The City's Purchasing and Contracting Processes
What the City Purchases:
The City and County of San Francisco (the City) has an annual operating budget of over 6 billion dollars. The City operates an international airport and seaport, a public transportation system comprised of buses, trolleys, streetcars, trains and cable cars, a regional water system and a major hospital. In addition to one-time purchases, the City meets its reoccurring business needs (e.g., office supplies, fuel, information technology, janitorial services, and security services) with term contracts.
The City's Office of Contract Administration (OCA) manages in excess of 1,500 active contracts valued at approximately $2 billion. Annually, OCA bids and awards contracts that exceed $400 million.
How the City Meets its Purchasing Needs:
The City uses competitive bidding procedures to select vendors and requires that all City vendors comply with City ordinances and other requirements prior to entering into a contract with the City. Depending on the requirement, the City uses various competitive procurement processes.
Types of Contracts and Awards:
Competitive bidding is the primary method for issuing solicitations. In general, solicitations will be requested through a document called a "Low Bid Solicitation," Contract Proposal (CP), Request for Proposal (RFP), or Request for Qualifications (RFQ). Interested businesses should respond to the document by following the instructions detailed therein. Although the City's needs vary from day-to-day, contracts with the City and County of San Francisco fall into one of three general categories: procurement, construction, and professional services. Awards for contracts are made in the following ways:
- Purchase Order: A Purchase Order is used for a one-time purchase of a defined quantity of goods.
- Term Contract: A Term Contract is a major contract, used by one or more departments, for large quantities of products or services and usually extending for at least three years. Examples include: fuel, office supplies, and janitorial contracts. (Click FY2016-FY2017 Term Contract Workbook.pdf to see a list of current OCA Term Contracts).
- Contract Purchase Order: For construction, professional services and other transactions, the City prepares a Contract Purchase Order and a contract document. The Contract Purchase Order verifies that funds have been encumbered and that performance can begin. The contract document provides a detailed description of the duties and responsibilities of the vendor and the City, as well as a comprehensive scope of work.
- Departmental Blanket Purchase Order: A Departmental Blanket enables a City department to order directly from the vendor in accordance with the Blanket's terms and conditions. The Departmental Blanket may cover: limited purchases of items not on a Citywide Blanket; monthly charges, such as for copier rental or maintenance.
- Emergency Order: If an emergency situation arises, OCA/Purchasing may authorize a department to make an emergency purchase with a vendor. In those cases a purchase order number is generated and the department will provide the vendor with both the purchase order number and a list of needed supplies.
- Departmental Purchase Order (DPO): Under OCA/Purchasing's guidelines, departments may place their own orders for products up to $10,000 (including tax and shipping). Departments are encouraged to solicit competitive bids.
Procurement responsibilities are delegated as follows:
- OCA procures most goods and services valued in excess of $10,000.
- City departments have the authority to purchase most goods and services, excluding professional services, valued at less than $10,000. This authority explicitly excludes information technology-related requirements.
- The Metropolitan Transportation Agency (MTA) has special Charter authority to make its own purchases; however, most of its high-dollar, non-construction requirements are purchased through OCA.
- For most professional services, OCA reviews, approves, and executes the contract after the user department conducts the appropriate competitive solicitation process to select a vendor and negotiates contract terms.
- Construction and construction-related contracts for architectural and engineering (A&E) services are awarded and managed by the City's construction departments. (Click here for more information about the City's construction procurement).
- With the exception of term contracts and Technology Marketplace contracts, contracts are administered by user departments.
How to Become a Vendor:
In order to do business with the City, a vendor must meet the City's minimum requirements. Those requirements vary depending on the type of goods or services being procured. Click here to find out how to become a vendor for the City.
For more information regarding the City's requirements for purchasing, consult Chapter 21 of the Administrative Code Chapter 21 Rules and Regulations.