City of Culver City, California
City Council Agenda Item Report
A12-1
RECOMMENDATION:
Staff recommends the City Council (1) discuss and consider implementation of a
City Council Policy Related to Requests for Proposals; (2) introduce an Ordinance
amending Sections 3.07.070 and 3.07.075 of the Culver City Municipal Code
(CCMC) relating to personal and professional services agreements and City
Manager contract approval authority, respectively; (3) adopt a Resolution
establishing the policies and procedures for the Request for Proposals (RFP)
process; and (4) direct staff to include provisions relating to design/build and
emergency contracts in the proposed ordinance relating to public works contracts
that will be presented to Council at a future date.
BACKGROUND:
The City Council has directed staff to present recommendations related to the use of
the RFP process. This staff report discusses a recommendation that provides for a
clear, consistent policy applicable to procurement of Personal and Professional
Services. As will be discussed later in this report, procurement of supplies,
materials, and equipment is already governed by existing provisions of the CCMC.
Meeting Date: 04/21/08 Item Number: A-12
AGENDA ITEM: (1) Discussion and Potential Implementation of a City Council
Policy Related to Requests for Proposals; (2) Introduction of an Ordinance
Amending Sections 3.07.070 and 3.07.075 of the Culver City Municipal Code
Relating to Personal and Professional Service Agreements and City Manager
Contract Approval Authority, Respectively; (3) Adoption of a Resolution
Establishing Policies and Procedures for the Request for Proposals Process; and
(4) Direction to Staff to Include Provisions relating to Design/Build and
Emergency Contracts in the Proposed Ordinance Relating to Public Works
Contracts that will be Presented to Council at a Future Date.
Contact Person/Dept.: Martin R. Cole,
Assistant City Manager
Phone Number: (310) 253-6000
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:
Master Notification List (04/17/08)
Department Approval:
Martin R. Cole (04/17/08)
City Attorney Approval:
Carol Schwab (by H. Baker) (04/17/08)
Fiscal Impact Review:
Jeff Muir (04/17/08)
City Manager Approval:
Jerry B. Fulwood (04/17/08) City of Culver City, California
City Council Agenda Item Report
A12-2
DISCUSSION:
Purchasing of Supplies, Materials and Equipment vs. Personal and
Professional Services
Chapter 3.07 of the CCMC was originally adopted in 1965. While it provides
guidance in a number of different areas, the fact the language is over 40 years old,
along with the requirements of the New Charter, provides the City Council with an
opportunity to perform a thorough review and update to the provisions of Chapter
3.07. The Subcommittee (Councilmember Rose and Councilmember Malsin) and
staff provide the following comments and recommendations for the City Council’s
consideration (please note, the following discussion does not include contracts for
Public Works, which shall be discussed separately and later in this report):
In considering the adoption of the RFP Policy, two criteria should be considered:
The Monetary Limit Criterion and the Time Criterion. These two criteria are
discussed below.
Monetary Limit Criterion
In several sections of Chapter 3.07, various dollar limits are specified which trigger
the applicability of different procedures. The following table summarizes these dollar
limits and the associated requirements:
Current Dollar Limit Procedure Triggered
$10,000 or less The City Manager is
authorized to approve
contracts for PPS pursuant to
Section 3.07.075. (Note:
Such authority is for a one-
time only $10,000 expenditure
over the aggregate life of the
agreement, not a per year
amount.)
$20,000 or less (For both supplies and
equipment and personal
and professional services)
Formal bidding is not
required; procurement based
upon competitive quotations,
whenever practical. City City of Culver City, California
City Council Agenda Item Report
A12-3
Manager shall develop written
policies for purchases in this
category. Section 3.07.055.
More than $20,000 Formal bidding required for
supplies or equipment.
Section 3.07.015. This
requirement does not apply to
personal and professional
services. Section 3.07.070.
