Agenda Item 9
February 24, 2015
Public Hearing
MEMORANDUM
TO:
FROM:
County Council
Robert H. Drummer, Senior Legislative Attorney
C\
~
SUBJECT:
Public Hearing:
Expedited Bill 7-15, Reorganization - Executive Branch -
Procurement and Reorganization Plan No. 1-15
Expedited Bill 7-15, Reorganization - Executive Branch - Procurement, sponsored by the
Council President at the request of the County Executive, was introduced on February 3,2015. A
Government Operations and Fiscal Policy Committee worksession is tentatively scheduled for
March 5, 2015 at 9:30 a.m.
Background
Bill 7-15 would establish the Office of Procurement as a principal Office of the Executive
Branch and transfer procurement related functions to the Office of Procurement. Prior to July 1,
2008, the Office of Procurement was a principal Office of the Executive Branch. At the request
of the Executive, the Council enacted Bill 4-08, Reorganization - Executive Branch, on April 15,
2008, effective July 1,2008. Part of the reorganization accomplished in Bill 4-08 was to create a
new Department of General Services (DGS) and transfer certain functions to the new Department,
including Procurement. The Executive is now requesting to pull the Office of Procurement out of
DGS and re-establish it as a principal Office of the Executive Branch. The Office would include
the procurement function as well as the duties that have been handled by the Office of Business
Relations and Compliance, which ensures that contractors meet the wage and minority-owned
business provisions of the procurement law. The Executive explained why he requested this
reorganization in his transmittal memorandum at ©7.
County Charter §217 provides that the Council "may prescribe by law the organization of
the Executive Branch of County government." Charter §217 also authorizes the Executive to
submit a reorganization plan to the Council for approval. If the Council does not disapprove the
plan within 90 days after it is presented to the Council, it becomes law. In addition to requesting
Bill 7-15, the Executive submitted Reorganization Plan No. 1-15 establishing the Office of
Procurement as a principal office ofthe Executive Branch under Charter §217 on January 22. See
©8-11. The Council does not have the authority to amend the reorganization plan. The Council
must approve it, disapprove it, or let it become law without taking action. However, the Council
can amend Bill 7-15 and disapprove the reorganization plan.
This packet contains:
Expedited
Bill
7-15
Legislative Request Report
Executive's Transmittal Memorandum
Reorganization Plan No.1-IS
Fiscal and Economic Impact statement
F:\LAW\BILLS\1507 Reorganization-Executive Branch-Procurement\PH Memo.Docx
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5
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Expedited Bill No.
-'-7.....;-1:...:::5--:-:-_--:::~_:_:_­
Concerning: Reorganization - Executive
Branch - Procurement
Revised: January 23. 2015 Draft No. _1
Introduced:
February 3. 2015
Expires:
August 3.2016
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date:
.:..:.No::::n~e:..-...-
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President
at
the Request ofthe County Executive
AN EXPEDITED ACT
to:
(I)
(2)
(3)
establish the Office ofProcurement as a principal Office ofthe Executive Branch;
Transfer procurement related functions to the Office of Procurement; and
generally amend the law regarding procurement and related functions.
By amending
Montgomery County Code
Chapter lA, Structure of County Government
Section IA-20l
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter II B, Contracts and Procurement
Section 11 B-1
Chapter 19, Erosion, Sediment Control and Stormwater Management
Section 19-29A
Boldface
Underlining
[Single boldface brackets]
Double undedining
[[Double boldface brackets]]
* * *
Heading or defined term.
Addedto existing law by original hill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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ExPEDITED BILL
No.
7-15
1
Sec. 1. Sections 1A-201, 2-30, 2-64N, 11B-1, and 19-29A are amended as
follows:
1A-201. Establishing departments and principal offices.
(
a)
2
3
4
5
6
7
Executive Branch.
(1)
These are the departments and principal offices of the Executive
Branch.
*
*
*
*
*
8
9
10
11
12
13
14
15
16
Procurement [Section 2-64N]
*
Division 5. DEPARTMENT OF GENERAL SERVICES.
2-30. Department of General Services - Functions.
