14-06 Ordinance RECORD OF ORDINANCES
Dayton Legal Blank, inc. Form No. 30043
14-06
Ordinance No. Passed 20
AN ORDINANCE AMENDING SECTION 37.03 OF THE
DUBLIN CODIFIED ORDINANCES TO INCREASE THE
COMPETITIVE BIDDING THRESHOLD
WHEREAS, Article VIII, Section 8.04 B of the Revised Dublin City Charter provides
that City Council shall establish a threshold amount for competitive bidding by
Ordinance; and
WHEREAS, procedures other than formal competitive bidding can be utilized to
ensure that the City obtains goods and services cost effectively; and
WHEREAS, Council periodically reviews the amount of the competitive bidding
threshold to determine if it shall be adjusted to provide for efficient and cost-effective
City operations; and
WHEREAS, Ordinance No. 13-01 passed on February 20, 2001 established the
competitive bid threshold in the amount of $30,000; and
WHEREAS, the City Manager recommends that the existing threshold for
competitive bidding be increased from $30,000 to $75,000;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin,
State, of Ohio, of the elected members concurring that:
Section 1. Section 37.03 of the Dublin Codified Ordinances be amended to read as
follows:
Pursuant to Section 8.04 of the Revised Dublin City Charter, a threshold
amount of $75,000 is established for competitive bidding.
(A) Current Competitive Bidding Threshold or More. As a factor in determining
the lowest and best bid, and for the award of contracts reasonably anticipated by the
City to involve expenditures equal to or greater than the current competitive bidding
threshold, competitive bidding and legislative authorization shall be required, unless
an exception or alternative is otherwise provided by Council.
(B) Less than the Current Competitive Bidding Threshold. The City Manager may,
without competitive bidding or further legislative authorization, enter into contracts
for expenditures of less than the current competitive bidding threshold for which City
funds have been appropriated, provided that price quotes are obtained and documented
as required by administrative order based upon the amount of the estimated
expenditure.
Section 2. This ordinance shall take effect and be in force from the earliest point in
time permitted by law.
Passed this D~ day of ~ , 2006
Mayor -Presiding Officer
ATTEST:
I hereby certify that copies of this
y~~ ~ Ordinance/Resolution were posted in the
l~n City of Dublin in accordance with Section
Clerk of Council 731.25 of the Ohio Revised Code.
ty Clerk of Council, Dublin, Ohio
City Manager
5200 Emerald Parkway • Dublin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
Memo
To: Members of Dublin City Council
From: Jane S. Brautigam, City Managei~~~„~ S .
Date: March 2, 2006
Initiated By: Marsha I. Grigsby, Director of Finance
Michele M. Hoyle, Director of Fiscal Administration
Re: Ordinance No. 14-06, Amending Section 37.03 of the Dublin Codified Ordinances to
Increase the Threshold for Competitive Bidding
SUMMARY:
On February 21, 2006, the Finance Committee of Dublin City Council met to review staff's
recommendation to increase the City's bidding threshold from $30,000 to $75,000. The information
prepared for the Finance Committee meeting is attached, as are the minutes from the Finance Committee
meeting.
As discussed at the Finance Committee meeting, the City's competitive bidding threshold amount was
last increased in February, 2001. For staff's review and evaluation, see Discussion in the Finance
Committee packet.
Other provisions of this recommendation include a process requiring documentation that the work unit
obtained informal and formal price quotes, depending on the level of expenditure. These quotes will be
documented in the City's electronic requisitioning process, as well as kept on file in the work unit.
Following review and discussion, the Finance Committee directed staff to move forward with the
proposed increase of the formal bidding threshold to $75,000. Ordinance 14-06 amends Section 37.03
of the Dublin Codified Ordinances accordingly. Also at the direction of the Finance Committee,
quarterly reports will be provided for at least the next year documenting those purchases of goods and
services greater than the current bid threshold of $30,000 but less than the new level of $75,000.
Mechanisms for increasing the access of vendors to City procurement will be explored, including
advertising of items to be procured and ongoing listing of those items on the City's website.
RECOMMENDATION•
Staff is recommending passage of Ordinance No. 14-06 at the March 20, 2006 City Council meeting.
Attachments
City Manager
5200 Emerald Parkway • Dublin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
Memo
To: Members of Dublin City Council Finance Committee
From: Jane S. Brautigam, City Manager
Date: February 16, 2006
Initiated By: Marsha I. Grigsby, Director of Finance
Michele M. Hoyle, Director of Fiscal Administration
Re: Information re: Proposal to Increase Formal Competitive Bidding Threshold
For Discussion at Meeting of Finance Committee
February 21, 2006
SUMMARY:
Attached is a proposal to increase the City's formal competitive bidding threshold and supporting
information. While increases in this threshold previously were based solely on comparison with other
jurisdictions, issues raised as to the impact on City operations of the current process and bidding
threshold indicate that a more individualized approach tailored to the City's needs is justified at this
time.
RECOMMENDATION:
Following discussion with the Finance Committee, we hope to forward legislation to amend Section
37.03 of the Codified Ordinances of the City of Dublin to increase the threshold amount for formal
competitive bidding.
