Item 4 - Amend PMC to Provide Informal Bidding Procedures for Public Projects Pursuant to the CA Uniform Public Construction Cost Acct Act.February 1, 2022, Item #4City of Poway CITY COUNCIL DATE: February 1, 2022 TO: FROM: Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance ;{b t \ Eric Heidemann, Director of Public Works f J,rl CONTACT: SUBJECT: Summary: Will Wiley, Assistant Director of Public Works for Maintenance OperationcAfi'/ (858) 668-4705 or wwiley@poway.org "'r Electing to Become Subject to the California Uniform Public Construction Cost Accounting Procedures of the Public Contract Code and Amending Poway Municipal Code, Title 3 (Revenue and Finance), Chapter 3.28 to Provide Informal Bidding Procedures for Public Projects Pursuant to the California Uniform Public Construction Cost Accounting Act The California Uniform Public Construction Cost Accounting Act (CUPCCAA) was enacted in 1983 to promote uniformity on bidding procedures and accounting standards for public works projects performed by contract or by staff. CUPCCAA provides greater flexibility and efficiency in the award and execution of public works projects. Staff recommends the City Council adopt a resolution (Attachment A) electing to become subject to the CUPCCAA's bidding procedures for public works projects. The proposed Ordinance (Attachment B) implements bidding procedures to align with CUPCCAA. The Ordinance amends four sections of Chapter 3.28 of the Poway Municipal Code (PMC): 3.28.060 (Formal bidding procedures -public works projects}, 3.28.070 (Formal bidding procedure}, 3.28.110 (Cooperative purchasing}, 3.28.120 (Award and execution of contracts}, and amends Chapter 3.28 by adding one new section, 3.28.150 (Informal bid procedures under the CUPCCAA). Recommended Action: It is recommended that the City Council: 1. Adopt a Resolution pursuant to the provisions of Public Contract Code Section 22030, the City of Poway will voluntarily become subject to the California Uniform Public Construction Cost Accounting Procedures; and 2. Introduce an Ordinance to amend Sections 3.28.060, 3.28.070, 3.28.110, 3.28.120 and add Section 3.28.150 to Chapter 3 of the PMC to implement an informal bid process for public projects for first reading by title only, waive further reading and schedule the adoption of the Ordinance for February 15, 2022. 1 of 11
February 1, 2022, Item #4Discussion: California Public Contract Code requires general law cities to competitively bid public works contracts for all public projects over $5,000 and award the work to the lowest responsible bidder. A public works project is defined as construction, alteration, demolition, installation, or repair work done under contract and paid in whole or in part out of public funds. In 1983, the California Legislature adopted informal bidding procedures via CUPCCAA to promote uniformity in bidding procedures and accounting standards for public works projects performed by contract or by an agency's staff. Approximately 280 cities utilize CUPCCAA standards to perform public works projects, including 11 cities in San Diego County (Carlsbad, Coronado, Del Mar, Encinitas, Escondido, Imperial Beach, Lemon Grove, La Mesa, Oceanside, Solana Beach, and Vista). Procurement methods contained in CUPCCAA provide greater flexibility in the award and execution of public works projects, resulting in improved timelines of project completion, cost savings and simplified administration. In lieu of the $5,000 threshold for the general bidding requirements, CUPCCAA provides informal bidding procedures for public works contracts that are less than $200,000. Key provisions of CU PC CAA are: 1. Level 1 Projects: Public projects of $60,000 or less may be performed by City employees or may be awarded by negotiated contract or purchase order without competitive bidding. 2. Level 2 Projects: Public projects of $200,000 or less may be awarded by informal bidding procedures (minimum of three quotes). The City is required to develop and maintain a contractor's list and send notices to all contractors from the applicable category of work to be bid, provide notices in construction trade journals or both. 3. Level 3 Projects: Public projects of more than $200,000 are required to be awarded by formal bidding procedures. The City is required to adopt a resolution electing to be subject to CUPCCAA's terms (Attachment A) and is required to adopt an ordinance implementing CUPCCAA's informal bid procedures (Attachment B). The following summarizes the amendments to Chapter 3.28 of the PMC incorporating the necessary changes to implement and align the informal bidding procedures provided by CUPCCAA. Informal Bid Procedures: The Ordinance adds Section 3.28.150 to Chapter 3.28, which provides that public projects of $60,000 or less may be awarded without competitive bidding or performed by City staff. This section also increases the dollar amount for which the City Council is required to award contracts for public works projects from $5,000 to $60,000. For public projects greater than $60,000 but less than or equal to $200,000, Section 3.28.150 establishes informal competitive bidding procedures (minimum three quotes). This section further requires the City to maintain a list of qualified contractors identified by category of work (e.g., electrician, plumbing, masonry, etc.), and stipulates that notices inviting informal bids for these projects be sent to the respective contractors on the qualified contractor's list and to specified construction trade journals at least 1 O days in advance of a bid due date. The qualified contractor's list will be developed and updated by the Public Works Department; contractors will be notified annually to apply through the Public Works Department webpage. Resulting contracts must be awarded by the City Council. Lastly, for all public projects more than $200,000 a formal competitive bidding will still be required, and the contract must be awarded by the City Council to the lowest responsible bidder, like the formal bidding procedures currently used by the City. The Ordinance also establishes guidelines for unique 2 of 11
