any contractor to take a look. >> so reasons for change amazingly the late a change was 15 years ago so in june of 2014 the controller's office condone a working group with the chapter 6 department in earlier saw the logo and the city attorney's office the zoning administrator the office of contract mix and the risk manager and monitoring distribution and other stakeholders we met every others week for about a year they were very lively discussions and considered more than 50 recommendations and we settled on about 34 moving

forward. >> no one other just - >> all righty so summary proposed changes the first one is the threshold increases so currently, the threshold is 4 hundred and 40 thousand we're proposing to increase to 6 hundred thousand this effects the amount of work performed by city employees and enable the departments to set aside larger contracts for smaller contractors and it will increase the task odor that are allowed under job order contracting and then under it - the changes will be modifying the evaluation

process and the two ones you all will see most in our contract are for design builds and construction also known as contract refilling this is when a contractor is - after we have a designer of record and bring on a general contractor. >> can we just i wanted to highlight that i think that is important for us to talk about the different types of contracting we're going to start shifting from the low bid the low bid you have plans and specs a contractor gets the document and bids a hard bid and evaluates the low bid we voluntary manslaughter it you bring in a contractor on earlier that performs the contract

activities and they become did contract manager they'll break the design plans into a trade package and bid those to the substances and so it is great to have the contractor on board earlier they've perform up to 25 percent the work but the great thing they'll solicit the bids for trading packages the reason we find this is a great alternative when you bring the c m g c on you worked have angeles rather than price thirty how to engage local businesses how do you help with the local hire hire so they can be creative one thing to offer the food truck into the

facility we want to make sure it's a local food truck so through the process really will benefit the community that we impact that's the at risk the design build is where the designer and the contractor is on the same team we'll design the perimeters of what we said to build and have a team of folks come in and design it and build it so it is similar to tesla treatment facility we have a design build 9 example was 585 we've used them before but we use more of the c mc contracting we'll want to bring that before you today. >> does that - how does that

conform with state contracting law that's always been a presumption for competitive bidding so state law allows for this or do we exempt users. >> it is an alternative construction process what we're doing is that we are through solicitation we're hiring a construction manager for their fees and their fees we're saying a portion i think up to 65 percent of the fee has to be based on low cost we're a chapter city we came up with deviation and non-related costs this is what are you going to do

to encourage more local birds and so this is when the km is selected and becomes a general contractor but they breakdown into trades a concrete foundation or electrical they put it in a package with a low bid and the other great thing they prequalify with 3 birds to bids on each package it is a great way i think everyone is moving towards that method you know state agency is utilizing this type of delivery method. >> probably one of the areas that is familiar to you is south of market ucsf and i think almost entirely use the c m g c for the would out >> how do we get the k c m.

>> a compilation of bid like i said, it is 65 percent based on the mark up they say they're a general contractor every bid is a mark up they bids on this but like i said, the 35 percent of the remaining is based on off the non-monetary how are you going to break down so more let's see can participate. >> on experience and prior projects. >> so one the new major chancellor is the evaluation of the projects so the cost is not the criteria so our procuring a small amount of contract so the code will adjust the selection process so the cost evaluation

criteria is a minimum of 40 percent instead of the 65 and the quality experience criteria is going do account for 60 percent of the qualification this quality should run equal if not lower due to the best possible design early on most of the project costs live down stream during the construction period and the trade packages are extensively bid out. >> so can you audience the on thing i'll add i think this method is probably the best apply for the southeast because you know going on the community and giving they have endured the smell we want to make sure they have ever opportunity to participate if you been it if we

pay attention where the c m and g c come in and talk about how there i go to break down the contracts they have to have 3 birds so breaking down so local businesses can participate they have to think about how to do that and since it is competitive we should get some competitive prices these that's why i feel this will go along ways when we spend billions of in the community and try to get the community to participate. >> the construction costs will be typically a percentage of the major project. >> so the construction is 70 percent of the cost of constricting and what we're looking at official and profit

it is 60 percent of the whole project will be low bid out of the 70 will be low bid 10 percent of the mark up and the trends will be the c m g c responsibility. >> so new contracting methods that be being proposed increase in public works code include contracts under $10,000 that we don't have to go through a traditional procurement and selection process we can obtain a bid and move forward the cost the resources into the development of the under 10 thousand we have to do a formal bid process will be more than $10 million so no where under chapter 6 do we have that option

