CONTRACT CONTRACT

ADMINISTRATIONADMINISTRATION

Presented by:Presented by:

Gail E. WaitersGail E. Waiters

Office of Inspector GeneralOffice of Inspector GeneralPeralta Community College DistrictPeralta Community College District

Goal of Contract AdministrationGoal of Contract Administration

Goal of Function:Goal of Function:

To ensure that contracts are performed as To ensure that contracts are performed as

agreed and the responsibilities of both agreed and the responsibilities of both

parties are properly discharged. parties are properly discharged.

Responsibility of Contract Administrator:Responsibility of Contract Administrator:

Oversee, monitor and provide technical Oversee, monitor and provide technical

guidance on a continuing basis to minimize guidance on a continuing basis to minimize

or eliminate problems and or eliminate problems and potential claims potential claims

and disputes.and disputes.

ResponsibilitiesResponsibilities

�� Governing Board: setting policy, Governing Board: setting policy, approving expendituresapproving expenditures

�� Chancellor: resolving disputes, Chancellor: resolving disputes, promulgates and implements policies; promulgates and implements policies; establishes administrative proceduresestablishes administrative procedures

�� General Services: implements procedures, General Services: implements procedures, executes transactions, monitors policies executes transactions, monitors policies and proceduresand procedures

�� General Counsel: legal issuesGeneral Counsel: legal issues

�� Manager(s): requesting work, judging Manager(s): requesting work, judging technical expertisetechnical expertise

�� Equal Opportunity: judging good faith, Equal Opportunity: judging good faith, documenting compliance, investigating documenting compliance, investigating eligibility, judging preference pointseligibility, judging preference points

Routine FunctionsRoutine Functions

1.1. OversightOversight

2.2. Review of WorkReview of Work

3.3. Progress MonitoringProgress Monitoring

4.4. Invoice ProcessingInvoice Processing

5.5. Change ManagementChange Management

6.6. Documentation and FilingDocumentation and Filing

7.7. Performance ReviewsPerformance Reviews

8.8. Contract CloseoutContract Closeout

Success FactorsSuccess Factors

��Establishment of goalsEstablishment of goals

��Ongoing monitoringOngoing monitoring

��Accountability for resultsAccountability for results

RisksRisks

�� Contract not awarded according to Contract not awarded according to

policy/procedurespolicy/procedures

�� Contract not subject to open bidding; Contract not subject to open bidding;

Bids not conforming to specificationsBids not conforming to specifications

�� Terms of Terms of ““extrasextras”” not clearly stated in not clearly stated in

contractcontract

�� Financial responsibility and insurance Financial responsibility and insurance

requirements not metrequirements not met

�� Measurable objectives not in contractMeasurable objectives not in contract

ProtectionsProtections

�� Performance and costs conform to contractPerformance and costs conform to contract

�� Full value is received for money spentFull value is received for money spent

�� District is adequately protectedDistrict is adequately protected

�� Identification of costs preventing overIdentification of costs preventing over--expendituresexpenditures

�� Liabilities set up based on work measurementLiabilities set up based on work measurement

�� Protection to staff engaged in acquiring goods Protection to staff engaged in acquiring goods and services from third partiesand services from third parties

�� Adequate audit provisionsAdequate audit provisions

�� Contractual objectives stated in measurable Contractual objectives stated in measurable termsterms

�� Contractual provisions in accordance with laws, Contractual provisions in accordance with laws, regulations, and guidelinesregulations, and guidelines

Contract TypesContract Types

�� FormalFormal

�� InformalInformal

�� Professional ServicesProfessional Services

�� Under $600Under $600

Resolution 99/00Resolution 99/00--55

Chancellor AuthorizationChancellor Authorization

�� Authorization to sign documents Authorization to sign documents

during month of Board vacation during month of Board vacation

and holiday closuresand holiday closures

�� Items are of an expedient natureItems are of an expedient nature

�� Make items available to each Make items available to each

Trustees for considerationTrustees for consideration

Contract AuthorizationContract Authorization

Board Policy 6.84Board Policy 6.84

�� Contracts for personal services Contracts for personal services

�� Up to $25,000 unrestricted fundsUp to $25,000 unrestricted funds

�� Not bond funds or other goods and Not bond funds or other goods and servicesservices

