HomeMy WebLinkAbout(2018, 06/26) - F-14 - AmendedAUTHORITY TO CONTRACT
Purpose and Limitation
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The purpose of this policy is to set out the City's policy establishing authority for City contracts.
This policy applies to all contracts, whether entered into through standard, emergency, or other
procedures, including, but not limited to, professional services, purchase requisitions, acquisition
of goods, supplies, equipment, and materials, settlements, right of entry agreements, cost sharing
agreements, joint defense agreements, cooperative agreements, reimbursement agreements, grant
agreements, audit services, legal and investigative services, independent instructional and
recreation services, former employee services, on-call and emergency services, temporary labor
services, training services, public works projects, and public property maintenance, installation,
custodial, and repair services.
General Authority to Enter Into Contracts
Provisions of the Charter govern the methods through which the City may be bound by contracts.
Under the Charter, all contracting authority, with the exception of services rendered by a person
in the employ of the City at a regular salary, rest with the City Council. The Charter states that
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 and signed on behalf of the City by the Mayor and City
Clerk or by such other officer or officers as shall be designated by the City Council (Charter §
421). The City Attorney shall approve the form of all contracts made by or amendment thereto
and all bonds given to the City, endorsing his or her approval thereon in writing
(Charter § 602(e)). The City Council may, however, by ordinance or resolution authorize the City
Manager to bind the City, with or without a written contract, for the acquisition of equipment,
materials, supplies, labor, services or other items included within the budget approved by the
City Council, and may impose a monetary limit upon such authority.
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 Department Directors, and to the City Attorney as set out below. All formalities required
under the provisions of the Charter shall be applied to these contracts. As such, the City Attorney
shall review, approve and sign all such contract documents prior to contract award and execution
and the City Clerk shall sign all such contracts attesting to their being entered into by the City.
Additionally, the City Manager shall adopt and enforce administrative procedures that assure all
contracts are: (1) 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.
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1. The City Manager.
The City Manager is authorized to award and sign all contracts, without
prior Council approval, in an amount not in excess of $120,000 provided
funding for the contract was approved by the City Council as part of the
annual Department budget, authorized budget amendment, City Council
action or is available in an applicant deposit account. With the exception of
grants and donations, which are covered in City Council Policies F-3, F-25
and B-17, the City Manager is authorized to sign all contracts without prior
Council approval where the City is receiving or expending an amount not in
excess of $120,000. This authority shall not be delegated below the Assistant
City Manager level.
2. Department Directors.
Contracts for Services
Department Directors are authorized to award and sign contracts for services
without prior City Manager or Council approval in an amount not in excess
of $75,000 provided that the services and funds were approved by the City
Council as part of the annual Department budget, authorized budget
amendment, City Council action, or are available in an applicant deposit
account. This authority may not be delegated below the Department Director
level.
Contracts or Purchase Requisitions for the Acquisition of Goods and Materials
Department Directors, including the City Clerk and the City Attorney, are
authorized to award and sign contracts or purchase requisitions for the
acquisition of goods and materials, with prior City Manager or Council
approval, in an amount not in excess of $75,000 provided that the funds were
approved by the City Council as part of the annual Department budget,
authorized budget amendment, City Council action or are available in a
deposit account.
3. City Attorney.
The City Attorney is authorized to award and sign 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.
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B. Authority to Amend Contracts
If circumstances arise that were are 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 and Department Directors are authorized to
amend a contract as set out below. For purposes of this policy, "total contract
amount" shall be defined as the total consideration paid over the term of the
agreement, including any previous amendments to the contract. "Original contract
amount" shall be defined as either the amount of compensation agreed upon when
the contract was first entered into or the amount of compensation last approved to
by the City Council, whichever is greater.
1. City Manager.
The City Manager may sign and award a contract amendment on a contract
approved by the Council if the total cost will not exceed 125% of the original
contract amount, or increase the original contract by more than $120,000,
whichever amount is less. Otherwise the City Manager may sign and award
a 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.
2. Department Directors.
The Department Director overseeing the contract may sign the contract
amendment if that amendment will not cause the total contract amount to
exceed $75,000.
3. Amendments in Cases of Possible Work Stoppage or Undesirable Delay.
In certain situations, the City Manager and the Department Director in
charge of the contract may determine that an amendment is needed that will
cause the total contract amount to exceed the City Manager's amendment
signing authority, and that the timing is such that a work stoppage or other
undesirable consequence will result if approval of the change is delayed until
the next City Council meeting. In those situations, the City Manager may
approve an amendment that increases the total contract amount up to 150%
of the original contract. However, the City Manager will notify all City
Council Members individually if this situation develops, and if any
individual Council Member objects to the increase, a special meeting of the
City Council will be called to address the issue.
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4. Amendments Necessary to Address Emergency Situations
In event of emergency work that requires an amendment to an existing
contract, the emergency contracting policy outlined below may be followed.
Types of Services Contracts and How to Award Them
It is recognized that by their nature, service contracts cannot always be awarded as a result of a
competitive bid process. However, competitive proposals should be obtained whenever possible
before resorting to negotiated awards.
A. Professional Services Consultant Selection
Professional consultant services differ from other services in that they are of a
professional nature, and due to the ethical codes of some of the professions
involved, as well as the nature of the services provided, do not readily fall within
the competitive bidding process. Professional consultants should be individually
selected through a qualifications -based selection process for a specific project or
service on the basis of 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.
