Chapter 3.04
PURCHASING SYSTEM*
Sections:
3.04.040 Purchasing guidelines.
3.04.060 Award of contracts to businesses located in the city.
3.04.070 Informal bid procedure.
3.04.080 Formal bid procedure.
3.04.090 Sole-source purchasing.
3.04.100 Sole-source purchases from businesses within the city.
* Prior legislation: Ord. 581.
3.04.120 Exemptions from bidding procedure.
3.04.130 Disposition of surplus personal property.
3.04.140 Federal grant procurement.
3.04.010 Purpose.
A. This chapter is adopted pursuant to Government Code Section 54201 et seq. to provide guidance and direction regarding the procurement of supplies, equipment, and services; to ensure that the city and its departments will receive high quality goods and services at minimum cost to the taxpayer; to exercise positive financial control over purchases; to clearly define the authority for all purchases; and to limit the administrative demands imposed by the purchasing system to those reasonably necessary to achieve the other objectives of that system.
B. The policies and procedures contained in this chapter are not intended to conflict with Public Contracts Code Section 20160 et seq., Public Contracts Code Section 22030 et seq., or any other applicable law governing the solicitation of bids and award of contracts for public works projects requiring the expenditure of five thousand dollars or more. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.020 Definitions.
Unless otherwise indicated, the following definitions shall apply to this chapter:
"City clerk" means the city clerk of the city of Lakeport, or such other officer to whom the duties and responsibilities of the city treasurer have been transferred, or his or her designee.
"City manager" means the city manager of the city of Lakeport or his or her designee.
"Department head" means a person designated by the city manager and/or the city council to be responsible for the management of a department of the city or his or her designee.
"Emergency" means an emergency as defined by Section 2.28.030.
"Equipment" means items that are durable, have a fixed life expectancy and are shown in the city’s books as fixed assets.
"General services" means all services other than professional services and services pursuant to a public works contract excluded from this chapter by Section 3.04.010(B).
"Local business" means an individual, business, partnership or corporation that meets all of the following: (1) maintains a place of business located within the city of Lakeport; (2) has a current city of Lakeport business license; (3) reports to the state sales tax returns for goods purchased at its business located within the boundaries of the city which regularly maintains a place of business and an inventory of merchandise for sale within the sphere of influence of the city; (4) has any necessary licenses, certificates, bonds and insurances; and (5) is in good financial and legal standing with the city.
"Market value" means the value estimated by the purchasing officer at which the surplus personal property would sell if offered at auction or other open competitive bid sale.
"Professional service agreement" means a written contract for professional services entered into as provided in this chapter.
"Professional services" means those services governed by Government Code Section 4525 et seq., including architectural, landscape architectural, engineering, environmental, and land surveying services.
"Purchase" means the renting, leasing, purchasing, licensing or trade of supplies or equipment or the hiring of private contractors.
"Purchase order" means a form approved by the purchasing officer for the purchase of supplies, material, and/or equipment, but not professional services.
"Purchasing officer" means the city manager or his or her designee.
"Supplies" means office supplies, janitorial supplies, materials, goods, tools, or other commodities used in the general conduct of the city’s business that do not constitute equipment.
"Surplus personal property" means any personal property or equipment owned by the city of Lakeport which the purchasing officer determines, subject to approval of the city manager or the city council as required by Section 3.04.130, is no longer needed or used for city purposes or which has become obsolete, worn out or past its useful life. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.030 Powers and duties.
A. Department heads:
1. Shall have the power to:
a. Negotiate and recommend to the city council contracts for the purchase of supplies, equipment, and/or services on behalf of their respective departments.
b. Approve purchase orders and professional service agreements for the benefit of their respective departments for amounts up to three thousand five hundred dollars.
c. Execute contracts for the purchase of supplies, equipment and/or services for the benefit of their respective departments in accordance with the policies and procedures prescribed by this chapter.
d. Increase the time for performance or the not-to-exceed amounts prescribed by professional service agreements for which they are responsible by up to ten percent of the original agreement amount if they reasonably conclude that doing so will result in cost and/or time savings to the city.
