BUDGET GUIDELINES
“Best” Total Cost of Ownership When determining which products and equipment to purchase, the goal and practice of the City is to ensure that the “best” Total Cost of Ownership is achieved that meet City standards, rather than only considering the lowest purchase price. Total Cost of Ownership (TCO) is an analysis used to determine all the lifetime costs associated with owning certain kinds of assets. When requesting funding for products or equipment with an aggregate cost exceeding $50,000 total funds requested, City or consultant technical staff should take into consideration the “Best” TCO, rather than just the purchase price. “Best” TCO analysis may include, but is not limited to, such factors as installation costs, financing costs (if applicable), energy costs, repair costs, upgrades, maintenance, downtime, training and disposal. When selecting or designing the product or equipment, consideration should be given to such attributes as product life, warranty coverage and time period, reliability rating, energy rating, obsolescence issues, technology changes, carbon footprint, environmental impact aspects, and other relevant factors which could impact quality. Lease versus buy analysis should be performed for capital equipment acquisition. Sole Source Procurements Staff is required to perform a competitive bidding process whenever feasible. For Requests for Proposals (RFP), the scope of services must include all anticipated phases of the project which could be performed by a single firm. Additionally, any reasonably anticipated phase or option cannot be excluded from an RFP and later determined to be a sole source. RFPs will be evaluated on the full scope of services. There are instances when obtaining competitive bids or proposals is not possible. In such an event, staff must complete and submit a “Sole Source Request Form.” The form must be signed by the requestor and department director prior to forwarding to the Purchasing Agent for approval. For procurements $30,001 - $100,000, additional sole source approval is required from the Director of Administrative Services and the Assistant City Manager. Sole source requests exceeding $100,000 require review by the Finance Commission (or Orange County Great Park Board for Great Park procurements), followed by City Council review and approval. Staff reports, including recommendations, must clearly state it is a sole source request and include supporting information such as how the pricing was determined to be fair and reasonable. For City Council approved sole source requests, a copy of the Minutes approving the request shall be attached to the purchase requisition in the financial system. In the event an actual procurement exceeds the approved sole source amount by greater than 30 percent, and/or requires a higher approval level from the original request, then a new Sole Source Request Form must be submitted. Procurements with monopolies, such as utility companies, do not require sole source approval, nor do procurements with other government agencies. For procurements involving rebates to the City, such rebate amounts may be deducted from the total cost of the procurement for the purpose of determining the appropriate level of approval required.
Sole source approvals shall be maintained by Purchasing staff.
528
FY 2019-21 Proposed Budget
Made with FlippingBook Learn more on our blog