CHAPTER 3.16
PURCHASING PROCEDURES
SECTION:
3.16.010: Adoption Of Purchasing System
3.16.030: Exemptions From Centralized Purchasing
3.16.050: Bidding Required; Exceptions
3.16.070: Encumbrance Of Funds
3.16.085: Bidding Procedures For Public Construction Projects
3.16.090: Inspection And Testing
3.16.010 ADOPTION OF PURCHASING SYSTEM:
In order to establish efficient procedures for the purchase of supplies and equipment, to secure for the city supplies and equipment at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function and to assure the quality of purchases, a purchasing system is adopted. (1972 Code § 3.28.010)
3.16.020 PURCHASING OFFICER:
A. Appointment: There is created the position of purchasing officer. He shall be appointed by the city council.
B. Duties: The duties of purchasing officer may be combined with those of any other office or position. The purchasing officer shall have authority to:
1. Purchase or contract for supplies and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, such administrative regulations as the purchasing officer shall adopt and such other rules and regulations as shall be prescribed by the city council;
2. Negotiate and recommend execution of contracts for the purchase of supplies and equipment;
3. Act to procure for the city the needed quality in supplies and equipment at least expense to the city;
4. Discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases;
5. Prepare and recommend to the city council rules governing the purchase of supplies and equipment for the city;
6. Prepare and recommend to the city council revisions and amendments to the purchasing rules;
7. Keep informed of current developments in the field of purchasing, prices, market conditions and new products;
8. Prescribe and maintain such forms as are reasonably necessary to the operation of this chapter and other rules and regulations;
9. Supervise the inspection of all supplies and equipment purchased to ensure conformance with specifications;
10. Recommend the transfer of surplus or unused supplies and equipment between departments as needed and the sale of all supplies and equipment purchased which cannot be used by any agency or which have become unsuitable for city use;
11. Maintain a bidders list, vendors catalog file and records needed for the efficient operation of the purchasing department. (1972 Code § 3.28.020)
3.16.030 EXEMPTIONS FROM CENTRALIZED PURCHASING:
The purchasing officer, with approval of the city council, may authorize, in writing, any agency to purchase or contract for specified supplies and equipment independently of all the purchasing department; but he shall require that such purchases or contracts shall be made in conformity with the procedures established by this chapter, and shall further require periodic reports from the agency on the purchases and contracts made under such written authorization. (1972 Code § 3.28.030)
3.16.040 REQUISITIONS:
Using agencies shall submit requests for supplies and equipment to the purchasing officer by standard requisition forms. (1972 Code § 3.28.040)
3.16.050 BIDDING REQUIRED; EXCEPTIONS:
A. Purchases of supplies and equipment shall be by bid procedures as prescribed by this chapter; provided, that bidding shall be dispensed with:
1. When the amount involved is less than five thousand dollars ($5,000.00); or
2. When an emergency requires that an order be placed with the nearest available source of supply; or
3. When the commodity, produce or equipment can be obtained from only one vendor; or
4. When the city council determines, by a resolution passed by four-fifths (4/5) of its members, that because of differences in the kinds or types of the particular commodity, product or equipment available on the market, it would be to the city’s advantage to make a selection on the basis of the suitability of the same to the city’s needs, rather than on the basis of price; or
5. When the city council determines, by a resolution passed by a majority of its members, that cost and time savings can be realized by using the purchasing procedures and bid results of another public entity in lieu of the bidding policies prescribed in this chapter, in accordance with the procedures set forth in subsection C of this section.
B. An "emergency" exists if:
1. There is a great public calamity;
2. There is immediate need to prepare for national or local defense;
3. There is a breakdown in machinery or an essential service which requires the immediate purchase of supplies or services to protect the public health, welfare or safety;
4. An essential operation affecting the public health, welfare or safety would be greatly hampered if the prescribed purchasing procedure would cause an undue delay in procurement of the needed item or service.