February 1, 2022, Item #4situations, such as when all bids exceed the estimated amount of the project or when two or more bids are identical. The Ordinance provides that the City Manager is authorized to award contracts for public projects less than $60,000, with all other projects going to the City Council for award. Formal Bidding Procedures: Section 3.28.060 and 3.28.070 amends the formal bidding procedure and dollar threshold for which the City administers public projects from $5,000 to the dollar thresholds and procedures provided for CUPCCAA. Cooperative Purchasing: Section 3.28.11 O eliminates the requirement of only allowing purchases from agencies within the state that have awarded contracts through a cooperative purchasing group (U.S. Communities, Sourcewell, Omnia Partners, etc.) to also include those agencies outside the state for specific procurements, such as heavy or unique equipment and/or services to avail itself to a more cost effective and comprehensive market. This section also allows the City to purchase directly off a contract awarded by a public agency within the State not organized through a cooperative purchasing group, a procurement method known as piggybacking. Award and Execution of Contracts: Section 3.28.120 increases the dollar amount of contracts for supplies, services, and equipment that is to be awarded by the City Council from $50,000 or more to $60,000 or more. Additionally, the Ordinance amendment increases the City Manager's contract authority from an amount less than $50,000 to an amount less than $60,000, for supplies, services and equipment. Any contract $60,000 or more must be awarded by the City Council. The increased contract limits are provided to be consistent with the informal bid procedures outlined by CUPCCAA and provided in Section 3.28.150, above. Attached for the Council's consideration is a resolution and ordinance electing and implementing CUPCCAA's informal bidding procedures. The new procedures will give the City more flexibility to address smaller scale public works projects and enable staff to complete these projects more promptly. For larger projects ($60,000-$200,000), the revised procedures will allow the City to utilize informal bidding procedures to solicit competitive bids more quickly while still streamlining the public works procurement process. Finally, for large public projects (>$200,000), the City's procedures will be the same as those currently utilized by the City. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: Informal bidding has lower administrative and supply costs than formal bidding does. As such, staff anticipates minor cost savings from adopting the Act. These cost savings cannot be quantified because they will vary based on the number of projects that qualify for informal bidding. Further, staff also anticipates productivity savings from spending less time managing the formal bid process which will allow staff more time to focus on other projects for the City. Public Notification: None. 3 of 11
February 1, 2022, Item #4Attachments: A. Resolution B. Ordinance Reviewed/Approved By: Wendy Kaserman Assistant City Manager 4 of 11 Reviewed By: Alan Fenstermacher City Attorney
February 1, 2022, Item #4RESOLUTION NO. 22-A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ELECTING TO BECOME SUBJECT TO THE UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING PROCEDURES OF THE PUBLIC CONTRACT CODE WHEREAS, local agencies must competitively bid all public projects (as defined by Sections 20161 of the California Public Contract Code) in excess of $5,000 in accordance with the requirements applicable to cities set forth in the Public Contract Code, commencing with Section 20160; WHEREAS, in 1983, the California Legislature adopted Assembly Bill 1666 which added Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the California Public Contract Code, which provides for a uniform cost accounting standard for construction work performed or contracted by local agencies and further provides for an alternative method for bidding public projects; WHEREAS, California Public Contract Code Section 22030 provides that any city that wishes to avail itself of the alternative procedures for bidding and contracting for public projects must elect, by resolution, to become subject to the uniform construction cost accounting procedures set forth in the Public Contract Code and must notify the State Controller of its election; WHEREAS, the City desires to become subject to the uniform construction cost accounting procedures set forth in the Public Contract Code, commencing with Section 22000; WHEREAS, California Public Contract Code Section 22034 requires each public agency that elects to become subject to the uniform construction cost accounting procedures to enact an informal bidding ordinance that complies with the requirements set forth in said Section 22034; and WHEREAS, the City Council has introduced Ordinance No. __ which enacts procedures governing public works contracts and establishes, among other things, informal bidding procedures in accordance with the requirements of Section 22034 of the Public Contract Code. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: SECTION 1: The City Council hereby elects under Public Contract Code Section 22030 to become subject to the uniform construction cost accounting procedures set forth in the Uniform Public Construction Cost Accounting Act, commencing with California Public Contract Code Section 22000 or any successor statute, and to the policies and procedures manual and cost accounting review procedures promulgated by the California Uniform Construction Cost Accounting Commission, as each may be amended from time to time. SECTION 2: The City Clerk is hereby directed to notify the State Controller of the City Council's election to become subject to the uniform construction cost accounting procedures by transmitting a certified copy of this resolution forthwith. 5 of 11 ATTACHMENT A
