Chapter 7.08 SOURCE SELECTION AND CONTRACT FORMATION

B. All contracts equal to or less than $50,000.00 shall be awarded by the City Manager or their designee, subject to the provisions of Section 7.04.060(D).

C. The City Manager may delegate, in writing, the authority to award contracts equal to or less than $30,000.00.

D. All procurements exceeding $30,000.00 in value require a formal contract.

E. All procurements not exceeding $30,000.00 in value must be supported by written documentation. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-7)

7.08.015 Contract modifications—Change orders—Price adjustments.

A. The following contract changes (including contract modifications, change orders, and price adjustments) must be approved by ordinance which may be enacted upon a single reading pursuant to Section 7.04.060(A):

1. Changes to any contract not originally awarded by the Council when the cumulative value of the original contract and all changes to the contract exceed $50,000.00;

2. Changes to any contract originally awarded, or any contract previously modified by the Council, when the cumulative value of all changes exceeds both:

a. Fifty thousand dollars; and

b. Ten percent of the original contract.

B. Except as otherwise provided by applicable law, the City Manager shall approve all other contract changes in writing. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

7.08.020 Voidable contracts.

If any official of the City purchases or contracts for any goods, services or capital improvements in a manner contrary to the provisions of this chapter, such purchase or contract shall be voidable by the City. However, when, in the opinion of the City Manager, the contracting violation occurred through no fault of the contractor, the contractor may be reimbursed on the basis of goods and services furnished or work performed in good faith, in such amount as the City Manager may determine. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-8)

7.08.025 Multi-term contracts.

A. A contract for goods, insurance, or services, other than professional services, may be entered into for any period of time deemed to be in the best interest of the City, not to exceed three years; provided, that the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting. When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled with no penalty to the City.

B. Professional services contracts may be entered into for any period of time deemed to be in the best interest of the City, not to exceed five years.

C. Software contracts may be entered into for any period of time deemed to be in the best interest of the City, not to exceed five years. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

7.08.026 Indefinite quantities contracts.

The City may utilize indefinite quantities contracts, as defined in Section 7.04.040, to procure goods or services to be furnished at specific times, or as ordered, at fixed unit prices. During the term of a requirements contract, the City should use reasonable efforts to order all actual requirements of the City, or one of its departments, during a specified period of time. Failure to utilize a specific indefinite quantities contract for a particular procurement must not be considered a breach of the contractual obligation unless the contract specifically provides that the contractor is the exclusive source for the goods or services. Where practical, an indefinite quantities contract should include a maximum amount of funds that may be expended pursuant to such contract within a one-year period. If it is not practical to include in an indefinite quantities contract the maximum amount of funds that may be expended within a one-year period, the City Manager shall explain the reasoning in writing to the Council. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

7.08.030 Validity of claims.

No person or entity shall have a valid or enforceable claim against the City for the payment of any moneys or any other thing of value pursuant to an alleged contract or agreement, unless the contract or agreement has been signed and authorized as provided in this division. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-9)

7.08.035 Records of procurement actions.

A. Contents of Record. All determinations and other written records pertaining to any solicitation, award or performance of a contract shall be maintained for the City in a contract file. All records shall be maintained for such time as required by State law or regulation but for not less than three years.

B. Submission to the City Council. A copy of such record shall be submitted to the City Council upon request. Such record shall be available for public inspection.

C. Reporting to the City Council. The City Manager shall immediately report to the City Council any emergency purchase exceeding $30,000.00. The City Manager shall provide a report to the City Council at least twice every fiscal year concerning:

1. All emergency procurements exceeding $10,000.00 in value; and

2. All procurements between $30,000.00 and $50,000.00 in value. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-16. Formerly 7.08.100)

Article 2. Competitive Bidding and Source Selection

7.08.040 Conditions for use.

A. General. All City contracts shall be awarded by competitive sealed bidding or competitive sealed proposals, except as otherwise provided in Section 7.08.070.

