INTERNAL OPERATIONS COMMITTEE
Meeting Date: October 14, 2024
Subject: Recommended Updates to the Small Business Enterprise and Outreach Programs
Submitted For: Warren Lai, Director
Department: Public Works
Referral No: IOC 24/11
Referral Name: Triennial Review of Countywide Purchasing Programs and Policies
Presenter: Carrie Ricci and Cindy Shehorn, Public Works Department
Contact: cindy.shehorn@pw.cccounty.us
Referral History:
County Ordinance Section 24-4.008 requires the County Administrator to develop a system of Administrative Bulletins, which are designed to provide guidance to County departments to ensure compliance with County policies and practices. In addition to administrative policies established by the County Administrator, many Board of Supervisors policies are also communicated to staff through County Administrative Bulletins.
The recommendations in this report attempt to reconcile the requirements of five distinct County purchasing programs: the Small Business Enterprise Program (2000), Outreach Program (1990s), E-Outreach (2006), the Local Bid Preference Program (2005), and Administrative Bulletin 600 - Purchasing Policies and Procedures (2023). The Internal Operations Committee has, for decades, maintained oversight of the Small Business Enterprise and Outreach Programs.
On June 27, 2023, the Board approved Administrative Bulletin No. 600, “Purchasing Policies and Procedures” (see Attachment 2) and directed the Purchasing Agent and Equal Employment Opportunity Officer to consolidate all Small Business Enterprise (SBE) and Outreach policies into a single Administrative Bulletin.
Referral Update:
On November 7, 2023, the Board of Supervisors approved an increase in the SBE Program threshold from $100,000 to $200,000 and directed County Counsel to draft an ordinance to raise the trigger for the Local Bid Preference Program from 5% to 7%. Ordinance No 2023-21 Local Bid Preference was introduced on December 5, 2023, and adopted on December 12, 2023.
The Board approved the SBE and Outreach Programs in the late 1990s and early 2000s. The Outreach Program requires broad outreach to SBEs for service contracts and purchasing of goods and supplies and applies to the following transactions:
1. Professional/Personal Services of $2,500 or more; and
2. Purchasing transactions for goods and supplies that exceed $10,000;
3. Construction contracts that exceed $100,000.
The E-Outreach Program was approved by the Board in 2006 and requires an internet-based platform to be used to conduct outreach for purchases and contracts that meet specific thresholds. In 2012, a pre-award, two-step appeal procedure for service contracts exceeding $100,000 was added to the Outreach Program requirements.
Administrative Bulletin 600, “Purchasing Policies and Procedures” (Attachment 2) approved in 2023, and current Purchasing Division technologies and practices have effectively replaced and superseded the 1990s Outreach Program and the 2006 E-Outreach Program. For example, the 2023 Purchasing Policies and Procedures include solicitation thresholds and requirements for contracts and the purchase of goods and supplies. Purchases equal to or below $25,000 do not require solicitation, however Departments are encouraged to purchase from a SBE. Purchases above $25,000 and equal to or below $100,000 require a minimum of three quotes with at least one quote from a SBE.
Moreover, Purchasing has for many years used cloud-based programs that allow vendors to register at no charge to view County solicitations for goods and services. The Purchasing Manual includes procedures for bid protests that are similar to an appeal procedure.
For the foregoing reasons and to avoid confusion between older and newer policies, staff recommends abolishing the 1990s Outreach and 2006 eOutreach Programs in favor of Administrative Bulletin 600. The 2000 SBE Program and the 2005 Local Bid Preference Program remain relevant in their current form and can continue to stand alone.
The Board of Supervisors has long recognized that some business transactions cannot feasibly be targeted to small businesses. Such transactions were described under a list of Board approved exemptions and modified from time to time over the last 25+ years. Staff recommends that the following exemptions be added to the Purchasing Manual with direction to the Procurement Manager to review the exemptions periodically and make any recommendations to modify the exemptions to the County Administrator for approval.
The following good and services are recommended as continued exemptions from the SBE program reporting requirements.
• postage, courier services provided by national companies, i.e., FedEx, UPS;
• bus fares, Bay Area Rapid Transit District tickets, fares for other forms of public transportation and bridge tolls;
• lodging, hotels;
• registration for conferences and conference booths;
• permits, fees, and licenses paid to government agencies;
• pre-employment screening and fitness for duty exams;
• utility services and installation fees;
• intergovernmental agreements;
• newspaper and publication services;
• print legal briefs, legal notices, law books, and publications;
• contracts between divisions within a department or contracts between two departments/divisions;
• purchases or contracts with other public (local, state, and federal) agencies
• group purchasing contracts;
• services provided by private non-profit organizations
• medical publications, journals, subscriptions;
• medical devices and equipment, rental or repair parts;
• medical supplies, lab chemical and reagents, vaccines, orthopedic supplies, therapy supplies, implant devices, etc.;
• maintenance agreements for medical equipment;
• warrant requests;
• procurement card transactions;
• purchases and services through the Contra Costa Clean Water Program.
The Warrant Request and Procurement Card Programs were created to provide departments with a simplified process for doing low value purchases. In 2017, the Procurement Services Manager reviewed Procurement Card transactions for a six-month period and the majority of transactions were determined to be exempt from SBE reporting. The Procurement Services Manager is currently working with the County Administrator’s Office to propose updates to the Procurement Card Manual which may include changes to allowable procurement card purchases. The Procurement Services Manager will evaluate the changes, potential impacts to the SBE Program, and make a recommendation to the County Administrator’s Office to determine if they should be exempt from SBE reporting requirements.
Recommendation(s)/Next Step(s):
1. APPROVE abolishment of the 1990s Outreach and 2006 eOutreach Programs in favor of the outreach requirements prescribed in County Administrative Bulletin 600 - Purchasing Policies and Procedures.
2. APPROVE updates to the Small Business Enterprise Program (see Attachment 1) and DIRECT the Purchasing Agent to prepare all necessary action to implement the policy for consideration by the full Board of Supervisors.
3. PROVIDE any additional direction to staff as needed.
Fiscal Impact (if any):
None.