On February 7, 2012, Naomi M. Kelly was sworn in by Mayor Edwin M. Lee to serve as the City Administrator for a five year term for the City and County of San Francisco. As City Administrator, Ms. Kelly oversees the City’s General Services Agency consisting of 20 departments, divisions, and programs including the Department of Public Works, Department of Technology, Administrative Services, Office of Contract Administration/Purchasing, Real Estate, County Clerk, 311, Fleet Management, Convention Facilities, Animal Care and Control, Medical Examiner, Treasure Island, and more. The General Services Agency has an annual budget of over $450 million and approximately 2,100 employees. In this capacity, Ms. Kelly’s objective is to ensure responsible fiscal management and accountability to those who pay taxes for our local government to provide essential services.
Prior to her appointment, Ms. Kelly was the Deputy City Administrator where she assisted Mayor Lee in rolling out the City’s new local hiring policy by preparing and working closely with City departments, contractors, and the broader community to ensure compliance with the new legislation. The new policy required contractors performing public works or other capital improvement projects to meet mandatory levels of San Francisco resident participation that support the local economy.
In 2004, Ms. Kelly was appointed the City Purchaser and Director of the Office of Contract Administration by Mayor Gavin Newsom. Ms. Kelly managed the procurement of approximately $250 million in materials and supplies and approved approximately $500 million of professional service contracts that support the operations of city services in a fair and transparent manner. She also improved the department’s performance by enhancing and streamlining the procurement procedures.
Q: Has the local hire policy had any documented impact on local contractors seeking work with the City and County of San Francisco?
No, there has been no documentation of the Local Hire Ordinance’s impact on local contractors. However, the Office of Economic and Workforce Development (OEWD) did release the San Francisco Local Hiring Policy for Construction 2011-12 Annual Report in March which found that 34% of total craft hours and 68% of apprentice hours for 22 active Public Works projects have been performed by local residents. The City’s Local Hire Ordinance was adopted in December of 2010. As more information on the legislation’s impact is released, the Contract Monitoring Division (CMD) will work with OEWD to gauge the ordinance’s effect on LBE-certified firms.
Q: How has the city been assisting small contractors with bidding on local contracts?
The Contract Monitoring Division works in collaboration with city departments when they award their contracts. For example, the City has a set-aside program that awards to Micro-LBEs depending on the size of the contracts. For public works contracts estimated to be equal to or less than $400,000, the amount will not be less than 50%. For public works contracts estimated to be equal to or less than $100,000, the set-aside award to Micro-LBEs will not be less than 25%. In addition, during pre-bid, pre-proposal meetings, CMD encourages all contractors, including small and micro LBE firms to request technical assistance to ensure clarification on contracting requirements. Under the 12B, Equal Benefits Program, CMD ensures timely and efficient analysis of their 12B submittals, thereby increasing the pool of pre-qualified small contractors.
Q: How is the City prepared to assist small contractors with JOC contracts that are becoming more prevalent as a bidding mechanism throughout the City and County of San Francisco?
One of the main concerns by small contractors with respect to JOC contracts is the bonding requirement. CMD worked with the PUC & DPW in order to set up a Micro Set-Aside JOC requirement that helps alleviate the bonding requirement concern (e.g. tying up small contractor bonding capacity). The City’s Bonding and Financial Assistance Program for small contractors assists in this endeavor. The first JOC contract at the Airport will be advertised in early 2013. CMD has set the Airport JOC contract with a 25% LBE sub-goal. The license requirement is a “B” General Building trade.
Our City’s Risk Manager has also been working with the contracting departments and the City Attorney’s office to secure options for bond duration modifications on these JOC contracts. It is still a work in progress but is something that is at the forefront of our attention.
Q: What is your history with the City and County of San Francisco Surety Bond Program?
As the City Purchaser, I worked closely with the Risk Manager on the Surety Bond program. I have been intimately aware and supportive of the program. I worked daily on LBE contracting issues and while my direct interaction with the program was limited, the coordination of LBE outreach was central to our mission. As City Administrator, I have taken the lead in updating the program’s legislation to make the administration more cost effective and efficient. Additionally, I am currently overseeing the complete review of the program from both a process and cost perspective to ensure it provides the most effective support possible to the contracting community, which in turn, gives the City a more competitive pool of bidders.
Q: How is the new local hire policy expected to increase work for small and micro LBE contractors?
Local businesses are more likely to hire local employees. Prime contractors may be more inclined to hire LBE-certified firms as subcontractors to meet both their LBE and local hire goals. In 2010, the HRC surveyed over 90 LBE-certified General A & B licensed firms and found that over 40% of employees working for these firms were local residents
Q: With the transition of the LBE program to your jurisdiction, what are a few of your targeted objectives for 2013?
- Continue to implement and expand the Elations Contract Compliance Tracking System to allow for online monitoring of contracts and certification of local firms.
- Increase the total dollar amount of contracts awarded to LBE-certified firms through micro set-aside and Proposition Q purchases
- Revise, update, and expand Chapter 14B of the administrative code to create greater opportunities for LBE-certified firms
- Provide targeted outreach, such as fencing, roofing, etc. These are categories needed by departments that lack LBE availability
- Continue to lower the barriers for LBEs to compete for City construction contracts through our Surety Bond Program. We want to improve program administration and increase access for local businesses. The Risk Management Office has a dedicated staff person working with city departments and companies. The Risk Management team understands the surety market and the many challenges that our LBE contractors are facing in the market place. They are currently working to streamline the bond approval process. We are exploring the possibility of expanding the eligibility of the participants from not just construction contracts to other contracts requiring performance and/or payment bonds.
Q: With the significant number of private major public/private projects like Block 6 and 7 of Transbay, 8 Washington, Warrior’s Project, what will LBE opportunities look like and how will the City capitalize on maximizing leverage negotiating with these private parties?
Under the current Chapter 14B Ordinance, CMD does not have jurisdiction over private development projects. However, the City has in the past negotiated agreements to include LBE subs and utilize the local hire process (Harding Park, AT&T Park, etc). If the City negotiates an agreement to utilize LBE firms with private parties, CMD can provide technical assistance to developers on the program (e.g., setting LBE sub goals, good faith outreach, and contract monitoring, etc.).