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CC SR 20190305 F - Purchasing Ordinance Ord No 618RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 03/05/2019 AGENDA REPORT AGENDA HEADING: Consent Calendar AGENDA DESCRIPTION: Consideration and possible action to adopt Ordinance No. 618 repealing and replacing Chapter 2.14 (Approval and Execution of Contracts), Chapter 2.42 (Public Projects) and Chapter 2.44 (Purchasing System) of Title 2 of the Rancho Palos Verdes Municipal Code. RECOMMENDED COUNCIL ACTION: (1) Adopt Ordinance No. 618, AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES REPEALING AND REPLACING CHAPTER 2.14 (APPROVAL AND EXECUTION OF CONTRACTS), CHAPTER 2.42 (PUBLIC PROJECTS), AND CHAPTER 2.44 (PURCHASING SYSTEM) OF TITLE 2 OF THE RANCHO PALOS VERDES MUNICIPAL CODE. FISCAL IMPACT: No fiscal impact on the budget. Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Trang Nguyen, Deputy Director of Finance REVIEWED BY: Deborah Cullen, Director of Finance APPROVED BY: Doug Willmore, City Manager ATTACHED SUPPORTING DOCUMENTS: A. Ordinance No. 618 (page A-1) B. Chapter 2.42 Public Projects Revised (page B-1) The previous Staff Report, Meeting Minutes, and public comments on this topic can be found on the City's website via February 19, 2019, City Council Agenda at http://rpv.granicus.com/player/clip/3344?view_id=5 BACKGROUND AND DISCUSSION: On February 19, 2019, Ordinance No. 618 (Attachment A) was introduced and unanimously approved by the City Council. This Ordinance repeals and replaces Chapter 2.14 (Approval and Execution of Contracts), Chapter 2.42 (Public Projects) and Chapter 2.44 (Purchasing System) of Title 2 of the Rancho Palos Verdes Municipal Code. 1 The attached ordinance and has been updated to reflect the recommendation by Councilman Dyda to Chapter 2.42.030 (B). This evening, Ordinance No. 618 is presented for its second reading and adoption. If adopted this evening, this Ordinance will go into effect on April 5, 2019. ALTERNATIVES: (use when relevant) In addition to the Staff recommendation(s), the following alternative action(s) is/are available for the City Council’s consideration: 1. Direct staff to revise Ordinance No. 618 for re-introduction and/or second reading at a future City Council meeting. 2 R6876-0001\1201238v6.doc ORDINANCE NO. 618 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES REPEALING AND REPLACING CHAPTERS 2.14 (APPROVAL AND EXECUTION OF CONTRACTS), 2.42 (PUBLIC PROJECTS) AND 2.44 (PURCHASING SYSTEM) OF TITLE 2 (ADMINISTRATION AND PERSONNEL) OF THE CITY OF RANCHO PALOS VERDES’ MUNICIPAL CODE WHEREAS, the City Council of the City of Rancho Palos Verdes desires to update Chapters 2.14, Chapter 2.42 and 2.44 of the Rancho Palos Verdes Municipal Code to reflect the current best practices, and to ensure clarity and consistency among all the procurement provisions in the Municipal Code. WHEREAS, the City of Rancho Palos Verdes lets public projects contracts pursuant to the Uniform Public Construction Cost Accounting Act, codified as Section 22000 et seq. of the California Public Contracts Code (the “UPCCAA”). The UPCCAA provides an alternative procedure for the bidding of public projects based on the dollar amount for the project. WHEREAS, the City Council further desires to update the provisions Chapter 2.42 relating to public projects to be consistent with the most current provisions of the UPCCAA. WHEREAS, all legal prerequisites to the adoption of the Ordinance have been met. THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY FIND, DETERMINE, AND ORDER AS FOLLOWS: Section 1: Chapter 2.14 (Approval and Execution of Contracts) of Title 2 of the Municipal Code is being repealed and replaced with the following: “CHAPTER 2.14” APPROVAL AND EXECUTION OF CONTRACTS SECTION: 2.14.010 Applicability 2.14.020 Definitions 2.14.030 Prohibition against splitting projects 2.14.040 Written contract requirement; exceptions 2.14.050 Approval and execution of contracts by purchasing agent 2.14.060 Approval and execution of contracts by city council 2.14.070 City manager’s settlement authority A-1 Ordinance No. 618 Page 2 of 13 2.14.010 – Applicability A. This chapter shall apply to all contracts under Chapters 2.42 (Public Projects) and 2.44 (Purchasing System). B. Any order, purchase, or contract made contrary to the provisions of this chapter and of Chapters 2.42 and 2.44 shall be void ab initio, and the city shall not be obligated thereunder. 2.14.020 – Definitions Unless the context otherwise requires, the following definitions shall govern the construction of this chapter, as well as Chapters 2.42 (Public Projects) and 2.44 (Purchasing Ordinance): “Contract” means a binding, legally enforceable agreement for goods or services. Written contracts shall include, but are not limited to, purchase orders, purchase agreements for supplies and equipment, and services agreements, or any amendment or change order thereto. “Informal bids” shall mean bids or proposals solicited by the purchasing agent or director of public works either in writing or orally by telephone. “Purchasing agent” shall have the same meaning as Section 2.08.070(I), and shall include his or her designee. “Services” means general services to be provided to the city, such as repair and maintenance, professional services, or any services related to a public works pro ject, such as inspection services and construction management services. 