PURPOSE
This procedure explains the process for changing the contract after it has been executed.
REFERENCES
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RESPONSIBILITIES
Project Manager (PM): The PM is responsible for determining whether or not an amendment is needed and securing the Program Manager’s concurrence. The PM is responsible for filing the Notification of Intent to Contract with the Office of the City Administrative Officer’s (CAO) Employee Relations Division and getting the CAO’s Charter 1022 determination. The PM is also responsible for negotiating the change with the Consultant and for processing the Amendment through the approval process. The PM must send a copy of the final Amendment to the Contracts Section of the Project Award and Control Division for its centralized file of executed contracts and amendments.
Program Manager: The Program Manager is responsible for reviewing and approving both the PM’s proposed need to amend the contract as well as the amendment itself and its related Board Report.
Board of Public Works: The Board of Public Works is responsible for considering the City Engineer’s Board Report, as prepared by the PM, to amend the personal services contract.
Personal Services Contracts Section of the Project Award and Control Division (PAC): The Contracts Section maintains the Standard Personal Services Contract Amendment Format. The Contracts Section is the Bureau’s liaison with the City Attorney. The Contracts Section will review the proposed amendment before submittal to the Consultant and will review the Board Report prior to submittal to the Board Unit for processing. The Contracts Section maintains a centralized file of the Bureau’s executed contracts and amendments.
City Attorney: The City Attorney must approve and sign the negotiated Amendment “As to Form” prior to execution by the Board.
PROCEDURE
Whenever it is necessary to change the terms of a contract, the PM must first secure approval of the Program Manager to amend the contract. The most common reasons to amend a contract include:
Additional funding required
Increased (or revised) scope
Increased duration
Once the need is identified and the Program Manager has approved the PM’s proposal to amend the contract, the PM is to send a Notification of Intent to Contract (see Procedure 6.1) to the CAO’s Employee Relations Division. If necessary, the PM is to obtain the CAO’s Charter 1022 determination for the proposed amendment. Charter 1022 procedures are discussed in Procedure 6.1. Then the PM is to secure a sample Standard Form Personal Services Amendment and a sample Board Report to Amend a Contract from the Contracts Section of PAC. This Standard Form Amendment should be used as the foundation of the Amendment.
Negotiation
The PM must then negotiate the change with the Consultant. If scope, cost, or schedule is involved, then the same general type of issues discussed in Procedure 6.5 - Contract Negotiations apply. The PM should consider the following guidelines:
Scope changes must be clearly identified in the Amendment
Cost issues must be dealt with in a similar manner as in the original contract – an estimate of labor hours or days that builds to the added cost (or lesser cost if scope is being deleted) must be prepared. The Exhibit, in the original contract, that contained the cost basis must be revised to reflect any proposed change in cost. The Article regarding Cost Ceiling of the contract must be revised. The Minority Business Enterprise / Women Business Enterprise / Small Business Enterprise / Emerging Business Enterprise / Disabled Veterans Business Enterprise / Other Business Enterprise (MBE/WBE/SBE/EBE/DVBE/OBE) Utilization Plan should be revised to reflect the change in cost and it will then be the official plan for the contract. The revised Utilization Plan should be input to the Personal Services Contract System (PSCS) to reflect the new plan.
Schedule changes must be shown as a revision to the appropriate Exhibit of the contract.
Once the negotiations have been completed and a draft of the Amendment has been prepared, the PM should ask the Contracts Section of PAC to review the Amendment. The PM needs to schedule an appointment with the City Attorney to get a verbal approval from the City Attorney “As to Form” on the Amendment.
Execution
From this point forward in the approval process, the procedure is the same as for executing the original contract (refer to Procedure 6.7 - Contract Execution). In simplified terms, the steps are as follows:
Request a sample of the standard Board Report to Amend a Contract from the Contracts Section of PAC. It will be a Joint Board Report with the Bureau of Contract Administration for the Amendment. The Office of Contract Compliance has requested that the Board Report include a table on the actual subconsultant utilization, both in dollars and percentage of the invoiced to date amount. A PSCS report can be generated showing subconsultant utilization information. The information will be as of the date the report was generated and may not be the same as the PSCS Monthly Report due to the input of additional invoices. The PSCS Section of PAC can provide assistance. If the Amendment is to increase the cost ceiling of the contract, another table should be included to show what the expected subconsultant utilization will be with the added funding to the contract. If subconsultants have been added since the execution of the original contract, these added subconsultants are listed in the Board Report, along with an explanation as to why the subconsultants were added. The PM is to keep in mind that the standard personal services contract allows the Bureau to add subconsultants; however, subconsultant substitution is only done upon approval of the Board of Public Works.
