Chapter 3.20 PURCHASING POLICY

Chapter 3.20
PURCHASING POLICY

Sections:

3.20.005 Authority and procedures generally.

3.20.010 Purpose—City purchasing agent.

3.20.020 General.

3.20.030 Purchasing guideline.

3.20.040 Materials, supplies and equipment.

3.20.050 Request for proposals (RFP).

3.20.060 Competitive negotiation.

3.20.070 Public works.

3.20.075 Change orders.

3.20.080 Exemptions.

3.20.090 Protests.

3.20.100 Professional and personal services.

3.20.110 Surplus.

3.20.120 Post federal award requirements.

3.20.005 Authority and procedures generally.

The exercise of the powers, duties and procedures relative to purchasing by the city shall comply with the statutes of the state as codified in the Revised Code of Washington. (Ord. 426 § 11, 1986)

3.20.010 Purpose—City purchasing agent.

The purpose of this chapter is to fix and coordinate all powers, duties and procedures relative to purchasing by the city in the office of the mayor or designee, who shall function as the city’s purchasing agent. The mayor or designee may create written purchasing policies for the city which shall comply with the laws of the state of Washington. Any and all city purchasing policies shall be approved by the Ocean Shores city council. All city employees shall follow the provisions of the city purchasing policy. (Ord. 864 § 1, 2009; Ord. 805 § 1, 2006: Ord. 37 § 1, 1971)

3.20.020 General.

A. Purpose. The city of Ocean Shores is a noncharter code city; ... “the legislative body of a code city may exercise any of its powers or perform any of its functions including purchasing, and participate in the financing thereof, jointly or in cooperation, as provided for in Chapter 39.34 RCW.” This chapter establishes guidelines and clarifies the policies and procedures for purchasing supplies and materials and contracting for services by the city of Ocean Shores. The procedures set forth in subsequent sections of this chapter are designed to assure the citizens, the city council and city administrative staff that the city of Ocean Shores is receiving maximum value for each tax and utility dollar expended, and to enhance and assure fiscal responsibility in the procurement process.

The manual codified in this chapter is effective immediately upon issuance and receipt by all departments and supersedes all previous purchasing instructions and directives.

B. Mission. The city’s mission for contracting, purchasing, and property disposal includes:

1. Implementing the policies of state laws, local ordinances and administrative procedures, thereby assuring the legality of the purchasing process.

2. Coordinating a uniform procurement system to supply city operations with an uninterrupted flow of materials and services.

3. Buying competitively and wisely to obtain maximum value for the public dollars spent.

4. Promoting good, continuous vendor relations, as well as reliable alternate sources of supply.

5. Keeping inventory losses at a minimum.

In performing these services, the city promotes competition, impartiality, conservation of funds, and fair and open operations done in a manner that ensures accountability, while seeking to realize the maximum value of every dollar.

C. Purchasing Code of Ethics. The public must have confidence in the integrity of its government. The purpose of this code of ethics is to give guidance to all city employees so that they may conduct themselves in a manner that will be compatible with the best interest of the city. Proper purchasing procedure requires that:

1. Actions of city employees be impartial and fair.

2. Government decisions and policies are made in the proper channels of government structure.

3. Public employment is not to be used for personal gain. City employees may not solicit, accept, or agree to accept any gratuity for themselves, their families or others that would or could result in personal gain. Purchasing decisions must be made impartially. The following are examples of items not considered gratuities:

a. Discounts or concessions realistically available to the general population;

b. Items received that do not result in personal gain;

c. Samples to the city used for general city use.

Questions regarding particular problems/events should be referred to the employee’s department head.

D. Controlling Laws. The exercise of the powers, duties and procedures relative to purchasing by the city shall comply with the statutes of the state as codified in the Revised Code of Washington, the Washington Administrative Code and all other local, state and federal laws and regulations (see Section 3.20.005). If there is a conflict between local, state or federal law, contact the purchasing coordinator.

E. Proper Authorization. Only authorized employees may obligate the city in the acquisition of goods and services. Any employees purchasing goods on behalf of the city without proper authorization may be personally liable to the vendor and the city, and subject to disciplinary action.

Purchase orders commit city funds for the acquisition of goods or services. The mayor or designee and the purchasing coordinator are authorized to issue purchase orders on behalf of the city in accordance with this policy.

F. Monitoring and Compliance. The purchasing coordinator and the department heads will enforce this policy. In the event of disagreement, the matter shall be referred to the finance director for further action.

All city officers and employees should be aware of possible personal penalties, termination, and financial liability for intentional and willful violation of competitive bidding laws. RCW 39.30.020 provides:

In addition to any other remedies or penalties contained in any law, municipal charter, ordinance, resolution, or other enactment, any municipal officer by or through whom or under whose supervision, in whole or in part, any contract is made in willful and intentional violation of any law, municipal charter, ordinance, resolution or other enactment requiring competitive bidding upon such contract shall be held liable to a civil penalty of not less than three hundred dollars and may be held liable, jointly and severally, with any other such municipal officer for all consequential damages to the municipal corporation. If, as a result of a criminal action, the violation is found to have been intentional, the municipal officer shall immediately forfeit his office. For purposes of this section “municipal officer” shall mean an “officer” or “municipal officer” as those terms are defined in RCW 42.23.020(2).

(Ord. 864 § 2, 2009; Ord. 805 § 3 (part) (Exh. A § 1), 2006)

3.20.030 Purchasing guideline.

When procuring under a federal award, the city of Ocean Shores will follow the federal awards purchasing procedures or city of Ocean Shores purchasing procedures, whichever is stricter.

Purchases of Goods and Equipment	Purchasing Process	Other Requirements	Contract Authorization
Under $1,500	None	Field order
Between $1,500 and $15,000	No formal requirement; quotes desirable	Purchase order	None required but may be advisable
Between $15,000 and $30,000	Must either: bid; use vendor list; state contract; interlocal	Purchase order	Mayor or designee awards
Over $30,000	Must either: bid; state contract; interlocal	If bid: advertise 13 days; noncollusion affidavit; bidder’s qualifications; bid deadline; purchase order	If purchase was previously authorized by city council under budget adopted pursuant to Section 3.02.010, then mayor or designee may award and execute contract