Attachments
Proposal to Increase Competitive Bid Threshold
Background
By Charter, the Dublin City Council establishes a threshold amount over which formal
competitive bidding is required by ordinance. Ordinance 49-96 established Chapter 37 of
the Dublin Codified Ordinances, "Contracting and Competitive Bidding," and set the
formal competitive bidding threshold amount at $20,000 at that time. The current
- threshold of $30,000 was set by Ordinance 13-01 in February 2001. Attachment A
includes these documents.
Ohio Revised Code Requirements for Non-Charter Municipalities
In the Ohio Revised Code (ORC), a threshold amount over which competitive bids are
required is established for non-charter municipal corporations for purchases made by the
municipality. In March 1999 this threshold was raised to $15,000, prompting the City to
review its threshold. Prior practice had been to raise Dublin's threshold level to two
times that established for municipal corporations in the ORC; accordingly the bid
threshold was increased to $30,000 in February 2001. In September 2003, this ORC-
established bid threshold was raised to $25,000 as shown in ORC 731.14.1 (Attachment
B).
State of Ohio Thresholds
The State of Ohio currently differentiates between the threshold at which bidding is
required for commodities and services. These amounts increase in January of each odd-
numbered year. As of January 31, 2005, these thresholds are $31,300 for commodities
and $62,600 for services.
Discussion
While competitive bidding in theory should result in lower costs, the process also adds
complexity and cost to the City's procurement of goods and services. Preparation of a
formal competitive bid is time-consuming, both for the City and for the vendor, including
the costs of advertising, preparation, copying and distribution of bid documents, and the
required bid bond. These costs are outlined in Attachment C. Because the nuances of a
project often cannot be expressed within the specifications, the bidder is forced to bid
based on "worst case" interpretation of the specifications.
Also absent from the competitive bid process is the ability to negotiate with the vendor.
In smaller projects, the ability to discuss the project with the vendor and to negotiate
regarding some aspects of the vendor's proposal have resulted in both a better outcome
and lower prices for the City.
The City has utilized cooperative purchasing for many years for a limited number of
items, having passed legislation in 1988 and 1990 authorizing participation in cooperative
programs with the Ohio Department of Administrative Services and the Ohio Department
of Transportation, respectively. In recent years we have expanded our use of this
alternative and are continuing to evaluate where we can further utilize cooperative
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Proposal to Increase Competitive Bid Threshold
(Continued)
purchasing. The use of cooperative purchasing alternatives (e.g., State of Ohio
Departments of Administrative Services and Transportation, Franklin County Purchasing
Department, U.S. Communities National Purchasing Cooperative) allows the City to
obtain competitively bid pricing without having to conduct a formal competitive bid
process. Access to cooperative purchasing bids provides the City with the ability to
acquire items directly from the approved list or to obtain our own quotes and compare
them to the competitive bid price. Frequently, the volume pricing for these items bid for
larger entities such as Franklin County or the State of Ohio is lower than what a
competitive process for our own lower volumes would yield. We currently use the
cooperative purchasing process to procure items such as fuel, most vehicles, cleaning
supplies, paper products and computer equipment at competitive pricing, and plan to
extend the use of this process as the preferred alternative when such routine items are
purchased. Cooperative purchasing also provides us with the option of purchasing
supplies and services from vendors who are not the identified cooperative vendor if
another vendor offers a lower price than the cooperative contracts, as long as the terms,
conditions and specifications are equivalent; that provision frequently allows us to
purchase commodities with volatile prices such as fuel at prices lower than the state
contract price.
A review of the routine purchases made by the City indicates that the break point
between relatively small and routine purchases and those of greater magnitude and policy
implication occurs at the $70,000 - $75,000 mark. Increasing the bidding threshold to
$75,000 would eliminate the need for formal competitive bidding and City Council action
for items such as chlorine for the City's swimming pools, which will cost approximately
$70,000 in 2006, the printing of the recreation services brochure, estimated to cost about
$42,000 in 2006, and traffic sign hardware and films, each estimated to cost
approximately $60,000 in 2006. At the same time, competitive bids and Council action
will remain for items such as capital projects, including annual street maintenance and
most park improvements, and for purchases such as street salt and the Police mobile
command unit, all of which exceeded or are estimated to exceed the proposed new
threshold. Because funding for all items to be purchased is included in the operating
budget, annual review of the budget will apprise City Council as to what services and
commodities will be purchased in any given year and at what estimated cost.
Another consideration is the thresholds at which prevailing wage provisions take effect.
As of January 1, 2006, these thresholds were increased from $65,843 to $69,853 for new
construction, and from $19,752 to $20,955 for renovations including remodeling,
enlargement and painting. The threshold set for new construction lends support to a
formal competitive bidding threshold of $69,000, roughly equal to the level at which
documentation of payment of prevailing wage would also be required. Renovation
projects, which already fall below the bid threshold, currently require written verification
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Proposal to Increase Competitive Bid Threshold
(Continued)
of meeting prevailing wage requirements as part of the vendor's proposal and would
continue to do so.