B. City Vendors or Suppliers. The City Manager or designee shall take all reasonable steps to assure that all qualified vendors or suppliers of goods or services residing or having their principal offices in the City are made aware of the City’s issuance of invitations for bids or requests for proposals and given an opportunity to submit bids or proposals in response thereto. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-10)

7.08.050 Competitive sealed bidding.

A. Conditions for Use. Competitive sealed bidding shall be used when all of the following circumstances apply:

1. Time permits the solicitation, submission and evaluation of sealed bids;

2. The award will be made on the basis of price and price-related factors;

3. It is not necessary to conduct discussions with responding sources about their bids; and

4. There is reasonable expectation of receiving more than one bid.

B. Procedure. The following general procedures shall be followed for awarding contracts by competitive sealed bidding:

1. Invitation for Bids. An invitation for bids shall be issued, which shall include specifications and all contractual terms and conditions applicable to the procurement.

2. Public Notice. Public notice of the invitation for bids shall be given at a reasonable time prior to the date set forth therein for the opening of bids. Such notice may include publication in a newspaper of general circulation.

3. Opening of Bids. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The amount of each bid and such other relevant information as may be specified by regulation, together with the name of each bidder, shall be recorded; the record and each bid shall be open to public inspection.

4. Acceptance and Evaluation of Bids. Bids shall be evaluated based on the requirements set forth in the invitation for bids. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as, but not limited to, discounts, transportation costs and total or life cycle costs. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bid.

5. Correction or Withdrawal of Bids. Correction or withdrawal of inadvertently erroneous bids before or after award or cancellation of awards or contracts based on bid mistakes shall be permitted in accordance with such regulations as the City Manager may establish. After the opening of bids, no changes in bid prices or other provisions of bids prejudicial to the interest of the City or fair competition shall be permitted. Except as otherwise provided by regulation, all decisions to permit the correction or withdrawal of bids or to cancel awards or contracts based on bid mistakes shall be supported by a written determination by the City Manager.

6. Award. The contract shall be awarded with reasonable promptness by written notice to the most responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids.

7. Multistep Sealed Bidding. When it is considered impractical to initially prepare a purchase description to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders or offerors whose offers have been qualified under the criteria set forth in the first solicitation.

C. Cancellation of Invitation for Bids. An invitation for bids or other solicitations may be canceled or any or all bids may be rejected, in whole or in part, as may be specified in the solicitation when it is in the best interests of the City. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code 9A-11)

7.08.060 Competitive sealed proposals.

A. Conditions for Use. A contract may be entered into by the use of competitive sealed proposal method:

1. When the City Manager determines, in writing, that due to stated circumstances, the use of competitive sealed bidding is either not practical or not advantageous to the City;

2. For the procurement of professional services; or

3. Procurements exempt from competitive bidding requirements pursuant to Section 7.08.070.

B. Request for Proposals. Proposals shall be solicited through a request for proposals.

C. Public Notice. Adequate public notice of the request for proposals shall be given in the same manner as provided in Section 7.08.050(B)(2).

D. Receipt of Proposals. No proposals shall be handled so as to permit disclosure of the identity of any offeror or the contents of any proposal to competing offerors during the evaluation process. A register of proposals shall be prepared containing the name of each offeror, the number of modifications received, if any, and a description sufficient to identify the item offered. The register of proposals shall be open to public inspection only after contract award.

E. Evaluation Factors. The request for proposals shall state the relative importance of price and other evaluation factors.

F. Discussion with Responsible Offeror and Revisions to Proposals. As provided in the request for proposals, discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible to being selected for award for the purpose of clarification to assure full understanding of and conformance with the solicitation requirements. Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposal, and such revisions may be permitted after submissions and prior to award for the purpose of obtaining best and final offers. In conducting discussions, there shall be no discussion of the identity of competing offerors.

G. Award. Award shall be made to the responsible offeror whose proposal is determined to be the most advantageous to the City, taking into consideration price and evaluation factors set forth in the request for proposals. The contract file shall contain the basis on which the award is made.

H. Cancellation of Request for Proposals. A request for proposals or other solicitations may be canceled or any or all proposals may be rejected, in whole or in part, as may be specified in the solicitation when it is in the best interests of the City. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code 9A-12)

Article 3. Other Procurement Methods

7.08.070 Procurements exempt from competitive bidding.

A. Purchases Under $30,000.00. Any procurement of goods not exceeding the amount of $30,000.00 may be made without the requirement of competitive bidding; provided, however, that procurement requirements shall not be artificially divided so as to constitute a small purchase under this section.

