(a) The restrictions of this section shall not apply to:
(1) Contracts involving consideration reasonably valued at less than Twenty-Five Thousand Dollars ($25,000.00). Provided, however, that the Purchasing Agent of the City shall not be required to formally advertise for bids for contracts for the purchase of materials, supplies or equipment, or for rental, repair or maintenance thereof, when the contract involves an expenditure of One Hundred Thousand Dollars ($100,000.00) or less.
(2) Contracts, as determined by the contracting authority, for the performance of professional, scientific, expert, technical, or other special services of a temporary and occasional character for which the contracting authority finds that competitive bidding is not practicable or advantageous.
(3) Contracts for the furnishing of articles covered by letters patent granted by the government of the United States.
(4) Contracts for leasing as lessee or purchasing real property when approved by majority vote of the Council.
(5) Contracts for repairs, alterations, work or improvements declared in writing by the contracting officer or board, or its designee, to be of urgent necessity for the preservation of life, health or property. The declaration shall give the reasons for the urgent necessity and must be approved by the Council or its designee. Approval may be conditioned upon compliance with one or more of the requirements of this section.
(6) Contracts entered into during time of war or national, state or local emergency declared in accordance with federal, state or local law, where the Council, by resolution adopted by two-thirds vote and approved by the Mayor, suspends any or all of the restrictions of this section or their applicability to specific boards, officers or employees.
(7) Contracts for equipment repairs or parts obtained from the manufacturer of the equipment or its exclusive agent.
(8) Contracts for cooperative arrangement with other governmental agencies for the utilization of the purchasing contracts and professional, scientific, expert or technical services contracts of those agencies and any implementing agreements, even though the contracts and implementing agreements were not entered into through a competitive bid process.
(9) New, long-term concession agreements with the existing merchants as of June 8, 1999, on Olvera Street negotiated by the City department responsible for administering the El Pueblo de Los Angeles Historical Monument.
(10) Subject to the requirements of Charter Section 1022, contracts (including without limitation those, as determined by the contracting authority, for the performance of professional, scientific, expert, technical or other special services), where the contracting authority finds that the use of competitive bidding would be undesirable, impractical or impossible or where the common law otherwise excuses compliance with competitive bidding requirements. For purposes of this Section, and for construing the same term in Charter Section 371(e)(10), the term “undesirable” shall mean and include only such situations in which the nature of the subject of the contract is such that competitive bidding would work an incongruity or be unavailing or would not produce an advantage, with sole reference to the public interest and in light of the purposes to be accomplished.
(b) The City of Los Angeles shall not be, and is not, bound by any contract involving the expenditure of more than Twenty-Five Thousand Dollars ($25,000) unless the officer, board or employee authorized to contract shall first have complied with the procedure for competitive bidding or submission of proposals established by this section unless exempted by Subsection (a), above, or other applicable law, and the contract complies with all other applicable requirements of the Charter and of this Code. Provided, however, that the Purchasing Agent of the City shall not be required to formally advertise for bids for contracts for the purchase of materials, supplies or equipment, or for rental, repair or maintenance thereof, when the contract involves an expenditure of One Hundred Thousand Dollars ($100,000) or less.
(c) The Council, Board, officer or employee authorized to contract shall first cause notice to be published at least once in a daily newspaper printed and published in the City or by electronic method providing widespread circulation, inviting bids or proposals for the work, services, information or property required to be furnished or supplied to the City or to be sold by the City. If applicable, said notice shall specify the amount of the bond to be given for the faithful performance of the contract. The right to reject any and all bids or proposals shall, in every case, be reserved, as shall the right to waive any informality in the bid or proposal when to do so would be to the advantage of the City or its taxpayers. Bidders or proposers may be required to submit with their bids or proposals detailed specifications of any item to be furnished, together with guarantees as to efficiency, performance, characteristics, operating cost, useful life, time of delivery, and other appropriate factors. Such notice shall specify the time and place such bids or proposals will be received, may indicate a waiver of the requirement for bonds, pursuant to Subsection (j) of this section, and, in the discretion of the awarding authority, may indicate whether written and/or electronically prepared and submitted bids or proposals, or other forms of bids or proposals authorized by ordinance, will be accepted.
