HomeMy WebLinkAboutIR 10676 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 21-10676
To the Mayor and Members of the City Council September 28, 2021
Page 1 of 2
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SUBJECT: LOCAL PREFERENCE PROGRAM IN THE PROCUREMENT OF
rrn GOODS AND SERVICES
Background
Before the City enters into a contract that requires an expenditure of more than $50,000, the City must
take certain steps required by Texas statute.
One example is the competitive sealed bidding or proposal requirements of Chapter 252 of the Texas
Local Government Code. If the competitive sealed bidding requirement applies, then Chapter 252 defines
additional procedures that must be followed, which include rules related to awarding the contract. A
general rule is that the contract must be awarded to the lowest responsible bidder or to the bidder who
provides goods or services at the best value for the City. An exception to this general rule is the allowance
of a local preference in limited circumstances.
Texas Local Government Code Chapter 271 allows the City to consider the location of a bidder's principal
place of business when awarding contracts for goods and services. Local Preference allows the City to
consider a bid from a bidder whose principal place of business is in the City and whose bid is within the
3%-5% (see chart below) of the lowest bid price received by the City from a bidder who is not a resident of
the City. State Law establishes criteria of when Local Preference can apply based on the amount and
type of contract amount
Statutory Limits
Contract Amount Goods and Real Services (Non- Construction Contracts
Property Professional)
$50,000 or less No preference No preference No preference
$50,000.01-$99,999.99 5% preference 5% preference 5% preference
$100,000-$499,999.99 5% preference 5% preference No preference
$500,000 or more 3% preference No preference No preference
If the City receives a bid in which a Local Preference would apply, the City can either award to:
1. The lowest bidder; or
2. The bidder who is located in the City so long as the City Council determines in writing that:
a. The bidder is a local bidder;
b. The local bidder offers the best combination of contract price and additional economic
development opportunities.
Local Preference does not apply to awards of Professional Services contracts that are governed under
Chapter 2254 of the Texas Government Code ("Professional services" means services within the scope of
the practice of accounting, architecture, landscape architecture, land surveying, medicine, optometry,
professional engineering, real estate appraising or professional nursing.). Under Chapter 2254.003 of the
Government Code, awards for Professional Services must be based upon:
1. Demonstrated competence and qualifications; and
2. A fair and reasonable price
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 21-10676
To the Mayor and Members of the City Council September 28, 2021
Page 2 of 2
i
i7 Y
SUBJECT: LOCAL PREFERENCE PROGRAM IN THE PROCUREMENT OF
rrn GOODS AND SERVICES
Adoption of Local Preference by the City of Fort Worth
On January 29, 2013, the Fort Worth City Council was briefed about Local Preference. On March 5, 2013,
the Fort Worth City Council adopted a Local Preference ordinance based upon State Law with one change
highlighted below:
Contract Amount Goods and Real Services (Non- Construction
Property Professional
$50,000 or less No preference No preference No preference
$50,000.01-$99,999.99 5% preference 5% preference No preference
$100,000-$499,999.99 5% preference 5% preference No preference
$500,000 or more 3% preference No preference No preference
The adopted ordinance excluded Local Preference for construction contracts between $50,000-
$99,999.99 since smaller construction projects are grouped together and procured through annual Job
Order Contracts (JOC) and Remodel contracts. The use of annual contracts is more efficient for smaller
construction projects because they provide City Departments with a list of awarded vendors with
competitive prices that can be utilized quickly instead of requiring individual bids for each small project.
The chart below shows the Job Order Contracts and Remodel Contracts the City has and whether the
contract has been awarded to a Local Vendor.
Local Vendor Not a Local Vendor
Job Order Contracts 2 1
Remodel Contracts 2 1
Local Preference is considered in all sealed bids for Goods and Real Property over $50,000 and for
Services (Non-Professional) $50,000.01-$499,999.99 in which the evaluation criteria is Lowest
Responsible Bidder. To qualify, the Local Bidder must request Local Preference and complete an
attachment in the Bid. Purchasing Staff then reviews the information to ensure that Local Preference does
apply.
The City Code does not currently allow use of a Local Preference for procurements using a best value
evaluation. However, staff is researching to determine how the Code might be changed and what the
projected costs and benefits of such a change might be. A follow up on this issue will be provided after an
evaluation has been completed.
If you have any additional questions, please contact Cynthia Garcia, Assistant Finance Director, at 817-
392-8525 or Cynthia.Garcia(a)-fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS