HomeMy WebLinkAboutMINUTES - 06272000 - SD2 TO: BOARD OF SUPERVISORS ,'
Contra
FROM: Finance Committee C 0 t1
Mark DeSaulnier County
Joe Canciamilla
DATE: June 27, 2000
SUBJECT: REPORT ON PURCHASING POLICIES AND PRACTICES
Specific Request(s) or Recommendation(s) & Background &Justification
RECONN NATIONS:
ACCEPT the report"Review of County Purchasing Policies and Practices," prepared by the staff of the
CAC}, in conjunction with staff of the Auditor-Controller, Employment and Human Services, General
Services, Health Services, Public Works, and Sheriff.
ACCEPT the policy recommendations in the report, as amended by the Finance Committee:
1. Increase the Fixed Asset amount to $6.000
2. Evaluate the Surplus Property Program
I Eliminate from the Warrant Reauest Pr-Q 'fied professional services;
i Interpreter and Translation Services;
♦ Reimbursement to health care provides for services performed on referral; and
i Pre-employment Screening and fitness for duty exams,
4. Raise the level when forme bidding is required on `Public 1N r s AM.acts" from
S50,00Q t0 $75,000, as allowed by law
Continued on Aftachment:_IL YES Signature:
Recommendation of County Administrator Recommendation of Board Committee
Approve Other
Signature(s):
Action of Board on: t,e ,J 7,?a-y Approved as Recommended >< �7t re
f
Vote of Supervisors: I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
Unanimous (Absent 2,Liwit AND ENTERED ON THE MINUTES OF THE
Ayes: Noes: BOARD PF SUPERVISORS ON DATE SHOWN.
Absent: Abstain: of
f
Contact:Tony Enea(335-1094) Attested: ' ,,, "'!�
cc: General Services ;f Phil Batchelor, Clerk of
Auditor-Controller the Board of Supervisors
Employment&Human Services and County Administrator
Health Services
Public Works By: dY ✓, -, DEPUTY
r ,.
"bject.: Report on Purchasing Policies and. Practices
Date: , June 27, 2000
Page 2
5. Rewire that Quote Sheets be filled out and maintained by departments*
6. Require that departments receive informal bids or quotes for any item estimated at more
than $5,000*
7. Recommend that GAO staff review the Administrative Bulletins related to purchasing, to
revise as needed
8. Encourage countywide Internet procurement
9. Encourage Procurement Card purchasing by departments
10. Direct the Purchasing Manager to explore the purchase of software to provide information
and management controls for the Procurement Card and request funding during budge
hearings in an amount not to exceed $40,000. (Added by Finance Committee.)
*The Finance Committee amended these policy recommendations in the report to establish the
practices as requirements.
FISCAL. IMPACT:
The acquisition of software to manage the Procurement Card program is expected to cost no more
than $40,000. Expanded use of the Procurement Card by County departments will result and time
and cost savings to the County in terms of greatly reduced transaction costs.
BACKGROUND/REASONS FOR RECOMMENDATION:
The attached report was prepared in response to a request from the Board of Supervisors during the
FY 1999-2000 budget hearings. The purpose of the report was to review the County's purchasing
policies and practices, particularly with respect to competitive pricing. A team of staff from the
following departments participated in the development of this report: Auditor-Controller, Employment
and Human Services, Health Services, General Services (Purchasing), Public Works, Sheriffs Office,
and County Administration.
In its review of the County's purchasing policies and practices, the team performed the following
tasks that responded directly to the Board Order:
♦ Research of the legal framework of purchasing in terms of State and County regulations;
♦ Description of the roles and responsibilities for purchasing within the County;
i Investigation of other county purchasing policies and practices;
♦ Survey of competitive pricing practices of Purchasing and all other County departments;
♦ development of policy recommendations for Board consideration.
a
REVIEW OF COUNTY PURCHASING
POLICIES AND PRACTICES
Report Prepared By:
Staff of the Contra Costa County Administrator
In conjunction with staff of.
Auditor-Controller
Employment and Human Services
General Services
Health Services
Public Works
Sheriff
June 6, 2000
EXECUTIVE SUMMARY
This report was prepared in response to a request from the board of Supervisors during the
FY 1999-2000 budget hearings. The purpose of the report is to review the County's purchasing
policies and practices, particularly with respect to competitive pricing. A team of staff from the
following departments participated in the development of this report: Auditor-Controller,
Employment and Human Services, Health Services, General Services (Purchasing), Public
Works, Sheriff's Office, and County Administration. CAO staff is grateful for the participation
of the team members and acknowledges their invaluable contributions to the project.
In its review of the County's purchasing policies and practices,the team performed the following
tasks that respond directly to the Board Order. The structure of the report follows these tasks:
➢ Research of the legal framework of purchasing in terms of State and County regulations;
➢ Description of the roles and responsibilities for purchasing within the County;
➢ Investigation of other county purchasing policies and practices;
Survey of competitive pricing practices of Purchasing and all other County departments;
➢ Development of policy recommendations for Board consideration. These include:
1. Increase the Fixed Asset amount to $5,000 (Does not require Board approval.)
2. Evaluate the Surplus Property Proaram
3. Eliminate from the Warrant Request Process specified professional services:
Interpreter and Translation Services;
♦ Reimbursement to health care provides for services performed on referral; and
♦ Pre-employment Screening and fitness for duty exams.
4. Raise the level when formal bidding is required on "Public Works proiects" from
$50,000 to $75,000, as allowed by law
5. Recommend that Quote Sheets be filled out and maintained by departments*
6. Recommend that departments receive(informal) bids or quotes_ for any item
estimated at more than $5.000*
7. Recommend that CAO staff review the Administrative Bulletins related to
purchasing, to revise as needed
8. Encourage countywide Internet procurement
9. Encourage Procurement Card purchasing by departments
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Review of County Purchasing Pokdex and Practices r
I IDENTIFICATION OF THE LEGAL PARAMETERS FOR
PURCHASING, INCLUDING STATE LAW AND COUNTY ORDINANCE
CODE
An understanding of the legal parameters for County purchasing provides a perspective on the
authority and responsibilities of the County Purchasing Agent and County departments.
The legal authority of the Purchasing Agent, who is the Director of the General Services
Department,resides in the powers delegated to the Board of Supervisors from the State
Government Code, Sections 25500 through 25509. (See Exhibit A.) The enumerated duties of
the purchasing agent, which are fairly general in scope, include:
a) Purchasing for the County and its offices all materials, supplies, furnishings, equipment,
livestock, and other personal property.
b) Renting furnishings, equipment, and livestock.
The law requires that the purchasing agent make purchases, rentals, and contracts only upon
written requisition.
Contract Services
On behalf of the Board,the purchasing agent may also engage independent contractors to
perform services for the County when the aggregate cost of the contract does not exceed
$100,0001. The law authorizing the Board of Supervisors to contract for special services--
defined as financial, economic, accounting, engineering, legal,medical,therapeutic,
administrative, architectural, airport or building security matters, or laundry or linen services--is
set forth in Section 31000 of the Government Code. This section also states that the Board may
contract for maintenance or custodial matters if the Board finds that the site to be served is
remote from available County employee resources and that the County's economic interests are
served by such a contract.
There is an additional statute that grants the County authority to contract for services of a non-
County employee. Under Government Code Section 26227,the County or its departments,
acting through the Board of Supervisors, may contract with other public agencies, private
agencies or individuals to operate programs that meet the social needs of the County's
population. These programs include the areas of health, law enforcement, public safety,
rehabilitation,welfare, education, legal services, and programs designed to meet the needs of
physically, mentally, and financially handicapped persons and aged persons.
California Labor Code Sections 1720-1$61 set forth comprehensive regulations of public work
projects which may involve contracting for services. The basic requirements for compliance
Note that in 1991, Government Code Section 25502.5 was amended to increase the purchasing agent's
authority to contract from$25,000 to$100,000. County policy, however, as specified in Administrative
Bulletin 605.2,requires any contract for services over$25,000 be authorized by the Board of Supervisors.
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Review of County Punhasing Policies and Practices
,with the public'works laws are the payment of prevailing wages, satisfaction of apprenticeship
obligations, and maintenance of certified payrolls. For a determination of whether a particular
project is covered by the public works laws, see Exhibit B.