2. Are under the duty to:
a. Identify the type and quantity of supplies, equipment, and/or services required to fulfill the responsibilities of their respective departments.
b. Engage in an informal bidding process under Section 3.04.070 for items expected to cost more than three thousand five hundred dollars and less than or equal to one hundred fifty thousand dollars, or a formal bidding process under Section 3.04.080 for items expected to cost more than one hundred fifty thousand dollars.
It is not permissible to split or separate purchases into smaller amounts to evade the requirements of this chapter.
c. Maintain records of all submitted bids for the procurement of supplies, equipment, and/or services as required by the city’s approved document-retention schedule.
d. Determine whether the required items or services are budgeted or the city council has otherwise authorized their purchase.
e. Secure necessary authorization prior to the commencement of work or delivery of supplies and equipment by preparing a purchase order or professional service agreement and ensuring that it is approved as prescribed by this chapter.
f. Supervise the inspection of supplies or equipment purchased to ensure that the items conform to the quality expectations of the city.
g. Monitor the work of contractors to ensure adherence to the terms and conditions of professional service agreements.
h. Provide coded and approved invoices to the finance department for payment in a timely fashion.
B. The purchasing officer:
1. Shall have the power to:
a. Negotiate contracts for the purchase of supplies, equipment, and/or services on behalf of the city.
b. Approve purchase orders and professional service agreements on behalf of the city in amounts up to twenty-five thousand dollars.
c. Execute contracts for the purchase of supplies, equipment and/or services on behalf of the city in accordance with this chapter.
2. Is under the duty to:
a. Enforce this chapter.
b. Recommend the transfer or exchange of surplus supplies and equipment between departments as needed, and recommend the sale of all supplies and equipment which have become obsolete, useless, or otherwise unsuitable for use by the city.
C. The city manager:
1. Shall have the power to:
a. Approve purchase orders and professional service agreements on behalf of the city for amounts up to twenty-five thousand dollars, or up to one hundred thousand dollars during a state of emergency declared pursuant to Chapter 2.28.
b. Perform any or all the duties of a department head or the purchasing officer.
2. Is under the duty to:
a. Ensure that the process for purchasing supplies, equipment, and services meets the needs of the community and the city.
b. Recommend to the city council revisions and amendments to this chapter to achieve its purposes.
D. The finance director shall have the power to:
1. Review and process payment to vendors after receiving properly coded and approved invoices.
2. Prepare the warrant/check register and submit to the city clerk for vendor payment issuance.
3. Delay processing payments to vendors if an agreement is void or if insufficient budgetary appropriation is available. Purchase orders and professional service agreements are void if any of the following is true:
a. The term of the agreement has expired;
b. The not-to-exceed amount specified by the agreement has been exceeded; or
c. The services performed are other than specified in the agreement.
E. The city clerk shall have the power to issue payment to vendors after receiving an approved warrant/check register from the finance director. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.040 Purchasing guidelines.
A. Purchases of supplies, equipment, or services for amounts equal to three thousand five hundred dollars or less do not require a bidding process and may be approved by a department head. Purchases in this range do not require a purchase order or a professional service agreement unless otherwise required by the vendor.
B. Purchases of supplies, equipment, or services for amounts greater than three thousand five hundred dollars but less than or equal to twenty-five thousand dollars are subject to the informal bidding process set forth in Section 3.04.070. Purchases in this range require that a purchase order or a professional service agreement be prepared and approved by a department head and by the purchasing officer or city manager.
C. Purchases of supplies, equipment, or services for amounts greater than twenty-five thousand dollars but less than or equal to one hundred fifty thousand dollars must meet the requirements of the informal bidding process set forth in Section 3.04.070. Purchases in this range require that a purchase order or a professional service agreement be prepared and approved by the department head, the city manager, and council.
D. Purchases of supplies, equipment, or services for amounts greater than one hundred fifty thousand dollars must meet the requirements of the formal bidding process set forth in Section 3.04.080. Purchases in this range require that a purchase order or a professional service agreement be prepared and approved by the department head, the city manager, and council.
E. During a declared state of emergency, purchases of supplies, equipment, or services for any amount do not require a bidding process. Purchases less than or equal to one hundred thousand dollars require the approval of the city manager. Purchases greater than one hundred thousand dollars require the approval of the city council.
