TRANSMITTAL LETTER FOR BOARD MEETING OF FEBRUARY 21, 2008
COMMITTEE ON PURCHASING
Mr. Richard Lanyon, General Superintendent
Title
Authorization to increase the competitive bidding threshold from $10,000.00 to $40,000.00, for furnish and deliver contracts only, in accordance with the State of Illinois Complied Statute; Chapter 70 Special District; Purchasing Act 2605/11.3, 11.6, 11.7, 11.10 and 11.13 (Deferred at the January 17, 2008 and the February 7, 2008 Board Meetings)
(Refer to Miscellaneous and New Business item 48)
Body
Dear Sir:
On May 9, 2001, the Illinois General Assembly enacted a change in the Illinois Complied Statue Chapter 70; Special Districts; Act 2605 Metropolitan Water Reclamation District Act; Section 11 Purchasing Act, which allows an increase from $10,000.00 to $40,000.00 in the procurement level required to "be let by free and open competitive bidding after advertisement, to the lowest responsible bidder". Public Act 92-0195, at Section 20, expressly amends sections 11.3, 11.6, 11.7, 11.10, 11.13 of the District's Purchasing Act. At the November 1, 2001 Board Meeting, the Board of Commissioners (Board) adopted a policy in which the minimum competitive bidding threshold would remain at $10,000.00.
At this time, the District is recommending that the Board consider increasing the competitive bidding threshold from $10,000.00 to $40,000.00, for furnish and deliver material, supplies or equipment contracts only. This change will also apply to contracts for furnish and deliver material, supplies or equipment procurable only from a single source. Contracts for professional or construction services will remain at the $10,000.00 competitive bidding threshold and require advertising.
A review of the number of contracts let by open competitive bidding for the past three years has revealed there were approximately eighty (80) contracts per year that were advertised with an estimated value between $10,000.00 and $40,000.00 per contract. Of the eighty (80) contracts, approximately fifty (50) percent were for material, supplies or equipment. The average total dollar value of contracts for material, supplies or equipment was $1.1 million. After thorough evaluation, it has been determined that an increase in the competitive bidding threshold at this time would offer significant administrative benefits directly related to contract advertising and realize actual cost benefits for the District.
The Purchasing Department would continue to solicit a number of bids from vendors, evaluate bids with the requesting department and issue a purchase order to the lowest responsible bidder, as is currently done for purchases under $10,000.00. However, with the increase in the competitive bidding threshold, there would consequently be a significant reduction in the number of contracts requiring formal advertisement, thereby reducing the number of bid openings, manpower and internal costs needed to process contracts to procure materials, supplies or equipment for contracts under $40,000.00.
In view of the foregoing, it is requested that the Board adopt an order to increase the competitive bidding threshold from $10,000.00 to $40,000.00 for furnish and deliver contracts for material, supplies or equipment only. This change will be applicable to sections 11.3, 11.6, 11.7, 11.10 and 11.13 of the District's Purchasing Act (70 ILCS 2605, 11.1-11.24).
Recommended, Darlene A. LoCascio, Purchasing Agent, DAL:lc
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Purchasing
ORDERED passed by affirmative roll call vote of a majority of the Commissioners present this February 21, 2008. Approved, President Terrence J. O'Brien