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Chapter 5.10
PURCHASING AND CONTRACTS

Sections:

Article I. General

5.10.010    Purpose.

5.10.020    Types of purchases and contracts.

5.10.030    Definitions.

5.10.040    Implementation.

5.10.050    Contracting authority.

5.10.055    Local preferences.

Article II. Goods and General Services

5.10.060    Purchase of goods.

5.10.070    General services contracts.

5.10.080    Procedures – Goods or general services up to $50,000.

5.10.090    Procedures – Goods or general services for more than $50,000.

5.10.100    Exceptions – Emergency, sole source, cooperative purchasing, negotiated purchases.

Article III. Professional Services

5.10.110    Professional services contracts.

Article IV. Environmental Preferences

5.10.150    Purpose and limitation.

5.10.160    Implementation.

5.10.170    Source reduction.

5.10.180    Purchases, practices and use of products.

Article I. General

5.10.010 Purpose.

The purpose of this chapter is to:

A. Provide for the authority of certain city employees to enter into contracts and to set forth procedural requirements; and

B. Establish efficient procedures for the purchase of goods and general services at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function, and to assure the quality of purchases. (Reference: Government Code sections 54201 through 54205.)

C. This chapter does not apply to public works construction contracts (see PHMC Chapter 11.10), to contracts concerning real property, franchise agreements or to labor contracts with city employees. (Ord. 807 § 1, 2005)

5.10.020 Types of purchases and contracts.

Following are the major types of purchases and contracts governed by this chapter.

A. Goods. Goods includes tangible goods, supplies, equipment, vehicles, materials, printing and insurance. An employee purchasing goods shall comply with the requirements in PHMC § 5.10.060. If the purchase of goods and general services are combined in one transaction, the requirements of a general services contract apply.

B. Services. There are two types of service contracts, each defined in PHMC § 5.10.030, with separate requirements applying to each:

1. General services contracts. An employee obtaining general services shall comply with the requirements in PHMC § 5.10.070.

2. Professional services contracts. A professional services contract includes services by architects, accountants, attorneys, engineers, planners, environmental consultants, technicians, and similar services. An employee obtaining professional services shall comply with the requirements in PHMC § 5.10.110. (Ord. 807 § 1, 2005)

5.10.030 Definitions.

For the purposes of this chapter, the following definitions apply:

Best value means the best value to the city based on all factors, including: cost; contractor’s ability, capacity or skill; ability to perform within the time required; character, integrity, reputation, judgment, experience and efficiency; quality of contractor’s performance on previous purchases or contracts, if applicable; and the ability of the contractor to provide future maintenance, repair, parts and services, if necessary.

Contract and agreement are synonymous. They include, but are not limited to, a purchase order, a contract for services, an addendum or change order, a letter agreement or a memorandum of understanding.

Emergency means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. (This does not include a self-created emergency resulting from delay or inaction.)

Goods includes tangible goods, supplies, equipment, vehicles, materials, printing and insurance.

Public project means (1) construction, reconstruction, erection, alteration, renovation, improvement, demolition or repair work involving any publicly owned, leased, or operated facility; or (2) painting or repainting of any publicly owned, leased or operated facility. Public project does not include maintenance work: (1) routine, recurring, and usual work for the preservation or protection of any publicly owned or operated facility for its intended purposes; (2) minor repainting; (3) resurfacing of streets and highways at less than one inch thickness; or (4) landscape maintenance. (Public Contract Code section 22002.)

Services involve the furnishing of labor, time or effort by an independent contractor who is specially trained to perform the services.

General services includes any work performed or services rendered, with or without the furnishing of materials, including, but not limited to:

1. Repair, modification and maintenance of city equipment;

2. Licensing software;

3. Repair, modification and maintenance of software;

4. Cleaning, analysis, testing, moving, removal or disposal of city supplies and equipment (other than by sale);

5. Providing temporary personnel services which are not professional services;

6. Performing repair, demolition or other work required to abate a nuisance;

7. Leasing or rental of equipment, and related maintenance agreements;

8. Maintenance work on city property including: (a) routine, recurring, and usual work for the preservation or protection of any publicly owned or operated facility for its intended purposes; (b) minor repainting; (c) resurfacing of streets and highways at less than one inch; or (d) landscape maintenance. General services does not include work defined as a public project. (See PHMC Chapter 11.10.)

