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CC 2023-09-26 Purchasing Update_PP City of Arroyo Grande Purchasing Policy and Procedures Update September 26, 2023 1 8/22/2024 Last comprehensive update in 2000 Policies and procedures are outdated and do not incorporate changes in law since last update Policies and procedures do not adequately reflect best public procurement practices Inordinately low bidding and contract award thresholds impact efficiency and effectiveness of City operations Background 2 2 2 Pertinent definitions added Purchasing compliance oversight established Purchasing responsibilities of department directors enumerated Provisions added for: Amending contracts, making purchases with grant funding, disposing of surplus property, and defining conflicts of interest Best practice bid protest procedures incorporated Flexibility for city manager to update administrative policy and procedures provided New requirements associated with green purchasing cross-referenced Key Additions to Purchasing Ordinance 3 3 3 Contract award authority and delegation thereof specified Solicitation procedures for goods and services clarified Requirements associated with emergency purchases articulated Greater flexibility for awarding contracts to local businesses provided Bidding procedures for public projects updated Major Clarifications and Updates to Purchasing Ordinance 4 4 4 Current levels for goods and services exceedingly low compared to best practice metrics Results in administrative and operational inefficiencies Survey of eight cities proximate to Arroyo Grande: Atascadero, Grover Beach, Lompoc, Morro Bay, Paso Robles, Pismo Beach, San Luis Obispo, and Santa Maria Every jurisdiction has higher bidding and contract award thresholds Grover Beach updated policies in August 2023 Atascadero, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo updated policies in 2022 Significant Increases to Bidding and Contract Award Thresholds Recommended 5 5 5 Recommended Increases for Competitively Bidding Goods and Services 6 6 Recommended Increases for Awarding Goods and Services Contracts 7 7 Effect of Increasing Bid and Award Thresholds $10,001 General Services Contract 8 City follows the California Uniform Construction Cost Accounting Act (CUPCCAA) for public works construction Bid thresholds set by Public Contract Code No bids required for projects up to $60,000 Informal bids required for projects greater than $60,000 up to $200,000 Formal bids required for projects greater than $200,000 Threshold amounts are periodically adjusted to account for changes in economic conditions Proposed Increases for Bidding and Awarding Contracts for Public Projects 9 9 9 Currently, Council does not award contracts for public projects Council approves plans and specifications for formal bids prior to bidding, city manager awards contract State law allows cities to authorize city engineer/public works director to approve plans and specifications for formal bids Proposed ordinance includes this authorization while requiring Council approval to award contracts greater than $200,000 Results in greater transparency and consistency with contract award requirements for goods and services Proposed Increases for Bidding and Awarding Contracts for Public Projects (continued) 10 10 10 Questions and Comments 11 11 12 12