Chapter 3.24
PURCHASING POLICIES AND PROCEDURES1
Sections:
3.24.010 Purpose of purchasing policies and procedures.
3.24.030 Purchasing officer designated and duties established.
3.24.040 Procedures for purchase of less than and including $50,000.
3.24.050 Procedures for purchase of $50,001 and more – Formal sealed bids.
3.24.055 Procedures for routine maintenance purchases, contracts and services.
3.24.070 Purchasing award – Factors to be considered.
3.24.080 Exceptions to this chapter.
3.24.090 Local preference for discretionary purchases.
3.24.100 Splitting orders prohibited.
3.24.130 Surplus supplies and equipment.
3.24.140 Inspection and testing of purchases.
3.24.150 Fully reimbursed professional services agreements.
3.24.010 Purpose of purchasing policies and procedures.
The purpose of this chapter is to (A) establish efficient and effective processes for the purchase or lease of services, supplies, materials and equipment at the lowest feasible cost commensurate with the level of quality required; (B) exercise financial control and accountability over purchases; (C) compensate for economic and geographic disadvantages suffered by certain local businesses; and (D) clearly define authority for the purchasing function. In adopting the ordinance codified in this chapter, it is the intent of the City Council to responsibly manage public funds, stimulate the local economy, generate local sales tax revenue by purchasing locally where feasible, and provide responsibility for, and consistency in, implementing purchasing policies and procedures. (Ord. 1081 § 3, 2009.)
3.24.020 Definitions.
As used in this chapter, the following terms shall have the meanings described below:
A. “City” means the City of Healdsburg, including the political entity and its geographical boundaries.
B. “Code” means the City of Healdsburg Municipal Code.
C. “Excluded goods or services” means goods or services (as described below) in which any City official or City employee has a financial interest.
D. “Goods or services” means services, supplies, materials and equipment that are the subject of this chapter.
E. “Local vendor” means a bidder, vendor, or supplier of goods or services having an established place of business within the City and having had a City business license continuously for at least 12 months.
F. “Purchasing officer” means the City Manager or designee of the City Manager.
G. “This chapter” means Chapter 3.24 HMC.
H. “Routine maintenance” is defined as the regular and general upkeep of a building, equipment, machine, plants, or system for ongoing/day-to-day City operations. Examples of routine maintenance include, but are not limited to:
1. Membrane and meter replacement.
2. Water and wastewater chemical purchases.
3. Software service contracts.
4. Asphalt, striping and concrete contracts.
5. Transformers and wire for the electric utility. (Ord. 1147 § 2, 2015; Ord. 1081 § 3, 2009.)
3.24.030 Purchasing officer designated and duties established.
A. The City Manager is designated as purchasing officer for the City and for the City’s redevelopment agency (collectively, “City”).
B. The City Manager may delegate all or a portion of the duties of purchasing officer to any City staff member. The purchasing officer shall have the authority to:
1. Purchase, or contract for the sale or lease of, goods or services required by the City in accordance with purchasing procedures established in this chapter and other applicable law;
2. Negotiate and recommend execution of contracts for purchase or lease of goods or services in accordance with purchasing procedures established in this chapter and other applicable law;
3. Act to procure for the City the necessary quality in goods or services in accordance with the provisions of this chapter and other applicable law;
4. Prepare and recommend to the City Council amendments to the purchasing rules;
5. Establish and maintain such forms as reasonably necessary to the purchasing function and maintain other records necessary for the efficient acquisition of goods or services;
6. Supervise the inspection of all goods or services purchased or leased by the City to ensure conformance with specifications;
7. Recommend and oversee the sale or disposal of all goods or services which cannot be used by the City, or which have become unsuitable for City use;
8. Maintain a bidders’ list, including a local bidders’ list that identifies businesses and service providers that have an established place of business within the City and that have had a City business license for at least 12 months.
C. Purchase agreements up to and including the amount of $50,000 may be authorized and executed by the purchasing officer. Purchase agreements of $50,001 or more shall be authorized by the City Council.