Public Works Project	Purchasing Process	Other Requirements	Contract Authorization
Projects costing less than $5,000	No formal process required; no contract required	Prevailing wage; may waive performance bond and retainage; insurance; wage compliance; exemption list; city business license	Purchase signature authorization of individual employee
Public works—Single craft/multiple craft ($75,000/$150,000)	Single craft/multiple craft contract; advertise if over $25,000	Prevailing wage; performance bond or 10% retainage; insurance; wage compliance; exemption list; city business license	Mayor or designee awards and executes contract up to $50,000 otherwise city council approval
Small works roster ($5,000—$350,000) excluding sales tax	Small works roster process; small works contract. Must send to all on roster within the category/trade	Prevailing wage; payment and performance bond; at contractor’s option on projects up to $150,000 contractor may elect to waive bond in lieu of 10% retainage; 5% retainage or retainage bond; notice of award; notice to proceed; insurance; wage compliance; exemption list; city business license	Mayor or designee awards and executes contract up to $50,000 otherwise city council approval
Projects over $350,000	Bid (advertise minimum of 13 days in paper of record, bid bond, noncollusion, bidder qualifications, deadline for bid); contract	Prevailing wage; performance bond; retainage or retainage bond; bid bond; notice of award; notice to proceed; insurance; wage compliance; exemption list; city business license	City council awards, authorizes mayor or designee to execute contract

Professional Services Contract (A&E)	Contracting Process	Other Requirements	Authorization
Under $5,000	No formal requirement but must follow Chapter 39.80 RCW	Purchase order; insurance
Between $5,000 and $30,000	No formal requirement but must follow Chapter 39.80 RCW	Purchase order; professional services agreement; insurance	Mayor or designee to negotiate and execute contract
Over $30,000	Professional services roster or RFP; must advertise for SOQ if federal funding; must follow Chapter 39.80 RCW	Purchase order; professional services agreement; insurance	If previously authorized by city council under budget adopted pursuant to Section 3.02.010, then mayor or designee may award and execute contract

Professional Services Contract (non-A&E)	Contracting Process	Other Requirements	Authorization
Under $5,000	No formal requirement	Purchase order; insurance
Between $5,000 and $30,000	No formal requirement	Purchase order; professional services agreement; insurance	Mayor or designee to negotiate and execute contract
Over $30,000	RFP or bid; must advertise for SOQ if federal funding	Purchase order; professional services agreement; insurance	If previously authorized by city council under budget adopted pursuant to Section 3.02.010, then mayor or designee may award and execute contract

A. Determining the Cost of the Purchase.

1. Annual Cost. The anticipated annual need for a particular good or service should be used to determine the appropriate purchasing process. Projects and purchases shall not be split in order to avoid the required competitive bidding process. Closely related goods will be considered as one purchase on an annual basis when determining which purchasing process applies.

2. Total Cost. The total cost of goods or services, including any applicable taxes, freight, set-up, or die charges, shall be considered when determining which purchasing process applies.

3. Total Quantity. Requirements for the total quantity of an item shall be considered together when determining which purchasing process applies.

Example: If one pump is to be purchased now at an estimated cost including sales tax and delivery of eight thousand nine hundred fifty-nine dollars, but a total of three pumps are expected to be purchased during the year at an aggregate cost of twenty-six thousand eight hundred seventy-seven dollars (eight thousand nine hundred fifty-nine dollars times three), then the procurement of the first pump falls within the over-fifteen-thousand- dollar category, and must be competitively bid.

4. Items Used in Conjunction. If two or more items are designed or intended to be used in conjunction with each other, the total annual accumulated cost of all such items shall be considered together to determine which purchasing process applies, unless these components are not available from a single supplier.

B. Purchase Requisition. The purchase requisition is the first step in the purchasing procedure. The requisition should be submitted to purchasing in a timely fashion to allow adequate time for review, price quotations if necessary, and the preparation of a purchase order. The length of time needed to obtain an item will depend upon the characteristics of the product or service sought, the number of alternative vendors or contractors, availability of the product, etc.

A purchase requisition is an internal instrument that communicates a department’s needs to purchasing. It is not to be conveyed directly to a vendor. Purchase requisitions must be signed by the appropriate department head/designee, to approve purchases for a specific budget. It is the department head’s responsibility to ensure that total annual expenditures do not exceed the authorized budget appropriation.

If you have questions regarding how to complete the purchase requisition, contact the purchasing coordinator.

(Ord. 1118 § 1, 2024; Ord. 1049 § 1, 2019; Ord. 864 § 3, 2009; Ord. 805 § 3 (part) (Exh. A § 2), 2006)

3.20.040 Materials, supplies and equipment.

A. Purchases—Less Than One Thousand Five Hundred Dollars.

1. Petty Cash. The purchase of small incidental items may be made using petty cash.

2. Bars number is used in PO field on orders thirty-five to one thousand five hundred dollars. Field orders allow authorized users to purchase items under one thousand five hundred dollars without going through the purchase requisition/purchase order process.

B. Purchases—One Thousand Five Hundred to Fifteen Thousand Dollars. When the purchase is over one thousand five hundred dollars, purchasing/department designee will attempt to obtain the lowest practical price for such goods and services, and purchasing will issue a purchase order to the vendor. A copy of the purchase order will be returned to the requesting department. Once the goods or services are received, the department will verify the order is complete, attach the packing slip to the purchase order and return it to accounts payable for payment processing.

In response to receipt of a properly authorized purchase requisition that includes clear, concise written specifications, purchasing will use its knowledge of supplies, vendors, costs, and the market to issue purchase orders as appropriate. Purchasing will see that goods and services are obtained as economically as possible, even if the procurement is small.

C. Vendor List Purchases—Fifteen Thousand Dollars to Thirty Thousand Dollars.

1. RCW 39.04.190 allows purchasing of materials, supplies or equipment not connected to a public works project, to be awarded by a vendor list process. The city has adopted this process by resolution (Resolution No. 500, 2004).

2. At least twice a year, per RCW 39.04.190(2), the city shall publish, in the city’s official newspaper, notice of the existence of a roster of vendors for materials, supplies, and equipment, and shall solicit names of vendors for the roster.

3. The city shall use the following process to obtain telephone and/or written quotations from vendors for the purchase of materials, supplies, or equipment:

a. The requesting department shall draft a written description of the specific materials, supplies, or equipment to be purchased, including the number, quantity, quality, and type desired, the proposed delivery date, and any other significant terms of purchase on a purchase requisition;

b. The mayor/designee or appropriate department head/designee will approve all requisitions;

c. Purchasing or department shall make a good faith effort to contact at least three of the vendors on the roster to obtain telephone or written quotations for the required materials, supplies, or equipment;

d. The quotations from one vendor shall not be shared with other vendors solicited for the quote on the materials, supplies, or equipment;

e. A written record shall be made of each vendor’s quote on the material, supplies, or equipment, and of any conditions imposed on the quote by such vendor;

f. Purchasing shall present all quotations and a recommendation for award of the purchase to the mayor.