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Contract Amount |
Purchase Order |
Professional Services Agreement |
Bidding Process |
Authorization Required |
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$3,500.00 or less |
Not required |
Not required |
None |
Department head only |
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$3,500.01–$25,000.00 |
Required |
Required |
Informal |
Department head and either (1) purchasing officer or (2) city manager |
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$25,000.01–$150,000.00 |
Required |
Required |
Informal |
Department head, city manager, and city council |
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$150,000.01 or more |
Required |
Required |
Formal |
Department head, city manager, and city council |
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Any amount during a declared state of emergency |
Not required |
Not required |
None |
City manager (up to $100,000.00) or city council (above $100,000.00) |
NOTE: The above matrix is intended to summarize the requirements of this chapter and not to change them. If the matrix contradicts the text of this chapter in any respect, the language of the chapter will prevail. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.050 Purchase agreements.
A. Professional Service Agreement (PSA).
1. Professional service agreements are used to purchase professional services as defined in Section 3.04.020.
2. All purchases of professional services over three thousand five hundred dollars require the completion of a PSA on the city’s standard form, except during times of a declared state of emergency. Deviations from the city’s standard professional service agreement must be approved by the purchasing officer or the city manager.
3. The city shall secure professional services based upon demonstrated competence, professional qualifications, and suitability for the project in general and needs to comply with either the informal or formal bid procedures set forth in Section 3.04.070 or 3.04.080 respectively if the value of the agreement exceeds three thousand five hundred dollars. The city should also consider the cost of the professional service, and in the event that a vendor is selected that does not offer the lowest price, a rationale must be provided to and approved by the city manager prior to final selection being made.
4. Authority to approve a professional service agreement shall be as specified in Section 3.04.040.
5. Authority to modify a professional service agreement shall be as specified in Section 3.04.040 based on the total not-to-exceed value of the agreement, including any proposed increase in the not-to-exceed value.
B. Purchase Order (PO).
1. Purchase orders are used to purchase supplies, materials, and/or equipment having a cost greater than three thousand five hundred dollars. They are not to be used to secure professional services.
2. Authority to approve a purchase order shall be as specified in Section 3.04.040.
3. Authority to modify a purchase order shall be as specified in Section 3.04.040 based on the total not-to-exceed value of the purchase order, including any proposed increase in the not-to-exceed value.
4. All procurements using a PO require the completion of a purchase order on the city’s standard form, except during times of a declared state of emergency. Deviations from the city’s standard purchase order must be approved by the purchasing officer or the city manager. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.060 Award of contracts to businesses located in the city.
A. In establishing a preference to local businesses in the award of contracts for supplies, equipment or services under this chapter, the city council finds that local businesses are disadvantaged in comparison to businesses located outside the city, particularly due to longer commutes for the delivery of goods and services and the high gas prices which increase the cost of goods and services delivered to and from the city limits. The city council also finds that awarding contracts to local businesses results in financial advantages to the city.
B. City personnel are directed to use their best efforts to purchase supplies, equipment, and services from local businesses whenever possible and consistent with the terms of this policy.
C. All informal and formal bids are to be evaluated with a ten percent preference for local businesses. A bid or proposal received from a local business will be tabulated as if it were ten percent lower than the figure actually set forth in the bid or proposal. The local business must claim the local business preference to be considered.
D. To qualify as a local business, the business shall submit with its bid or proposal, or have on file with the city clerk, an affidavit that demonstrates its eligibility as a local business, including but not limited to the following: the business has a facility with an address within the city and the business will attribute any sales tax from sales to the city of Lakeport. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.070 Informal bid procedure.
When the informal bid procedure is required, purchases shall be made in compliance with the following:
A. The city shall specifically identify the goods and/or services it wishes to purchase and determine the estimated cost of the goods and/or services from at least three different providers whenever possible.
B. Informal bids received must be documented in writing and retained by the department head as required by the approved document retention schedule.
C. Unless otherwise provided by any existing law, rule, regulation, or policy, the purchase of supplies, equipment and nonprofessional services shall be awarded to the provider with the lowest responsive estimated cost. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.080 Formal bid procedure.
