Chapter 3.08
PURCHASING REGULATION1
Sections:
3.08.030 Purchasing officer duties.
3.08.040 Purchasing authority.
3.08.060 Encumbrance of funds.
3.08.070 Bidding for purchase of supplies and equipment – Use of not required when.
3.08.080 Bidding – Open market bidding.
3.08.090 Formal bidding – Procedure.
3.08.100 Preference for local business.
3.08.110 Inspection and testing.
3.08.120 Surplus supplies and equipment.
3.08.010 Adoption.
A purchasing regulation is adopted in order to establish efficient procedures for the purchase of supplies and equipment at the lowest possible cost commensurate with the required quality, to exercise positive financial control over purchases that meet legal requirements and to define authority for the purchasing function. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4).
3.08.020 Definitions.
As used in this chapter, the following terms, phrases, words and their derivations shall be construed as herein stated, or have the meanings given herein:
“Awarding authority” means the city council or person authorized to award the contract and to execute the agreement unless delegated to another person.
“Bid” means an offer to sell supplies and equipment at a specified price.
“Bid security” means a guarantee, in the form of a bond or deposit, that the bidder, if awarded the contract, will accept the contract as bid, otherwise the bidder (in the case of a deposit) or his/her guarantor (in the case of a bond) will be liable for the amount of the bond or deposit.
“Bidder” means any person submitting a competitive bid in response to a solicitation.
“Bidders’ list” means a list maintained by the finance department setting out names and addresses of responsible prospective suppliers of various goods and services, from whom bids, proposals, and quotations can be solicited.
“Contract” means a binding agreement between the city and the company providing the goods or equipment, specifying needs, pricing, terms and conditions, insurance requirements, etc.
“Electronic bidding platform” means one or more computing or digital software platforms selected by the city to solicit and receive, evaluate, and/or award written bids for goods, supplies, equipment and/or services as detailed in the rules and regulations adopted by the city pursuant to this chapter.
“Emergency purchase” means a purchase made without following normal purchasing procedures (competitive bidding) in order to obtain goods or services when time is of the essence. Emergency purchases shall be made only for the following reasons: (A) to preserve or protect life, health or property, (B) upon natural disaster or manmade disaster, (C) to correct or forestall a shutdown of public services.
“Equipment” means furnishings, machinery, vehicles, rolling stock, and other personal property used in the city’s business.
“Evaluation of bid” means the process of examining a bid after the opening to determine the bidder’s responsibility, responsiveness to requirements, and to ascertain other characteristics of the bid that relate to determination of the successful bidder.
“Formal bid” or “offer” means a bid that must be submitted in a sealed envelope or by electronic bidding platform as required by the city being used for a purchase and in conformance with a prescribed format, to be opened at a specific time.
“Governmental agency” means another governmental body other than the city of Benicia such as a public agency as defined by California Government Code Section 6500, including federal, state, county, city and local government agencies such as school districts and special districts.
“Informal bid” means an unsealed competitive offer conveyed by letter, telephone, facsimile/telegram, electronic mail or other electronic media format and under conditions different from those required of formal bidding.
“Negotiation” means contracting through the use of either competitive or other than competitive proposals and discussions. Any contract/purchase order awarded without using sealed bidding procedures is a negotiated contract/purchase order. Further, negotiation is a procedure that includes the receipt of proposals from offerors, permits bargaining, and usually affords an opportunity to revise offers before award of a contract/purchase order. Bargaining in the sense of discussion, persuasion, alteration of initial assumptions of positions, and give-and-take may apply to price, schedule, technical requirements, type of contract/purchase order, or other terms of a proposed contract/purchase order.
“Payment bond” means a contract of guarantee executed subsequent to award by the successful bidder to satisfy claims of material suppliers and of mechanics and laborers employed under the contract.
“Performance bond” means a contract of guarantee executed subsequent to award by the successful bidder to protect the city from loss due to contractor’s inability to complete the contract as agreed.
“Personal property” means everything that is not real property, is subject to ownership, and has exchange value.
“Purchasing officer” means the city manager and any person or persons authorized by the city manager to purchase or acquire supplies, services, or equipment on behalf of the city.
“Quotation” means a statement of price, terms of sale, and description of goods or services offered by a prospective seller to a prospective purchaser, usually for purchases below the amount requiring formal bidding.
“Request for proposal (RFP)” means all documents, whether attached or incorporated by reference, utilized for soliciting competitive proposals. It is used in hiring consultants, professional services or general services.
“Request for quotation (RFQ)” means the document generally used for seeking competition on small purchases or on any purchase that does not require competitive sealed bidding. RFQs can be used for obtaining price and delivery information for sole source and emergency purchases.
“Responsible bidder or offeror” means a firm/person who has the capability in all aspects to successfully perform, in full, contract requirements, and the integrity and reliability that will assure good faith performance.
“Responsive bidder” means one that is in substantial conformance with all requirements of the invitation to bid, including specifications and the city’s contractual terms and conditions. Bidders who substitute terms and conditions or who qualify their bids in such a manner as to nullify their liability may be considered nonresponsive bidders. This may also include provision of insurance requirements, bonds, completion of all forms, inclusion of references and additional information as requested in bid documents.
“Sealed bidding” means a method of contracting that employs competitive bids, public opening of sealed bids and award.
“Sole source procurement” means an award for a commodity or service to the only known capable supplier, occasioned by the unique nature of the requirement, the supplier, or market conditions.
“Supplies” means all property, including, but not limited to, equipment, materials, printing, insurance, and leases of real property, excluding land or permanent interest in land.
“Surplus property” means city-owned personal property that is not needed by the city at the present time or in the foreseeable future. This includes obsolete supplies, equipment, or scrap materials that have completed their useful life.
“Unencumbered” means that portion of an allocated appropriation which is immediately available for reservation against incoming purchase orders. (Ord. 22-09 § 1; Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4).
3.08.030 Purchasing officer duties.
The duties of the purchasing officer shall include, but not be limited to, the following:
A. Purchase and contract for supplies, services, equipment and public projects required by the operating departments;
B. Negotiate and recommend execution of contracts for the purchase of supplies and equipment;
C. Take the necessary action to ensure that the city will receive the needed quality of supplies and equipment at the lowest possible cost to the city;
D. Maintain the highest levels of efficiency and effectiveness by assuring compatibility among the city’s equipment, such that existing parts inventory, tools inventory, and staff expertise are utilized to the greatest extent possible;
E. Prepare and recommend to the city council rules governing the purchase of supplies and equipment for the city;
F. Keep informed of current developments in the field of purchasing prices, market conditions and new products;
G. Prescribe and maintain forms as reasonably necessary to the operation of this chapter and other rules and regulations;
H. Supervise the inspection of supplies and equipment purchased to ensure conformance with specifications;
I. Recommend the transfer of surplus or unused supplies and equipment between departments as needed; and
J. Encourage competitive bidding as set forth in this chapter. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.040).
3.08.040 Purchasing authority.
The purchasing officer is authorized and responsible for legally obligating the city in the purchase of supplies and equipment. The purchasing officer may authorize any officer or department employee to solicit prices, award and execute contracts and purchase orders for purchase of specified supplies and equipment independently of the purchasing officer, but all such solicitations, purchases and contracts shall conform to the procedures set forth herein. A listing of such delegated employees including the dollar limits associated with the purchase of supplies and equipment shall be maintained by the city manager and updated no less than biennially. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.050).
3.08.050 Purchase orders.
A purchase of supplies and equipment in the aggregate amount of $10,000 or more shall be made only by purchase order. A purchase order shall not be issued until the purchasing officer first approves it. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.070).
3.08.060 Encumbrance of funds.
Except in case of an emergency, the purchasing officer may not issue a purchase order for supplies or equipment unless there exists an unencumbered appropriation in the budget account against which the purchase is to be charged. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.080).
3.08.070 Bidding for purchase of supplies and equipment – Use of not required when.
Each purchase of supplies and equipment shall be by bid procedures set forth in BMC 3.08.080 and 3.08.090. The purchasing officer may dispense with bidding when:
A. An emergency requires that an emergency purchase be placed with the nearest available source of supply; or
B. When the amount involved is less than $20,000; or
C. The commodity can only be obtained via sole source procurement. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.090).
3.08.080 Bidding – Open market bidding.
If the estimated value of the purchase of supplies and equipment is between $20,000 and $50,000, the purchasing officer may make the purchase in the open market under the following procedures:
A. Minimum Number of Bids. The purchasing officer shall obtain at least three informal or written bids.
B. Notice Inviting Bids. The purchasing officer shall solicit bids by verbal or written request to prospective vendors, by telephone, electronic mail or by public notice posted on a public bulletin board in City Hall.
C. Bid Award. The purchasing officer shall make the purchase from the lowest responsible bidder via purchase order or contract (if the aggregate amount of the procurement is $10,000 or more) with documentation of the bids received submitted to the purchasing officer. The department making the purchase shall keep a written record of all open market orders (informal bids) for a period of not less than two years after the submission of bids or the placing of orders. This record is open to public inspection. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.100).