Offer to brief Board Members on the Amendment
Board approves the Report and sends it to the Mayor’s Office
Mayor’s Office asks the CAO’s Office to review the Amendment
The CAO prepares the “Analysis of Proposed Contract” report, sends it to the Mayor who will authorize the Board to execute the Amendment
The Board executes the Amendment
The City Clerk certifies the Amendment, keeping an original. A copy of the Amendment may be kept by the Board, one copy is given to the Consultant, and a copy of the Amendment is sent to the Contracts Section of PAC for their files. The Controller’s Office and the Office of Accounting may require copies of the Amendment for payment purposes.
Special Circumstances
Following are a few situations in which special circumstances apply:
City Engineer Executes Contract Changes: There are some personal services contracts that contain articles allowing the City Engineer to authorize changes to the contract that do not change the cost by more than a specific dollar value limit. If these articles exist in the original contract, it is desirable to use them because it speeds up the approval process. However, the Program Manager and the City Engineer must first approve the use of the article rather than the “normal” approval process through the Board and Mayor. The current Standard Personal Services Contracts no longer allow this circumstance.
Program Manager or PM Executes Contract Changes: The Program Manager or PM does not have the authority to execute contract amendments on behalf of the City. Contracts that contain this article shall only be amended through a formal report to the Board of Public Works. After approving the Amendment, the President or two members of the Board will then execute the Amendment on behalf of the City.
No future contracts are to contain authority for PMs or Program Managers to execute contract amendments.
Anytime the contract multipliers are revised, PAC’s PSCS Section must be notified in writing and the new approved revised multiplier documentation used to establish the new rate must be entered in PSCS.
City Council Approval Required: When the Amendment extends the total cumulative duration of the contract to a period in excess of 3 years on contracts that don’t support capital projects or in excess of 5 years on Capital Improvement Program (CIP) related contracts, then the City Council must approve the Amendment. This must be recognized in the recommendations contained in the Board Report that forward the Amendment from the Board to the Mayor for execution. The Board Report must recommend that the Board approve the Amendment and forward it to the Mayor and City Council for their approval. The Contracts Section of PAC can provide the technically correct language to be included in the Board Report. The PM must be aware of this requirement and recognize its impact on the length of time that it will take to get the Amendment executed.
Upon the Board adopting the Report, the process is the same as noted above except as follows:
After the Mayor has considered the CAO’s report and the Amendment and approved its execution, his office submits it to the Referral Clerk in the City Clerk’s Office.
The Referral Clerk enters a record into the Council File Index and assigns the Amendment to the appropriate Council Committee(s).
The Council Committee(s) and full Council consider and approve the Amendment and return it to the City Clerk.
The City Clerk sends the Council (and Mayor) approved Amendment back to the Board.
The Board executes the Amendment and forwards it to the City Clerk.
Next Actions by Project Manager
Ensure the new contract and its required information, including multipliers, are entered into the PSCS.
Expiring Contracts
Although a contract amendment is not considered to be executed unless it has been signed by the City Clerk’s Office, the Board may allow a Consultant to continue working on a project if the amendment is approved by the Board prior to the expiration date of the original contract. However, this practice is neither recommended nor encouraged. Project Managers are expected to utilize resources such as the PSCS Monthly Report to determine the expiration dates of their contracts and begin the amendment process with sufficient time.
Contracts that have expired prior to Board of Public Works’ approval cannot be amended.
Any problems arising during the amendment process should be brought to the attention of the Contracts Section of PAC.
RELATED PROCEDURES
Links / Attachments
Links
Execute Amendment to Contract (City Staff only)
PSCS Monthly Report (City Staff only)
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