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HomeMy WebLinkAbout3.b. Review Draft Position Paper to Adopt Proposed Revisions to BP 035- Purchasing Page 1 of 5 Item 3.b. Algi CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER DRAFT MEETING DATE: OCTOBER 22, 2019 SUBJECT: REVIEW DRAFT POSITION PAPER TO ADOPT PROPOSED REVISIONS TO BOARD POLICY NO. BP 035 - PURCHASING SUBMITTED BY: INITIATING DEPARTMENT: DONNA ANDERSON, ASSISTANT TO THE SECRETARYOF THE DISTRICT SECRETARY OF THE DISTRICT KATI E YOUNG, SECRETARY OF THE DISTRICT REVIEWED BY: STEPHANIE KING, PURCHASING AND MATERIALS SERVICES DIVISION MANAGER PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ANN SASAKI, DEPUTY GENERAL MANAGER KENTON L.ALM, DISTRICT COUNSEL/ ROGER S. BAILEY, GENERAL MANAGER ISSUE On August 16, 2018, the Board adopted Board Policy No. BP 035 — Purchasing, which was the first time the policy had been updated since 2003. This policy was reviewed by the Administration Committee in August 2018, along with two other policies: BP 036 — Informal Bidding, and BP 037 — Delegation of Authority to General Manager. The Committee suggested that, if adopted by the Board, all three policies be reviewed by staff prior to their normal biennial review to consider any fine tuning. All three policies are being brought forth at this time but they have been split into separate items for ease of review and action. BACKGROUND Several changes are being proposed to BP 035 — Purchasing, as explained below: 1. Policy Statement 8. The intent of this policy statement was to focus on the purchase of environmentally sustainable products and services that both minimize environmental impacts and are cost effective. As currently written, the emphasis is on cost effectiveness, which is not the intention, but obviously is a consideration. Staff proposes a wording change as indicated in the strikeout October 22, 2019 Regular ADM IN Committee Meeting Agenda Packet- Page 16 of 242 Page 2 of 5 attached. 2. Purchasing Authority. Rather than incorporating authority limits in more than one Board policy, a new reference was added to BP 037 — Delegation of Authority to General Manager, which clarifies authority limits regarding contracts for goods and services. 3. Solicitation Requirements. The Board has designated requirements for solicitation regarding certain categories of procurement. One example is the December 7, 2017 increase from $3,500 to $5,000 for the purchase of goods and services (including purchases made using procurement cards). (This increase arose out of the Board discussion on local area preference.) These Board- approved limits for when quotes are required (other than UPCCAA limits) are no longer captured in any policy, presumably because they were considered to be of a procedural nature. But the value limits were established by the Board either by separate Board action, as in 2017, or in the 2003 Purchasing Policy, which was rescinded upon adoption of this Board Policy last year. Not addressing them in the policy may lead staff to think they are procedural and subject to being changed by the General Manager or Purchasing Manager, which could lead to inconsistency and confusion. Staff proposes that these Board-approved limits related to procurement of goods and services and professional consulting services be captured in a simple new chart entitled "Solicitation Requirements" attached as an exhibit to BP 035. The above proposed changes are shown in strikeout inAttachment 1. If approved by the Board, BP 035 — Purchasing will come up for regular biennial review two years from now. ALTERNATIVES/CONSIDERATIONS The Board could choose not to adopt the proposed revisions to B P 035, or the Board could provide some other direction to staff. FINANCIAL IMPACTS There are no fiscal impacts anticipated from adopting the proposed revisions. COMMITTEE RECOMMENDATION Staff presented these proposed revisions to the Administration Committee on October 22, 2019, and the Committee recommended RECOMMENDED BOARD ACTION Adopt proposed revisions to BP 035 — Purchasing, effective immediately. Strategic Plan Tie-In GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility Strategy 2- Manage costs ATTACHMENTS: 1. BP 035 - Purchasing (with proposed changes in strikeout) October 22, 