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R5N-Amend Ch 2 Procedure To Provide Preference To MB-Based VendorsCOMMISSION ITEM SUMMARY Condensed Title: CommissionofTheCityofMiamiBeach,Florida,AmendingChapter2of The City Code, Entitled'Administration," ByAmending Article Vl, Entitled "Procurement," ByAmending Dvision 3, Entitled''Contract Procedures," By Repealing Section 2-372,Entitled'Procedure To Provide Preference To Miami Beach-Based Vendors ln Contracts For Goods And Contractual Services"; Providing For Repealer, Severability, Codification, And An Effective Date. Advisory Board Recommendation: , . , J At its Februarv 21, 2014, the Finance and Citv-Wide Proiects Committee approved the recommendation. I Financial lnformation : Source of Funds: Amount Account 1 N/A N/A 2 OBPI Total Financial lmpact Summary: ns/AGE}IBA ITEIIII Data (Surveys, EnvironmentalScan, etc: N/A Item Summarv/Recommendation : Section 2-372 of the eity CoOe requires a preference to be awarded in City competitive solicitations for Miami Beach based bidders. While the local preference is well-intentioned, it also creates some challenges. First, with the exception of a few industries (primarily tourism and entertainment related), the ability of local vendors to suppty the goods and services required by the City is very limited; therefore, a very small percentage of the City's coniricts for goods and services are awarded to local vendors. As a result, the local preference requirement has very little impact on the City's industry base. Second, an unintended consequence of local preference ordinances is that they tend to discourage non-local vendors from participating in the City's competitive solicitations. ln recent years, the City has experienced limited competition for many of the competitive solicitations it receives despite iignificant outreach efforts to increase competition. This reality is especially true for competitive solicitations relating to construction projects. To address the lack of competition concerns in construction contracting, the Administration has been working with the Associated Builders and Contractors - Florida (ABC), the local chapter of the national trade association for the construction industry. ABC has reported to the City that many of its member companies are averse to participating in competitive solicitations that include local preference requirements and are issued by municipalities in which the vendor does not have an office because of the time and effort that is required of these solicitations and the likelihood that the solicitation will be awarded to a local vendor. Accordingly, competition on competitive solicitations becomes limited and, overtime, may result in a very limited pool of bidders. For these reasons, both the National lnstitute of State Procurement Officials (NASPO) and the National lnstitute of Governmental Procurement (NIGP) have opposed local preferences laws as impediments to the cost effective procurement of goods, services and construction. At its February 21,2014, the Finance and City-Wide Projects Gommiftee (the'Committee') endorsed the recommendation by the Administration to repeal Section 2-372 of lhe City Code, entitled 'Procedure to Provide Preference to Miami Beach-Based Vendors in Contracts for Goods and Services." On April 23,2014, the City Commission authorized the Administration to implement the procurement ordinance revisions approved by the Committee, which included repeal of Section 2-372 of lhe City Code. CONCLUSION To tmprove competition on the City's competitive solicitations and allow the City to cooperate with other local municipalities on joint procurements for like items in an effort to maximize aggregated volume discounts, the Administration recommends eliminating local preference requirements. ln its alternative, the City Commission may, on a case-by-case basis, consider implementing local preference when it has been determined that a sufficient number of potential local bidders are available to compete on a given procurement solicitation. RECOMMENDATION Resolution. (s MIAIIAIBEACH sffis -l_77- ly681 g MIAMI BEACH City of Miomi Beoch, 1700 Convention Center Drive, Miomi Beoch, Florido 33 139, www.miomibeochfl.gov COMMISSION MEMORANDUM To: Mayor Philip Levine and Memb"r. {t the City y'mmission FRoM: Jimmy L. Morales, City Manager ffiDATE: July 23,2014 \ SUBJECT: AN ORDTNANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MTAMI BEACH, FLORIDA, AMENDING CHAPTER 2 OF THE CITY CODE, ENTITLED "ADMINISTRATION,'' BY AMENDING ARTICLE VI, ENTITLED "PROCUREMENT," BY AMENDING DVISION 3, ENTITLED "CONTRACT PROCEDURES," BY REPEALING SECTION 2.372, ENTITLED "PROCEDURE TO PROVIDE PREFERENCE TO MIAMI BEACH-BASED VENDORS IN CONTRACTS FOR GOODS AND CONTRACTUAL SERVIGES"; PROVIDING FOR REPEALER, SEVERABILITY, CODIFICATION, AND AN EFFECTIVE DATE. BACKGROUND Section 2-372 of the City Code requires