D. Routine maintenance is defined in HMC 3.24.020. Routine maintenance purchase agreements shall be made by the City Manager up to and including the amount of $150,000. Routine maintenance purchases or agreements of $150,001 and over shall be authorized by the City Council. (Ord. 1147 § 2, 2015; Ord. 1081 § 3, 2009.)
3.24.040 Procedures for purchase of less than and including $50,000.
A. For purchases of goods or services of less than and including $50,000 that are not subject to other laws and/or procedures, the purchasing officer shall use the following procedures:
1. For purchases of goods or services having an estimated value of $1,000 or less, informal quotes may be obtained from vendors but are not required.
2. For purchases of goods or services having an estimated value of more than $1,000, but less than and including $50,000, firm quotes either received in writing or taken verbally but confirmed in writing shall be obtained. At the discretion of the purchasing officer, the competitive bid process described in HMC 3.24.050 may be used for the acquisition of goods or services having an estimated value of more than $1,000, but less than and including $50,000.
B. Bids should be solicited and obtained from local vendors whenever feasible. (Ord. 1147 § 2, 2015; Ord. 1081 § 3, 2009.)
3.24.050 Procedures for purchase of $50,001 and more – Formal sealed bids.
A. Except for contracts involving the purchase of electricity and/or electric power made by the Northern California Power Agency on behalf of the City, when the estimated amount of value involved in a purchase transaction exceeds $50,000, the authorization to award a purchase contract shall be made by City Council resolution following a sealed competitive bid process as outlined below:
1. A notice inviting bids shall be prepared and shall include a general description of the goods or services to be purchased or sold, where bid instructions and specifications may be obtained, the time and place for bid openings, and whether a bid deposit or bond, or other security, such as performance, payment or maintenance bonds, will be required.
2. At the discretion of the purchasing officer a notice inviting bids shall be advertised at least twice in a newspaper of general circulation in the City with the first publication being at least 10 days prior to the opening of bids.
3. The purchasing officer may advertise the notice inviting bids in applicable publications and websites accessible to the public.
4. When required by law or deemed appropriate by the purchasing officer, and if included in bid instructions, bidders may be required to submit a bid deposit or bond in an amount determined by the purchasing officer. Bidders shall be entitled to return of bid security, except that a successful bidder (and a successful bidder’s surety, if a bid bond is required) shall be liable for any damages suffered or incurred by the City upon refusal or failure to execute a contract within 10 days after the notice of award of contract has been mailed, unless the City is responsible for the delay.
5. The City Manager may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the City Manager awards the contract to the next lowest bidder following a forfeit of the bid security by the lowest bidder, the amount of the lowest bidder’s bid security shall be applied by the City to the difference between the low bid and the second lowest bid; the surplus, if any, shall then be returned to the lowest bidder.
6. When deemed appropriate by the purchasing officer, and if included in bid instructions, any person or entity entering into a contract with the City may be required to furnish a faithful performance deposit or bond in an amount determined by the purchasing officer.
7. 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 30 calendar days after the bid opening.
8. In its sole discretion, the City Council may reject all bids presented and readvertise for bids.
B. Bids should be solicited and obtained from local vendors whenever feasible. (Ord. 1147 § 2, 2015; Ord. 1081 § 3, 2009.)
3.24.055 Procedures for routine maintenance purchases, contracts and services.
A. Routine maintenance is defined in HMC 3.24.020.
B. For routine maintenance purchases of goods or services of less than or equal to $150,000 that are not subject to other laws and/or procedures, the purchasing officer shall use the following procedures:
1. For purchases of goods or services having an estimated value of $1,000 or less, informal quotes may be obtained from vendors but are not required.
2. For purchases of goods or services having an estimated value of more than $1,000, but less than or equal to $50,000, firm quotes either received in writing or taken verbally but confirmed in writing shall be obtained. At the discretion of the purchasing officer, the competitive bid process described in HMC 3.24.050 may be used for the acquisition of goods or services having an estimated value of $50,001 or more, but not more than $150,000.
C. Bids should be solicited and obtained from local vendors whenever feasible.
D. The authorization to award a purchase contract shall be made by the City Manager in an amount not to exceed $150,000. For bids up to and including $150,000, the City Manager, in his/her sole discretion, may reject all bids presented and readvertise for bids.