The increased bid threshold will not eliminate the obligation of City operating units to
obtain proposals from multiple vendors for purchases under $75,000. The City's on-line
purchasing system provides the capability to require documentation of the process
through which the vendor was determined for all purchases. Additional controls will be
added through a process that will require informal or formal quotes depending upon the
anticipated level of expenditure for that commodity or service (Attachment D). In cases
where, after quotes are received, it appears that formal competitive bidding may result in
better prices, that process remains an option. The role of procurement will shift from the
preparation of competitive bids to monitoring the procurement of goods and services to
ensure that pricing continues to be competitive and that City funds are spent efficiently
and effectively.
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Attachment A
1) Article VfII -Dublin City Charter (Budgeting and Contracting Procedures)
2) Ordinance 49-9(i (An Ordinance Amending Title fII of the Dublin Codified
Ordinances to Establish Chapter 37 "Contracting and Competitive Bidding"
3) Ordinance l3-O1 (~~n Ordinance emending Section 37-03 of the Dublin Codified
Ordinances to Increase the Threshold for Competiti~~c Bidding)
ARTICLE II -DUBLIN CITY CHARTER
POWERS OF THE CITY
2.04. COOPF,RATTVT? AUTHORITY.
'The City may exercise any of its powers, perform any of its functions and provide
related financing, jointly or in cooperation, by contract or other-w-ise, with any one or
more states, including but not limited to the State of Ohio, and any of their political
subdivisions, special districts, instnrmentalities, divisions or agencies; the United States
or any of its divisions or agencies; or any individual, partnership, corporation or other
ty}~e of entity, whether for profit or not-for-profit, unless prohibited by the Constihrtion of
the State of Ohio.
ARTICLE VIII -DUBLIN CITY CHARTER
BUDGETING AND CONTRACTING PROCEDURES
8.04. CON"T'RACT'[N(: F'ROCF:DUR[~:5.
(a) AIVAKU ANl) F.XF.C'U7'lON C1F ("ON12~(:'7:S'.
Consistent with Section 5.04(j) of this Revised Charier and except as otherwise
provided in This Section, the City Manager shall award and execute all contracts on behalf
of the Oily.
(b) COAIf'E77TIVF. ~1It)1)INI;.
Council, by ordinance, shall establish a threshold arnc~unt, nolicc provisions and
other procedures for competitive bidding. When any contract for the construction of a
public inrprovermcnt or the purchase of equipment, supplies, or materials is estimated to
exceed the threshold established by Council, the contrrc( shall be competitively hid.
Council shall award a contract Io the lowest and hest Milder, provided that ('ouncil r7~ay
reject any and all bids in whole or by items. No conlracl shall be divided to avoid the
requircrments of competitive bidding.
(c) 6fAlVF.R OF COAI/'F..77T11''L: L3/L>[>!N(~.
E3y a vote of no Icss than five mernhers, Council may waive. the competitive
bidding requirement if the statutory or common law of the State of Ohio does not require
competitive bidding; if Council determines that an item is available and can he acquired
only from a single source; or if Council determines that a waiver of the competitive
bidding requirement is in the hest interest of the City.
(d) PROFF,SSI~)N,41. SF.RVICI;S'.
Contracts for professional services shall not be subject to the corupetitive bidding
requirements of this Section and shall not require authorization by Council if the current
operating budget provides sufficient funding for the scope of services in any such
contract.
(e) ~fLTF,RATIONS' OR A~10DIFICATIONS OF C(INTRACT<S.
Council shall establish procedures for alterations or modifications of contracts.
Modifications or alterations of contracts shall not require corl~petitive kidding.
CER TIFICA TION OF FUNDS'.
No contract involving the expenditure of money shall be entered into or authorized
by the City Manager unless the Director of Finance or designee shall first certify that:
(1) funds required for the contract are in the City's treasury or in the pmccss of
collection; and
(2) furnds have been appropriated by Council for the specified purpose and remain
unencumbered.
The Director of Finance shall file and record the certification of availability and
appropriation of funds in the accounting records of the City and shall furnish a copy to
the vendor or contractor. Without the certification, a contractual obligation shall he void
and unenfc~rceahle against the City unless recognized by Council as a moral obligation.
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~eytan Legnl HIan4 Cu. Fb nn No, 'd UOAJ
Utrliuartcc No ..49-96 Amended Pnsscrl 19. .
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ll!, AN ORDINANCE AMENDING TITLE III OF THE DUBLIN CODIFIED
ORDINANCES TO ESTABLISH CHAPTER 37
"CONTRACTING AND COMPETITIVE BIDDING" AND
DECLARING AN EMERGENCY. '
II~II
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WHEREAS, on March 19, 1996, the citizens of the City of Dublin, Ohio
l,~ adopted the Revised Charter which will become effective on July 4, 1996;
I~I and,
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WHEREAS, the Revised Charter requires Council to establish a threshold,
l notice provisions and other procedures for competitive bidding; and,
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WHEREAS, the Revised Charter further requires Council to establish
procedures for the alteration or modification of contracts; and
I WHEREAS, Council desires to establish exceptions and alternatives to
' competitive bidding; and
Ii WHEREAS, Council desires to establish a purchasing preference for products
manufactured with recycled materials;
NOW, THEREFORE, be it ordained by the Council of the City of Dublin, Ohio,
of the members concurring;
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Section 1, That Title III ("Administration") of the Dublin Codified Ordinances
~ is hereby amended by deleting sections 35,50, 35.65, 35.66, 35.67, and 35.68
from Chapter 35 ("Taxation and Finance") and establishing a new Chapter 37
~!I ("Contracting and Competitive Bidding") as follows:
I,'!