The Department of General Services must:
[(a)
administer, through the Office of Procurement, the procurement system
under Chapter lIB;]
[(b)]
W
acquire and dispose of real property, except real property used
(or intended to be used) for right-of-way governed under Chapter 49,
including roads, streets, highways, bridges, culverts, storm drainage
systems, pedestrian and bicycle pathways and walkway systems;
[(c)]
(hl
design and build County buildings, including public parking
17
18
19
20
21
22
23
facilities under Chapter 60;
[(d)]
W
maintain County vehicles, including heavy and light equipment
and transit equipment;
[(e)]
@
remodel and renovate County buildings, except public parking
24
25
facilities under Chapter 60, which remain open during the remodeling
or renovation;
[(f)]
(s:}
repair and maintain County buildings, except public parking
26
27
1.docx
facilities under Chapter 60;
o
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ExPEDITED BILL
No. 7-15
28
29
[(g)]
ill
manage County property and identify and acquire real property
needed for the operation of County government;
[(h)]
(g)
[(i)]
{h}
plan and implement the use of space in County buildings; and
operate mail, printing, duplication, and archiving services.
30
31
32
33
34
35
36
37
Division 20. OFFICE OF PROCUREMENT.
2-64N. Functions.
[The Office of Procurement is part of the Department of General Services.]
The Office of Procurement must:
*
11B-1. Definitions
*
*
*
38
39
*
*
Director
means the Director of the Office of Procurement [Department of
40
41
42
General Services] or the Director's designee.
*
*
(b)
*
*
*
*
19-29A. Watershed restoration grants program.
43
44
45
46
47
To identify non-profit organizations to perform water quality protection
or improvement activities, the Director of the [Department of General
Services] Office of Procurement may issue a competitive solicitation
under Chapter lIB that is limited to non-profit organizations.
48
49
*
*
*
Sec. 2. Transition.
Any regulation in effect when this Act takes effect that
implements a function transferred to the Office ofProcurement by this Act continues
in effect, but any reference in any regulation to the Department of General Services,
from which the function was transferred, must be treated as referring to the Office
ofProcurement, to which the function is transferred. The transfer ofa function under
50
51
52
53
Qf:\laW\bills\1507 reorganization-executive branch-procurement\bill
1.doc.x
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ExPEDITED BILL
No.
7-15
54
55
56
57
58
59
60
this Act does not affect any right ofa party to any legal proceeding begun before this
Act took effect.
Any responsibility or right granted by law, ordinance, regulation, delegation
of authority, contract, or other document to the Department General Services in
connection with the Procurement Law and Regulations is transferred to the Office
of Procurement.
Sec. 3. Expedited Effective Date.
The Council declares that this legislation
is necessary for the immediate protection ofthe public interest. This Act takes effect
on the date it becomes law.
Approved:
61
62
63
64
George Leventhal, President, County Council
Date
65
66
Approved:
Isiah Leggett, County Executive
Date
67
68
This is a correct copy o/Council action.
Linda Lauer, CMC, Clerk ofthe Council
Date
l.docx
G
f:\Iaw\bills\1507 reorganization-executive branch-procurement'.bill
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LEGISLATIVE REQUEST REPORT
Expedited Bill 7-15
Reorganization Executive Branch
-
Procurement
DESCRIPTION:
Bill 7-15 would create the Office of Procurement as a principal office
within the Executive Branch of the County, rather than as a division
within the Department of General Services (DGS).
The inclusion of the procurement function within a department that itself
procures major goods, services, and construction has raised perceived
issues regarding the independence of the procurement function. For
example, in FY2014, DGS spent $855 million on procurement matters of
the County's total $3.66 billion, which amounts
to
25% of the County's
procurement expenditures. Moreover, DGS engages in some of the
County's most complex and sophisticated procurements that involve
construction of buildings and fleet management.
In
addition, several
obligations have been placed on DGS since 2007 that increase the
complexity ofkeeping the procurement function within DGS, namely, the
expansion of the small business reserve program in 2009, the expansion
of the prevailing wage law in 2009, and the whistleblowers statute in
2010. During the same period, DGS acquired responsibility for a more
complex real property disposition process in 2012.
PROBLEM:
GOALS AND
OBJECTIVES:
As an independent principal office, the Office of Procurement will be less
susceptible to pressures to defer to other priorities within the department,
and can focus on the best interests of the County from an overall
procurement perspective. By having the status of a cabinet level
department, the separation of duties would remain intact without the
blurred lines of authority that have occurred during the tenure of
procurement as a division within DGS. The Office would include the
procurement function as well as the duties that have been handled by the
Office of Business Relations and Compliance, which ensures that
contractors meet the wage and minority-owned business provisions ofthe
procurement law.
