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SERVICE CONTRACTS GROUP (SCG)

Letter of Agreement (LOA) Procedures Training

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Agenda

I.  Authorities II.  Encumbering Documents III.  Letter of Agreement (LOA) Process IV.  After-the-Fact V.  Questions VI.  SCG Contacts VII.  Adjourn

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Training Objectives The purpose of this training is to ensure:   City contracting policies and procedures

are followed.   Department staff are able to provide

complete information to ensure that the process is completed within an acceptable time frame.

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AUTHORITIES

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Authorities

Charter Section 320 No department, bureau, or office of the City government shall expend or incur liabilities in excess of the amount appropriated.

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Authorities

Administrative Code Requirements

Pursuant to Los Angeles Administrative Code Section10.2, every contract valued at more than $1,000 must be made in writing.

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Authorities   Services $20,000 and under with a period not

to exceed one-year, LOA approved by GM or designee (Charter Sec 370 and Admin Code 10)

  Services over $20,000 or terms over one-year will require Board approval. (Admin Code 10.1.1)

  Services over $25,000 will require a formal bid process (Charter Section 371 and Admin Code 10.15)

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What do Requestors need to do to procure services?

1. Identify the type of required services. 2. Determine the type of encumbering

document that will be used.

encumbering/encumbrance: a financial contractual commitment/obligation before services can be procured.

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ENCUMBERING DOCUMENTS

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Supply Management System (SMS) Region Coordinator

A.  Repair, maintenance, and installation of existing equipment

B.  Incidental services related to repair, maintenance, installation, rental, and purchase of commodities

Examples: repair/maintenance of copy machines, maintenance of alarm systems, installation of score board, piano repair, etc.

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A.  Government fees, utility fees, training or seminar fees, insurance fees, subscription fees, membership fees, and advertising fees.

B.  Services that would require vendors to come on to City property or require travel of participants, will require insurance.

C.  Personal Services $1,000 or under.

Authority for Expenditure (AFE/AE) through Accounting

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Letter of Agreement (LOA) - Services over

$1,000 and up to $20,000

A.  Entertainment services, instructors, professional services, maintenance (except for services related to equipment), recreation support, consultants, etc.

B.  All other services not related to equipment and not listed in AE checklist.

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Personal Service Contracts

A.  Personal Service Contracts $20,000 and above and under $25,000 will require Board approval. Board Report will be required to be completed and submitted by Requestor

B.  Personal Service Contracts $25,000 and over will require Board approval and a formal bid process. SCG will assist the requestor.

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LETTER OF AGREEMENT

(LOA) PROCESS

Services valued over $1,000 and up to $20,000

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  Check RAP Intranet located at http://rapintra/mrpProcurement/wklysumappr.htm to see if there are LOAs already in place for the required services.

  If service is listed: for MRP funded, submit a General Encumbrance Form (GEF) to MRP Accounting. For General Fund, submit invoice with stamp of contract/LOA number, and funding information to be submitted to Cost Accounting

  If not, complete the Service Request Forms to request for an LOA

What to do if the services being requested has an Executed LOA?

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Phase I Requestor Responsibilities

Services over $1,000 – up to $20,000

1.  Provide a complete Service Request Forms package.

•  Pre-approval Request Form •  Vendor Quote Form •  Include complete and well-defined Scope of Work •  Notice of Intent to Contract form •  W-9 •  BTRC

2.  Draft Board Report for services over $20,000.

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Service Request Forms Package Located at http://rapintra/mrpTraining/forms.htm

1.  Pre-Approval Request Form   Authorized signatures   Funding source/account #/balance

2.  Vendor Quote Form   Cost breakdown   Deliverables   Scope of Work or Price List   Vendor Signature

3.  Notice of Intent to Contract Form 4.  W-9 5.  Business Tax Registration (BTRC) Certificate

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Scope of Work Who, What, When, Where, Why, and How?

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Scope of Work General Guidelines

  Scope should be specific and clear.   Scope should be understood by someone

unfamiliar with the work.   Define terms. No jargons, buzzwords or

acronyms.   When in doubt, explain and include more details.   Scope must be discussed and agreed with the

vendor prior to submission of request to SCG.

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Examples of Questions Requestor should answer when assembling

Scope of Work   WHO

…is the Contractor? …receives the invoices for Department? …benefits from the services? …else is required to see the

Agreement for approval? …are the Contractor and Department contacts?