CHAPTER 37
!I CONTRACTING AND COMPETITIVE BIDDING
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37.01 HOME RULE AUTHORITY
~ Asa "home rule" charter city, Dublin shall not be obligated to follow
Ohio- statutory procedures regarding contracting including, but not '
limited to, Ohio Revised Code sections 9.312, 9.313, 9,32, 9,33 '
through 9.332, 153,12-.14, 153,50-.52, 153.54, 153.56, 153.57,
153,571, 153.67-.71, and 735.05-.09 and other applicable sections
within O.R.C. 153.
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III 37.02 DEFINITIONS
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For the purposes of this Chapter, the following definitions shall apply,
III
unless the context clearly indicates or requires a different meaning:
~l (A) Contracting: The process of entering into a deliberate
verbal or written agreement between the City and competent parties in
accordance with the Ohio Ethics Law for the purchase of goods and/or II
I services.
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(8) Competitive Bidding: A contracting method by which the
City develops bid specifications and/or documents, publishes notices 'i
and/or advertisements soliciting bids by a stated deadline, accepts or
rejects bids, and awards a contract to the lowest and best bidder,
(C)Competitive Bargaining: A contracting method by which
~ the City solicits proposals and/or quotes, negotiates the terms,
conditions, and other relevant factors, and enters into a contract II
~ advantageous and beneficial to the City.
(D) Cooperative purchasing: A contracting method by which
the combined and collective efforts of governmental entities share the i
III advantages and benefits of volume purchasing programs and reduced
administrative expenses including, without limitation, the local
government purchasing programs sometimes referred to as SWOP4 G. I,
COOPP, a separate program through the Office of State Purchasing
(part of the Ohio Department of Administrative Services) pursuant to
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de 125.04 and the ro ram arran ed b the Ohio
Ohio Revised Co 9 Y
P 9
Department of Transportation pursuant to Ohio Revised Code 5513.01.
(E) Professional Services: Services that usually require
I,I education, training or expertise to an advanced, specialized or
significant degree, including, without limitation, such services as those
I performed by attorneys, architects, engineers, accountants, physicians,
insurance brokers/agents, and/or third party administrators.
(F) Product: Any material, equipment, supplies, commodities
or any similar items purchased by the City in order to fulfill the
j operating and/or capital responsibilities of the City,
(G) Recycled Material; Material the components of which, in
whole or in part, would otherwise have been destined for permanent ~
II disposal
j 37.03 COMPETITIVE BIDDING AND NOTICE REQUIREMENTS
Pursuant to Revised Charter section 8.04, a threshold amount of
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it $20,000,00 is established for competitive bidding.
(A) $20,000,00 Or More: As a factor In determining the lowest
and best bid, and for the award of contracts reasonably anticipated by
the City to involve expenditures of $20,000.00 or more, competitive
bidding and legislative authorization shall be required, unless an ~
exception or alternative is otherwise provided by Council.
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(B) Less Than $20,000.00: The City Manager may, without
competitive bidding or further legislative authorization, enter into I,
contracts for expenditures of less than $20,000,00 for which city funds
have been appropriated.
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RECORD OF ORDINANCES
Dayton 4egn1 lllsnk Co. Form Na. UUU+J
III! Orrlinrnrcc_ Nu_ ._99-4_----- Prissetl _ _ _ _ 19
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III (C)Notice: All bid advertisements or other solicitations for bids
'I shall be placed, on a timely basis, with a reasonable period allowed for
I response, at least once in a newspaper of general circulation within the
City.
I~ 37.04 EXCEPTIONS AND ALTERNATIVES TO COMPETITIVE
BIDDING
I
II Pursuant to Revised Charter section 8.04, the exceptions and
alternatives to the requirement for competitive bidding set forth in this
Ill Chapter are deemed to be in the best interest of the City.
(A) No Or Rejected Bids: If no bids are received after the
advertisements or other solicitations required by this Chapter, or if all
bids are rejected, the City Manager shall have the authority to either
seek new competitive bids, or to obtain the goods and/or services for
~ which funds have been appropriated through competitive bargaining
II without further legislative authorization, whichever is deemed to be in
the best interest of the City.
i (B) Used Equipment Or Utilities: Regarding contracts for the ~I
purchase of used equipment or utilities such as gas, water, electricity
or telephone service for which funds have been appropriated, the City
Manager shall have the authority to enter into contracts through
competitive bargaining without further legislative authorization.
(C)Professional Services: Pursuant to Revised Charter
section 8,04(d), contracts for professional services are not subject to
'Ii competitive bidding requirements and shall not require further
legislative authorization where the operating budget provides sufficient
funding.