February 1, 2022, Item #4Resolution No. 21-Page 2 PASSED, ADOPTED AND APPROVED at a regular Meeting of the City Council of the City of Poway, California on the 1st day of February, 2022 by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Carrie Gallagher, CMC, City Clerk 6 of 11
February 1, 2022, Item #4ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, AMENDING SECTIONS 3.28.060, 3.28.070, 3.28.110, 3.28.120 AND ADDING 3.28.150 TO CHAPTER 3.28 (PURCHASING) OF THE POWAY MUNICIPAL CODE WHEREAS, Chapter 3.28 of the Poway Municipal Code ("PMC") establishes procedures for the purchase of supplies, equipment, materials and services; WHEREAS, the City Council of the City of Poway is currently required by the California Public Contract Code to competitively bid all Public Projects in excess of $5,000; WHEREAS, Public Contract Code, Sections 22032, et. seq. set forth informal bidding procedures for public projects over $60,000 and up to $200,000 upon adoption by a public agency of the California Uniform Public Construction Cost Accounting Act ("CUPCCAA") procedures; WHEREAS, the City Council has determined that it is in the best interest of the City of Poway to adopt these procedures for informal bidding of public projects in accordance with CUPCCAA; and WHEREAS, the City seeks additional Ordinance amendments to four sections and seeks to add one section to reflect changes in procedures pursuant to the adoption of CUPCCAA and subsequent changes in purchasing procedures. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF POWAY DOES ORDAIN AS FOLLOWS: SECTION 1: The above recitations are true and correct. SECTION 2: The City Council hereby approves this Ordinance and amends Sections 3.28.060, 3.28.070, 3.28110, 3.28.120 and adds Section 3.28.150 to Chapter 3.28 of the PMC as specified below. Removals are indicated with strikethrough and additions are indicated with underline. SECTION 3: Section 3.28.060 of the Poway Municipal Code is hereby amended as follows: 3.28.060 Formal bidding procedures -Public works projects Contracts for public projects shall be administered in the manner provided by Section 2-04W 22032 et. seq. of the Public Contracts Code as may be amended from time to time. (Ord. 55 § 6, 1992) SECTION 4: Section 3.28.070 of the Poway Municipal Code is hereby amended as follows: 3.28.070 Formal bidding procedure. 7 of 11 ATTACHMENT B
February 1, 2022, Item #48 of 11 Except as otherwise provided in this chapter, any purchase which exceeds $50,000 $60,000 in value for supplies, services, and equipment, or the amount established by Public Contracts Code Section ~ 22032 and succeeding amendments for contracts on public works projects, will be by formal bid. A. Notices inviting sealed bids shall be published at least twice, not less than five days apart, the first time being 10 days before the date of the opening of the bids, in a newspaper of general circulation in the City, or they shall be posted in at least three places in the City that have been designated by ordinance as the places for posting public notices. B. Notices inviting bids shall include a general description of the articles to be purchased, where bid forms and specifications may be obtained, and the time, date and place for the opening of bids. C. When deemed necessary by the Director of Finance, bidder's security may be prescribed in the public notice inviting bids. Bidders shall be entitled to return of bid security; provided, however, that a successful bidder shall forfeit the bid security upon the bidder's refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed. The City Council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the City Council awards the contract to the next lowest bidder, the amount of the lowest bidder's security shall be applied by the City to the contract price differential between the lowest bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. If the City Council rejects all bids presented, due to the failure of the successful bidder to execute the contract, and readvertises, the amount of the lowest bidder's security may be used to offset the cost of receiving new bids and the surplus, if any, shall be returned to the lowest bidder. D. Sealed bids together with bidder's security shall be submitted to the Director of Finance or designee. The bid shall be so identified on the envelope. Bids shall be opened in public at the date, time and place stated in the public notices inviting the bids. Any bid received after the scheduled time of the bid opening shall be returned to the bidder unopened. A tabulation of all bids received shall be available for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening. E. At its sole discretion, the City Council may reject any and all bids presented and readvertise for bids pursuant to the procedure prescribed above. In the event no bids are received or, all bids are rejected, the City Council may, in accordance with Public Contracts Code Section 20167, and any amendments thereto, direct the Director of Finance or designee to proceed pursuant to paragraphs relating to open market procedure or competitive negotiations. F. If two or more bids received are for the same total amount or unit price, quality and service being equal, the City Council may at its discretion accept the bid it chooses with or without further negotiations with the tie bidders. G. The City shall have authority to require performance and labor and materials security before entering a contract in such amount as it finds reasonably necessary to protect the best interests of the City. If the City requires security, the form and the amount of the security shall be described in the notice inviting bids. The notice inviting bids may