Although the contracting laws and policies are included in this report to provide a comprehensive
overview of the legal framework, the team focused its efforts on the policies and procedures for
the acquisition of goods, rather than services. A separate committee headed by senior CAO staff
has been reviewing contract policies and procedures and is expected to publish guidelines in the
near future. These guidelines will likely be included in the County's Purchasing Guide.
Advertisinje and Bidding
With respect to advertising for bids to furnish county supplies,the law finds that such
advertisement is not necessary--with the exception of advertising. (To obtain advertising
services,the County must advertise for bids.) Although advertising for bids for supplies is
optional, it is the practice of the County's Purchasing division to advertise for bids on its web site
because advertisement stimulates market competition and has become an expectation of many
vendors. Web site advertising of bid opportunities also represents a trend employed by other
cities and counties in California.
As for competitive bidding, state law provides the Board of Supervisors the authority to establish
rules and regulations requiring the purchasing agent to obtain quotes for goods, either through
formal or informal bids. Under this authority, County Code section 1108-2.406 establishes a
procedure whereby competitive bidding is not required, except as otherwise provided by
ordinance or general law2. However,the code stipulates that if the purchase of any item costing
more than$5,000 is made without competitive bids or quotations, or if there are competitive bids
or quotes and the accepted bid is not the lowest, the purchasing agent is required to report this
action to the County Administrator with a justification.
General Purchasing Duties Prescribed by County Ordinance
The duties of the purchasing agent are further defined in the Contra Costa County Ordinance
Code Articles 1108-2.2 through 1108-2.4. (See Exhibit C.) These code sections establish the
office of the purchasing agent and prescribe the duties of the agent with respect to:
■ Administrative duties: The purchasing agent shall appoint staff,provide requested
information to the Board and other departments, and establish procedures for department
functioning;
■ Purchases and Equipment Rentals: He shall obtain for the County and its offices and, when
authorized, for other public agencies such things as materials, supplies, furnishings,
equipment, livestock, other personal property;
z Bidding requirements are established in the Government Code, Public Contract Code, Labor Code,and
Uniform Public Construction Cost Accounting Act for public works projects.
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Review of County Purchasing Policies and Practicer1.
■ Equipment'service contracts: He shall negotiate and execute all equipment service contracts
and lease-purchase agreements concerning personal property;
■ Sales and trade-ins: He shall sell County property found by the Board not to be further
required for public use, and accept favorable trade-in allowances or exchanges;
■ Independent contractors: He shall engage contractors to perform services where the
aggregate amount does not exceed the amount authorized in Government Code Section
25502.5;
■ Service contracts: He shall contract for special services permitted by Government Code
Section 31000 within the monetary limit specified in 25502.5 ($100,000);
■ Building repair, construction: He shall engage independent contractors to construct, repair,
or furnish any building or structure.
■ Legal Services
■ Other Services
■ Emergency Purchases
While these duties are fairly extensive,purchasing is not exclusively the domain of the
purchasing agent. County Code section 1108-2.222 permits the Board to authorize,by
resolution, County departments and officers to purchase services, supplies, equipment, materials,
goods and other personal property without using the purchasing agent, except as otherwise
required by ordinance or general law. Any such purchase may only be made as provided for by
board resolution, any applicable administrative bulletin, and in accordance with budgeted
appropriations.
An example of a Board resolution affecting the purchasing process was the recently adopted
resolution(January 25, 2000)establishing the County's Small Business Enterprise Program.
This program applies to construction contracts of$25,000 or less,purchasing transactions of
$50,000 or less, and professional service contracts of$50,000 or less. For those transactions not
exempt from the program, 50%of the dollar amount is to be awarded to small businesses.
In addition to Board resolutions, various County Administrative Bulletins provide County
departments with detailed purchasing policy and procedures for requesting goods and services:
❑ 600 Purchasing Policy & Procedures
❑ 601 Contract Purchase Orders
❑ 602 Preparing Requisitions
❑ 603 Receiving Shipments
❑ 604.1 Stock Room Policy
❑ 605.2 Service Contracts $25,000 and under
❑ 606.2 Information Processing Equipment Acquisitions
❑ 517.1 Disposal of Surplus Property
❑ 510.2 Work Orders, Buildings & Grounds
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One of the recommendations of this report is to direct CAO staff to comprehensively review the
'Administrative Bulletins and revise, as needed, for procedural or policy changes.
11. ROLES AND RESPONSIBILITIES FOR PURCHASING AMONG
DEPARTMENT STAFF, GENERAL SERVICES STAFF, CAO STAFF,
AND THE BOARD OF SUPERVISORS
The function of purchasing has evolved in Contra Costa County from a centralized process to
one that incorporates elements of decentralization and flexibility. Decentralization and
flexibility are most evident in the departments'authority to process professional services
contracts and to process small dollar purchases via Warrant Requests or the Procurement Card.
These policies and practices have expanded the role of the departments in the purchasing
process, in order to create efficiencies in time and cost savings.
Department Staff
The acquisition of goods and services begins at the department with the identification of needs.
At the very least, departments must identify the product or service needed and develop its
specifications. Depending on the nature of the needed good or service,the acquisition process
may also conclude at the department level—with the exception of vendor payment, which is
the responsibility of the Auditor-Controller. The current avenues by which departments can
effect their own purchases include the Warrant Request and the Procurement Card.
County department managers and officers are responsible for:
❑ initiating the purchasing transaction through a Requisition, Warrant Request, or
Procurement Card;
❑ complying with the requirements of the Small Business Enterprise Program;
❑ completing the appropriate form to effect the payment or transfer for the purchase;
❑ designating persons who have authority to approve expenditures;
❑ ensuring that all goods and services that are to be processed for payment have been
delivered in good order and performed in accordance with the terms and conditions of the
contract;
❑ retaining appropriate supporting documentation of all transactions for accountability
purposes; and
❑ ensuring that their direct purchases (otherwise legal) will be made so as not to be subject to
any appropriate and proper criticism by the Board of Supervisors, Grand Jury, or the public
in regard to the propriety or decorum presented by it.
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General Services Staff
The purchasing function in Contra Costa County has historically been a centralizedprocurement
process with the exception ofprofessional service contracts and the delegation of small dollar
purchases to County departments.3 While decentralization has expanded in recent years with the
Warrant Request process and the development of the Procurement Card, there remains a need
for centralization of certain functions. Centralization allows Purchasing staff to assist
departments in major acquisitions, to identify and standardize on goods and services procured
throughout the County, and to achieve maximum cost savings through high volume usage.
In terms of their primary duties, buyers in the Purchasing division are responsible for
facilitating the acquisition transaction by:
✓ reviewing Requisitions from departments and districts for completeness and accuracy;
✓ interviewing vendors to obtain product information, when not supplied by departments;
✓ investigating sources of supply;
✓ grouping items to facilitate bids on larger quantities;
✓ conferring with departmental representatives in preparing purchasing specifications on
items to be bid;
✓ obtaining and reviewing bids and quotes for price, legality, and acceptability of items with
respect to specifications and awarding bids;
Other duties of the Purchasing division, beyond those related specifically to single-transaction
acquisition, include:
✓ negotiating contracts or agreements for commodities or services when competitive bidding
is not appropriate;
✓ monitoring contracts to assure vendor compliance to specifications, schedules and other
terms or conditions;
✓ investigating complaints and securing adjustments;
✓ resolving billing and payment problems;
✓ preparing reports and maintaining records.
The delegation of purchasing to departments may only be made as provided for by board resolution
and/or any applicable County administrative bulletin. Any such purchase is accomplished through the
Warrant Request or the Procurement Card processes.
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CAO Staff
The purchasing process involves the County Administrator's Office specifically when budget
adjustments or contracts are needed to facilitate a purchase. In the event that there are
insufficient appropriations, appropriation and revenue adjustments are required prior to a
requisition being processed by Purchasing. For instance, if a department wishes to purchase an
item that is designated as a fixed asset and there are insufficient funds available in the
expenditure line item for the purchase, an appropriation adjustment will need to be expedited.
When a budget adjustment shifts appropriations within a department,the approval is handled at
the County Administrator's level. If, however, the adjustment shifts appropriations between
departments and/or includes revenue adjustments, the County Administrator will submit it to the
Board of Supervisors for approval.
With regard to the purchase of services through contracts, any contracts with payment limits
under$25,001 can be approved at the County Administrator's level and submitted to Purchasing
to be processed. Contracts over$25,000 are also submitted to the County Administrator for
approval by the Board of Supervisors.
