HomeMy WebLinkAboutO-2009-3192 qualification of bidders,certain city projects; raising threshold from $500,000 to $100,000
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested:
October 12. 2009
Appropriation
Requested By: S. Gillett
Source of Funds:
N/A
Department:
Public Works
Account Number: N/A
Report:
Resolution:
Ordinance:
x
Amount Budgeted: NI A
Exhibits:
Ordinance
Amount Requested:
~/A
Exhibits:
Markup of Chan2es
Budgeted Item: N/A
Exhibits
SUMMARY & RECOMMENDATION
Chapter 2 of the Code of Ordinances includes the administration of Public Works Contracts. Section 2-
106 was codified in 1991. The original ordinance (Ord. 1476) was passed on October 28, 1985 to
establish the prequalification of contractors for projects over $300,000. Section 2-016 was amended on
February 26, 2007 to require prequalification for projects over $500,000.
At the Workshop on September 28,2009, changes were proposed to eliminate the prequalification of
projects, raising the threshold from $500,000 to $1,000,000, include the requirement to have qualification
statements submitted as a part of the bid package, and changing the requirement for financial statements
to include only the apparent low bidder. These changes are proposed to streamline the process of
identifying qualified bidders and increase the number of bidders while maintaining the ability of the city
to ensure large projects are awarded to qualified and financially stable contractors.
The attached ordinance accomplishes these goals, and amends the Code of Ordinances to reflect these
changes. The attached ordinance mark-up also identifies deletions and additions to the Code.
Council: Approve an ordinance amending Section 2-106 and 2-107 of the Code of
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Date
ORDINANCENo. ::j J q ,;(
AN ORDINANCE OF 1HE CITY COUNCIL OF LA POR1EAMENDlNG CHAPTER 2 ''AIMINlSTRATION',
ARTICLE III, ''FINANCE', DMSION 2, "PURaJASES AND CONIRACTS", SUBDMSION IT, "PUBliC
WORKS CONIRACTS", SECTIONS 2-106 "PREQUAIlFICATIONS FOR BIDDlNG; FILING OF
CONIRACIOR'S STATEMENT' AND 2-107 "REQUIREMENfS FOR CONIRACIDRS ENTERING BIDS",
BY CHANGING QUAIlFICATION REQUIREMENTS FOR CERTAIN BIDDERS; FINDlNG CCMPIlANCE
WIIHlHE OPENMEEI1NGS LAW; AND PROVIDII\D AN EFFECIlVEDA1E HEREOF.
BE IT ORDAINED BYlHE CITY COUNCIL OF 1HE CITY OF LAPOR1E, TEXAS:
Section 1: That Chapter 2, "Achninistration", Article III, "Finance", Division 2, "Purchases and Contracts",
Subdivision II, "Public W Olks Contracts", Section 2-106, "Prequalifications for bidding; filing of contractor's
statemenf', is hereby amended and shall hereafter read as follows, to wit:
"Sec. 2-106. Qualification requirement of bidders; filing of contractor's qualification
statement.
(a) The city council has detennined, and does hereby find, detennine, and declare that it is in the best
interest of the city that in the case of all construction projects having an owner's estimated construction cost
of greater than $1,000,000.00, all bidders must submit with their bid package, a satisfactory contractor's
qualification statement, on forms to be provided by the city. Submission of a contractor's qualification
statement is a condition precedent to execution of a contract by the city with the successful bidder.
(b) For projects with an owner's estimated construction cost ofless than $1,000,000.00, contractors may be
required to file a contractor's qualification statement, if such is detennined by the city manager to be
required. In making such detennination, the city manager shall review the city's past experience with
projects of similar nature; the recommendation of the project architect/engineer which considers the
complexity of the project; and the uniqueness or novelty of the anticipated project which may require a high
degree of contractor specialization, technical expertise and/or previous experience on similar projects.
( c) After the bid opening the city shall request audited financial statements from the apparent low bidder.