When the formal bid procedure is required, purchases shall be made following compliance with the following:
A. Notice Inviting Bids. Notices inviting sealed bids shall include: (1) a general description of the articles and/or services to be purchased, (2) where bid forms and specifications may be obtained, (3) the date, time and place for the bidders’ conference, if any, and for the submission of sealed bids, and (4) any other information which the department head conducting the procurement deems useful.
B. Published Notice. Notice inviting bids shall be published at least once in a newspaper of general circulation published in the city at least five days before the date of opening of the bids, or, if there is no such newspaper, posted in at least three public places in the city designated by the city clerk for posting public notices at least five days before the date of opening of the bids.
C. Bidder’s Security.
1. When deemed necessary or appropriate, as with public works projects, the purchasing officer may require a bidding vendor to submit a bid security in any of the following forms:
a. Cash;
b. A cashier’s check made payable to the city;
c. A certified check made payable to the city;
d. A bidder’s bond executed by a surety insurer admitted to do business in California, made payable to the city.
2. Any requirement for bid security must be included in the public notice inviting bids.
3. The security shall be in an amount equal to at least ten percent of the bid amount.
4. A vendor shall forfeit its bid security upon its refusal or failure to perform pursuant to the terms of its contract with the city within twenty days after notice of award of contract or such lesser period specified in the notice inviting bids.
D. Failure to Perform.
1. Upon refusal or failure of the lowest successful bidder to execute or perform the contract pursuant to its terms, the officer or agency of the city authorized to award the contract may award it to the next lowest responsible bidder.
2. If the officer or agency of the city authorized to award the contract awards the contract to the next lowest 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.
E. Bid Opening Procedure.
1. Sealed bids shall be submitted to the office of the city clerk and shall be identified as "Submitted Bid" on the envelope.
2. Bids shall be opened at the time and place stated in the notice inviting bids.
3. A record of all bids submitted to the city shall be subject to public inspection at the office of the city clerk during regular business hours for at least ten calendar days after the bids are opened.
F. Rejection of Bids. The officer or agency of the city authorized to award the contract may reject any and all bids and require the purchasing officer or department head to rebid the purchase.
G. Award of Contracts. The officer or agency of the city authorized by Section 3.04.040 to do so shall award contracts.
H. Tie Bids. If two of more bids are submitted in the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay of re-advertising for bids, the officer or agency of the city authorized to award the contract may accept either bid.
I. No Bids Received. If no bids are received following compliance with the requirements of this section, the officer or agency of the city authorized to award the contract may procure the requested supplies, equipment, or services without further compliance with this chapter.
J. Performance Bonds.
1. The purchasing officer may require a performance bond in such amount as may be reasonably necessary to ensure performance before entering into any contract.
2. If a performance bond is required, the form and amount of the bond shall be described in the notice inviting bids. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.090 Sole-source purchasing.
A. Prior to submitting a purchase request, the requesting department shall conduct a survey of available sources to determine whether there is only one source capable of competently and efficiently providing the required supplies, equipment or service.
B. If it is determined that there is only a single source for the purchasing of a particular item or service, the requesting department shall prepare a waiver of bid and submit it to the purchasing officer.
C. If it is determined that there is only a single source for the purchasing of a particular item or service, upon review and approval of the request by the purchasing officer and the city manager, the contract may be awarded to the sole-source vendor without competition. In this case, the purchasing officer or authorized designee shall conduct negotiations, as appropriate, as to price, delivery, and terms. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.100 Sole-source purchases from businesses within the city.
A. Prior to submitting a purchase request, the request department shall conduct a survey of available sources within the city to determine whether there is only one local business capable of competently and efficiently providing the required supplies or equipment.
B. If it is determined that there is only a single local business for the purchasing of a particular item or service, the requesting department shall prepare a waiver of bid and submit it to the purchasing officer demonstrating the purchase meets all the following requirements:
1. The price of the supplies or equipment is twenty-five thousand dollars or less.
2. The supplies or equipment have been competitively bid and awarded by the state of California and are available to the city on the same or substantially similar terms as they are available to the state.
3. The purchase is made from a local business where the requesting department has conducted a survey of available sources within the city and found that there is only one local business capable of competently and efficiently providing the required supplies or equipment.