~ (D) Cooperative Purchasing Programs: As an alternative to
~ both competitive bidding and competitive bargaining, the City Manager
shall have the authority to obtain goods and/or services for which funds
have been appropriated through cooperative purchasing programs
without further legislative authorization. As part of any cooperative
fill purchasing program, the City Manager may agree that the City will be
II bound by contract terms and conditions prescribed by that program,
ll. Including, without limitation, payment of a reasonable fee by the City
to cover the administrative costs incurred by the program officials as
a result of purchases by the City• The City Manager may also agree
that the City will pay the vendor directly for items received by the City.
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j 37.05 ALTERATION AND MODIFICATION OF CONTRACTS
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j Pursuant to Revised Charter section 8.04, modifications or alterations
j to competitively bid contracts shall not require competitive bidding,
(A) Limited To Appropriations: No contract alteration or
modification to a competitively bid contract shall be approved as set i
forth below, when the amount of the alteration or modification causes
the contract sum for the project or purchase to exceed the amount
appropriated by Council.
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RECORD OF ORDINANCES
Ueyton Legal Blenk Co. _ F'onn No. 900n9 _ _
Orrlinancc No_~44=96_-...=___ Passed.._=--__,--_-_- 1~---
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(B) Approval Procedure: An alteration or modification to a
competitively bid contract shall be approved only upon the order of the ~
i City Manager or designee. No order shall be effective until the sum to
be paid under the altered or modified contract is agreed to in writing
it and signed by the contractor, the City Manager or designee, and the
Finance Director or designee.
37.06 PURCHASING PREFERENCE FOR RECYCLED MATERIALS
A purchasing preference is hereby established for products
manufactured with recycled material.
(A) Less Than $20,000.00: For purchases less than
'I $20,000.00 the following conditions are established:
(1) Products manufactured with recycled material may be
purchased when the following circumstances or conditlons
exist:
a The rice of the product manufactured with recycled
O P
material does not exceed by more than five percent to a
I~ maximum of $1,000, the price of the otherwise lowest and
best quote; and
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1 (b)The product that is made of recycled material is of II
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equal or superior quality to the product made from non-
! recycled material offered in the otherwise lowest and best
quote.
(2) When the additional cost of the product made from recycled
material forces the total price of the product to exceed !i
~ $20,000,00, the next lowest and best quote with a price of less
than $20,000,00 shall be purchased.
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i (B) $20,000.00 Or More: For purchases requiring competitive ~I
i bidding, all specifications for manufactured products shall include the
following language: I,
"Bidder may submit an alternate bid reflecting the price for a like or
III similar product which is made of recycled content material. Bidder
~I~ shall note what component(s) of the product is (are) made from
recycled material and describe the recycled material. Bidder shall state
ail, what percentage of the total product is made of recycled material.
Products must consist of no less than ten percent recycled material.
Said alternate bid may be accepted if:
The price does not exceed 5% or $10,000,00 of the price I,
of the otherwise lowest and best bid. The product that is
!il made of recycled material is of equal or superior quality to
l' the product made from non-recycled material offered in the i
l,i otherwise lowest and best bid; and
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~ The City determines that the ratio of added cost to the '
amount of recycled content is beneficial to justify the
added cost,"
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III 37.07 AUTHORITY OF CITY MANAGER
To implement Council policy and procedures as established within this
Chapter, the City Manager or designee shall have the authority to
Ills promulgate and amend written administrative rules, regulations, and
~ procedures not inconsistent with this Chapter or the Revised Charter.
Section 2, That this Ordinance is declared to be an emergency measure
necessary for the immediate preservation of the public peace, health, safety
or welfare, and for the further reason that the Revised Charter, effective July
4, 1996, mandates that Council adopt contracting procedures. This ordinance
shall therefore be effective on July 4, 1996,
Passes this day of , 1996.
I
r -Presiding Officer
Attest:
I
~~/y~~~ ~ ~ I'i
Clerk of Council
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.III Sponsored By: Council Member Zawaly and 'i
Council's Administrative Committee
ace Posted'~n tr°
.+,uo Revised COdo'
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_ Dayton Legel Blenk Co, Forth No. 30043
---13-01---- - - _
~ r u c Passed ---;t:~ri------
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r ~ r ^ ~ ~,i,~l ORDINANCE AMENDING SECTION 37.03 OF I~
t~__, _ D BLIN CODIFIED ORDINANCES TO INCREASE
' n~ ' ' - T E THRESHOLD FOR COMPETITIVE BIDDING
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~I~~' WHEREAS, Aniele VIII, Section 8.04(b) of the Revised Dublin Chatter requires Council,
j~'~, by Ordinance, to establish a threshold amount for Competitive Bidding; and
WHEREAS, the City Manager has recommended that the existing threshold for Competitive
~ Bidding be increased from $20,000 to $30,000; and
WHEREAS, Council desires to increase the threshold for Competitive Bidding from $20,000
to $30,000; I~
I NOW, THEREFORE BE IT ORDAINED by the Council of the City of Dublin, State of j
! Ohio, of the elected members concurring;
Ili Section 1. That Section 37.03 of the Dublin Codified Ordinances be amended to increase the
existing threshold for Competitive Bidding from ,20,000 to 530,000 Iii
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~'II Section 2. That this Ordinance shall take effect and be in force froth the earliest point
permitted by law,
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I' Passed this~_ day o ~i,(a r ~0G1
II! ~ ~ I
ayor -Presiding Officer ~
lil, ATTEST:
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'I'~! Clerk of Council
III
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Attachment B
Ohio Revised Code 731.14.1
!-\IIU\+1 JV11 J Vl1.L.J1llV LVVNIIIVIIlu1.1 VI1 i u4u' V l Vi t
731.14.1] ~ 731.141. Contracts by village administrator; cenh•al purchasing.