Professional services or consultant services means the services of an attorney, architect, accountant, financial consultant, planning or environmental consultant, investment advisor, bank or trustee officer, or other professional. (Ord. 807 § 1, 2005)

5.10.040 Implementation.

The finance director is authorized to implement this chapter. This implementation includes, among other things, the preparation and circulation of purchasing procedures. (Ord. 807 § 1, 2005)

5.10.050 Contracting authority.

The city manager, or his or her designee, is authorized to enter into and sign on behalf of the city the following contracts. At the discretion of the city manager, any contract may be submitted to the city council for its approval.

A. Goods and services contracts. A purchase or contract for goods or services if funds have been appropriated in the budget. The manager may also enter into change orders or amendments which, cumulatively, do not exceed 20% of the original contract price.

B. Professional services contracts. A purchase or contract for professional services for up to $25,000 if funds have been appropriated in the budget. The manager may also enter into change orders or amendments which, cumulatively, do not exceed 20% of the original contract price.

C. Contracts with no cost to the city. Contracts which have no cost to the city, including:

1. Community services. Contracts for community, social or recreational services, or for the use of city property or facilities, in accordance with established administrative guidelines, which require no payment of money by the city or which provide for payment of money to the city in an amount not in excess of $50,000 under each contract.

2. Professional services contract paid for by developer. Contracts for professional services in an amount up to $100,000 if (a) a developer has deposited the full amount of the contract into a trust fund account (or made a deposit with a written promise to pay the balance when due), and (b) the funds are to be used for a city-managed professional services contract, such as an environmental impact report.

3. Public agencies and utilities. Contracts with public agencies or public utility companies regarding construction or use of public improvements or utility facilities, which require no payment of money by the city or which provide for payment of money to the city in an amount not in excess of $50,000 under each contract.

4. Other. Any other contract when there is no cost to the city.

D. Settlement agreements. Agreements documenting the settlement of litigation against the city for an amount not to exceed $20,000, in consultation with the city attorney.

E. Emergency contracts. In an emergency endangering the lives, property or welfare of the people of the city or the property of the city, the city manager may authorize the expenditure of any unencumbered moneys in the emergency reserve fund, notwithstanding the fact that such moneys may not have been appropriated for such purpose, to the extent that other moneys have not been appropriated or are otherwise unavailable. (See also PHMC § 11.10.100 regarding public projects in an emergency.) (Ord. 807 § 1, 2005)

5.10.055 Local preferences.

Purchasing goods and services from local vendors is desired because it stimulates the local economy, recognizes that our local vendors are valued members of our community, and provides additional sales tax revenue to the city. If factors such as quality, previous performance, and availability are substantially equal among vendors, a vendor whose business is located in Pleasant Hill shall be awarded a contract if his or her quote or bid is within 5% of the low bid (including shipping costs). (Ord. 835 § 2, 2008)

Article II. Goods and General Services

5.10.060 Purchase of goods.

Each transaction for the purchase of goods shall conform with this section and with the procedural requirements in PHMC §§ 5.10.080 through 5.10.100.

A. Requirements. An employee purchasing goods shall make appropriate use of purchase orders, request for proposals, notice inviting sealed bids, vendor letters, credit card purchases, petty cash, or a combination of them, under the city’s purchasing policy. (See PHMC §§ 5.10.080 through 5.10.110.)

B. Keeping records of purchase transactions. Each employee purchasing goods shall keep records of the purchase as required by his or her department. When quotations, request for proposals or notice inviting sealed bids is required, those records shall be kept in the department responsible for the transaction.

C. Leasing. Leasing of equipment shall be in accordance with PHMC §§ 5.10.080, 5.10.090 or 5.10.100, depending upon the cost of an annual lease. Each contract for the leasing or rental of equipment for the city shall contain a provision permitting the city to terminate the contract at the end of any fiscal year during the term of the contract upon not less than 30 days’ written notice to the other party. (Cal. Const. art. XVI § 18.) (Ord. 807 § 1, 2005)

5.10.070 General services contracts.

Each contract for general services shall conform to the following procedural requirements:

A. Requirements. An employee contracting for general services shall make appropriate use of purchase orders, request for proposals, notice inviting sealed bids, vendor letters, credit card purchases, petty cash, or a combination of them, under the city’s purchasing policy. (See PHMC §§ 5.10.080 through 5.10.100.)

B. Service contract. The employee purchasing general services shall obtain written confirmation of: the contractor’s license number (when applicable), automobile and general liability insurance coverage, workers’ compensation insurance, and a city business license.

