Agenda Item   



                                                                                                                        ASR Control  19-000648




legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

County Executive Office   (Approved)

Department contact person(s):

Rob Richardson (714) 834-3481 



Georgetta Vlad (714) 567-7312



Subject:  Approve 2019 Contract Policy Manual


      ceo CONCUR

County Counsel Review

Clerk of the Board


Approval Not Required




3 Votes Board Majority




    Budgeted: N/A

Current Year Cost:   N/A

Annual Cost: N/A




    Staffing Impact:


# of Positions:

Sole Source:   N/A

    Current Fiscal Year Revenue: N/A

  Funding Source:      N/A

County Audit in last 3 years: 2017



    Prior Board Action:          6/6/2017 #S58D, 3/14/2017 #40






Approve 2019 Contract Policy Manual effective September 1, 2019.



Provide direction to staff on increasing Board of Supervisor approval threshold for service contracts from $100,000 up to $200,000







Approval of the 2019 Contract Policy Manual will amend procurement policies for efficiency and implements the changes described in the Background Information section below.






On November 6, 2018, then Chairman Supervisor Do requested the establishment of an Ad Hoc Procurement Subcommittee to review and discuss updates to the County’s Contract Policy Manual (CPM). The Board members designated to the Ad Hoc included Supervisor Bartlett and Supervisor Do.  Following a series of meetings, the 2019 revision of the CPM is presented for consideration and approval by the full Board. Key elements of the revisions recommended by the Ad Hoc committee are identified below. 


Contract Policy Manual Updates:

Proposed modifications included in the 2019 CPM are listed below, and are depicted in the redlined 2019 CPM (Attachment A). Page numbers are those in the redlined version.




Clarification related to “software as a service” contracts to define the various types of products/procurements as commodities or services.  [Section 3.1-101 (1) c) and d), page 36]




Clarification related to use of sole source contracts when a sole source rather than a solicitation process may be in the best interest of the County, such as when negotiating with an existing vendor allows the County to control cost increases. [Section 4.5-112 (1), page 92]




Use of sole source contracts under such circumstances are expected to be few and far between, and approvals by the County Procurement Officer (CPO) and Chief Financial Officer (CFO) are required.  In addition, the Board will be notified of such usage. [Section 4.5-112 (2), page 92]




Clarification on vendor reference check requirements to ensure departments obtain sufficient independent references from outside the County. [Section 4.2-112 (1) a) i., ii., iii., page 76; Section 4.3-117 (1) a) i., ii., iii., page 84; Section 4.4-102 (2) c) i., ii., iii., iv., pages 87-88]




Includes the ‘Request for Application’ (RFA) process for Human Services use only. The language included on page 101 of the CPM describes when an RFA would be used such as when the County’s need for a specialized service exceeds the available supply of vendors; for example, psychiatrists.  [Section 4.9, pages 100-104]




Clarification of Hybrid Contract definition and that Board threshold compliance for service contracts applies; i.e., if a hybrid contract has a service component that exceeds $100,000, Board approval is required. [Section 3.1-123 (3), page 43; Section 3.3-128 (3), page 58; Section 3.4-120, pages 64]




Clarify consecutive contract language for Commodities, Services, and Human Services to ensure the solicitation process is used, as required per policy. [Section 3.1-106 (3), page 38; Section 3.3-109 (3), page 52; Section 3.4-115 (2), (3), page 63]




Inclusion of a Local Business Preference Policy for procurement of Commodities and Services. Implementation of the Local Business Preference Policy supports local businesses, the local economy, and the development of the County’s tax base.  [Section 4.2-113, pages 76-77; Section 4.3-118, pages 84-85; Section 4.4-106, pages 88-89]




While the IFB, RFP and Two-Step Sealed Bidding sections of the CPM describe the Local Preference Policy, highlights are provided below.




Definition of Local Business




Maintains their principal center of operations (i.e., headquarters) within Orange County; and



Has a business address located in the County that is not a post office box; and



Is shown to have a valid business license or certificate of occupancy issued by the County of Orange or by an Orange County city, or other documentation acceptable to the County.



The Local Business Preference Policy provides for the CPO and CFO to waive the requirement if it is in the best interest of the County. All waivers must be justified and documented, and the CPO will notify the Board prior to a waiver approval. [Section 4.2-113 (3) and (4), pages 76-77; Section 4.3-118 (3) and (4), page 85; Section 4.4-106 (4) and (5), page 89]




The Local Business Preference Policy does not apply where prohibited by law or regulation, and including, but not limited to:




Specific state or federally funded projects



Cooperative contracts



Sole Source contracts



Human Services contracts



Emergencies as defined in the CPM



Outcomes of the Local Business Preference Policy will be documented and reported to the Board annually.  The CPO will develop the specific procedures for implementation of the Local Business Preference Program upon Board adoption.


Additionally, Government Code Section 25502.5 (a) was amended effective January 1, 2019, to “In counties having a population of 200,000 or more, the board of supervisors may authorize the purchasing agent to engage independent contractors to perform services for the county or county officers, with or without the furnishing of material, when the aggregate cost does not exceed $200,000.”  The current threshold for Board of Supervisors approval of service contracts is $100,000. Should the Board wish to increase the current threshold from $100,000 up to a maximum of $200,000 consistent with GC 25502.5 (a), a Board directive to CPO to prepare a revision to OCCO 1-4-13 and return to the Board for action would be required; this ordinance would require two readings.


The recommended implementation date following Board approval of the 2019 CPM is September 1, 2019, to allow adequate time for training and final refinement of procedures.














Attachment A - Proposed 2019 Contract Policy Manual – Redlined Version
Attachment B - Side-by-Side Comparison of the 2018 CPM and Proposed 2019 CPM
Attachment C - Proposed 2019 Contract Policy Manual