4. Award. The mayor or designee will award qualifying vendor list purchases. Purchasing will issue a purchase order to the successful bidder. A copy of the purchase order will be returned to the requesting department. Once the goods or services are received, the receiving department will verify that the order is complete, attach the packing slip to the purchase order and return it to accounting for payment processing.

D. Invitation to Bid—Thirty Thousand Dollars or More.

1. A call for bids will be sought in response to a properly authorized purchase requisition submitted to purchasing that includes clear, concise written specifications. Such requisitions will include approval by the mayor or designee or the appropriate department head/designee. The mayor or designee shall approve all vehicle requisitions. Once approved, purchasing will solicit sealed bids. Bid specifications should incorporate a clear and accurate description of the technical requirements for the material or product to be purchased. Such descriptions should not contain features that unduly restrict competition. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equal” description may be used. The city has no obligation to accept proposed substitutions or engage outside consultants or experts to evaluate proposed substitutions. Acceptance of a substitute product proposed as an “equal” to that specified will be made in writing and, if made prior to bid, other bidders will be notified if practical and convenient.

2. At least one notice of the call for bids shall be published in the city’s official newspaper or a newspaper of general circulation a minimum of thirteen days prior to bid opening. Other methods may be used to attract potential bidders in addition to, but not in place of, publication in the newspaper. For example, notices may be placed on the city’s website, or advertised in trade papers or magazines.

3. Sealed bids will be submitted to the purchasing coordinator at the location specified in the invitation or call for bids. At the appointed time, all bids will be opened and read aloud in the presence of the bidders or their representatives.

4. Contract forms shall be reviewed and approved by the city attorney.

5. Award.

a. City council will make all sealed bid awards. Once an award is made, purchasing will issue a purchase order to the successful bidder. Such purchase orders will be signed by the purchasing coordinator and reference city council’s award. A goldenrod copy of the purchase order will be returned to the requesting department. Once the goods or services are received, the department will verify the order is complete, attach the packing slip to the goldenrod copy of the purchase order, and return it to accounts payable for payment processing.

b. The contract will be awarded to the lowest responsive and responsible bidder whose bid meets the requirements and criteria set forth in the invitation for bids. RCW 43.19.1911(9) states:

In determining “lowest responsible bidder,” in addition to price, the following elements shall be given consideration:

a. The ability, capacity, and skill of the bidder to perform the contract or provide the service required;

b. The character, integrity, reputation, judgment, experience, and efficiency of the bidder;

c. Whether the bidder can perform the contract within the time specified;

d. The quality of performance of previous contracts or services;

e. The previous and existing compliance by the bidder with laws relating to the contract or services;

f. Such other information as may be secured having a bearing on the decision to award the contract: PROVIDED, that in considering bids for purchase, manufacture, or lease, and in determining the “lowest responsible bidder,” whenever there is reason to believe that applying the “life cycle costing” technique to bid evaluation would result in lowest total cost to the city, first consideration shall be given by city purchasing activities to the bid with the lowest life cycle cost that complies with specifications. “Life cycle cost” means the total cost of an item to the city over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life. The “estimated useful life” of an item means the estimated time from the date of acquisition to the date of replacement or disposal, determined in any reasonable manner.

c. Any recommendation that uses life cycle costing to determine the lowest responsive and responsible bidder shall be approved by the finance director. Local taxes generated by the purchase may be considered when determining the lowest responsive and responsible bid as permitted by RCW 39.30.040. When a trade-in option is in the city’s best interests, the price offered on the trade will be considered when determining the lowest responsive and responsible bid.

E. Rejection of Bids. The city reserves the right to reject any bid not in substantial compliance with the bid documents, or all prescribed public bidding procedures and requirements and may reject for good cause any or all bids upon a finding of the city that it is in the public interest to do so.

F. Open Purchase Order. Open purchase orders may be established when there is a sufficient number of small purchases from a single supplier. City employees should contact purchasing to inquire about establishing open purchase orders.

G. Local Business Open Accounts. The city has established open accounts at certain local businesses. Purchases on these accounts may be made by authorized employees up to the individual limits established annually through the purchasing signature authorization process. Once the goods are purchased, the receipt should be stamped with the A/P stamp, coded and signed by the authorized purchaser, and forwarded to accounts payable. Open purchase orders may also be established by departments on these accounts. When purchasing on an open purchase order, the receipt is forwarded to accounts payable upon completion of the purchase; no further coding or signature is required.

H. Credit Cards. Some suppliers accommodate the city by providing the use of a supplier-specific credit card. All such credit cards are held in purchasing. Before an eligible employee can use a credit card, the employee is required to obtain a signed form from his or her supervisor authorizing the use of the card. The form details what will be bought and sets a dollar limit. Purchasing will not release a credit card without this preauthorization. Supervisors will be notified if there are any discrepancies between the preauthorization and the store receipt.

I. Procurement Card. Purchasing holds a procurement card that can be used to acquire items when a purchase order is either impractical or not available. Before an authorized employee can use a procurement card, the employee is required to obtain a signed and dated form from his or her supervisor authorizing the use of the card. The form details what will be bought and sets a dollar limit. Purchasing will not release a procurement card without this preauthorization. Supervisors will be notified if there are any discrepancies between the preauthorization and the store receipt. For additional information see the procurement card procedure manual.

(Ord. 1118 § 2, 2024; Ord. 864 §§ 4—7, 2009; Ord. 805 § 3 (part) (Exh. A § 3), 2006)

3.20.050 Request for proposals (RFP).

A. Request for Proposals—Materials, Equipment and Supplies. Request for proposals can be used as an alternative to the competitive bidding procedures set forth in Section 3.20.040(D), when it is determined in writing that the use of competitive bidding is neither practicable nor advantageous to the city. City council approval of a call for proposals will be sought in response to the submittal of a properly authorized purchase requisition that includes a description of the requirements and identifies significant evaluation factors and their relative importance. Once approved, purchasing will solicit sealed proposals. Such requisitions will include approval by the mayor or designee or the appropriate department head/designee.

At least one notice of the request for proposals shall be published in the city’s official newspaper, or a newspaper of general circulation, a minimum of thirteen days prior to proposal deadline. Other methods may be used to attract potential proposers in addition to, but not in place of, publication in the newspaper. For example, notices may be placed on the city’s website, or advertised in trade papers or magazines.

Sealed proposal responses will be submitted to the purchasing coordinator. At the appointed time, a register of proposals shall be prepared containing the name of each proposer and a description identifying the item offered.

