. (19) "Employee" means an individual drawing a salary or wages from the City, whether elected or not; any non-compensated individual performing personal services for the City or any department, commission, council, board, or any other entity established by the City; and any non-compensated individual serving as an elected official of the City. (20) "Environmental Services" means those services performed in connection with project development and permit processing in order to comply with federal and state environmental laws. "Environmental Services" also includes the processing and awarding of claims pursuant to Chapter 6.75 (commencing with Section 25299.10) of Division 20 of the Health and Safety Code). IRV#15395 v4 -6- Draft of 12/13/01 13A6 (21) "Established Catalogue Price" means the price included in a catalogue, price list, schedule or other fonn that: (a) is regularly maintained by a manufacturer or contractor; (b) is either published or otherwise available for inspection by customers; and (c) states prices at which sales are currently or were last made to a significant number of any category of buyers or buyers constituting the general public for the supplies or services involved. (22) "Facility" means any plant, building, structure, ground facility, utility system, real property, streets and highways, or other public project improvement. (23) "Firm"means any individual, firm, partnership, corporation, association, or other legal entity permitted by law to practice the profession of architecture, landscape architecture, engineering, environmental services, land surveying or construction project management. (24) "Force Account Construction" means construction performed by the City's own personnel. (25) "Independent Peer Reviewer Services" are additional architectural and engineering services provided to the City in design-build-operate-maintain or design-build- finance-operate-maintain procurements. The function of the independent peer reviewer is to confirm that the key elements of the professional engineering and architectural design provided by the contractor are in conformance with the applicable standard of care. (26) "Invitation for Bids" (IFB) means all documents, whether attached or incorporated by reference, utilized for soliciting bids. (27) "Maintenance Work" includes all of the following, however a public project does not include "maintenance work": (a) Routine, recurring, and usual work for the preservation or protection of any publicly owned, or publicly operated facility for its intended purposes; (b) Minor repainting; (c) Resurfacing of streets and highways at less than one inch; (d) Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; and (e) Work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems, including, but not limited to, dams, reservoirs, powerplants and electrical transmission lines of 230,000 volts or higher. IRV#15395 v4 -7- Draft of 12/13/01 1 gA 7 (28) "Multi-Step Sealed Bidding" is a two phase process consisting of a technical first phase composed of one or more steps in which bidders submit unpriced technical offers to be evaluated by the City and a second phase in which those bidders whose technical offers are determined to be acceptable during the first phase have their price bids considered. It is designed to obtain the benefits of competitive sealed bidding by award of a contract to the lowest responsive, responsible bidder, and at the same time obtain the benefits of the competitive sealed proposals procedure through the solicitation of technical offers and the conduct of discussions to evaluate and determine the acceptability of technical offers. (29) "Operations and Maintenance" means a project delivery method whereby the City would enter into a single contract for the routine operation, routine repair and routine maintenance of an infrastructure facility. (30) "Pricing Data" means factual information concerning prices for items substantially similar to those being procured. Prices in this definition refer to offered or proposed selling prices, historical selling prices and current selling prices. The definition refers to data relevant to both prime and subcontract prices. (31) `Prime Contractor" means a person who has a contract with the City to build, alter, improve, or demolish any public stricture or building. (32) "Procurement" means the buying, purchasing, renting, leasing, or otherwise acquiring of any supplies, services, construction, constriction services, or professional services. It also includes all functions that pertain to the obtaining of any supply, service, or construction, including description of requirements, selection, and solicitation of sources, preparation and award of contract, and all phases of contract administration. (33) "Professional Services" means those advisory, consulting, architectural, engineering, research, testing or developmental services which involve the exercise of discretion and independent judgment together with an advanced or specialized knowledge, expertise or training gained by formal studies or experience, and where the qualifications of persons rendering the service are of primary importance. (34) `Property"means real or personal property assets. (35) "Proposal" means an offer submitted in response to a "Request for Proposals" (RFP), where selection for award is based on criteria specified in the RFP documents. All elements of an offeror's proposal are subject to negotiations. (36) "Proposal development documents" means drawings and other design related documents that are sufficient to fix and describe the size and character of an infrastructure facility as to architectural, structural, mechanical and electrical systems, materials, and such other elements as may be appropriate to the applicable project delivery method. (37) "Public Entity" means a governmental entity such as a country, state, city, district, county or any other organization created by the state as a separate legal public entity. 1RV#15395 v4 _8_ ra Dft of 12/13/01 IfeA s? (38) "Public Notice" means the distribution or dissemination of information using methods that are reasonably available to interested parties. Such methods will often include publication in newspapers of general circulation, electronic or paper mailing lists, and web site(s) designated by the Director of Procurement and Contracting and maintained for that purpose. (39) "Public Project" has the same meaning as contained in California Public Contract Code, Section 22002, as amended, which defines a "Public Project' as: (a) Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility. (b) Painting or repainting of any publicly owned, leased or operated facility. (c) hi the case of a publicly owned utility system, the constriction erection, improvement or repair of dams, reservoirs, powerplants, and electrical transmission lines of 230,000 volts and higher. (d) "Public Project' does not include maintenance work. For purposes of this section, "maintenance work" includes all of the following: 1. Routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes. 2. Minor repainting. 3. Resurfacing of streets and highways at less and one inch. 4. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems. 5. Work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems, including, but not limited to, dams, reservoirs, power plants, and electrical transmission lines of 230,000 volts and higher. (40) `Purchase Description" means the words used in a solicitation to describe the supplies, services or construction to be purchased, and includes specifications attached to, or made a part of, the solicitation. (41) "Purchase Order"means an agreement to procure goods or supplies. (42) "Qualified Products List" (QPL) is an approved list of supplies, services, or constriction items described by model or catalogue numbers, which, prior to competitive solicitation, the City has determined will meet the applicable specification requirements. (43) "Regulation" as used herein means an authoritative rule dealing with details or procedures. IRV#15395 v4 _9_ Draft or 12/13/01 9 ./� L (44) "Request for Proposal" (RFP) means all documents, whether attached or incorporated by reference, utilized for soliciting proposals. (45) "Request.for Qualifications" means a request by the City for detailed information concerning the qualifications of firms to provide specific services. (46) "Responsible Bidder or Offeror" means a person who has the capability in all respects to perform hilly the contract requirements, and the integrity and reliability which will assure good faith performance. (47) "Responsive Bidder" means a person who has submitted a bid which conforms in all material respects to the Invitation for Bids. (48) "Services" means the furnishing of labor, time, or effort by a contractor. Services includes both general services (janitorial, maintenance, etc.) and professional and construction unless otherwise designated. (49) "Signature" means (enter the appropriate reference to State's applicable Digital Signature Act if enacted) (a manual or electronic identifier , or the electronic result of a authentication tecluiique attached to or logically associated with a record that is intended by the person using it to have the same force and effect as a manual signature.) (50) "Solicitation" means the process of notifying prospective bidders that the buyer wishes to receive bids to provide goods or services. (51) "Specification" means any description of the physical or functional characteristics or of the nature of a supply, service or construction item. It may include a description of any requirement for inspection, testing or preparing a supply, service or construction item for delivery. (52) "Supplies" means all property, including but not limited to, commodities equipment, materials, and other supplies. (53) "Surplus Property" means personal property no longer needed by City Departments for their operations, obsolete property, property in poor or non-working condition, or property that is a by-product(e.g., scrap metal, used tires, and oil, etc.) (54) "Surplus Real Property" means real property that City Council has made a deternaination is no longer needed for city use and has made a declaration of finding that it is surplus. (55) "Unsolicited Offer" means an offer other than one submitted in response to an Invitation For Bid, Request for Proposal, or other solicitation. (56) "Using Department" means any department, commission, board, or public agency requiring supplies, services, or construction procured pursuant to this Title. IRV#15395 v4 -10- Draft of 12/13/01 AtAyb (57) "Written or In Writing" means the product of any method of forming characters on paper, other materials, or viewable screen, which can be read, retrieved, and reproduced, including information that is electronically transmitted and stored. 7.01.050 Public Access and Record Retention for Procurement Information. (1) Procurement information shall be a public record to the extent provided in the Public Records Act (Government Code, Section 6250 et seq.) and shall be available to the public as provided in the Public Records Act. The City may charge a reasonable cost for copying records. (2) Retention of Procurement Records. All procurement records shall be retained and disposed of by the City in accordance with records retention guidelines and schedules approved by the City Council and as required by the Public Records Act. Procurements may be conducted through electronic communication, however, records of the transaction shall be maintained in a retrievable manner. The City Clerk's office shall retain the original copy of all contracts. (3) Request for Confidentiality. Requests for confidentiality of proprietary information provided in response to request for proposals or bids may be honored after the City determines that the material so requested conforms to the exceptions recognized in the Public Records Act and the case law interpreting its provisions. CHAPTER 7.02 PROCUREMENT ORGANIZATION & ADMINISTRATION Sections 7.02.010 Procurement and Contracting Department Created 7.02.020 Director of Procurement and Contracting- Position Created 7.02.030 Authority and Duties of Director 7.02.040 Delegation of Authority by Director of Procurement and Contracting 7.02.050 Contract Administration 7.02.010 Procurement and Contracting Department Created. There is created a centralized Procurement and Contracting Department which shall have authority over the procurement of supplies, services and constriction for the public purposes of the City. 7.02.020 Director of Procurement and Contracting-Position Created. There is created the position of Director of Procurement and Contracting who shall be appointed by and serve at the pleasure of the City Manager. The City Manager may combine the duties and responsibilities of the Director with any other office or position. IRV#15395 A _1 1_ Draft of 12/13/01 /gPA!