I. RECOMMENDATION:
Under Public Contract Code section 22030, the City Council approval of Resolution No. 3918 electing to become subject to the uniform public construction cost accounting procedures set forth in the Act and to the Commission's policies and procedures manual and cost accounting review procedures, as they may each from time to time be amended, and directs that the City of Coalinga notify the State Controller forthwith of this election.
II. BACKGROUND:
Public Works
Labor Code section 1720(a)(1) defines “public works” to mean “construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds.”
To qualify as a public work, generally there must be:
- Construction, alteration, demolition, installation, or repair
- Done under contract
- Paid for in part or in whole out of public funds
Because Coalinga is not part of the Uniform Public Construction Cost Accounting Act, its threshold is limited to $5,000 under Public Contract Code section 20162…..“When the expenditure required for a public project exceeds five thousand dollars ($5,000), it shall be contracted for and let to the lowest responsible bidder after notice.”
A general law city who has not applied for participation in the Uniform Public Construction Cost Accounting Act essentially has no informal bidding procedure available to it for amounts over $5,000 even if the municipal code authorizes such action, It cannot override public contract code.
For purchases falling outside the public project definition (such as capital street projects, categorized as maintenance or repair of the streets and thus falling outside of the public project definition requiring formal bidding), the procedures in section 2-4.607 and 2-4.608 of the Coalinga Municipal Code would apply. The City has discretion to set those limits however it may choose.
Public Agency’s Use of Own Forces (Force Accounts)
There is a dollar amount limit to the work performed in house by use of a force account. For Coalinga, a general law city, the work may be performed in house only if the public works project is less than $5,000. (California Public Contract Code section 20162). This poses issues related to performing smaller public works projects efficiently.
These constraints under the public contract code have led to lengthy project delivery timeframes when staff and Council are eager to proceed with capital improvements and other various public works projects due to the $5,000 threshold including the use of our own forces and the requirement for formally bidding projects. Staff is looking for a solution to expedite public works project delivery through participating in the Uniform Public Construction Cost Accounting Act (Herein referred to as “The Act”).
III. DISCUSSION:
The Act is legislation that was enacted in 1983 to help promote “uniformity of the cost accounting standards and bidding procedures on construction work performed or contracted by public entities in the state”. The Act is a voluntary program available to all public entities in the State, but it applies only to those public agencies that have “opted in” to the provisions set forth by the Act using the processes outlined in the Act.
LINK: Uniform Public Construction Cost Accounting Act Manual
The Act allows for public project work in the amount of $60,000 or less to be performed by a public agency’s force account using the public agency’s own resources, or by negotiated contract, or by purchase order. Public projects in the amount of $200,000 or less may use the informal or formal bidding procedures set forth in Section 22032(b) or (c) of the Act. Public projects at a cost of more than $200,000 must use formal bidding procedures to let the contract pursuant to Public
Contract Code.
Some of the benefits of the program are:
- Increased force account limit for public agencies;
- Simplified bidding for projects that are $200,000 or less;
- Reduced number of formal bids based on project size; and
- Expedited contracting for projects under $200,000.
Many participating agencies appreciate the program because it has given them more leeway in the execution of public works projects under a certain dollar amount; sped up the award process; expedited project delivery; reduced the time, effort, and expense associated with bidding projects under $200,000; and simplified administration for those projects. Few agencies have experienced challenges with the accounting requirements and overhead provisions. Moreover, adjustments, when required, have been relatively simple; most required procedures were already in place, so there were few, if any, major changes to existing operations. The current Standard Accounting Codes Structure satisfies reporting requirements when used properly. Currently, there are approximately 1,274 cities, counties, K-12 school and community college districts, other special districts participating in The Act.
Staff has provided a copy of some frequently asked questions related to The Act.
Staff feels that opting into The Act would allow the City to delivery more public works projects in a more efficient manner as there are many projects needing immediate attention throughout the City.
If the Council chooses to proceed with opting-in to The Act, the City Council will need to execute Resolution 3918 (attached) and direct staff to notify the State Controller that the City has opted into the Act. The City may also withdraw from the Act by filing a resolution with the State Controller at any time the Council chooses to opt-out. Once the City has opted-in to The Act it remains part of the program until is opts-out.
Once the Resolution has been filed with the State Controller Office, the City must enact an informal bidding ordinance (sample has been attached) to govern the selection of contractors to perform public projects in accordance with The Act. In addition to the Ordinance, at least once per calendar year, the City will need to establish a list of qualified contractors by mailing, faxing, or emailing written notice to all construction trade journals designated for the City under Section 22036. The notice will invite all licensed contractors to submit the name of their firm to the City for inclusion in the City’s list of qualified bidders.
IV. ALTERNATIVES:
Do not adopt Resolution No. 3918 and direct staff accordingly.
V. FISCAL IMPACT:
Electing to become subject to the uniform public construction cost accounting procedures would result in more efficient projects and potentially at a lessor costs due to limited prevailing wage requirements. |