EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: December 6, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Tomohito Oku, Finance Director
Greg Henry, Senior Management Analyst
SUBJECT: Updates to the City’s Contracting and Procurement Process Recommendation
Receive and file this report on updates to the City’s Contracting and Procurement Process and adopt a resolution approving the East Palo Alto Purchase Policy & Delegation of Authority.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 3: Increase Organizational Effectiveness and Efficiency Background
A municipal contracting and procurement process is a set of guidelines and procedures that a local government follows when making purchases for goods and services. The purpose of such a process is to ensure that the government makes responsible and transparent decisions when spending taxpayer funds.
The specific details will vary depending on the municipality, but there are some common elements are typically included. For example, the process might outline the purchases are subject to the policy, such as goods and services over a certain dollar amount. It also might specify the approval process for making a purchase, which could include obtaining multiple quotes from vendors or obtaining approval from the Council.
Further, a municipal contracting and procurement process might include guidelines for selecting vendors. For example, the process could require that the selection of vendors be based on factors such as price, quality, and reputation. It might require that vendor selection be through a competitive bidding process in order to ensure the government is getting the best value for its money.
By following a clear set of guidelines and procedures, the City can ensure it is getting the best value for its money and that its spending decisions are subject to oversight and accountability.
The City of East Palo Alto’s contracting and procurement process comprises several elements, including:
· Municipal Code Chapter 2.84 Purchasing, which details the City’s requirements for the purchase or contract of supplies, services, equipment and public projects, including the City’s purchase policy required by Section 2.84.030. · Risk elements such as insurance requirements for contracts. · Additional contract requirements such as Exhibit D of the City’s standard contract which requires contractors follow the City’s Policy Against Discrimination, Harassment and Retaliation.
Analysis
As the City implements the new Enterprise Resource Program which will provide better controls for the City Manager, the Finance Department, and Department Heads, the City will update the current contracting and procurement process, bringing all the elements to a more modern standard.
When updating its municipal contract and purchasing process, the City will consider several key elements. These elements help ensure the process is fair, efficient, and transparent, and that it provides the best value for taxpayer funds.
The City will consider the following in the update to the Purchase Ordinance, Purchase Policy and contracting process:
· Purchasing Limits
Updating the requirements for informal bids or Request for Proposal before award.
· Adding specific “piggyback” terms.
Piggybacking is when an organization uses an existing competitively bid contract as a template to form their own contract directly with the vendor to purchase on the same or similar terms. For public agencies, management of the competitive bidding process typically must be by another government entity or by a mutual benefit association, such as US Communities. · Separate goods from services in the policy
Currently, the procedures for procuring goods and services treat both types of acquisitions the same way. It would improve the City’s purchasing process to separate the process for these two different types of purchases. · Adding local purchasing requirements.
· Ensuring conformity to Federal, State and County laws and requirements. · Public Contract Code
Update to ensure conformity and maximize the benefit of adhering to the California Public Contract Code.
· Setting order of precedents such that if the ordinance or policy conflicts with State, Federal or funding source requirements, those supersede the City requirements.
· Vendor Requirements.
Insurance amounts and types.
Proof of certification.
Because those updates are two distinct elements of the City’s Purchase Ordinance, Policy and contract process, the City will issue a request for proposals for firms to support the City in those updates to ensure that best practices and applicable laws are followed.
In the near term, there are two updates to the process.
The first is approval of the Purchase Policy. While City Council approval is required by Section 2.84.030, there is no current record of such. Adopting the Resolution will remedy this. Further, in order to improve efficiency, the proposed Purchase Policy delegates invoice approval authority down to the Manager level, at the discretion of the Department Heads, for invoices of less than $10,000. Currently, City Department Heads (including the City Manager) spend significant time approving minor expenses.
Second, the City will update is contracting process for vendors providing services that include interaction with children, specifically our Summer and Winter program vendors.
For those contracts, the City will develop requirements for Child Abuse Prevention and Human Trafficking Prevention Training. The exact form is as yet to be determined, but the City will consider either sponsoring and managing the training, or requiring proof of certification as part of the Request for Proposal process.
Fiscal Impact
There is no fiscal impact to this item.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
A. Resolution Approving City Purchase Policy