E. Routine maintenance agreements or purchases over $150,000 shall be awarded by City Council resolution following a sealed competitive bid process as outlined below:
1. It is at the discretion of the purchasing officer to publish a notice inviting bids in a local newspaper, City website or bid procurement website. The information of the intent to purchase or contract shall include a general description of the goods or services to be purchased or sold, where bid instructions and specifications may be obtained, the time and place for bid openings, and whether a bid deposit or bond, or other security, such as performance, payment or maintenance bonds, will be required.
2. The purchasing officer shall solicit sealed bids from known responsible local vendors whose names are on a bidders’ list, including a local bidders’ list, or who have requested their names to be added thereto. The purchasing officer may advertise the notice inviting bids in publications and websites accessible to the public.
3. When required by law or deemed appropriate by the purchasing officer, and if included in bid instructions, bidders may be required to submit a bid deposit or bond in an amount determined by the purchasing officer. Bidders shall be entitled to return of bid security, except that a successful bidder (and a successful bidder’s surety, if a bid bond is required) shall be liable for any damages suffered or incurred by the City upon refusal or failure to execute a contract within 10 days after the notice of award of contract has been mailed, unless the City is responsible for the delay.
4. 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 City Council awards the contract to the next lowest bidder following a forfeit of the bid security by the lowest bidder, the amount of the lowest bidder’s bid security shall be applied by the City to the difference between the low bid and the second lowest bid; the surplus, if any, shall then be returned to the lowest bidder.
5. When deemed appropriate by the purchasing officer, and if included in bid instructions, any person or entity entering into a contract with the City may be required to furnish a faithful performance deposit or bond in an amount determined by the purchasing officer.
6. 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 30 calendar days after the bid opening.
7. For bids over $150,000, the City Council, in its sole discretion, may reject all bids presented and readvertise for bids. (Ord. 1147 § 2, 2015.)
3.24.060 Purchasing award.
In awarding a contract for goods or services that is subject to this chapter, the following procedures and policies shall be applied:
A. Subject to the provisions of subsection (C) of this section, and except as may otherwise be provided in this chapter, contracts that are subject to this section shall be awarded to a responsible bidder who submits the lowest responsive bid.
B. If two or more bids received from responsible bidders are for the same total amount or unit price, quality and service being equal, preference shall be given to a local vendor, in accordance with subsection (C) of this section, or the purchasing officer or City Council (depending on who will make an award) may accept the lowest bid made by negotiation with the tie bidders.
C. Local vendors shall be given an allowance of five percent, up to a maximum allowance of $5,000 on any bid for goods or services. In applying this local vendor allowance, the purchasing officer shall deduct five percent from the total bid submitted by a local vendor for purposes of comparing bid prices and determining the lowest responsive bid. (Ord. 1081 § 3, 2009.)
3.24.070 Purchasing award – Factors to be considered.
A. In determining bid responsiveness, the purchasing officer or City Council (depending on who will make an award) shall consider whether the bid documents are completed as required and the bid generally conforms to the bidding requirements. The purchasing officer or City Council may waive any bid nonconformities in accordance with applicable law. Any conditions or qualifications included by a bidder in a bid will be considered when determining whether a bid is responsive.
B. In its discretion, the purchasing officer or City Council (depending on who will make an award) may use any of the following criteria in evaluating the responsibility of bidders:
1. The ability, capacity and skill of the bidder to perform the contract or provide the service required.
2. The ability of the bidder to perform the contract or provide the service promptly, or within the time specified, without delay or interference.
3. The reputation and experience of the bidder, including the City’s previous experience with the bidder.
4. Prior and current compliance by the bidder with applicable law, including, without limitation, compliance with any applicable licensing requirements.
5. The sufficiency of the bidder’s financial and staffing resources for performing the contract or providing the goods or services.
6. The quality, availability and adaptability of the supplies or contractual services to the particular use required.
7. The ability and availability of the bidder to provide future maintenance/service.
8. Any conditions or exceptions attached to the bid by the bidder. (Ord. 1081 § 3, 2009.)
3.24.080 Exceptions to this chapter.
A. The following conditions constitute sufficient cause to dispense with the bidding requirements of this chapter and such requirements shall not apply to:
1. Contracts for professional or expert services, such as, but not limited to, services rendered by architects, attorneys, engineers, and other specialized consultants.
