2018-070 Contracts and COsDate: June 8, 2018 Report No. 2018-070
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Report on active contracts on the City’s website and associated change orders that have been
executed.
EXECUTIVE SUMMARY:
At the June 4, 2018 City Council meeting, Council Member Meltzer requested a report be made
available on the City website detailing active contracts along with change order information. The
purpose of this informal staff report is to provide information about the change order process and
on-going efforts to report active contracts with change order information.
The City enters into numerous contract types, including but not limited to, procurement, leases,
memorandums of understanding, and temporary easements. Procurement contracts are published
on the City website to create transparency with citizens, vendors, and other agencies. The
website includes contracts awarded by City Council and small contracts executed by
Procurement staff.
Currently, there is no centralized storage of all contracts and change orders. Each department
manages their contracts separately and Materials Management monitors contract expiration,
value, and not to exceed amounts manually. Change orders are stored with each contract and
managed individually, added to the contract file as departments request modifications.
The City is working on a centralized contract management solution. Newly purchased contract
management software will house all contracts and change orders. The software will also interface
with the City’s financial software, assisting in managing the contract not to exceed amount,
contract expiration, and obligations of the contractor and the City. The new software is currently
in the early stages of development, with a planned implementation in October 2018.
In the interim, Technology Services is reviewing the information available in the financial
software to identify change orders for construction projects. The report would review
modifications to the purchase order showing an increase or decrease in contract value. The report
would not identify change orders that did not result in a contract value change.
BACKGROUND:
Contract change orders occur due to modifications to the scope of work or changes in the
products or services needed during the contract term. Change orders for goods and services are
tracked on a change order log and stored with the corresponding contract. These types of change
orders seldom result in an increase in the contract’s total not to exceed value.
Date: June 8, 2018 Report No. 2018-070
Construction change orders may be the result of a change in project plans or materials needed.
These change orders are signed by the contractor, architect/engineer, project manager, and the
City’s authorized agent. The authorized agent is the Purchasing Manager or City Manager,
depending on the individual or cumulative change order value. Construction change orders may
not result in an overall price change, but often involve purchase order price changes.
CONCLUSION:
The City is working towards a centralized contract management solution for all contracts and
change orders. Software will provide an overview of all contract types, values, terms, and change
orders. The new software will also manage contract spend and not-to-exceed contract totals.
Implementation is planned for October 2018 and will include all future contracts.
STAFF CONTACT:
Cassey Ogden
Director of Procurement & Compliance
(940) 349-7195
Cassandra.Ogden@cityofdenton.com