4. The purchase is made with city funds only.
5. The purchase price, delivery, and terms offered by the local business are the same or substantially similar to those available to the city under subsection (B)(2) of this section. For purposes of this section, "substantially similar" means, for pricing, an amount within ten percent of the price available to the city under subsection (B)(2) of this section.
C. If the requesting department determines there is a single source local business that can provide the supplies or equipment on the same or substantially similar terms as those offered under the state’s competitively bid contract, the requesting department shall prepare a waiver of bid and submit it to the purchasing officer. Upon review and approval of the request by the purchasing officer and the city manager, the contract may be awarded to the single source local business without competition because competitive bidding will provide no economic benefit to the city.
D. The purchasing officer or authorized designee shall conduct negotiations, as appropriate, as to price, delivery, and terms. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.110 Emergency purchases.
The city manager shall make, or authorize others to make, emergency purchases of supplies, equipment or services during a declared state of emergency for amounts less than or equal to one hundred thousand dollars; provided, that such emergency purchases shall be made with such competition as is practicable under the circumstances. Purchases for amounts greater than one hundred thousand dollars must be approved by the city council. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.120 Exemptions from bidding procedure.
A. Purchases of three thousand five hundred dollars or less.
B. Sole-source purchases in accordance with Section 3.04.090.
C. Sole-source local business purchases in accordance with Section 3.04.100.
D. Emergency purchases in accordance with Section 3.04.110.
E. Intergovernmental orders by which the city has contracted with another governmental entity to purchase particular supplies, equipment or services on a cooperative basis or where the city contracts with suppliers who have been awarded contracts by the state or other local agencies for the purchase of supplies, equipment, and/or services under a competitive process and are able to have the bid prices they received extended to the city.
F. Purchases of professional services in accordance with Section 3.04.050. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.130 Disposition of surplus personal property.
A. Prior to disposal, a list of surplus personal property specifying the item, its actual or estimated purchase price, date of purchase, and estimated market value shall be submitted to the city council for approval as to its "surplus" status. Surplus personal property of the city shall be disposed of on an annual or semiannual basis, in the following manner:
1. The city manager may authorize the sale or disposition of surplus personal property which has a market value equal to or less than his or her contracting authority under Section 3.04.040.
2. The city council may authorize the sale or disposition of surplus personal property which has a market value in excess of the city manager’s contracting authority under Section 3.04.040.
3. Any surplus personal property within his or her contracting authority may be sold or disposed of by the city manager as follows:
a. Surplus property with an estimated market value of less than one hundred dollars may be disposed of by the department head, upon written approval of the city manager, in the manner most advantageous to the city considering the value of the property and the cost of sale, including, but not limited to, sale by salvage, recycling or disposal.
b. Surplus personal property with an estimated market value of more than one hundred dollars but less than or equal to five thousand dollars per individual item of property may be sold or disposed of by any method the city manager determines to be most advantageous to the city considering the value and nature of the property and the cost of sale, including, but not limited to, sale by salvage, recycling or disposal.
c. Surplus personal property with an estimated market value of greater than five thousand dollars per individual item of property shall be sold under sealed bid or by public auction. Public auctions may include electronic bidding or auction services.
d. Disposition of surplus personal property pursuant to this section shall be "as is" without warranty, express or implied, and the buyer shall agree to pay applicable sales or transfer taxes.
e. Notwithstanding other provisions in this section, surplus personal property may be sold to another public entity for market value or traded for market value equivalent property or services as approved by the city manager.
f. Notwithstanding other provisions in this section, surplus personal property of any value may be traded in as consideration toward the acquisition of other personal property upon written approval of the city manager.
g. Notwithstanding other provisions in this section, surplus personal property of any value may be transferred to other city departments without consideration as approved by the city manager.
4. Surplus personal property which the city manager deems unacceptable for sale to the public may be disposed of in the manner deemed appropriate by the city manager. Examples of such property include: city-owned animals, law enforcement equipment and property which may pose a hazard to the general public.
B. The city council may, by resolution, authorize the donation of surplus personal property, if the city council finds that such donation serves a public purpose or benefit. All donations pursuant to this section shall be "as is" without warranty, express or implied, and the transferee shall agree to defend, indemnify and hold harmless the city, its officers and employees from any claim, cause of action, damage, loss or liability arising out of the condition of the property or its use by the organization or subsequent transferee.
