Committee advances amended procurement ordinance to remove mandatory cost weighting for some construction contracts

The Rules Committee voted April 10 to forward an amended ordinance to the full board that removes a mandatory cost criterion for awarding construction manager/general contractor (CMGC) contracts and gives departments discretion to weigh cost and non-cost factors on a case-by-case basis.

Supervisor Rafael Mandelman, sponsor of the legislation, said the proposal bundles recommendations from two civil grand jury reports (June 2021 and April 2022) addressing capital-project delivery problems, including the Van Ness BRT. Mandelman said the first change would "remove the mandatory cost criterion in awarding construction management general contractor or CMGC contracts and instead would allow for departmental discretion in weighing cost and non cost criteria on a case by case basis." He said departments should "be thinking about the value of the contract and the capacity of the contractor to deliver the thing that we're asking for," rather than focusing on front-end cost estimates that may change over a long project.

The broader package originally included a requirement that departments consult a contractor performance database when evaluating bidders; Mandelman said stakeholders had raised concerns about whether the database was the right tool. He asked the committee to duplicate the file, amend out the past-performance/database provisions, and forward only the cost-criterion provisions to the full board for prompt consideration.

There was no public comment. Vice Chair Shimon Walton moved to amend the duplicated file to remove the past-performance/database pieces and to advance only the cost-criterion change; the amendment passed without objection. The committee then voted to forward the duplicated, amended file to the full board with a positive recommendation. The committee also moved to continue the original version (including the past-performance/database provisions) to the call of the chair for further discussion.

Supervisor Matt Dorsey praised the approach to avoid lengthy disputes over change orders, saying from his experience in the City Attorney's Office "nobody wins in that kind of a situation." The committee thanked staff and civil grand jury members referenced by Mandelman but did not set a date for further action on the past-performance piece.

The committee action advances a procedural change to the municipal procurement code; the amended file forwarded to the full board would give departments discretion on how to weigh cost in certain public-works contract awards, while the question of formalizing use of contractor performance evaluations will be discussed separately.