/ 7.02.030 Authority and Duties of Director. (1) Except as otherwise provided herein, the Director shall serve as the public procurement official for the City, and shall be responsible for the procurement of all supplies, services, and construction in accordance with this Title, as well as the management and disposal of supplies. (2) In accordance with this chapter, and subject to the supervision of the City Manager, the Director of Procurement and Contracting shall: (a) procure or supervise the procurement process for all supplies, services, and construction needed by the City; (b) sell, trade, or otherwise dispose of surplus supplies belonging to the City; (c) establish and maintain programs for inspection, testing and acceptance of supplies, services and constriction, in cooperation with using department; (d) exercise general supervision and control over all inventories of supplies belonging to the City; (e) adopt regulations, consistent with this Title, governing the procurement, management, control and disposal of any and all supplies, services and constriction procured by the City; (f) ensure compliance with this Title and implementing regulations by reviewing and monitoring procurement conducted by any designee, department, agency or official delegate authority under Section 7.02.060 (Delegation of Authority by the Director of Procurement and Contracting); (g) retain records of written determinations pertaining to the solicitation, award, performance under a contract or purchase order; (h) cooperate with the Director of Finance and Treasurer in the preparation of statistical data concerning the procurement, usage, and disposition of all supplies, services, and construction. All using departments shall furnish such reports as the Director of Procurement and Contracting may require concerning usage, needs and stocks on hand; (i) prescribe forms to be used by using departments in the requisitioning, ordering and reporting of supplies, services and construction; 0) ensure that City Clerk obtains the original copy of all contracts; and (k) submit a monthly report of all purchase orders and contracts entered into during the reporting period exceeding $5,000 and less than $25,000 to the City Manager and the City Council. IRV#15395 v4 _12_ Draft of 12/13/01 /5.� l� 7.02.040 Delegation of Authority by the Director of Procurement and Contracting. The Director of Procurement and Contracting, with approval of the City Manager, may authorize in writing any department of the City to purchase specified supplies, services, and construction independently of the Procurement and Contracting Department, provided that such purchases shall comply with the procedures established by this Title, and provided that the department shall be required to make periodic reports to the Director of Procurement and Contracting on all purchases made. 7.02.050 Contract Administration. (1) All public projects of a civil engineering nature shall be administered by the Director of Public Works or his designee unless other project administration is designated by the City Manager. (2) All facility repair and maintenance contracts shall be administered by Director of Facilities or his designee unless other administration is designated by the City Manager. (3) All contracts for special projects developed by, or caused to be developed by the Assistant City Manager - shall be administered by the Assistant City Manager, or his designee unless other administration is designated by the City Manager. (4) All contracts for supplies and services, including professional services and construction services developed by or caused to be developed by the Director of Aviation shall be administered by the Director of Aviation or his/her designee unless other administration is designated by the City Manager. (5) All master contracts for supplies and services which apply to multiple departments will be administered by the Director of Procurement and Contracting unless other contract administration is designated by the City Manager. (6) All other contracts shall be administered by the using department director or his designee unless other administration is designated by the City Manager. IRV#15395 A -13- Draft of 12/13/01 I ff CHAPTER 7.03 GENERAL METHOD OF AWARDING CONTRACT OR PURCHASE ORDER Sections 7.03.010 General Methods of Award of Contract or Purchase Order 7.03.020 Contract and Purchase Order Procedures for Procurements up to $25,000 7.03.030 Contract and Purchase Order Procedures for Procurements Greater than $25,000 up to $100,000 7.03.040 Contract and Purchase Order Procedures for Procurements Greater than $100,00 7.03.050 Cancellation of Invitations for Bids or Requests for Proposals 7.03.060 Responsibility of Bidders and Offerors 7.03.070 Pre-qualification of Potential Bidders and Offerors 7.03.080 Pre-Qualification of Contractors Seeking to Bid on Public Projects Exceeding $100,000 7.03.090 Substantiation of Offered Prices 7.03.010 General Methods of Award of Contract or Purchase Order. (1) Method Determined by Cost Estimate. The procedure to be followed in awarding contracts or purchase orders is determined initially by the estimated cost to the City of the goods, service or public projects. The three basic categories are procurements ranging from: up to $25,000; $25,000 to $100,000; and greater than $100,000. (2) No Division of Order, Work or Service. Neither public project nor service contracts shall be knowingly staged or separated into smaller units or segments solely for the purpose of evading the competitive bidding requirements of this chapter. Similarly, no purchase of goods shall be artificially divided for purposes of evading the competitive bidding requirements of this Chapter. 7.03.020 Contract and Purchase Order Procedures for Procurements up to $25,000. (1) General Authority. A public project, a service contract and/or a procurement order of Twenty-five Thousand Dollars ($25,000.00) or less may be performed by City employees by force account,by negotiated contract or by purchase order. (2) Negotiated Contract Procedures for public projects. For those projects estimated to cost less than $25,000, the Director of Procurement and Contracting shall obtain a cost estimate from the Director of Public Works prior to negotiating a contract with a responsible contractor. For any City force account work, the Director of Public Works shall first comply with the guidelines established by the California Uniform Construction Cost Accounting Commission in determining the cost of the public project. IRV#15395 v4 -14- Draft of 12/1/3/01 A /0 APL (3) Negotiated Contract Procedures for non-professional service contracts. For non- professional service contracts with a cost estimate of $25,000 or less, the Director of Procurement and Contracting shall develop procedures for negotiating a contract with a responsible contractor. The procedures for professional service contracts are specified in Chapter 7.04. (4) Delegation of Authority to award purchase orders under $2,500. The Director of Procurement and Contracting shall adopt operational procedures for making procurement of $2,500 or less and may delegate the head of any using departrnent the authority to make procurement of $2,500 or less. Any such delegation shall be in writing and may be revoked, if the delegated authority is not exercised in accordance with the operational procedures, the delegation, and this Title. (5) Purchase Order Procurements under $5,000. Any purchase order procurement not exceeding $5,000 may be made in accordance with procedures promulgated by the Director of Procurement and Contracting. (6) Purchase Order Procurement between $5,000 and $25,000. Insofar as is practical, for purchase order procurement in excess of $5,000 and less than $25,000 no less than three businesses shall be solicited to submit quotations. The names of the businesses submitting quotations and the date and amount of each quotation, shall be recorded and maintained as a public record. Such record may be electronic. (7) Award. Award may be made by City Manager for all contracts and purchase orders up to $25,000. The City Manager may delegate award authority to the Director or other appropriate staff in writing for specified amounts. Any such delegation, including who the delegation is to and the amounts delegated, shall be reported in writing to City Council. 7.03.030 Contract and Purchase Order Procedures for Procurements Greater than $25,000 to $100,000 (1) General Authority. A public project, a service contract and/or a purchase order ranging in cost from Twenty-five Thousand Dollars ($25,000) to One Hundred Thousand Dollars ($100,000.00) may be let to contract by informal bid procedures as set forth in this chapter. (2) Informal Bidding Procedures for Public Projects. For those projects which qualify under this Section for informal bidding, the following procedures shall be used: (a) Bidder List. The City shall maintain a list of qualified contractors, identified according to categories of work. Minimum criteria for development and maintenance of the contractor's list shall be consistent with the State Uniform Construction Cost Accounting rules. (b) Notice. Unless the product or service is proprietary, all contractors on the City's list for the category of work being bid shall be mailed a notice inviting informal bids, or an announcement advertisement shall be placed in all construction trade journals specified in this section, or both such mailing and advertising. The trade journals shall be those identified by the California Uniform Construction Cost Accounting Commission as appropriate for this area. IRV#15395 v4 -15- Draft of 12/13/01 is46 (c) Bidder's Security/Failure to Sign Contract. Bidder's security shall be prescribed in the notice inviting bids in an amount equal to ten (10%) per cent of the amount hid. Bidder's security shall he either a cash deposit with the City, a cashier's certified check, payable to the City, or a bidder's bond. Unsuccessfitl bidders shall be entitled to the return of bid security within sixty (60) days of the date of the award. However, the lowest responsive and responsible bidder shall forfeit all or part of his hid security, as may be determined by the City Council, upon the bidder's refusal or failure to execute the contract within the ten (10) days after the date of the award of the contract. On the refusal or failure of the lowest responsive and responsible bidder to execute the contract the City Council may award the contract to the next lowest responsible bidder. (d) Minimum Time Period. All mailing of notices to contractors and announcement and/or advertisements published in the constriction trade journals pursuant to Subsection (b) shall be completed not less than ten (10) calendar days before bids are due. (e) Notice Contents. The notice inviting informal bids shall describe the project in general terms, and how to obtain more detailed information about the project, and state the time and place for the submission of bids. (f) Performance/labor/materials Bonds. The City may require a performance and/or labor and materials bonds in an amount and form as it deems appropriate. (g) Bid Opening Procedure. Sealed bids shall he submitted to the Director of Procurement and Contracting Office and shall he identified as to bidder, project, and Bid Title/Number on the envelope. Bids shall be opened by the staff of the Director of Procurement and Contracting in public at the time and place stated in the notice inviting bids. A written record and tabulation shall be made at that time of all bids received and shall be open for public inspection during regular business hours for a period of one (1) year after the hid opening. The project manager shall make an analysis of the bids for compliance with bid specifications and thereafter, make a recommendation for award or rejection to the City Council. Bids shall be evaluated based on the requirements set forth in the Invitation For Bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the hid price and he considered in evaluation for award shall he objectively measurable, such as discounts, transportation costs, and total or life cycle costs. The total or life cycle costs may include an analysis of maintenance costs over the useful life of the product or project. The Invitation for Bids shall set forth the evaluation criteria to he used. No criteria may be used in bid evaluation that are not set forth in the Invitation for Bids. (h) Award. The City Council shall award the contract or reject the bids, or it may by resolution with 4/5ths vote delegate this authority to the City Manager or other appropriate person. The City Council shall hear any hid protests and may waive minor hid irregularities where evidence exists that the irregularity is a clerical error. (i) Bids in Excess of Statutory Amount. If all bids received are in excess of One Hundred Thousand Dollars ($100,000.00), the City Council may, by passage of a resolution by a four-fifth (4/5ths) vote, award the contract at up to One Hundred and Five Thousand Dollars IRV#15395 0 _16_ Draft of 12/13/01 1*A�� ($105,000.00) to the lowest responsible bidder, if it determines the cost estimate of the City was reasonable. (3) Informal Bid Procedures for non-professional service contract and purchase of supplies or goods pursuant to purchase order. (a) The Director of Procurement and Contracting shall adopt operational procedures for noticing and conducting informal bids under this Section. (b) Unless it is determined that it is a sole source provider under special circumstances and, so far as is practical, no less than six businesses shall be solicited to submit quotations. (c) A report of the process with a reconmmendation of the lowest qualified bid shall be presented to the City Council for approval. (d) In the event that bids or proposals for any supplies or services are solicited and no bids or proposals are received at the time and place established by the applicable bid invitation, the City Manager shall have the authority to authorize the Director of Procurement and Contracting to negotiate directly with potential vendors and enter into a contract for the provision of such supplies or services. (e) In procurement of supplies or services pursuant to this section, of whatever nature or character, the Director of Procurement and Contracting shall submit a report of the bids within thirty (30) days, to the City Council, with a recommendation concerning acceptance or rejection thereof, and the City Council shall thereupon approve or disapprove the recommendation. 7.03.040 Contract and Purchase Order Procedures for Greater than $100,000. (1) A public project, a service contract and/or a procurement order of more than One Hundred Thousand Dollars ($100,000.00) shall, except as otherwise provided in this chapter, be let to contract by formal bidding procedures. (2) Formal Bidding Procedures for public project projects. For those projects which qualify under this section for formal bidding, the following procedures shall be used: (a) Adoption of Plans and Specifications. Prior to soliciting bids, the City Council shall approve and adopt the plans, specifications and working details, and authorize the bid request for all public projects in excess of One Hundred Thousand Dollars ($100,000.00). (b) Invitation for Bids. An Invitation for bids shall be issued and shall include a purchase description and all contractual terms and conditions applicable to the procurement. (e) Publication. A notice shall be published at least once fourteen (14) calendar days before the date of opening the bids in a newspaper of general circulation, printed and published in the jurisdiction of the City. The notice inviting formal bids shall also be mailed to all constriction trade journals specified by the California Uniform Construction Cost IRV#15395 A _17- Draft of 12/13/01 /?A17 Accounting Commission as appropriate for the area. The notice shall be mailed at least thirty (30) calendar days before the date of opening the bids. The notice inviting formal bids shall state the time and place for the receiving and opening of sealed bids and distinctly describe the project. hi addition to notice required by this section the City may give such other notice as it deems proper. (d) Public Notice. Except as provided under Section 7.05.010(4)(b), Public Notice, or as required by state or federal regulations, or terns of state, federal or third party grant funding, public notice of Invitation for Bids shall be determined by the Director of Procurement and Contracting. Such notice may include, but is not limited to, publication in a newspaper of general circulation, notifying suppliers on a list of established suppliers and/or posting notice on- line on the internet. Notices inviting bids shall include a general description of the articles to be purchased or sold, and shall state where bid documents and specifications may be secured, and shall provide the time and place for opening bids. Adequate public notice of the Invitation for Bids (IFB) shall be given, a reasonable time prior to the date set forth therein for the opening of bids. The Director of Procurement shall determine the adequacy and reasonableness of the notice and preparation time depending on the complexity of the project to be bid. (e) Bidder's Security for Public Projects Contracts. Bidder's security/failure to sign contract. Bidder's security shall be prescribed in the notice inviting bids in an amount equal to ten (10%) percent of the amount bid. Bidder's security shall be either a cash deposit with the City, a cashier's or certified check, payable to the City, or a bidder's bond. Unsuccessful bidders shall be entitled to the return of bid security within sixty (60) days of the date of the award. However, the lowest responsive and responsible bidder shall forfeit all or part of his security, as may be determined by the City Council, upon the bidder's refusal or failure to execute the contract within ten (10) days after the date of the award of the contract. On the refusal or failure of the lowest responsive and responsible bidder to execute the contract, the Council may award the contract to the next lowest responsible bidder. (f) Bid Opening Procedure. Sealed bids shall be submitted to the office of the Director of Procurement and Contracting and shall be identified as to bidder, project, and Bid Title/Number on the envelope. Bids shall be opened by the Director's staff in public at the time and place stated in the notice inviting bids. A written record and tabulation shall be made at that time of all bids received, and shall be open for public inspection during regular business hours for a period of one (1) year after the bid opening. The Director, consulting with the Director of Public Works, shall make an analysis of the bids for compliance with bid specifications and, thereafter, make a recommendation for award or rejection. (g) Award. The contract shall be awarded with reasonable promptness by appropriate written notice to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the Invitation For Bids. In the event the low responsive and responsible bid for a construction project exceeds available funds as detennined by the Director of Finance and Treasurer or the Engineer's estimate, the City Manager or his designee is authorized, when time or economic considerations preclude re-solicitation of work of a reduced scope, to negotiate an adjustment of the bid price with the low responsive and responsible bidder, in order to bring the bid within the amount of available funds. The City Manager or his designee, shall submit a report of the bids to the next regular session of the City Council with a IRV#15395 v4 Draft of 12/13/01 /e'A tt recommendation concerning acceptance or rejection thereof, and the City Council shall thereupon approve or disapprove the recommendation. The Council may waive minor bid irregularities where evidence exists that it is merely a clerical error. (h) Bid Acceptance and Bid Evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in this chapter. Bids shall be evaluated based on the requirements set forth in the Invitation For Bids, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. The total or life cycle costs may include an analysis of maintenance costs over the usefid life of the product or project. The Invitation for Bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the Invitation for Bids. (i) Tie Bids. If two or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay or re- advertising for bids, the Council may accept either bid. Should tie bids be received the following priority list will apply to the award: 1. Business located within City boundaries with valid business license; 2. Coachella Valley based business; 3. Riverside County based business; or 4. State of California based business. 0) No Bids. If no bids are received, the project may be performed by City employees by force account, or by informal bidding procedures without further complying with this article. (k) Rejection of Bids. In its discretion, the City Council may reject any bids presented. If after the first invitation for bids all bids are rejected, the City shall state the reasons for the rejection, and after re-evaluating its cost estimates of the project, the City shall have the option of either of the following: 1. abandoning the project or re-advertising the bids in the manner described this article. 2. by passage of a resolution by a four-fifths (4/5ths) vote of the City Council declaring that the project can be perfonned more economically by City employees, may have the project done by force account without further complying with this chapter. (3) Formal Bid Procedures for Purchase Orders and Non-professional Service Contracts. IRV#15395 A _19- Draft of 12/13/01 19AA (a) The Director of Procurement and Contracting shall adopt standards for publication and notice for purchase orders and non-professional service contracts of a value greater than $100,000. (b) Procedures for bid opening and award shall be as specified in (b)6.-11. above. 7.03.050 Cancellation of Invitations for Bids or Requests for Proposals. An hrvitation for Bids, a Request for Proposals, or other solicitation may be canceled up until the opening of bids by the Director, or any or all bids or proposals may be rejected in whole or in part as may be specified in the solicitation, when cancellation or rejection is for good cause and in the best interests of the City. The reasons therefor shall be made part of the contract file. 7.03.060 Responsibility of Bidders and Offerors. (1) Application. Prior to the award of any contract, the Director of Procurement and Contracting shall insure that the prospective contractor is responsible under the terms of this section. A determination of responsibility or non-responsibility shall be governed by this section. (2) Standards of Responsibility. In determining whether a bidder or offeror is responsible, the following shall be considered: (a) The ability, capacity and skill of the bidder or offeror to perform the contract or to provide the services required; (b) Whether the bidder of offeror can perform the contract or provide the service promptly and within the time specified without delay or interference; (c) The character, integrity, reputation, judgment, experience and efficiency of the bidder or offeror; (d) The quality of the bidder's or offeror's performance of previous contracts or services with the City or other entity; (e) The previous and existing compliance by the bidder or offeror with the laws and ordinances relating to the contract or service of the City or other entity; (f) The sufficiency of the financial resources and ability of the bidder or offeror to perform the contract or provide the service; (g) The quality, availability, and adaptability of the materials and services to the particular use required; (h) The ability of the bidder or offeror to provide future maintenance and service for the use of the subject of the contract; IRV#15395 A -20- Draft of 12/13/01 149 A z& (i) Any other circumstance(s) which will affect the bidder's or offeror's performance of the contract. (3) Information Pertaining to Responsibility. The prospective contractor shall supply information requested by the Director of Procurement and Contracting concerning the responsibility of such contractor. If such contractor fails to supply the requested information, the Director of Procurement and Contracting shall base the determination of responsibility upon any available information or may find the prospective contractor non-responsive if such failure is unreasonable. (4) No award may be made to any bidder or offeror who is in default on the performance of any other contract with the City or in the payment of any taxes, licenses or other monies due to the City. Similarly, no award may be made to any bidder or offeror who has been in default of any contract with the City within the prior three years or who has defaulted on two prior City agreements. 