(d) Except as provided in Subsections (j) and (k), every proposal or bid shall be accompanied by a check certified by a responsible bank in the City of Los Angeles or a cashier’s check issued by a responsible bank, payable to the order of the City of Los Angeles, for an amount not less than ten percent of the aggregate sum of the bid or proposal, or, in lieu thereof, may be accompanied by a satisfactory surety bond, in like amount, guaranteeing that the bidder or proposer will enter into the proposed contract if the same be awarded to it. In lieu of the foregoing an annual bid bond sufficient to cover any one proposal or bid, may be filed.
Every bid or proposal to perform a contract with the City, or with any board, officer or employee thereof, shall include in the affidavit of the bidder or proposer that such bid or proposal is genuine, and not sham or collusive, nor made in the interest or on behalf of any person not therein named. The affidavit shall further state that the bidder or proposer has not directly or indirectly induced or solicited any other bidder or proposer to put in a sham bid, or any other person, firm or corporation to refrain from bidding, and that the bidder or proposer has not in any manner sought by collusion to secure for itself an advantage over any other bidder or proposer. Any bid or proposal made without such affidavit, or in violation thereof, shall not be considered. If at any time it shall be found that the person, firm or corporation to whom a contract has been awarded has, in presenting any bid(s) or proposal(s), colluded with any other party or parties, then upon the entry of such finding on the records of the board or officer awarding said contract, the contract so awarded shall be voidable at the option of the Council, or the board, officer or employee making the same on behalf of the City, as the case may be, and the contractor or supplier and its bond company shall be liable to the City for all loss or damage which the City may suffer thereby; and the Council, board, officer or employee, as the case may be, may advertise for a new contract. Any contractor or supplier making a false affidavit may be excluded from future bidding or contracting with the City. The officer, board or City Council, having jurisdiction over the contracting process , may permit any informality in such affidavit to be remedied, so as to comply with requirements, at any time prior to award of the contract.
After bids or proposals have been opened by the City, except with the consent of the officer, board or City Council having jurisdiction over the contracting process, no bid or proposal shall be withdrawn, but the same shall be subject to acceptance by the City for a period of three months, or such lesser period as prescribed in the notice inviting proposals or bids to contract.
(e) At the time set for receiving the bids or proposals, those presented will be publicly opened and declared by or on behalf of the officer or board or the City Council; and thereupon may be referred to any appropriate officer for report and recommendation at a specified time, prior to consideration by such officer, board or the Council for award.
(f) At the time specified for opening said bids or proposals, or at any time to which the matter thereafter may be continued for report, the contract shall be awarded to the lowest responsible bidder providing satisfactory security for its performance. That determination may be based on the lowest ultimate cost of the materials, supplies and/or services in place and use; and where the same are to constitute a part of a larger project or undertaking, consideration may be given to the effect on the aggregate ultimate cost of such project or undertaking. In addition, irrespective of provisions of this subsection requiring award to the lowest responsible bidder, a bid preference can be allowed in the letting of contracts for California or Los Angeles County firms and, in addition, the bid specifications can provide for a domestic content requirement; the extent and nature of such bid preference, domestic content requirement and any standards, definitions and policies for their implementation shall be provided for by ordinance adopted by the Council and, as to those departments which exercise independent control over their expenditure of funds, by adoption by such departments of policies consonant with any such ordinance.
As an alternative to an award to the lowest responsible bidder, a contract can be let pursuant to a competitive sealed proposal method permitting negotiations, in accordance with the following requirements, conditions and limitations:
(1) To acquire the following items or services:
(a) telecommunications devices, systems or services;
(b) automated systems, or the computers on which they are automated;
(c) services related to the automation of systems or the computers on which they are automated, including computer software;
(d) highly specialized equipment for the DWP used for water and power generation, transmission and distribution, including, but not limited to, large gas turbines, switchgear, emission controls and other equipment where the technical complexities of such equipment require that factors in addition to price be taken into consideration.