C. In cases where a sealed bid or public auction is required for the sale of surplus personal property, reasonable notice to prospective bidders of such sale by sealed bid or public auction shall be given, as determined by the purchasing officer, taking into account the circumstances and the item or items to be sold.
D. Any department disposing of surplus personal property shall document the disposition and provide, in writing, to the finance director or his or her designee, who shall keep a record of sales, exchanges or other disposition of any property disposed of pursuant to the provisions of this chapter, at least the following information:
1. A description of the property transferred;
2. The name of the transferee;
3. The date of transfer;
4. The gross receipts, net receipts and/or transaction costs; and
5. A description, including the value of any personal property received in exchange for the property transferred.
E. Such records shall be kept consistent with the city’s records retention policy. (Ord. 935 §1, 2022; Ord. 894 §1(part), 2014)
3.04.140 Federal grant procurement.
A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, codified under Title 2, Subtitle A, Chapter 2 of the Code of Federal Regulations ("2 CFR 200"), as may be amended from time to time, include procurement requirements for nonfederal entities expending federal awards. When appropriate, the city requests federal grant monies for projects that benefit its residents, property owners, and businesses. This section outlines the city’s procurement policy for all federally funded projects and purchases. These policies and procedures reflect applicable state and local laws and their conformity to the applicable federal laws and standards identified in 2 CFR Sections 200.318 through 200.326. The uniform guidance is designed to better mitigate the risk of waste, fraud, and abuse of federal funds. Nonfederal entities are required to have certain written policies and procedures surrounding the management of their award funds.
B. All requesting departments shall consult this section when dealing with any procurements in which federal funds are contemplated or used.
C. All federally funded procurements shall be overseen by the applicable department head, city manager, or purchasing officer as provided in Section 3.04.030.
D. Code of Conduct.
1. In addition to the requirements in this section, employees, officers, and agents of the city are required to abide by all other codes of conduct governing conflicts of interest, including but not limited to Government Code Section 1090, and the city’s conflict of interest code.
2. No employee, officer, or agent of the city shall participate in the selection, award, or administration of a contract supported by federal funds if a conflict of interest, real or apparent, is or would be involved. Such a conflict could arise if the employee, officer, or agent; any member of his/her immediate family; his/her partner; or an organization which employs (or is about to employ) any of the above, has a financial or other interest or a tangible personal benefit from a firm considered for a contract as identified in 2 CFR Section 200.318(c)(1).
3. No employee, officer, or agent of the city shall solicit or accept gratuities, favors, or anything of monetary value from contractors or firms, potential contractors or firms, or parties to sub-agreements, except where the financial interest is not substantial. This restriction not only applies to the city employee, officer, or agent, but also to that person’s spouse or any entity in which that person or their spouse owns at least twenty-five percent. CFR reference: 2 CFR Section 200.318(c)(1).
4. The prohibition against conflicts of interest and gratuities and kickbacks shall be conspicuously set forth in every written contract and solicitation. It shall be a breach of ethical standards for any public employee or former employee, officer, or agent knowingly to use confidential information for his actual or anticipated personal gain or the actual or anticipated personal gain of any other person. CFR reference: 2 CFR Section 200.318(c)(1).
5. When federal funds are utilized, the purchasing officer shall check the potential vendor list against SAM.gov to verify that the potential awardee is not subject to federal debarment or suspension status. Additionally, vendors are required as a part of their response to a solicitation to attest to the fact that they have not violated any standards in their submission to the city. If the city determines that there is a federal debarment, the city will not award a contract to the entity. CFR reference: 2 CFR Section 200.318(c)(1).
6. All employees, department heads, and consultants are required to report any alleged violations of this established code of conduct to the city manager immediately. Where violations appear to have occurred, the offending employee, officer, or agent may be subject to disciplinary action as outlined in the Personnel Rules and Regulation document. CFR reference: 2 CFR Section 200.318(c)(1).