C. The following requirements must be met in every instance in which the city desires to use the in-lieu exception set forth in subsection A5 of this section:
1. The city manager must approve of the use of the exception for a given purchase;
2. The purchasing officer must determine that the bid to be relied upon was made within the preceding twelve (12) months in accordance with applicable law;
3. The purchasing officer must determine that there has been no significant change to the price of the item to be purchased since the time that the relied-upon bid was awarded;
4. If the bid to be relied upon was made by an entity outside of Monterey County, the purchasing officer must confirm that there is no reason to believe that there would be a significant price difference in the item to be purchased based on the location of available vendors;
5. The city may only purchase the desired supplies or equipment from the vendor identified as the lowest responsible bidder in the relied-upon bid;
6. This exception may not be used for any purchase for which bidder’s security is required by law;
7. Staff must prepare a report to the city council setting forth compliance with the aforementioned rules and the city council must approve the proposed purchase at a regular meeting of the city council. (1972 Code § 3.28.050; amd. Ord. 2014-78, 6-2-2014)
3.16.060 PURCHASE ORDERS:
Purchases of supplies and equipment shall be made only by purchase order. (1972 Code § 3.28.060)
3.16.070 ENCUMBRANCE OF FUNDS:
Except in cases of emergency, the purchasing officer shall not issue any purchase order for supplies or equipment unless there exists an unencumbered appropriation in the fund account against which the purchase is to be charged. (1972 Code § 3.28.070)
3.16.080 BIDDING PROCEDURE:
Except as otherwise provided in this chapter, purchases and contracts for supplies and equipment of estimated value greater than five thousand dollars ($5,000.00) shall be by written contract with the lowest responsible bidder pursuant to the procedure prescribed in this section:
A. Notice Inviting Bids: Notices inviting bids shall include a general description of the articles to be purchased, shall state where bid blanks and specifications may be secured, and the time and place for opening bids. (1972 Code § 3.28.080)
1. Published Notice: The notice inviting bids shall set a date for the opening of the bids. The first publication or posting of the notice shall be at least ten (10) days before the date of opening the bids. Notice shall be published at least twice, not less than five (5) days apart, in a newspaper of general circulation, in the city. (1972 Code § 3.28.080; amd. 2003 Code)
2. Bidders List: The purchasing officer shall also solicit sealed bids from all responsible prospective suppliers whose names are on the bidders list or who have requested their names to be added thereto.
3. Bulletin Board: The purchasing officer shall also advertise pending purchases by a notice posted on a public bulletin board in the city hall.
B. Bidder’s Security: When deemed necessary by the purchasing officer, bidder’s security may be prescribed in the public notices inviting bids. Bidders shall be entitled to return of bid security; provided, that a successful bidder shall forfeit his bid security upon refusal or failure to execute the contract within ten (10) days after the notice of award of contract has been mailed, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the council awards the contract to the next lower bidder, the amount of the lowest bidder’s security shall be applied by the city to the difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder.
C. Bid Opening Procedure: Sealed bids shall be submitted to the purchasing officer and shall be identified as bids on the envelope. Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty (30) days after the bid opening.
D. Rejection Of Bids: In its discretion, the city council may reject any and all bids presented and readvertise for bids.
E. Award Of Contracts: Contracts shall be awarded by the city council to the lowest responsible bidder except as otherwise provided herein.
F. Tie Bids: If two (2) or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay or readvertising for bids, the city council may accept the one it chooses or accept the lowest bid made by negotiation with the tie bidders at the time of the bid opening.
G. Performance Bonds: The city council shall have authority to require a performance bond before entering a contract in such amount as it shall find reasonably necessary to protect the best interests of the city. If the city council requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids. (1972 Code § 3.28.080)
3.16.085 BIDDING PROCEDURES FOR PUBLIC CONSTRUCTION PROJECTS:
A. Purpose: The purpose of this section is to adjust the monetary limits for construction projects which can be carried out with administrative decision, informally bid, and formally bid projects. It is the intent of the city council that this chapter shall govern the selection of contractors by the city through the bidding procedures specified in article 1, chapter 2, part 3, division 2 of the Public Contract Code section 22000 et seq., the uniform public construction cost accounting act.
B. Definitions: The definitions employed in article 1 of chapter 2, part 3, division 2 of the Public Contract Code section 22000 et seq., and their statutory successors shall govern the construction of this section.
Accordingly, a "public project" means any of the following:
1. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility.
2. Painting or repainting of any publicly owned, leased, or operated facility.
3. In the case of a publicly owned utility system, "public project" shall include only the construction, erection, improvement, or repair of dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand (230,000) volts and higher.
A "public project" does not include maintenance work, such as:
1. Routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes.
2. Minor repainting.
3. Resurfacing of streets and highways at less than one inch (1").
4. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems.
5. Work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems, including, but not limited to, dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand (230,000) volts and higher.
C. Contract Letting Procedures: Except as otherwise provided herein, the provisions of the Uniform Public Construction Cost Accounting Act, Public Contract Code section 22000 et seq., shall be controlling.
1. List Of Qualified Contractors: The responsible department head shall maintain a list of qualified contractors identified according to categories of work in accordance with Public Contract Code section 22034 and as determined by the California Uniform Construction Cost Accounting Commission.