Board of Supervisors
The Board's responsibilities in the purchasing process are several. To begin,the Board
authorizes the establishment of department budgets that provide the appropriations and revenues
for purchasing expenditures. As stated above, any appropriation adjustment between
departments or any revenue adjustment required for a purchase must be approved by the Board.
In addition,the Board also authorizes all contracts for services where the budgeted amount is
greater than$25,000. In its function of establishing policies and procedures,the Board has taken
or is authorized to take action regarding:
* competitive bidding,
* authorized purchases by departments,
* limits on department purchasing authority,
* purchasing programs(such as the Small Business Enterprise and the Outreach Programs).
111. COMPETITIVE PRICING: COUNTY BLANKET CONTRACTS
The first step any department should take when embarking on the purchasing process is to
determine whether the desired item is contained in a pre-negotiated agreement(contract). The
County will negotiate a contract with a vendor to purchase a particular item or group of items
when the terms of the contract offer the County the best possible price and quality at the time of
negotiation. When it is determined that a negotiated item can be supplied at a lower price with
identical or better terms by another vendor, the County will seek to revise the terms of the
contract when it is brought up for renegotiation.
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Rniew of County Purchasing Policies and Practices -,
-A. Office Supplies
Office Depot is the vendor used by the County to obtain office supplies. The County has a pre-
negotiated list of 250 of the most commonly used office products listed in a County custom
catalog. These items are discounted at 62%-84% off of list price. In addition,the County
receives a discount of 52%off list price on the remaining items in Office Depot's Catalog,
excluding electronics and furniture.
This contract has been under re-negotiation for six months and is nearly complete. The contract
will have a two year term with an option for a third year. The County will be adding some items
to the custom catalog, as well as receiving a larger discount(approximately 4%) on other items
in the catalog than we are receiving now.
With respect to the competitive pricing of office supplies, it is important to consider the
following:
1. Competitively pricing or"shopping" an item is not simply the comparison of prices. For
department staff to engage in shopping, it generally requires an individual leave the
workplace. The cost of the shopping includes lost productivity, expense for the employee
time and increased liability to the County. Imagine if an employee paid$15 an hour leaves
their workplace for an hour or two to go and buys $100 worth of office supplies they
perceive to be less expensive than the contracted items. How much would the County
actually be saving? Another consideration is the potential for injury on the way to the store.
The County would be liable and incur additional costs.
2. Office Depot delivers to the end-user any size order next day. That means you could order a
box of paper clips at County cost of$0.18 a box and receive it the next business day with no
delivery charge.
3. It is always helpful to remember that going out and finding a less expensive item (which can
be done by anyone), does not necessarily constitute effective purchasing. Comparable
quality, warranty, service and other issues also constitute effective purchasing.
B. Computer Equipment
The County has a blanket agreement with En Pointe to provide computer-related equipment.
The County spends approximately $5 million a year on this agreement. It is a Los Angeles
County agreement, and we receive approximately 25%off list price. The County has
competitively priced numerous purchases against this agreement, and it is very rarely higher
priced. Los Angeles County re-negotiates this agreement every two years; however, pricing is
adjusted quarterly to take advantage of any price reductions or to accommodate vendor requests
for price increases.
Government pricing is understood to be direct from the manufacturer to the government agency.
The County's pricing from En Pointe is 25%off of the manufacturer's list price, not En Pointe's.
The national contracts the County takes advantage of represent billions of dollars a year to major
manufacturers like IBM, Compaq, Dell, etc. and are accessed by the local and federal
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Review of County Purchasing Policies and Practices
government alike. Their marketing departments are experienced enough to recognize if the
pricing they offer to government is not competitive.
Something else worth noting is that people have become accustomed to the cost of computers
constantly dropping. However, with supply shortages and other supply chain disruptions around
the world in the past year(from U.S. tariff increases on Japanese chips, earthquake in Taiwan,
power outages in South Korea), prices have actually flattened and are projected to increase 3-5%
over the next year or two.
Purchasing solicits competitive quotes on most orders over$10,000. Purchasing compares GE
Capital, Compucom, Rhino and En Pointe, who are mainline distributors. Purchasing does not
always competitively price orders against the local computer stores. In practice, local vendors
will always supply something comparable in order to be competitive. In an"apples to apples"
comparison on a small order, the local vendor may be competitive; on a large volume order,they
will likely not be.
For example, a department recently processed a requisition for 300 17" Viewsonic computer
monitors from a small local firm they frequently patronize. The cost of the monitors was $300
each, which is a reasonable price. However, Purchasing found the identical monitors at En
Pointe for$240 each. When the small firm was notified, it offered to reduce its price by$10 per
monitor, but it was the best they could do. The decision to buy from En Pointe represented a
one-time savings of$18,000.
It is important to note that when price comparisons are made,they are not valid unless
specifications for the product are identical, not equivalent. Often people who go out and shop for
computers see a box sitting on a table. From the outside, every IBM model looks the same,
however, substitution of a single internal component can change the price on a particular model
by as much as $200-$400. When stores advertise a computer system being"blown out," it is
often because it contains older components that have become obsolete. Therefore, it is not
accurate to compare the cost of a particular model of computer that has been sitting in the store's
backroom for several months with the cost of the same model that was received yesterday.
Perhaps the most appealing aspect of the County's agreement with En Pointe is the consistency
of product the County receives. Some smaller firms that build computers can substitute less
costly components and sell a computer that looks virtually identical for what appears to be a
great price. It should also be noted that national brands such as IBM or Compaq generally cost
more than an off-the-shelf clone from a computer store. The County purchases the national
brands because they are assembled more consistently and the internal parts do not constantly
change. Therefore, if we buy one or one hundred machines, we can expect the disk drives,
memory, video cards, etc. to be the same. This is a significant consideration when it comes to
placing computers on networks.
Another important consideration in purchasing decisions is the customer service provided by the
vendor. The County has had equipment fail that was purchased from En Pointe, and it was
replaced at En Pointe's expense--with no questions asked. This level of service is not always
provided elsewhere.
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Furniture
The County spends about$2 million a year on Knoll furniture with the vendor MG West in
San Francisco. This vendor gives the County a 65%discount from Knoll's list prices. This
contract was last renegotiated three years ago. Recently, Purchasing has been in negotiation with
a vendor named Advent, in Santa Rosa. Advent qualifies and is in the process of self certifying
as a Small Business Enterprise with the County. Advent is Knoll's General Services
Administration(the federal purchasing agency) listed dealer in Northern California and is able to
sell to the County on a GSA schedule. The current listed discount to the end-user from Knoll on
GSA is 72°x'0 off list.
D. Paper
The County spends approximately$1.4 million a year on different types of paper. The discount
to the County is difficult to quantify because there is no real list price for paper. Paper is a
commodity with a constantly changing price. On average, an estimate would indicate that we
buy our paper at a price about 30%lower than the general public. For example,the price for a
ream of 8 112 x 11 white paper that was recently bid was $2.14 for Contra Costa County.
Alameda County's price for the same ream of paper from the same supplier was $2.37 a ream.
Last year Contra Costa County spent approximately $420,000 on this one line item(about
200,000 reams at$0.23 a ream savings off Alameda's price).
E. Other commodities
The County has many other contracts in place for different commodities such as food, fuel,
pharmaceuticals, surgical products, etc... The County receives standard government discounts
on most of them. This is generally 35-50%off of list price. The County may not get the lowest
price available every time an item is purchased, but the County does receive a discount every
time we purchase.
According to its management philosophy,the Purchasing division does not live by the watch-
words"the cheaper the better." Buyers make recommendations that allow the County to buy
good quality, reasonably priced products from responsible vendors that allow the County
recourse if the product does not meet expectations.
IV. COMPETITIVE PRICING—DEPARTMENT PRACTICES
The Board Order that requested this study directed the team to document the steps taken by all
departments to secure the most competitive prices for goods and services. To document this
information,the team contacted 31 County departments and surveyed by telephone 26 of the
departments. The department staff were asked:
1. What kinds of goods did your department purchase by Purchase Order in the last fiscal year?
2. For what goods purchased by your department was bid or pricing information obtained?
3. If someone in the department obtained bids or pricing information, was the decision to
bid/price made by:
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➢ The dollar amount of the item required
➢ Unique characteristics of the item
➢ Time concern(wanted to save time in Purchasing)
➢ Department policy/practice
➢ Other
4. If there was a standard procedure for obtaining bids/quotes, what was the procedure?
5. Were there any goods purchased by the department in the last fiscal year that you think could
have been purchased at a better price, if bidding or pricing had been done?
