HomeMy WebLinkAbout(2022, 12/13) - F-14 - AmendedF-14
1
CONTRACT PROCUREMENT AND AUTHORITY TO CONTRACT
Purpose
This policy sets forth requirements for contract procurement and City Council’s
delegation of authority for entering into contracts. “Entering into a contract” or
“executing a contract” is synonymous with the awarding and signing of a contract and
means the formal approval of the contract terms and intent to be bound thereby.
“Contracts” includes all agreements, purchase orders, and purchase requisitions,
which is applicable regardless of whether the City is expending or receiving funds. The
types of contracts covered by this policy include, but are not limited to, settlements,
right of entry agreements, cost sharing agreements, joint defense agreements,
cooperative agreements, reimbursement agreements, grant agreements, professional
services agreements, former employee services agreements , independent instruction
and recreation contracts, public works contracts, and “as-needed” or “on-call” services
agreements.
Background
The City shall not be bound by any contract or amendment thereto, unless the same
shall be made in writing, approved by the City Council or employee designated by the
City Council; signed on behalf of the City by (i) the Mayor or by such other employees
designated by the City Council, (ii) the City Clerk, and (iii) the City Attorney (Charter
§ 421). The City Attorney shall approve the form of all contracts made by the City and
amendments thereto and all bonds given to the City, endorsing his or her approval
thereon in writing (Charter § 602(e)).
Delegation of Authority to Enter Into and Amend Contracts
The City Council hereby delegates its authority to contract to the City Manager and
through him or her to the Assistant City Manager, Department Directors, and to the
City Attorney as set out below. The City Manager has final authority to approve any
contract within the City Manager’s approval limit.
All formalities required under the provisions of the Charter shall be applied to these
contracts.
The City Manager may make exceptions to the City’s standard contract terms,
including but not limited to, insurance and indemnification requirements, based on
F-14
2
operational considerations and weighing the particular risks involved. When deciding
whether to modify standard contract terms, the City Manager shall consult with the
City Attorney, Risk Manager, and Department Directors, as necessary. This authority
shall not be delegated below the Assistant City Manager level.
Contracts may not be written to circumvent any of the authority limits described herein.
The City Manager shall, in consultation with the City Attorney, adopt and enforce
administrative procedures that ensure: (1) all contracts are entered into at a reasonable,
fair and competitive price to the City; (2) all necessary formalities are followed and the
requirements of federal, state, and local laws, including Council policies, are met; (3)
best accounting practices are followed; and (4) the contracting process of the City is
open and transparent, and provides accountability.
A. Authority to Enter into Contracts
The authority to enter into original contracts is delegated as set out below.
1. The City Manager
The City Manager is authorized to execute all contracts without prior
Council approval, in an amount that shall not exceed $120,000. For
contracts involving expenditure of funds, the services and the funds must
have been approved by the City Council as part of the annual approved
budget. Execution of contracts for grants and donations shall be in
accordance with City Council Policies F-3, F-25 and B-17. This authority
shall not be delegated below the Assistant City Manager level.
2. Department Directors
Department Directors, including the City Attorney and City Clerk, are
authorized to execute contracts without prior City Manager or Council
approval in an amount not in excess of $75,000. For contracts involving
expenditure of funds, the services and funds must have been approved
by the City Council or City Manager as part of the annual approved
budget. This authority may not be delegated below the Assistant or
Deputy Director level. The City Manager has authority to approve
requests for budget increases without City Council approval at the level
F-14
3
set forth in Policy F-3, Section E-1 (“Administration of the Annual Budget,
New Appropriations”).
3. City Attorney
The City Attorney is authorized to execute contracts for all services for
outside counsel, investigators, and experts related directly to and
necessary for prosecution and defense of pending litigation as defined in
the Brown Act, and for services for outside counsel, investigators, and
experts necessary to address other pending or potential legal claims or
legal issues so long as funds for outside counsel, investigators, experts
and related legal services were approved by the City Council as part of
the approved annual budget. The City Attorney shall keep Council
informed regarding any such expense that exceeds $120,000 on not less
than a quarterly basis and shall seek budget updates, if needed, within a
timely fashion.
4. Human Resources Director
The Human Resources Director shall have authority to enter into
contracts to resolve claims, litigation and other legal disputes where the
City is receiving or expending an amount not in excess of $75,000. This
authority may not be delegated below the Department Deputy Director
or Risk Manager level.