(2) For the acquisition of goods or services described in Subdivision (1) of this subsection, the competitive sealed proposal procedure shall be used only after the Purchasing Agent, or in the case of the Departments of Airports, Harbor, and Water and Power the respective Board of Commissioners, has adopted written findings setting forth the specific facts which support the determination that competitive bidding and adherence to the rule that the award be made to the lowest responsible bidder is not practicable or is disadvantageous. For the acquisition of highly specialized equipment for the DWP described in Subdivision (1)(d), the competitive sealed proposal criteria may, in addition to price, include factors such as vendor financing, performance reliability, standardization, life-cycle costs, delivery timetables, support logistics, and the broadest possible range of competing products and materials available, fitness of purchase, manufacturer's warranty and similar factors.
(3) Proposals shall be solicited by issuing a request for proposal (RFP) which shall be subject to prior Council approval. The Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representatives, shall consult with appropriate personnel of a requisitioning department to develop specifications for an RFP. Public notice of the RFP shall be given in writing or electronically to prospective contractors or suppliers of the appropriate commodity and to any other sources deemed appropriate. The RFP shall state the time and place at which the proposals will be received. Proposals received after the time and date specified may be returned and may not be considered.
(4) At a minimum, the RFP shall include:
(a) A description of the item(s) and/or service(s) desired;
(b) A statement of the criteria that will be used in evaluating proposals; and
(c) A statement as to when and in what form prices are to be submitted.
(5) The evaluation criteria shall be described in a plan of evaluation which identifies evaluation factors and their relative importance to the proposed work or project. The criteria shall include, but not be limited to, a means to measure how well a proposal meets desired performance requirements.
For the acquisition of goods or services described in Subdivision (1)(a)-(c) of this subsection, the following factors, among others, shall be used when establishing the criteria for evaluating proposals:
(a) The overall life of the system or equipment;
(b) Hardware costs, including costs of acquiring, operating and maintaining hardware included with, associated with, or required for the system or equipment;
(c) Software costs, including costs of acquiring, operating and maintaining software included with, associated with, or required for the system or equipment;
(d) Installation costs;
(e) The estimated cost of supplies;
(f) The estimated cost of employee training;
(g) The estimated cost of additional long-term staff needed;
(h) The estimated increase in employee productivity.
(6) Proposals shall be opened and their contents secured to prevent disclosure during the process of negotiating with competing proposers. The proposals shall be opened publicly, but only the names of the proposers shall be revealed. Adequate precautions shall be taken to treat each proposer fairly and to insure that information gleaned from competing proposals is not disclosed to other proposers. Prices and other information concerning the proposals shall not be disclosed until a recommendation for award is made to the awarding authority.
(7) Proposals shall be evaluated on the basis of compliance with the RFP requirements and the merits of the proposal rather than comparing one proposal against another. Only the evaluation criteria stated in the RFP will be considered in the evaluation of proposals. An evaluation team may be formed to evaluate and discuss proposals; if so, the Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representative, will select the participants.
(8) After proposals are received, an award may be made without discussing the proposals with any of the proposers. In this context, “discussing” means clarifying, modifying, negotiating or having any other communications.
(9) The Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power, the General Managers or their representatives, may discuss acceptable or potentially acceptable proposals with the proposers who made the proposals in order to evaluate a proposer’s ability to meet the RFP requirements. If discussions are conducted, all proposers whose proposals are found to be acceptable, or reasonably susceptible to being made acceptable, shall be given equal opportunity to discuss their proposals with the Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representatives, and revise them accordingly. During discussion, no information from a proposal may be revealed to another proposer. Any type of auction practice or allowing the transfer of technical information is specifically prohibited.
(10) Following negotiations, a time and place will be set for receipt of best and final offers from all proposers whose proposals are acceptable. No changes to proposals or prices will be allowed after best and final offers are received unless the Purchasing Agent, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representatives makes a written finding that resubmission would be in the public interest.