This policy shall include, but not be limited to, services in the following fields:
• Engineering (civil, mechanical, electrical, structural, traffic,
geotechnical, etc.)
• Building plan review and grading plan review and/or inspection
services
• Architecture
• Landscape Architecture
• Construction Project Management Firms
• Environmental
• Planning
• Economic Analysis
• Property Appraisals
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• Land Surveying
• Financial Services
• Data Processing Services
• Legal Services not otherwise authorized in Section A(3) of this Policy
• Training and Temporary Labor Services
B. General Services Contracts
General Services Contracts are not strictly professional in nature, but arise where
operations, repair, installation, and maintenance services, or other services of a non-
professional nature, are provided to the City. Contracts that typically fall into this
category are for repair and maintenance of roadways, landscape maintenance,
repair and maintenance of City facilities, and other such non-professional services.
Some General Service Contracts may be considered "public works' under the
Charter and, if so, the work covered by the General Service Contract shall be
awarded in accordance with the laws governing the award of "public works"
contracts. If not considered a "public work" under the Charter, the City shall select
general services contractors though a Request for Proposal or a Request for Bid
process, whichever serves the City's greater benefit, based on each contract or
procurement. Contracts through a Request for Bid process shall be awarded based
solely on pricing and minimum qualifications to determine the most responsive and
responsible bidder. Contracts through a Request for Proposal process shall be
awarded based on qualifications and pricing in order to determine the best value to
the City.
C. Capital Improvement Program
Contracts for public works shall be awarded consistent with the provisions of
Charter Section 1110 and Chapter 15.75 of the Newport Beach Municipal Code as
updated and amended from time to time. Under the terms of City Charter Section
1110, contracts for public works that exceed $120,000 in total expenditures must be
awarded by the City Council through the conducting of a formal bidding process.
At its option, the City Council may direct that such contracts be signed by the
Mayor, the City Manager or the Public Works Director.
D. 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") §200.318
through §200.326. To ensure the City's adherence to the Federal guidelines related
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to these procurements and contracts, the City Manager has adopted procurement
procedures for such projects in the Administrative Procedures Manual.
E. Independent Instructional and Recreation Contractors
Where contractors are paid for services from fees collected for the services provided,
Department Directors are authorized to award and sign contracts with independent
contractors for instructional, educational, cultural, or recreational purposes 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. Contracts
with such independent contractors may be up to two (2) years in duration.
Should fees paid to any contractor exceed $75,000 during the term of the contract,
the Department Director shall provide written notice to the City Manager
identifying the program, independent contractor and anticipated total fees to be
paid. The City Manager shall give written notice to the City Council should fees
paid exceed $120,000.
F. On -Call or Emergency Contracts for Services
Under limited circumstances the use of formal contracting procedures to procure
services is not an effective or an efficient use of City resources. The following
contracting procedures are authorized for entering into on-call agreements for
services as needed and for procuring services in times of emergency.
1. On -Call Agreements.
The City Manager and Department Directors are authorized to enter into on-
call agreements for obtaining services on an as needed basis, including, but
not limited to, professional services and repair and maintenance services,
that are needed from time to time where the size of the job does not warrant
the expense of entering into individual agreements for each service. On-call
agreements must be within the authority of the individual entering into the
agreement on behalf of the City and the initial term cannot exceed three (3)
years. The City Manager is authorized to extend the term of an on-call
agreement for up to six (6) months if work has been authorized or
encumbered during the initial term but not yet completed. Selection of
consultants and contractors for award of on-call agreements shall be
consistent with the award procedures for the type of contract being awarded
as set out above. Procedures for entering into on-call agreements shall be
prescribed by the City Manager in the Administrative Procedure Manual.
2. Emergency Contracts for Services.
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If a contract for services is necessary under the provisions of Newport Beach
Municipal Code Section 2.20.020, the City Emergency Procedures shall be
followed.
If a contract for services is entered into in times of urgent necessity under the
authority of Newport Beach City Charter Section 1110, and the contract
amount exceeds the signing authority of the relevant Department Director or
City Manager as authorized in this Policy, then that contract shall be brought
to the City Council at its next regularly scheduled meeting for review.
Whenever possible, the City shall enter Emergency On -Call Agreements
with contractors or consultants who can be relied upon to assist the City in
advance of any actual emergency. Emergency On -Call Agreements shall be
submitted to Council for approval after being reviewed and approved by the
Office of the City Attorney. After the Emergency On -Call Agreement is
approved, services provided on an emergency basis under an Emergency
On -Call Agreement may be retained by oral commitment of the City
Manager (or, in the case of an emergency described by Municipal Code
Section 2.20.020, the Director or Assistant Director of Emergency Services),
to be memorialized in a Letter Agreement between the parties as soon as
possible thereafter.
When a written contract has been entered into in order to address an
emergency, a copy of the written contract shall be provided to the City Clerk
as soon as possible.
G. Contracts with Former City Employees
When not more than five (5) years has passed since a person who is a former City
employee has left service with the City:
1. All professional services contracts with former City employees or temporary
employment contracts with retiring or former City employees shall require
approval of the City Council; and
2. City Council approval shall also be required for professional services
contracts with a corporation or other business entity owned or operated by a
former City employee or that employs a former City employee
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 data base in order to maintain transparency in
contracting.
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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 the
City's published Contract Templates (or as otherwise approved by the City's Risk
Management Division).
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")
Amended F-14 - 06-26-2018