2019 Regular ADM IN Committee Meeting Agenda Packet- Page 17 of 242 Page 3 of 5 Number: BP 035 ATTACHMENT 1 Related Admin. Procedure: Pending Authority: Board of Directors _ _- oil- Adopted: 8/16/18 Revised: / /19 Draft CENTRALSAN Reviewed Initiating Dept./Div.: Administration / Purchasing & Materials Services BOARD POLICY PURCHASING PURPOSE To receive the best value for materials, supplies, equipment, services and public works projects, and to promote free and open competition through a fair and equitable selection process that complies with applicable federal, state and local laws and regulations. POLICY 1. Comply with applicable federal, state and local procurement laws and regulations; 2. Provide a fair and equitable bidding environment that fosters competition from responsive and responsible prospective contractors and vendors; 3. Be transparent; 4. Provide a timely, effective and consistent method of procurement of goods and services; 5. Provide best overall value for the supply of goods and services to support the needs of District departments and divisions; 6. Follow good business practices and adhere to all District policies and procedures; 7. Perform purchasing activities with the highest ethical standards; 8. Support the purchase of cost effective and environmentally sustainable products and services that minimize environmental impacts to the extent practicable and cost effective; 9. Manage inventory in a fiscally responsible manner; October 22, 2019 Regular ADMIN Committee Meeting Agenda Packet- Page 18 of 242 Page 4 of 5 Number: BP 035 PURCHASING Page 2of3 10. Dispose of surplus, damaged, scrap, excess and obsolete material, equipment and supplies efficiently and economically; and PURCHASING AUTHORITY The ndministratiOR DepartmeRt'c Purchasing and Materials Services Division is the centralized procurement authority to contract for goods and services on behalf of the District in accordance with Chapter 2.36, Section 2.36.010 of the Central Contra Costa Sanitary District Code. Refer to Board Policy No. BP 037 — Delegation of Authority to General Manager for specific authority limits regarding contracts for goods and services. SOLICITATION REQUIREMENTS The minimum solicitation requirements for procurement of goods and services and professional consulting services are set forth in Exhibit A. RESPONSIBILITIES The General Manager and Purchasing and Materials Services Manager are authorized to establish and implement procedures to support this Policy. [Original retained by the Secretary of the District] October 22, 2019 Regular ADMIN Committee Meeting Agenda Packet- Page 19 of 242 Page 5 of 5 Number: BP 035 PURCHASING Page 3 of 3 EXHIBIT A Minimum Solicitation Requirements PROCUREMENT CATEGORY Goods Professional Value' and Services Consulting Services Competitive Quotes <_$5,000 Not Required (best judgment purchase) > $5,000 and :5$15,000 Minimum of Two Quotes (as possible) Informal Selection > $15,000 < $30,000 Minimum of Three Quotes3 (as possible) > $30,000 and <_ $100,000 Informal Solicitation2 > $100,000 Formal Request for Proposals ' The value limits are reflective of the total anticipated amount for the entire term of the contract and apply to all procurement situations noted in the table above. The value thresholds and categories are further specified in the District's Purchasing Procedures. Projects may not be split into smaller projects for the purpose of circumventing any of the limits in the table above. 2 Informal Selection: The Project Manager in charge of the project shall select a consultant taking into account(a)the nature of the project, (b)the geographic proximity of the consultant to the project, (c)the capability of the consultant to produce the required service within a reasonable time, (d) past performance, and (e) ability to meet project budget requirements. Informal Solicitation: The Project Manager shall conduct an informal solicitation of telephone and letter proposals from a limited number of firms. The consultant will be selected based on his/her qualifications in relation to: factors (a)-(e) noted above. 3 Purchasing may utilize a more formal solicitation process when considered beneficial to the District. October 22, 2019 Regular ADMIN Committee Meeting Agenda Packet- Page 20 of 242