3.08.090 Formal bidding – Procedure.
The purchase of supplies and equipment with an estimated value greater than $50,000 shall be by written contract and purchase order with the lowest responsive and responsible bidder after following this procedure:
A. Notice Inviting Bids. The purchasing officer shall prepare a notice inviting bids. The notice shall include a general description of the article to be purchased, shall state where bid blanks and specifications may be secured, the time and place for opening bids and the security required, if any.
1. Published Notice. The notice inviting bids shall set a date for the opening of bids. The first publication or posting of the notice shall be at least 10 days before the date of opening the bids.
2. Bidders’ List. The purchasing officer shall also solicit sealed bids from responsible prospective suppliers whose names are on the bidders’ list or who have made written request that their names be added to it.
3. Bulletin Board. The purchasing officer shall also advertise pending purchases by a notice posted on a public bulletin board in the City Hall or on the city website.
B. Written Bids. For purchase of property estimated to cost over $50,000, written bids shall be submitted to the finance director or designated representative, who shall require all bids to be sealed, in writing, identified as “bids” on the envelope, or as otherwise required by the electronic bidding platform being used for the purchase. The department making the purchase shall keep a written record of all bids received for a period of not less than two years after the submission of bids or the placing of orders. This record is open to public inspection.
C. Bidder’s Security. When the purchasing officer considers it necessary, he/she shall prescribe bidder’s security and a statement of the security shall be included in the notice inviting bids. Each bidder is entitled to a return of the bid security. However, a successful bidder forfeits the bid security if he/she refuses or fails to execute the contract within 10 days after the notice of award of contract is mailed or notified on the electronic bidding platform if used for the purchase. If the successful bidder fails or refuses to execute the contract, the purchasing officer may award the contract to the next lowest responsible bidder or readvertise.
If the purchasing officer awards the contract to the next lowest bidder, the city shall apply the amount of the lowest bidder’s security to the contract price difference between the lowest bid and the second lowest bid. The surplus, if any, shall be returned to the lowest bidder. If the purchasing officer rejects all bids and readvertises, the amount of the lowest bidder’s security may be used to offset the cost of receiving new bids and the surplus, if any, shall be returned to the lowest bidder.
D. Bid Opening Procedures. For purchase of supplies and equipment estimated to cost over $50,000, the finance director or designated representative shall open the bids in public at the time and place stated in the public notice or on the electronic bidding platform if used for the purchase. The finance director or designated representative shall tabulate the bids received and shall keep the tabulation open for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening.
E. Rejection of Bids. At his/her discretion, the purchasing officer may reject all bids presented and readvertise for bids.
F. Award of Contracts. For purchase of supplies and equipment costing more than $100,000, the city council shall award the contract to the responsive bidder who is also the lowest responsible bidder. For purchase of supplies and equipment costing less than $100,000, the city manager and finance director shall award the contract to the responsive bidder who is also the lowest responsible bidder.
For purchase of supplies and equipment costing more than $200,000 by the Public Works Department, the city council shall award the contract to the responsive bidder who is also the lowest responsible bidder. For purchase of supplies and equipment costing less than $200,000 for the Public Works Department, the city manager and finance director shall award the contract to the responsive bidder who is also the lowest responsible bidder.
G. Tie Bids. If two or more bids received are for the same total amount or unit price, quality being equal, and if the public interest will not permit the delay of readvertising for bids, the purchasing officer may accept the one he/she chooses or accept the lowest bid made after negotiation with the bidders at the time of the bid opening.
H. Payment and Performance Bonds. For purchase of supplies and equipment estimated to cost over $50,000, the city council may require a payment and/or performance bond before entering a contract in such amount as it finds reasonably necessary to protect the best interests of the city.
I. Use of Vendors Selected by Another Governmental Agency. The city purchasing officer may purchase supplies and equipment for which the city would normally follow its own bid procedures from a vendor awarded a bid by another governmental agency if said agency used procedures substantially the same as those normally used by the city. The amount of said purchase shall be based on the price bid in the other agency.
J. Joint Purchase with Other Governmental Agencies. Notwithstanding any other provision of this chapter, the city may enter into lawful agreements with other governmental agencies for the joint purchase of equipment and supplies. (Ord. 22-09 § 2; Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.110).
