Budget committee backs larger spending limits for city tech-marketplace contracts to support local contractors

The Budget and Finance Committee on Dec. 2019 voted to forward two resolutions to the Board of Supervisors that would increase spending authority for two technology-marketplace contracts used by city departments.

Chair Sandra Lee Feuer called the committee to order and, after a presentation by the Office of Contract Administration, moved Items 1 and 2 to the board with a positive recommendation and no objection.

Andy Grafenfried of the Office of Contract Administration described the tech marketplace as a prequalified pool that departments use to procure hardware and services. "We've grown the number of firms that are involved in the tech marketplace from what was once 8 to 9 firms is now up to 43 firms," Grafenfried said, explaining the pool is organized in three tiers (large, mid-size and micro/LBE) with different contract caps and procurement rules.

Grafenfried said the city spent about $72,000,000 through the marketplace in the prior nine months across tiers and that those transactions tend to be smaller single procurements: "We've seen 1,028 individual transactions with an average value of about $44,000," he said. He told the committee staff seek to increase opportunities for Local Business Enterprises (LBEs) through a combination of subcontracting goals and streamlined procedures for micro-LBEs.

On LBE participation, Grafenfried gave detailed figures: roughly $5,200,000 of the marketplace spend has gone to LBEs in the first nine months, including about $3,200,000 at the subcontracting level and $1,300,000 to Tier 2 primes; that total equates to roughly 7.2% of the $72,000,000 run rate. The contract-monitoring division sets a 15% subcontracting goal; Grafenfried said actual subcontracting results are around 12% to date.

Severn Campbell of the Budget Analyst Office summarized the requested amendments and the fiscal impact: the CC Technology contract (also read into the record earlier with a Computerland reference) would be increased by $3,000,000 from $20,000,000 to $23,000,000; the Extech/XTech JV contract would be increased by $24,000,000 from $20,000,000 to $44,000,000. "The estimate is that this would give sufficient spending authority through June of 2020," Campbell said; the BLA recommended approval.

Grafenfried explained the requested increases are based on observed run rates and to ensure capacity if those vendors win upcoming competitions. He also noted that a portion of each contract's spend consists of pass-through purchases (where subcontracting opportunities are limited) and identified the portions of those contracts where LBE participation is feasible.

Chair Feuer and other supervisors thanked staff for outreach and LBE-focused work; the chair moved the items to the board with a positive recommendation and the committee took no public comment.

What happens next: The Board of Supervisors will consider the two contract-authority increases. If approved, departments will continue to award discrete projects through competitive processes within the marketplace structure.