B. Professional Services. Any procurement of or contract for professional services may be made without the requirement of competitive bidding. The City Manager may, by regulations, establish competitive negotiation or selection procedures for professional service contracts or classes of professional service contracts.

C. Emergency Procurement. The City Manager may make or authorize others to make emergency procurements without the requirement of competitive bidding when there exists a threat to the public health, welfare or safety under emergency conditions; provided, that the City Manager shall file promptly with Council a certificate showing such emergency, the necessity for such action, together with an itemized account of all expenditures, that such emergency procurements shall be made with such competition as is practicable under the circumstances and that the City Manager shall make a written determination of the basis for the selection of the particular contractor, which shall be included in the contract file. In no case shall failure to plan for provision of a City service constitute an emergency under this subsection.

D. Sole Source Procurement. A contract for procurements not exceeding $50,000.00 in value may be awarded for a good, service or construction item without the requirement of competitive bidding when, under such regulations as the City Manager may establish, the City Manager determines, in writing, that there is only one available source for the good, service or construction item or if a specific manufacturer’s product is required to ensure compatibility with existing installed equipment and so notifies the City Council. The City Manager’s determination shall be subject to review and approval by the City Council by resolution.

E. Cooperative Purchasing. The City Manager may enter into contracts or agreements for cooperative purchasing, as defined in Section 7.04.040, without the requirement of competitive bidding by the City; provided, that such cooperative purchasing meets all of the requirements of this division and Chapter 14.04 and is consistent with their provisions in every respect and that the cooperative purchasing agreement is subject to review and approval by the City Council by resolution prior to any actual purchase or purchases being made thereunder.

F. Products or Services Immediately Available. Subject to written authorization by the City Manager, when immediate action is necessary to take advantage of a sale or when the product or service is immediately available from one vendor and not from lower bidders, the procurement does not exceed $50,000.00 in value, the delay would impair the City’s ability to procure such goods or services, and the price from the vendor who can deliver quickly is not materially higher than the lower bids.

G. Rider Contracts. The City Manager may use rider contracts, without the requirements of competitive bidding by the City, if the contract was established in a manner consistent with the purposes of this title and:

1. The vendor provides to the City Manager, in writing, a statement extending the terms of the contract to the City; and

2. The City Manager obtains copies of the solicitation document, scoring sheets and/or bid tabulation, evidence of contract award and the underlying executed contract, or explains in writing to the Mayor and City Council why the rider contract is recommended in the absence of some or all of the documentation identified in this subsection.

The quantity and dollar value of rider contracts may be amended; however, the scope and specifications of goods and services must match the underlying contract.

H. In addition, the following types of transactions are exempt from competitive procurement:

1. Purchases for water, sewer, electric, postage, or other utility services;

2. Sales, rentals, or purchases of land and rights-of-way;

3. Employment contracts and employee relocation costs;

4. Temporary labor agreements;

5. Goods purchased from a public auction sale, including an internet auction; provided, that a written determination is made in advance by the City Manager that such a purchase is in the best interest of the City;

6. Expenditures for travel, subscriptions, courses, seminars, and conventions, membership dues and subscription fees;

7. Acquisition of works of art for public display; and

8. Procurement of instructional or educational services for City officials, staff, or residents, or for social, cultural, or recreational programs or events offered or sponsored by the City. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-13)

7.08.080 Procedure for procurements exempt from competitive bidding.

A. Procurements Equal to or Exceeding $10,000.00. Insofar as it is practical, in all procurements equal to or exceeding $10,000.00 in value, with the exception of sole source procurement, cooperative purchasing, products or services immediately available, and riders, proposals for goods or services required shall be solicited from at least three qualified sources. In the event that three qualified sources do not exist, the City Manager or their designee shall make a written determination of that fact and report that determination to the City Council.

B. Procurements Less Than $10,000.00. For expenditures less than $10,000.00, a reasonable effort shall be made to obtain goods or services at the lowest cost. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-14)

7.08.090 Extensions.

A. An extension of a contract may be awarded without competition when the City Manager finds, in writing, that circumstances warrant the extension of an existing contract at the same unit price; provided, that the extension occurs within 12 months of the date of the execution of the original contract.