B. Authority to Amend Contracts
If circumstances arise that were not reasonably foreseeable by the parties at the
time of contracting which make extra work or material necessary for the proper
completion of the service originally contracted for, a contract amendment and
corresponding increase in total contract amount may be necessary. Under those
circumstances, the City Manager, Department Directors, City Clerk and City
Attorney are authorized to amend contracts as set out below. For purposes of
this policy, “total contract amount” is defined as the total consideration paid
over the term of the agreement, including any previous amendments to the
contract. “Original contract amount” is defined as either the amount of
compensation agreed upon when the contract was first entered into or the
F-14
4
amount of compensation most recently approved by the City Council by
amendment, whichever is greater.
1. City Manager
Contracts within the City Manager’s Contracting Authority
The City Manager may execute any contract amendment, including but
not limited to amendments to extend the term of a contract, so long as the
total contract amount as amended does not exceed $120,000 and the term
extension does not exceed the maximum allowable contract term.
Contracts approved by City Council
The City Manager may execute any contract amendment, including but
not limited to amendments to extend the term of a contract, so long as the
total contract amount does not exceed 125 percent of the original contract
amount or the original contract amount plus an additional $120,000,
whichever amount is less, and the term extension does not exceed the
maximum allowable contract term.
2. Department Directors
The Department Director, including the City Clerk and City Attorney,
who entered into the contract or whose department is designated as the
contract administrator, may execute any contract amendment, including
but not limited to amendments to extend the term of a contract, so long as
the total contract amount as amended does not exceed $75,000 and the
term extension does not exceed the maximum allowable contract term.
3. Amendments in Cases of Possible Work Stoppage or Undesirable Delay
The City Manager is authorized to execute a contract amendment that
increases the total contract amount up to 150 percent of the original
contract amount in cases where a work stoppage or other undesirable
consequence will result if approval of the amendment is delayed until the
next City Council meeting. Within twenty-four (24) hours, the City
Manager shall notify the City Council Members of any such amendment.
F-14
5
4. Amendments Necessary to Address Emergency Situations
In the event of emergency work requiring an amendment to an existing
contract, the emergency contracting policy outlined below may be
followed.
Special Requirements
Competitive proposals should be obtained for service contracts whenever possible
before resorting to negotiated awards.
A. Professional Services Contracts
Services of a professional nature shall be obtained through a qualifications-
based selection process based on demonstrated competence and qualifications
for the types of services to be performed and with the objective of selecting the
most qualified consultant at a fair, reasonable and verifiably appropriate cost.
The procedures for achieving this goal shall be adopted and applied by the City
Manager in the Administrative Procedures Manual.
B. Services Contracts (Non-Professional)
The City shall select services contractors though a Request for Proposal (RFP) or
a Request for Bid (RFB) process, whichever serves the City’s best interest.
Contracts through the RFB process shall be awarded based solely on pricing and
minimum qualifications to determine the most responsive and responsible
bidder. Contracts through the RFP process shall be awarded based on both
qualifications and pricing to determine the best value to the City.
C. Maintenance and Repair Service Contracts
A service contract for maintenance or repair work that is fixed or of a definite
nature (not on-call) and over the formal bid dollar amount in Charter Section
1110 must be requisitioned as a formal public works contract. For contracts not
exceeding the formal bid dollar amount, the City may select services contractors
F-14
6
though the RFP or RFB process, whichever serves the City’s best interest based
on the service to be provided.
D. Public Works Contracts
Contracts for public works where the total expenditures for the project exceed
the formal bid dollar amount shall be awarded consistent with the provisions of
Charter Section 1110 and relevant provisions of the California Public Contract
Code.
E. Procurements and Contracts Involving Federal or Pass-Through Funding
Procurements expending funds from federal grants or awards received directly
by the City or from a pass-through agency, such as the State of California, must
comply with the provisions of Title 2 of the Code of Federal Regulations (“CFR”)
Sections 200.318 through 200.326. To ensure the City’s adherence to the Federal
guidelines related to these procurements and contracts, the City Manager has
adopted procurement procedures for such projects in the Administrative
Procedures Manual.
F. Independent Instruction and Recreation Contractors
Department Directors are authorized to execute contracts with independent
contractors for instructional, educational, cultural, or recreational purposes
(“Instruction and Recreation contracts”) where the fees paid by the City are
based upon either a percentage of fees collected by City for a program or on a
flat rate basis for tasks performed by the contractor.
Instruction and Recreation contracts shall not exceed five (5) years in duration
and shall include a termination clause granting the City the right, at its sole
discretion and with or without cause, to terminate the contract at any time by
giving seven (7) calendar days’ prior written notice.