�� Contracts exceeding $25,000* in a Contracts exceeding $25,000* in a fiscal year must have Board fiscal year must have Board approvalapproval

* By organization, individual, vendor* By organization, individual, vendor

Lowest ^ Responsible BidderLowest ^ Responsible Bidder�� Quality and performance of the supplies Quality and performance of the supplies

or servicesor services

�� Ability, capacity and skill to perform Ability, capacity and skill to perform

�� Ability to provide the supplies or Ability to provide the supplies or services within the time specifiedservices within the time specified

�� Character, integrity, reputation, Character, integrity, reputation, judgment, experience and efficiencyjudgment, experience and efficiency

�� Quality of performance on previous Quality of performance on previous contracts with the District or other contracts with the District or other governmental entitiesgovernmental entities

�� Validation of good standing with the Validation of good standing with the State of California Contractors State State of California Contractors State Licensing Board Licensing Board

Responsive and

Sole SourceSole Source

Sole Source is a contract award Sole Source is a contract award

(without competitive bidding) for a (without competitive bidding) for a

good or service because of its good or service because of its

specialized or unique characteristics specialized or unique characteristics

or performance capability.or performance capability.

If you If you ““GoogleGoogle”” a product and you get a product and you get

a list of vendors that supply it, the a list of vendors that supply it, the

product is not a sole source.product is not a sole source.

Sole SourceSole Source

�� Purchasing has no separate tracking for Purchasing has no separate tracking for sole source purchases. District should sole source purchases. District should annually account for dollars spent on sole annually account for dollars spent on sole source contractssource contracts

�� Must be approved by the Board if over Must be approved by the Board if over current thresholdcurrent threshold

�� Develop specific and consistent criteria to Develop specific and consistent criteria to validate a sole sourcevalidate a sole source

�� Determination is not the role of the user, Determination is not the role of the user, it is the role of the Buyerit is the role of the Buyer

�� Establish vendor list for future reference Establish vendor list for future reference

Contract SplittingContract Splitting

Public Contract Code Public Contract Code §§20116. 20116.

It is unlawful to split or separate into smaller It is unlawful to split or separate into smaller work orders or projects any work, project, work orders or projects any work, project, service, or purchase for the purpose of evading service, or purchase for the purpose of evading the provisions of this article requiring the provisions of this article requiring contracting after competitive bidding. contracting after competitive bidding.

The district shall maintain job orders or similar The district shall maintain job orders or similar records indicating the total cost expended on records indicating the total cost expended on each project in accordance with the procedures each project in accordance with the procedures established in the most recent edition of the established in the most recent edition of the California School Accounting Manual for a California School Accounting Manual for a period of not less than three years after period of not less than three years after completion of the project. completion of the project.

Contract SplittingContract Splitting

District PracticesDistrict Practices

�� Within same week or monthWithin same week or month

�� One college versus anotherOne college versus another

�� Contract for exactly $25,000 or Contract for exactly $25,000 or

$24,9xx or $76,400, et. al$24,9xx or $76,400, et. al

�� Exceeding $25,000 and asking for Exceeding $25,000 and asking for

authorization after the fact, or authorization after the fact, or

knowingly approving contract that knowingly approving contract that

will exceed thresholdwill exceed threshold

Professional ServicesProfessional Services

�� Any work performed by an attorney, doctor, Any work performed by an attorney, doctor, architect, engineer, construction manager, architect, engineer, construction manager, accounting firm, etc. which require special accounting firm, etc. which require special performance criteria, specific experience, performance criteria, specific experience, training, personal judgment, quality of work or training, personal judgment, quality of work or factors other than simply obtaining the service factors other than simply obtaining the service at the lowest cost to the District. at the lowest cost to the District.