In those villages that have established the position of village administrator, as provided by section
735.271 [735.27.1] of the Revised Code, the village administrator shall make contracts, purchase
supplies and materials, and provide labor for any work under the administrator's supervision involving
not more than twenty-five thousand dollars. When an expenditure, other than the compensation of
persons employed by the village, exceeds twenty-five thousand dollars, the expenditure shall first be
authorized and directed by ordinance of the legislative authority of the village. When so authorized and
directed, except where the contract is for equipment, services, materials, or supplies to be purchased
under division (D) of section 713.23 or section 125.04 or 5513.01 of the Revised Code, available
from a qualified nonprofit agency pursuant to sections 4115.31 to 4115.35 of the Revised Code, or
required to be purchased from a qualified nonprofit agency under sections 125.60 to 125,6012
[ 125.60.12] of the Revised Code, the village administrator shall make a written contract with the lowest
and best bidder after advertisement for not less than two nor more than four consecutive weeks in a
newspaper of general circulation within the village. The bids shall be opened and shall be publicly read
by the village administrator or a person designated by the village administrator at the time, date, and
place as specified in the advertisement to bidders or specifications. The time, date, and place of bid
openings may be extended to a later date by the village administrator, provided that written or oral
notice of the change shall be given to all persons who have received or requested specifications no later
than ninety-six hours prior to the original time and date fixed for the opening. All contracts shall be
executed in the name of the village and signed on its behalf by the village administrator and the clerk.
The legislative authority of a village may provide, by ordinance, for central purchasing for all offices,
departments, divisions, boards, and commissions of the village, tuzder the direction of the village
administrator, who shall make contracts, purchase supplies or materials, and provide labor for any work
of the village in the manner provided by this section.
HISTORY: 131 v 265 (Eff 9-28-65); 132 v S 378 (Eff 4-29-68); 136 v H 8 (Eff 8-11-75); 136 v S 430
(Eff 8-13-76); 136 v S 338 (Eff 9-1-76); 137 v H l (Eff 8-26-77); 138 v H 371 (Eff 3-14-80); 140 v H
373 (Eff 7-1-83); 141 v H 100, § 1 (Eff 3-6-86); 141 v H 100, § 3 (Eff 7-1-90); 142 v H 527, § l (Eff
3-17-89); 1.42 v H 527, § 3 (Eff 7-1-90); 143 v S 254 (Eff 4-13-90); 147 v H 204. Eff 3-30-99; 150 v H
95, ~ 1, eff. 9-26-03; 151 v H 66, § 101.01, eff. 6-30-05.
http://onlinedocs.andersonpublishing.com/oh/1pExt.d11/PORC/Sb92/68 ef/6940/6947?f=tem... 2/ 14/2006
Attachment C
Estimated City Cost of Average Formal Competitive Bid
Hours Rate (w/Fringes) Total
Preparation of Specifications and Bid Documents
Procurement Tech (PT) 4 27.50 110.00
Work Unit Staff (WU) 5 43.75 218.75
Document Assembly 3 82.50 247.50
Copying 2 27.50 55.00
Advertising
Preparation/submission of ad 2 27.50 55.00
Cost of printing ad (average) 500.00
Gommunication with potential bidders
Procurement Tech (PT) 2 27.50 55.00
Work Unit Staff (WU) 3 43,75 131.25
Bid Opening (PT) 1 27.50 27.50
(WU) 1 43.75 43.75
Tabulation of Bids 3 27.50 82.50
Foliowup (eg reference check) (WU) 2 43.75 87.50
Contract Documents 4 27.50 110.00
Notification of Bidders 2 27.50 55.00
Staff report/resolution
Initial Draft (PT) 2 27.50 55.00
Review/revision (WU/Finance) 4 43.75 175.00
2,008.75
Does not include cost of bid bond; most bidders add this cost to bid.
Usual bid bond required is 5% of bid.
Attachment D
Purchasing Procedures
The annual operating and capital budgets establish a general plan for function and unit
expenditures in a given fiscal year. Using the budget as a guideline, functions and units
then determine what specific services and commodities are necessary as the year
progresses. The goal of any purchasing procedure is to facilitate acquisition of the
necessary goods and services in a timely manner, while conforming to the requirements
established within the City Code and Charter, and the Ohio Revised Code.
Dublin City Council establishes the expenditure threshold over which formal bids must
be solicited for goods and certain services. This threshold is reviewed each year during
the budget process to determine if the level at which fornial bids must be obtained is
reasonable.