Department of General Services
Office of the County Attorney
To be provided
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
To
be
provided
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EVALUATION:
EXPERIENCE
ELSEWHERE:
nla
Other large municipalities house their procurement functions
independent office of procurement.
III
an
SOURCE OF
INFORMATION:
David E. Dise, Director, DOS
Marc P. Hansen, County Attorney
APPLICATION
WITHIN
MUNICIPALITIES: nla
PENALTIES:
nla
F:\LAw\BILLS\1507 Reorganization-Executive Branch-Proeurement\LEGISLATIVE REQUEST REPORT.Doel:
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLB, MARYLAND
20850
Isiah Leggett
County Executive
MEMORANDUM
January 22,2015
TO:
George Leventhal, President
County Council
FROM:
Isiah
Leggett, County Executive
SUBJECT: Reorganization Plan and Expedited Bill Creating an Office ofProcurement within
County Government
I am attaching for Council consideration Reorganization Plan No. 1-15 in
accordance with Section 217 ofthe Montgomery County Charter. This Plan will create an Office
of Procurement within County government, separate and apart from the Department of General
Services (DGS). Because Section 217 contemplates an up or down vote on the Plan as submitted,
I am also attaching an Expedited Bill to do the same
in
the event that Council wishes to make
changes to the Plan.
.
The purpose of the Reorganization Plan is to establish as an independent principal
office the Office of Procurement As such, the Office will be less susceptible
to
pressures to
defer
to
other priorities within DGS and will be able to focus on the best interests of the County
from an overall procurement perspective. The Office will be able to focus on the various
contracting needs generated across County government,
and
ensure compliance of all
departments with best practices and laws,
re~ations
and policies related to contracting.
Executive staff is available to assist the Council
Your assistance is appreciated.
in
its consideration ofthis Plan.
Attachments
.
'
·3"
q)
~
lI1OI1tgomerycountymd.gov/311
'"
240-773-3556 TTY
(jJ
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Reorganization Plan No............
1-1.:::..5_ _ __
Concerning: Office of Procurement ­
Creation
Submitted
to
Council: January 22, 2015
Council: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date: .:..:.N=on=e'---_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY EXECUTIVE
FOR MONTGOMERY COUNTY, MARYLAND
Charter Section 217 Plan of Reorganization
AN
ACT to:
(1)
(2)
(3)
establish the Office of Procurement as a principal Office of the Executive Branch;
transfer procurement related fimctions to the Office of Procurement; and
provide for the orderly transfer of procurement related fimctions to the Office of
Procurement.
By amending
Montgomery County Code
Chapter lA, Structure of County Government
Section 1A-201
Chapter 2, Administration
Sections 2-30 and 2-64N
Chapter lIB, Contracts and Procurement
Section IIB-I
Chapter 19, Erosion, Sediment Control and Stormwater Management
Section 19-29A
Boldface
Underlining
[Single boldface brackets]
Double undedining
[[Double boldface bracketsD
* * *
Heading or defined term
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Executive for Montgomery County, Maryland approves thefollowing Act:
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REORGANIZATION PLAN
1-15
1
Sec.
1.
Sections
lA-20l, 2-30, 2-64N, liB-I,
and
19-29A
are amended as
follows:
2
3
4
5
6
lA-20t.
Establishing departments and principal offices.
(a)
Executive Branch.
(1) These are the departments and principal offices of the Executive
Branch.
7
8
9
10
*
*
*
*
*
*
Procurement [Section 2-64NJ
Division 5. DEPARTMENT OF GENERAL SERVICES.
11
12
2-30.
Department of General Services - Functions.