�� Professional service contracts are awarded Professional service contracts are awarded based upon competence. Once it has been based upon competence. Once it has been determined that a firm has demonstrated an determined that a firm has demonstrated an adequate level of experience, competence, adequate level of experience, competence, staffing and other professional qualifications for staffing and other professional qualifications for more than a satisfactory performance, the cost more than a satisfactory performance, the cost of the service may be considered. The lowest of the service may be considered. The lowest cost may not be the sole factor in deciding cost may not be the sole factor in deciding which firm shall be awarded the contract.which firm shall be awarded the contract.

Independent ContractorsIndependent Contractors

�� Professional Services Contract for an Professional Services Contract for an

Independent ContractorIndependent Contractor

�� Limited timeLimited time--frameframe

�� Board approvalBoard approval

�� Insurance: Errors/Omissions, Insurance: Errors/Omissions,

WorkersWorkers’’ Compensation, General Compensation, General

LiabilityLiability

�� IRS Form SSIRS Form SS--8 Determination of 8 Determination of

Worker StatusWorker Status

Contractor ControlsContractor Controls

�� Contractor Disclosure AffidavitContractor Disclosure Affidavit

�� Confidentiality and Privileged Confidentiality and Privileged

InformationInformation

�� Performance EvaluationsPerformance Evaluations

�� Progress ReportsProgress Reports

Progress ReportsProgress Reports

�� Gives the contract administrator and Gives the contract administrator and

manager an opportunity to provide manager an opportunity to provide

feedback to vendors in a more timely feedback to vendors in a more timely

and structured mannerand structured manner

�� This opens up a line of This opens up a line of

communication that is valuable to all communication that is valuable to all

partiesparties

�� PCCD form signed by contractorPCCD form signed by contractor

�� Frequency monthly, no less that with Frequency monthly, no less that with

submission of every invoicesubmission of every invoice

IG RecommendationsIG Recommendations

1.1. Require employees to annually* sign an Require employees to annually* sign an affidavit regarding any potential business affidavit regarding any potential business conflicts of interestconflicts of interest

2.2. Adopt Administrative Procedure for business Adopt Administrative Procedure for business conflicts of interestconflicts of interest

3.3. Create Board Policy to require professional Create Board Policy to require professional services contracts that exceed the Chancellorservices contracts that exceed the Chancellor’’s s threshold authority undergo a competitive threshold authority undergo a competitive administrative procedureadministrative procedure

4.4. Revise Board Policy to:Revise Board Policy to:a)a) require employee disclosure business partner(s) for require employee disclosure business partner(s) for

which they have investments that are within the which they have investments that are within the sphere of influence of the Districtsphere of influence of the District

b)b) more clearly state disclosure of personal more clearly state disclosure of personal investments within two miles of Oakland, Berkeley, investments within two miles of Oakland, Berkeley, Alameda, Piedmont, and parts of Emeryville San Alameda, Piedmont, and parts of Emeryville San Leandro and AlbanyLeandro and Albany

IG RecommendationsIG Recommendations

5.5. Ratify Board Resolution No. 99/00Ratify Board Resolution No. 99/00--5 as Board 5 as Board

PolicyPolicy

a)a) Require that amendments be ratified not later than Require that amendments be ratified not later than

first scheduled meeting Board returns to sessionfirst scheduled meeting Board returns to session

