Title
Introduction of Ordinance Amending the Alameda Municipal Code by Amending Various Sections of Article IV (Contracts) and Article V (Administrative Procedures and Policies) Concerning Conformance of Alameda’s Bidding Procedures on Public Works Projects to Public Contract Code 22032 and California Uniform Public Construction Cost Accounting. (Public Works 310) (45 minutes)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Introduction of an Ordinance Amending the Alameda Municipal Code by Amending Sections of Article IV (Contracts) and Article V (Administrative Procedures and Policies) in Chapter II (Administration) Concerning Conformance of Alameda’s Bidding and Contract Award Procedures on Public Works Projects to Public Contract Code and California Uniform Public Construction Cost Accounting
BACKGROUND
Staff proposes to amend contracting provisions in Alameda’s Municipal Code (AMC) to enable the Public Works Department to deliver faster, more efficiently, and with less legal risk on its construction projects, especially those related to the maintenance of City buildings.
In 1983, the State adopted the California Uniform Public Construction Cost Accounting Act (CUPCCAA) to provide for more flexibility and efficiency in public works contracting. It provided local public entities with the ability to opt into the Act. In 1990, Alameda opted in. Today 215 cities, 39 counties, and 365 school districts have also opted in.
CUPCCAA introduced both formal and informal (or streamlined) procedures for competitively bidding construction contracts. The general principle is that, the larger the project, the more stringent the bidding procedure and the more approvals required from the public entity’s governing board. Smaller projects are afforded more flexible bidding procedures and relief from the requirement to gain the governing board’s approval in order to help reduce the cost and time associated with their completion.
When Alameda adopted CUPCCAA, it adopted CUPCCAA’s thresholds for formal and streamlined-or what the code terms informal-bidding. Projects under $25,000 were permitted to be done by City forces, negotiated contract, or purchase order. Projects between $25,000 and $75,000 used streamlined bidding procedures in which advertising of the bid opportunity was required 10 days before the opening of bids, and the governing body (City Council) was not required to approve the contract.
Projects in excess of $75,000 were required to follow formal bidding procedures including advertising of the bid opportunity 20 days before bid openings and gaining the City Council’s approval of the contract’s award. (Alameda’s Municipal Code section 2-59.2 adds another City Council approval of a project’s plans and specifications if the project is above $75,000.)
The California State Controller updated these bidding thresholds in 2000, 2005, 2011, and 2015. These thresholds now require projects over $175,000 to be formally bid and approved by the public entity’s governing board; between $45,000 and $175,000 to follow the streamlined process; and projects under $45,000 to be done by City forces, negotiated contract, or by purchase order.
In the 26 years since Alameda adopted CUPCCAA, Alameda has not updated its bidding thresholds. If this item is approved, Alameda’s bidding thresholds would become up-to-date with CUPCAA and the California Public Contract Code.
DISCUSSION
Staff proposes to update the AMC to be consistent with CUPCCAA and Public Contract Code (PCC’s) current bidding thresholds, and then to automatically adjust these bidding thresholds whenever the State Controller does. As a result of this change, construction projects between $45,000 and $175,000 would follow the streamlined bidding procedures described above, and City Council approval on these projects would no longer be required. In the last ten years, every construction contract under $175,000 has been on the City Council’s consent calendar-every contract has been approved, and none involved bid protests. This record reflects an important reality that the City has little discretion in awarding construction contracts given the state law requirement that all public construction contracts be awarded to the lowest responsible bidder.
Public Works’ newly created Project Management Unit (unit) is proposing these changes, as they are essential in this unit’s ability to deliver on the many capital projects related to City’s buildings. These types of projects include roofing replacements, replacing worn or out-of-date heating and cooling equipment, weather sealing, and smaller reconfigurations of building space that often range between $45,000 to $175,000. Under Alameda’s current bidding thresholds, Public Works will only be able to complete building projects on four buildings within a twelve-month period because so many of them require formal bidding procedures and two City Council approvals-first of the project’s plans and specifications and then of the project’s contract award. An updated municipal code will eliminate four months from each of these projects’ schedules, and help Public Works’ succeed in reducing City buildings’ deferred maintenance.
Updating these bidding thresholds will also reduce project costs. Formal bidding requirements can add up to 10% on project costs, given that the documentation often exceeds 150 pages and involves a considerable expenditure of staff time.
Finally, smaller local contractors with less administrative staff often are at a disadvantage in responding to more formally bid projects. Updating the City’s bidding thresholds will enable these local contractors to compete for more of the City’s projects under the streamlined process, which should enable the City to get more competitive bids from more contractors.
Public Works is also proposing that the City Council amend AMC section 2-59.2 to designate the City Engineer, rather than the City Council, with authority to approve plans and specifications before a construction project is put out to bid. The approval of plans and specifications is required if a public entity seeks immunity pursuant to California Government Code section 830.6 for any injuries that may have been caused by the plan or design of a construction project. Yet recent case law suggests that, unless the designated authority approves amendments to those plans and specifications-and amendments are a fact for almost every project-the immunity may be lost. Designating the City Engineer is the best way to protect the City’s immunity given the changes to plans and specifications are a constant, and only the City Engineer is positioned, both technically and organizationally, to best use that authority.
As a practical matter, this amendment would result in 5 to10 fewer consent calendar items being approved by the City Council per year. Most of these items relate to plans and specifications for annual projects to resurface streets, upgrade pump stations, and replace sewer mains. These items are almost always on the consent calendar, approved, and then return to City Council for a third approval at contract award. As a result of this amendment, City Council would retain two approvals (budget and contract award) but relinquish one (for plans and specifications). For parks, new buildings, and other projects of significant public concern, staff will return to City Council for approvals of plans and specifications, even though these projects already gain design approvals from the Planning Board.
FINANCIAL IMPACT
Adoption of staff’s proposed AMC revisions is likely to enable staff to more efficiently use General Funds, as these fund most capital building projects, which will be able to be completed more quickly, at less expense, and with less legal risk than currently.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This draft ordinance amends the AMC by amending sections of Article IV (Contracts) and Article V (Administrative Procedures and Policies) in Chapter II (Administration) concerning conformance of Alameda’s bidding and contract award procedures on Public Works Projects to PCC and CUPCCA.
ENVIRONMENTAL REVIEW
The ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15378 subd. (b)(5)5301(b) Administrative activity of the City that will not result in direct or indirect physical changes in the environment.
RECOMMENDATION
Approve an Ordinance amending the Alameda Municipal Code by amending sections of Article IV (Contracts) and Article V (Administrative Procedures and Policies) in Chapter II (Administration) concerning conformance of Alameda’s Bidding and Contract Award Procedures on Public Works projects to Public Contract Code and California Uniform Public Construction Cost Accounting.
Respectfully submitted,
Liam Garland, Acting Public Works Director
By,
Abdulla Ahmed, Public Works Project Manager II
Financial Impact section reviewed by,
Elena Adair, Finance Director
Exhibits:
1. Current Ordinance
2. Redlined Ordinance
3. PowerPoint Presentation