2.14.030 - Prohibition against splitting projects A. It shall be unlawful to split into smaller work ord er or projects any contract for supplies, equipment, or services for the purpose of circumventing or evading the requirements of this chapter or Chapter 2.44 (Purchasing Ordinance). B. It shall be unlawful to split or separate into smaller work orders or projects any public project for the purpose of circumventing or evading the require ments of this chapter, Chapter 2.42 (Public Projects), or the Uniform Public Construction Cost Accounting Act. 2.14.040 - Written contract requirement; exceptions A. Written Contracts. All transactions for $3,000 or more per vendor/consultant/contractor per fiscal year, shall require the execution of a written contract prior to the provision of any work, services, or supplies or equipment, provided that: A-2 Ordinance No. 618 Page 3 of 13 1. Performance of work on private property. Where work (including services) shall be performed on private property, regardless of the dollar amount of the proposed work, such work shall be by written contract only, which shall include, but not be limited to, insurance and indemnity requirements satisfactory to the city attorney. 2. Protection of city. A written contract shall be required for the provision of any work (including services), regardless of the dollar amount of the proposed work, if, in the opinion of the purchasing agent or the city attorney, a written contract is necessary to protect the city from increased liability that could arise from the performance of the work. Any written contract required pursuant to this subsection shall include, but not be limited to, insurance and indemnity requirements satisfactory to the city attorney. B. Purchase Orders. The city shall issue a purchase order to accompany every agreement for public projects, services, or supplies and equipment. No contracting party is authorized to perform any service, perform any work on a public project, or provide any supplies or equipment, prior to issuance of a fully executed purchase order. Purchase orders shall not be required for the following: 1. All purchases of less than $3,000 that are processed by the presentation of an invoice acceptable to and approved by the finance departm ent; 2. Utility bills, rents, lease purchases, legal bills, employee reimbursements, settlements, payments to governmental agencies, membership and dues, trust deposit payments. 3. Purchases made by credit cards authorized by the city council and issued to those employees approved by the purchasing agent, provided such purchases conform to the written policy established by the purchasing agent. 2.14.050 - Approval and execution of contracts by purchasing agent. A. The purchasing agent may approve and execute co ntracts for public projects, services, supplies or equipment, with a value of $25,000 or less without prior city council approval, provided that funding for the contract has been allocated in the city’s budget by the city council. B. The purchasing agent may execute any specific contract of any value if so authorized by resolution or minute order of the city council. C. The purchasing agent may approve and execute a grant contract without prior city council approval if the contract complies with all requirements of the grant program and if the city's budget contains sufficient unencumbered funds for a city matching amount, if required, not to exceed a city contribution of $25,000. 2.14.060 - Approval and execution of contracts by city council. All contracts other than contracts pursuant to Section 2.14.050 require city A-3 Ordinance No. 618 Page 4 of 13 council approval and execution by the mayor; provided that the city council may, by minute order or resolution, authorize the purchasing agent to execute any specific contract. 2.14.070 - City manager’s settlement authority. The city manager may approve settlement agreements in an amount up to $25,000 per case.“ Section 2: Chapter 2.42 (Public Projects) of Title 2 of the Municipal Code is being repealed and replaced with the following: “CHAPTER 2.42 PUBLIC PROJECTS 2.42.010 Applicability 2.42.020 Definitions 2.42.030 Bid requirements 2.42.040 Bid security 2.42.050 Interpretation of bid specifications 2.42.060 Exceptions to competitive bid requirement 2.42.070 Change orders and contract amendments 2.42.010 - Applicability. A. This chapter is to provide standardized procedures for awarding contracts for public projects in conformance with the Uniform Public Constr uction Cost Accounting Act. B. The approval and execution of all contracts pursuant to this chapter shall be in conformance with the provisions of Chapter 2.14 (Approval and Execution of Contracts) 2.42.020 - Definitions. Unless the context otherwise requires, the following definitions, as well as the definitions in Chapter 2.14, shall govern the construction of this chapter: "Change Order" means a written authorization from the city directing an addition, deletion, or revision to an awarded purchase order or contract. “Director” shall refer to the Director of Public Works, as defined in Section 12.08.010(A). “Force account” shall refer to the part of the city’s expense account resulting from the employment of a labor force, as distinguished from the p art resulting from outsourcing for similar services. A-4 Ordinance