INTEROFFICE CORRESPONDENCE Los Angeles Unified School District Office of the Superintendent

TO: FROM: SUBJECT: Members, Board of Education DATE: June 13,2012

Dr. John E. Deasy. Superintendent ~""\
NYC LEADERSHIP ACADEMY\\nSCUSSION I am following up on last night's discussion concerning the agreement with the NYC Leadership Academy. As you are aware, this contract for essential professional services was narrowly approved by the Board after much discussion and deliberation. While I am pleased with the outcome, I am very concerned about some of the comments that were made. In particular, there were references to possible improper conduct by Dr. Aquino with respect to the contract itself. I want you to know that I have the utmost faith in Dr. Aquino's integrity and am deeply concerned about the comments that were made. If Board Members have any knowledge or facts that support the implication that there was anything improper about this or any other procurement or professional services contract, I hope and expect you to advise me of these at once. In the absence of such information, I think it would be appropriate to apologize to Dr. Aquino for having impugned his integrity. On a related matter, yesterday's discussion again raises the question of the practical meaning of "delegated authority." As you know, this contract was brought as a ratification pursuant to authority previously delegated to staff. I trust you can understand my concern when the Board effectively rescinds the delegation by failing to ratify such contracts when they are brought to the Board for action. This obviously creates some very serious operational challenges for us as we plan and execute our work. 1 certainly do not want to revise our Procurement/Contract procedures but will bring forward a recommendation to the Board to make such changes if we cannot come up with a process that achieves both, transparency and efficiency. I am attaching a recent memorandum from Mark Hovatter on this subject that outlines the process for your review. Thank you for your prompt attention to this important matter. c: Michelle King Dave Holmquist Dr. Jaime Aquino

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LOS ANGELES UNIFIED SCHOOL DISTRICT Board of Education Report I-iDop.
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r1L:~~==~=---~~~nr-,----------------------------__ Report Number: 211-11112
Date: Subject: Responsible Staff:

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April 10, 2012 Extension of Consolidated Procurement Services Delegations of Authority Enrique Boull't, Chief Operating Officer Kelly J. Schmader, Chief Facilities Executive Office of Chief Operating Officer and Facilities Services Division (213) 241-4133 and (213) 241-4811

Name Office/Division Telenhone No.
BOARD REPORT Action Proposed:

Staff proposes that the Board of Education approve the renewal of the delegations of authority for Procurement Services for a one-year period through June 30,2013. On June 21, 2011 (Board Report No. 356-10111), the Board of Education approved updated and consolidated Delegations of Authority for Procurement Services for a one year period. In an effort to leverage best practices and utilize District expertise to streamline operations, in 2011 the responsibilities of the Procurement Services Division and the Facilities Contracts Branch were consolidated under one umbrella to form "Procurement Services." Procurement Services assumed responsibility for all of the District's procurement and contracting activities. The Director of Procurement Services reports to the Chief Facilities Executive on all facilities related needs and to the Chief Operating Officer on all other matters.
In accord with the restructuring, updated and consolidated delegations of

Background:

authority for "traditional" procurement actions and those related to facilities contracts were developed and submitted to the Board for approval. Additional delegations were developed, some existing delegations amended, and outdated delegations deleted in order to better reflect the District's current procurement needs and enhance its ability to reduce costs through strategic efforts.
Expected Outcomes:

The combined resources and delegations of authority enable Procurement Services to continue its efforts to standardize processes and develop more strategic contracting efforts. Renewal of the delegations will result in significant savings to the District and simplified procedures for those who utilize the services.
Page J of3
Board of Education
April 10.2012

Bd. of Ed Rpt No. 2J J-l J/J2

LOS ANGELES UNIFIED SCHOOL DISTRICT Board of Education Report

Board Options and Consequences:

Approving the one-year renewal of the Delegations of Authority 'Will enable Procurement Services to continue to expedite procurement actions and allow the District to obtain the highest quality and best possible prices for goods and services by utilizing best practices and the expertise of the contracting staff. Under the special limited delegation of authority to purchase regular Distribution Center material, Procurement has and will continue to report detailed expenditures to the Board on a monthly basis. All of the delegated actions will continue to be submitted to the Board for ratification and will be in accord with the California Public Contact Code, California Education Code and all other applicable statutory provisions. This action supports the Board's initiatives to streamline processes, enhance efficiency, and reduce expenditures. Approval of the renewal of the Delegations of Authority will allow the District to continue its strategic procurement efforts. The delegations of authority will enhance Procurement's ability to save between 10 and 30 percent of the cost of awarding individual smaller contracts. Delaying contract awards while waiting for future Board approval on contracts for actions already approved by the Board needlessly puts risk of cost escalations on vendors and limits their ability to offer their best prices. It is anticipated that the renewal of the delegations of authority will result in continued savings and efficiency, and a reduction in administrative effort by Procurement staff and requestors without losing accountability. All actions will continue to be submitted to the Board for ratification or approval and updates will be provided on a regular basis and as requested.