6. Why do you think bidding or pricing was not done for those items?
7. What kind of documentation does your department keep when bidding or pricing information
is obtained?
8. Any other comments you would like to make about competitive bidding/pricing in your
department or countywide?
Department Survey Results
1. Regarding the types of goods purchased by departments, survey results indicated that the
majority of purchases via purchase order were made for office supplies (92%of all
respondents) or minor equipment(including computer equipment) (84%). This is in contrast
to the acquisition of periodicals and subscriptions (16%) and professional/specialized
services (28%). These services are usually obtained through the use of warrant requests in
the case of subscriptions or service contracts in the case of professional services. (However,
Resolution 95/526 currently allows for the payment of interpreter/translator and health care
provider services by warrant).
2. When asked about the types of goods for which pricing information was obtained, it was
revealed that 61%of departments have competitively priced office supplies prior to purchase
and 62%have competitively priced minor equipment(furniture, computer equipment).
3. As for the criteria used in the decision to bid/price items, 38%of the departments ranked
dollar amount and the unique characteristics of the item as the motivating factors that prompt
whether an item will be competitively priced. 35% of departments felt that it would speed up
the purchasing process to obtain competitive price quotes at the department level. Only 23%
of departments have a policy in place for competitive pricing.
4. Regarding the issue of standard procedures, 50%of the departments indicated that they do
follow a procedure to obtain competitive bids or quotes. These procedures,which were often
informal and not rigorously followed, included:
➢ Obtaining two or three bids by phone or fax and attaching bids to requisition for Purchasing
➢ Contacting Purchasing for vendor names then soliciting bids from recommended vendors
➢ Contacting vendors frequently patronized
➢ Requesting that Purchasing obtain bids
➢ Shopping on the web or check prices from local stores, watching for sales
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5. Comments about Purchasing staff s ability to obtain the "best"prices were frequently
reported. Staff from 16 departments thought that a better price could not have been obtained
than that which they received. Comments included: "I'm often astounded by Purchasing. I
try to get the best price myself, and they surprise me with a better one." And"Sometimes
quality is an important factor. (Jur decisions are usually based on warranty information,
quality of product versus the price, and the sense of urgency for the product."
Staff from nine departments indicated that it was their belief items could have been
purchased at a better price if bidding or pricing had been done. In general,these comments
were made in reference to computer equipment, printing services, and other technology
equipment such as copiers or color printers. Comments included: "Departments should not
be forced to buy from En Pointe because they over pay for equipment." And"We know we
could have purchased a color printer cheaper from a private vendor."
6. Answers to the question about why they thought bidding or pricing had not been done for
those items included:
➢ Required to purchase from vendor because of the existing contract(e.g. Office Depot).
➢ Matter of preference.
➢ Because they always use the same vendor.
➢ Because of the assumption that the contract has a beneficial pricing structure for the County.
7. With regard to bidding or pricing documentation maintained by departments, several
responses indicated that formal documentation is not maintained in the department.
Departments tend to pass along to Purchasing any of the information they have gathered,
attached to the requisition. Of the sixteen departments that responded to this question, seven
indicated that documentation was kept in the department files.
8. Other comments about the purchasing process included:
➢ There should be more places to shop, and we shouldn't be forced to buy everything from the
contract vendors like Office Depot.
➢ We could do better with technology purchases if we didn't go with En Pointe.
➢ The cheapest bid is not always the best. Purchasing should think of the long run,
➢ You need to make the process simpler.
V. SURVEY OF PURCHASING POLICIES IN OTHER COUNTIES
The team contacted the following counties to obtain their purchasing guide and make follow-up
inquiries about their policies and practices: Alameda, Butte, Kern, Monterey, Orange,
Sacramento, San Diego, San Francisco, San Mateo, Santa Clara, Solano, and Ventura. (A
number of additional counties were contacted but did not have purchasing guides available.)
The team reviewed the guides, concentrating on the counties' limits for Warrant Requests (if
they had such a process), fixed assets, credit card policies, bidding/quoting policies, petty cash
12 June 15,2000
Review of County Purchasing Pohaes and Practices
limits, automation systems, outreach programs, and departmental discretion in the purchasing
process.
The survey of other counties assisted the team in developing several of its recommended policy
and procedure changes,which follow. In particular,the team is recommending a change to the
fixed asset definition; the amount of$5,000 is utilized in nine of the 12 surveyed counties. Also,
the team is recommending that quotes or bids be obtained for items valued at more than$3,000.
All of the surveyed counties had quote requirements ranging from$1,000 to $25,000.
The survey also provided the team with valuable information about different automated
purchasing systems. A discussion about the possibility of obtaining a new automation system
concluded that a new system should not be pursued independent of decisions about a new
finance system. Integration of the two systems is vital to a seamless and efficient process.
The results of the survey are included in Exhibit D.
V1. RECOMMENDED POLICY AND PROCEDURE CHANGES
The recommendations that follow were developed by the team with the goal to increase
departmental,flexibility where possible, without losing fiscal control and accountability for
purchases. Another goal was improving administrative processes so that administrative burdens
would be eliminated, while introducing administrative efficiencies into the system. These
recommendations emerged from the team's survey of department practices and other county
policies and procedures.
1. Increase Fixed Asset Amount from $3,000 to $5,000. (Does not require BOS
approval.)
The purpose of this recommendation is to reduce the cost of tracking the acquisition, addition,
and disposal of individual equipment items. These costs are borne largely by the Auditor-
Controller department who is responsible for maintaining the County's fixed asset inventory.
The Auditor-Controller is authorized by state law to establish the amount for the definition of a
fixed asset.
According to the team's survey of counties, several jurisdictions have their fixed asset definition
for equipment set at $5,000. This limit is consistent with requirements established by the State
of California Accounting Standards and Procedures for Counties. The definition of a fixed asset
in Contra Costa County, however, is equipment valued over$3,000.
Fixed asset equipment is identified at the time of purchase and added to a County department
inventory list. Equipment identification requires that each purchase be separated into individual
pieces identified by type, cost, date of purchase, purchase order number, warrant number, brand
name, and serial number. The items are marked with a County tag. Subsequent improvements
to a fixed asset item must be identified and added to the original value of the equipment.
13 June 15,2000
f j
Review of County Pumhasing Policies and Practices
'Depreciation schedules for all equipment is maintained so that County overhead and indirect
costs might be recovered on County claims and grants.
On an annual basis,the County Auditor-Controller conducts an inventory certification of each
department's fixed asset equipment list. The department certifies that each item on its equipment
list is either in the department's possession or has been disposed of according to County policy
and procedures. A review of the annual departmental equipment certification records indicates
that departments have maintained equipment inventories with little or no reported losses.
However, a change to the fixed asset definition could affect the perception of items. Items could
become more "disposable" if they are not perceived as valuable"fixed" assets. This concern
pertains especially to computer equipment which tends to have a greater rate of obsolescence
than other fixed assets. To address this concern, it is recommended that departments maintain
periodic inventories of their computer equipment. Moreover, departments should continue to
dispose of all County equipment, capital and non-capital, using the procedures and forms
established by the General Services Department.
2. Evaluate County's Surplus Property Program
The ownership of goods involves more than their acquisition; it also involves their eventual
disposal. While the team concentrated its efforts on evaluating the acquisition side of the
equation, disposal became an issue particularly when considering faked assets. The
recommendation to evaluate the County's Surplus Program is suggested as a management tool
to reduce disposal costs while maintaining accountability for County property.
Many items are transferred to Surplus at General Services that have no economic or productive
value. It costs the County more time and money to transfer them to Surplus and auction them
than they are worth. Therefore, the County's policy on surplus property should be re-evaluate to
determine if a more efficient system can be devised. Some jurisdictions participate in internet
auctions,the feasibility of which is being explored. The General Services Department has
signed an agreement with CityBid.Net, an on-line auctioneering service, and is currently working
on identifying surplus items for purposes of testing the value to the County.
3. Eliminate from the Warrant Request Process the payment of
professional services including:
#12. Interpreter and Translation Services;
#13. Reimbursement to health care provides for services performed on
referral; and
#14. Pre-employment Screening and fitness for duty exams
This recommendation would require the modification of the Warrant Request
Resolution 951526. (See Exhibit E.)
