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6.L.- Page 2of19 <br />There are a variety of contract types but most frequently, Redwood City contracts for public works and <br />improvements and for goods and services. Generally, there are three types of procurement methods: (1) <br />public bidding where there is a formal solicitation process; (2) informal bidding which means there is a <br />competitive process that is handled through informal quotes; and (3) direct select which is often used for <br />small contracts where the low amount does not necessitate a competitive process. <br />As a Charter city, Redwood City may set forth its own rules for public bidding. Section 67 of the City Charter <br />provides that the conditions and procedures for contracts, including advertising and bidding <br />requirements, will be established by ordinance. The City Charter authorizes the Council to dispense with <br />advertising and bidding under conditions specified by ordinance. Furthermore, the Charter provides that <br />all contracts are to be signed by the City Manager and any other officer of the City as the Council may <br />authorize by ordinance. <br />Chapter 2, Article VII of the Municipal Code implements the Charter and adopts additional purchasing <br />procurement procedures and requirements. For goods and services, the Code currently requires public <br />bidding for goods and services valued at more than $60,000, while informal bidding is permitted for <br />procurements greater than $10,000 but less than $60,000. However, the Code as written has a number <br />of ambiguities such as allowing direct select (no bidding) for contracts under $60,000 (Section 2.80) which <br />appears to be at odds with other sections. The Code also lacks a clear trigger point for cooperative <br />purchasing ("piggybacking') where the City participates in the bidding process of another governmental <br />agency in order to get reduced prices as a result of bulk pricing. In addition, there are numerous exceptions <br />to bidding spread throughout the chapter making it difficult to determine which exceptions may apply in <br />a particular situation. <br />ANALYSIS <br />A new ordinance is proposed to clarify the method of procurement ambiguities, to update procurement <br />requirements for more flexibility, and to provide necessary flexibility to adjust thresholds, including <br />approving authority, as inflation changes purchasing power. The following are some of the key provisions: <br />1. Method of procurement and trigger amount consistent among all contracts. <br />Whereas the existing purchasing ordinance provides for different thresholds for public works contracts <br />($100,000) and all other contracts ($60,000), the proposed ordinance provides the same threshold for <br />all contracts. There are three different levels of purchasing procedures, progressing from very small <br />contracts with no competitive bidding, to informal bidding procedures for medium sized contracts, up to <br />formal advertised bids for large contracts, as follows: <br />Contract Value <br />Procurement Procedure <br />$10,000 or less <br />Direct Select — Negotiated Contract (No Competition) <br />>$10,000 and under $100,000 <br />Open Market —Informal Bidding <br />$100,000 or more <br />Public Bid — Formal Advertised Solicitation <br />Page 2 of 5 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />163 <br />