Should fees paid under an Instruction and Recreation contract exceed $75,000
during the term of the contract, the Department Director shall provide written
notice to the City Manager identifying the program and independent contractor.
The City Manager shall give written notice to the City Council should fees paid
exceed $120,000.
F-14
7
G. On-Call Contracts for Services (Professional or Non-Professional)
The City Manager and Department Directors are authorized to enter into on-call
(“as-needed”) agreements for obtaining services, including but not limited to
professional services and maintenance and repair services, where the need for
services is contingent, does not have a set timeframe, or where the size of the job
does not warrant the expense of entering into individual agreements for each
service.
On-call services contracts shall not exceed five (5) years and shall include a
termination clause granting the City the right, at its sole discretion and with or
without cause, to terminate the contract at any time by giving prior written
notice of seven (7) calendar days. The City Manager is authorized to extend an
on-call services contract for up to six (6) months if work has been authorized or
encumbered during the initial term but not completed.
City Council approval is required for: (1) an on-call contract that exceeds
$120,000, and (2) on-call contracts to multiple contractors stemming from a
single procurement where the combined amount of the contracts exceeds
$120,000.
On-call contracts may not be used to perform maintenance or repair work in
contravention of Charter Section 1110. For example, a project, task, job, or work
order in an amount in excess of the formal bid dollar amount in Charter Section
1110 cannot be performed under an on-call maintenance or repair services
contract but must be requisitioned as a public works project.
H. Emergencies
Services contracts obtained for purposes of responding to an emergency (as
defined in Newport Beach Municipal Code Section 2.20.020) that exceed the
signing authority of the City Manager or Department Director as authorized in
this policy shall be brought to the City Council at its next regularly scheduled
meeting for review and authorization.
F-14
8
I. Contracts with Former Council Members and City Employees
City Council approval is required for the following when not more than five (5)
years have passed since a person who is a former Council Member or City
employee has left service with the City:
1. All professional services contracts with former Council Member or City
employees;
2. All professional services contracts with a corporation or other business
entity owned or operated by a former Council Member or City employee
or that employs a former Council Member or City employee.
J. Exceptions to Competitive Procurement Requirements
Certain commodities and service types are unique or otherwise not amenable to
traditional procurement and bidding procedures. The City Manager shall
prescribe in the Administrative Procedures Manual alternative procedures and
methods for the procurement of such items, e.g. cooperative agreements and
piggyback agreements, and ensure that the pricing involved in the
procurements is competitive to the greatest extent possible.
General Procedures
A. Contract Retention
The City Clerk shall retain all original executed contracts in accordance with the
City’s current adopted Records Retention Schedule. Contracts shall be posted
into the City’s electronic document database in order to maintain transparency
in contracting.
B. Insurance
All contracts shall be accompanied by proof of the appropriate level of insurance
at the time of execution. The insurance level required shall be in accordance with
F-14
9
the City’s published Contract Templates (or as otherwise approved by the City
Manager or Risk Manager).
C. Reporting
At least once annually, the City Manager shall report to the Council the
summary of all contracts entered into by the City Manager and Department
Directors. The summary shall include the vendor, the department responsible
that will oversee the contract, the purpose of the contract, and the contract
amount.
Future Amendments to Policy
Any future changes in the provisions of this policy shall be made by resolution of the
City Council.
History
Adopted F-14 – 09-22-1969 (Purchase Authority for Goods & Materials)
Reaffirmed F-14 – 03-09-1970
Reaffirmed F-14 – 02-14-1972
Amended F-14 – 11-11-1974
Amended F-14 – 11-24-1975
Amended F-14 – 12-08-1975
Amended F-14 – 11-24-1986
Amended F-14 – 05-26-1987
Adopted F-14 – 01-24-1994 (new F-14) (Authority for Contracts)
Amended F-14 – 01-24-1994 (old F-14) (changed to F-5)
Amended F-5 – 02-26-1996
Amended J-1 – 11-10-1997 (Contracts with Former Employees)
Amended J-1 – 03-09-1998
Amended J-1 – 03-22-1999 (changed to F-20)
Amended F-5 – 03-14-2000
Amended F-20 – 04-08-2003
Amended F-14 – 04-13-2004
Amended F-5 – 11-22-2005
Amended F-14 – 05-09-2006
Amended F-14 & F-5 – 01-25-2011
Amended F-14 – 05-12-2015
Amended F-14 – 02-23-2016 (incorporating F-5 & F-20 and renaming “Authority to
Contract”)
F-14
10
Amended F-14 – 06-26-2018
Amended F-14 – 02-12-2019
Amended F-14 – 12-13-2022