a preference to be awarded in City competitive solicitations for Miami Beach based bidders. While the local preference is well-intentioned, it also creates some challenges. First, with the exception of a few industries (primarily tourism and entertainment related), the ability of local vendors to supply the goods and services required by the City is very limited; therefore, a very small percentage of the City's contracts for goods and services are awarded to local vendors. As a result, the local preference requirement has very little impact on the City's industry base. Second, an unintended consequence of local preference ordinances is that they tend to discourage non-local vendors from participating in the City's competitive solicitations. ln recent years, the City has experienced limited competition for many of the competitive solicitations it receives despite significant outreach efforts to increase competition. This reality is especially true for competitive solicitations relating to construction projects. To address the lack of competition concerns in construction contracting, the Administration has been working with the Associated Builders and Contractors - Florida (ABC), the local chapter of the national trade association for the construction industry. ABC has reported to the City that many of its member companies are averse to participating in competitive solicitations that include local preference requirements and are issued by municipalities in which the vendor does not have an office because of the time and effort that is required of these solicitations and the likelihood that the solicitation will be awarded to a local vendor. Accordingly, competition on competitive solicitations becomes limited and, over time, may result in a very limited pool of bidders. For these reasons, both the National lnstitute of State Procurement Officials (NASPO) and the National lnstitute of Governmental Procurement (NIGP) have opposed local preferences laws as impediments to the cost effective procurement of goods, services and construction. 682 Commission Memorandum - Repeal of Local Preference Ordinance July 23,2014 Page2 At its February 21,2014, the Finance and City-Wide Projects Committee (the "Committee") endorsed the recommendation by the Administration to repeal Section 2-372 of the City Code, entitled "Procedure to Provide Preference to Miami Beach-Based Vendors in Contracts for Goods and Services." On April 23, 2014, the City Commission authorized the Administration to implement the procurement ordinance revisions approved by the Committee, which included repeal of Section 2-372 of the City Code. CONCLUSION To improve competition on the City's competitive solicitations and allow the City to cooperate with other local municipalities on joint procurements for like items in an effort to maximize aggregated volume discounts, the Administration recommends eliminating local preference requirements. ln its altemative, the City Commission may, on a case-by-case basis, consider implementing local preference when it has been determined that a sufficient number of potential local bidders are available to compete on a given procurement solicitation. RECOMMENDATION Approfihe resolution. JLM /m^, T:\AGENDA\201 4Uuly\Procurement\Repeal Local Preference MEMO.docx.doc 683 ORDINANGE NO. AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MTAMI BEACH, FLORIDA, AMENDING CHAPTER 2 OF THE CIry CODE, ENTITLED "ADMINISTRATION," BY AMENDING ARTICLE VI, ENTITLED "PROCUREMENT," BY AMENDING DVISION 3, ENTITLED.,CONTRACT PROCEDURES,'' BY REPEAL!NG SECTION 2-372, ENTITLED "PROCEDURE TO PROVIDE PREFERENCE TO MIAM! BEACH.BASED VENDORS IN CONTRACTS FOR GOODS AND CONTRACTUAL SERVICES,,; PROVIDING FOR REPEALER, SEVERABILITY, COD!FIGATION, AND AN EFFECTIVE DATE. WHEREAS, Section 2-372 of the City Code provides that Miami Beach-Based vendors be provided a preference in contracts for goods and contractual services; and WHEREAS, with the exception of a few industries (primarily tourism and entertainment related), the ability of local vendors to supply the goods and services required by the City of Miami Beach is very limited, and, WHEREAS, given the reduced industry base within the City, a very small percentage of the City's contracts for goods and services are awarded to local vendors resulting in very little impact of the local preference ordinance on the City's local economy; and WHEREAS, an unintended consequence of local preference ordinances is that they tend to discourage non-local vendors from participating in the City's procurement projects as evidenced, especially in construction procurements, by limited competition for many of the competitive solicitations (despite significant outreach efforts to increase competition); and WHEREAS, to address the lack of competition concerns in construction procurement projects, the Administration has been working with the