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Agenda Item # 13

BOARD MEMORANDUM

RECOMMENDATION:

Adopt a resolution amending Chapter 9 of the Administrative Code to add provisions relating to : 1) contracting services through sealed bidding; 2) contracting for incidental services; 3) utilization of “tag-on” procurements for services; and 4) Execution of Cooperative Agreements with public agencies and public utilities.

BACKGROUND:

Section 9 of the Administrative Code sets forth the powers and duties of the Purchasing Agent. It has become apparent that amendments in several areas are desirable in order to minimize administrative burden, promote efficiency, and possibly reduce costs.

DISCUSSION:

Item No. 1: Contracting for Services through sealed bidding.
Currently, by virtue of Section 9-2(a), the Purchasing Agent may procure goods, supplies and equipment (but not services) without regard to dollar limit and without Board approval, so long as the items have been budgeted, and are procured using the sealed bid process. This process involves preparation of detailed specifications, advertising of an Invitation for Bids, and award to the lowest responsible and responsive bidder. Thus, there is no subjectivity involved in contractor selection. In addition, the Purchasing Agent may procure any other supplies, materials equipment or personal property up to $250,000 per contract. Contract over $25,000 are subject to sealed bids under California Public Contract Code Section 20301. All contracts over $250,000, even though publicly bid, must be approved by the Board of Directors.

There are many routine services, however, which are procured using the sealed bid process, such as printing, equipment maintenance, security camera monitoring, painting, and paving repair and maintenance.

For consistency and efficiency, purchasing staff recommends that services procured pursuant to sealed bid added to Section 9-2(a). If this section is amended as recommended, the Purchasing Agent would have the authority to procure routine and recurring services that have been included in the budget, without dollar limitation; and to procure all other services up to $250,000 so long as they are procured through sealed bid.

It is not cost effective to conduct a solicitation and generate a new contract for these low dollar value services every three years. It is recommended, as more prudent and still consistent with the intent of the Administrative Code, to grant the Purchasing Agent the authority to execute service contracts for periods up to seven years, where the total dollar value of those services over the full duration will not exceed $300,000 (average of $40,000 per year for a seven year agreement).

Item No. 3: Utilization of “tag-on” procurements for services.
Section 9-10 of the Administrative Code authorizes VTA to utilize the competitive solicitation process of another public agency to procure goods, supplies, materials and equipment, so long as there was adequate competition to ensure fair and reasonable pricing, and that the vendor offers VTA comparable pricing. VTA has tagged on to Santa Clara County purchases (e.g., hazardous waste removal) and State of California purchases (e.g., computer hardware).

It is recommended that services be added to this section of the Administrative Code in order to result in more efficient utilization of VTA’s procurement and fiscal resources, Examples of services that might be procured through a “tag-on” process are courier services, pest control, recycling, and document shredding.

Item No. 4: Execution of Cooperative Agreements in Connection with Public Works Construction.
The current Administrative Code has no provision authorizing the execution of Cooperative Agreements such as utility relocation agreements, construction cost sharing agreements, operations and maintenance agreements, and exchanges of services related to public works construction projects.

It is recommended that the Administrative Code be amended to grant the Purchasing Agent the authority to execute this type of agreement with public agencies or public utilities in an amount up to $1 million in connection with public works construction projects, provided the construction project is budgeted and has been previously approved by the Board of Directors. These agreements are typically between VTA and other public entities such as cities, transit properties, CalTrans, or public utilities.

ALTERNATIVES:

The Board could modify the recommendations, or decline to adopt any or all of them.

FISCAL IMPACT:

There would be some cost savings associated with the use of “tag-on” procurements for services and due to elimination of the administrative tasks associated with bringing these various types of procurements to the Board for award.

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