The infonnation contained in such contractor's qualification statement and audited financial statement is
deemed confidential; shall not be disclosed by the city to the public or to other contractors; and shall be
deemed exempt from disclosure under the Open Records Act, V.T.CA, Govenunent Code S 552.001 et
seq., in accordance with the state attorney general's opinionnurnberORD-309, 1982. The city council finds
that disclosure of the financial infonnation is likely to have either of the following effects:
(1) To impair the city's ability to obtain necessary infonnation in the future; or
(2) To cause substantial hann to the competitive position of the person from whom the information was
obtained."
Section 2: That Chapter 2, ''Achninistration'', Article III, "Finance", Division 2, "Purchases and Contracts",
Subdivision II, "Public Works Contracts", Section 2-107, "Requirements for contractors entering bids", is
hereby amended and shall hereafter read as follows, to wit:
"Sec. 2-107. Requirements for contractors entering bids on projects subject to submittal of
qualification statement under Section 2-106.
(a) Subcontracting of work in excess of 5 0 percent; consent required. Contractors entering bids on
city construction projects subject to Section 2-106 of this Code shall not subcontract more than 50 percent
of the wOlk on the project without first obtaining the express written consent of the city.
(b) Attendance of pre-bid conference required. All contractors (or representatives of the contractors)
desiring to bid on city construction projects subject to Section 2-106 of this Code must attend a prebid
conference. Otherwise, such contractors' bids will be returned by the city unopened.
(c) Determination of bidding capacity. The city is interested in determining a contractor's bidding
capacity for the purpose of awarding contracts subject to Section 2-106 of this Code. Bidding capacity for
each contractor shall be equal to net wolking capital. Net wolking capital is defined as current assets less
current liabilities, as shown on a balance sheet audited by an independent certified public accountant. The
city will detennine the minimum bidding capacity for each project. Only those contractors possessing a
bidding capacity meeting or exceeding that minimum will be considered qualified for that project.
(d) Standards for contractor disqualification. The city council adopts the following standards for
disqualification of contractors:
(1) Automatic disqualification. Automatic disqualification shall take place under the following
circumstances:
a. The company has a negative net wolking capital or does not meet minimum bidding capacity.
b. There is a failure to complete statements in all detail.
c. The company or personnel are on the federal job debarment list.
d. The company or personnel are on the Justice Department list of unacceptable contractors; i.e.
convicted on antitrust violations.
e. There is a failure to complete a statement in a truthful manner.
(2) Other considerations for possible disqualification. Disqualification may also take place
according to the following considerations:
a. Companies with pending litigation may be disqualified for the duration of litigation as deemed to the
advantage of the city by the city's project manager.
b. There is a default on the contract, or forfeiture of bid bonds or performance bonds.
c. There is a performance record ofpoorwoOOnanship on previous projects.
d. There is a performance record offailure to complete warranty work
e. There has been a bankruptcy or financial reorganization.
f Companies submitting consolidated financial statements will be disqualified unless their parent company
agrees to be the contracting party with the city."
Section 3: All ordinances or parts of ordinances inconsistent with the terms of this ordinance are hereby
repealed; provided, however, that such repeal shall be only to the extent of such inconsistency and in all
other respects this ordinance shall be cumulative of other ordinances regulating and governing the subject
matter covered by this ordinance.
fonnally acted upon. The City Council further ratifies, approves and confirms such written notice and the
contents and posting thereof.
Section 5: This Ordinance shall be effective upon its passage and approval.
PASSED AND APPROVED this theY day of Mfrt~
~
~ Mayor ~
,2009.
~A- tf.m
ty ecretary
APPROVED:
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Assistant City Attorney
"
3
Sec.2-106. Prequalifieatians far bidding Qualification reauirement of bidders;
filing of contractor's aualification statement.