The Department of General Services must:
[(a)
administer, through the Office ofProcurement, the procurement system
under Chapter lIB;]
[
(b)]
13
14
15
16
W
acquire and dispose of real property, except real property used
(or intended to be used) for right-of-way governed under Chapter 49,
including roads, streets, highways, bridges, culverts, stonn drainage
systems, pedestrian and bicycle pathways and walkway systems;
[(c)]
17
18
19
®
design and build County buildings, including public parking
20
21
facilities under Chapter 60;
[(d)] (£)
maintain County vehicles, including heavy and light equipment
22
23
24
25
and transit equipment;
[(e)]
@
remodel and renovate County buildings, except public parking
facilities under Chapter 60, which remain open during the remodeling
or renovation;
[(f)]
26
27
W
repair and maintain County buildings, except public parking
facilities under Chapter 60;
- 2­
f:\law\bills\1507 reorganization-executive branch-procurement\charter 217-reorg 1.docx
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REORGANIZATION PLAN
1-15
28
29
30
[(g)]
ill
manage County property and identify and acquire real property
needed for the operation of County government;
[(h)]
(g)
[(i)]
@
plan and implement the use of space in County buildings; and
operate mail, printing, duplication, and archiving services.
31
32
33
Division 20. OFFICE OF PROCUREMENT.
2-64N. Functions.
[The Office of Procurement is part of the Department of General Services.]
The Office of Procurement must:
34
35
36
37
38
39
*
IlB-1. Definitions
*
*
*
*
*
Director
means the Director of the Office of Procurement [Department of
General Services] or the Director's designee.
40
41
42
*
*
(b)
*
*
*
19-29A. Watershed restoration grants program.
43
44
45
*
To identify non-profit organizations to perform water quality protection
or improvement activities, the Director of the [Department of General
Services]
Offic~
46
47
48
of Procurement may issue a competitive solicitation
under Chapter lIB that is limited to non-profit organizations.
*
*
*
49
50
51
Sec. 2. Transition.
Any regulation in effect when this Act takes effect that
implements a function transferred to the Office ofProcurement by this Act continues
in effect, but any reference in any regulation to the Department of General Services,
from which the function was transferred, must be treated as referring to the Office
ofProcurement, to which the function is transferred. The transfer ofa function under
52
53
-3­
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1507
reorganization-executive branch-procurement'lcharter 217-reorg 1.docx
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REORGANIZATION PLAN
1-15
54
55
this Act does not affect any right ofa party to any legal proceeding begun before this
Act took effect.
Any responsibility or right granted by law, ordinance, regulation, delegation
of authority, contract, or other document to the Department General Services in
connection with the Procurement Law and Regulations is transferred to the Office
of Procurement.
Approved:
56
57
58
59
60
61
62
Isiah Leggett, County Executive
Date
-4­
f:\law\bills\1507 reorganization-executive branch-procurement\charter 217-reorg 1.doc:x
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ROCKVIllE,
MARYLAND
MEMORANDUM
February 10,2015
TO:
FROM:
George Leventhal, President, County Council
Jennifer A. Hughes, Dir-
ofManagem.ent and Budget
Joseph F. Beach.
Direct~~artment ~
-~ce
SUBJECT: FEIS for Council Bill 7-15E. Reorganization - Executive Branch ­
Procurement
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:fz
00:
Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices of the County Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director,·Public Information Office
Joseph F. Beach, Director, Department ofFinance
David Platt, Department of Finance
David Dise, Director, Department ofGeneral Services
Erika Lopez-Finn, Office ofManagement and Budget
Naeem
Mia,
Office of Management
and
Budget
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Fiscal Impact Statement
Council BiU 7-15E
&
Creation of the Office ofProcurement
1.
Legislative Summary.
The proposed legislation establishes the Office ofProcurement as a principal Office of
the Executive Branch. transfers procurement related functions
to the
Office of
Procurement, and generally amends the law regarding procuremerit and related functions.
2.
An
estimate ofchanges
in
County revenues
and
expenditures regardless ofwhether the
revenues or expenditures are assumed
in
the recommended or approved budget. Includes
source of information, assumptions, and methodologies
used.
The proposed legislation
does
not affect County revenues.
The
proposed legislation
would increase County expenditures by the
total
personnel cost of creating one
FfE
for _
the Director position for the Office of Procurement and $30,000 for associated operating
expenses ofthe Office of Procurement, such as database
space
on servers.
The bulk of the costs of
creating
the
Office ofProcurement are covered through
shifts
of
resources from
the
Department ofGeneral Services. DGS
will
shift personnel and
operating costs from the Division of Procurement (26.0 FTBs), the Office of
Bus1ness
Relations and Compliance (ODRe) (5.0 nEs), and a Management and Budget Specialist
ill
(1.0 PTE) to the Office of Procurement.