7.03.070 Pre-Qualification of Potential Bidders and Offerors. (1) The Director of Procurement and Contracting may by issuance of a Request for Qualifications pre-qualify prospective suppliers for particular types of supplies, services and constriction. Solicitation mailing lists of potential contractors shall be limited to such pre- qualified suppliers. 7.03.080 Pre-Qualification of Contractors Seeking to Bid on Public Projects Exceeding $100,000. (1) When it is considered in the best interest of the City for development of contracts for public projects, City Manager, or his designee may approve the use of a pre-qualification process. (2) Iri accordance with Pubic Contract Code 20101(d), enacted as part of AB 574, the City has elected to adopt the pre-qualification procedures for public projects linked to a single project and which includes the following requirements: (Section 20101(d) (a) Utilization of a standardized questionnaire and financial statement in a form specified by the City(Section 20201 [a]); (b) Application of a uniform system of rating bidders on objective criteria, and on the basis of the completed questionnaire and financial statement (Section 20101[b]); (c) Creation of an appeal procedure by which a contractor that is denied pre- qualification may seek a reversal of that determination (Section 20101[d]) (3) The Director shall make a recommendation to City Council based on the findings of the evaluation process. Only those successfully completing the pre-qualification process and approved by the City Council, shall be allowed to submit bids. IRV#15395 v4 -21- Draft of 12/13/01 Ig A emu 7.03.90 Substantiation of Offered Prices. (1) Required Submissions Relating to the Award of Contracts. A prospective contractor shall be required to submit cost or pricing data when the contract is expected to exceed $25,000 and is to be awarded by Competitive Sealed Proposals (Section 7.04.080); or by Sole Source Procurement authority(Section 7.04.020). (2) Exceptions. The submission of cost or pricing data relating to the award of a contract is not required when: (a) the contract price is based on adequate price competition; (b) the contract price is based on established catalogue prices or market prices; (c) the contract price is set by law or regulation; or (d) A written record of such cost analysis or price data shall be made a part of the contract file. (3) Certification Required. A contractor, actual or prospective, required to submit cost or pricing data in accordance with this section, shall certify that, to the best of its knowledge and belief, the cost or pricing data submitted was accurate, complete, and current as of a specified date prior to the award of the contract or the pricing of the change order or contract modification. CHAPTER 7.04 SPECIAL CIRCUMSTANCE METHODS OF AWARD OF CONTRACT OR PURCHASE ORDER Sections 7.04.010 In General 7.04.020 Sole Source Procurements. 7.04.030 Special Expertise Procurement. 7.04.040 Emergencies: Procedures. 7.04.050 Contracting Procedures for Professional Services. 7.04.060 Contracting Procedures Where the Design of the Project is Combined with the Construction. (Design-Build). 7.04.070 Multi-Step Sealed Bidding Procedures. 7.04.080 Competitive Sealed Proposals/Competitive Negotiations. 7.04.010 In General. (1) Decision to Use Special Method. For procurements using either purchase orders or contracts under this Chapter, with the exception of emergency procurements under 7.04.040, all decisions to utilize a special circumstance method and the award shall be made by the City IRV#15395 v4 _22_ Draft of 12/13/01 /v A Z'�. 7.04.040 Emergencies: Procedures. (1) This section applies to services which are governed by California Public Contract Code where a state of emergency is determined to exist. A state of emergency exists when findings are determined by the City Council which may include but are not limited to, the states of emergency defined in Section 8558 of the Government Code and as defined in Section 1102 of the Public Contract Code, and in conformance with the provisions of Public Contract Code section 22050 an06-1 when repair or replacements are necessary to permit the continued conduct of the operation of services of the City, or to avoid danger to life or property. Where Council makes such findings, it may, by majority vote, proceed at once to replace or repair any public facility ar ttx`:Qhtatn supplies anrl`servtces without adopting plans, specifications, or working details, or give notice for bids to let contracts. The work may be done by day labor under the direction of the Council, by contract, or by a combination of the two. Alternatively, Council may by resolution delegate to the City Manager, the power to declare a public emergency in the future to all..UAt citcumstartces set Earth ali ive, subject to confirmation by the Council r a .laY. p ty vote f©s supptteg.and by a four-fifths (4/5ths)vote tpo.-xtlr1ic.`pteij Cts. 7.04.040 Emergencies: Procedures. (1) This section applies to services which are governed by California Public Contract Code where a state of emergency is determined to exist. A state of emergency exists when findings are determined by the City Council which may include but are not limited to, the states of emergency defined in Section 8558 of the Government Code and as defined in Section 1102 of the Public Contract Code, and in conformance with the provisions of Public Contract Code section 22050 and/or when repair or replacements are necessary to permit the continued conduct of the operation of services of the City, or to avoid danger to life or property. Where Council makes such findings, it may, by majority vote, proceed at once to replace or repair any public facility or to obtain supplies and services, without adopting plans, specifications, or working details, or give notice for bids to let contracts. The work may be done by day labor under the direction of the Council, by contract, or by a combination of the two. Alternatively, Council may delegate to the City Manager, the power to declare a public emergency in the future in all of the circumstances set forth above, subject to confirmation by the Council (a) by a majority vote for supplies and services, or(b)by a four-fifths (4/5ths) vote for public projects. � g a 3 Manger or his delegee for procurements up to $25,000 and by the City Council for procurements over $25,000. (2) Award of Special Method. Any use of methods in this Chapter shall require a report explaining why the special circumstance method is appropriate and the results of the negotiations or solicitations. For procurements under $25,000, where the City Manger has delegated authority, the City Council shall be given a report of the amount of authority delegated and the individual to whom authority has been granted. In the event of procurements over $25,000 under this Chapter, Council shall initially be given a full report as to the circumstances that support using a method in this Chapter for their determination of whether to authorize the method by adopting a resolution. After authorization, Council shall be given a report for consideration of award that specifies: the reason the technique was used; the results of the solicitation; the results of the negotiations; and the recommendation for the award. Any award shall be approved by resolution setting out findings from the report 7.04.020 Sole Source Procurement by the City. A contract may be awarded without competition when the action is made after conducting a good faith review of available sources, that there is only one source for the required item or service. The Director of Procurement and Contracting shall conduct negotiations, as appropriate, as to price, delivery, and terms. A written record of sole source procurement shall be maintained as a public record and shall list each contractor's name, the amount and type of each contract, a listing of the item(s) procured under each contract, the identification number of each contract file, and the documentation of why sole source procurement was required. 7.04.030 Special Expertise Procurement A contract may be awarded without competition when it is determined that an unusual or miique situation exists, in that due to experience and expertise demonstrated in prior contracts with the City a particular contractor is uniquely qualified for a particular task, that makes the application of all requirements of competitive sealed bidding or competitive sealed proposals contrary to the public interest. Any special procurement under this Section shall be made with such competition as is practicable under the circumstances. 7.04.040 Emergencies: Procedures. (1) This section applies where a state of emergency is determined to exist. A state of emergency exists when findings are determined by the City Council which may include but are not limited to, the states of emergency defined in Section 8558 of the Government Code and as defined in Section 1102 of the Public Contract Code, and in conformance with the provisions of Public Contract Code section 22050 when repair or replacements are necessary to permit the continued conduct of the operation of services of the City, or to avoid danger to life or property. Where Council makes such findings, it may, by majority vote, proceed at once to replace or repair any public facility without adopting plans, specifications, or working details, or give notice for bids to let contracts. The work may be done by day labor under the direction of the Council, by contract, or by a combination of the two. Alternatively, Council may, by resolution, IRV#15395 v4 _23_ Draft of 12/13/01 / dA2:a delegate to the City Manager, the power to declare a public emergency in the future, subject to confirmation by the Council by a four-fifths (4/5ths)vote, at its next meeting. (2) Where an emergency has been detenmined under (1) above, the City Manager or his/her representative may authorize the Director or others to make emergency procurement of supplies, services, or construction items, regardless of the amount of the expenditure, when there exists a threat to public health, welfare, or safety, provided that the emergency procurement shall be made with such competition as is practicable under the circumstances. As soon as practicable, a record of each emergency procurement shall be made and shall set forth the contractor's name, the amount and type of the contract, a listing of the item(s) procured under the contract, and the identification number of the contract file. The record of action taken is required to insure that the City receives maximum reimbursement from state and federal agencies, when appropriate. (3) Emergency Procurement for the Palm Springs International Airport. The City Manager or his/her representative may authorize the Director or the Director of Aviation, or his/her representative, to make emergency procurement of supplies, services or constriction items regardless of the amount of the expenditure when there exists a threat to public health, welfare, security, or safety at the Palm Springs International Airport, as determined by the Director of Aviation or his/her representative and/or as defined by FAA regulations or other appropriate safety or regulatory guidelines. (4) Report to the City Council Required. A written report of the circumstances of all emergency purchases in excess of $25,000 for supplies, services, construction and/or construction services, shall be made by the City Manager to the City Council at the next regularly scheduled meeting after the emergency procurement is made. The City Council may not impair any contract obligation duly authorized by this Section 7.04.040 but may disapprove any contract or approval where no performance or detrimental reliance is shown. 