City council will make awards pursuant to a request for proposals. When an award is made, a contract and/or a purchase order will be issued to the successful proposer. In general, contracts and purchase orders are issued when services are predominant and purchase orders are issued when goods are predominant. Such purchase orders will be signed by the purchasing coordinator and reference city council’s award.

(Ord. 864 § 8, 2009; Ord. 805 § 3 (part) (Exh. A § 4), 2006)

3.20.060 Competitive negotiation.

A. Telecommunication Systems/Services.

1. Competitive negotiation can be used as an alternative to the competitive bidding procedures for the acquisition of electronic data processing and telecommunications systems; energy-saving or energy-related equipment or services; or when it is determined in writing that the use of competitive bidding is neither practical nor advantageous to the city.

2. “Electronic data processing” includes, but is not limited to, systems that comprise a combination of equipment or units to provide input of source data, and storage and processing of data and output in predetermined form, including a central processing unit (CPU) or mainframe (RCW 36.92.020 (1967)). In other words, hardware, software, firmware, “smart cards” or any combination thereof.

3. Eligible purchases (RCW 39.35A.030 (1985)) are those for “equipment, materials, or supplies that are expected, upon installation, to reduce the energy use or energy cost of an existing building or facility, and the services associated with the equipment, materials, or supplies, including but not limited to design, engineering, financing, installation, project management, guarantees, operations, and maintenance.” (RCW 39.35A.020(1) (1985)). The procurement may be structured on a performance basis, rather than a design specification, so that the city may specify a result, rather than the type or model of equipment (RCW 39.35A.020(3) (1985)).

4. The approval requirements found in Section 3.20.040(D) also apply to procurement by competitive negotiation. The approving officer (e.g., mayor or designee, or department head/designee, depending upon the anticipated procurement cost) shall determine in writing that competitive bidding is either not practical or not advantageous to the city.

5. Requisitions for electronic data processing systems shall be routed through and approved by the computer services manager or contracted IT services provider for compatibility certification prior to purchase. This will allow for the appraisal of the present supply of devices, and the possible elimination of an unnecessary expenditure of city funds.

6. A request for proposals should be prepared and submitted to enough qualified sources to permit reasonable competition consistent with the requirements of the purchase. The request for proposal should identify significant evaluation factors, including price, and their relative importance. The city reserves the right to determine the number of sources considered to be adequate.

7. The city will provide procedures for technical evaluation of the proposals received, identification of qualified sources, and selection criteria for awarding the contract.

B. Award. The city may select the qualified vendor whose proposal is most advantageous to the city, with price and other factors considered. If the city is unable to negotiate a contract successfully, the city may terminate negotiations and proceed to negotiate with the second most advantageous proposer, and so on.

C. Rejection of Bids. The city reserves the right to reject any bid not in substantial compliance with the bid documents, or all prescribed public bidding procedures and requirements and may reject for good cause any or all bids upon a finding of the city that it is in the public interest to do so.

(Ord. 864 § 9, 2009; Ord. 805 § 3 (part) (Exh. A § 5), 2006)

3.20.070 Public works.

Public works are defined by state law and city ordinance. RCW 39.04.010 defines the term “public work” as follows: “The term public work shall include all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or that is by law a lien or charge on any property therein.” WAC 296-127-010(7)(b)(iii) defines “ordinary maintenance” as: “Work not performed by contract and that is performed on a regularly scheduled basis (e.g., daily, weekly, monthly, seasonally, semiannually, but not less frequently than once per year), to service, check, or replace items that are not broken; or work not performed by contract that is not regularly scheduled but is required to maintain the asset so that repair does not become necessary.”

A. Under Five Thousand Dollars.

1. If a work, construction, alteration, repair or improvement project is estimated to cost less than five thousand dollars, the department or purchasing may solicit a quote from a qualified contractor, preferably on the small works roster.

2. The city waives the payment and performance bond requirements of Chapter 39.08 RCW and the retainage requirements of Chapter 60.28 RCW. In waiving such requirements the city assumes the liability for the contractor’s nonpayment of laborers, mechanics, subcontractors, materialmen, suppliers, and taxes imposed under RCW Title 82. However, the city shall have the right of recovery against the contractor for any payments made on the contractor’s behalf. Prevailing wage and insurance requirements are not waived. For projects under five thousand dollars, the Labor and Industries combined intent and affidavit prevailing wage form is required from the contractor upon project completion. Purchasing will initiate form in online portal and request the insurance requirements with the notice of award, before project commencement.

B. Single Craft—Less Than Seventy-Five Thousand Five Hundred Dollars; Multiple Craft—Less Than One Hundred Fifty Thousand Dollars. RCW 35.23.352.

1. The city may construct any public works, as defined in RCW 39.04.010, by contract or day labor using city employees without calling for bids whenever the cost of the public works project will not exceed seventy-five thousand five hundred dollars (single craft) or one hundred fifty thousand dollars (multiple craft) or as may be amended by the Washington State Legislature. The city must keep records of public works projects in excess of five thousand dollars and not let by contract. For any project using city workers that costs in excess of twenty-five thousand dollars, the city must publish it in its official newspaper at least fifteen days before beginning the work (RCW 39.04.020).

“Craft” or “trade” means a recognized construction trade or occupation for which minimum wage categories are established by the Department of Labor and Industries of the state of Washington in the locality of the city’s projects or purchases.

2. Purchasing shall present all quotations/bids and recommendation for award of the contract to the lowest responsible bidder to the mayor or designee. Whenever there is a reason to believe that the lowest acceptable bid is not the best price obtainable, all bids may be rejected, and the city may call for new bids.

3. Award. The mayor or designee shall have the ability to award all contracts of fifty thousand dollars or less to the lowest responsive and responsible bidder whose bid meets the requirements and criteria set forth in the invitation for bids. If there are questions or concerns regarding whether a bidder is responsible, refer to subsection (C) of this section and the purchasing coordinator for guidance.

4. Rejection of Bids. The city reserves the right to reject any bid not in substantial compliance with the bid documents, or all prescribed public bidding procedures and requirements and may reject for good cause any or all bids upon a finding of the city that it is in the public interest to do so.

C. Small Works Roster—Five Thousand to Three Hundred Fifty Thousand Dollars Excluding Sales Tax.

1. The city need not comply with formal sealed bidding procedures under subsection (D) of this section for the construction, building, renovation, remodeling, alteration, repair, or improvement of real property where the estimated cost does not exceed three hundred fifty thousand dollars, including the costs of labor, material, or equipment excluding sales tax. Instead, the city may use the small works roster procedures for public works projects as set forth herein. The breaking of any project into units or accomplishing any projects by phases is prohibited if it is done for the purpose of avoiding the maximum dollar amount of a contract that may be let using the small works roster process.

