Contracts are required for service work performed by an independent contractor. An independent contractor is defined as an individual (rather than a company) who performs a service (rather than provides a tangible product) for the District. Independent contractors are in business for themselves and are responsible for their own tax reporting to the IRS. An independent contractor uses a social security number for tax identification purposes (rather than a Federal Tax ID number). SB1419 sets specific guidelines for appropriate use of independent contractors. Board approval is required for independent contracts in excess of the legal bid limit of $114,500.
Standard Service Contracts
Contracts are required when working with a vendor who provides services to the colleges or the District Office. All district contracts must be reviewed by the College Business Office and the District Office and must be signed by a board authorized signatory - generally the Deputy Chancellor, the Executive Vice Chancellor or the Director of General Services sign district contracts. Students, faculty or staff members, and administrators, including college presidents, are not authorized to sign contracts. If contracts are signed by a non-authorized person, the District is not liable for payment and the party that signs the contract may be personally liable.
Board approval is required for contracted services in excess of the legal bid limit of $114,500. Once again, the exception to this amount is public works project agreements, which require Board approval if they exceed $200,000.
Board approval is required, regardless of the dollar amount, for (1) District use of off-campus facilities which require a lease, or (2) use of District facilities by outside organizations requiring a lease.
A Certificate of Insurance and an Additional Insured Endorsement from a vendor or contractor performing services for the District is required. A minimum of $1,000,000 comprehensive general liability is required. A minimum of $1,000,000 comprehensive general liability with $2,000,000 aggregate is required. Excess liability in an amount of at least $2,000,000 is required. Higher risk Projects require a $3,000,000 umbrella Liability. District Insurance requirements are further discussed in the Contracts and Insurance Guidelines PowerPoint. Certain large construction projects may require additional insurance. For construction performed under District Capital Improvement Programs, the District has a mandatory Owner Controlled Insurance Program (OCIP) for all contracts in excess of $30,000.
Public Works Project Requirements
The District has elected to become subject to the California Uniform Public Construction Cost Accounting Act. The Act provides for alternative bidding procedures when an agency performs public work by contract.
- $0-$60,000 - No Bid Requirements
CUPCCAA exempts this size of project from bidding requirements; the District will negotiate a contract. The Facilities Services Master Agreement will be used for this type of procurement.
- $60,001-$200,000 - Informal Bid
Bid award to the qualified contractor submitting the lowest quote through an informal bidding process. The informal bid process requires that notification of the Bid be sent to all contractors, prequalified with the District, who have the qualifications to perform the work. Bid, performance, and payment bonds continue to be required of all contractors doing work under CUPCCAA. Board action is not required with an informal bid. The District reserves the right to bid a project in this range formally.
- Over $200,000 - Formal Bid
Requires advertisements in a local paper with 14-day advance notice. Trade Journals are notified 30 days in advance. Requires Board approval.
- No Bids Received
If the District receives no bids through the informal or formal bidding procedures, the Act authorizes the District by Section 22038(c) to have the Project completed by negotiated contract, which complies with bidding procedures.
Board Approval Requirements
- Annual membership dues over $25,000.
- Lease agreements.
- Purchases of products or equipment over the legal bid limit of $114,500.
- Contracts or agreements for services, including Independent Contractors, in excess of the legal bid limit of $114,500 except those contracts governed by public contract codes.
- Public Works Projects over $200,000.