Purchases should not be artificially divided to circumvent formal bidding. The
procedures for purchases less,that the formal bid threshold are as follows:
Purchases of $1,000 or less: Purchases of this amount can be made from a vendor at the
director's discretion. Whenever possible, informal price comparisons should be obtained
from more than one vendor to ensure that the City is receiving a competitive price.
Purchases greater than $1,000, but less than or equal to $20,000: At least two (2)
informal price quotes are required for purchases in this range. Informal quotes can
include verbal or telephone quotes reduced to writing; documentation of these quotes
should be maintained in the work unit, with notation as to the vendors contacted and
quotes obtained added to the requisition as "Miscellaneous Information".
Purchases for projects involving reconstruction, enlargement, alteration, repair,
remodeling, renovation, or painting greater than $20,955 (as of January 1, 2006):
These projects exceed the threshold at which prevailing wage requirements established
by the Ohio Department of Commerce must be followed. These projects will require at
least two (2) written quotes, in which the contractor must verify that pricing includes
payment of prevailing wages for the trades required for completion of the project, Written
price quotes must include the name and address of the vendor, and be signed by a
responsible representative. All quotes must include unit and total prices, as well as the
length of time for which the price quote is applicable, and any qualifications that affect
the bid (for example, quantity discounts) Documentation of these quotes should be
maintained in the work unit, with notation as to the vendors contacted and quotes
obtained added to the requisition as "Miscellaneous Information".
Purchases for projects involving new construction greater than $69,853 (as of.Ianuary
1, 2006)but less than $75,000:
These projects exceed the threshold at which prevailing wage requirements established
by the Ohio Department of Commerce must be followed. If the estimated total cost of a
new construction project exceeds $69,853 but is less than $75,000. it will require at least
two (2) written quotes, in which the contractor must verify that pricing includes payment
of prevailing wages for the trades required for completion of the project. Written price
quotes must include the name and address of the vendor, and be signed by a responsible
representative. All quotes must include unit and total prices, as well as the length of time
for which the price quote is applicable, and any qualifications that affect the bid (for
example, quantity discounts) Documentation of these quotes should be maintained in the
work unit, with notation as to the vendors contacted and quotes obtained added to the
requisition as "Miscellaneous Information".
If the estimated cost of a new construction project is greater than or equal to $75,000, it
will require formal competitive bidding as well as verification of conformance with
prevailing wage requirements.
Purchases greater than $20,000, but less than or equal to $75,000: At least two (2)
written price quotes are required for purchases in this range. Writtetl price quotes must
include the name and address of the vendor, and be signed by a responsible
representative. All quotes must include unit and total prices, as well as the length of time
for which the price quote is applicable, and any qualifications that affect the bid (for
example, quantity discounts) Documentation of these quotes should be maintained in the
work unit, with notation as to the vendors contacted and quotes obtained added to the
requisition as "Miscellaneous Information".
DUBLIN CITY COUNCIL
Finance Committee of the Whole
Tuesday, February 21, 2006
Minutes of Meeting
Mr. Keenan, Chair, called the meeting to order at 6:20 p.m.
Council members present were Mr. Keenan, Mr. Lecklider and Mr. McCash, also in
attendance: Mayor Chinnici-Zuercher.
Staff members present were Ms. Grigsby and Ms. Hoyle.
Mr. Keenan stated that the purpose of the meeting is to consider a proposal to increase
the City's formal competitive bidding threshold.
Ms. Grigsby stated that the City's Charter provides that City Council shall establish the
City's bidding threshold. It has been several years since a modification to the bidding
threshold has been requested. It is necessary to occasionally amend that threshold to
facilitate efficient City operations. Staff has conducted a study to determine what the City's
threshold should be. It is currently $30,000 as established by Council in 2001. Prior to
that action, it had been $20,000 since 1996. When inflation is factored into the current
threshold a $36,000 figure results, but that amount would not really improve the process.
The bidding threshold of other entities, including the State, was considered. Dublin's
threshold has historically been twice the State's threshold. Last year, the State increased
their bid threshold to $25,000, which would indicate a $50,000 threshold for Dublin.
Staff also met with certain staff members to evaluate the various issues they deal with in
the competitive bidding and purchase process for their division. They also looked at the
various bid projects that are brought to Council for approval throughout the year -which
projects should continue to have Council authorization? There are some items that are
currently brought to City Council that do not need Council review -the print project for the
Recreation Center brochure, sign shop materials, chlorine and pond maintenance. A bid
threshold that would make sense is $75,000. Because an increase from $30,000 to
$75,000 is significant, it is appropriate for the Finance Committee to review staff's proposal
and make a recommendation for Council action.
Changing the bid threshold would result in a savings in both money and staff time. In
many cases, the current bidding process is not saving the City money, as the City must
select from the bids received. For the project on Council's agenda tonight, only one bid
was received. Many vendors do not participate in a formal competitive bid process
because it is time-consuming. Often a best price is obtained by calling the vendor and
negotiating a price.
