Council approves adaptive signal contract but rejects 15% contingency; debate opens change-order policy

The Bakersfield City Council on Feb. 25 approved an adaptive-traffic-signal contract (item 7F3.1) but declined to pre-authorize a 15% change-order contingency (item 7F3.2), prompting discussion about formal limits on contractor change orders.

Council Member Basher Tash expressed concern about large post-award change orders and asked staff to prepare a city policy to cap change orders at 5% and require council approval for higher amounts. "We need to create a policy as a city that limits change orders on any contract ... to 5%." he said, adding that pre-authorized contingencies can be abused if left unchecked.

Staff and the city attorney responded that current city code already requires council review for change orders above 10% and that the practice of pre-authorizing contingencies sometimes reduced repeated back-and-forth returns to council. The city manager said the typical administrative change-order authority is to keep contingencies in a 5–10% range but that some projects require higher contingencies because of underground and unknown conditions.

The council approved the base contract while declining the 15% contingency; staff said they would return with options for a clearer policy and noted the practical need for some contingency on public-works projects while balancing procurement safeguards.

What happens next: staff will return with policy options that may include a firm change-order cap, clearer reporting for contingency use, and consistent thresholds for when council approval is required.