Associated Builders and Contractors - Florida (ABC), the local chapter of the national trade association for the construction industry; and WHEREAS, ABC has reported to the City that many of its member companies are averse to participating in competitive solicitations that include local preference requirements and are issued by municipalities in which the vendor does not have a local office; and WHEREAS, both the National lnstitute of State Procurement Officials (NASPO) and the National lnstitute of Governmental Procurement (NIGP) have opposed local preferences laws as impediments to the cost effective procurement of goods, services and construction in a free enterprise system; and WHEREAS, the Administration believes that, while well-intentioned, the City's local preference procedure creates challenges to maximizing competition on City procurement projects; and 684 WHEREAS, at its February 21,2014, the Finance and Citywide Projects Committee (the "Committee") endorsed the recommendation by the Administration to implement certain revisions to the City's Procurement Code, including a recommendation to repeal Section 2-372 of the City Code, entitled "Procedure to Provide Preference to Miami Beach-Based Vendors in Contracts for Goods and Services"; and WHEREAS, on April 23, 2014, the City Commission accepted the Committee's recommendation and authorized the Administration to implement the Procurement Code revisions, which include repeal of Section 2-372 of the City Code. NOW, THEREFORE, BE IT DULY ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AS FOLLOWS: SECTION 1. That Section 2-372 of Division 3, Article Vl, of Chapter 2 of the Miami Beach City Code is hereby repealed in its entirety as follows: CHAPTER 2 ADMINISTRAT!ON ARTICLE VI - PROCUREMENT DIVISION 3 - CONTRACT PROCEDURES iees" (1) gefinifiens, Fer purpeses ef this seetien enly; the fellewing definitiens shall apply: (a) Bid shall mean a eempetitive bid preeedure establistred threugh the issuanee ef an invitatien te bid, request fer prepesals (RFP); request fer qualifieatiens (RFQ),requests fer letters ef interest (RFtl); invitatiens te negetiate (lTN); er the selieitatien ef purehase erders based en eral er written quetatiens, (b) Mrami Eeaeh based vender means a bidder that (i) has a valid business tax issuanee ef a bid, whieh autherizes said vender te previde the subjeet geeds issuanee ef a bid, its headquarters in the eity; er has a plaee ef business fin€J= 685 iee+ (al lnvitatiens te bid; eral er written requests fer quetatiens, Exer*,ptwhere federal er state law mandates te the eentrary, in the purehase ef geeds er eentraetual lewest bid fer a eernpetitively bid purehase; and sueh bids are respensive and vender whe is eertified by Miami Dade Ceunty as a minerity er wemen gusiness€nterprise' (b) Requests fer prqesalq requests fer qualifiea$iene; reqaeets fer letters ef i+ the reeemmendatien and seleetien ef prepesers submitting respenses ef sueh evaluatien methedelegy; seleetien eriteria; and/er ether applieable faeters te be set ferth and ineluded within the RFP; RFQ; er RFtl deeument) en a peint system frem 0 100 peints)' er an additienal five pereent (where the evaluatien methedelegy is based en a pereentage system frem 0 100 pereentl-te prepo peints sn* ge ap based venders fellewing the eempletien ef the alleeatien ef peints by the (3) Cemparisen ef gsal,L'6afiens, The preferenees eetablished herein in ne way prehibit the right ef the eity manager and/er the eity eemmissien; as applieable; te eemPare Further, the preferenees established herein in ne way prehibit the right ef the eity manager and/er the eity eemrnissien, as applieable; frem giving any ether preferenee permitted by law in additien te the preferenees granted herein' SECTION 2. REPEALER. All ordinances or parts of ordinances in conflict herewith be and the same are hereby repealed. 686 SECTION3. SEVERABILIW. lf any section, sentence, clause or phrase of this ordinance is held to be invalid or unconstitutional by any court of competent jurisdiction, then said holding shall in no way affect the validity of the remaining portions of this ordinance. SECTION 4. CODIFICATION. It is the intention of the Mayor and City Commission of the City of Miami Beach, and it is hereby ordained that the provisions of this ordinance shall become and be made a part of the Code of the City of Miami Beach, Florida. The sections of this ordinance may be renumbered or re-lettered to accomplish such intention, and the word "ordinance" may be changed to "section," "article," or other appropriate word. SECTION 5. EFFECTIVE DATE. This Ordinance shall take effect the - day of 2014. PASSED and ADOPTED this day of ATTEST: RAFAEL E. GRANADO, CITY CLERK Underline denotes additions S+ike+nreugh den otes deletio ns. 2014. PHILIP LEVINE, MAYOR APPROVED AS TO FORM & LANGUAGE EFORE)(ECUTION 4 M,,BS 687 THIS PAGE INTENTIONALLY LEFT BLANK 688