  WHAT …services are provided? …materials, equipment, and personnel are necessary for performance of services? …are the deliverables? …are the cancellation policies? …are the liability issues? …are the payment terms?

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Examples of Questions   WHERE

…is the service going to be performed? …does the Contractor

send invoices?

  HOW …will the work be performed? …often will the work be

performed?

  WHEN …will the service begin and end? …should the services be completed? …are the milestones for the work, if it is a long term project?

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Important Note:

  If it’s not in the Agreement, the Vendor/Department will not provide the services.

 The Requestor must be very specific with what they are requesting.

 Do not assume anything.

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LOA TIMELINE

  Submit all documents 4-6 months prior to the event.

  If it’s a new service, SCG highly recommends to submit the request 6 months ahead.

  Request for RUSHES are not always processed.

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Phase II SCG Responsibilities

Services over $1,000 – up to $20,000

1. SCG Review: Upon receipt of service request, SCG reviews the package to ensure that the Scope of Work is sufficient and that LOA is the correct vehicle. If package is not sufficient, SCG will contact requestor.

2. A Notice Of Intent to Contract (NOI) will be required and must be submitted to the Office of the City Administrative Officer (CAO). The Requestor will assist with completing the form. SCG will submit to CAO.

Services Not To Be Outsourced include: Printing, publishing and graphic design, Bookkeeping, Newsletter writing, etc.

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Phase II SCG Responsibilities

Services over $1,000 – up to $20,000

3. SCG drafts the LOA and… a.  Sends LOA draft to the Risk Manager for

insurance determination. b.  Sends LOA draft to Requestor for approval. c.  Sends LOA draft to Vendor for approval. d.  Vendor is also sent Contract Compliance

documents.

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Contract Compliance Requirements

Services over $1,000 – $25,000

  Affirmative Action/Equal Employment Opportunity (AA/EEO) Requirements

  Slavery Disclosure Ordinance (SDO) Requirements   Equal Benefits Ordinance (EBO) – For services

over $5,000   Los Angeles Residency Form   Insurance Requirements determined by RAP Risk

Manager   Other requirements: Environmental Review (Goats),

Murals (Cultural Affair Approval), etc.

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Phase II SCG Responsibilities

Services over $1,000 – up to $20,000

4. Upon receipt of approval from Requestor and Vendor, SCG sends LOA draft to City Attorney for pre-approval.

5. Upon receipt of all Contract Compliance Requirements, SCG sends completed forms to the Office of Contract Compliance for approval.

6. LOA draft, Mayor’s Transmittal, and Funding Information are sent to Management for approval.

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Phase III SCG and Requestor Responsibilities Services over $1,000 – up to $20,000

7. Upon Management approval: a. LOA is sent to Mayor’s Office/CAO for Executive

Directive #3 review and approval. b. If LOA is over $20K, under $25K, Requestor is

responsible for drafting the Board Report. Requestor is also responsible for processing LOA for Board approval. Board Office will send approved LOA to Mayor’s Office/CAO for Executive Directive #3 review and approval. Board Office will also execute LOA.

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Phase III SCG Responsibilities

Services over $1,000 – up to $20,000

8. Upon receipt of approval from Mayor’s Office/CAO, LOA is sent to Vendor, Management, and City Attorney for final signature.

9. Upon execution, SCG informs and sends a copy of executed LOA to Requestor, Vendor, and Accounting.

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Requestor Responsibilities after LOA is executed

  It is the Requestor’s responsibility to contact Contractor to schedule performance.

  Upon agreement of the performance schedule, Requestor completes and submits a General Encumbrance Form (GEF) to Accounting to encumber funds.

  Upon receipt of invoice, Requestor submits invoice to Accounting for payment.

  It is the Requestor’s responsibility to timely and accurately process Vendor’s invoices for payment.

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AFTER-THE FACT

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After-the-Fact

What happens if you procure the services prior to establishing a contract?

  Requestor completes an After-the-Fact justification memo for every violation.

  Requestor will be responsible for having the vendor comply with contract compliance requirements before payment.

  City may incur additional liabilities.   Requestor may be subject to disciplinary actions.

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QUESTIONS?

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Service Contracts Group Contact Information

(818) 243-6421 or (818) 243-6488 Fax: 818-243-1459

  Laarni Paras Ext. 202 E-mail: laarni.paras@lacity.org   Mark Stipanovich Ext. 209 E-mail: mark.stipanovich@lacity.org

  Supervisor: Karen Freire Ext. 217 E-mail: karen.freire@lacity.org

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ADJOURN