B. For multi-year contracts, executed in accordance with Section 7.08.025(A), an initial extension under this subsection may be made for a period of one year and approved by the City Manager. Any subsequent extensions must be approved by the City Council. When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled with no penalty to the City.

C. For multi-year contracts, executed in accordance with Sections 7.08.025(B) and (C), subsequent extensions must be approved by the City Council. When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled with no penalty to the City. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-15)

7.08.100 Compliance with Chapter 14.04.

Notwithstanding any other provision of this division, all procurement actions shall comply in every respect with all the provisions of Chapter 14.04, known as the “Takoma Park Nuclear-Free Zone Act.” (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-17. Formerly 7.08.110)

7.08.110 Purchase orders.

A. City purchases shall be memorialized by a written contract or a purchase order signed in accordance with this chapter, except as specified in subsection (D) of this section. Purchase orders shall be consecutively numbered from the start of each fiscal year. Purchase orders shall be signed by the City Manager or their designee.

B. No department head shall make any purchase on behalf of or chargeable to the City except by means of a purchase order signed in accordance with subsection (A) of this section; provided, however, that this subsection (B) shall not apply to expenditures made in advance of a purchase in emergencies as defined in and subject to the regulations that may be established by the City Manager; provided, however, that in the case of emergency expenditures, a purchase order must be obtained from the City Manager or designee within 72 hours of the purchase.

C. No person employed by the City or providing services to the City as an independent contractor shall purchase or cause to be purchased through or from the City any item for their personal use. Without limitation on any other legal actions or remedies available, violations of this section shall be sufficient cause for dismissal, suspension or termination of employment or of any contract for services, as the City Council may determine. A violation of this section shall be a Class A offense.

D. No department head shall order and obtain goods or services exceeding $10,000.00 in value without first securing a purchase order. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-18. Formerly 7.08.120)

7.08.120 Petty cash expenditures.

The City Manager shall have the authority to establish procedures for petty cash expenditures. Such procedures may provide for departmental petty cash levels of up to $200.00 for expenditures made by or with the approval of department heads. Such petty cash expenditures shall be made after such price shopping as the department head deems appropriate or is otherwise established by the City Manager. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-19. Formerly 7.08.130)

7.08.130 Purchase of recycled products.

A. General Preference. The City shall purchase recycled products whenever sufficient quantities are readily available and meet the City’s specifications. The City shall purchase recycled products that contain the highest percentage of recovered material and are produced to the greater extent with post-consumer materials.

B. Price Preference. To the extent practicable the City shall purchase recycled products and may provide for a price preference not to exceed 15%.

C. Purchase of Certain Specified Products and Services. Notwithstanding any other provision of this division, all procurement actions shall comply with the following provisions:

1. All City stationery and envelopes with the City return address shall be made of recycled paper.

2. The City newsletter shall be produced on recycled content newsprint.

3. When the City is using an outside printer, the City must obtain both a price quote for recycled and nonrecycled paper and shall require that the job be done using recycled paper if there is a price differential of 15% or less.

4. All copiers and laser printers purchased by the City after the effective date of the ordinance codified in this chapter shall be able to use recycled paper, and all copiers shall be able to perform two-sided copying as an automatic function.

D. Product Specifications. All departments of the City shall review and revise product specifications so as to conform to the following guidelines:

1. Specifications shall not require the use of products made from virgin materials.

2. Specifications shall not exclude the use of recycled products.

3. A minimum percentage of recovered material content shall be incorporated into each specification when it is known that there are sufficient and readily available supplies of a particular recycled product.

E. Practicability of Procurement. In an assessment of the practicability of procurement of goods containing recycled materials, the City shall consider, among other relevant factors, product availability, product suitability for intended use, including whether the product meets established performance standards and will not negatively impact the health and safety of employees and residents, and cost.

F. Certification of Recycled Content. The City shall require the seller to certify in writing that any recycled product sold to the City by competitive bid contract or cooperative purchase contains the minimum percentage of recovered materials set forth in the City’s product specification and shall also specify the percentage of post-consumer materials contained in the product.