A written agreement is required for services of $10,000 or more. Each general services contract must: (1) be in writing, (2) be signed by an employee having the authority to sign (See PHMC § 5.10.050); (3) include appropriate insurance and indemnification provisions; and (4) be approved as to form by the city attorney, either individually or by approval of a standard form.

C. Keeping original contracts. A signed original of each general services contract entered into must be kept by the department handling the contract matter for as long as the contract is in effect, plus three years.

D. Indemnity and insurance. A contractor engaged in services on city property shall hold the city harmless, and maintain commercial general liability, automobile and workers’ compensation insurance in the amounts and form determined by the city attorney. The department handling the general services matter is responsible for reviewing and monitoring insurance requirements, both initially and during the term of the contract.

E. Keeping records of purchase transactions. Each employee purchasing services shall keep records of the purchase as required by the city’s purchasing policy and by his/her department. When quotations, a request for proposals or notice inviting sealed bids is required, those records shall be kept in the department responsible for the transaction. (Ord. 807 § 1, 2005)

5.10.080 Procedures – Goods or general services up to $50,000.

A. Quotation. A department may purchase goods or general services of a value of up to $50,000 (in a one-year period) according to the following procedures.

Whenever possible and practical, the purchase shall be based on at least three quotations. The department shall solicit quotations by written request (including facsimile or electronic mail) or by telephone to prospective vendors. The department shall keep a record of all orders and quotes for a period of one year after the submission of quotes or placing of orders.

For a purchase of up to $10,000, the quotations may be verbal or written. For a purchase in an amount between $10,000 and $50,000, the quotations shall be written (including facsimile and electronic mail). The department shall award the contract to the quotation representing the best value as defined in PHMC § 5.10.030. If no bid, or no responsive bid, is received after inviting quotations under this section, the department head may, with the city manager’s approval, proceed to hire or have services performed or purchase the goods in the open market.

B. Exceptions. The quotation procedure under this section may be dispensed with under any exception set forth in PHMC § 5.10.100. (Ord. 807 § 1, 2005)

5.10.090 Procedures – Goods or general services for more than $50,000.

A. Bidding procedures. A department shall purchase goods or general services for more than $50,000 (in a one-year period) by the formal bid procedures prescribed in this section.

1. Notice. The notice inviting bids shall include a general description of the articles or general services to be purchased; state where bid forms and specifications may be secured; and state the final time and place for submitting bids. The notice shall be published 10 days before the bid opening date at least once in a newspaper of general circulation. The department shall also solicit sealed bids from responsible prospective suppliers.

The department may require bidders’ security or a performance bond, or both, and that requirement shall be included in the notice. A bidder is entitled to the return of bid security upon execution of the contract or upon the readvertisement for bids. A successful bidder forfeits the bid security upon refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed, unless the city is responsible for the delay.

2. Bid opening procedure. Bidders shall submit sealed bids to the department director, and shall identify them as bids on the envelope. 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.

In his or her discretion, the department director may reject any and all bids presented, and may readvertise for bids. If no bid, or no responsive bid, is received after inviting bids under this section, the department director may, with the city manager’s approval, proceed to hire or have services performed or purchase the supplies in the open market.

3. Award of contract. The department director shall award the contract to the bid representing the best value as defined in PHMC § 5.10.030. The basis upon which the award is made shall be in writing.

B. Exceptions. The bidding procedure under this section may be dispensed with under any exception set forth in PHMC § 5.10.100.

C. No splitting. Splitting the purchase of goods or general services into smaller orders for the purpose of evading the competitive bidding provisions of this section is not permitted. (Ord. 807 § 1, 2005)

5.10.100 Exceptions – Emergency, sole source, cooperative purchasing, negotiated purchases.

The department may dispense with quotation or bidding procedures for purchasing goods or general services in any of the following circumstances:

A. Emergency. In an emergency situation as defined in PHMC § 5.10.030.

B. Sole or limited source. Occasionally, required goods are unique, of a proprietary nature, or of specific design or construction. Examples include hardware, software or communications equipment. In these cases, quotation or bidding procedures could be meaningless. The department shall keep a written record of the basis for this determination.

C. Cooperative purchasing. If such purchases are based on an agreement or cooperative purchasing program entered into by any of the following, regardless of whether the city is a named party to the agreement or an actual participant in such a program: (1) any public agency situated within the state, if the underlying purchase was made using quotation or bid procedure substantially similar to the city’s; or (2) the California Multiple Award Schedules (CMAS); or (3) the federal Government Services Administration (GSA) Cooperative Purchasing Program.