14 June ts,2000
Review of County Purchasing Policies and Practices
`According to the resolution establishing the Warrant Request process,professional services are
not permitted to be processed using the Warrant Request process. Professional services should
be acquired through contracts. There are concerns about tax reporting requirements, such as
1099 forms, for contractors paid via'Warrant Requests. An additional concern is that services
could be paid twice if a contract demand is paid and then payment for services is requested by
Warrant Request. Staff from Accounts Payable has indicated that vendor payment via Warrant
Request would not show up as a payment against a contract in their Contracts Unit,resulting in
double payment. Therefore, the team recommends the elimination of this"loophole"in the
Warrant Request process.
The Warrant Request Resolution 95/526 would be modified to eliminate items 12, 13, and 14
(see above), and additional language for item 17 would read:
"Includes one-time professional services costing less than $500, not covered under a County
contract, and authorized by the Purchasing department." This language would essentially allow
the use of the Warrant Request process for those services that are not specified as "special
services" in Government Code section 31000, such as certain deposition fees, speakers, or city
services.
In addition,the last section of Resolution 95/526, which states the exclusions from the Warrant
Request, would be modified to include the following:
"Professional services greater than$500 covered by Government Code Section 31000."
4. Raise the level where formal bidding is required on "Public Works
projects" from $50,000 to $75,000, as allowed by the Uniform Public
Construction Cost Accounting Act
The County's current policy allows informal bidding on public works jobs estimated at$50,000
and under. Changing the policy to allow informal bidding for jobs under$75,000 would save
the County time and money.
State law currently permits informal bidding for capital projects up to a maximum of$75,000.
Moreover, the California Uniform Construction Cost Accounting Commission recommends that
the $75,000 amount be increased. There is an increased cost that can be up to 50%higher to
follow the required formal bidding process for all public works capital projects above the
$50,000 level. The formal process also takes approximately two months longer. Departments
thus can save money, and Architectural Services can speed up implementation of a small project
if staff can use an informal bidding process instead of formal bidding. Therefore, if the County's
limit is increased to the maximum permitted under the law, the cost for County capital projects
will be lower and the time for completion faster. Alameda, Sonoma, and Santa Clara counties all
have the level set at $75,000. There is no disadvantage to raising the limit, as competitive quotes
are still requested for informal projects.
5. Recommend Quote Sheets be filled out by departments and maintained
15 June 15,2000
B—miew of County Pumbasing Policies and Practices
Departments will need to document their competitive bidding and pricing practices in
compliance with the Small Business Enterprise program. Therefore, filling out and maintaining
quote sheets in the department is not necessarily an additional burden. Rather,this practice will
facilitate the documentation and monitoring of competitive pricing practices.
6. Recommend that departments (including Purchasing) receive (informal)
bids or quotes for any item estimated at more than $5,000
There are no competitive bidding requirements in the County Code. The only code section that
addresses competitive bidding states that if the Purchasing Agent does not competitively bid an
item that costs more than$5,000, he needs to send a report to the CAO explaining why it was not
bid or quoted. This recommendation would request that departments only competitively bid or
quote items valued at more than$5,000. For requisitions that are submitted to Purchasing
without information related to bidding or quotes, it is recommended that Purchasing request bids
or quotes for items costing more than$5,000. The Purchasing Manager believes that cost
savings can generally be obtained on items above this level, when pricing comparisons are made.
This recommendation is intended to facilitate the goals of the SBE program,providing more
opportunities to local small businesses in the County's purchasing process. This
recommendation is not intended to conflict with the formal bidding requirements for public
works projects.
7. Review Administrative Bulletins related to Purchasing
The Administrative Bulletins that relate to purchasing are, in many cases, outdated. These
.Administrative Bulletins include:
❑ 600 Purchasing Policy & Procedures
❑ 601 Contract Purchase Orders
❑ 602 Preparing Requisitions
603 Receiving Shipments
❑ 604.1 Stock Room Policy
❑ 605.2 Service Contracts $25,000 and under
❑ 606.2 Info Processing Equipment Acquisitions
❑ 517.1 Disposal of Surplus Property
❑ 510.2 Work Orders, Buildings & Grounds
A review of the Administrative Bulletins relating to Purchasing should conducted to amend
existing bulletins and add relevant bulletins as needed. A team of staff from the County
Administrator's Office, General Services and Auditor-Controller's Office would review the
bulletins and make recommendations. Any amendments or additions will require approval by
County Counsel prior to adoption by the County Administrator.
S. Encourage Countywide Internet Procurement
16 June 15,2000
t�r�
Raview of County I'urcharing Folies and Pradwes
This recommendation is intended to leverage new technology to the purchasing process and
extend this automation to departmental users Countywide. Automation will lower transaction
costs, speed delivery of goods and services to departments, consolidate the vendor database and
facilitate competitive pricing practices.
To this end, departments should be encouraged to purchase supplies via the internet at the
websites with which the County has established contracts. These include Office Depot and En
Pointe, and will include in the near future: Granger, GrayBar, CompuCom, as well as other
companies with which the County is currently negotiating.
The increased demand by County departments to access vendors through the Internet will cause
more of these types of agreements to be made available.
9. Encourage Department Procurement Card Purchasing
The Purchasing Policy team determined that the greatest and most affordable opportunity
available to the County for increasing efficiencies in the purchasing process lies in the County's
Procurement Card program. This program has been tested by a handU of departments over the
past year, and the results to date have been positive. A formal approach to completing an
expansion and Countywide roll-out to all departments should be pursued by the Purchasing
division.
Studies have shown that the number of small-dollar transactions in Purchasing and Accounts
Payable is about 80% of all transactions, but totals only 5%-10% of expenditures. By moving
these low-value,non-strategic purchases from the traditional purchasing/payables process to the
procurement card, organizations have been able to achieve a 50%-90%reduction in processing
costs and paperwork.
The resulting time savings in Purchasing and Accounts Payable would enable more value-added
focus on activities such as negotiating better pricing and terms on large-dollar contracts. In
addition, cardholders would find the procurement cycle time for small purchases shrinking from
weeks to days. Also, management would see improved control over these purchases and better
reporting.
The Purchasing division is currently investigating software that will enhance information control
of the Procurement Cad purchasing. There are software programs that can account for the
procurement card transactions that occur through the Internet. The program will receive the
transaction data from purchases made on the card and enable the account reconciliation to occur
in an automated manner, as opposed to the current manual process that produces reports on a
monthly basis.
The software is estimated to cost between $20,000-$40,000.
17 June 15,2000 //
t W,AIS Document Retrieval '
Exhibit A f
CALIFORNIA CODES
GOVERNMENT CODE
SECTION 25500-25509
25500. The board of supervisors may employ a purchasing agent and
such assistants as are necessary for him properly to fulfill his
duties.
25501. The purchasing agent may:
(a) Purchase for the county and its offices all materials,
supplies, furnishings, equipment, livestock, and other personal
property.
(b) Rent for the county and its offices furnishings, equipment,
and livestock.
(c) Contract for services pursuant to this article and contract
for public works projects pursuant to Article 3.5 (commencing with
Section 20120) of Chapter 1 of Part 3 of Division 2 of the Public
Contract Code.
The purchasing agent shall make purchases, rentals and contracts
only upon proper written requisition.
For purposes of this article, the population of a county shall be
the most recent estimate determined by the Population Research Unit
of the Department of Finance.
25501.5. The board of supervisors may authorize the destruction or
disposition of any written requisition received by the purchasing
agent which is more than three years old. Such requisitions need not
be photographed, reproduced, or microfilmed prior to destruction and
no copy thereof need be retained.
25502. Whenever the board of supervisors employs a purchasing agent
it shall not be necessary for it to advertise for bids for
furnishing county supplies as required in Section 25980, with the
exception of advertising.
25502.3. In counties having a popul-at7lon of less than 200, 000, the
board of supervisors may authorize the purchasing agent to engage
independent contractors t-p perform services for the county or county
officers, with or wit4o t the furnishing of material, when the
aggregate cost dos-l�ot exceed ten thousand dollars ($10, 000) .
25502. 5. (a) In counties having a population of 200, 000 or more,
the board of supervisors may authorize the purchasing agent to engage
independent contractors to perform services for the county or county
officers, with or without the furnishing of material, when the
aggregate cost does not exceed one hundred thousand dollars
($100, 000) .
(b) The board of supervisors may establish rules and regulations
to effectuate the purposes of this section.
