| California Government Code §25502.5 (attached) was amended by Senate Bill 1498, effective January 1, 2019, to increase the statutory authority of the purchasing agent to enter into service contracts from a limit of $100,000 to a limit of $200,000 for counties with populations of 200,000 or more. County Ordinance Code section 1108-2.215 currently authorizes the Purchasing Agent to enter into service contracts up to the statutory limit of $200,000. However, County policies and practice have limited this authority, and also authority to issue purchase orders, to aggregate amounts of $100,000 or less. These policies were last updated in 2007/08. |
On April 9, 2019, the Board of Supervisors referred to the Internal Operations Committee an examination of the purchasing agent's authority to engage independent contractors to determine if it would be appropriate to increase that authority from the current limit of $100,000 to the new statutory limit of $200,000.
The County Administrator is charged with reviewing all contracts and purchase orders for operational necessity, policy compliance, and budgetary impact, and verifying that contracts have received the proper legal review by County Counsel. County Counsel reviews contracts as to their legal form and enforceability. Risk Management may also review certain contracts to verify the adequacy of insurance coverage.
Currently, contracts and purchase orders exceeding $100,000 are submitted to the Board of Supervisors for approval, as well as any contract that deviates significantly from the standard county indemnification or insurance provisions. At each meeting, the Board of Supervisors takes action on an average of 88 Consent Calendar items that require staff preparation, review, approval, distribution and filing. Preparing an item for Board action adds up to three weeks to the processing time for these items. The volume of routine items produces a compendium of documents that must be reviewed by the Board during the 96-hour period between Friday and Tuesday in order to prepare for a Board meeting.
To provide some context for the Committee, staff sampled 12 board meetings from 2018 comprising the highest volume meeting (in terms of numbers of items) in each month during 2018. The total number of all Consent items for the 12 selected meetings was 1,430; across 33 meetings in a year, the Board takes action on an estimated 4,000 Consent items annually. The average volume of the Board's meeting packet was 885 pages. The total number of contracts and purchase orders payable for the 12 select meetings was 600; over the course of a year, the volume is estimated at 1,650 items. Following is how the 600 contracts/purchase orders payable for the 12 sample meetings broke down in terms of dollar value:
| Criteria |
Qty |
% of Total |
Examples |
| Less than or equal to $100,000 |
35 |
6% |
Software as a service, hardware maintenance, consumer incentives, employee services, vehicles, congregate meal services, training |
| Greater than $100,000 but less than or equal to $200,000 |
396 |
66% |
Institutional supplies, heavy equipment rentals, software licensing & maintenance, janitorial services, residential board and care, social services, consulting services, telecom supplies/parts, administrative services |
| Greater than $200,000 |
169 |
28% |
Medical services and supplies, IT services, social services, temporary staffing, non-emergency transportation, construction/engineering services, legal services, security services |
| Total |
600 |
100% |
|
The Internal Operations Committee is asked to examine and evaluate whether or not it would be beneficial and appropriate to increase, consistent with State statute, the purchasing agent's authority to engage independent contractors from the current limit of $100,000 up to a limit of $200,000, and report its findings and recommendations to the Board of Supervisors. The Committee should consider what level of direct oversight and accountability the Board wishes to have for transactions valued between $100,000 and $200,000, the level of administrative review that otherwise exists for these transactions, the level of transparency the Board wishes to have for these transactions, and any additional administrative oversight or reporting that might be appropriate should the Committee decide to raise the purchasing agent's discretion. For example, the County Administrator or purchasing agent could provide a periodic report to the Board of Supervisors listing all contracts approved administratively that were in excess of $100,000.
Secondarily, if the Committee decides to recommend increasing the purchasing agent's authority to engage independent contractors from the current limit of $100,000 up to a limit of $200,000, the Committee could also consider modifying the County's purchasing policy to increase the purchasing agent's authority to issue purchase orders so that it corresponds to the limit for engaging independent contractors. Staff recommends that the two limits be kept the same, at whatever level the Committee deems appropriate, to avoid confusion among operating department staff who are charged with purchasing and contracting responsibilities.
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| Should the committee decide to recommend an increase in the purchasing agent's discretion to engage independent contractors and issue purchase orders, we would expect to achieve efficiencies in the operating departments both in lead time and effort currently required to prepare the estimated 1,100 items (396 sample extrapolated to reflect 33 meetings) annually that fall within the contract thresholds (greater than $100,000 and less than or equal to $200,000) for board of supervisors consideration. The Purchasing Division (Public Works) would, conversely, be required to process an additional 1,100 average contracts annually. The Purchasing Services Manager indicates that this additional work could be managed with the current resources of the Purchasing Division, which would receive the contracts from the County Administrator, verify that proper approvals have been secured, scan and tag the contracts, and log the contracts into a database from which basic reports can be generated. |