Public Contract and Procurement Bidding Regulations

The City of Del Mar follows strict California state laws when selecting contractors for public construction projects, utilizing a competitive and transparent public bidding process outlined in the California Public Contract Code. The process is central to how government agencies contract for public works projects and is intended to ensure fairness and guard against favoritism, fraud and corruption; prevent misuse of public funds; and ensure that cities are receiving the highest level of services for the lowest price. Below is a summary of the process.

Bidding and Document Requirements

• The City releases detailed notices inviting bids on the City website and e-bid boards when public works projects are available for bidding. The bid package released by the City typically consists of a notice inviting bids; information on the project scope; bid instruction; standard construction contract; general conditions; required compliance forms; and important bid submittal requirements.
• When a bid package is released, all potential bidders have access to the same released information and documents in order to ensure the bidding process is fair. If any new information is released during a bidding process, all bidders will be promptly notified and required to submit their acknowledgement of the information in order to promote fair access to the information. 
• Additional requirements may be included depending on how the project is funded (e.g. state or federal funds).
• Pre-bid meetings and site visits may be mandatory, and addenda or changes to the bid can be issued by the City during the bidding period at any time.

Provisions Required by Law 

• Prevailing wages must be paid for construction projects over $1,000. Contractors must ensure they are responsible for paying prevailing wages during the performance of the public project.
• Bid security in the form of performance bonds and payment bonds are required for contracts over $25,000. Payment bonds are required by California Civil Code whereas performance bonds are required by the City, like many other agencies, to protect the City in case of a default by the contractor.
• Contractors must possess the appropriate license for the nature of the work, and subcontractors must be listed as per the Subletting and Subcontracting Fair Practices Act.
• Pursuant to Senate Bill 854, no contractor or subcontractor may be listed on a bid or awarded a contract for a public works project unless registered with the Department of Industrial Relations (DIR) per California Labor Code Section 1725.5.

Bidding Thresholds

The bidding thresholds that trigger the level of the states requirements for the City's public construction projects are as follows:

• Projects $60,000 and under - work can be performed by the City’s own resources, negotiated contracts, or direct purchase orders. 
• Projects up to $200,000 - the City can use informal or formal bidding, set forth in Section 7.20.020 of the Del Mar Municipal Code. 
• Projects exceeding $200,000 - the City must perform formal bidding procedures. 

Review of Bid Proposals and Contract Award

• Sealed bids are publicly opened at a specified time and location stated in the bid package, and contracts are awarded to the lowest responsive and responsible bidder whose submittal meets all of the bid requirements. 
• If the City determines that awarding the contract to any prospective bidder is not in its best interest, the City reserves the legal right to reject all bids.
• Responsibility and responsiveness of bidders are evaluated based on factors like financial capability, experience, and compliance with bid requirements. 
• The City will also use the Engineer’s Estimate as a basis for evaluation of the bids.
• Except as further described below as part of the California Uniform Public Construction Cost Accounting Act, public works contracts are awarded by the City Council at a public meeting.

Low Bid Lump Sum/Unit Price & Emergency Time/Material Bidding 

• Bid schedules for public construction projects typically include lump sum and unit price bid items. Lump Sum pricing puts all of the responsibility for reviewing the plans, identifying job quantities and estimating labor, equipment, materials, and all other costs of the job on the contractor. The contractor is legally responsible to construct the project for the fixed cost identified in their bid once accepted. Lump sum bid items put higher risk on the contractor, and lower risk on the City.  Unit Price bid items (such as $/SF of asphalt or $/LF of pipeline) require the contractor to submit a unit price based on the bid schedule’s estimated quantity.  Post construction, the City and Contractor measure and agree on the actual constructed quantities and multiply by the bid’s unit price for payment.
• Once the lowest responsible/responsive bid is accepted by the City, and contract documents executed, it is the contractor’s responsibility to construct the project for the accepted price, regardless of cost overruns due to the contractor underestimating the cost of the job. A change order to the project contract is only processed when agreed upon by the contractor and City for unforeseen conditions that were not known at the time of the bid and related cost estimating process.
• In situations of emergency, the City may execute time/material contracts with a select contractor when it is impractical to go through the public bidding process and not in the best interest of the City (See Section 7.04.090 of the Del Mar Municipal Code).  These types of contracts are most commonly utilized when the exact specifications of a project are not known, such as for emergency repairs to critical infrastructure when work must begin immediately and the design and specifications of the work are in flux. 

California Uniform Public Construction Cost Accounting Act (CUPCCAA)

The CUPCCAA is a voluntary program enacted by State legislation in 1983, which allows public entities to utilize alternate bidding procedures for public projects under $60,000, which can be performed by the City’s own resources, negotiated contracts, or direct purchase orders. For projects up to $200,000, the City can use informal or formal bidding. Projects exceeding $200,000 mandate formal bidding procedures. The benefits of CUPCCAA include: 

• Increased City performed work limits, simplified bidding, reduced formal bidding requirements, expedited contracting for smaller projects, and efficiency with public funds.
• City maintained List of Qualified Contractors. This annually updated list allows qualified contractors to be included in notifications when projects are available in the City. Therefore, increasing the number of bids and the quality of work. 

More information about the CUPCCAA can be found here. 

Creation of a Public Works Project/Opportunities for Public Input

Throughout the life of a Public Works project, there are many opportunities for public input. City projects come about in a variety of ways.  Sometimes they are initiated by City staff as a result of an identified need or regulatory requirements, or they are requested for consideration by members of the public or identified by the City Council as part of the Council’s annual goals and priorities setting process.  

Once a project has been identified, it typically goes to the City Council for approval to move forward with Phase 1 Preliminary Assessment, Environmental Permitting and Engineering Design and related funding to complete the work.  Depending on the outcome of the Phase 1 engineering work, staff may recommended that the Council approve Phase 2 Final Design and Development of Construction Documents and the related funding.  During this phase, an Engineer's Estimate is prepared and presented to the Council. An Engineer’s Estimate is prepared during this final design by using historical data and experience from similar past projects to estimate the cost of the current project. 

Once the City Council accepts the final design of the project and directs staff to put the project out for bid, the award of the construction contract and necessary construction funding go to the City Council for final consideration. The Engineer’s Estimate is used to help as a basis for evaluation of the bids for Council's final consideration. These important public meetings provide an opportunity for the public to provide input and gives the City Council the opportunity to provide direction to staff regarding the scope and costs for the Project before final approval and construction.

Helpful Links

Del Mar Municipal Code – Title 7, Expenditures. Chapter 7.04 Purchases or Supplies, Equipment, and Services.

California Public Contract Code 

City of Del Mar E-Bid Board Page