No. 618 Page 5 of 13 “Level 1 Projects” shall mean public projects below the monetary threshold of subdivision (a) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. “Level 2 Projects” shall mean public projects below the monetary threshold of subdivision (b) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. “Level 3 Projects” shall mean public projects below the monetary threshold of subdivision (c) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. "Public Project" shall be defined as that term is defined in Section 22002 of the California Public Contract Code, or any successor statute thereto. "Uniform Public Construction Cost Accounting Act" means the procedures and regulations set forth in Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the California Public Contract Code or any successor act thereto. 2.42.030 - Bid requirements. This section shall govern the procedures for bidding all contracts to perform public projects, including any associated purchase of goods and supplies for such projects. Projects funded by federal, state, or local grants shall be awarded pursuant to the more restrictive bidding requirements. A. Level 1 Projects may be awarded by negotiated contract or by purchase order without competitive bidding. B. Level 2 Projects may be let to contract by the informal bid procedures set forth in this subsection. All Level 2 Projects shall require competitive ora l or written bidding procedure for a public project which is in the best interest of the city. If the director determines that a competitive oral bidding procedure for a public project is in the best interest of the city, the director may solicit oral bids as provided pursuant to subsection (a) below. Otherwise, the director shall require competitive written bids as provided in subsection (b) below. The director may waive the requirement to solicit bids if performance of the public project is available from only one source and may solicit only two bids if performance of the public project is available from only two sources. 1. Oral Bids. i. Bids shall be orally solicited from a minimum of three sources and may be received orally. The person who solicits the bids shall prepare a memorandum to the file documenting the identity of the bidders and the amount of the bids that were obtained. ii. The contract shall be awarded to the lowest responsible bidder only if the director determines that such action is in the best interest of A-5 Ordinance No. 618 Page 6 of 13 the city. The city may reject all bids, or waive any irregularities or informalities in any bid or bidding. 2. Written Bids. i. Bid specifications shall be prepared and a notice inviting informal bids shall be disseminated to a list of at least three prospective bidders in accordance with (d) below. ii. Bids shall be submitted in writing and must be received prior to t he bid closing date to be considered. iii. The contract shall be awarded to the lowest responsible bidder only if the director determines that such action is in the best interest of the city. The city may reject all bids, or waive any irregularities or informalities in any bid or bidding. 3. Contractors List. The city shall develop and maintain a list of contractors, identified according to categories of work, in accordance with the provisions of Section 22034 of the California Public Contract Code, or any successor statute thereto, and the criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission. 4. Notice Inviting Informal Bids. At least ten calendar days prior to the date informal bids are due, the city shall mail a notice inviting informal bids to all contractors from the applicable category of work to be bid, as shown on the contractors list developed in accordance with subsection (c) above, and to all construction trade journals as specified by the California Unif orm Construction Cost Accounting Commission in accordance with Section 22036 of the California Public Contract Code, or any successor statute thereto. Said notice shall describe the project in general terms, shall clearly indicate how to obtain more detailed information about the project, and shall set forth the time and place for the submission of bids. 5. If all bids received are in excess of the amount set forth is subdivision (c) of Section 22032 of the Public Contract Code, the city council may, by adoption of a resolution by a four-fifths vote, award the contract, up to the amount set forth in subdivision (d) of Section 22034 of the Public Contract Code, to the lowest responsible bidder, if the council determines the cost estimate of the city was reasonable. C. Level 3 Projects shall, except as otherwise provided by (B)(e) above, be let to contract by the formal bidding procedures set forth in this subsection. 1. Bid Specifications. For all public projects that must be let pursuant to level three procedures, bid specifications shall be prepared, and notices inviting sealed bids shall be disseminated to at least three prospective bidders approved by the director. In addition, bid plans and working details shall be formally adopted by the city council for all pub lic projects in accordance with the requirements of Section 22039 of the Public Contract Code or any successor statute thereto. 