Transparency & Fiscal Responsibility Continues – Maximum Contract Period Policy

Fiscal responsibility requires the City’s contracting officers and/or the City Council be frugal and vigilant when spending the taxpayers’ money. This is particularly important when a contract includes a clause that automatically escalates the cost to the City after specified periods during the life of the contract. The purpose of this Ordinance is to ensure that the City is getting the best value by requiring the initiation of a Request for Proposal process after the same contractor has been delivering the same goods and/or services for five continuous years.


I have written the following policy and hope to implement it in our city.


I. The Five-Year Limit on Utilizing Same Contractor for Supplies, Commodities, General Services and/or Advisory and Assistance Services

DP Ordinance section *** provides as follows:

A. Except as provided for below, the maximum length of time under which any third party contractor (“Contractor”) may deliver Supplies, Goods, Commodities, General Services and/or Advisory and Assistance Services (“Goods and Services”) to the City of Dana Point pursuant to an oral or written contract for such Goods and Services (“Original Contract”) shall not exceed 5 contiguous years (“Maximum Period”).

For purposes of determining the Maximum Period, the starting date shall be the date of execution of the oral or written contract then in effect between the City of Dana Point and a Contractor and under which the contract’s Goods and Services are being delivered to the City (including all options, amendments, renewals and/or modifications to the Original Contract).

For purposes of this Ordinance, Contractor means the original contracting third party and its successors and assigns, as applicable.

B. Subject to the exceptions stated in this Ordinance below, prior to the end of the Maximum Period, but in no event less than 6 months before the Maximum Period is reached, the City of Dana Point shall initiate a process to solicit bids to deliver the applicable Contract’s Goods and Services consistent with the City’s then policies regarding Requests for Proposals (“RFP”).

C. Notwithstanding the RFP process required by this Ordinance, the City’s contracting officer and/or City Council, as applicable, may select the then current Contractor among those applicants submitting bids pursuant to the RFP process stated herein for an additional period, not to exceed an additional Maximum Period.

D. The 5-year limitation does not apply when-

(i) A longer period is specifically authorized by a statute; or

(ii) The Contract is for an acquisition of supplies or services that includes the acquisition of advisory and assistance services and the contracting officer, or other official designated by the City, determines that the advisory and assistance services are incidental and not a significant component of the Contract.

E. The City’s contracting officer and/or City Council, as applicable, may extend the Contract on a sole-source basis only once for a period not to exceed 6 months after reaching the Maximum Period if the contracting officer, or other official designated by City, or City Council, as required by Code, determines that-

(i) The award of a follow-on contract is delayed by circumstances that were not reasonably foreseeable at the time the Original Contract was entered into; and

(ii) The extension is necessary to ensure continuity of services, pending the award of the follow-on contract.

F. Note that this Ordinance limits the duration of the Contract period for advisory and assistance services, not the duration of Contractor’s performance under the Contract. In other words, Contractor may perform a discrete task given to the Contractor up to the last day of the Maximum Period that could require the Contractor to perform after the Maximum Period. However, such an order must be consistent with the bona fide needs of the City and not used as a pretext to extend a Contract’s Maximum Period and thereby avoid the limitations stated in this Ordinance.

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