The city council has determined, and does hereby find, determine, and declare that it is in
the best interest of the city that all contractors desiring to bid on city construction
projects, having an owner's estimated construction cost of greater than $500,000.00
$1,000,000.00, must prequalify by filing all bidders must submit with their bid package, a
satisfactory contractor's statement, on the forms attached hereto, v.'ith the €lity manager or
his designee no later than 30 days prior to the date bids are to be opened, if a €lontractor is
to be eligible to bid. on forms to be provided by the citv. Submission of a contractor's
qualification statement is a condition precedent to execution of a contract by the city with
the successful bidder. For projects with an owner's estimated construction cost of less
than $500,000.00 $1,000,000.00, contractors may be required may have to prequalify, to
file a contractor's qualification statement, if such is determined by the city manager. In
making such determination, the city manager shall review the city's past experience with
projects of similar nature; the recommendation of the project architect/engineer which
considers the complexity of the project; and the uniqueness or novelty of the anticipated
project which may require a high degree of contractor specialization, technical expertise
and/or previous experience on similar projects. Once a contractor has successfully
prequalified, in order for them to remain prequalified, a new contractor's statement shall
be filed with the city annually. After the bid opening the city shall request audited
financial statements from the apparent low bidder. The financial information contained in
such contractor's qualification statement and audited financial statement is deemed
confidential; shall not be disclosed by the city to the public or to other contractors; and
shall be deemed exempt from disclosure under the Open Records Act, V.T.C.A.,
Government Code S 552.001 et seq., in accordance with the state attorney general's
opinion number ORD-309, 1982. The city council finds that disclosure of the financial
information is likely to have either of the following effects:
(1) To impair the city's ability to obtain necessary information in the future; or
(2) To cause substantial harm to the competitive position of the person from whom the
information was obtained.
Sec. 2-107. Requirements for contractors entering bids on oroiects subiect to
submittal of aualification statement under Section 2-106
(a) Subcontracting of work in excess of 50 percent; consent required. Contractors
entering bids on city construction projects subiect to Section 2-106 of this Code shall not
subcontract more than 50 percent of the work on the project without first obtaining the
express written consent of the city.
(b) Attendance of pre-bid conference required. All contractors (or representatives of the
contractors) desiring to bid on city construction projects subiect to Section 2-106 of this
Code must attend a prebid conference. Otherwise, such contractors' bids will be returned
by the city unopened.
(c) Heticc of pr<:tjualificatien ef bidders. Public notice of prequalification of bidders by
the city shall be published in a like manner as invitations to bidders, and shall not be a
substitute for publishing the actual invitation to bidders on each project.
(d) Adepti8n 81 CfJntracwr's statcmcnt .ferms. The city eouncil approves and adopts the
forms for contractor's statements, incorporated b)' reference in this seetion, and made a
part of this article for all purposes.
ffl Determination of bidding capacity. The city is interested in determining a
contractor's bidding capacity for the purpose of issuing proposals and awarding contracts
subiect to Section 2-106 of this Code. Bidding capacity for each contractor shall be equal
to their net working capital. Net working capital is defined as current assets less current
liabilities, as shown on a balance sheet examined audited by an independent certified
public accountant. The city will determine the minimum bidding capacity for each
project. Only those contractors possessing a bidding capacity meeting or exceeding that
minimum will be considered prequalified for that project.
@ Standards for contractor disqualification. The city council adopts the following
standards for disqualification of contractors:
(1) Automatic disqualification. Automatic disqualification shall take place under the
following circumstances:
a. The company has a negative net working capital or does not meet minimum bidding
capacitv.
b. There is a failure to complete statements in all detail.
c. The company or personnel are on the federal job debarment list.
d. The company or personnel are on the Justice Department list of unacceptable
contractors; i.e. convicted on antitrust violations.
e. There is a failure to complete a statement in a truthful manner.
(2) Other considerations for possible disqualification. Disqualification may also take
place according to the following considerations:
a. Companies with pending litigation may be disqualified for the duration of litigation as
deemed to the advantage of the city by the city's project manager.
b. There is a default on the contract, or forfeiture of bid bonds or performance bonds.
c. There is a performance record of poor workmanship on previous projects.
d. There is a performance record of failure to complete warranty work.
e. There has been a bankruptcy or financial reorganization.
f. Companies submitting consolidated financial statements will be disqualified unless
their parent company agrees to be the contracting party with the city.