2. Notice Inviting Formal Bids. The city shall publish and mail a notice inviting sealed formal bids in accordance with the provisions of California Public Contract Code Section 22037, or any successor statute thereto. A-6 Ordinance No. 618 Page 7 of 13 3. Receipt of Bids. Bids shall be sealed, and shall not be opened until the time and place designated in the bid specifications. Bids must be received prior to the bid opening to be considered. 4. The city council shall award the bid to the lowest responsible bidder, or reject all bids pursuant to Public Contract Code Section 22038, or its successor statute. The city council may waive any irregularities or informalities in any bid or bidding. 5. The city council may waive the procedures required by this subsection if the city council determines that performance of the public project is available only from a single source and may send a notice inviting bids to only two prospective bidders if the council determines that performance of the public project is available from only two sources. 2.42.040 - Bid security. A. Bid security shall be required as a condition of submitting a written bid unless deemed unnecessary by the director. B. If a bidder is awarded a bid and then fails or refuses to execute a written contract with the city, the city may award the bid to the next lowest responsible bidder. If the bid is awarded to the next lowest responsible bidder under these circumstances, the amount of the lower bidder's bid security shall be applied by the city to the purchase or contract price differential between that bidder and the next lowest responsible bidder, and the remainder, if any, shall be returned to the lower bidder. 2.42.050 - Interpretation of bid specifications. Oral interpretation of written bid specifications shall not be made to prospective bidders. If a prospective bidder discovers discrepancies or omissions in any specification, or if the bidder is in doubt as to t he meaning of any specification, the bidder shall request a written interpretation or modification from the city. If interpretations or modifications are deemed necessary, the city will then issue a written addendum to all parties known to have received copies of the specifications. 2.42.060 – Exceptions to competitive bid requirement. A. Emergency. If an emergency situation requires that a public facility be repaired or replaced to permit the continued conduct of the operation or services of the city or to avoid danger to life or property, the city council may proceed to replace or repair the facility in accordance with the provisions of Section 22035 of the California Public Contract Code or any successor statute thereto. B. Any other bidding exemption permitted by law. A-7 Ordinance No. 618 Page 8 of 13 2.42.070 - Change orders and contracts amendments. A. Any alteration to, amendment of, or deviation from an awarded purchase order or contract as to scope, cost, time for completion, material, or equipment furnished as a part of the purchase order or contract, or any alteration to, amendment of, or deviation from the nature of work to be performed, shall require the completion and issuance of a change order or amendment. Additions to work cannot be combined with deletions to work to avoid the change order or amendment requirement. B. The change order or amendment shall be approved and executed by the person or body that, pursuant to Section 2.42.030 (Bid Requirements), would have authority to approve and execute a purchase for the combined amo unt of the original contract and the change order or amendment. No change order or amendment shall be binding on the city until approved as provided herein. C. Change orders shall be issue only if all the following conditions are met: 1. The change order arises in good faith out of an unknown condition or unforeseen circumstance differing materially from the conditions of the purchase or contract, or, alternatively, the change order arises due to an error in the city's specifications that accompanied the invitation for bids. 2. The change order is reasonably related to the scope of work authorized under the original contract. 3. The amount of the change order is within an authorized contingency amount. 4. The change order shall be in accordance with the most current ed ition of the "Standard Specifications for Public Works Construction," and/or Cal- Trans standards and/or LA County standards. D. Contract amendment. Any alteration to, amendment of, or deviation from a contract as to scope, cost, time for completion, material, or equipment furnished as a part of the contract, or any alteration to, amendment of, or deviation from the nature of work to be performed, that does not meet all the requirements of Subsection (C), above, shall require an executed contract amendment. Exa mples requiring an executed contract amendment include, but are not limited to, an expansion of the scope of work, contract term extension, and an increase in compensation not previously authorized by the purchasing agent or city council, as applicable.“ Section 3: Chapter 2.44 (Purchasing System) of Title 2 of the Municipal Code is being repealed and replaced with the following: “CHAPTER 2.44 PURCHASING ORDINANCE 2.44.010 Policy 2.44.020 Applicability 2.44.030 Definitions A-8 Ordinance No. 618 Page 9 of 13 2.44.040 Authority and responsibility 2.44.050 Procurement procedures for services, supplies, and equipment 2.44.060 Use of vendors selected by another agency 2.44.070 Exceptions to procedures for quotes and proposals 2.44.080 Emergency purchases 2.44.090 Payment of invoices 2.44.100 Use of city credit cards 2.44.110 Conference expense 2.44.120 Petty cash 2.44.130 Sale of obsolete personal property 2.44.010 - Policy. It shall be the policy of the city to secure services, supplies and equipment at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases and to assure the quality of purchases. 