it is modeled under the source contracting and other parts the administrative codes as well as several contracting and all source contract will come before i for approval and list out even though sole contracts to the board of supervisors and so now i'm going to move onto the local business entries owners and accident purpose of the local business entries is to mitigate competitive disadvantages to small businesses in san francisco through discounts and micro set aside a 10 percent preference applies to contracts under $10 million for local business enterprises i've mentioned the therapy is that

vendor that have a principle place of business in san francisco the cost of doing business payroll and rent and taxes and shiners is more expensive in san francisco in order to avoid putting our small businesses at a disengage this leveling the playing field suspecting goal is applicable on suspects under 2 hundred and 20 thousand and goals are set by the contract division on a caught by contract base on the local business process for the work done on each contract micro set aside contracts as the term significance contracts set aside they're small contractor no more than 40 thoughts for construction and professional

services hundred and $10,000 those small contracts are meant to help the merchant and build the ability to compete every year the department reports the set aside contracts to the board of supervisors and late is the puc lbe's this saw the puc lbe firms established to help the with his up shared costs between the region partners and regional small businesses should be able to participate in the local enterprise program for the shared costs project. >> so the reason to change our local enterprise program to

codify the transfer of the function of the human rights commission to the zoning administrator, what say you? office last comprehensive review of the local enterprise was in 2006 and the need to empowers the certification threshold for raising construction materials want to strengthen our lbe community. >> so a summary of the changes the certification threshold those relate to the size of businesses that are under the program and the mutter on the early gross receipts of the company and shows the allowable gross receipts for certain types of companies the expansion of the puc lesbian program now includes professional services with construction and includes

all shared costs projects and non-shared projects located 70 miles outing outside of the san francisco this will help our hetch hetchy improvement program we'll be able to utilize small businesses in that region for the contract and the discounts the change allows for small businesses that are trickles living out to have a process in the city projects. >> we have the san francisco first program that is one we're soliciting informally contracts all departments will outreach to all lebanese in the certification categories that is something the puc has started for a number of years doing and there's also going to be a

citywide envisional goals participation on all contracts regarding the subcontractors c m b will justify the codes to a low percentage a program i'm working on with the controller's office as well as the zoning administrator, what say you? office is a subcontractor advance payment we're looking at ways to be able to provide early payment for the local business enterprises so they don't have to wait until the prime is paid until they get paid and then another program that is emerging the mentor program we're exciting it encourages the prime contractors to mentor the smaller contractor by weighing some of the good faith requirements so i know that was a lot

it didn't encompass all the changes but definitely a highlight is there any questions. >> did i put you all to sleep (laughter). >> glad you presented it well it is clear and precise. >> the question i have what would be different about what items are brought to the commission for approval. >> so to give you some examples of what would change when you're at the document or in your agenda items and you start looking at the low bid you normally see in one of the columns 10 percent discount so they gave them a 10 percent discount what you'll see different the f b.a. which is a firm that move forward from a

lbe to category to a f b.a. category they've moved out of the program one right of concerns once they graduate from the program and receive a letter saying congratulation you've graduated they thought that was the kiss of death they didn't get the 10 percent preference they're not big so they want a transition they moved it to 5 percent now you'll see 5 percent between 10 and $20 million they'll receive this is something to help them transition to a larger firm you'll see that larger calculation the way we do it first, we give a 10 percent to the lbe if they're the lowest bid they win if not to the other bid gets it, it's a way the s

b.a. won't trumpet the lbe that's one thing you may ask questions and it's not c m.d. you'll see more designs at c m g c types of contracts when we go out for construction instead of a low bid. >> as our approval process the same i thought when i was reading it for the design build and the c management the early phase they'll come here. >> yeah. the early phase comes to the commission. >> okay. >> i think what doesn't and i'm not sure. >> the prequalification so currently on the design build and c m g c we come to you prior

to advertising the approved qualification now we don't have to come before you to prequalify for vendors but after the selection process we'll come to you you also receive an advertisement report for all professional service and all construction contracts being advertised and for the approval process it will be no different you'll see all contracts you currently see come before you i want to make sure when the c m g c go out with the trade packages they'll be prequalified and get that bid that didn't come to in front of the commission. >> those bid packages. >> correct. correct. >> so the award of the selected

