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BOARD MEETING DATE: September 11, 1998 AGENDA NO. 24

PROPOSAL:

Execute Contract for Management Audit of Contract, Administrative, and Technical Support Provided to MSRC and AB 2766 Discretionary Program

SYNOPSIS:

H&S Code 44233 stipulates that not more than 5% of the fees collected may be used for administrative costs toward the AB 2766 Discretionary Program. It is estimated that contract, administrative and technical support for FY 1998-99 will be 4.8%. The MSRC has decided to conduct a management audit to determine if staff support functions can be streamlined or consolidated and administrative costs reduced. With assistance from AQMD staff, the MSRC conducted an informal bid process using a list of management audit firms that previously worked with the AQMD. The MSRC considered the results of the informal bid and a contract recommendation at its September 24, 1998 meeting. The MSRC requests approval of a contract with this management firm for an amount less than $10,000.

COMMITTEE:

Mobile Source Air Pollution Reduction Review,
September 24, 1998, Approved Unanimously

RECOMMENDED ACTION:

1. Approve management audit contract with Thompson, Cobb, Bazilio & Associates for an amount not to exceed $9,000, as part of the FY 1997-99 AB 2766 Discretionary Work Program.
2. Authorize the Chairman of the Board to execute an agreement with Thompson, Cobb, Bazilio & Associates.

Gregory T. Winterbottom
Chair, MSRC

Background

In September 1990 Assembly Bill 2766 was signed into law (Health & Safety Code Sections 44220-44247) authorizing the imposition of an annual $4 motor vehicle registration fee to fund the implementation of programs exclusively to reduce air pollution from motor vehicles. In addition, Health &Safety Code 44233 stipulates that not more than 5% of the fees collected may be used for administrative costs. AB 2766 provides that 30 percent of the annual $4 vehicle registration fee subvened to the AQMD be placed into an account to be allocated pursuant to a work program developed and adopted by the MSRC and approved by the AQMD Governing Board. This portion of the AB 2766 funding is referred to as the AB 2766 Discretionary Program. It is estimated that contract, administrative and technical support for the AB 2766 Discretionary Program for FY 1998-99 will be 4.8%. Consequently, the MSRC has decided to conduct a management audit to determine if staff support functions can be streamlined or consolidated and administrative costs reduced.

The AQMD’s Procurement Policy and Procedure, adopted January 9, 1998, stipulates that an informal bid may be conducted when the cost of the services is so low (under $10,000) as to not justify the costs of the formal bidding procedure. Since the MSRC stipulated that the management audit would be for an amount less than $10,000, it was decided that an informal bid would be conducted to seek requests for quotations. With assistance from AQMD staff, the MSRC conducted this informal bid process using a list of management audit firms that had previously worked with the AQMD.

Outreach

According to the AQMD’s Procurement Policy and Procedure, an informal bid is an unadvertised written bid solicited from a vendor(s) when the cost of the services is so low as to not justify the costs of the formal bidding procedure. Since the MSRC conducted an informal bid process via requests for quotations, no formal advertising was conducted. However, a letter was mailed on September 3, 1998, soliciting bids from nine qualified management consulting firms that had previously worked with the AQMD. The letter stipulated the purpose and timeline of the audit, the criteria to be used for evaluating the informal bids, and the due date for bids.

Bid Evaluation

Four informal bids were received by the due date of 5:00 p.m. on September 9, 1998. The criteria for evaluating the bids were as follows:

The following lists the four bidders, along with their hours bid, their proposed cost, and their average hourly cost, and their final average score based on the above criteria:

Panel Composition

The evaluation subcommittee composed of Technical Advisory Committee members to the MSRC consisted of the following individuals:

• Daniela Fernandez (subcommittee chair), representing the San Bernardino County Board of Supervisors
• Michelle Kirkhoff (MSRC-TAC Chair), representing the San Bernardino
  Associated Governments;
• Juan Perez, representing the Cities of Riverside County;
• Antonio Thomas, representing the AQMD;
• Polin Modanlou, representing the Orange County Board of Supervisors; and

Proposition 209 Compliance
On August 28, 1997, Proposition 209 went into effect when a stay of enforcement was lifted. Proposition 209 prohibits granting of preferential treatment based upon race, ethnicity, color, sex or national origin in the operation of public employment, public education, or public contracting. Proposition 209 does not address disabled veteran business enterprises. On January 9, 1998, the District’s Board adopted a New Procurement Policy and Procedure. The Policy eliminates the granting of preference points based upon race or gender and only requires a good faith effort to subcontract with minority and women-owned businesses if subcontracts are to be let, when contracts are funded in whole or in part by EPA grant funds. Proposition 209 does not prohibit actions necessary to maintain eligibility for federal funding. However, the MSRC does not receive any federal funding. On October 23, 1997, the MSRC adopted a Proposition 209 Compliance Policy that eliminates preference points based upon race, ethnicity, color, sex or national origin, and awards preference for disabled veteran business enterprises and local businesses, where appropriate. The contract awards are based on current policies. However, any preference points did not affect the contract recommended for approval in this Work Program, so the contract can be awarded as recommended.

Proposal

On September 24, 1998, the TAC presented its evaluation results and recommendation to the MSRC relative to the management audit. The MSRC unanimously approved the recommendation to contract with Thompson, Cobb, Bazilio & Associates to conduct a management audit of contract, administrative and technical support. This contract shall not exceed $9,000. The MSRC requests the Board’s approval of this contract as part of the FY 1997-99 AB 2766 Discretionary Fund Work Program.

Resource Impacts

Health & Safety Code Section 44243(2)(c) requires the AQMD to deposit the discretionary fund revenues "in an account to be used, pursuant to Section 44244, to provide grants to fund projects for the exclusive purpose of reducing air pollution from motor vehicles." Since the monies for this contract will be drawn from this special fund, there would be no fiscal impact on the AQMD’s operational budget.

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