2.44.020 - Applicability. A. The procedures set forth in this chapter shall not apply to contracts for "public projects," as defined in Section 22002 of the California Public Contract Code or any successor statute, which are governed by the procedures set forth in Chapter 2.42 (Public Projects). B. Approval and execution of contracts for supplies, equipment, and services are subject to the provisions of Chapter 2.14 (Approval and Execution of Written Contracts) 2.44.030 – Definitions. Unless the context otherwise requires, the definitions in Chapter 2.14 shall govern the construction of this chapter: 2.44.040 - Authority and responsibility. The authority and responsibility for the purchase of services, supplies, and equipment for the city shall be vested in the purchasing agent, subject to the contract approval provisions of Chapter 2.14. The purchasing agent shall purchase services, supplies and equipment in accordance with the procedures prescribed in this chapter. 2.44.050 - Procurement procedures for services, supplies, and equipment. A. Purchases of services, supplies, or equipment with an aggregate value of $3,000 or less per fiscal year per vendor or service provider shall not require a written contract, and shall be procured on the basis of the combination of price and quality that best serves the city’s needs. A-9 Ordinance No. 618 Page 10 of 13 B. Purchases of services, supplies, or equipment in excess of $3,000 but less than or equal to $25,000 shall be made as follows: 1. The purchasing agent shall obtain between one and three informal quotes or proposals, at his or her discretion. Informal quotes or proposals may be obtained in writing or orally by telephone. 2. Contracts for the purchase of supplies and equipment shall be awarded to the lowest responsible and responsive vendor, provided the quality of the supplies or equipment meets the city’s requirements. The purchasing agent may reject any and all quotes, waive any irregularity in any quote, or re-solicit quotes. 3. Contracts for services shall be awarded to the service provider who offers the city, as determined by the purchasing agent in his or her sole discretion, the best combination of price and quality. 4. If a vendor or service provider provides a quote orally, the purchasing agent shall maintain written notes or documentation confirming the receipt and content of such oral quote and shall require the vendor or service provider to provide an electronic transmission, or other written documentation, confirming the substance of the oral quote. Copies of all written quotes received together with the purchase agent’s written documentation, or the purchasing agent’s notes confirming oral quotes and the confirming documentation provided by the vendor or service provider, shall be public records to be retained for not less than two years after receipt. Notwithstanding the foregoing, vendor proprietary data shall not be open for public inspection. C. Supplies, equipment, and services, of an estimated value greater than $25,000. 1. Purchases of supplies and equipment, and provision of services, of an estimated value greater than $25,000 shall be procured pursuant to quotes or proposals. The city council shall award the contract to the vendor or service provider who offers the best combination of price and quality, as determined by the city council in its sole discretion. 2. On refusal or failure of the successful vendor or service provider to execute the contract, the city council may award the contract to another vendor or service provider in conformance with Subsection (C)(1), above. 3. The city council may reject any and all quotes or proposals, waive any irregularity in any quote or proposal, or re-advertise for quotes or proposals. 4. If two or more quotes received for supplies and equipment are for the same total amount or unit price, the council may accept the quote it considers best meets the needs of the city. 2.44.060 - Use of vendors selected by another agency. The purchasing agent may purchase services, supplies and equipment for which the city would normally follow its own bid procedures from a vendor awarded a bid by another public agency if said agency utilized procedures substantially the same as those normally utilized by the city. The amount of said purchase shall be based on the A-10 Ordinance No. 618 Page 11 of 13 price bid in the other jurisdiction. 