3.08.100 Preference for local business.
In the case of contracts for purchase of supplies and equipment, whether by formal bid or otherwise, a preference not to exceed 10% – with an absolute limit of $500.00 – shall be allowed to firms or individuals who regularly maintain a place of business and transact business in the city. In order to qualify for such a preference, a firm or individual shall have maintained a place of business in the city and have been issued a business license by the city for one year prior to the date for the opening of bids for the contract or prior to submission of the proposal by the firm or individuals in the case of contracts not subject to competitive bidding. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.120).
3.08.110 Inspection and testing.
The purchasing officer shall have the authority to inspect supplies, material and equipment delivered to determine their conformance with the specifications set forth in the order. 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. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.130).
3.08.120 Surplus supplies and equipment.
All departments shall submit to the finance director or designee, at such times and in such forms as he/she shall prescribe, reports showing all supplies and equipment that are no longer used or which have become obsolete or worn out. The finance director or designee shall have authority to exchange for, or trade in on, new supplies and equipment all supplies and equipment that cannot be used by any department or which have become unsuitable for city use. Surplus supplies and equipment with no appreciable value may be discarded as junk.
Supplies and equipment with an estimated value of $5,000 or less may be sold as surplus by the finance director. Supplies and equipment with an estimated value greater than $5,000 shall be placed with a duly licensed public auctioneer or reputable on-line auctioneer for disposal and sale on behalf of the city. Proceeds from such public auction sales shall be deposited into the city fund that was originally used to purchase the supplies or equipment.
Surplus supplies and equipment may be offered for sale to other public agencies without the use of a duly licensed public auctioneer or reputable on-line auctioneer. Sale of supplies and equipment with an estimated value of less than $25,000 may be offered for sale by the city manager. Sale of supplies and equipment with an estimated value greater than $25,000 shall be sold only upon city council approval.
All surplus or worn out supplies or equipment with an estimated value of $25,000 or less may be transferred, donated or dedicated to, or may be permitted to be used by, community service or public benefit organizations, which, in the opinion of the purchasing officer, would use such supplies or equipment exclusively to promote the general municipal welfare or otherwise use the surplus supplies or equipment for purposes that clearly are to the public benefit.
All surplus or worn out supplies or equipment with an estimated value of $25,000 or less may be transferred, donated or dedicated to, or may be permitted to be used by community service or public benefit organizations, which, in the opinion of the city manager, would use such supplies or equipment exclusively to promote the general municipal welfare or otherwise use the surplus supplies or equipment for purposes that clearly are to the public benefit.
All surplus or worn out supplies or equipment with an estimated value greater than $25,000 may be transferred, donated, or dedicated to, or may be permitted to be used by, community service or public benefit organizations upon city council approval. (Ord. 21-02 § 1; Ord. 13-02 § 1; Ord. 03-4. Formerly 3.08.140).
3.08.130 Recycled products.
It is the intent of the city council that the city take a leadership role not only in recycling its waste products but also in the purchase of recycled products for use in the delivery of city services. It is the purpose of this section to provide direction to the purchasing officer in the procurement and use of recycled products. For the purpose of this section, recycled materials are defined as any materials (e.g., glass, paper, plastic, etc.) that are separated by type, reprocessed by industrial methods, and used as raw materials for the manufacture of new products.
If, in procuring supplies, a recycled product can achieve the necessary city performance standard, and if such recycled product is readily available, specifications should, if economically feasible, require products made with recycled materials be bid. If the procuring department determines that (A) a recycled product lacks performance capabilities or needed quality level, or (B) a sufficient amount of said recycled or reusable product is not currently available in the market, then a reduced percentage can be required, or the supply specification can be limited to nonrecycled materials. When recycled products are required, reasonable efforts shall be made to label the products as containing recycled materials. (Ord. 21-02 § 1; Ord. 13-02 § 1).
3.08.140 Purchase card usage.
The city utilizes purchase cards as part of its purchasing process. The use of purchase cards is intended to reduce the use of petty cash and small open purchase orders and to streamline the purchasing process and payment procedures. Use of purchase cards is not intended to circumvent the city purchasing regulations.
Purchase cards may be available to city employees for the conduct of official city business. Department heads may submit a request for purchase cards for their employees to the finance director. A listing of current authorized purchase cardholders is maintained in the city’s finance department. A purchase card manual has been established and each authorized cardholder has access to this manual. Under no circumstances shall a personal charge be made on a city purchase card. (Ord. 21-02 § 1; Ord. 16-08 § 1; Ord. 13-02 § 1).
Prior legislation: Ord. 99-4 N.S.; Ord. 87-8 N.S. § 2, 1987; amended during 1980 codification; prior code §§ 2-601 – 2-613.