G. Labeling of Recycled Products. To the extent practical, all products purchased by the City made from recycled materials shall be labeled as such. City stationery, envelopes with the City return address and the City newsletter shall be labeled as being printed on recycled paper. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-19.1. Formerly 7.08.140)

7.08.140 Environmentally preferable purchasing.

A. General Preferences. Environmental and energy considerations shall become part of the City’s normal purchasing and procurement decisions, with the goals of justifying environmental and energy costs of City decisions and choosing minimal-effect options, consistent with such traditional factors as safety, price, performance, and availability. The City also prefers to do business with vendors and contractors that are locally owned, use and sell environmentally preferable products or services, produce minimal waste, and use recycled products and environmentally preferable purchasing practices, as services provided by local suppliers reduce environmental impact due to transportation and keep municipal funds in the community. To the greatest extent practicable, the City shall purchase environmentally and energy preferable products and services that:

1. Use recycled materials.

2. Generate minimal waste in manufacturing or use.

3. Are durable, longer lasting, reusable, refillable or compostable.

4. Use minimal energy and water.

5. Involve minimal use of toxic and hazardous materials.

6. Minimize production of greenhouse gases.

7. Minimize production of environmental pollutants including ozone precursors.

8. Are locally supplied or produced.

B. Price Preference. To the greatest extent practicable, the City shall purchase environmentally preferable and locally supplied products and services, and may provide for a price preference for such products and services not to exceed 15%.

C. Locality Preference. The City may give preference in purchasing products and services to locally supplied products, goods, and services, Montgomery County green certified businesses, and State of Maryland certified small businesses.

D. Purchase of Certain Specified Products and Services. City procurement actions shall comply with the following provisions:

1. Energy and Water Savings. Where applicable, energy-efficient equipment shall be purchased with the most up-to-date energy efficiency functions. This includes, but is not limited to, high efficiency space heating systems and high efficiency space cooling equipment.

2. Energy Efficiency Certifications. All products purchased by the City for which United States Environmental Protection Agency (U.S. EPA) Energy Star or WaterSense certification is available shall meet that certification, when practicable. When Energy Star or WaterSense labels are not available, energy-efficient products that are in the upper 25% of energy efficiency as designated by the Federal Energy Management Program are preferred.

3. Recycled Content Products. All products for which the U.S. EPA has established minimum recycled content standard guidelines, such as those for printing paper, office paper, janitorial paper, construction, landscaping, parks and recreation, transportation, vehicles, miscellaneous, and nonpaper office products, shall contain the highest post-consumer content practicable, but no less than the minimum recycled content standards established by U.S. EPA guidelines. These standards are described at www.epa.gov/cpg.

4. Remanufactured Products. The City shall purchase remanufactured products such as laser toner cartridges, tires, furniture, equipment, and automotive parts whenever practicable, but without reducing safety, quality, or effectiveness.

5. Ozone Depleting Compounds. The use of refrigerants, solvents and other products shown to deplete stratospheric ozone shall be phased out and new purchases shall not contain them.

6. Pollutants. All detergents shall be readily biodegradable and, where practicable, shall not contain phosphates.

E. Product Specifications. All departments of the City shall review and revise product specifications so as to conform to the following guidelines, to the extent practicable:

1. Specifications shall not require the use of products made from virgin materials.

2. Specifications shall not exclude the use of recycled or remanufactured products.

4. Cleaning or disinfecting products (i.e., for janitorial or automotive use) shall not contain ingredients that are carcinogens, mutagens, or teratogens. These include chemicals listed by the U.S. EPA or the National Institute for Occupational Safety and Health on the Toxics Release Inventory.

5. Wherever practicable, products and materials shall use and meet the following federal standards where applicable:

a. U.S. EPA Energy Star (energy efficient products);

b. U.S. EPA WaterSense (water efficient products);

c. U.S. EPA guidelines (various other products at www.epa.gov/cpg);

d. U.S. Green Building Council LEED standards.

6. At the discretion of the City Manager, industry standards for environmentally preferable products, including construction, landscaping, paper, park and recreation, transportation, vehicular, nonpaper office and other products should be followed. Current examples of these are:

a. Responsible Purchasing Network (various products);

b. EcoLogo (various products), Green Seal (various products);

c. Greenguard Environmental Institute (various products);

d. CFPA (chlorine free paper);

e. EPEAT (electronics);

f. Forest Stewardship Council (paper products);

g. Resilient Floor Covering Institute (flooring products);

h. Carpet and Rug Institute (carpets).