c m g c contractors when we go out with our digesters we will prequalify it is under our current rules you'll actually see on item for the prequalification process but you'll also see when a vendor is it selected down the line when those trade packages are bid out we don't come to you but now either. >> yeah. >> could you ask for a report we give you an update for the procurement process absolutely we can create something like that. >> it is - i mean that sounds like the 60 or 70 percent construction contract that will be put out on trade packages normally the current rules we see the vetting process and basically put our stamp on it

that the rules have been followed and the decision discussion was correct will we no longer see those. >> through chapter 6 in the way it is defined you wouldn't because what happens is the c m g c prequalifies the 3 bias and obtains bids from those 3 that will be given to the c m contract so lauren. >> city attorney. >> there will be a maximum contract amount at the time of the award to the c m g c. >> correct. correct. >> you'll see the scope of the contract but right the bidding process will be pursuant to the contract. >> in terms of i mean are we

privatizing the construction bidding process. >> it's an interesting way of putting it. >> what we've done sort of the same thing with you know 525 where we had a budget and what happens is that the c m g c the city tried to design in the budget for example one trade panning is more than the budget we evaluate and work with the designer and you know the contractor to see what we can do to bring it in and sometimes you have savings for others but we can always the commission can always request if - we can identify each thing in the budget the reason you don't want to come to the commission meeting you slow the process all the process is you're trying to move quickly and so one of the

reasons a lot of people at c n or m g c you take the design early and get the packages out airline what's the result first of all you select 3 prequalified contractors and then if they're an issue with their bid the same protested process is you know that we would examine in a construction contract you know we determine for example something was unclear or substitution was not accepted or something like that we'll resolve is the same way we resolve is now we don't come front the commission. >> typically if that resolution is not agreed to they can could come to the commission and on

occasion have i'm seeing redress part of really is oversight and to the extent a large portion the contract it sounds like this is a large portion the contracts d is going out to private entities that may not be as transparent or may not provide the opportunities that will certainly make things faster but not sure that protects the interests. >> we can definitely debate about it i've been 16 years and one of the things that is a trend when we go to you know a f c e and the reason they go to c m g c you want to bring the contractor only early the other

thing pre-qualified firms or trade contracts that actually really helps in a lot of times they're involved early so you element a lot of that by this whole process. >> i understand that and i understand the premium on quick decisions the slow decisions we're prone to say a government entities is costing us a lot i recognize that but i'm concerned i guess about the issue of transparency and opportunity for redress that people have this is something that is going before the board of supervisors as an ordinance correct. >> just to point out the c m g c already exists and we use it and the dpw uses it all the time it is something if so there we're modifying some of the told her i wanted to pointed out that we are planning to eye it

anymore frequently and i think that a confident level needs to be discussed they commission before we start going and maybe what we can do is have conversations about when w what we can do to make the commissioners feel for comfortable with the processed because it has sgaejz i tlndz are concerns. >> we took on the recent program and faced a dual challenge how to get $4.6 billion down on a transparent oversight we came up with a bunch of ways one of which was the most robust program and i would be interested in pursuing what measures we can take that preserves the business benefits

of you know proper and timely decisions and at the same time making sure that you know an important part of the process is not underground and out of site. >> we can definitely with work with a proposal that we can submit maybe at the next commission meeting as sort of a c m g c h bred we'll have working with the program manager and also the city auditors to participate in maybe even accepting the bids when they those those bids are relate to the c m g c. >> i'll appreciate it but as the next meeting comes off quickly. >> i have it all right here

(laughter). >> she put this presentation together short time. >> all right. so the next update is the drought update as we've had a press conference today and steve richie was on point with nicole there she is in the back we had a press event we talked about the status of our water system and our drought so steve. >> steve richie vaunt general manager for water if i can have the slides please i didn't want information that looks at they very, very good challenging in others this is a slide of the

april 2015 residential per capital use the 15 lowest users in the san francisco bay area 11 of those are customers including the city their highlighted in the green there and again, this is a testament to the water use efficiency this is chuchd thought our water ear in terms of the storage hetch hetchy as of yesterday was 92 percent full at the same time the trade off has dropped to an extremely low level i'll talk about that but the jest is the system is working the way it is intended to we scarce water for the sake of storing water in the hetch hetchy that's a really good