TO: HONORABLE MAYOR FROM: Rick Bruneau
AND CITY COUNCIL
SUBJECT: SEE BELOW DATE: September 11, 2023
Approved Date
9/18/23
SUBJECT: AMENDMENTS TO TITLE 4 OF THE SAN JOSE MUNICIPAL CODE
RELATED TO PROCUREMENT OF GOODS AND SERVICES
RECOMMENDATION
Approve an ordinance amending Title 4 of the San José Municipal Code, Chapter 4.04 Contract Authority and adding to and amending Chapter 4.12 Procurements of Goods and Services as follows:
a) Amend Section 4.04.080(A) titled Quarterly Reports to increase the Minimum Contract Values for “Sunshine” Reports to the Informal Procurement Threshold, as defined in Section
4.12.028 of the San José Municipal Code;
b) Amend Section 4.04.085(B) titled Periodic Automatic Adjustments to Contract Authority Limitations and Related Figures to remove references where Section 4.04.085(B) is no longer applicable;
c) Add Section 4.12.018 titled Competitive Procurement Threshold to define the “Competitive Procurement Threshold” to be $10,000.00, as automatically adjusted to remain aligned with the Federal Micro-Purchase Threshold as defined in 48 CFR §2.101; d) Add Section 4.12.028 titled Informal Procurement Threshold to define the “Informal procurement threshold” to be $250,000.00, as automatically adjusted to remain aligned with the Federal Simplified Acquisition Threshold as defined in 48 CFR §2.101; e) Amend Section 4.12.210(A) titled Selection of Procurement Method to align the upper limit of purchases that may be made without a competitive procurement to the Competitive Procurement Threshold;
f) Amend Section 4.12.210(B) titled Selection of Procurement Method to increase the lower and upper limits for using the request for quotes process to the Competitive Procurement Threshold and the Informal Procurement Threshold, respectively; g) Amend Section 4.12.210(C, D) titled Selection of Procurement Method to increase the threshold for using the request for proposals and formal bid processes for services and goods, respectively, to those purchases estimated to exceed the Informal Procurement Threshold; h) Amend Section 4.12.225(B)(3) titled Public Agencies Purchases to allow the City to leverage the results of other public entities’ solicitations which substantially comply with the City's procurement procedures if the respective solicitation gives notice to the bidders that the procurement may be leveraged by other public agencies, which is satisfied if either the COUNCIL AGENDA: 10/3/23
FILE: 23-1321
ITEM: 3.3
HONORABLE MAYOR AND CITY COUNCIL
September 11, 2023
Subject: Amendments to Title 4 of the San José Municipal Code Related to Procurement of Goods and Services
solicitation documents or the executed contract resulting from the procurement includes language allowing other entities to use said procurement, procedure, or contract; i) Amend Section 4.12.350(B1, B2) titled Rejection of Responses to increase the threshold to the Informal Procurement Threshold for when the Procurement Authority may negotiate and execute contracts after all responses have been rejected; j) Amend Section 4.12.415 titled Formal and Informal Protest Procedures to increase the threshold for using formal protest procedures to procurements having a value greater than the Informal Procurement Threshold; and
k) Amend Section 4.12.420 titled Notice of Decision to increase the threshold for sending a notice of intended award to procurements valued over the Informal Procurement Threshold.
SUMMARY AND OUTCOME
Approval of the recommendations streamlines and simplifies the City’s processes for procuring commodities and services and for the required reporting process. Particularly, it:
(1) Increases the Informal Procurement Threshold for formal solicitations; (2) Aligns the City’s procurement thresholds with those of the Federal Government; and (3) Enables staff to leverage other public entities’ procurement efforts more easily.
The aggregate effects of these changes will simplify the procurement process, reduce the timelines for procuring more items, and reduce the backlog of current solicitations.
BACKGROUND
In February 2019, the Finance Department and the City Manager’s Office of Civic Innovation launched the “Procurement Improvement and Readiness Program” in response to Citywide year-over- year increases in demand for procurement services. The Procurement Improvement and Readiness Program called for a comprehensive assessment of the City’s procurement and contracting processes for the acquisition of equipment, goods, and services to identify opportunities for improved efficiencies.