F. Practicability of Procurement. In an assessment of the practicability of the procurement or purchase of specific environmentally preferable or locally available products, the City shall consider, among other relevant factors, product availability, product longevity, and product suitability for its intended use, including whether the product meets established performance standards, any adverse impact of the product on the health and safety of employees and residents, and cost. Nothing contained in this section shall require a City department, purchaser, or contractor to procure or purchase products that do not perform adequately for their intended use, exclude adequate competition, or cost more than 15% above the standard cost for the product. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2014-41 § 1, 2014. Formerly 7.08.150)

Article 4. Living Wage Requirement

7.08.150 Scope.

Every City contract for the provision of services, awarded after a competitive bid or proposal process, shall require the contractor and any subcontractor to pay each employee assigned to perform services under the City contract a living wage. As used in this article, “covered employer” refers to any contractor or subcontractor who is subject to the City’s living wage requirement. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2013-26 § 1, 2013/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.180)

7.08.160 Exemptions.

The provisions of this article do not apply to the following:

A. A contract for services valued at less than $20,000.00.

B. A contract:

1. With a public entity.

2. With a nonprofit organization that has qualified for an exemption from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code.

3. Procured through an emergency procurement, sole source procurement, or cooperative purchase procurement.

4. For electricity, telephone, cable television, water, sewer, or similar service delivered by a regulated public utility.

5. For the purchase or lease of goods, equipment or vehicles.

C. If the City Manager makes a written determination that application of this article would conflict with an applicable Federal, State or County program, contract, or grant requirement, then the living wage requirements of this article shall not apply to the contract or program. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2013-26 § 1, 2013/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.190)

7.08.170 Solicitation requirements.

A. The City’s living wage requirement shall be identified and set forth in all nonexempt procurement solicitations for the contract.

B. Each response to a bid or proposal to provide services to the City and each City contract for services must include a certification that the contractor and each subcontractor shall comply with the City’s living wage requirements or a certification by the contractor or subcontractor setting forth the applicable exemption from the living wage requirement, along with supporting documentation for the exemption. Any contractor or subcontractor who knowingly makes a false statement in such certification, or who fails to comply with the living wage requirement during performance of a City contract for services, shall be subject to loss of the contract and disqualification from future City contracts.

C. A contractor must not split or subdivide a contract, pay an employee through a third party, or treat an employee as a subcontractor or independent contractor, to avoid the imposition of any requirement under this article.

D. If a contractor or subcontractor commits in its bid or proposal to provide health insurance to any employee who provides services to the City under a City contract, the contractor or subcontractor may:

1. Certify in its bid or proposal the per-employee hourly cost of the employer’s share of the premium for that insurance; and

2. Reduce the wage paid under Section 7.08.180 to any employee covered by the health insurance by all or part of the per-employee hourly cost of the employer’s share of the health insurance premium. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.200)

7.08.180 Living wage requirement.

A. Except as permitted under Section 7.08.170(D), each covered employer must pay each employee who is not exempt under subsection (F) of this section no less than the City’s living wage rate.

B. The City’s living wage rate shall be equal to the Montgomery County living wage rate established and published by Montgomery County pursuant to Section 11B-33A of the Montgomery County Code and any applicable regulations, as amended and in effect from time to time.

C. The City’s living wage rate shall be adjusted as of July 1st of each year to reflect the most current Montgomery County living wage rate and shall be applicable to any contract awarded thereafter until the date of the next adjustment; provided, however, that the wage rates in effect at the time a contract is awarded to a covered employer by the City shall remain in effect under such contract during its original term. At the time of the exercise of any renewal option under a City contract with a covered employer, the required wage rate shall be adjusted as provided above, and as adjusted, shall remain in effect during the renewal term.

D. The City Manager shall establish the applicable living wage rate by April 1st of each year and cause such rate to be published in English and Spanish on the City’s website. Notice of the required living wage rate also shall be stated in procurement solicitations, as required by Section 7.08.170(A).

E. Each covered employer must include the living wage requirements of this article in every subcontract so that the provisions of this article will be binding upon each subcontractor.