WAIS Document Retrieval
Exhibit A
25502. 6. It is unlawful for the purchasing agent in any county
having a population of 900,000 or more to split or separate into
smaller work orders or projects any public work project for the
purpose of evading the provisions of this chapter or of any other law
requiring public work to be done by contract after competitive
bidding. Every purchasing agent who violates the provisions of this
section is guilty of a misdemeanor.
25502.7 . Notwithstanding the provisions of Sections 25502.3 and
25502. 5, the board of supervisors may, whenever it has proclaimed a
local emergency pursuant to Section 8630, direct the purchasing agent
to engage independent contractors to perform services related to the
local emergency for the county and officers thereof, with or without
the furnishing of materials, within the amounts the board of
supervisors may establish.
The board of supervisors may establish rules and regulations to
effectuate the purposes of this section. Those rules and regulations
shall include provisions for informal bidding procedures to the
extent that such procedures are feasible under emergency
circumstances.
25503. When purchasing personal property for which it is not
necessary to advertise for bids, the board may authorize the county
purchasing agent by ordinance to solicit and accept advantageous
trade-in allowances for county personal property which has scrap
value of less than ten thousand dollars ($10, 000) and which has been
previously determined by the purchasing agent to be not further
required for public use.
25509 . The county purchasing agent may by direct sale or otherwise
sell, lease, or dispose of any personal property belonging to the
county not required for public use, subject to such regulations as
may be provided by the board of supervisors. He shall pay the
proceeds into the county treasury for the use of the county. Where
the property is exchanged or traded in he shall secure its value in
behalf of the county.
25509 . 5. The county purchasing agent, with the approval of the
board of supervisors, and after publishing notice of his or her
intended action pursuant to Section 6061, may, by direct sale or
otherwise, sell to a purchaser any personal property owned by or to
be owned by the county, provided the purchaser agrees to lease the
equipment back to the county for use by the county following the
sale. The approval by the board of supervisors of the sale and
leaseback shall be given only if the board of supervisors finds, by
resolution, that the sale and leaseback is the most economical means
for providing such personal property to the county.
25505. Where specifically authorized by law the purchasing agent
may sell, lease, or dispose of the personal property of any special
district, and pay the proceeds into the treasury of the district, or,
if an exchange or trade-in is made, return the proceeds to the
special district.
WAIS Document Retrieval S,
Exhibit A
25506. Notices of sales shall be posted for not less than five
business days preceding the day of sale in the courthouse of the
county and in the office of the purchasing agent.
25507. In the disposition of any personal property pursuant to this
article and upon approval by the board, the purchasing agent may
purchase advertising space and may advertise the proposed sale or
other disposition of the personal property in such newspapers,
magazines, and other periodicals as in his judgment will best
publicize the proposed sale or other disposition to those persons
most likely to bid for or purchase the personal property.
Within the limits of the order of the board approving the
advertising, the purchasing agent shall decide upon the amount,
nature, make-up, and content of the advertising.
25508. The board of supervisors may by ordinance establish rules
and regulations requiring the purchasing agent to obtain quotations
by the use of formal or informal bids, in connection with the
purchase of materials, supplies, furnishings, equipment, livestock
and other personal property which such purchasing agent is authorized
to purchase for the county and its offices. The purchasing agent
shall comply with such rules and regulations.
25508. 8. (a) The board of supervisors of any county may, by
resolution, authorize the purchasing agent to procure construction
materials pursuant to Section 25508 for the construction of
facilities to be utilized by a regional opportunity program.
(b) A county shall be exempt from requirements of the Public
Contract Code with respect to the construction of a facility if the
majority of labor utilized for the construction of the facility
pursuant to subdivision (a) is provided by the regional opportunity
program or volunteer labor, the facility is to be constructed for use
by the regional opportunity program, and the land on which the
facility is to be constructed is currently used by a county jail.
25509. In any county which employs a purchasing agent the board of
supervisors may by ordinance create and maintain a purchasing agent's
stores account for the purchase and maintenance of a stock of
general supplies and materials for the county. The board shall
determine the amount of said account and shall fix the same in the
ordinance creating the account; said ordinance shall also prescribe
the method of administration of the account and the manner of
accounting therefor. The board may also by ordinance authorize the
purchasing agent to establish a checking account in a bank for the
payment of miscellaneous and emergency purchases of services and
supplies by purchase order check not to exceed an amount fixed by
such ordinance. The procedures for the issuance of such purchase
order checks and the administration, including replenishment of such
account, shall be established by resolution of the board. Any loss,
not caused by negligence of any officer or employee of the county,
incurred by reason of the issuance of any check on such checking
account shall be charged against the general fund of the county. The
authority of this section shall be in addition to and not a
limitation upon any revolving fund of the purchasing agent otherwise
C,3,/,3q
WAIS Document Retrieval ` '
Exhibit A LL
provided for by law.
r
f��
15/VV 1U:tla FAA. VZS 31:s 11t)6 ttiJl AUZI14
Exhibit B
MMDUCnON
CWomla Labor Code (LIC) Sections 1720-186" seat forth a conlpretmm"
scheme fox reguiatlon,under certain dreumstanCW,of publicworks construction In
this Sia*.mv--.purpose of WS pamphlet is to provide guidance,In nonlegal tan-
guago.to the parties involved In such CJonstntdlon-
Wring ttie last ten years,the Departrnent of Industrial Relations has developed a
number ofpmcedum and interpretations gonvesreirtg the eeforc mens of the public
works laws witch require the payment of proem ng wages,the employment and
braining ofapprenticesundercertalnciccmistames andthesubmis onofcertifted
payrtrsa records upon requersL Within the I)CIM &M these tesponsibllides are
enforced by the Division of taborStandarids Enforcernettt(DLSE or Labor Commis-
eoWs Of91ce)and the Division ofApprenticeship Standar&(Mh The Division of
Labor Sb d dc,and Researcch (DM) ptede=rines the&ppwpdm pro's
wage for pardcwu crafts and Imes"prevaft wage detwMina dons!;The DIM
torus office and Its legal counseldetem*10,in complicated cases.whether the
public works laws apply to a partICAU ProjeM witch have made
A number of fad=have over ed ovthe last ten years
compliance wi t, and erdbr mumt of, the public works taws more complex
Becam of the finarxft difficettties created by the passage of PMPcsition 13 In
im, tonal awarding bodies and asencies began d nean-tax
methods for pubiic works projects.M0re0Ver,there has been a
swicant hcrease,in the rnambeir of n constuctim work e"s or'pubuc
Vm tes projects.On such noraidodprojecxs,the traditicnal Crafts and das axions
utilized in union consmicdon,(which are usuawhe basis for DLSIUS prevaft'Wige
determinations) are rice observed. This compikaws entbrtzment *
Finally.the lna'ease In tate WdeWOurld eery WW w*h has~f u&hed n fixe
construction industry,has pc mftdad&donglenfomememproblems.AU ofthese
bam have ieSdto conhtslon the rights and responsWiles of the arlous
parties kwohoed in public wodm ConstructiOrL
This pamphlet is not meant to be a defintdve SWWwd for parties engaged in
such work but rather Is Intended only to htghught'the VPeS of problems and
resporsibilitles that exist on pubkcwwcrtcs pr'o -7he 1"mpt&n3houId be used as
aresoemct,,-when additional t<'dbmution IS needed on a subject,the reader
should contact the appropriate e nforcaetnett dtvlsion or otfie-
w:
The of kWus*eai Rda om hu d a pamgift die exact of cholic Libor
� C.w3e reaiubes at�d the tt is x+rat4sblt Gom enf�l of the ®lActs
Lse rid 4s dis pa+pheet
•.,.""'.v' r+r``r.�s°e�`.�'- .t+,o,-x`,c,.;?cee;�ra'�':c1.>:...: ':+:•:... .. •. . .... .. •
- • - .`" arm` �.�',.
7X
t}7ft15/VV 1U:Ut$ feA8 VZb J1s -rlurt Aurtitr __ _
Exhibit B �
.. mss: ".•.y .,t..,.