Policy Implications:

Budget Impact:

Issues and Analysis:

Attachments:

IBl Informative
r'J Desegregation

District Delegation Form; Procurement Services Delegations of Authority Informative

Impact Statement

Bd. of Ed Rpt No. 211-11112

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Board of Education
April 10. 201:!

LOS ANGELES UNIFIED SCHOOL DISTRICT Board of Education Report
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Respectfully submitted,

APPROVED BY:

MICHELLE KINO Senior Deputy Superintendent School Operations REVIEWED BY:

DAVID HOLMQUIST General Counsel ~ Approved as to form.

TONY ATIENZA Director of Budget Services and Financial Planning (Interim)
Kelly J. S

Chief Fa . ies Executive Facilities Services Division

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)a Approved as to budget impact statement.

Bd. of Ed Rpt No, 211-11112

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Board of Education
April 10. 2012

I I Fiscal Delegation (to enter contracts) [ l Operational Delegation (to perform a non-fiscal opernuon)

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ATTACHMENT A DISTRICT DELEGATION FORM
Requesting Division: Select One: Date: Delegation No.:
OFFICE Or THE CHIEF OPERATING OfFICER Ai'lD FACILITII:;'5 SERVICES DIVISION

r ] NEW DELEGATION
APRIL 10.2012

[X ] AMENDED DELEGATION Board Report No.: Amendment No.: 211-1011 1

DES(RED TEXT OF DELEGATION (Underline amended language tf applicable) APPROVAL OF PROCUREMENT CONTRACT POLICY, AWARD, MANAGEMENT. AND ENFORCEMENT (Procurement Contracts) JI:fRe 21, 2QJ 1 April 10.2012. Delegation of authority to the Superintendent. or his or her designee who shall have authority to further delegate to another employee of the LAUSD, to create and implement procedures. advertise, issue requests for qualification and proposal, negotiate. evaluate, award. execute. commence and continue performance of. enforce. authorize payments under. amend, exercise options. and terminate (whether by default or convenience) and do the following with respect to Procurement contracts. as described below. subject to and in accordance with California Public Contract Code. California Education Code and any other statutory provisions as applicable: (i) to establish contractor and vendor prequalification requirements and procedures: to make contractor prequalification determinations; to reject bids or proposals: to declare bidders nonresponsive or non-responsible: to release low bidder and award to next lowest responsible. responsive bidder: and to release or assess payment against bid bonds; (ii) to act as hearing officer to conduct and render decisions regarding the procurement and enforcement of Procurement contracts. including. without limitation. bid protest", bid appeals. contractor responsibility hearings, subcontractor substitution hearings; provided. the Board of Education shall be given written notification of any decision rendered by the hearing officer within 5 business days follow~the issuance of such decision;
(iii) to establish and assess appropriate penalties or other permitted sanctions for contractor

violations of the Subletting and Subcontracting Fair Practices Act of the California Public Contract Code and to make recommendations for penalties and other permitted sanctions (0 the Department of Industrial Relations for contractor violations of the California Labor Code; (iv) to assess liquidated damages against. or withhold contract payments and penalties from. contractors who fail to comply with contract terms and conditions:
To Be ComplelCd By the Bll.'ITdSec,am,",1 Only: Hoard Approval 1 I Yes (I No Ud.orEdRplNo
211·11/12

Board of Education l>age I
i\priIIO.2012
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I J FisC1l1Delegation (10 Imler contracts) r J Operlilionull>elegnlion (to perform a non-fiscal
(v)

operation)