7.04.050 Contracting Procedures for Professional Services. (1) Authority. For the purpose of procuring the services of architectural, landscape architectural, engineering, environmental, land surveying, appraisal, constriction project management, financial or other professional services, including but not limited to those defined by the laws of the State of California Government Code Section 4525/4526 as professional services, the selection procedures specified in this Section shall be used. (2) Policy. It is the policy of this City to negotiate contracts for professional services on the basis of demonstrated competence and qualification for the type of services required, and at fair and reasonable prices. (3) Selection Procedure. (a) Conditions for Use. Except as provided under Section 7.04.020 (Sole Source Procurement); Section 7.04.030 (Emergency Procurement), or Section 7.04.30 (Special Expertise Services) the professional services designated in Subsection (1) of this Section shall be procured in accordance with this Subsection. IRV#15395 v4 -24- Dina of 12/13/01 110A �y (b) Statement of Qualifications. Persons engaged in providing the types of professional services designated in Sub-Section (1) of this Section may submit statements of qualifications and expressions of interest in providing such professional services. The City may specify a uniform format for statements of qualifications. Statements of qualifications may be project specific or may be for multiple projects which occur during a time period, typically 12 months. (c) Form of Request for Proposals. The Request for Proposals shall describe the services required, list the types of information and data required of each offeror, list the evaluation factors and state the relative importance of identified qualifications. (d) Discussions. The Director or his designee may conduct discussions with any offeror who has submitted a proposal to determine such offeror's qualifications for further consideration. Discussions shall not disclose any infornmation derived from proposals submitted by other offerors. (e) Award. Award, if any, shall be made to the offeror determined to be best qualified based on the evaluation factors set forth in the Request for Proposals, and negotiation of compensation determined to be fair and reasonable. If compensation cannot be agreed upon with the best qualified offeror, then negotiations will be formally terminated with the selected offeror. If proposals were submitted by one or more offerors determined to be qualified, negotiations may be conducted with such other offeror or offerors, in the order of their respective qualification ranking, and the contract may be awarded to the offeror then ranked best qualified if the amount of compensation is determined to be fair and reasonable. 7.04.060 Contracting Procedures Where the Design of the Project is Combined with its Construction. (Design-Build). (1) Design-build. Contracts for design-build shall be procured by competitive sealed proposals, as set forth in Section 7.04.080 (Competitive Sealed Proposals/Competitive Negotiations), except that the regulations may describe the circumstances under which particular design-build procurement will not require the submission of proposal development documents. A design-build procurement shall include a maximum not to exceed amount as part of the request for competitive sealed proposal. (2) Participation in a report or study that is subsequently used in the preparation of design requirements for a project shall not disqualify a firm from participating as a member of a proposing team in a design-build. 7.04.070 Multi-Step Sealed Bidding Procedures. (1) When it is found to be impractical to initially prepare a purchase description to support an award based on price due to the unique nature of the commodity or project, which makes it difficult to estimate a price in advance, an invitation for bid may be issued requesting the submission of unpriced technical offers to be followed by an invitation for bids limited to those bidders whose offers have been qualified under the criteria set forth in the first solicitation. IRV#15395 v4 -25- Draft of 12/13/01 * Q ',�' Procedure for step one of multi-step sealed bidding: (a) Fonn. Multi-step sealed bidding shall be initiated by the issuance of an invitation for bids. The multi-step invitation for bids shall state: 1. that unpriced technical offers are requested; 2. whether priced bids are to be submitted at the same time as unpriced technical offers. If they are, such priced bids shall be submitted in a separate sealed envelope; 3. that it is a multi-step sealed bid procurement, and priced bids will be considered only in the second phase and only from those bidders whose unpriced technical offers are found acceptable in the first phase; 4. the criteria to be used in the evaluation of the unpriced technical offers; 5. that the City, to the extent the Director of Procurement and Contracting finds necessary, may conduct oral or written discussions of the unpriced technical offers; 6. that bidders may designate those portions of the unpriced technical offers which contain trade secrets or other proprietary data which are to remain confidential; and 7. that the item being procured shall be furnished generally in accordance with the bidder's technical offer as found to be finally acceptable and shall meet the requirements of the Invitation For Bids. (b) Amendments to the Invitation for Bids. After the closing date for submitting unpriced technical offers, amendments to the Invitation For Bids shall be distributed only to bidders who submitted unpriced technical offers, and they shall be permitted to submit new unpriced technical offers or to amend those submitted. If, in the opinion of the Director of Procurement and Contracting, a contemplated amendment will significantly change the nature of the procurement, the Invitation For Bids shall be cancelled in accordance with Section 7.03.090 (Cancellation of Invitation for Bids or Request for Proposals) of this chapter and a new Invitation For Bids issued. (c) Receipt and Handling of Unpriced Technical Offers. Unpriced technical offers shall not be opened publicly but shall be opened in front of two or more procurement officials. Such offers shall not be disclosed to unauthorized persons. Trade secrets and/or other proprietary data identified in writing shall be kept confidential. IRV#15395 v4 -26- Draft of 12/13/01 I¢ A ,oL (d) Evaluation of Unpriced Technical Offers. The unpriced technical offers submitted by bidders shall be evaluated solely in accordance with the criteria set forth in the Invitation For Bids. The unpriced technical offers shall be categorized as: 1. acceptable; 2. potentially acceptable, that is, reasonably susceptible of being made acceptable; or 3. unacceptable, in which case the Director of Procurement and Contracting shall record in writing the basis for finding an offer unacceptable and make it part of the procurement file. The Director of Procurement and Contracting may initiate step two of the procedure if, in the Director's opinion, there are sufficient acceptable unpriced technical offers to assure effective price competition in the second phase without technical discussions. If the Director finds that such is not the case, the Director shall issue an amendment to the hivitation For Bids or engage in technical discussions as set forth in Subsection (8)(b)5 of this Section. (e) Discussion of Unpriced Technical Offers. The Director may conduct discussions with any bidder who submits an acceptable or potentially acceptable unpriced technical offer. During the course of such discussions the Director shall not disclose any confidential information, identified in writing under paragraph 3 above, derived from one unpriced technical offer to any other bidder. Once discussions have begun, any bidder who has not been notified that its offer has been finally found unacceptable may submit supplemental information amending its unpriced technical offer at any time until the closing date established by the Director. Such submission may be made at the request of the Director or upon the bidder's own initiative. (f) Notice of Unacceptable Unpriced Technical Offer. If the Director determines an offeror's unpriced technical offer is unacceptable and notifies the offeror in writing of this determination, such offeror shall not be afforded an additional opportunity to supplement its technical offer. (3) Procedure for Step Two. (a) Mitiation. Upon the completion of Step One, the Director shall either: 1. open priced bids submitted in Step One (if priced bids were required to be submitted) from bidders whose unpriced technical offers were found to be acceptable; or 2. if priced bids have not been submitted, technical discussions have been held, or amendments to the Invitation for Bids have been issued, invite each acceptable bidder to submit a priced bid. IRV#I5395 v4 _27_ Draft of 12/13/01 OP A 5n (b) Conduct. Step Two shall be conducted as any other competitive sealed bid procurement except no public notice need be given of this invitation to submit priced bids because such notice was previously given. (c) Tie Bids. Should tie bids be received the following priority list will apply to the award: 1. Business located within City boundaries with valid business license; 2. Coachella Valley based business; 3. Riverside County based business; or 4. State of California based business. 7.04.080 Competitive Sealed Proposals/Competitive Negotiations. 1. Conditions for Use. (a) A contract may be entered into by use of the competitive sealed proposals/competitive negotiations method when the complex nature or technical details of a particular procurement make the use of competitive sealed bidding either not practical or not advantageous to the City, for example: 1. Specifications cannot be fairly nor objectively prepared so as to permit competition by issuance of an Invitation For Bids; 2. High technology and electronic equipment is available from a limited number of sources; 3. Quality, availability, or an offeror's technical and performance capability is overriding in relation to price; 4. For professional services; 5. When the initial installation needs to be evaluated together with subsequent maintenance and service capabilities; 6. When the market place will respond better to a solicitation permitting not only a range of alternate proposals, but evaluation and discussion of them before making an award, such as an award for specialized computer software programs; 7. When oral or written discussion needs to be conducted with Offerors concerning technical and price aspects of their proposals; or IRV#15395 v4 _28_ Draft of 12/13/01 /9► A � Ss 8. When Offerors may need to be afforded an opportunity to revise their proposals, including price. (b) Contracts for the design-build project delivery method shall be entered into by competitive sealed proposals, except as otherwise provided in 7.04.020 Sole Source Procurement or 7.04.040. (2) Request for Proposals. Proposals shall be solicited through a Request for Proposals. (3) Public Notice. Adequate public notice of the Request for Proposals shall be given in the same mamier as provided in Section 7.03.040(3)(a). (4) Receipt of Proposals. Proposals shall be opened so as to avoid disclosure of contents to competing Offerors during the process of negotiation. A Register of Proposals shall be prepared in accordance with regulations, and shall be open for public inspection after contract award. (5) Evaluation Factors. The Request for Proposals shall state the relative importance of evaluation factors, including price. (6) Discussion with Responsible Offerors and Revisions to Proposals. As provided in the Request for Proposals, discussions may be conducted with responsible Offerors who submit proposals determined to be reasonably susceptible of being selected for award for the purpose of clarification to assure frill understanding of, and responsiveness to, the solicitation requirements. Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals and revisions to the proposals may be permitted after submission and prior to award for the purpose of obtaining best and final offers. In conducting discussions, there shall be no disclosure of information derived from proposals submitted by competing offerors. (7) Award. Award shall be made to the responsible offeror whose proposal conforms to the solicitation is determined to be the most advantageous to the City, taking into consideration price and the evaluation factors set forth in the request for proposals. No other factors or criteria shall be used in the evaluation. The contract file shall contain a written report detailing the basis on which the recotmmendation for award of contract is made. IRV 915395 v4 _29_ Draft of 12/I3/01 /4 A Z4 CHAPTER 7.05 SPECIFICATIONS FOR PURCHASE ORDER AND CONTRACT PROCUREMENT Sections 7.05.010 Purchase Order Procurement Specifications 7.05.020 Qualified Products List (Q.P.L.) 7.05.030 Brand Name or Equal Specification 7.05.040 Brand Name Specifications 7.05.050 Recycled and Energy Consumptive Materials; Life Cycle Costing; Environmental Procurement. 7.05.010 Purchase Order Procurement Specifications A purchase order form is used for all acquisitions of goods, commodities, and supplies and any tangible personal property items. All specifications shall be drafted so as to promote overall economy for the purposes intended and encourage competition in satisfying the City's needs, and shall not be unduly restrictive. The policy enunciated in this section applies to all specifications, including, but not limited to, those prepared for the City by architects, engineers, designers, and draftsmen. 7.05.020 Qualified Products List(QPL). The Director of Procurement and Contracting may, when it serves the best interest of the City, establish a qualified products list (Q.P.L.) for evaluation and pre-qualification criteria for bidding acceptable products which would require testing or samples subsequent to the receipt of bids. 7.05.030 Brand Name or Equal Specification. (1) Use. Brand name or equal specifications may be used for purchase orders or contracts when the Director of Procurement and Contracting determines in writing that: (a) no other design or performance specification or qualified products list is available; (b) time does not permit the preparation of another form of purchase description; (c) the nature of the product or the nature of the City's requirements makes use of a brand name or equal specification suitable for the procurement, or (d) use of a brand name or equal specification is in the City's best interests. (2) Designation of Several Brand Names. Brand name or equal specifications shall seek to designate three, or as many different brands as are practicable, as "or equal" references and shall further state that substantially equivalent products to those designated will be considered for award. IRV#I5395 v4 _30_ Draft of 12/13/01 ) stAA (3) Required Characteristics. Unless the City Manager's designee determines in writing that the essential characteristics of the brand names included in the specifications are commonly known in the industry or trade, brand name or equal specifications shall include a description of the particular design, or of the functional or perforniance characteristics which are required. (4) Nonrestrictive Use of Brand Name or Equal Specifications. Where a brand name or equal specification is used in a solicitation, the solicitation shall contain explanatory language that the use of a brand name is for the purpose of describing the standard of quality, performance, and characteristics desired and is not intended to limit or restrict competition. 7.05.040 Brand Name Specifications. (1) Use. Since use of a brand name specification is restrictive of product competition, it may he used only when the Director of Procurement and Contracting makes a written determination that only the identified brand name item or items will satisfy the City's needs. (2) Competition. The Director of Procurement and Contracting shall seek to identify sources from which the designated brand name item or items can be obtained and shall solicit such sources to achieve whatever degree of price competition is practicable. If only one source can supply the requirement, the procurement shall be made under Section 7.03.070 (Sole Source Procurement). 7.05.050 Recycled and Energy Consumptive Materials; Life Cycle Costing; Environmental Procurement. Guidelines shall be established governing the review and approval of specifications for the procurement of selected materials based on consideration of recycling, energy conservation, life cycle costing and other environmental considerations. IRV#15395 v4 _31_ Draft of 12/13/01 '* A :k / CHAPTER 7.06 CONTRACT PROVISIONS Sections 7.06.010 Types of Contracts 7.06.020 Contract Clauses 7.06.030 Prevailing Wages and Benefits 7.06.040 Accounting and Verification of Performance 7.06.050 Multi-Year Contracts 7.06.060 Authorization to Execute Documents 7.06.070 Authorization for the Use of Electronic Transmissions & Payments 7.06.080 Price Adjustments 7.06.010 Types of Contracts. (1) Types of Contract. Any type of contract which will promote the best interest of the City may be used; provided that the use of a cost-plus-a- percentage-of-cost contract for the purchase of goods or supplies is prohibited. The contract form will generally include those clauses listed below in Section 7.06.020. Generally the preferred form specifies the tasks to be completed in sufficient detail to pen-nit evaluation of performance of such task, and with a stated component for such task. Payment in advance of performance is discouraged and retention of a percentage of payment until completion is encouraged. A cost- reimbursement contract may be used only when such contract is likely to be less costly to the City than any other type or that it is impracticable to obtain the supplies, services or construction required except under such a contract. Purchase order form shall be used for purchase of all supplies and goods. A contract form meeting the requirements of this Chapter shall be used for all services and public projects, with the exception that, at the discretion of the Director, a purchase order form may be used for contracts less than $5,000 in value. (2) Standard Clauses and their Modification. The Director of Procurement and Contracting, after consultation with the City Attorney, may establish standard contract clauses for use in City contracts and a standard attachment for city requirements in a purchase order. Such standard clauses may be varied, after approval by the city attorney provided that any variations are supported by a written determination that states the circumstances justifying such variations, and provided that notice of any such material variation be stated in the invitation for bids or request for proposals. 7.06.020 Contract Clauses. All City purchase orders and contracts shall include provisions necessary to define the responsibilities and rights of the parties to the agreement. The Director of Procurement and Contracting, after consultation with the City Attorney, may issue clauses appropriate for services and constriction contracts, addressing among others the following subjects: (1) A labor and materials bond, plus a performance bond may be required, from an acceptable surety, in such amounts and in such a form as the City finds reasonably necessary to protect the public interest. IRV#15395 v4 -32- Draft of 12/13/01 /o14%z (2) The unilateral right of the City to order in writing changes in the work within the scope of the contract; (3) The standard of care provisions specifying that performance shall be of the highest standard but in no event less than the generally prevailing industry standard. (4) The unilateral right of the City to order in writing temporary stopping of the work or delaying performance that does not alter the scope of the contract; (5) Variations occurring between estimated quantities of work in contract and actual quantities; (6) Defective pricing; (7) Liquidated damages where the time of performance is critical and damages would otherwise be difficult to determine; (8) Specified excuses for delay or non-perfonnance; (9) Termination of the contract for default; (10) Termination of the contract in whole or in part for the convenience of the City which provisions should be incorporated in every contract unless Director finds good cause for its exclusion; (11) Site conditions differing from those indicated in the contract, or ordinarily encountered, except that a differing site conditions clause need not be included in a contract: (a) When the contract is negotiated; (b) When the contractor provides the site or design; or (c) When the parties have otherwise agreed with respect to the risk of differing site conditions. (12) Incentive payments for early completion of work may provide for bonus payments for a public project or service contract; (13) A "not to exceed amount' limiting the total amount of payments under the contract which can only be exceeded by subsequent amendment of the agreement; (14) Limits on transfer or assignment of the agreement; (15) Insurance provisions as specified by the Risk Manager with provisions providing for adjustment of minimum limits over time; (16) Ability to cancel due to unavailability of fiords when fiords are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period provision that the contract shall be cancelled and the contractor shall be reimbursed for the IRV#15395 A -33- Draft of 12/13/01 10P A 3 reasonable value of any non-recurring costs incurred but not amortized in the price of the supplies or services delivered under the contract. Any such reimbursement shall be specifically identified in the contract in advance so that costs incurred due to termination are clear at any given time. 7.06.030 Prevailing Wages and Benefits. (1) Contracts for public projects, as defined in Section 1720 of the Labor Code, shall not be subject to prevailing wage law (Labor Code Section 1770 et.seq.), except as specified in Subsection (2) of this Section. Any notice inviting bids for such public projects shall include notification of this Subsection. (2) The provisions of Subsection (1) of this Section shall not apply when the public project is funded in whole or in part by state or federal loans or grants and payment of prevailing wages is required in order to receive state or federal funding. 7.06.040 Accounting and Verification of Performance (1) Accounting. Regulations shall be issued requiring that contractors submit appropriate documentation prior to the award of contracts in which the City agrees to reimburse costs, confirming that: (a) the proposed contractor's accounting system will permit timely development of all necessary cost data in the form required by the specific contract type contemplated; and (b) the proposed contractor's accounting system is adequate to allocate costs in accordance with generally accepted accounting principles. (2) Invoices. All invoices will properly document the proportion of the costs or services performed during the period covered by the invoice. (3) Right to inspect plant. The City may, at reasonable times, inspect the part of the plant, place of business, or work site of a contractor or subcontractor at any time which is pertinent to the performance of any contract awarded or to be awarded by the City. (4) Right to audit records. (a) Audit of Cost or Pricing Data. The City may provide for the right in the contract for audit of the books and records of any contractor who submits costs or pricing data to the extent that such books, documents, papers, and records are pertinent to such cost or pricing data. (b) Contract Audit. The City shall be entitled to audit the books and records of a contractor or a subcontractor at any time under any negotiated contract or subcontract other than a fine fixed-price contract to the extent that such books, documents, papers, and records are pertinent to the performance of such contract or subcontract. Such books and records shall be IRV#15395 0 -34_ Draft of 12/13/01 /0AAV ' maintained by the contractor for a period of seven (7) years from the date of final payment under the subcontract 7.06.050 Multi-Year Contracts. (1) Specified Period. Unless otherwise provided by law, a contract for supplies or services may be entered into for any period of time deemed to be in the best interest of the City provided the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting. Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and appropriation of funds therefor. (2) Use. A multi-year contract is authorized where: (a) estimated requirements cover the period of the contract and are reasonably firm and continuing; and (b) such a contract will serve the best interests of the City by encouraging effective competition or otherwise promoting economies in City procurement. (3) Any multi-year contract exceeding a potential term of five (5) years, including any options to renew or extend, shall be approved by City Council. 7.06.060 Authorization to Execute Documents. All documents may be executed by the City Manager whenever such authorization is granted in a resolution, motion, or minute order adopted by the City Council. All contracts over $25,000 shall be executed "approved as to form" by the City Attorney and attested by the City Clerk. In general contracts approved by City Council shall be executed by the Mayor. Contracts which do not require City Council approval shall be executed by City Manager, or if he has delegated awarding authority, in writing reported to City Council, then by the delegee. MV#15395 v4 -35- Draft of 12/13/01 / tA ;tS - 7.06.070 Authorization for the Use of Electronic Transmissions and Payments. Notwithstanding any other provision of law, the use of electronic media, including acceptance of electronic signatures and participation in the State of California "Cal-Card" Procurement Card Program, is authorized consistent with Federal and State of California applicable statutory, regulatory or other guidance for such media, so long as such guidance provides (1) appropriate security to prevent unauthorized access to the bidding, approval, and award processes; (2) appropriate protection is provided to protect the City from unauthorized charges, and (3) accurate retrieval or conversion of electronic forms of such information into a medium which pen-nits inspection and copying. Records may be kept in electronic form. 7.06.080 Price Adjustments. (1) Adjustments in price resulting from the use of contract clauses required by Section 7.06.020 shall be computed in one or more of the following ways: (a) By agreement on a fixed price adjustment before commencement of the pertinent performance or as soon thereafter as practicable; (b) By unit prices specified in the contract or subsequently agreed upon; (c) By the costs attributable to the events or situations under such clauses with adjustment of profit or fee, all as specified in the contract or subsequently agreed upon; (d) In such other marmer as the contracting parties may mutually agree; (2) Required Submissions Relating to Change Orders or Contract Modifications. A contractor may be required to submit cost or pricing data prior to the pricing of any change order or contract modification, including adjustments to contracts awarded by competitive sealed bidding, whether or not cost or pricing data was required in connection with the initial pricing of the contract, when the change or modification involves aggregate increases or aggregate decreases in costs, phis applicable profits, that are expected to exceed $25,000. Change Orders in excess of $25,000 shall be approved by City Council if the total contract amount with that addition would have required City Council approval for the original agreement or unless additional authority to execute change orders was approved by City Council specific to a project and/or contract. (3) Price Adjustment Provision Required. Any contract award, change order, or contract modification under which the submission and certification of cost or pricing data is required shall contain a provision stating that the price to the City, including profit or fee, shall be adjusted to exclude any significant sums if the City finds that such price was increased because the contractor- furnished cost or pricing data was inaccurate, incomplete, or not current as of the date agreed upon between the City and the contractor. IRV#15395 v4 -36- Draft of 12/13/01 &A19 12 t CHAPTER 7.07 DISPOSITION OF SURPLUS PROPERTY Sections 7.07.010 Surplus Property Disposition Guidelines 7.07.020 Disposition of Surplus Property 7.07.010 Surplus Property Disposition Guidelines. (1) The Director shall establish additional guidelines as may be required governing: (2) The transfer of surplus property and operation of the surplus property program; (3) The sale or disposal of surplus, unclaimed and seized property by public auction, competitive fonnal and infonnal bid, or other appropriate method designated by regulation. (4) The trade-in of surplus property for purchase of new equipment. (5) The disposal of surplus real property is not regulated under this Title. 7.07.020 Disposition of Surplus Property. (1) The Director of Procurement and Contracting will operate a surplus property program for the purpose of receiving, storing, transferring, or selling surplus property no longer needed by the City. (2) Departments shall use the property transfer form to request authorization to transfer property to another department, or to request the transfer of property into or from the surplus property program. (3) Smplus property no longer needed by any department shall be offered for sale through competitive bids or public auction. Sales by competitive bid will be conducted in accordance with Section 7.03.030 (Competitive Sealed Bidding) or Section 7.03.060 (Small Purchases), except that sale shall be made to the highest responsible bidder. (4) Unless otherwise provided, all proceeds from sale or auction of surplus property will be deposited into the City's general fund. Proceeds from sale of enterprise, federal, grant or other special designation property will be reimbursed, less prorated selling expenses to the appropriate fund, after completion of each sale. IRV#15395 v4 -37- Draft of 12/13/01 / IP 47 CHAPTER 7.08 PROCEDURES FOR BID CORRECTIONS, OBJECTIONS AND APPEALS Sections 7.08.010 Appeal of Denial of Pre-Qualification Rating 7.08.020 Correction or Withdrawal of Bids for Goods and Services 7.08.030 Bid Protests 7.08.040 Remedies for Solicitations or Awards in Violation of Law 7.08.050 Reporting of Anti-Competitive Practices. 7.08.010 Appeal of Denial of Pre-Qualification Rating Appeal procedure for denial of pre-qualification rating: Contractor will be provided a written notice of basis for prospective contractor's disqualification and any supporting evidence received from others or adduced as a result of an investigation by the City. Appeal time-frame procedures: (i) notice to contractor of City's pre-qualification rating shall be no later than 10 business days prior to closing date of bids; (ii) if contractor wishes to appeal it shall be requested within 2 days of notification; (iii) hearing shall be conducted and a determination made by the City Council within 5 business days after City's receipt of a notice of appeal; 7.08.020 Correction or Withdrawal of Bids for Goods and Services. (a) Before bid opening correction or withdrawal of inadvertently erroneous bids for goods and services may be permitted only in accordance with this Section. Mistakes discovered before bid opening may be modified or withdrawn by written, telegraphic, or electronic notice received in the office designated in the Invitation For Bids prior to the date and time set for bid opening. (b) Any request filed for withdrawal shall be made within five (5) days after bid opening. A bidder shall not be relieved of the bid unless by consent of the awarding authority nor shall any change be made in the bid because of mistakes except a low bidder alleging a material mistake of fact may be permitted to withdraw its bid if the bidder shall establish the following to the satisfaction of awarding authority: 1. a mistake was made; 2. the bidder gave the public entity written notice within five days after the opening of bids of the mistake, specifying in the notice in detail how the mistake occurred; 3. the mistake made the bid materially different then the bidder intended it to be; or 4. the mistake was made in filling out the bid and not due to error in judgment or to carelessness in inspecting the site of the work or in reading the plans or specifications. IRV#15395 0 -38- Draft of 12/13/01 /4 A A? (c) A bidder who claims a mistake or who forfeits his or her bid security by refusing or failing to execute the contract shall be prohibited from participating in further bidding on the project on which the mistake was made or security forfeited. (d) If the City Council deems it is in its best interest, it may, on refusal or failure of the successful bidder to execute the contract, award it to the second lowest bidder. If the second lowest bidder refuses or fails to execute the contract, the awarding authority may likewise award it to the third lowest bidder. On the failure or refusal of the second or third lowest bidder to execute the contract, the security of the second, third or other bidder shall be likewise forfeited. 7.08.030 Bid Protests. (1) Right to Protest. Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may submit a formal protest to the City Manager or his designee requesting an appeal to the city council in accordance with Chapter 2.05 of the Municipal Code. A protest with respect to an Invitation for Bids or Request for Proposals shall be submitted in writing within five (5) business days following the day of opening of bids or closing date of proposals. (2) Stay of Procurement During Protests. In the event of a timely protest under Subsection (1) of this Section, the Director of Procurement and Contracting shall not proceed further with the award of the contract until the appeal is decided. 7.08.040 Remedies for Solicitations or Awards in Violation of Law. (1) Prior to Bid Opening or Closing Date for Receipt of Proposals. If prior to the bid opening or the closing date for receipt of proposals the Director of Procurement and Contracting, after consultation with the City Attorney, determines that a solicitation is in violation of federal, state, or municipal law, then the solicitation shall be canceled or revised to comply with applicable law. (2) Prior to Award. If after bid opening or the closing date for receipt of proposals the Director of Procurement and Contracting, after consultation with the City Attorney, determines that a solicitation or a contemplated award of a contract is in violation of federal, state, or municipal law, then the solicitation or proposal award shall be canceled. (3) After Award. If, after an award, the Director of Procurement and Contracting, after consultation with the City Attorney, determines that a solicitation or award of a contract was in violation of applicable law, then: faith: (a) If the person awarded the contract has not acted fraudulently or in bad (1) The contract is void but may be affinned by the parties, provided it is determined that doing so is in the best interests of the City and the applicable law can be complied with; or IRV#15395 0 -39- Draft of 12/13/0I 10 A Md (2) The contract is void and the person awarded the contract shall be compensated for the actual costs reasonably incurred under the contract, plus a reasonable profit, prior to the termination; or (b) If the person awarded the contract has acted fraudulently or in bad faith the contract is void. 7.08.050 Reporting of Anti-Competitive Practices. When for any reason collusion or other anti-competitive practices are suspected among any bidders or offerors, a notice of the relevant facts shall be transmitted to the State Attorney General and the County of Riverside District Attorney. CHAPTER 7.09 SPECIAL PROGRAMS Section: 7.09.010 Cooperative Purchasing Programs 7.09.020 Assistance to Disadvantaged Business Enterprises (DBE) 7.09.030 Special Provisions for Promoting Local Business Enterprise 7.09.010 Cooperative Purchasing Programs. The City Council may authorize the acquisition of supplies, equipment or services through a joint powers or other cooperative purchasing program with a public entity or association of public agencies or officials such as the California State Association of Counties, League of California Cities, or National Conference of Mayors, provided that the bidder selected has been selected through a competitive process and the Director of Procurement and Contracting finds (a) that the competitive process is similar to that contained in this Title or adequate to protect the public interest, and (b) that due to economies of scale, the nature of the product, or market conditions, the price of the supplies, equipment, or services is likely to be less through the cooperative purchase than through the City's independent purchasing pursuant to this Title. 