2. The small works roster shall consist of all responsible contractors who have requested to be on the roster, and where required by law are properly licensed or registered to perform such work in this state. As a condition of being placed on the roster, contractors shall keep current records of any applicable licenses, certifications, registrations, bonding, insurance, or other appropriate matters on file with the city.

3. At least once a year, the city shall publish in a newspaper of general circulation within the jurisdiction a notice of the existence of the roster and solicit the names of contractors for such roster. Responsible contractors shall be added to the roster at any time that they submit a written request and necessary records. The city may require contractors to sign a master contract that takes effect when a small works roster award is made. An interlocal contract or agreement between the city of Ocean Shores, Washington, and other local governments establishing a small works roster or rosters to be used by the parties to the agreement or contract shall clearly identify the lead entity that is responsible for implementing the small works roster provisions. The city will notify OMWBE to encourage small businesses to be added to our roster.

4. The city shall obtain written or electronic quotations for public works contracts from contractors on the appropriate small works roster to assure that a competitive price is established and that contracts are awarded to the lowest responsible bidder, as defined in RCW 43.19.1911(9). Such quotations shall be obtained as follows:

a. A contract awarded from a small works roster need not be advertised. Invitations for quotations shall include an estimate of the scope and nature of the work to be performed as well as materials and equipment to be furnished. However, detailed plans and specifications need not be included in the invitation. This subsection does not eliminate other requirements for architectural or engineering approvals as to quality and compliance with building codes.

b. Quotations will be invited from all appropriate contractors on the appropriate small works roster.

c. Purchasing shall keep a written record of each contractor’s bid on the project and of any conditions imposed on the bid. Immediately after an award is made, the bid quotations obtained shall be recorded, open to public inspection, and available by email inquiry.

5. For all public works projects in excess of fifty thousand dollars, the mayor or designee shall present all quotations/bids and recommendation for award of the contract to the lowest responsible bidder to the city council. The city council shall award the contract for the public works project to the lowest responsible bidder. Whenever there is a reason to believe that the lowest acceptable bid is not the best price obtainable, all bids may be rejected and the city council may call for new bids. RCW 43.19.1911(9) states:

In determining “lowest responsible bidder,” in addition to price, the following elements shall be given consideration:

a. The ability, capacity, and skill of the bidder to perform the contract or provide the service required;

b. The character, integrity, reputation, judgment, experience, and efficiency of the bidder;

c. Whether the bidder can perform the contract within the time specified;

d. The quality of performance of previous contracts or services;

e. The previous and existing compliance by the bidder with laws relating to the contract or services;

6. Exception. Code cities with a population of fewer than twenty thousand are released from the requirements of the bid laws if no responsive bids are received (RCW 35.23.352(1)). The mayor or designee may talk to contractors or suppliers and negotiate with them, or the city may perform the project using city employees.

D. Competitive Sealed Bid.

1. Public works of more than seventy-five thousand five hundred dollars for one craft or trade or one hundred fifty thousand dollars for more than one craft or trade or as may be amended by the Washington State Legislature will be awarded by competitive sealed bidding unless a small works roster is used (RCW 35.23.352(1)).

2. Purchasing will obtain sealed bids in response to written plans and specifications. Specifications should not contain features that unduly restrict competition. Purchases in this dollar range are usually handled by the competitive sealed bidding method. Exceptions require council action.

3. At least one notice of the call for bids shall be published in the city’s official newspaper. Advertising will occur a minimum of thirteen days prior to bid opening. Other methods may be used to attract potential bidders in addition to, but not in place of, publication in the city’s official newspaper. For example, notices may be placed on the city’s website, or advertised in trade papers or magazines.

4. Sealed bids will be submitted to the purchasing coordinator or department designee. At the appointed time, all bids will be opened and read aloud in the presence of the bidders or their representatives.

5. RCW 39.30.060 specifies that every bidder for a public works contract over one million dollars shall submit, with the bid or within one hour of the published bid submittal time, the names of all the subcontractors with whom the bidder will subcontract for heating, ventilation and air conditioning, plumbing and electrical work. When a bidder is successfully awarded the contract, he/she is obligated to use these subcontractors named on the list. If such a list is not provided, the bid will be considered nonresponsive (this amendment was included in Chapter 94, Laws of 1995).

6. Bid bonds are required on public works projects to help ensure that a bid has been made in good faith and that the bidder will enter into a contract if the bid is accepted. RCW 35.23.352(1) requires that each bid shall be accompanied by a bid proposal deposit in the form of a cashier’s check, money order, or surety bond made payable to the city in a minimum amount of five percent of the bid amount, including sales tax. Pursuant to state law, “no bid shall be considered unless accompanied by such bid proposal deposit.”

7. RCW 39.08.010 provides that a municipality shall require a performance bond whenever it enters into a public works contract, to ensure that the job will be completed and that all workers, subcontractors, and suppliers will be paid. This performance bond requirement applies to all public works contracts, whether or not let pursuant to competitive bids. A failure to obtain such a bond subjects the city to all claims of persons performing the contract (RCW 39.08.015).

8. Public works contracts shall contain a provision requiring the local government to retain an amount not to exceed five percent of the moneys earned by the contractor as a trust fund for the protection and collection of claims by any persons arising under the contract and the state with respect to taxes that may be due from the contractor. The money so reserved shall be, at the option of the contractor:

a. Retained in a fund by the public body;

b. Deposited in an interest-bearing account in a bank, mutual savings bank, or savings and loan association;

c. Placed in escrow with a bank or trust company.

9. Interest on these moneys shall be paid to the contractor (RCW 60.28.011).

10. The city attorney shall review the contract and general and special conditions form. Contracts shall be signed by the mayor or designee.

11. Award. The city council shall award the contract to the lowest responsive and responsible bidder whose bid meets the requirements and criteria set forth in the invitation for bids. If there are questions or concerns regarding whether a bidder is responsible, refer to subsection (D) of this section and the purchasing coordinator for guidance.

12. Rejection of Bids. The city reserves the right to reject any bid not in substantial compliance with the bid documents, or all prescribed public bidding procedures and requirements and may reject for good cause any or all bids upon a finding of the city that it is in the public interest to do so.

13. Exception. Code cities with a population of fewer than twenty thousand are released from the requirements of the bid laws if no responsive bids are received (RCW 35.23.352(1)). They may talk to contractors or suppliers and negotiate with them or city employees may perform the project.

