5.33.105 Feasibility and Cost Analysis.

City Code Section

(Added by Ordinance 183445; Amended by Ordinance 185065, effective January 1, 2012.)

  1. A.  For purposes of this rule, the term “bureau” means a department, bureau, office or other subdivision of the City of Portland. 
  2. B.  Before conducting a procurement that pertains exclusively for services other than professional services, and which is estimated to exceed $250,000, the bureau shall conduct an analysis to determine if it is feasible to use the City’s own personnel or resources to perform the same services.   The City may determine that it is not feasible if:
    1. 1.  The bureau needing the services lacks the specialized capabilities, experience or technical or other expertise necessary to perform the services.  In making this finding, the City shall compare the bureau’s capability, experience or expertise in the field most closely involved in performing the services with a potential contractor’s capability, experience or expertise in the same or a similar field; or
    2. 2.  Special circumstances require the bureau to procure the services by contract. Special circumstances may include, but are not limited to, circumstances in which: 
      1. a.  The terms under which the bureau receives a grant or other funds for use in a procurement require the bureau to obtain services through an independent contractor;
      2. b.  Other state or federal law requires the bureau to procure services through an independent contractor;
      3. c.  The procurement is for services that are incidental to a contract for purchasing or leasing real or personal property, including service and maintenance agreements for equipment that is leased or rented;
      4. d.  The bureau cannot accomplish policy, administrative or legal goals, including but not limited to avoiding conflicts of interest or ensuring independent or unbiased findings in cases when using the bureau’s existing personnel or persons the bureau could hire through a regular or ordinary process would not be suitable; 
      5. e.  The procurement is for services to which the provisions of ORS 279B.080 (emergency procurements) apply;
      6. f.  The procurement is for services, the need for which is so urgent, temporary or occasional that attempting to perform the services with the bureau’s own personnel or resources would cause a delay that would frustrate the purpose for obtaining the services; or
      7. g.  The services the bureau intends to procure will be completed within six months after the date on which the contract for the services is executed.
  3. C.  If it is determined it is not feasible to acquire the services with the bureau’s own personnel or resources, a written determination shall be made and kept in the City’s procurement file.   If it is determined it is feasible to acquire the services with the bureau’s own personnel or resources, the bureau shall conduct a cost analysis as set forth in Subsections 5.33.105 D. – F.  below. 
  4. D.  The bureau shall first estimate the bureau’s cost of performing the services, including:
    1. 1.  Salary or wage and benefit costs for contracting agency employees who are directly involved in performing the services, including employees who inspect, supervise or monitor the performance of the services.
    2. 2.  Material costs, including costs for space, energy, transportation, storage, raw and finished materials, equipment and supplies.
    3. 3.   Costs incurred in planning for, training for, starting up, implementing, transporting and delivering the services and costs related to stopping and dismantling a project or operation because the contracting agency intends to procure a limited quantity of services or procure the services within a defined or limited period of time.
    4. 4.  Miscellaneous costs related to performing the services. The contracting agency may not include in the cost analysis the contracting agency’s indirect overhead costs for existing salaries or wages and benefits for administrators or for rent, equipment, utilities and materials except to the extent that the costs are attributable solely to performing the services and would not exist unless the contracting agency performs the services.
  5. E.  After estimating the bureau’s costs, the bureau shall estimate the cost a potential contractor would incur in performing the services.   The bureau may estimate a contractor’s potential costs by any reasonable means, including, but not limited to, past bids or current information provided by contractors performing the same or similar services.  In the absence of information that can be reasonably and simply obtained without the expenditure of undue time and expense, a bureau may employ employing percentage markups for overhead and profit.  No matter the method, the bureau’s estimate should ensure it captures the following costs:          
    1. 1.  Average or actual salary or wage and benefit costs for contractors and employees who:
      1. a.  Work in the industry or business most closely involved in performing the services that the contracting agency intends to procure; and
      2. b.  Would be necessary and directly involved in performing the services or who would inspect, supervise or monitor the performance of the services;
    2. 2.   Material costs, including costs for space, energy, transportation, storage, raw and finished materials, equipment and supplies; and
    3. 3.  Miscellaneous costs related to performing the services, including but not limited to reasonably foreseeable fluctuations in the costs for the items identified in this subsection over the expected duration of the procurement.
    4. 4.  Profit Included. Contracting Costs include the Authorized Agency’s estimate of Contractor’s profit in addition to the estimate of Contractor’s costs under Subsection 5.33.105 E. If the Authorized Agency, in the reasonably near past, received Bids or Proposals for the performance of the Services under consideration, or reasonably comparable services, the Authorized Agency may consider the pricing offered in those Bids or Proposals in making its estimate. Similarly, the Authorized Agency may consider what it actually paid under a Contract for the same or similar services. For the purposes of these examples, the reasonably near past is limited to Contracts, Bids or Proposals entered into or received within the five (5) years preceding the date of the cost estimate. The Authorized Agency must take into account, when considering the pricing offered in previous Bids, Proposals, or Contracts, adjustments to the pricing in light of measures of market price adjustments that apply to the Services, such as the Consumer Price Indexes.
  6. F.  After comparing the estimate of the bureau’s costs with a potential contractor’s costs, a bureau may proceed with the procurement only if the contracting agency would incur more cost in performing the services with the contracting agency’s own personnel and resources than the contracting agency would incur in procuring the services from a contractor.
    1. 1.  Notwithstanding the fact that a potential contractors’ cost may be less, the state legislature has decided that a bureau cannot proceed with the procurement if the sole reason the bureau’s estimated costs are lower than a potential contractor’s estimated costs is because the bureau’s costs for salary or wage and benefit costs for the bureau’s employees, as calculated in Subsection 5.33.105 D.1. above is greater than the average or actual salary or wage and benefits costs for contractors and employees, as calculated in Subsection 5.33.105 E.1. above. 
    2. 2.  A bureau may proceed with a procurement even if the bureau determines that the bureau would incur less cost in providing the services with the contracting agency’s own personnel and resources if at the time the bureau intends to conduct a procurement, the bureau lacks personnel and resources that are necessary to perform the services within the time in which the services are required. If the contracting agency conducts a procurement under the conditions described in this paragraph, the contracting agency shall:
      1. a.  Keep a record of the cost analysis and findings that the contracting agency makes for each procurement the contracting agency conducts under this section, along with the basis for the contracting agency’s decision to proceed with the procurement; and
      2. b.  Collect and provide copies of the records described in Subsection 5.33.105 F.2.a. each calendar quarter to the City Council. 

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