Del. No.1

to approve change orders within the limits set forth in California Public Contract Code section 20118.4: to issue notices to proceed or other documents necessary to commence contract performance and to file notices of completion or cessation: To Fethfee .etsRlisH from 1(:)Q~ 10 Sg<,at My time H~ORa eletermiHatieH tl=lat worl. l=IaseBBA flF8gpessiRg satisHleterily; &nel10 release FeteelieH H~ORa eleteFmiRatien that '.... rk has eeeR o Gompletee satisfaetoFily; to retain a percent of payment for completed work as required bv current statute and to release retention upon a determination that the contract has been completed satisfactorilv and a notice of completion is filed with the coumv. to arbitrate contract matters and pay arbitration awards not to exceed $25.000 per disputed amount; to authorize payments of liquidated damages assessed against the District pursuant to contract terms, and to authorize payments of interest and penalties pursuant to contract terms or the California Public Contract Code; to award or assess payment against performance bonds: to approve assignment of contract money to a surety which has invoked its right of assignment under its indemnity agreement with the contractor: to sell, lease, or dispose of all personal property that is surplus, obsolete or not suitable for school use in accordance with applicable law: to sell Los Angeles Unified School District published materials. not to exceed $10.000 per sale. to any person. political subdivision. public officer or agency or educational institution; 12 purchase. as needed. the following items essential to the operation of the District where a competitive selection for an equivalent source or product is not available: a. Bus PasS/MTA tokens b. lnstlunional membership renewals (e.g., Council Qf Great City Schools) c. SchoollLAUSD accreditation (e.g .• Western Association of Schools and Colleges) d. Renewal subscription fees (e.g., software license renewal, maintenance of leased equipment) e. Student testing

(vi)

(vii)

(viii)

(ix)

(x) (xi)

(xii)

(xiii)

(xiv)

To Be Completc:d By the B04Id SccrelllTmt Only Board Approval r I Yes I) No
Ild ofE.dRptNIl211.lt/12

Roard Approval Date
Hoard of'Education

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ApTl110.2012

J Fiscal Delegation uo enter eontructs)

IOpcfOllionnl Delegation no perform a non-flseal operation)
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Del. No [

Postage g. Waste fees as associated with the Office of Environmental Health and Safety ·,D h. Advance payments to utilities i. Shipping and handling charges j. Utilit)' fees. (xv) To make purcha~es through "piggyback" contracts withjn the authority limits defined herein in accordance with procurement law

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DISTRICT DELEGATION FORM
Requesting Division: OFFICE Of THECHIEf OPERATING OFfiCER AND fACILITIES SI;RVICES PIVISION Select One: Date: Delegation No.: ( J NEW DELEGATION APRIL 10.2012 L X] AMENDED DELEGATION Board Report No.: Amendment No.:

DES IRED TEXT OF DELEGATION (Underline amended language if applicable) APPROVAL OF PROCUREMENT CONTRACTS (Procurement Contracts) JI:IRe ~I. 2911 April 10.2012. Delegation of authority to the Superintendent, or his or her designee who shall have authority to further delegate to another employee of the LAlJSD to create and implement procedures, advertise. issue requests for qualification and proposal. negotiate. evaluate. award. execute, commence and continue performance of, enforce. authorize payments under, amend, exercise options, and terminate (whether by default or convenience) with respect to the following Procurement contracts. as described below:
(i)

Architectural and Engineering Services

Contracts for architectural and engineering services for approved Facilities projects so long (IS such contracts do not impose costs upon the District in excess of the applicable Board-approved project budget.
(ii)

Professional Services (Excluding Architectural and Engineering)

Contracts for all other professional services (other than architectural and engineering services) up to $250,000 for a single contract action for approved projects with cumulative contract actions for a single Division with a single contractor not to exceed $500.000 in a' 12-month period shall lJe
Itfll"Fe¥eEi e~rt:he Be8f6.prieF te tRe l"erfemulRse

sf ser ...iees.
Board Approval Dme

1'0 Be Completed By the Bo:ud Sccreilltiul Only: lloard Appnwal: [I Ye:I (J N(I Hd. or(!d Rp1 No. 21 '·1 III:!

Board of Education Apnl 10.2012

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( I Fiscal Delegation (10 enter contracts) I Operauona] Delegation (to perform n non-fiscal operation)

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The foregoing delegation shall include the authority to award existing options or amendments 10 extend all such professional services contracts up to an amount not (0 exceed $250.000 for a single contract action with cumulative options not to exceed $500.000 to a single contractor or consultant in a 12-month period within a single division.
(iii) Construction