DETERMINING VARUM A PARMULAR MOJECT _ i Ribilc FOUIS
5 A PUBU C WORK tabor Code Section 172.0 r
ttW arepaid[or,inwhole Orin
The basic requirements for compkance with the pubic works laws are the pay- warts project under the post:
anent of prtvattir►g wages,satisfaction of appreirtitxslhip►obigadorm and ffmte- 51000(wSaxtio n,1771)»Ala!
nance of cartFfied paynois for subrrussaon to irtt ueste+d parties upon request How- contacts to odro mwaw nt the S'
evm,bdbm these nsponsWtfes neeed be tn%tt mustLrst be domed wwhedw otic percentage of hands w Wct
aparticularprojextisapubSeworkwnitti n the mewft oftheCalifornia labor Code Were wit.If&W part of the
(SectSon 1720 ed sett_). performed according to tht
the public moneys were orig,
1S IM MOIEC:T A PUSUC WORV through,or are adrradstemd
public works responsibilities
s
Time are titres main cft&to consider when deturnining whedw a paWcular The last point to be:mad
project Is a public wort.First the Ope of wecuk that is belrtg pe forrnech second. cr&,Ww firiarx ft methods b
volugther the pro is paid for.in wtw le or In part,out of pew fund*and thliwd, using lkvorabte provisions Si
whedw the entity(aarwy ud i g body) contracting vvt#h the contractor is a pubitc markets.A common rnethoc
aRge ncy(or the agent of a pobc aagency).Ewept In limited c3rarru tones,all of the which grant a tight to the Inv
above criteda must be satisfied bei the pubtle works requirements appy this money Is taised In the p
.
and gxwtfbr,a.pubAcsge=
1. Type ofiNo>& pure a public building y
situaidons,such creative fire
When tare other two criteria are met,the state's prevaliing wage requirements staoe's pubicworM laws.
cover the followft types of wo&.
• Construes alteration.dernoildon or repair(LC 1720(a)) l 3. !` rSc Ji1E'c +{Awaurciloi
• Work for kftado n.uth'lfty,reclarneitiot,and odwirnprovement districts,apt ; in the typical public v,**
the operation of an mon of redarna don district(LC Section 1770(b)) ' contract to a contractor to
• Street and sevw rworkdone under the dktcdoinand supervision ofapubl`ibbody i public agcy•Inm
ost case
(LC Section 1720(c)) Code as any county,city,d-
I
• The laying of carpet in a public bulioiit`g(LC Sectkm 0 a state and any assessment
17 (e)) bodyls defined in the Labor
• Malntenancework In a publickyownesd or operated building(LC Section 1771 and 1 awiuding a contact for put
+tie 8 C.alliotnia AdmhtWative Code(CAC)Section 16000) i the ofwork which is cc
• R+eEisse haiiRng from ft site of public w►ortrs construction to an outside+ciEsPosal workv Atth orae oftf*se end
area when a state agency. Including the unlversfty of California system, is the Labor Code+mins+be rr
Involved(UG Section 17203) Certain cities,whiodh wuc>
• The relocation of stare facilities when tate cvrrtra ct is in 6=w of 52,500) = wnrotks lags, have taken ax
(Gov rrffte nt Code Section 14920) agows them to declare th
• Custodial or jarftorlal work in public utilities(Public titer Code Sermon 465) t statelawon local m
• Federally funded a Waft context,tthls s
slay profits wvttenowei'a project is ctxet3rolled or carried
out by a Ca rdbrda awarding ding body(Mie 8 CAC-%dfon 16001(b)) pubkwoftprojectinad
• Faeldsurveywakwr+fiery:itisanlntegraipartofaspedicprbCicworksproject(Title isnotsubjectto ttepublic
mandated by the cJwter,
8 CAC Section 16001(c)) Dim if nether a publi,
V the vAxk does not W within one of the above categories,tate projectls not of dreumstance.'s.wauo1k%%h1c.
prevalling wage project under state Law the Labor Code(LC Secdc
2
115/95 1U:87 Y•AX VZO 414 YIUO ------__ SLag rxvstri
t ---
Exhibit E
.`.r; '..:'E't: �'•'„',:�r#•�,jY7Y.Y�:s::p.�rY."�.0 ;.y•. .... • .: ..•r> .. .>. a
jKnCX ,AAR M.OJEa 2. Pubtk tFumwb
ORK Labor Cade Section 1720 dctihes various types of wo*as public works when
they am paid for.inw holeortripart.out ofpubacfunds.inordertoqualifyasapubic
e public works taws are the pay works project under ft public works law,.a prood mist also be In excess of
kwAip obligations.and mainte- $1,000(LC Section 1771}A larger contrail My riot be SOM'ad tato several smralle r
steel parties upon m quesL Now co to circurrrvent the$1.000 threshold for publicwories MOreovet.
me ttbstbedetarrNrKdwt edw thepe.rcxntageoff tndsw hkharepubfrccomparedtothetotatcostoftheprojectis
nbg of theCalrfornia Libor Code irretevwt if arw part of the money is public money,the entire project must be
perforrne d according to the state's pub c,works laws.it is also hiele want whether
the public moneys ween ori&a,tly federal,state.or As as the fonds pass
Rough.of amadmimiryimfed by.a political subdivision ofthe state(or its agent),the
pubic waft resporulbitides in the Labor Cade must be met.
dederminingwhedwaparticular 'The last point to be nude Is particularly Important In the content of today's
tat Is being performed;second, area ve in wvtalch pubtk agertclles and awarding bodies are now
art out of parbc fimcls;and third, using f1svorable provisions In the tax code to rause motley in the private capital
with the cormactor Is a public maw A common method utr tOd is the issuance of cer0cates of participation
nWr*edall ofthe whichgrantairghttothetrivestartarecelptofidurekasepay wft Eventhough
works requirements apply this money is raised in the private capital markrets.it Is$tilt money that is raised by,
andspentfor.aperbk gencyanolsbeingusedbythe'gerdofthepubleagencyto
purchase:a public building for that pubirc agency.Accordirtgjy,in many of these
slWatiorm such creative&Wncing,'tectnwiques will not preclude application of the
s's .ailing wage requirements stages public works laws.
LC Section 172A(a)� 5. Pub&Agency cy Ukwau )
„a.imp rnsirernmd dlsftfcb�v=pt In the typical public works rase,a public ageiq/or an awarding boxy awards a
thict(LC Section 1720(b)) amnect,to a connector to engages in a partkuW type of riblic construction.A
t and of public body publit age.in most cam.isat paliticat subdivision Which Is.dem In the Labor
Cade as any can*.clly.dstkt public ha�authority+.or public agency of the
coons 1720(d)and(e)) state and any anessrme:rrt or Improvement district(LC-Section 1721) Awuar6ng
ted building ICS1771and �Ylsd in the LabosrCodeasadepartrnevAboard.aurttoarity'.offic+nroragent
( e cftnaw wdirrg a conned far public work(LC Section 1722).if a connector is perfarming
r#ton 1t�tI00) the type afw+orkwfykh is convexed b)rthe puNcwodo't lags and contracting for such
it istnrcdon to an outside ftposal work vorith ane of thme an#1 m Itis very likelythart the public works req uirertters of
my of Caftmla vjstem is the Labor Code worst be rneL
Catain dtim which would otherwise be awarding bodies,subject to the pub4c
is In mess of$2.500 waft laws, have taken adva ntap of a California ranstttudonal prvvision which
alova them to dedare themsetves r+cam.Chart'ddes are eaa xnPt from
ublic Litlikies Cade Sewn 46.5) state law on c&rWn local matrte m w+filch are deemed`ynrrniedpat aiiairs."In the public
r a project is of ntrn>lled or carried worm context,dtis ftodan has been jurdidalby inte4weted to meant that when a
Section 16001(b)) pubkwoftproj9edinachatteedtytspaid forsd*outtoflacalfunds.thatprolect
speotdticpurbtieworksproject(Me: is notsubj+edtothe publlcwoftrequlr+eane nts Inthe LaborCodeurolessspedtiealty
mandated by the charter city.
Wen if neither a public agency nor publc funds am tttvalvexl. under cartoon
se categories,the project is not a dreumstarm= workwhich is done under prfvate contract Ls stili a pubticwotk under
the tabor Cade(LC Section 1720.2).This situation usually ocx Mwhe n a,contractor
3
..+.^ •:+f:. �.'W"o Pte.r r`...y:. ! .. •' ... .... r
W15/99 10:Ul VAL Yx• 313 lluii ��u wwttr
Exhibit B
�gi±;:`�.L}Y�,"�'•r,.«={'v1•'ri,` ..�..a`'`r'1.•�•Fr, r.. .. .•. .e. , , + ` `'I. .,. .. � e , . .. •, ,,n::''r.: ....
maty rctsWth W ate fords a buAdrtgwhlch the awnerordeve lopex has agreed t+
leasee to a public agency.y In order flit'the publlc works tequkernetres to apply,Ltte
finorwIng condWorrs aria
b (lift;
• TM prDPUW tS ovined by a prhate pally
• y a Owner of the must enter tato a►construcdon cOntrad 1Atlth w'Odw
private tiatl or entity
• More Om 50 pez=d ofthe fable square feet of the structure consaucted
on the pmpe*must be leased to the public agency upon completion of the
constr`rldlon work
••adw the iewe agreement between een the lessor and the public agency was
entered Into prior to the:canstrucdon cmittva or the consttuctlon work was
paftnICC a=ordkgtop and• c tfG3 StirtSltltt3lSr iedby !'rC'pttbkagKIY cy.
and the lease was entered into drift or upon completion of the corAft ictlon
wovk
Cam ktvolvft diaster dues and/or Section I TnO.2 of the Labor Code present
ve ly cornplkCaterd s€tuadons. and.wben such a project is conternplated,advice
should be sought ddter'ftmcour orttt)epautment0flndusitiatR,el OnsPriior
to bld.
Dire ctoes Dertenn> 4as
+'projecu do not bA neatlyvAtin one or more of tate dues,crlte ft set forth
above.In such krstancer..an opirdon maybe sought from the Chief orfthe Luton of
Labor Sftdsdcs and Research or the Director of the Department of indust:tal
Relations as to whethw a patdctu w projed is covered by the publk works k%--
Mme adngs arc ad*ary in nature and do not prechide a party farm se dit a
NdcW detenrawdon r+egardh* oonr ep- Howe yer, dW dol mpresatt the
Depart r ent"s pocky Mqudag a Proms and determine whwdw etinforeme n t w#Il
be sought by the department In thatrase,.
F ,
. C .
Y
:•;:;• '+c.:._+=d+.i'1•:ter'`o.„�,...,..,w.,... .+''�.;+>::;,:,;,....+.y i �'
CrN
Exhibit C a7de&,4
PURCHASING 110$,2.222-1108-2.404
the cost shall not constitute a legal charge against or employees within the department by filing a
the county. (Prior code § 2503: Ord. 1212). written authorization with the purchasing agent
and the auditor-controller. (Prior code § 250$:
1108-2.222 Authorization of certain Ord. 1212).
purchases. Except as otherwise required by
ordinance or general law, the board of super-
visors, by resolution, may authorize county
departments and officers to purchase services,
supplies, equipment, materials, goods and other
personal property without utilizing the purchasing
agent. Any such purchase may only be made as
provided for by board resolution, any applicable
county administrative bulletin and in accordance
with current appropriated budget accounts by
obtaining a warrant from the auditor-controller.As
appropriate or necessary, the auditor-controller
! shall report to the county administrator on county
officer and department purchasing done pursuant
to this section. (Ord. 90-115).
Article 1108-2.4 .
Procedure
1108-2.4.02 Procedure — Revolving fund.
There is established from the unappropriated
funds of the county a revolving fiend in an amount
that the board of supervisors may establish from
time to time by resolution. The fund shall be
known as the purchasing department revolving
fund.The purchasing agent may purchase supplies
and materials in quantity for offices and
departments of the county as needed, and he shall
make payments for them out of the revolving
fund. As the supplies and materials are issued to
an office or department, the fund shall be reim-
bursed from the budgeted funds of the requisition-
ing department. (Prior code § 2504: Ord. 1212).
1108-2.404 Procedure — Generally. Except
for purchases from the revolving fund, all pur-
chases, rentals, and contracts shall be made only
on proper written requisitions,the forms of which
shall be supplied by the purchasing agent to the
offices of the county. The head of any county
office, department, or institution, or his duly
designated assistant, is authorized to draw
drequisitions for purchases for the office, depart-
ment, or institution in accordance with current
budget accounts. The head may delegate this au-
thority to one or more of his deputies, assistants,
489/491 (C«7" Co:u Coumty 6-9 1)
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` THE BOARD OF SUPERVISORS Exhibit E /
CONTRA COSTA CCH CALIFORNIA
Adopted this Order on 11/7/95 ,by the following vote:
AYES: Supervisors Rogers, Smith, DeSaulnier, Torlakson and Bishop
NOES: gone
ABSENT: None
"Cr.- Warrant Request } RESOLUTION NO.95/5 2 6
Pesch sing Procedure } (Govt.C,54201 ff.and
Ord.C. § 1108-2.222)
The Board of Supervisors of Contra Costa County Resolves that:
Pursuant to County Ordinance Code Section 1108 -2.222, County departments and officers may be
authorized to purchase directly certain items without utilizing the Purchasing Agent.
Any such authorized item purchases may be made only as provided by this Resolution and in accordance
with current departrnemal appropriated budget accounts by obtaining a warrant from the Auditor-Controller
utilizing its prescribed"'Warrant Request"form. Further,any such authorized item purchases shall be made
only in compliance with any applicable County policies,regulations,and administrative bulletins(e.g.,any
required approved travel authorization, County Administrator and/or Board of Supervisors imposed
purchasing restrictions or moratoriums,etc.).
Effective 11/7/ 1995,and subject to the above,County departments and officers are hereby authorized
and may(m lieu of using the Purchasing Agent)directly purchase the following specified items required for
County business and operations,
1. AcsachWon Dues And Membership Fees,
2. Postage-Federal Faress_and LIPS.
3. Lodging.
4. Registration and Conference Booths,
5. X11111'RMIal and bad. ' This item covers obtaining facilities for use on a one-time or very
infrequem basis similar to lodging,as well as catering at such facilities,County-sponsored meetings
and gents,or group meals at restaurants.
6. Advertising This item covers advertising for County employment opportunities to notify potential
candidates of temporary or permanent jobs with Contra Costa County.
7. Lem]Em=,,S,mdee . This item includes,among other things,the service of subpoenas(civil
and ),mmmonses,p c batenotices,guardianship and LPS documents,and service of other
legal proceedings(orders to show cause,unlawful detainer notices,notices to debtors,etc.).
8. Bus fares. Bev A= Rapid Imnsit Didr_,ct fB_= t&c1e s. fares for other forms ofL}� blie
transportation. d bridge tolls,
9. PCMg1S fees,and licenses paid to governmental agencies, This item covers,for example,permits
to store flammable liquids and land use permits.
10. Utility installation fees(General Services and Public Works Departments only.)
.. 1.
PESOI.L"nON NO.95/ 5 2 6
Exhibit E
1: Bo subscriptions and nvblieati n .including tjephone directories. j�
12. In a refer and translation s wises. v
13. Reinibursement to health care nro)dders for wakes performed an referral by Health S wises
Department staff
14. pre_emalovment screening and fitness for duly exam.
15. Legal notices.
THE FOLLOWING ITEMS ARE LIMITED TO A MAXIMUM OF$500.0b,EXCLUDING SALES
TAX,SHIPPING AND HANDLING,PER WARRANT REQUEST.
16. Computer hardware gjld software from the fire-approv d Hata Proces9.ng fien:ces list, n0 0
exams 4S 2•
17. items under 00 00 which re not authorized byhl na ket pcirchase order,or for which County
contMets dont exist and have not existed.
THE FOLLOWING ITEMS ARE TO BE EXCLUDED FROM THE WARRANT REQUEST
PURCHASING PROCEDURE,REGARDLESS OF COST.
Professional services covered by Government Code Section 31000.
Furniture,including chairs,desks,lamps,tables,etc.
Computer hardware and software not within guidelines of item number 17 above.
Cellular telephones.
Printing services.
Appliances,including refrigerators,microwave ovens,televisions,VCR's,etc.
Office supplies on contract.
Building related charges such as utilities,custodial services,elevator maintenance,etc.
Additions to existing fixed assets.
This Resolution supersedes Resolution 93/429 adopted on July 13, 1993.
I hereby cartity that this IS a taus and correct COPY Of
an action taken and entered on the minutsa of the
Boma of S sora on data ktawn.
A.fTEs7En: `�1l1
PHIL BA CHELOR,Clark of ilea Board
of 5uperviro and Coun miniatratar
BY 2 Deouty
Orig.Dept./ General Services Depart+nent
Contact: Barton J.Gilbert-313-7100
cc: General Services Department
Administration
Purchasing
County Auditor-Controller
County Administrator
/ County Counsel
95/526
_2_