2. Goods or services which can be provided by only one supplier or only from one source due to a patent or copyright.
3. Contracts for advertising, ordinary travel expense items, and subscriptions to trade publications or other publications used by the City for a public purpose.
4. Situations where no bids have been received following bid announcements or all bids received exceed budget appropriations or costs estimates.
5. Emergency conditions which involve a sudden, unexpected occurrence or discovery of a condition or circumstance that poses a clear and imminent danger requiring immediate action and that compels placing an order with the most expedient source of supply.
6. Contracts involving the purchase of electricity and/or electric power or other goods and services executed by the Northern California Power Agency on behalf of the City.
7. Contracts for janitorial services for City buildings and facilities.
8. Products or services for which other public agencies have gone through a competitive bidding process and are able to have the bid prices they received extended to the City. These “cooperative purchasing” or “piggyback purchasing” agreements (including, but not limited to, CCOP State Department of General Services, U.S. General Services Administration, any county, and state cooperative purchasing pools) in which the City is eligible to participate may be used in lieu of any bidding requirements under this chapter.
9. When the estimated value of the goods or services is less than $1,000.
10. When the City Council specifically waives the competitive bid process and authorizes staff to negotiate the purchase by a four-fifths vote.
B. This chapter is expressly made inapplicable to bids for public projects as defined by the state of California in the Public Contracts Code, Section 20160, et seq.
C. Contracts for excluded goods or services that are not otherwise prohibited by law shall not be eligible for the five percent allowance as described in HMC 3.24.060(C). (Ord. 1081 § 3, 2009.)
3.24.090 Local preference for discretionary purchases.
To the extent permitted by applicable law, and subject to the provisions of this chapter, purchases that are exempt from competitive bidding law shall be made from local vendors, so long as the purchasing agent determines that the local vendor meets the City’s requirements and that the purchase from a local vendor is otherwise in the best interests of the City. (Ord. 1081 § 3, 2009.)
3.24.100 Splitting orders prohibited.
It is unlawful to split or separate into smaller orders the purchase of goods or services for the purpose of evading the competitive bidding provisions of this chapter. For goods or services which are purchased repeatedly throughout a year, the bidding procedures used shall be consistent with the estimated cumulative expenditures during a 12-month period. (Ord. 1081 § 3, 2009.)
3.24.110 Prevailing wages.
Potential bidders for goods and services that are subject to the requirements of the California Prevailing Wage Law (California Labor Code Section 1720, et seq.) shall be notified of the applicability of prevailing wage requirements in the bid documents and shall comply therewith. (Ord. 1081 § 3, 2009.)
3.24.120 Recycled products.
Product purchases, whenever feasible, shall contain the highest amount of post-consumer and recovered materials practicable. In all cases, goods or services must meet reasonable performance standards, and be readily available at a competitive price. (Ord. 1081 § 3, 2009.)
3.24.130 Surplus supplies and equipment.
At such times as determined by the purchasing officer, reports shall be prepared showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The purchasing officer shall have the authority to sell, trade or exchange all supplies and equipment. All supplies and equipment valued at more than $500.00 require a City Council resolution declaring them surplus. Upon declaration of an asset as surplus, the City Manager shall have the authority to dispose of supplies and equipment in whatever manner shall best serve the interests of the City. (Ord. 1178 § 2, 2018; Ord. 1081 § 3, 2009.)
3.24.140 Inspection and testing of purchases.
The purchasing officer is authorized to order the inspection of supplies and equipment delivered and services performed 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. (Ord. 1081 § 3, 2009.)
3.24.150 Fully reimbursed professional services agreements.
Professional services agreements for services to be provided on behalf of a third party (such as a developer) that are to be fully funded by the third party may be approved by the City Manager upon execution of a binding cost recovery agreement by the third party. (Ord. 1147 § 2, 2015.)
For state law as to purchases of supplies and equipment by cities, see Government Code §§ 54201 to 54205. As to requirement that city establish purchasing system, see Government Code § 54202.
Prior legislation: Ord. 411.