F. The living wage requirements of this section do not apply to any employee:

1. Who performs no measurable work related to any contract with the City;

2. Who participates in a government-operated or government-sponsored program that restricts the earnings of or wages paid to employees to a level below the wage required under this section;

3. Who participates for no longer than 120 days in any calendar year in a government-operated or government-sponsored summer youth employment program; or

4. For whom a lower wage rate is expressly set in a bona fide collective bargaining agreement.

G. If any Federal, State, or City law or regulation requires payment of a higher wage, that law or regulation controls. If any applicable collective bargaining agreement requires payment of a higher wage, that agreement controls. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.210)

7.08.190 Notices.

A. Each covered employer shall conspicuously post notice of the required City living wage rate, in English and Spanish, on such form as shall be provided by the City.

B. Within three days of an employee’s request, a covered employer shall provide to such employee a written statement in English and Spanish, on such form as shall be provided by the City, of the then-required living wage rate. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.220)

7.08.200 Enforcement.

A. During the term of the City contract and for a period of three years after the expiration or earlier termination of the City contract, each contractor and subcontractor subject to the provisions of this article shall keep and preserve records which show the wages provided by such contractor and its subcontractors to each employee who provided services under the City contract. The City Manager, or designee, shall have the power to examine such records at reasonable times during normal business hours for the purpose of administering and enforcing the provisions of this article, and to make copies of all or any parts thereof.

B. As an additional term of the City contract, no covered employer shall discharge, reduce the compensation of, or otherwise retaliate against an employee for asserting any right under this article, filing a complaint of violation, or taking any other action to enforce the requirements of this article. Any retaliation is subject to all sanctions for noncompliance with this article.

C. City contracts may specify that liquidated damages for any noncompliance with this article include the amount of any unpaid wages, with interest at the judgment rate from the date originally due and less any deductions required or permitted by law, and that the contractor is jointly and severally liable for any noncompliance by a subcontractor.

D. Any contractor or subcontractor which fails to pay an employee the living wage required by this article shall be liable to the employee in the amount of the unpaid wages, plus interest at the judgment rate from the date originally due and less any deductions required or permitted by law, reasonable attorney’s fees, and damages for any retaliation for asserting any right under this article. Any aggrieved employee of a covered employer under a City contract shall be deemed a third-party beneficiary of the City contract and of the provisions mandated by this article in the City contract. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.230)

7.08.210 Review of living wage requirement.

The City Council shall review the living wage requirement, including the exemptions set forth in Section 7.08.160, every three years following the effective date of this article. Subsequent to such review, the City Council shall determine whether to continue or modify the City’s living wage requirement. The Council’s failure to conduct such review shall have no effect on the validity of the living wage requirement set forth in this article. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/Ord. 2007-55 § 1 (part), 2007. Formerly 7.08.240)

Article 5. Bonds and Bid Security

7.08.220 Bid security.

A. Requirement for Bid Security.

1. Bid security shall be required for all construction contracts where performance security is required.

2. At the discretion of the City Manager, bid security may be required for other contracts.

3. Where bid security is required, a successful bidder shall forfeit such security upon failure to enter into a contract within the time specified in the invitation for bids or contract award.

B. Form of Security. Bid security shall be in the form of a bond provided by a surety company authorized to do business in this State, or the equivalent in cash, letter of credit, or in such other form satisfactory to the City.

C. Amount of Bid Security. Bid security for a construction contract shall be in an amount equal to at least 5% of the amount of the bid. Bid security for other than a construction contract shall be in such amount as is determined by the City Manager to sufficiently guarantee that the bidder to whom the contract is awarded will enter into the contract for the work described in the bid.

D. Rejection of Bids for Noncompliance with Bid Security Requirements. When the invitation for bids requires security, noncompliance requires that the bid be rejected, unless it is determined in writing that such noncompliance is insubstantial.

