Annual Procurement Activity in Fiscal Year 2017-18
As required by the Procurement Policy adopted by the Board in July 2018, the County Purchasing Agent hereby submits this annual report on procurement during the fiscal year ended 6/30/2018. The current procurement system is not yet capable to efficiently deliver the types of information specifically stipulated in the policy at this time, however the following summary statistics are offered:
The County issued 4,769 purchase orders totaling $16.7 million in FY 2017-18. Approximately 8.5% or $1.4M of the purchase orders, by value, went to locations within Yolo County. The County entered into 154 contracts last fiscal year, with a total value of $136.4 million. A number of these contracts are multi-year contracts, and the value does not represent the total authorized spent within FY 2017-18. Almost half of this amount ($66M) is due to the approval of architectural/engineering as-needed consulting contracts. These as-needed consulting contracts were approved by the Board of Supervisors in June 2017 for the following fiscal year.
The Procurement Division is working towards developing a training program for County staff on Procurement Policy, Cal-Cards, and Request for Proposals. It has delivered one training to County staff and will offer two more training sessions prior to the end of fiscal year.
Revise Procurement Policy based on Recent Legislative and Regulatory Actions
In 2018, two state laws and one federal memorandum impacted procurement rules. All three items provide additional flexibility for the Purchasing Agent should the Board of Supervisors adopt the proposed policy changes. The Department of Financial Services recommends modifying County procurement policy to mirror the recent changes. All proposed policy changes are shown in Attachment A.
California Assembly Bill 2249 raised the maximum delegated authority for small public works projects from $175,000 to $200,000. Also as part of this law, the maximum amount the County can spend using its own workforce to perform public works projects increased from $45,000 to $60,000. The state board overseeing this small public projects program recommended this change to reflect the rising inflationary costs of construction works.
California Senate Bill 1498 of 2018 modifies the Purchasing Agent's maximum delegated authority to contract for services from $100,000 to $200,000. The amount had been capped at $100,000 since 1991 and inflation has reduced the purchasing power by almost half. Approximately 10-15 contracts per year fall within this revised threshold. For contracts between $100,000 to $200,000, these contracts will be reviewed by the Chief Financial Officer and the County Counsel's Office, prior to execution by the Purchasing Agent. Contracts above $200,000 will continue to be submitted to the Board for approval.
The United States Office of Management and Budget (OMB) issued Memorandum M-18-18 in June 2018 modifying the threshold for when federally-funded purchases must be informally and formally bid out. The threshold for when informal bids are required increased from $3,500 to $10,000. The threshold for when formal bids are required increased from $100,000 to $250,000. The Procurement Division recommends that the County's procurement policy increase the informal bid threshold from $3,500 to $5,000, thus requiring fixed asset purchases to follow the informal bidding process, and requiring only two informal bids for purchases valued between $5,000 and $10,000. Also, the Procurement Division recommends increasing the formal bid threshold to $250,000 during a period of declared emergency. This recommendation is compliant with the OMB memorandum, and thus with Federal Emergency Management Agency procurement policies. The formal bid threshold remains unchanged at $50,000 for all purchasing made during the course of regular business.
Future Activity
The Procurement Division will return to the Board of Supervisors by the end of March with additional information on local business preference policy options and sustainable procurement policy options. The Division is currently reviewing and evaluating a competitive solicitation for janitorial supplies that includes a green cleaning supplies option, and also reviewing the offerings of current vendors to identify sustainable procurement opportunities and related impacts. The Division management continues to work towards providing additional data and statistics related to the total procurement activity in the County, as well as work toward further professionalization of procurement staff and processes. |