MEMORANDUM

TO: William Popp, Assembly President

Members, Kenai Peninsula Borough Assembly

FROM: Jack Brown, Assembly Member

DATE: February 3, 2000

SUBJECT: Best value ordinance, 2000-07

The accompanying ordinance is designed to provide the administration with greater flexibility in awarding contracts. Currently, the purchasing code requires the administration to award bids to the lowest bidder, except for bids for professional services and where the borough determines that competitive bidding is not practicable.

While this is the traditional method used by governmental agencies, people are increasingly concluding that frequently it is not in the best interest of the government to strictly follow this approach. For example, in ordering a certain item, the borough may prefer to have it arrive by a certain delivery date, but would be willing to accept it at a later time depending upon the size of potential price reduction. The current system does not provide a clean mechanism for addressing such differing situations. Additionally, it does not allow the borough to give different weight to the level of experience and benefits that bidders may be in a position to propose that would make it more worthwhile to pay a higher price for a better final product. This ordinance is not designed to be used where the needed specifications are very clear and other criteria are not relevant in determining the best value for the borough.

It is also my intent, to the extent allowed by law, that the location of the bidder may be given weight in the award of a bid to the degree that awarding a contract to a local bidder may provide more value to the borough. Currently, the code does provide the mayor with discretion to give a local bidder some preference. The mayor has issued a policy which gives the borough the ability to give a five percent preference to a local bidder. This ordinance is not intended to affect the application of that local preference. Instead, it gives the administration more flexibility in designing the award criteria and factors to be considered in its bidding process.