E. Withdrawal of Bids. If a bidder is permitted to withdraw a bid before award, or is excluded from the competition prior to award, no action shall be taken against the bidder or the bid security. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

7.08.230 Contract performance and payment bonds.

A. When Required and Amounts. When a construction contract is awarded, the following bonds or other security, in a form satisfactory to the City, shall be delivered to the City and shall become binding on the parties upon the execution of the contract:

1. A performance bond payable to the City, executed by a surety company authorized to do business in the State, or the equivalent in cash or other security, conditioned upon the faithful performance of the contract, including all warranties and guarantees. The bond or other security shall be in an amount equal to 100% of the price specified in the contract; and

2. A payment bond, executed by a surety company authorized to do business in the State, or the equivalent in cash, letter of credit, or other security deemed satisfactory to the City, for the protection of all persons supplying labor and materials, including lessors of equipment to the extent of the fair rental value thereof, to the contractor or its subcontractors for the performance of the work provided for in the contract.

a. For a contract exceeding $100,000.00 the bond or other security shall be in an amount equal to 100% of the price specified in the contract.

b. For a contract exceeding $25,000.00 but not exceeding $100,000.00, the bond or other security shall be in an amount equal to 50% of the price specified in the contract.

c. No payment bond is required for a contract not exceeding $25,000.00, unless a written determination is made that a payment bond is appropriate under the circumstances. Such a bond shall be in an amount not to exceed 50% of the contract price.

B. Certification of Payments. Any contractor, prior to receiving a progress or final payment under a contract covered hereunder, shall certify in writing that such contractor has made payment from the proceeds of prior payments, and that such contractor will make timely payments from the proceeds of the progress or final payment then due such contractor, to such contractor’s subcontractors and suppliers in accordance with such contractor’s contractual arrangement with them.

C. Waiver or Reduction of Requirement for Bonds. The City Manager may waive or reduce, in writing, the requirement for performance bonds for construction contracts under $25,000.00.

D. Maintenance Bond. Contract specifications may require security in an amount determined by the City Manager to adequately cover reasonable maintenance, repair, or replacement costs during the contract warranty or guarantee period. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

7.08.240 Additional bonds.

Nothing in this article shall be construed to limit the authority of the City to require any additional bonds or other security in addition to, or in cases other than those specified in, this article. (Ord. 2024-18, 2024/Ord. 2021-36, 2021)

Article 6. Disposition of Goods

7.08.250 Generally.

A. All departments, at such times and in such form as may be prescribed, shall submit to the City Manager reports listing stocks of all articles which are no longer used, which have become obsolete or which are surplus to the needs of the department. The City Manager shall transfer serviceable surplus goods between using departments in lieu of filling requisitions for the purchase of new or additional stock of the same or similar articles, unless such transfer is contrary to the best interests of the City as determined by the City Manager.

B. The City Manager shall provide a report on disposed equipment/goods to the Council on a quarterly basis. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-20. Formerly 7.08.150)

7.08.260 Methods of sale.

A. Except as provided in this article, all goods which have become surplus, obsolete or unusable and whose current estimated value is $10,000.00 or more shall be sold to the highest responsible bidder by the competitive bid or proposal procedures prescribed in Article 2 of this chapter, except that the goal shall be to obtain the highest price from prospective purchasers. The City Manager may waive the competitive bid or proposal procedures and sell such property by auction or by private sale after reasonable public notice when the return to the City is expected to be increased or the nature of the goods is such as to make competitive bid or proposal procedures impractical.

B. Goods which have been found by the City Manager to have become surplus, obsolete or unusable, and whose current value is estimated to be less than $10,000.00, may be disposed of by the methods described in regulations the City Manager may establish. Such dispositions shall, wherever feasible, be based on competitive price quotations and shall be made to a responsible purchaser offering the highest price. The City Manager is authorized to sell by auction such property to the highest responsible bidder, after public notice, when, in the City Manager’s opinion, the return to the City is expected to increase by this procedure. In order to produce the highest return for the disposition of such personal property, the City Manager may select from the following disposition methods the method which will yield the greatest return under the circumstances of each disposition:

1. Competitive sealed bids;

2. Competitive sealed proposals;

3. Competitive auction sale;

4. Trade-in or exchange for goods which are of current need;

5. Competitive negotiation. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-21. Formerly 7.08.160)

7.08.270 Worthless items.

In the event that the City Manager or their designee determines that the goods offered for disposal have no real or scrap value, they may be disposed of as refuse. (Ord. 2024-18, 2024/Ord. 2021-36, 2021/prior code § 9A-22. Formerly 7.08.170)