(Ord. 1118 § 3, 2024; Ord. 1049 §§ 2—9, 2019; Ord. 864 §§ 10—13, 2009; Ord. 805 § 3 (part) (Exh. A § 6), 2006)

3.20.075 Change orders.

A. The mayor or designee is authorized to execute change orders that fall within the scope of the project and city council approved project scope and project contingency.

Any change orders that change the scope of the project and/or exceed the city council approved project budget and project contingency would require additional city council action. (Ord. 1118 § 4, 2024)

3.20.080 Exemptions.

A. Cooperative Purchasing Agreement (“Interlocal”).

1. Pursuant to Chapter 39.34 RCW, the city may join with the state of Washington, other states or political subdivisions for the purchase of material, equipment, supplies, or services. This is accomplished by entering into a written intergovernmental cooperative purchasing agreement that requires compliance with the state’s or the political subdivision’s applicable procurement law. In addition, the city may make a bid call with another government entity as a joint purchase complying with the bid requirements of the participating jurisdictions. The mayor or designee is authorized to join in cooperative purchasing arrangements with other public agencies similarly authorized, whenever the best interests of the city would be served thereby. Any cooperative purchasing agreement shall set forth fully the purposes, powers, rights, objectives and responsibilities of the contracting parties and shall be governed by the requirements of state law in regard to competitive bidding, when applicable.

2. Such purchases may be made without advertising in the city’s official newspaper. Approval and authority for entering into an interlocal cooperative purchasing agreement will be determined by the anticipated cost of the procurement. When practical, the city should include language in its solicitations that allows other public agencies to purchase from the city’s bids or quotations.

B. Sole Source or Proprietary Procurements.

1. Occasions may arise when competition among potential vendors is not possible for a particular procurement. These situations may occur:

a. When there is clearly and legitimately (RCW 39.04.280(1)(1998)) only one source capable of supplying the subject matter in a timely fashion;

b. When there are special facilities or market conditions that result in only one source;

c. In the event of emergencies; and

d. When there is only one source capable of supplying the products in a timely fashion and that seeking competitive prices would be impractical.

2. Purchases may be made directly from a sole source vendor without soliciting other bids or quotes.

3. In the event the material, equipment, supplies, or services are available from only one supplier, written documentation demonstrating the appropriateness of sole source procurement should be submitted to and approved by the purchasing coordinator. Except in the event of an emergency, the contract and the basis for the exception from competitive procurement shall be recorded and open to public inspection immediately after its award (RCW 39.04.280 (1998)).

4. When the purchase exceeds seventy five thousand dollars, the city council may determine by resolution that there is only one source and authorize the purchasing coordinator to conduct negotiations as appropriate as to price, delivery, and terms. The resolution will recite the factual basis for the exception from competitive procurement. Such justification is subject to the approval of the mayor/designee and the city attorney.

C. Emergencies.

1. Competitive bidding is not required when an emergency exists; however, in making emergency purchases, an effort will be made to include the level of competition that is practical under the circumstances.

2. The mayor or designee is authorized to make emergency purchases upon a finding, duly entered of record, of the existence of an emergency. Such emergencies may include but are not limited to:

a. Any breakage or loss of equipment or in other circumstances in that necessary service is interrupted or is about to be interrupted; or

b. Situations where the city may suffer a substantial loss by reason of the time required for following the regular purchasing procedures that shall be reported to the city council at the next meeting.

3. If an emergency exists, the mayor or designee is authorized to act and will seek a resolution from the council that will:

a. Declare an emergency situation exists;

b. Waive competitive bidding requirements; and

c. Award, on behalf of the city, contracts necessary to address the emergency situation (including, but not limited to, architectural and engineering services).

(Ord. 864 §§ 14, 15, 2009; Ord. 805 § 3 (part) (Exh. A § 7), 2006)

3.20.090 Protests.

Vendors may appeal or protest a proposal solicitation or award of contract issued by the city of Ocean Shores; provided, that the vendor strictly follows the procedures described below.

Prior to the deadline for submitting bids or proposals, vendors may appeal or protest specifications, terms, or requirements. After the deadline for submission of bids or proposals, vendors may appeal or protest the award or pending award to the apparent low bidder or the selection of the apparently most advantageous proposal.

A. Procedures for Initial Appeal or Protest. The appeal or protest shall:

1. Be in writing; and

2. Explicitly identify itself as an appeal or protest; and

3. Explicitly identify the bid/project/ request being appealed or protested; and

4. Explicitly state all reasons and bases in law and fact supporting the appeal or protest, including, but not limited to, identification of any and all specifications, terms, requirements, or conditions to which the vendor objects; and

5. Include any and all supporting documents; and

6. Be filed with the city clerk.

B. Deadline for Filing Initial Appeal or Protest. If a vendor appeals or protests a purchase specification, term, condition, or requirement, any and all appeals and protests shall be filed with the city clerk no later than seven calendar days prior to the deadline for submission of bids or proposals. If the vendor appeals or protests an award or pending award, the appeal or protest shall be filed with the city clerk no later than five business days after the bidder is awarded the contract or a vendor’s proposal is selected as most advantageous to the city. In no event will appeals or protests be heard or considered if these deadlines are not met. The city reserves the right to proceed with the purchase without notice to the appellant or protestor, including execution of contracts, notwithstanding the pendency of any appeal or protest.

C. Consideration of Initial Appeal or Protest. A vendor’s initial appeal or protest will be reviewed by the purchasing coordinator, the city attorney, the department head of the procuring department, and the finance director, or their designees. The initial appeal or protest will be decided based upon the written appeal or protest, supporting documents, and other information obtained by those reviewing the appeal or protest. A meeting or conference with the appellant or protestor will occur only if the finance director, at his or her sole discretion, determines that a meeting or conference with the appellant or protestor would materially assist the city in making its decision. Only those issues raised by the appellant or protestor in its initial written appeal or protest filed with the city clerk will be considered. The finance director or designee will issue a written decision no later than ten business days after the filing of the initial appeal or protest with the city clerk. The finance director may exercise discretion to extend the time for decision if more time is needed.

D. Appeal from Denial of Initial Appeal or Protest. An appellant or protestor may only appeal the finance director’s decision by following the procedures described in this section. The appeal will be decided by the city council. The appellant or protestor shall file its appeal in writing with the city clerk no later than seven calendar days after the date of the finance director’s written decision. The appeal shall state the basis in law and fact for the appeal, include a copy of the initial appeal or protest and the decision from which the appellant or protestor appeals, and state whether the appellant requests time to appear before council to present its appeal. Council will not consider any issues not raised in the initial appeal or protest. At its sole discretion, council may decide to allow the appellant to make any presentation in addition to appellant’s written submission if council finds that such presentation would materially aid its decision. Council may form a committee of less than the entire council to consider the appeal and recommend a decision to the entire council. The council’s decision shall be final and binding.

