Item 8-C

City Council Meeting: 12-15-98

TO: Mayor and City Council

FROM: City Staff

SUBJECT: Recommendation to Introduce for First Reading an Ordinance amending the Public Works Contracting sections of the Santa Monica Municipal Code to allow for a Two-phased Process of Awarding Public Contracts.

INTRODUCTION

This report recommends that the City Council introduce for first reading an ordinance amending the public works contracting section of the Santa Monica Municipal Code to allow for a two-phased process of awarding public works contracts.

BACKGROUND

The City of Santa Monica is currently engaged in the most ambitious Capital Improvement Program in its history. The capital improvements that are programmed in the upcoming years range from large projects such as the Public Safety Facility to smaller projects such as renovations to critical elements of the public infrastructure. To ensure that the delivery of the unprecedented volume of public works projects is completed in an efficient, effective, and timely manner, a number of important steps have been taken including reorganization of the Civil Engineering Division and retention of professional project management firms for certain projects.

In evaluating potential improvements to the processes by which capital improvements are accomplished, staff reached out to other governmental agencies to identify best practices and learned that many have moved away from the single-step procedure of contracting for public works projects. Currently, all Santa Monica public works projects are advertised for public bid once the plans and specifications have been completed. Under this approach, each prospective contractor submits a bid package that includes their proposed contract amount as well as evidence of proper licensing, ability to obtain required insurance, experience with similar types and magnitudes of construction, etc. Following receipt of the bid packages, staff tallies the bid amounts, declares an apparent low bidder, and then goes about checking the background and qualifications of the apparent low bidder. In a situation where the apparent low bidder proves to be unqualified, staff then checks the qualifications and responsiveness of the second lowest bidder. This iterative process can cause significant delay of the project following the receipt of bids.Many other cities and government agencies have successfully employed a two-phased process for bidding of public works contracts. With this method, prospective contractors submit their qualifications and experience early in the process while the project construction documents are being prepared. Staff evaluates the qualifications of all of the interested contractors, determining their financial status, the scope and nature of their experience and the nature of any complaints or pending actions against them. All bidders qualified through that process are notified that may submit bid amounts once the construction documents have been finalized. Culver City has successfully used this two-phased contracting process for several significant projects, including construction of their new City Hall.

By allowing the pre-qualification of bidders to occur during the final design phase, this permits a thorough analysis of the contractors= qualifications without delay to the project. In addition, the pre-qualification phase focuses solely on the responsibility and qualifications of the prospective bidders. When bids are solicited, proposals are submitted by firms capable of handling the project.

The two-phased contracting process clearly notifies prospective contractors that only those construction firms with appropriate qualifications will be engaged by the City for the project. The process is beneficial to prospective contractors who spend considerable amounts of time and money preparing bid prices because it provides increased certainty that their bids will not ultimately be rejected due to lack of qualifications.

Currently, the Municipal Code prescribes a single-step bidding process. In order to use a two-step process, the Municipal Code must be amended to provide for this opportunity. In concert with the approval of the Code change, staff will prepare an Administrative Instruction to detail specific procedures for implementation of the two-phase bidding process. If the enabling ordinance is approved, the two-phased process will be used for the Public Safety Facility, which is scheduled to go out to bid for the first phase of construction (excavation and utilities) in the spring of 1999.

BUDGET/FINANCIAL IMPACT

There is no budget or financial impact as a result of this recommendation.

RECOMMENDATION

It is recommended that the City Council introduce for first reading an ordinance amending the public works contracting sections of the Santa Monica Municipal Code to allow for a two-phased process of awarding public works contracts.

Prepared by: Craig Perkins, Director

Anthony Antich, City Engineer

Environmental and Public Works Management Department

Suzanne Frick, Director

Andy Agle, Deputy Director

Planning and Community Development Department

Katie Lichtig, Assistant to the City Manager for Management Services

City Manager's Office