2. No Bidding Required: Public projects less than or equal to sixty thousand dollars ($60,000.00) may be performed by city staff, by force account with a contractor, by negotiated contract, or by use of a purchase order, pursuant to section 22032 of the Public Contract Code.
3. Informal Bids: The city shall follow the following informal bidding procedure for public projects of two hundred thousand dollars ($200,000.00) or less, or those public projects as specified in either section 22032(b) or section 22020 of the Public Contract Code.
a. Notice: A notice inviting informal bids shall be sent to: (1) all contractors on the city’s list of qualified contractors for the category of work being bid, and (2) all construction trade journals as specified in section 22036 of the Public Contract Code and as named by the California Uniform Construction Cost Accounting Commission.
(1) The mailing of notices to contractors and construction trade journals shall be completed not less than ten (10) calendar days before bids are due.
(2) The notice inviting informal bids shall describe the project in general terms, how to obtain more detailed information about the project, and state the time and place for the submission of bids.
b. Authority To Award Bid: The authority to award informal contracts is hereby delegated to the city manager unless all informal bids received are in excess of two hundred thousand dollars ($200,000.00), in which case the city council may, by passage of a resolution by a four-fifths (4/5) vote, award the contract at the amount set forth in section 22034(d) of the Public Contract Code or less to the lowest responsible bidder, if it determines the cost estimate of the responsible department head was reasonable.
4. Formal Bids: The city shall follow the following formal bidding procedure for public projects greater than two hundred thousand dollars ($200,000.00), or as specified in either section 22032(b) or section 22020 of the Public Contract Code.
a. Plans And Specifications: The city council shall adopt plans, specifications, and working details for all public projects that are formally bid.
b. Notice: A notice inviting formal bids shall be published and mailed as specified below.
(1) A notice inviting formal bids shall state the time and place for the receiving and opening of sealed bids and distinctly describe the project.
(2) The notice inviting formal bids shall be mailed to all construction trade journals specified in section 22036 of the Public Contract Code and as named by the California Uniform Construction Cost Accounting Commission, at least thirty (30) calendar days before the date of opening the bids.
(3) The notice inviting formal bids shall be published in a newspaper of general circulation printed and published within the jurisdiction of the city, or if none exists, in a newspaper of general circulation which is circulated within the jurisdiction of the city, at least fourteen (14) calendar days before the date of opening the bids.
(4) In addition to notice required by this section, the public agency may give such other notice as it deems proper.
5. Procedure For The Award Of Informal Or Formal Bids:
a. If a contract is awarded, it shall be awarded to the lowest responsible bidder. If two (2) or more bids are the same and the lowest, the city council may accept the one it chooses.
b. The city council has the discretion to reject any bids presented.
c. The city council has the discretion to reject all bids, if:
(1) The city council declares that the project may be more economically performed by employees of the city; and
(2) The city furnishes written notice to the apparent low bidder that informs the bidder of the agency’s intention to reject the bid. Such notice shall be mailed at least two (2) business days prior to the public hearing at which the city council intends to reject the bid.
d. If after the first invitation of bids all bids are rejected, after reevaluating its cost estimates of the project, the city shall have the option of either of the following:
(1) Abandoning the project or readvertising for bids in the manner described by this section; or
(2) By passage of a resolution by a four-fifths (4/5) vote of the city council, declaring that the project can be performed more economically by the employees of the public agency, may have the project done by force account without further complying with the uniform public construction cost accounting act or this section.
6. No Bids Received: If no bids are received through the formal or informal procedure, the project may be performed by the employees of the city by force account, or negotiated contract without further complying with the uniform public construction cost accounting act or this section.
7. Emergencies: In the case of emergency when repairs or replacements are necessary, the governing body may proceed at once to replace or repair any public facility without adopting plans, specifications, strain sheets, or working details, or giving notice for bids to let contracts. The work may be done by day labor under the direction of the city, by contractor, or by a combination of the two (2). If the city chooses not to give notice for bids to let contracts, the city must comply with the provisions of the uniform public construction cost accounting act, Public Contract Code section 22050 et seq. (Ord. 2010-65, 7-6-2010; amd. Ord. 2015-88, 11-2-15; Ord. 2018-112, 12-3-2018; Ord. 2018-112, 12-3-2018)
3.16.090 INSPECTION AND TESTING:
The purchasing officer shall inspect supplies and equipment delivered to determine their conformance with the specifications set forth in the order or contract. The purchasing officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. (1972 Code § 3.28.100)