2.44.070 - Exceptions to procedures for quotes and proposals. The procurement procedures of Section 2.44.030 050 (Procurement procedures for services, supplies, and equipment) shall not apply to the purchase of services, supplies, and equipment under any of the following circumstances: A. The procurement of specific professional services such as contracts with attorneys, architects, engineers, auditors, financial advisors, technology professionals, geotechnical engineers, surveyors, geologists, or any other similar licensed professional, or when the services contracted for deal with election services, public relations and related activities; negotiations for or acquisition of land; insurance; bonds; or other services of a similar nature. B. The purchasing agent finds that such services, supplies, or equipment are unique because of the quality, durability, availability, or fitness for a particular use and are available from only one source. C. The purchasing agent finds that exigent circumstances, such as natural disasters or other unforeseen circumstances, require the immediate purchase of such services, supplies, or equipment. The purchasing agent shall record the exigent circumstances on the purchase order, and shall report the purchase to the city council at the first available general meeting of the city council. D. The city council finds that due to the nature of the services, supplies, or equipment, bidding is not likely to result in the lowest price or greatest benefit to the city. 2.44.080 - Emergency purchases. Emergency purchases required due to natural disasters or other unforeseen circumstances may be made by the purchasing agent if so noted on the purchase order form. Any such purchase shall be reported to the city council at the earliest opportunity, including supporting documentation to demonstrate the emergency and to provide a detailed accounting. 2.44.090 - Payment of invoices. A. All invoices shall be submitted directly to the Finance Department by the supplier of the equipment, supplies or services. Each invoice shall be approve by the department head or his or her designee and director of finance for payment. B. Payment disputes will be resolved by the director of finance. 2.44.100 – Use of city credit cards. Purchases made by city-issued credit cards shall not include services provided to the City, and shall conform to the written policy established by the purchasing agent. The customer's copy of the invoice shall be delivered to the director of finance for approval for payment. A-11 Ordinance No. 618 Page 12 of 13 2.44.110 - Conference expense. Expenses incurred during attendance at conferences, or other activitie s in the interests of the city that require an overnight stay may be paid by: A. A credit card with all invoices returned to the director of finance. B. Obtaining a warrant from the director of finance in the amount of the advanced estimation of expense approved by the director of finance. Reconciliation shall be made within 30 days of returning to the city. C. By submission for reimbursement of appropriate expense invoices within 30 days after returning to the city. 2.44.120 - Petty cash. There is established a petty cash fund in the maximum amount of $5,000 that is administered under the supervision of the director of finance, which shall be used to make change by city cashiers, and from which cash disbursements may be made to city employees in an amount not to exceed $100. Disbursements must be accompanied by an invoice in the amount of the request, signed by the originator and approved by the department head or designee. An invoice is not required for auto mileage reimbursement, metered parking and any other requirement for which an invoice cannot be expected. 2.44.130 - Sale of obsolete personal property. The purchasing agent shall sell worn-out, scrap, or obsolete personal property, or exchange the same for, or trade in the same on new supplies and equipment, including property of all departments, by soliciting bids. No bids will be accepted from city employees or contractors. If the value of the property to be sold is of a value of $3,000 or less, the sale shall be approved by the city manager. In the event the value of the property to be sold is more than $3,000, the sale shall be subject to the approval of the city council.“ Section 4: The City Clerk shall certify to the adoption of this ordinance and shall cause the same to be posted in the manner prescribed by law. PASSED, APPROVED and ADOPTED this ___ day of _____2019. _____________________ Mayor Attest: _______________________________ City Clerk A-12 Ordinance No. 618 Page 13 of 13 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) CITY OF RANCHO PALOS VERDES ) I, Emily Colborn, City Clerk of the City of Rancho Palos Verdes, do hereby certify that the whole number of members of the City Council of said City is five; that the foregoing Ordinance No. 618 passed first reading on February 19, 2019, was duly and regularly adopted by the City Council of said City at a regular meeting thereof held on March 5, 2019, and that the same was passed and adopted by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ________________________ City Clerk A-13 Chapter 2.42 - PUBLIC PROJECTS 2.42.010 - Applicability. A. This chapter is to provide standardized procedures for awarding contracts for public projects in conformance with the Uniform Public Construction Cost Accounting Act. B. The approval and execution of all contracts pursuant to this chapter shall be in conformance with the provisions of Chapter 2.14 (Approval and Execution of Contracts) (Ord. 456 § 1 (part), 2007) 2.42.020 - Definitions. Unless the context otherwise requires, the following definitions, as well as the definitions in Chapter 2.14, shall govern the construction of this chapter: "Change Order" means a written authorization from the city directing an addition, deletion, or revision to an awarded purchase order or contract. “Director” shall refer