E. The uniform guidance outlines five methods of procurement: micropurchases, small purchases, sealed bids, competitive proposals, and noncompetitive (sole-source) proposals. The table below shall be used to identify bidding requirements for each of the five methods of procurement:
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Purchase Type |
Characteristics and Requirements |
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Below simplified acquisition threshold of $150,000 |
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Micropurchases |
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Small purchases |
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Above simplified acquisition threshold of $150,000 |
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Sealed bids |
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Competitive proposals |
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Above or below simplified acquisition threshold |
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Noncompetitive proposals |
Falls into one or more of these four circumstances: |
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Bid Amount
The purchasing thresholds shown in the table differ from the city’s procurement policy in Sections 3.04.010 through 3.04.110 and shall be used when considering or using federal grant funds for the procurement of services and/or goods.
Bid Solicitation
The city’s approved procedures for specific types of bidding are outlined in Sections 3.04.070 and 3.04.080 and shall be followed for the applicable type of bid solicitation based on the bid amount for federal projects per the table above.
The purchasing officer is responsible for identifying the requirements of both the city’s procurement ordinance and the federal guidelines above, as well as adhering to both when applicable.
Positive efforts shall be made by the city to utilize small businesses, minority-owned firms, and women’s business enterprises, whenever possible. The city shall take all of the following steps to further this goal:
1. Ensure that small businesses, minority-owned firms, and women’s business enterprises are used to the fullest extent practicable.
2. Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women’s business enterprises.
3. Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women’s business enterprises.
4. Encourage, when practical, contracting with consortiums of small businesses, minority-owned firms and women’s business enterprises when a contract is too large for one of these firms to handle individually.
5. Use the services and assistance, as appropriate and practical, of such organizations as the Small Business Administration and the Department of Commerce Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women’s business enterprises.
6. The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) shall be determined by the city but shall be appropriate for the particular procurement and for promoting the best interest of the program or project involved. The "cost-plus-a-percentage-of-cost" or "percentage of construction cost" methods of contracting shall not be used.
7. The city is prohibited from using statutorily or administratively imposed state or geographical preferences (unless mandated by federal statute, or in cases where a state license, such as architectural or engineering, may be required to perform a project in California).
F. Uniform guidance requires written procedures for determining whether a cost is allowable in accordance with subsection E of this section (CFR reference: 2 CFR Section 200.032(b)(7)). The following criteria summarize the key points that must be considered when determining whether a cost is allowable (CFR reference: 2 CFR Section 200.403):
1. Be necessary and reasonable for the performance of the federal award (and be allocated to that use).
2. Conform to limitations or exclusions regarding type or cost.
3. Be consistent with the policies and procedures the organization would apply to nonfederally financed work.
4. Be treated consistently with other comparable costs; for example, a cost may not be treated as a direct cost if a cost incurred for the same purpose in similar circumstances was allocated as an indirect cost.
5. Be determined in accordance with U.S. generally accepted accounting principles except as otherwise provided in 2 CFR 200.
6. Not be used to meet cost-sharing or matching requirements of any other federally financed program (see also 2 CFR Section 200.306(b)).
7. Be adequately documented (see also 2 CFR Sections 200.300 through 200.309).
G. Section 3.04.030 applies for federal procurements. Initially, it is the purchasing officer’s responsibility to determine if costs are allowable for a federal grant. The city’s finance department will regularly monitor all expenditures and report any concerns to the purchasing officer and city manager. Some form of cost or price analysis shall be made by the purchasing officer or department head, and documented in the procurement files in connection with every procurement action above five hundred dollars in value. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.
H. On a bimonthly basis, the city’s finance department will review all grant expenditures for allowable costs and applicable funding. If the grant is a reimbursement grant, the purchasing officer and the finance department will review the total expenditures not covered in prior reimbursement requests. If there are no nonallowable costs that must be researched or reported, a reimbursement request will be created on the appropriate grant website (or on forms provided by the grant agency if applicable) by the finance or grant manager. Only those expenditures deemed allowable will be part of the total reimbursement request, and if any questionable purchases have occurred an immediate investigation into the item(s) will be done by the finance manager. A grant that utilizes advanced payments will also be reviewed bimonthly to determine only allowable costs are charged to the grant fund. Any items that are improperly charged to a grant will be reclassified to another budget line item with available budget only in the instances that generally accepted accounting principles and city budget procedures permit the movement of the expenditure to a new budget line item. The new location of the expenditure will be determined by the purchase officer or applicable department head. If there is not another budget line with available budget to charge the nonallowable expenditure to, the purchasing officer will be required to report the expenditure to the city council and request additional budget in a nongrant fund be added to cover the cost.