6.6. Require all contract fees include the cost of Require all contract fees include the cost of

reimbursablesreimbursables

a)a) NotNot--toto--exceed amount of contractexceed amount of contract

b)b) NotNot--toto--exceed original contractexceed original contract

7.7. Commission a complete review of the PROMT Commission a complete review of the PROMT

Vendor History FileVendor History File

IG RecommendationsIG Recommendations

8.8. Require utilization and recordation of the Require utilization and recordation of the

Waiver of Competitive Procedures formWaiver of Competitive Procedures form

9.9. Develop performance evaluation process for Develop performance evaluation process for

contract vendorscontract vendors

10.10. Require vendors to submit with their proposal a Require vendors to submit with their proposal a

resume and references. File with contract resume and references. File with contract

documentsdocuments

11.11. Reflect in Administrative Procedure that Reflect in Administrative Procedure that

invoices are paid according to the contract invoices are paid according to the contract

award amount award amount –– no commingling of subsequent no commingling of subsequent

contract awardscontract awards

IG RecommendationsIG Recommendations

12.12. Provide a monthlyProvide a monthly financial ledger of all financial ledger of all procurement transactions categorized by procurement transactions categorized by activity activity

13.13. Make presentation to the Audit and Finance Make presentation to the Audit and Finance Committee regarding all options to District Committee regarding all options to District credit cardscredit cards

14.14. Strengthen Board Policy 3.16 Institutional Code Strengthen Board Policy 3.16 Institutional Code of Ethics to make enforceable, or convert the of Ethics to make enforceable, or convert the Policy into a Values StatementPolicy into a Values Statement

15.15. Provide annual financial report for Board review Provide annual financial report for Board review of status of all projectsof status of all projects

16.16. Require all contract negotiations be finalized Require all contract negotiations be finalized through the District contract templatethrough the District contract template

IG RecommendationsIG Recommendations

17.17. Adopt Board Policies provisionally until an Adopt Board Policies provisionally until an accompanying Administrative Procedure is accompanying Administrative Procedure is completecomplete

18.18. Adopt Administrative Procedures for the role Adopt Administrative Procedures for the role each Board Committee has in the review of each Board Committee has in the review of financial transactionsfinancial transactions

19.19. Review Administrative Procedure for Review Administrative Procedure for contracting with the Audit and Finance contracting with the Audit and Finance Committee Committee –– includes formal, informal, includes formal, informal, professional servicesprofessional services

20.20. Ensure Purchasing Manual is consistent with Ensure Purchasing Manual is consistent with Administrative Procedures and Board PolicyAdministrative Procedures and Board Policy

21.21. Require Purchasing Division to establish Require Purchasing Division to establish Standard Operating Procedure for monitoring Standard Operating Procedure for monitoring and archiving official procurement documentsand archiving official procurement documents

IG RecommendationsIG Recommendations22.22. Revise Independent Contractor/Consultant Services ContractRevise Independent Contractor/Consultant Services Contract

a)a) Do away with NCR formDo away with NCR form

b)b) Place contract form onlinePlace contract form online

c)c) Make instructions the first page of contractMake instructions the first page of contract

d)d) Include beginning and ending date of serviceInclude beginning and ending date of service

e)e) Require staff to complete contract, not vendorRequire staff to complete contract, not vendor

f)f) Void all contracts with crossVoid all contracts with cross--outs and inaccurate informationouts and inaccurate information

g)g) Provide more space for scope of work. Encourage Provide more space for scope of work. Encourage attachments, if necessaryattachments, if necessary

h)h) Require resume or bio and list of references (at least 3)Require resume or bio and list of references (at least 3)

i)i) ““Net 30 DaysNet 30 Days”” from receipt of invoicefrom receipt of invoice

j)j) Require errors and omissions insurance for professional Require errors and omissions insurance for professional servicesservices

k)k) Purchase Order is executed PRIOR to start of workPurchase Order is executed PRIOR to start of work

l)l) No increase in amount or scope of work without formal No increase in amount or scope of work without formal written amendment by Board, if over thresholdwritten amendment by Board, if over threshold

m)m) Identify city/county for active business license. Include Identify city/county for active business license. Include expiration dateexpiration date

n)n) Not for current District employees Not for current District employees

QUESTIONSQUESTIONS

AND AND

ANSWERSANSWERS