D. Other. Where goods or general services are purchased through negotiations. This exception applies when the purchase is for: (1) a specialized technology product; (2) an addition to, or repair or maintenance of, existing equipment which can be more efficiently added to, repaired or maintained by a particular company or manufacturer; or (3) equipment which must be compatible with existing equipment, by reason of the training of the personnel or an inventory of existing replacement parts kept by the city.

The affected department head shall state in writing the basis for a determination that this section applies. (Ord. 860 § 1, 2012; Ord. 807 § 1, 2005)

Article III. Professional Services

5.10.110 Professional services contracts.

Each professional services contract shall: (1) be in writing, (2) be signed by an employee having the authority to sign (See PHMC § 5.10.050); (3) include the nature and scope of services, total amount, and time for performance; (4) include appropriate insurance and indemnification provisions; and (5) be approved as to form by the city attorney. However, a department director may enter into a simpler agreement, on a form prepared by the city attorney, if the agreement has a value of $10,000 or less.

A contractor engaged in service on city property shall hold the city harmless, and maintain property damage, general liability and workers’ compensation insurance in the amounts and form determined by the city attorney.

Soliciting quotes, estimates or requests for proposals (RFP) for a professional service contract is advisable, depending on the circumstances, but is not required. (Ord. 807 § 1, 2005)

Article IV. Environmental Preferences

5.10.150 Purpose and limitation.

A. Purpose. It is the city’s intention to:

1. Institute practices that reduce waste by increasing product efficiency and effectiveness; and

2. Purchase products that minimize environmental impacts, toxics, pollution and hazards to workers and the community to the greatest extent practicable; and

3. Purchase products that: use less oil to produce and transport; include recycled content; are durable and long-lasting; conserve energy and water; use agricultural fibers and residues; reduce greenhouse gas emissions; use unbleached or chlorine-free manufacturing processes; are lead- and mercury-free; and use wood from sustainably harvested forests.

B. Limitation. Nothing in this article requires a department, purchaser or contractor to obtain products that do not perform adequately or are not available at a reasonable price in a reasonable period of time. The city intends to purchase environmentally preferable products when it is technically and economically feasible to do so. The sections of this article shall be interpreted subject to the provisions of this section. (Ord. 835 § 1, 2008)

5.10.160 Implementation.

The city manager shall implement this article in coordination with all city departments by amending the city’s purchasing procedures to include more detailed information regarding environmental preferences. The manager shall report to the city council annually regarding the effectiveness of this article. (Ord. 835 § 1, 2008)

5.10.170 Source reduction.

The city will institute practices that reduce waste and result in the purchase of fewer products, without reducing safety, quality or effectiveness. This includes:

A. Purchase of remanufactured products;

B. Evaluating long-term costs in comparing product alternatives;

C. Preferring products that are durable, long lasting, reusable, refillable or recyclable;

D. Reducing packaging or preferring packaging that is reusable, recyclable or compostable;

E. Requiring suppliers of electronic equipment to take back equipment for reuse or recycling;

F. Using energy efficient, and water efficient, equipment and lighting; and

G. Using products that use less oil to produce and transport. (Ord. 835 § 1, 2008)

5.10.180 Purchases, practices and use of products.

A. Recycled content. The city will purchase products made from recycled content. This includes, but is not limited to: office paper; janitorial paper supplies; construction materials; landscaping materials; lubricating and industrial oil; asphalt concrete, aggregate base or Portland cement; and transportation products such as signs, cones, parking stops, delineators and barricades.

B. Landscaping. The city will undertake landscape renovations, construction and maintenance using sustainable materials and techniques, including: integrated pest management; grasscycling; drip irrigation; composting; use of mulch; use of native and drought-tolerant plants; use of hardscape made of recycled content; and minimizing the amount of impervious surface.

C. Toxics and pollution.

1. The city will use products that do not include: cleaning and disinfecting products that contain ingredients which are carcinogens, mutagens or teratogens; products containing chlorofluorocarbons, phosphates, volatile organic compounds (VOCs) and formaldehyde, lead or mercury (except for fluorescent lights containing mercury); or products that contribute to the formation of dioxins and furans.

2. The city will use products that do include: biodegradable surfactants and detergents; physical, mechanical and biological pest controls; and fuel-efficient vehicles (including electric, hybrid, natural gas and biobased fuels). (Ord. 836 § 1, 2008; Ord. 835 § 1, 2008)