February 1, 2022, Item #4provide that security may be posted in the form of a surety bond, a letter of credit drawn on an institution located in San Diego County and approved by the City Attorney, or a cash deposit. (Ord. 811 § 7, 2017; Ord. 675 § 6, 2008; Ord. 260 §§ 1, 3, 1988; Ord. 188 § 1, 1986; Ord. 55 § 7, 1982) SECTION 5: Section 3.28.110 of the Poway Municipal Code is hereby amended as follows: 3.28.110 Cooperative purchasing. Purchase of supplies, services and equipment by contract, arrangement and agreement for the cooperative purchasing programs with the State, the County and any other public or municipal corporation of the State may be made by the Director of Finance when the administering agency has made their purchase in a competitive manner. In addition, the City Council. City Manager. or purchasing agent at their prescribed authorization levels. may buy directly from a vendor at a price established by another public agency of the State when the other public agency has made its purchase in a competitive manner. (Ord. 811 § 8, 2017; Ord. 675 § 9, 2008; Ord. 260 § 1, 1988; Ord. 55 § 11, 1982) SECTION 6: Section 3.28.120 of the Poway Municipal Code is hereby amended as follows: 3.28.120 Award and execution of contracts. Except in emergency situations, all contracts for supplies, services and equipment in an estimated amount of $50,000 $60,000 or more and public works projects in an estimated amount of $5,000 $60,000 or more shall be awarded by the City Council. Contracts for supplies, services.I. aoo equipment and public projects pursuant to the processes set forth in 3.28.150 in an amount less than $50,000 $60,000 shall be executed by the City Manager or the City Manager's designee. No contract shall be approved by the City Council or City Manager unless the expenditure is consistent with the City's adopted budget. (Ord. 675 § 10, 2008; Ord. 55 § 12, 1982) SECTION 7: Article Ill of the Poway Municipal Code is hereby amended to include the addition of 3.28.150 as follows: 3.28.150 Informal bid procedures under the California Uniform Public Construction Cost Accounting Act. 9 of 11 A. Informal Bid Procedures. A public works construction project as defined in Section 20161 of the Public Contract Code may be performed by contract acquired by informal procedures as set forth in Section 22032, et seq., of the Public Contract Code. B. Contractors List. A list of contractors shall be developed and maintained in accordance with the provisions of Section 22034 of the Public Contract Code and criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission. Such list will be maintained by the public works director or designee. C. Notice Inviting Bids. When a public works construction project is to be performed which is subject to the provisions of this section, a notice inviting informal bids shall be mailed to all contractors for the category of work to be bid, as shown on the list
February 1, 2022, Item #4developed in accordance with subsection B. of this section, and to all construction trade journals as specified by the California Uniform Public Construction Cost Accounting Commission in accordance with Section 22036 of the Public Contract Code. Additional contractors and/or construction trade journals may be notified at the discretion of the public works director: provided however: 1. If there is no list of qualified contractors maintained by the public works director for the particular category of work to be performed, the notice inviting bids shall be sent only to the construction trade journals specified by the commission. 2. If the producer or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors. D. Award of Contract. Award of contract to the successful responsive, responsible low bidder will be executed in accordance with this chapter. SECTION 8: This Ordinance shall be codified. EFFECTIVE DA TE: This Ordinance shall take effect and be in force thirty (30) days after its adoption. CERTIFICATION/PUBLICATION: The City Clerk shall certify the adoption of this Ordinance and cause it or a summary of it, to be published with the names of the City Council members voting for and against the same in the Poway News Chieftain, a newspaper of general circulation in the City of Poway within fifteen (15) days after its adoption and shall post a certified copy of this Ordinance in the Office of the City Clerk in accordance with Government Code § 36933. 10 of 11
February 1, 2022, Item #4INTRODUCED AND FIRST READ at a Regular Meeting of the City Council of the City of Poway, California, held the 1st day of February, 2022, and thereafter. PASSED AND ADOPTED at a Regular Meeting of said City Council held the 15th day of February, 2022, by the following vote, to wit: AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Carrie Gallagher, CMC, City Clerk 11 of 11