Shift
from
DGS
to
Office
of Procurement
"
FTEs PC costs
Division of
I
Procurement
Office
of Business
Relations and
Compliance
I
~u~nagement
and
dget Specialist
Associated
OE
costs
Total
26.0
$2,743,301
$140,070
$2,883,371
5.0
1.0
$531,738
$285,000
I
$816,738
Total
$160,987
32.0 $3,436,026
$160,987
$425,070
$3,861,096
3. Rl!:venue and expenditure estimates covering at least the next 6
fiscal
years.
Revenues are not impacted. Expenditures for
the
next six fiscal years are assumed to
be
flat.
4.
An
actuarial analysis through the entire amortization period for each bill
that
would
affect
retiree pension or group insurance costs.
The proposed legislation does not affect retiree pension or group insurance costs.
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5. An estimate of expenditures related
to
County's information technology
(IT)
systems,
including Enterprise Resource Planning (ERP) systems.
IT and ERP systems
are
already in place for the establishment of the Office of
Procurement. No anticipated increase in expenditures will
be
associated with the creation
ofthe new Office. Any
staff
work involved is to
be
absorbed within the cost of current
year budgets.
6. Later actions that may affect future revenue and expenditures if the bill authorizes future
spending.
The
proposed legislation does not authorize future spending.
7.
An estimate of the staff time needed to implement the bill.
The staffneeded to implement the new Office of Procurement is from
OMB,
DOS,
ERP,
and CountyStat. An estimate ofthe time to implement the Office of Procurement is
seventy hours.
8. An explanation of how the addition ofnew staff responsibilities would affect other duties.
The proposed legislation does not mandate new staff responsibilities.
9.
An estimate of costs when
an
additional appropriation
is
needed.
An additional appropriation of the total personnel costs of a Director's position and
administrative operating expenses such as server costs for databases ($30,000).
10. A description of any variable that could affect revenue and cost estimates.
None.
11. Ranges of
revenue
or expenditures that
are uncertain
or difficult to project.
Not applicable.
12.
If
a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
13. Other fiscal impacts or comments.
None.
14. The following contributed to and concurred with this analysis:
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Michele Crane, Department of General Services
Grace Denno, Department of General Services
Angela Dizelos, Department of General Services
Beryl Feinberg, Department of
General
Services
Rose Glavinic, Office of Management and Budget
Pam Jones, Department of General Services
Erika Lopez-Finn, Office of Management and Budget
,
:
. er
ughes,
Director
ce of Management and Budget
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Economic
lmpa~
Statement
Bill 7-13E, Reorganization - Executive Branch - Procurement
Background:
This legislation would create the Office of Procurement (Office) as a principal office
within the Executive Branch of the County, rather
than
as a division within the
Department of General Services (DGS). The office will have the status of a cabinet level
department within the Executive Branch.
1.
The sources of information, assnmptions, and methodologies used.
Sources of information: The Department of General Services (DGS).
The Office will continue to follow standard County procurement laws, policies and
procedures, as well as applicable state
and
federal laws..The Office includes the
procurement function and the compliance
programs
under the Office ofBusiness
Relations and Compliance.
2. A
description of any variable that could
alTect
the economic impact estimates.
There are no variables anticipated
to
affect the economic impact.
3.
The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
The Office will
be
elevated
to
a cabinet level department making it more independent
with a direct line to the Executive.
An
independent office makes it less susceptible
to
pressures to defer
to
other priorities within a larger department,
and
allows focus on
the best interests of
the
County from
an
overall procurement perspective. As such,
the separation of duties will remain intact
and
eliminate the blurred lines of authority
while procurement was in the Department ofGeneral Services. Therefore, there will
be positive economic benefits for the County with respect to obtaining goods,
construction,
and
services.
4.
If
a Bill
is
likely to have no economic impact, why is that the ease?
The
positive economic impact cannot be estimated with
any
degree of specificity
at
this
time
5.
The following contributed to or concurred with this analysis: David PIatt,
Mary
Casciotti, and Rob
Hagedoom,
Finance; Beryl Feinberg, Pam Jones, and
Grace
Denno, Department of General Services.
J~Dirl~
Department of Finance
­
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1
of!
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