to the Director of Public Works, as defined in Section 12.08.010(A). “Force account” shall refer to the part of the city’s expense account resulting from the employment of a labor force, as distinguished from the part resulting from outsourcing for similar services. “Level 1 Projects” shall mean public projects below the monetary threshold of subdivision (a) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. “Level 2 Projects” shall mean public projects below the monetary threshold of subdivision (b) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. “Level 3 Projects” shall mean public projects below the monetary threshold of subdivision (c) of Section 22032 of the Public Contract Code, as it may be amended from time to time by the State Controller or the State Legislature. "Public Project" shall be defined as that term is defined in Section 22002 of the California Public Contract Code, or any successor statute thereto. "Uniform Public Construction Cost Accounting Act" means the procedures and regulations set forth in Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the California Public Contract Code or any successor act thereto. B-1 (Ord. 456 § 1 (part), 2007) 2.42.030 - Bid requirements. This section shall govern the procedures for bidding all contracts to perform public projects, including any associated purchase of goods and supplies for such projects. Projects funded by federal, state, or local grants shall be awarded pursuant to the more restrictive bidding requirements. A. Level 1 Projects may be awarded by negotiated contract or by purchase order without competitive bidding. B. Level 2 Projects may be let to contract by the informal bid procedures set forth in this subsection. All Level 2 Projects shall require competitive oral or written bidding procedure for a public project which is in the best interest of the city. If the director determines that a competitive oral bidding procedure for a public project is in the best interest of the city, the director may solicit oral bids as provided pursuant to subsection (a) below. Otherwise, the director shall require competitive written bids as provided in subsection (b) below. The director may waive the requirement to solicit bids if performance of the public project is available from only one source and may solicit only two bids if performance of the public project is available from only two sources. 1. Oral Bids. i. Bids shall be orally solicited from a minimum of three sources and may be received orally. The person who solicits the bids shall prepare a memorandum to the file documenting the identity of the bidders and the amount of the bids that were obtained. ii. The contract shall be awarded to the lowest responsible bidder only if the director determines that such action is in the best interest of the city. The city may reject all bids, or waive any irregularities or informalities in any bid or bidding. 2. Written Bids. i. Bid specifications shall be prepared and a notice inviting informal bids shall be disseminated to a list of at least three prospective bidders in accordance with (d) below. ii. Bids shall be submitted in writing and must be received prior to the bid closing date to be considered. iii. The contract shall be awarded to the lowest responsible bidder only if the director determines that such action is in the best interest of the city. The city may reject all bids, or waive any irregularities or informalities in any bid or bidding. 3. Contractors List. The city shall develop and maintain a list of contractors, identified according to categories of work, in accordance with the provisions of Section 22034 of the California Public Contract Code, or any B-2 successor statute thereto, and the criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission. 4. Notice Inviting Informal Bids. At least ten calendar days prior to the date informal bids are due, the city shall mail a notice inviting informal bids to all contractors from the applicable category of work to be bid, as shown on the contractors list developed in accordance with subsection (c) above, and to all construction trade journals as specified by the California Uniform Construction Cost Accounting Commission in accordance with Section 22036 of the California Public Contract Code, or any successor statute thereto. Said notice shall describe the project in general terms, shall clearly indicate how to obtain more detailed information about the project, and shall set forth the time and place for the submission of bids. 5. If all bids received are in excess of the amount set forth is subdivision (c) of Section 22032 of the Public Contract Code, the city council may, by adoption of a resolution by a four-fifths vote, award the contract, up to the amount set forth in subdivision (d) of Section 22034 of the Public Contract Code, to the lowest responsible bidder, if the council determines the cost estimate of the city was reasonable. C. Level 3 Projects shall, except as otherwise provided by (B)(e) above, be let to contract by the formal bidding procedures set forth in this subsection. 1. Bid Specifications. For all public projects that must be let pursuant to level three procedures, bid specifications shall be prepared, and notices inviting sealed bids shall be disseminated to at least three prospective bidders approved by the director. In addition, bid plans and working details shall be formally adopted by the city council for all public projects in accordance with the requirements of Section 22039 of the Public Contract Code or any successor statute thereto. 