(Ord. 805 § 3 (part) (Exh. A § 8), 2006)

3.20.100 Professional and personal services.

Professional or personal services are those services involving specialized skill, education, and special knowledge. These services include, but are not limited to, architectural, engineering, design services, accounting, art, bond brokerage, insurance brokerage, legal, real estate appraisal, relocation assistance, title abstracts, surveying, soils analysis, and core testing.

A competitive process is not required for professional or personal services, other than professional engineering or architectural services for the design of city improvements.

Procurement and administration of such contracts are usually the responsibility of the mayor or designee or the department head. The mayor or designee may sign professional or personal service contracts where sufficient funding exists in the annual budget or plans and systems ordinance. The purchasing coordinator or city attorney should be consulted to determine whether a particular contract requires council approval.

A. Architectural, Engineering and Design Services. Professional engineering or architectural services should be selected either from a prequalified list or by advertising a request for qualifications for the specific project. The prequalified list is maintained by purchasing.

B. Advertisement.

1. Professional engineering or architectural services requirements should be published in advance in the official city newspaper and in any other media reasonably likely to attract sufficient numbers of potential service providers. The announcement should state concisely the general scope and nature of the project or work requiring the services, and the address of a city representative who can provide further details.

2. Announcements should occur either by: (a) advertising an announcement for a specific project on each occasion when professional engineering or architectural services are required; or (b) advertising a general announcement for the city’s projected requirements for any category or type of engineering or architectural services (RCW 39.80.030 (1981)).

3. The city encourages architectural and engineering firms to submit a statement of qualifications and performance data annually. When services are needed, the city will evaluate current statements of qualifications and performance data on file with the city, together with those that may be submitted by other firms regarding the proposed project.

C. Contract Negotiations.

1. Discussions will be conducted with one or more firms regarding anticipated concepts and the relative utility of alternative methods of furnishing the required services. Using criteria established by the city for the project, category, or type of services needed, a professional/personal services contractor will be selected that is deemed to be the most highly qualified to provide the services required for the proposed project.

2. The city will negotiate a contract with the most qualified firm at a price that the city determines is fair and reasonable. In making its determination, the city will take into account the estimated value of the services to be rendered as well as the scope, complexity, and professional nature of the services to be provided. If the city is unable to negotiate a satisfactory contract with the firm selected at a price that is determined to be fair and reasonable, negotiations with that firm will be terminated in writing. Another firm will then be selected and the process continued until an agreement is reached or the process is terminated (RCW 39.80.050 (1981)).

(Ord. 864 § 16, 2009; Ord. 805 § 3 (part) (Exh. A § 9), 2006)

3.20.110 Surplus.

The city council may authorize the sale of personal property belonging to the city if it determines that the property is not and will not be needed for city purposes and gives notice of intention to sell as provided in this section. All sales shall be public, except for scrap or sales to other government entities, which may be by private sale. Sales to other government entities shall be at fair market value unless otherwise declared by council to be in the best interests of the public. Scrap may be sold by private sale at prices established by current market conditions. Scrap is any equipment or material that cannot serve its original purpose. Trade-ins of old equipment to upgrade equipment of the same or reasonably related kind are permitted when it is in the best interests of the city. The public works director and/or designee shall be responsible for the sale, trade, or other disposition of surplus personal property and scrap belonging to the city of Ocean Shores.

A. Public Notice. The notice of intent to sell surplus or scrap at a public sale shall be published once a week for two consecutive weeks in the city official newspaper immediately prior to the sale. The notice shall state the time and place of the sale.

B. Inventoried Items. Any inventoried item that is going to be scrapped, surplus, or traded in will be signed off by the employee responsible and approved by his/her supervisor.

(Ord. 1118 § 5, 2024; Ord. 805 § 3 (part) (Exh. A § 10), 2006)

3.20.120 Post federal award requirements.

A. Procedures. City staff shall consult this policy when dealing with any procurements in which federal funds are contemplated or used. This document will be updated as needed to reflect changes in federal regulations. All procurements in which federal funds are contemplated or used must be conducted in accordance with federal procurement requirements. This policy explains the applicable city procurement policy and how it conforms to federal requirements.

B. Policy General Procurement Standards—CFR Reference: 2 CFR 200.318.

1. Goal. All purchasing functions are to be conducted with the highest ethical standard. Department directors, managers and employees must remain constantly aware of their responsibilities when spending public funds. The purchasing division will provide a purchasing process that implements and maintains the requirements of the city municipal code and provide a centralized purchasing system to:

a. Establish a purchasing program providing for competitive bidding in the open market and obtaining the greatest possible advantage to the city.

b. Provide a cost-effective purchasing process utilizing high ethical standards.

c. Obtain the appropriate quality of materials and services at the lowest ultimate cost and in a timely manner.

d. Provide a system to purchase, using effective fiscal controls that ensure adherence to budget, expenditures and encumbrances. Obtain appropriate levels of approval as established herein.

e. Award purchases to the lowest responsive and most responsible vendors meeting specifications and city requirements.

f. Promote and maintain good relationship with vendors. City staff shall deal in a professional manner and promote equal opportunity, fairness and courtesy in all vendor relations.

2. Staff Responsibilities. It is the responsibility of all city staff assigned to purchase materials, equipment, supplies and services for all city functions to follow this established process when in regard to federal funds. These purchasing activities shall be conducted in the most economical and efficient manner.

Department directors are responsible for ensuring their department purchases utilizing federal awards are made in accordance with the city of Ocean Shores federal award policy. To assist in administering the grant, the city’s grant coordinator shall maintain a grant file for each grant award. The fiscal file contains all documentation related to the financial history of the grant.

This file shall include:

• Executed copy of the grant award

• Copy of agenda bill to approve grant award

• Award modifications

• Approved grant budget

• Budget modifications

• Financial reports

• Reimbursement/payment requests and supporting documentation

Grant files must be retained in accordance with the city of Ocean Shores’s file retention policy or, for federal awards, the retention requirements for records per 2 CFR 200.334, whichever is more restrictive.