7.09.020 Assistance to Disadvantaged Business Enterprises (DBE). (1) Source Lists. The Director of Procurement and Contracting shall compile and maintain source lists of disadvantaged business enterprises for the purpose of encouraging procurement from disadvantaged business enterprises and to comply with federal law and authorized regulations which are mandatorily applicable when a procurement involves the expenditure of federal assistance or contract funds. Such source lists are subject to the certification requirements mandated by State or Federal laws. (2) Solicitation Mailing Lists. To the extent deemed by the Director of Procurement and Contracting or as may be required by state or federal code or regulation, the Director of Procurement and Contracting shall include disadvantaged business enterprises on solicitation mailing or election solicitation lists. aV#15395 v4 _40_ Draft of 12/13/01 J2A4% (3) Solicitation of Disadvantaged Business Enterprises. Director of Procurement and Contracting shall assure that disadvantaged business enterprises are solicited for each procurement for which such businesses may be suited. (4) Training Programs. The Director of Procurement and Contracting shall develop special training programs to be conducted by the City to assist disadvantaged business enterprises in learning how to do business with the City. 7.09.030. Special Provisions for Promoting Local Business Enterprise. For the purpose of this section, "local business enterprise" shall mean a business fine with fixed offices or distribution points within the boundaries of the City of Palm Springs, with a valid business license obtained pursuant to Chapter 3.40 through 3.96 of the City's Municipal Code, and a City of Palm Springs business street address. Post Office box numbers or residential addresses may not be used solely to establish status as a "local business enterprise". In determining the lowest responsible bidder the following provisions shall be applied to a bid submitted by a local business enterprise: (1) Contract for Supplies: For any contract for supplies, the net return of any sales tax to the City of Palm Springs to be generated by the purchase of supplies shall be utilized as a bid evaluation factor in determining the lowest net cost to the City; (2) Contract for Services: For any contract for services, except professional services, a reciprocal preference shall be given as against a non-local business enterprise contractor from any state, county or city that gives or requires a preference to contractors from that entity in award of its service contracts. The amount of the reciprocal preference shall be equal to the amount of the preference applied by the entity in which the non-local business enterprise contractor is based as against the bid of a City of Palm Springs contractor; (3) Contract Bids Proposing Sub-Contractors: (a) The prime contractor shall use good faith efforts to sub-contract the supply of materials and equipment to local business enterprises and to sub-contract services to businesses whose work force resides within the Coachella Valley("local sub-contract"); (b) The prime contractor shall submit evidence of such good faith efforts at the time of submission of bids. Good faith efforts may be evaluated by placing advertisements inviting proposals in local newspapers, sending Request For Proposals to local sub-contractors, or by demonstrating that no local sub-contractors are qualified to perform the work or supply the materials or equipment; (c) Any notice inviting bids which may require the use of sub-contractors shall include notification of this subdivision; (d) The City may reject as non-responsive the bid of any contractor proposing to use sub-contractors that fail to comply with the requirements of this Section. 02V#15395 v4 -41- Draft of 12/13/01 / 4 � t�i CHAPTER 7.10 ETHICS IN PUBLIC CONTRACTING Sections: 7.10.010 Employee Conflict of Interest 7.10.020 Gratuities and Kickbacks 7.10.030 Prohibition Against Contingent Fees 7.10.040 Contemporaneous Employment Prohibited 7.10.050 Waivers from Contemporaneous Employment Prohibition and Other Conflicts of Interest 7.10.060 Use of Confidential Information 7.10.010 Employee Conflict of Interest. (1) It shall be unethical for any City employee or City official to participate directly or indirectly in a procurement contract when the City employee or official knows that: (a) the City employee or official, or any member of the City employee's or official's immediate family has a financial interest pertaining to the procurement contract; or (b) any other person, business, or organization with whom the City employee or official, or any member of the City employee's or official's immediate family is negotiating or has an arrangement concerning prospective employment is involved in the procurement contract. (2) A City employee or City official, or any member of the City employee's or official's immediate family who holds a financial interest in a disclosed blind trust shall not be deemed to have a conflict of interest with regard to matters pertaining to that financial interest. (3) No City employee nor City official shall purchase any goods, supplies, equipment, etc., from the City unless the goods, supplies, equipment and materials are offered to the general public on the same tenns and conditions as those applicable to the employee or official, or as the result of a competitive bid process open to the public. (4) City employees or City officials who approve the designation of City property as surplus or recommend an item be surplused are ineligible to purchase said items under any process, including competitive bid. LRV 915395 v4 _42_ Draft of 12/13/01 /t A y2. 7.10.020 Gratuities and Kickbacks. (1) Gratuities. It shall be unethical for any person to offer, give, or agree to give any City employee or fonner City employee, or for any City employee or former City employee to solicit, demand, accept, or agree to accept from another person, a gratuity or an offer of employment in connection with any decision, approval, disapproval, recommendation, or preparation of any part of a program requirement or a purchase request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any proceeding or application, request for riling, determination, claim or controversy, or other particular matter, pertaining to any program requirement or a contract or subcontract, or to any solicitation or proposal therefor. (2) Kickbacks. It shall be unethical for any payment, gratuity, or offer of employment to be made by or on behalf of a subcontractor under a contract to the prime contractor or higher tier subcontractor or any person associated therewith, as an inducement for the award of a subcontract or order. Contract Clause. The prohibition against gratuities and kickbacks prescribed in this Section shall be conspicuously set forth in every contract and solicitation. 7.10.030 Prohibition Against Contingent Fees. It shall be unethical for a person to be retained, or to retain a person, to solicit or secure a City contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, except for retention of bona fide employees or bona fide established commercial selling agencies for the purpose of securing business. 7.10.040 Contemporaneous Employment Prohibited. It shall be unethical for any City employee who is participating directly or indirectly in the procurement process to become or to be, while such a City employee, the employee of any person contracting with the City. 7.10.050 Waivers from Contemporaneous Employment Prohibition and Other Conflicts of Interest. (1) The City Council may grant a waiver from the employee conflict of interest provision (Section 7.12.010; Employee Conflict of hrterest) or the contemporaneous employment provision (Section 7.12.040; Contemporaneous Employment Prohibited) upon making a written determination that: (a) the contemporaneous employment or financial interest of the City employee has been publicly disclosed; (b) the City employee will be able to perform its procurement functions without actual or apparent bias or favoritism; and (c) the award will be in the best interests of the City. IRV#15395 v4 _43_ Draft of 12/13/01 / rAtlat 7.10.060 Use of Confidential Information. It shall be unethical for any employee or former employee knowingly to use confidential information for actual or anticipated personal gain, or for the actual or anticipated personal gain of any other person. SECTION 2. EFFECTIVE DATE. This Ordinance shall be in fall force and effect thirty (30) days after passage. SECTION 3. PUBLICATION. The City Clerk is hereby ordered and directed to certify to the passage of this Ordinance, and to cause the same or a summary thereof or a display advertisement, duly prepared according to law, to be published in accordance with law. IRV#15395 v4 -44- Draft of 12/13/01 go ya ADOPTED this day of 2001. AYES: NOES: ABSENT: ABSTAIN: City Clerk Mayor REVIEWED AND APPROVED I HEREBY CERTIFY that the foregoing Ordinance No. was duly adopted by the City Council of the City of Palm Springs, California, in a meeting held on the _day of 2001, and was published in the DESERT SUN, a newspaper of general circulation on 2001. PATRICIA A. SANDERS City Clerk IRV#15395 v4 _45_ Draft of 12/13/01 / � 44 RESOLUTION NO. A RESOLUTION ELECTING UNDER PUBLIC CONTRACT CODE SECTION 22030 TO BECOME SUBJECT TO THE UNIFORM PUBLIC CONSTRUCTION COSTACCOUNTING PROCEDURES SET FORTH IN THE ACT AND TO THE COMMISSION'S POLICIES AND PROCEDURES MANUAL AND COSTACCOUNT REVIEW PROCEDURES AS THEY MAY EACH FROM TIME TO TIME BE AMENDED. WHEREAS, priorto the passage of Assembly Bill No. 1666, Chap. 1054 Stats. 1983, which added Chapter 2 commencing with Section 22000 to Part 3 of Division 2 of the Public Contract Code, existing law did not provide a uniform cost accounting standard for construction work performed or contracted by local public agencies; and WHEREAS, Public Contract Code Section 22000 et seq., the Uniform Public Construction Cost Accounting Act, establishes such a uniform cost accounting standard; and WHEREAS,the Commission established underthe Act has developed uniform public construction cost accounting procedures for implementation by local public agencies in the performance of or in the contracting for construction of public projects. NOW THEREFORE BE IT RESOLVED the City Council of the City of Palm Springs, California, hereby elects under Public Code Section 22030 to become subject to the uniform public construction cost accounting procedures set forth in the Act and to the Commission's policies and procedures manual and cost accounting review procedures, as they may each from time to time be amended, and directs that the City Clerk notify the State Controller forthwith of this election. ADOPTED this _day of AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED &APPROVED AS TO FORM WPPU BLIC/PU BCONTRCODE2203RESO.WPD 196