Contracts for construction as permitted by and in accordance with the California Public Contract Code and California Education Code (including, without limitation, publicly bid contracts, job order contracts. informal A and B letter agreements. and takeover and completion contracts) lip to $85 million per contract for approved Facilities projects. Notwithstanding the foregoing, the authority to execute contracts pursuant to California Education Code section 17515 (·'joint occupancy") is expressly excluded from this delegation of authority. and contracts pursuant to California Education Code section 17406 ("best value") shall be limited to $10 million per contract. (iv) Supply Contracts and General Services Contracts for supplies, materials, equipment and other personal property up to $250,QOOor fm sa leRg 85 sHeh contracts that do not impose costs upon the district in excess of the applicable Boardapproved program or project budget authority. (v) Special One-Time Delegated Authority Contracts for the procurement of regular Distribution Center materiel of furniture, office essentials, custodial/maintenance & operations, paper. visual arts. educational supplies/tools, sciencelhome economics/first aide, audio visual, athletic equipment, forms & publications, and music for a three one-year period commencing with on June 21,2012 and ending June 30. 2013. not to exceed a total ofS114.7 lfIilJieR $38 million or 75% of the average $51 million annual expenditures for these items. (vi) Special Services and Other Services Contracts for special services and other services specified by Government Code section 53060 or similar authority up to $250,OQOper action. (vii) Miscellaneous

Contracts under Which the District will receive no more than $500.000 in exchange for or in recognition of services or products provided by the District. Single/Sole source contracts in amounts not to exceed the value of the relevant grant for each vendor that is indentified as the District's exclusive partner in the grant. .
1"0 Be Completed By the Board Secrelarial Only: Board ApJlfovlll: I I Yes I) No Ud.

Board Approval Dale

_ Board of Educauon Apnl 10.2012

or Ed Rpt No. 211-11/12
"age 4 0(6

I Fiscal Delegation [to enter comracts) IOperational Delegation (1(1 perform a non-fiscal operation)

Dcl. Nil. (

Authority to enter into other sole source contracts with a single entity up to $1 million subject to applicable law. This authority shall not be delegated below the Chief Facilities Executive or Chief Operating Officer level. Contracts and other instruments. invoices. and obligations not otherwise covered by items (i) through (vi) above up to $25.000 per action. This delegation shall include the authority to take or authorize actions necessary for or incidental to the foregoing contract authority. provided such actions are routine ministerial actions. relatively minor transactions. or nonsubstaniive matters. wkere as sillgle aetieR iAvalves an expenditure efmere tRaA S23.QOQ.
:1

To BI: Completed By the Board Secretariat Onl)" Hoard ApprovuL (J YI:1I I J No Bd

Bourd Approval Dale Boord of Educalion
,\pnl 10. 201 ~
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Rpl No. 211·11/12 5 of6

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I I Operational Delegation (to perform a non-flscul operation)

J Fisca! Delegation (10 enter conh1lcts)

Dcl. No.,
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DISTRICT DELEGATION FORM
RequestingDivision: OFfICE Of TIlE eWEE OPERATINQ OEFrCER AND fACll.lTIES SERVICES DrVrSIOr-:
Select One: Date:

[ ] NEW DELEGA TION APRIL 10.2011

[ X ) AMENDED DEL EGA TTON Board Report No.: 211·11112 Amendment No.:

Delegation No.:

DESIRED TEXT OF DELEGATION (Underline amended language if applicable)

SOLICIT PROPOSALS AND CONDUCT A PRICE DISCOVERY AUCTION FOR UTILITIES, GOODS, AND SERVICES
(Procurement Contracts) JHRe 21, 2911 April 10.2012. Delegation of authority to the Superintendent, or his or her designee. who shall have authority to further delegate to another employee of the LAUSD. to conduct a competitive price discovery auction or a similar process utilizing transparent and objective selection criteria to receive a real-time market quote on electricity, natural gas and/or any other type of energy or for goodsjmd services, and to enter into a contract with the lowest responsible bidder if such contract is expected to result in cost savings to the District as compared to current goods/services from the local utility or through other procurement options.

PRIOR AMENDMENTS:

Amendment No.

Signature

Signature

Division Head/Sr. Administrator (Print Name) Date Submitted

Office of the Board Secretariat (Print Name)

Date Received

To Bo Compleled By the Boord Secretarial Only. Board Approval; I J Yes 1 I No Rd. ofF.d Rpl No 211·11/12
P3{le 6 off,

Board Aprrcwnl Dale

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Board of EduCBIIClI1 Apul 10.201:

Board of Education Report !"o. 211.11/12 For April 10.2012 Beard Meeting

INTEROFFICE CORRESPONDENCE Los Angeles Unified School District Procurement Services
INFORMATIVE TO: FROM:
Members, Board of Education Dr. John E. Deasy, Superintendent