(11) Award shall be made to the proposer whose proposal is most advantageous to the City, except that the Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representatives may reject any or all offers if rejection is in the best interest of the City. The contract file shall state in writing the basis on which the award is made. No award may be made pursuant to this alternative method to a proposer whose final proposal is higher as to the ultimate cost to the City, as defined in City Charter section 371, and if such can be determined, than any other proposal submitted.
(12) For each RFP, the Purchasing Agent or his or her representative, or in the case of the Departments of Airports, Harbor and Water and Power the General Managers or their representatives, shall create a proposal file identified by proposal number, or by proposal number and contract number if an award is made. The file shall be maintained in electronic or hard copy storage, subject to existing records retention schedules.
The bid or proposal of any bidder or proposer previously delinquent or unfaithful in the performance of any former contract with City may be rejected.
(g) Except as provided in Subsection (i), within thirty days or a lesser period of time as specified by the contracting authority, after the contract is awarded to the successful bidder, said bidder shall execute the contract and post the faithful performance bond.
(h) The bid bond or faithful performance bond, shall be executed by the contractor or supplier and by a responsible corporate surety company; or two or more individual sureties if and when approved by the contracting authority.
In the discretion of the officer, board or the City Council, having jurisdiction over the contracting process, deposit of cash by way of bond may be authorized, to be deposited with the City Treasurer under such procedure as may be approved by both the City Treasurer and the City Controller.
(i) If the successful bidder or proposer fails to enter into the awarded contract and to supply the necessary faithful performance bond within the required time, the sum posted in cash or by certified or cashier’s check or guaranteed by the bid bond is forfeited to the City. Such forfeiture shall not preclude recovery of any sum over and above the amount posted or guaranteed to which the City sustains damage by reason of such default or failure to contract.
In the event of the bidder’s or proposer’s default, any cash deposit shall be paid to the City; or the certified or cashier’s check shall be presented for payment and collected; or the surety shall be required to pay the amount of their bond, and the City Attorney shall take appropriate action to collect the same if such surety fails to pay the obligation of the bond within fifteen days after demand. Upon payment or collection, the amount shall be paid into the general fund or to the bond fund from which the contract is to be met; or, in the case of contracts made by departments having control of their own funds, into the appropriate fund of such department as designated by such department.
(j) The Purchasing Agent or in the case of the Department of Airports, Harbor, Water and Power and Library, the General Manager, may omit the requirement for the surety bond and the faithful performance bond or annual bid bond prescribed in Subsections (d) and (g), when letting contracts for purchases of non-construction services, and for materials, supplies and equipment, and for equipment rental and maintenance services as described in the City Charter.
(k) For bids or proposals for the sale of bonds, notes, other evidences of indebtedness and certificates of participation, the amount of the certified check, cashier’s check or surety bond which accompanies a bid or proposal to guarantee that the bidder or proposer will enter into the proposed contract if the same be awarded to it shall be the greater of $200,000 or one percent of the amount of the bid or proposal.
(l) Notwithstanding the requirements of this section, Council may, by ordinance, waive the requirements in Subsections (d) and (g) for specific projects involving the competitive sealed proposal process under Los Angeles City Charter Section 371(b) and provide in the ordinance alternative requirements.
SECTION HISTORY
Based on Charter Sec. 386.
Amended by: Subsecs. (a)(5) and (a)(6) added, Subsecs. (a)(4), (b), (d), (g), (h), and (i) amended, Ord. No. 154,252, Eff. 9-11-80; Subsec. (a)(6) repealed, Subsec. (b) amended, Ord. No. 158,965, Eff. 6-30-84; In Entirety, Ord. No. 170,313, Eff. 3-3-95, Oper. 4-25-95; Subsecs. (b) through (j), Ord. No. 173,186, Eff. 5-22-00; Subsec. (f)(11), Ord. No. 173,274, Eff. 6-25-00, Oper. 7-1-00; Subsec. (a), Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00. Subsec. (k) added, Subsec. (d) amended, Ord. No. 173,970, Eff. 6-22-01; Subsec. (l) added, Ord. No. 184,936, Eff. 7-11-17; Subsecs. (f)(1) and (f)(2), Ord. No. 185,471, Eff. 4-23-18.