As indicated in the table above, the CCMC provides the City Manager with the
authority to approve any contract in an amount not-to-exceed $10,000. For reasons
of efficiency and to provide a clearer standard, staff recommends increasing this
number to be consistent with the $20,000 limit, below which formal bidding is not
required. In considering an updated number for the City Manager’s approval
authority, it may be helpful to note that the $10,000 limit was instituted in 1965. By
applying only the change in the Consumer Price Index, $10,000 in 1965 is
equivalent to $67,788 today.
Staff recommendation: That a single dollar limit of $20,000 be implemented where
contracts for personal and professional services (PPS) and supplies, materials,
and equipment (SME) in the amount of $20,000 and below may be approved by the
City Manager and formal bidding/RFPs are not required. For procurements
exceeding $20,000, either formal bidding (for SME) or the Request for Proposals (for
PPS) procedures shall apply and the contracts shall be considered and potentially
awarded by the City Council.
Under the proposed Policy, it is recommended to clarify that this $20,000 contract
approval authority is a cumulative, lifetime limit applicable on a per vendor basis.
For example, if the City Manager were to approve a $20,000 contract in one fiscal
year, future contracts would require the City Council’s approval.
Section 3.07.065 provides for exemptions from the formal bidding requirements for
SME purchases. Staff recommends that these exemptions be retained and is not
proposing any changes in this regard.
Time Criterion
The Subcommmittee discussed the value in periodically employing either the formal
bidding process or the RFP process for procurements of PPS and SME without
regard to the amount of the purchase if a certain amount of time has elapsed since
the last time the PPS or SME had been formally bid or an RFP process had been City of Culver City, California
City Council Agenda Item Report
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undertaken. Therefore, staff recommends as part of the proposed RFP Policy, the
following time criterion be adopted:
• If the same vendor has been utilized for a period of five years, then the
procurement for SME or PPS must be (1) formally bid (for SME) or (2)
obtained through an RFP Process (for PPS) as provided for in the Policy
• The time criterion may be waived by the City Council.
The Time Criteria applies regardless of the amount of the procurement for both SME
and PPS.
Formal Bidding Procedures vs. Requests for Proposals
Chapter 3.07 (specifically Sections 3.07.020 et seq.) provides the process for
purchases using the Formal Bidding Process (for SME). In summary, following are
the key points of the Formal Bidding Process:
• Applies to purchase or contract in excess of $20,000 for supplies or
equipment.
• Publishing of Notice Inviting Sealed Bids
• Solicitation of Bids from bidders on the Bidders List
• Bidder Security may be required
• Bidder Performance/Labor & Materials Bonds may be required
• Public bid opening process by City Clerk’s Office
• Bids are subject to public inspection once opened.
• Bids shall be awarded by the City Council to the responsible bidder
For PPS, an alternative used often by many cities (including Culver City) is the
Request for Proposals process (the RFP Process). The City has often used the
RFP Process for the acquisition of professional services (which services are exempt
from the Formal Bidding Procedures as stated in Section 3.07.070). It is proposed
to formalize the use of the RFP process by adding 3.07.070.D to the CCMC. This
proposed addition would provide the City Council with the authority to establish, by
resolution, procedures for the implementation of an RFP Process for PPS.
Following are the recommended criteria for use of the RFP Process:
(1) Applies to purchase or contract (of PPS) in excess of $20,000;
(2) The RFP Process shall be required when:
a. A single purchase order or contract is estimated to exceed $20,000; or City of Culver City, California
City Council Agenda Item Report
A12-5
b. Purchase orders or contracts with the same vendor exceed $20,000 in
the aggregate ; or
c. The same vendor has been utilized for a period of five years,
regardless of amount of contract (subject to waiver by the City
Council).
d. RFP’s shall be presented to the City Council prior to release.
(3) City Council Waiver
a. The City Council may waive the requirement for the RFP Process
It is proposed that this proposed policy shall become effective on July 1, 2008. To
allow for a smooth implementation of this policy, the City Manager’s Office shall
direct each Department to review all of the City’s existing contracts. Contracts
where the specific vendor has been utilized for a period exceeding five years shall
be presented to the City Council for approval of a release of an RFP or a waiver
therefrom, as applicable.