The City also makes an effort to use cooperative purchasing for several items, such as
gasoline and vehicles. Those purchases are not brought to Council, as the cooperative
purchasing prices are arrived at through a bidding process. Staff is trying to identify some
other areas that cooperative purchasing could be used for.
Staff also looked at the prevailing wage issue. In establishing a new bid threshold, it may
be helpful to consider the prevailing wage requirement for new construction, which is
Finance Committee
February 21, 2006
Page 2
slightly over $69,000. Therefore, staff considers the proposed bid threshold of $75,000 to
be appropriate.
Mr. Keenan stated that attachment C in the packet includes noteworthy information: (1)
the approximate cost of the bidding process -bid packet, advertising, etc. is $2,000, and
(2) the cost of the bond, depending on who the vendor is, runs around 1 - 2% of the cost.
The argument for the prevailing wage amount is a good one. He inquired if it would be
necessary to bid a project at the Rec Center, for instance, that cost approximately
$60,000.
Ms. Grigsby responded that the requirements for renovation projects are different from
new-build, new roadway projects.
Mr. Keenan inquired if renovation projects must always require prevailing wage.
Ms. Grigsby responded that the threshold is $20,000 plus.
Mr. Keenan inquired what type of City project could be accomplished for $60,000.
Ms. Hoyle responded that the roof repair job was a renovation. The price was around
$22,000 and prevailing wage was paid.
Mr. Lecklider stated that the prevailing wage threshold is very low, whether renovation or
new build.
Ms. Grigsby responded that the renovation threshold is $20,000+ and new construction is
$69,000+.
Mr. Lecklider stated that if Dublin raised its bid threshold to $75,000 what happens to those
construction projects between $69,000 and $75,000?
Ms. Grigsby responded that attachment D details the process that would be followed.
Mr. McCash noted that raising the bid threshold would not affect the prevailing wage a
requirement.
Mr. Keenan inquired if the new build projects are subject to prevailing wage.
Ms. Grigsby responded that they are not.
Mr. Keenan stated that if a project is bid, it is subject to the prevailing wage. If it is not bid,
is it still subject?
Mr. McCash stated that if it is a renovation project, it would be subject to prevailing wage.
If it is a new build, it is not.
Mr. Keenan inquired if there are any other protocols. When the project will cost under
$20,000.00, is the purchaser required to obtain two price quotes?
Ms. Grigsby responded that those are proposed as compensating controls. The City has
not had formalized requirements, but this will formalize some of those requirements.
Mr. Keenan stated that the Township is required to do that as part of its purchase order.
Ms. Grigsby stated that it is assumed that price quotes are obtained with a purchase order.
Mr. Keenan inquired if the City bids a project, must it select from the bidders, or could the
City see or negotiate a lower price in some other manner?
Ms. Grigsby responded that the City must select from the bids. The competitive process is
good, but for small contracts such as the $48,000 contract on the agenda tonight, many
vendors do not want to invest the time to bid on a small project. In addition, putting
together the bid specifications on a project is not easy -they must be sufficiently detailed,
Finance Committee
February 21, 2006
Page 3
yet not too much so. When the information shared with the vendors is not adequate, the
City does not receive good bids. It is anticipated that a new bid threshold will mean that
not as many projects will be bid. This would free staff time to seek lower prices and
pursue other cooperative purchasing opportunities.
Mr. Keenan inquired if it would ever be desirable to bid a project that is under the $75,000
threshold.
Ms. Grigsby responded that it is possible, and there would always be the ability to do so.
Mr. Lecklider inquired how to avoid the perception of competitive vendors that the City is
giving its business to a preferred vendor.
Ms. Grigsby responded that can be the perception when Council is asked to approve a
purchase on which only one bid was received. It is important that staff make phone calls
to solicit a broader base of price quotes. In addition, the City website could be used to
inform vendors that the City will be accepting price quotes for an anticipated project. If
staff is aware of a vendor misperception, staff can take proactive steps to involve that
vendor.
Mr. Lecklider stated that he would like to know that the City has an internal process to
avert that type of perception and to ensure the opportunity is there for vendors who would
want to solicit the City's business.
Mr. McCash stated that revision of the City's bid threshold and bidding process has been
needed for some time. Too much staff time and effort has been required.
Mayor Chinnici-Zuercher suggested that if a formalized bidding process is not followed for
a project that an ad be placed in the newspaper classified section or at the City's website.
Doing so would demonstrate the City's efforts to make vendors aware of the opportunity. It
is also important to continue to offer the small projects. What is small scale to one vendor
will keep a small business owner in business.
Mr. McCash suggested that the news notice could be a request for statement of interest
(RSI). Interested vendors would submit a form providing their interest and their
qualifications to provide the product or service. Staff could review the statements and
select vendors to contact for price negotiation.
Mr. Keenan stated that if adopted, this would be a significant change in the bid threshold.
In the first year, it would be helpful to Council to have a quarterly report on those
purchases that did not come to Council due to the increased threshold, so they could
assess the impact of the change during the first year.
Committee consensus was to recommend Council approval of the bid threshold increase
to $75,000. Staff will prepare legislation for a first reading at the March 6 Council meeting.
The meeting was adjourned at 6:50 p.m.
Clerk of Council