2. Notice Inviting Formal Bids. The city shall publish and mail a notice inviting sealed formal bids in accordance with the provisions of California Public Contract Code Section 22037, or any successor statute thereto. 3. Receipt of Bids. Bids shall be sealed , and shall not be opened until the time and place designated in the bid specifications. Bids must be received prior to the bid opening to be considered. 4. The city council shall award the bid to the lowest responsible bidder, or reject all bids pursuant to Public Contract Code Section 22038, or its successor statute. The city council may waive any irregularities or informalities in any bid or bidding. 5. The city council may waive the procedures required by this subsection if the city council determines that performance of the public project is available only from a single source and may send a notice inviting bids to only two prospective bidders if the council determines that performance of the public project is available from only two sources. B-3 (Ord. 456 § 1 (part), 2007) (Ord. No. 522, § 1, 6-21-11; Ord. No. 539, §§ 1, 2, 11-20-12) 2.42.040 - Bid security. A. Bid security shall be required as a condition of submitting a written bid unless deemed unnecessary by the director. B. If a bidder is awarded a bid and then fails or refuses to execute a written contract with the city, the city may award the bid to the next lowest responsible bidder. If the bid is awarded to the next lowest responsible bidder under these circumstances, the amount of the lower bidder's bid security shall be applied by the city to the purchase or contract price differential between that bidder and the next lowest responsible bidder, and the remainder, if any, shall be returned to the lower bidder. (Ord. 456 § 1 (part), 2007) 2.42.050 - Interpretation of bid specifications. Oral interpretation of written bid specifications shall not be made to prospective bidders. If a prospective bidder discovers discrepancies or omissions in any specification, or if the bidder is in doubt as to the me aning of any specification, the bidder shall request a written interpretation or modification from the city. If interpretations or modifications are deemed necessary, the city will then issue a written addendum to all parties known to have received copies of the specifications. (Ord. 456 § 1 (part), 2007) 2.42.060 – Exceptions to competitive bid requirement. A. Emergency. If an emergency situation requires that a public facility be repaired or replaced to permit the continued conduct of the operation or services of the city or to avoid danger to life or property, the city council may proceed to replace or repair the facility in accordance with the provisions of Section 22035 of the California Public Contract Code or any successor statute thereto. B. Any other bidding exemption permitted by law. (Ord. 456 § 1 (part), 2007) 2.42.070 - Change orders and contracts amendments. A. Any alteration to, amendment of, or deviation from an awarded purchase order or contract as to scope, cost, time for completion, material, or equipment furnished as a part of the purchase order or contract, or any alteration to, amendment of, or deviation from the nature of work to be performed, shall require the completion B-4 and issuance of a change order or amendment. Additions to work cannot be combined with deletions to work to avoid the change order or amendment requirement. B. The change order or amendment shall be approved and executed by the person or body that, pursuant to Section 2.42.030 (Bid Requirements), would have authority to approve and execute a purchase for the combined amount of the original contract and the change order or amendment. No change order or amendment shall be binding on the city until approved as provided herein. C. Change orders shall be issue only if all the following conditions are met: 1. The change order arises in good faith out of an unknown condition or unforeseen circumstance differing materially from the conditions of the purchase or contract, or, alternatively, the change order arises due to an error in the city's specifications that accompanied the invitation for bids. 2. The change order is reasonably related to the scope of work authorized under the original contract. 3. The amount of the change order is within an authorized contingency amount. 4. The change order shall be in accordance with the most current edition of the "Standard Specifications for Public Works Construction," and/or Cal- Trans standards and/or LA County standards. D. Contract amendment. Any alteration to, amendment of, or deviation from a contract as to scope, cost, time for completion, material, or equipment furnished as a part of the contract, or any alteration to, amendment of, or deviation from the nature of work to be performed, that does not meet all the requirements of Subsection (C), above, shall require an executed contract amendment. Examples requiring an executed contract amendment include, but are not limited to, an expansion of the scope of work, contract term extension, and an increase in compensation not previously authorized by the purchasing agent or city council, as applicable. (Ord. 456 § 1 (part), 2007) B-5