I. The city shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions shall also be applied to subcontracts:
1. Contracts in excess of the simplified acquisition threshold shall contain contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms, and provide for such remedial actions as may be appropriate.
2. All contracts in excess of the simplified acquisition threshold shall contain suitable provisions for termination by the city, including the manner by which termination shall be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
3. For contracts dealing with construction or facility improvements the city shall comply with all requirements imposed by its funding sources (and the government regulations applicable to those funding sources) with regard to construction bid guarantees, performance bonds, and payment bonds.
4. All negotiated contracts (except those for less than the simplified acquisition threshold) awarded by the city shall include a provision to the effect that the city shall have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.
5. All contracts, including small purchases, awarded by the city and their contractors where the source of the funds, directly or indirectly, is the federal government, shall contain the following procurement provisions as applicable:
a. Equal Employment Opportunity. All contracts, when funded in whole or part by monies derived from the federal government (either directly or indirectly), shall contain a provision requiring compliance with E.O. 11246, "Equal Employment Opportunity," as amended by E.O. 11375, "Amending Executive Order 11246 Relating to Equal Employment Opportunity," and as supplemented by regulations at 41 CFR Part 60, "Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor."
b. Copeland "Anti-Kickback" Act (18 U.S.C. Section 874 and 40 U.S.C. Section 276c). All contracts in excess of two thousand dollars for construction or repair, when funded in whole or part by monies derived from the federal government (either directly or indirectly) shall include a provision for compliance with the Copeland "Anti-Kickback" Act (18 U.S.C. Section 874), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to the federal awarding agency.
c. Davis-Bacon Act, as Amended (40 U.S.C. Sections 276a through a-7). When required by federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than two thousand dollars shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. Sections 276a through a-7) and as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction"). Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to the federal awarding agency.
d. Contract Work Hours and Safety Standards Act (40 U.S.C. Sections 327 through 333). All contracts in excess of two thousand dollars for construction contracts and in excess of two thousand five hundred dollars for other contracts that involve the employment of mechanics or laborers, when funded in whole or part by monies derived from the federal government (either directly or indirectly), shall include a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. Sections 327 through 333), as supplemented by Department of Labor regulations (29 CFR Part 5).
e. Rights to Inventions Made Under a Contract or Agreement. Contracts or agreements for the performance of experimental, developmental, or research work, when funded in whole or part by monies derived from the federal government (either directly or indirectly), shall provide for the rights of the federal government and the recipient in any resulting invention in accordance with 37 CFR Part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued by the awarding agency.
f. Clean Air Act (42 U.S.C. Section 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), as Amended. Contracts and subgrants of amounts in excess of one hundred thousand dollars, when funded in whole or part by monies derived from the federal government (either directly or indirectly), shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. Section 7401 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. Section 1251 et seq.). Violations shall be reported to the federal awarding agency and the regional office of the Environmental Protection Agency (EPA).
g. Byrd Anti-Lobbying Amendment (31 U.S.C. Section 1352). Contracts for an amount above one hundred thousand dollars, when funded in whole or part by monies derived from the federal government (either directly or indirectly), shall include a certification by the contracting parties that they have not and will not use federally appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant or any other award covered by 31 U.S.C. Section 1352, and to further require disclosure of any lobbying with nonfederal funds that takes place in connection with obtaining any federal award. Such disclosures are forwarded from tier to tier, up to the nonfederal award.
J. Procurement records and files for purchases in excess of the small purchase threshold as fixed at 41 U.S.C. Section 403(11) (currently twenty-five thousand dollars) shall include the following at a minimum: (1) basis for contractor selection, (2) justification for lack of competition when competitive bids or offers are not obtained, and (3) basis for award cost or price. Procurement records shall be held by the applicable purchasing officer or department head for at least three years following the close of the grant award period. (Ord. 935 §1, 2022)