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HomeMy WebLinkAboutMINUTES - 08142001 - C.117 - CJ s L Contra TO: BOARD OF SUPERVISORS `� - �� `� Costa FROM: JOHN SWEETEN, County Administrator °` �' a ; DATE: AUGUST 14, 2001 �s��couK� `� County SUBJECT: RESPONSE TO GRAND JURY REPORT NO. 0106 ENTITLED "COUNTY USE OF CONTRACTORS AND CONSULTANTS" SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ADOPT report as the Board of Supervisors' response to Grand Jury Report No. 0106 entitled, "County Use of Contractors and Consultants". BACKGROUND: The 2000-2001 Grand Jury filed the above-referenced report on June 7, 2001, which was reviewed by the Board of Supervisors on June 26 and subsequently referred to the County Administrator, who prepared the attached response that clearly specifies: A. Whether the finding or recommendation is accepted or will be implemented; B. If a recommendation is accepted, a statement as to who will be responsible for implementation and a definite target date; C. A delineation of the constraints if a recommendation is accepted but cannot be implemented within a six-month period; and D. The reason for not accepting or adopting a finding or recommendation. CONTINUED ON ATTACHMENT: YES SIGNATURE(�---- 1"L: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMME TION OF dOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVE AS RECOMMENDED _ OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT /Zo17 e__ ) AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: ABSTAIN: ATTESTED G / CONTACT: JULIE ENEA(925)335-1077 JOHN SW EN, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR CC: PRESIDING JUDGE OF THE SUPERIOR COURT COUNTY ADMINISTRATOR HUMAN RESOURCES DIRECTOR COUNTY COUNSEL BY UTY County Use of Contractors and Consultants August 14, 2001 County Response to Grand Jury Report No. 0106 Page 1 RESPONSE TO GRAND JURY REPORT NO. 0106 COUNTY USE OF CONTRACTORS AND CONSULTANTS F G - 1. In the year 2001, approximately 30 Contractors and Consultants are performing supervisory and managerial roles in County government. The fiscal year 2000-2001 cost to the County for these Contractor/Consultants is estimated to be nearly $4 Million. Response: Agree. 2. The County has placed some Contractor/Consultants in positions of key responsibility for, what could be described as, excessively long periods. It was found that one has been employed for twenty-seven years, two for fourteen years, three for five years, and eight for two to three years. Response: Partially disagree. The appropriate length of time that a contractor should be employed is determined by the managers who are responsible and accountable for the services obtained, and ultimately by the Board of Supervisors. Factors influencing the length of time a contractor/consultant might be utilized include availability of specialized knowledge and skills in the local labor market, and business advantages such as having access to resources of well-established firms that provide such specialty services. Such judgments are viewed by the County to properly be within the discretion of department heads. While it is a concern that the long-term use of contractor/consultants in providing specialized services may sometimes inhibit the professional advancement of permanent County employees, we have found that more often, County employees have actually gained new knowledge and skill from working with and/or for highly qualified, specialized contractor/consultants and, as a result, have increased their potential for upward mobility within the County organization. 3. The County has no policy statements, directives, regulations or other written material providing guidance concerning the use of Contractor/Consultants in positions involving supervision of County employees; the furnishing of services which would customarily be provided by County employees; or the supervision of other contractor's work on behalf of the County. Response: Partially disagree. The County has not produced a separate policy statement, but instead relies on the legislative guidance contained in Government Code Section 31000 and other laws, where applicable, regarding the use of contractors/consultants. As stated in the County's response to Finding No. 4, contracts are generally considered in the context of the specific circumstances justifying their need, and receive several levels of review before they are executed. The decision of whether to outsource a service involves many more considerations than cost alone. Ideally, all knowledge and skills needed by the County could be obtained at salaries and benefits rates paid to County job classifications without regard to market factors, and ideally, equivalent County job classifications readily exist for all needed jobs and required skill levels. Contractors are typically considered in those instances when this is not the case. Another factor that may influence an outsourcing decision is the perceived stability of the funding stream that supports the contracted services. Finally, some jobs are project oriented and do not require permanent staffing. Outsourcing those jobs allows the County to meet its needs without creating permanent positions it does not require. 4. Department heads may, and do, contract with Contractor/Consultants for varying periods of time subject only to County payment approval levels typical in County contracts. County Use of Contractors and Consultants August 14, 2001 County Response to Grand Jury Report No. 0106 Page 2 Response: Disagree. In addition to verification of sufficient financing, justification of the need for all contracts is reviewed by the County Administrator's Office, and reviewed and executed by either the Purchasing Agent or the Board of Supervisors depending on the contract cost. 5. The County's selection process requirement for Contractor/Consultants covers programs such as the Small Business Enterprise Program and Outreach Program but does not call for competitive selection. Response: Partially disagree. Contracts governed by the Government Code Section 31000 do not require a formal competitive selection process. However, the County has often conducted both formal and informal solicitations and competitive selection processes for contracted services. The County's Outreach Program contains guidelines for advertising business opportunities to a diverse representation of businesses and individuals, but does not require a formal competitive selection process (no lowest bid requirement). The Small Business Enterprise Program requires that fifty percent of contracts falling within specified dollar thresholds be awarded to small business enterprises. In contrast to selection requirements for construction contracts, the County awards professional services contracts to the most qualified, responsive bidder. The most qualified, responsive bidder may not necessarily be the lowest cost bidder. 