The RFP Policy provides a process by which the City can confirm, through opening
purchases to the marketplace, that it is receiving the best quality personal and
professional services at a competitive price.
It is the goal of the RFP Policy to provide a consistent process by which all City
Departments conduct their procurement of PPS. Should the City Council adopt the
proposed Ordinance and Resolution implementing these new procedures, the City
Manager’s Office and the City Attorney’s Office will work with all City Departments to
create a boilerplate RFP to avoid duplication of efforts and to ensure RFP’s contain
certain common requirements (for example, insurance, payment processes,
cancellation clauses, etc.).
Contracts to City Employees/Former City Employees
Section 3.07.090 prohibits any City employee in having a financial interest, directly
or indirectly, in any purchase order or contract. To further the City’s high ethical
standards, it is proposed that contracts involving former City employees be awarded
solely by the City Council at a public meeting.
Public Works Contracts
As mentioned earlier in this report, Section 1604 of the New Charter requires the
City Council to establish by ordinance procedures for Public Works contracts. Until
such time as the Council establishes such procedures, the prior procedures set forth
in the Old Charter remain in effect per Section 2007 of the New Charter. It is City of Culver City, California
City Council Agenda Item Report
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important the City have appropriate procedures for public works contracts to ensure
the process has integrity and ensures quality projects in a fair and ethical manner.
Because of the potential complexity of the public works contracting process, a
separate ordinance will be prepared related to this specific subject and presented to
the City Council at a future date. At such time as staff returns with a proposed
ordinance relating to public works contracts, staff is seeking direction on the
following items for potential inclusion in the proposed ordinance:
Design/Build Process
"Design-build" means a procurement process in which both the design and
construction of a project are procured from a single entity.
While not always the most applicable process, the ability of a Charter City to utilize
the Design/Build process should be an option available to the City Council.
Therefore, staff recommends the City Council direct staff to include in a future
proposed ordinance the Design/Build Option.
Emergency Purchases
Section 3.07.060 provides the City Manager, Purchasing Officer, and (with some
limitation) department heads with the authority to procure supplies and equipment in
the event of an emergency. It is proposed that similar language be added for public
works contracts. Because of the extraordinary circumstances applicable to an
emergency, staff recommends the Council direct staff to include such language in a
future ordinance to be considered by the City Council.
FISCAL ANALYSIS:
The proposed Policy for procurement for SME and PPS are expected to streamline
and simplify the City’s purchasing procedures while further strengthening oversight
and implementing best management practices utilized in other surrounding cities.
Updating the administrative approval limit and standardizing the process for
determining when either (1) Formal Bidding or (2) the RFP Process is required will
reduce costs. Some of these cost savings may be offset by increased resources
being allocated to the preparation, distribution, evaluation, and management of the
RFP Process. It should be noted, that during the initial year of operation under this
policy, a significant investment of staff time will be needed to prepare the boilerplate
RFP and to review all of the City’s existing contracts. It is expected this process
may take a full fiscal year to complete.
City of Culver City, California
City Council Agenda Item Report
A12-7
Standardized processes are also expected to result in more frequent bidding/RFP.
This is expected to lower costs as more competitive bids are received and awarded.
ATTACHMENTS:
(1) Chapter 3.07 of the Culver City Municipal Code
(2) Proposed Ordinance (red-lined and clean version)
(3) Proposed Resolution
MOTION:
That the City Council:
1. Discuss the potential implementation a City Council Policy related to
Requests for Proposals; and
2. Introduce an Ordinance amending Sections 3.07.070 and 3.07.075 of the
Culver City Municipal Code relating to personal and professional services
agreements and City Manager contract approval authority, respectively;
3. Adopt a Resolution establishing the policies and procedures for the
Request for Proposals process; and
4. Direct staff to include provisions relating to design/build and emergency
contracts in the proposed ordinance relating to public works contracting
procedures that will be presented to Council at a future date.