DATE: March 26. 2012

SUBJECT:

PROCUREMENT SERVICES DELEGATIONS OF AUTHORITY

This Informative pertains to the delegations of authority granted to the Superintendent and designees fin Procurement Services. On June 21, 2011, the Board of Education approved the updated and consolidated Delegations of Authority for Procurement Services (Report No. 356-10/11). At that time, Procurement Services had recently reorganized to merge with Facilities Contracts in an effort to streamline administrative support .quirements and reduce costs. The delegations were approved for a one-year period and apply to both traditional procurement actions and those related to facilities contracts. The process for the procurement of goods and services is governed by the California Education Code, Government Code, and Public Contract Code. Per these codes, all goods and services procured must have the approval of the Board of Education. Typically, Procurement Services brings items to the Board to request authorization once a month. In order to expedite the procurement process, and thereby increase efficiency and cost effectiveness, the Board delegated its authority for specific. well-defined contract actions to the Superintendent. The Superintendent delegated the authority granted to him for traditional procurement items to the Chief Operating Offieer (COO) and the authority for facilities contracts to the Chief Facilities Executive (eFE), who in turn, delegated their authority to the Director of Procurement Services. The process for advertising, bidding, evaluating and selecting vendors is the same for contracts under delegated authority and for contracts not under delegated authority up to the point when a contract is ready for signature. This process is well-defined by public statute and includes bid protests and appeal procedures. For contracts not under delegated authority, Procurement Services brings these items to the Board of Education for its approval prior to contract award. The Board must approve each of these items before the contract is signed and awarded to the lowest, responsible. responsive bidder or successful proposer.

Members, Board of Education Dr. John E. Deasy. Superintendent

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March 26. 2012

/or items that are under delegated authority, the contracts are signed and awarded by Procurement Services prior to presenting them to the Board. The Education Code requires that these items be brought to the Board for review every 60 days. It is Procurement's policy to bring these items to the Board for ratification at the next available Board meeting; usually within 30 days. If for any reason the Board elects not to ratify a particular contract, the result is the same as if the contract were never awarded. No monies will be paid toward the contract. If the vendor had received monies for goods and/or services in the interim - prior to Board action - the vendor must return the funds received. It should be noted that there is a distinct difference between contracts awarded under delegated authority and after-the-fact contracts. Unlike after-the-fact contracts, for a contract awarded under delegated authority there is a valid, signed contract in place prior to work being performed or services provided. An after-the-fact contract involves a situation in which Procurement Services was not involved in the process and work has been performed or goods provided without a valid contract. In the event of an after-the-fact contract, there are rigorous review and approval procedures and the contract must be submitted to the Board for ratification and specifically noted as an after-the-fact contract. Delegated authority is restricted only for items with relatively low contract value, or those that are in support of a project or program previously approved by the Board through some other means. Under delegated authority, Procurement Services can approve professional services contracts, other than those for architectural or engineering services, in support ofa Strategic Execution Plan (SEP) approved roject, only up to $250,000 for a single contract, with cumulative contract actions for a single division with a single contractor only up to $500,000 within a 12-month period. As an example, under delegated authority, Procurement awarded a $172,934 contract to New Leaders/or New Schools to develop a school leadership framework in April 2011. The Board ratified the contract in May 201 1. In November 2011, additional support needs were identified, and under delegated authority, Procurement executed a contract amendment for $104,610. This separate low dollar contract action was later submitted to the Board for ratification. . Most facilities items that are delegated have been previously approved by the Board and added to the Facilities Services Division Strategic Execution Plan, as well as previously vetted by the Acquisition Strategy Board and Citizens' Bond Oversight Committee. The intention is that the Board should not be surprised hyany action coming to it for ratification under delegated authority. As stated previously. all procurement actions arc subject to the California Education Code, Government Code, and Public Contract Code. The Delegations of Authority allow Procurement Services to follow best practices including streamlining procurement actions and reducing the amount of time from bid to contract award. Reducing the amount of time from bid to contract award reduces the risk to the vendor. which in tum allows the District to procure goods and services when needed and at the best possible prices.

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Members> Board of Education Dr. John E. Deasy, Superintendent

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March 26. 2012

Please contact meat 213-241-8713 c: Michelle King Matt Hill Jaime Aquino David Holmquist
Enrique Soull't

if you should have any questions or need additional information.

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Kelly Schmader Megan Reilly Ronald Chandler
Jefferson Crain

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Yvette Merriman-Garrett

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