6. The County has no guidelines covering qualitative (subjective and judgmental) review of Contractor/Consultant performance. Quantitative (numerical) measurements are normally included in contracts. Response: Partially disagree. Depending upon the type of service being purchased, the County may include in the scope of work description and/or payment provisions qualitative criteria for acceptable work. In addition, the County has the legal right to terminate contractual relationships or withhold payment from contractors for unsatisfactory work. Moreover, standard County contracts include a termination for convenience clause that enables the County to terminate a contract with 30 days advanced written notice or immediately upon mutual written consent, for any reason. 7. The County maintains no summary records which would indicate the number of outside Contractor/Consultants who are performing work of a supervisory nature or work customarily provided by County employees; annual contract costs; employing department; position held; total cumulative length of time under contract with the County; and the supervising County employee. Response: Agree. RECOMME DATI N .., :. O - . . . . . ... .-.... ...... S ..... .............:...:.. 1. Direct the County Administrator to promulgate policies and guidelines for the selection and hiring of Contractor/Consultants to perform work of a supervisory nature or to provide services that customarily would be provided by County employees. The determination of whether services would customarily be provided by a County employee should be based on who would perform the task if a Contractor/Consultant were unavailable. Response: The County will, within 90 days, begin developing a policy that addresses the selection and hiring of contractors for professional services that is consistent with Government Code Section 31000. The policy will contain guidelines for engaging contractors, but will continue to afford department heads a high level of discretion in making such decisions and proposing such initiatives, consistent with the high level of responsibility and accountability assigned department heads in managing County programs. This level of discretion recognizes the many unique issues associated with each contracting decision. The County's intent will remain, however, to provide needed services in the most efficient and economical way. County Use of Contractors and Consultants August 14, 2001 County Response to Grand Jury Report No. 0106 Page 3 2. Direct the County Administrator to establish an on-going tracking procedure to identify the number of Contractor/Consultants performing work of a supervisory nature or furnishing services which customarily County employees would be providing. This tracking information should show: a) Annual contract cost; b) Employing department; c) Total cumulative length of time under contract by the County; d) The Contractor's supervisor. Said report should be the subject of annual review by the Board of Supervisors. Response: Requires further study. The County is interested in pursuing a tracking procedure along the lines recommended by the Grand Jury to promote efficiencies and potentially better contract pricing through consolidation of multiple contracts with the same vendor. The County will also explore the feasibility of tracking contract characteristics at the recommended level of detail. This study will be completed within 90 days. 3. The Board of Supervisors should direct the County Administrator to develop a process and assure that a cost analysis is made comparing the cost of hiring a Contractor/Consultant for a long duration vs. utilizing or hiring a County employee. This study should include County employee pension and benefit costs. There should be an appropriate management review of this study prior to the issuance of an initial or renewal contract for a Contractor/Consultant. I Response: Will not be implemented because it is not reasonable. Since contractors/consultants are typically hired to provide specialized services that are not readily available from within the County labor force, a valid cost comparison would not be possible for most contracting decisions. The 30 contractors with supervisory or managerial responsibilities the County identified for the Grand Jury, for example, were not hired in lieu of County employees, but rather to supplement the County workforce with specialized knowledge and skills or to provide needed coverage for functions or assignments that had no initial certainty of continuation. Moreover, cost is sometimes not the primary determining factor in a contracting decision. Other factors that may override cost, such as funding stability, have been previously mentioned in the County's response to Finding No. 3. 4. Establish a policy specifying that all Contractor/Consultants providing supervisory or management services do so under a contract with a term not to exceed two years. Response: Will not be implemented because it is not warranted. The length of time for which contractors are hired to provide consultation or services to the County is properly within the judgment of County department heads and ultimately is the jurisdiction of the Purchasing Agent and the Board of Supervisors, and is dependent on the circumstances of unique situations. 5. Establish a policy that Contractor/Consultant performance should be evaluated annually and require that results be submitted with the application for approval of contract renewal. Performance should be measured by detailed work specifications and/or quantitative benchmarks as specified in a contract. In addition, any Contractor/Consultant performing supervisory or managerial duties involving the exercise of management judgment should be measured on their qualitative performance using standards applied to a County employee holding the same or similar position. Response. Will not be implemented because it is not warranted and may interfere with contractors%onsultants' status as independent contractors. Under the Government Code Section 31000, independent contractors are distinguished from civil service system employees. An important distinction between contractors and employees is the County Use of Contractors and Consultants August 14, 2001 County Response to Grand Jury Report No. 0106 Page 4 level of control an employer exercises over "how"a job is done as opposed to whether a job is completed as specified. Contractors are ultimately evaluated on the end product of their efforts. As explained in the County's response to Finding No. 6, depending upon the type of service being purchased, the County may include in the scope of work description and/or payment provisions qualitative criteria for acceptable or complete work, sometimes referred to as benchmarks. When a County manager approves payment against a contract, one of the things he/she considers is whether the contractor is performing in accordance with the criteria set forth in the contract document. In addition, the County's legal right to terminate a contract for unsatisfactory performance or for convenience provides adequate protections against contractor non-performance or malfeasance.