Title
Amend City Code - Procurement (Ordinance G-6310)
Description
An ordinance amending Phoenix City Code, Chapter 43, Article II, Section 43-10, Contract Authorizations and Article III, Section 43-11, Available Source Selection Methods, pertaining to procurement sourcing thresholds, effective July 1, 2017 (Attachment A).
Report
Summary
Request City Council approval to amend Phoenix City Code Chapter 43, Procurement, to increase sourcing method thresholds as well as administrative changes to align with other jurisdictions and increase staff efficiencies. Specifically, formal procurement methods threshold would increase from $50,000 to $100,000 and small purchases would be increased from $5,000 to $8,600, which is equal to the Payment Ordinance.
City staff, utilizing Kaizen methods, evaluated procurement processes and determined increases in procurement methods thresholds would result in more procurements annually. City procurement staff must currently use formal competitive methods if the cost of goods and/or services is anticipated to exceed $50,000. This threshold is much lower than the majority of neighboring communities, the State of Arizona and Arizona State University (Attachment B). Raising the formal competitive threshold to $100,000 will align the City's sourcing methods with other jurisdictions, allow City staff to handle additional formal solicitations and benefit the business community by shifting solicitations under $100,000 to informal competitive methods. Further, small dollar procurements of goods and/or services costing less than $5,000 should equal the Payment Ordinance amount, as set forth in Chapter 4, Section 12 of the Phoenix City Charter. City Council authorization is still necessary for all purchases exceeding the Payment Ordinance amount of $8,600.
Concurrence/Previous Council Action
This item was unanimously approved by the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on March 21, 2017. City Council adopted Phoenix City Code Chapter 43 on Oct. 15, 2014 and amended the same on June 17, 2015 and July 1, 2015.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance Department.