On April 7, 2022, staff presented the results of that comprehensive assessment – FY 2021-2022 City Roadmap: Procurement Status Report – at the City Council Smart Cities and Service Improvements Committee
1. The item included the City of San José Procurement Current State Assessment Report and City of San José Procurement Future State Vision Report from Guidehouse, Inc.2, which presented potential strategies for procurement innovations and reforms, along with an assessment and evaluation of the resources required to implement the recommended strategies. The item was cross-referenced and
1 April 7, 2022, City Roadmap: Procurement Improvement Status Report https://sanjose.legistar.com/LegislationDetail.aspx?ID=5526271&GUID=E5ED8EA7-1B0B-4B32-B6A2-377FDBD74945&Options=&Search= 2 May 10, 2022, City Roadmap: Procurement Improvement Status Report – Supplemental Memorandum https://sanjose.legistar.com/View.ashx?M=F&ID=10856469&GUID=8BCC48A2-70EA-4CE9-BD2C-42F238AB4B65
HONORABLE MAYOR AND CITY COUNCIL
September 11, 2023
Subject: Amendments to Title 4 of the San José Municipal Code Related to Procurement of Goods and Services
heard at the City Council May 10, 2022 meeting3. The City Council subsequently directed staff to return to City Council with recommendations to update Chapter 4.04 Contract Authority and Chapter
4.12 Procurements of Goods and Services of Title 4 of the San José Municipal Code. On February 16, 2023
4, staff presented their status report on recommended amendments to Title 4 of the San José Municipal Code to the Public Safety, Finance and Strategic Support Committee. This status report and recommended amendments to Title 4 were cross-referenced, heard, and accepted by the full City Council on March 14, 20235.
ANALYSIS
As directed by City Council, staff worked with the City Attorney’s Office to prepare the necessary ordinance amending Title 4 of the San José Municipal Code, Chapter 4.04 Contract Authority, and adding to and amending Chapter 4.12 Procurements of Goods and Services. The proposed San José Municipal Code additions and amendments are summarized as follows:
(a) Competitive Procurement Threshold
Staff recommends the Competitive Procurement Threshold automatically adjust to remain aligned with the Federal Micro-Purchase Threshold, as defined in 48 CFR §2.101. (b) Informal Procurement Threshold
Staff recommends the Informal Procurement Threshold be increased from $140,000 to $250,000, and automatically adjust to remain in alignment with the Federal Simplified Acquisition Threshold, as defined in 48 CFR §2.101.
(c) Leveraging Other Public Entity Procurements
Staff recommends the San José Municipal Code be amended to allow the City to leverage the results of other public entities’ solicitations if that solicitation gives notice to the bidders that the procurement may be leveraged by other public agencies, which is satisfied if either the solicitation documents or the executed contract resulting from the procurement includes language allowing other entities to use said procurement, procedure, or contract.
EVALUATION AND FOLLOW-UP
The Finance Department will continue to review future state recommendations from the City of San José Procurement Future State Vision Report to evaluate the feasibility and timing of implementing additional recommendations and advancing components as appropriate for City Council consideration and action.
3 May 10, 2022, City Roadmap: Procurement Improvement Status Report https://sanjose.legistar.com/LegislationDetail.aspx?ID=5567613&GUID=18B91667-1895-4905-ABAE-2E711A986346&Options=&Search= 4 February 16, 2023, Amendments to Title 4 of the Municipal Code Related to Procurement of Goods and Services Status Report. https://sanjose.legistar.com/LegislationDetail.aspx?ID=6002388&GUID=6F1AE4CB-6307-4A64-B029-2B59F72C9B61&Options=&Search= 5 March 14, 2023, Amendments to Title 4 of the San José Municipal Code Chapter 4.04 Contract Authority and Chapter 4.12 Procurements of Goods and Services https://sanjose.legistar.com/LegislationDetail.aspx?ID=6045680&GUID=A46E2D43-CFFC-43A5-927F- 77C4F815CBAD&Options=&Search=
HONORABLE MAYOR AND CITY COUNCIL
September 11, 2023
Subject: Amendments to Title 4 of the San José Municipal Code Related to Procurement of Goods and Services
Approval of this recommendation will be the first reading of the ordinance. The ordinance will return to City Council for its second reading and approval on October 17, 2023. If approved at that time, the ordinance will be in effect as of November 16, 2023.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office and City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the October 3, 2023 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, Public Project File No. PP17-008, General procedure and policy making resulting in no changes to the physical environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
RICK BRUNEAU
Director of Finance
For questions, please contact Albie Udom, Deputy Director of Finance – Purchasing and Risk Management, at [email protected].