C. Procurement Using Grant Funds. When submitting purchase requisitions with the intention of using grant funds, the department head or program manager must clearly indicate the source of funding for the procurement. The grant coordinator must also communicate to the purchasing officer or delegated staff the applicable procurement standards for the grant, preferably by email. The purchasing officer or delegated staff must review the grant procurement standards and incorporate them, if necessary, in the procurement process. If federal funding is involved, the grant coordinator and department head must ensure the procurement standards outlined in 2 CFR 200.320 and the required suspension and debarment testing—2 CFR 200.214—for covered transactions are met. Covered transactions include procurement of goods and services that equal or exceed twenty-five thousand dollars, nonprocurement transactions as defined in 2 CFR 180.970 and subcontracts/subawards that equal or exceed twenty-five thousand dollars. List of debarred or excluded vendors can be found in the System for Award Management web page and can be accessed at the following address: sam.gov. The grant coordinator must document the result of the sam.gov search in the procurement file and be made available to the department head, program manager, finance department and/or external auditors upon request. In some cases, the city of Ocean Shores procurement policy may be more restrictive than the grant’s procurement standards. In this case, the purchasing officer or delegated staff must follow the city of Ocean Shores procurement policy because it is more restrictive.

D. Capital Asset Management—Equipment (2 CFR 200.439)—2 CFR 200.313(d). The program manager should notify the grant coordinator of any capital assets acquired using grant funds so they can be properly identified and documented with the funding agency. Such assets will be accounted for and managed in accordance with the terms and conditions of the grant. Any equipment of real property funded by federal funds shall be accounted for and managed in accordance with the federal requirements outlined in 2 CFR 200.310, 200.311, and 200.313.

1. Grant Funded Salaries and Wages. All payroll related costs charged to the grant must reflect actual time spent to the grant. The department head is responsible in ensuring that actual hours are charged to the grant appropriately. The department head will request a pay code be set up in the ADP timecard system for each grant that salaries and wages are being charged. The employee will log time spent on the grant in the ADP timecard system using the grant pay code. Any city employee whose salary is paid in part by a grant must also develop an activity log that will allow them to track actual time and effort performed for the grant. When completing the required log, the employee must itemize time by activity, indicating the grant pay code. The department head will review/sign the timesheet ensuring the following:

a. Total hours allocated to the grant is based on actual hours recorded in the employee’s activity log; and

b. The proper grant pay code is being used. Once approved by the department head, it will go to finance division to the attention of the payroll technician for processing. In the event of any change on the employee’s employment status, the department head must promptly complete a PAN indicating the pay code change and the start date for the status change.

2. Code of Ethics—2 CFR 200.318(c)(1).

a. Regard public service as a sacred trust, giving primary consideration to the interests of the city.

b. Purchase the best value obtainable, securing the maximum benefit for each tax dollar expended.

c. Allow for full and open competition and not participate in uniform bidding.

d. Know and respect their obligations to the public, private sector and using agencies.

e. Accord vendor representatives’ courteous treatment remembering that they are important sources of information and assistance in buying decisions.

f. Avoid all appearances of unethical or compromising acts during interaction with vendors.

g. Ensure that any and all vendors have the opportunity to participate in the bidding procedure.

h. Strive constantly for greater knowledge of purchasing methods and of the goods and services to be procured.

i. Conduct oneself with fairness and dignity, and demand honesty in buying and selling.

j. Remember that their conduct reflects the city.

3. Conflict of Interest—2 CFR 200.318(c)(1). No officer or employee of the city having any supervisory authority to purchase any specific goods, services or construction for the city shall engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract.

4. Gratuities. The purchasing agent and all other officers and employees of the city are prohibited from accepting directly or indirectly from any person to whom any purchase order or contract is, or might be, awarded, any rebate, kickback, gift, money or other unlawful consideration. The offer of such gratuity to an official or employee by any supplier or contractor shall be cause for declaring such individual to be an irresponsible bidder and for preventing such supplier or contractor from bidding.

5. Pre-Solicitation.

a. The purchasing agent and all other officers and employees of the city procuring with federal funds must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical purchase. CFR reference: 2 CFR 200.318(d).

b. Where advantageous for the city, when competitively bid and awarded and to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the federal government, the city is encouraging staff to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. CFR reference: 2 CFR 200.318(e).

c. The city is encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. CFR reference: 2 CFR 200.318(g).

d. The city must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. See also 2 CFR 200.214, Suspension and debarment. CFR reference: 2 CFR 200.318(h).

e. The city must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. CFR reference: 2 CFR 200.318(i).

f. The city may use a time and materials type contract only after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. “Time and materials type contract” means a contract whose cost to a nonfederal entity is the sum of:

i. The actual cost of materials; and

ii. Direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit.

g. In addition, since time and materials type contract generates an open-ended contract price, a time and materials contract provide no positive profit incentive to the contractor for cost control or labor efficiency. Therefore, each contract must set a ceiling price that the contractor exceeds at its own risk. Further, city staff must assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. CFR reference: 2 CFR 200.318(j).

h. The city alone must be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the city of any contractual responsibilities under its contracts. The federal awarding agency will not substitute its judgment for that of city staff unless the matter is primarily a federal concern. Violations of law will be referred to the local, state, or federal authority having proper jurisdiction. CFR reference: 2 CFR 200.318(k).

E. Competition—CFR Reference: 2 CFR 200.319.

1. All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:

a. Placing unreasonable requirements on firms in order for them to qualify to do business;

b. Requiring unnecessary experience and excessive bonding;

c. Noncompetitive pricing practices between firms or between affiliated companies;

d. Noncompetitive contracts to consultants that are on retainer contracts;

e. Organizational conflicts of interest;

f. Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement; and

g. Any arbitrary action in the procurement process.

2. City staff must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.

3. City staff must have written procedures for procurement transactions. These procedures must ensure that all solicitations:

a. Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and

b. Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.

4. City staff must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, staff must not preclude potential bidders from qualifying during the solicitation period.

5. City staff must use one of the following methods of procurement, or the city’s procurement policy, whichever is the strictest.

a. Procurement by Micro-Purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed ten thousand dollars (as previously defined in CFR reference: 2 CFR 200.67 or two thousand dollars in the case of acquisitions for construction subject to the Davis-Bacon Act; Federal Acquisition Circular (FAC) 2020-07 amended the Federal Acquisition Regulation (FAR) to reflect the increases to the micro-purchase threshold to ten thousand dollars and the simplified acquisition threshold to two hundred fifty thousand dollars). Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; to the extent practicable, city staff must distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive quotations if city staff consider the price to be reasonable.

b. Procurement by Small Purchase Procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the simplified acquisition threshold of two hundred fifty thousand dollars (one hundred fifty thousand dollars as previously defined in CFR reference: 2 CFR 200.88; Federal Acquisition Circular (FAC) 2020-07 amended Federal Acquisition Regulation (FAR) to reflect the increases to the micro-purchase threshold to ten thousand dollars and the simplified acquisition threshold to two hundred fifty thousand dollars). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.

c. Procurement by sealed bids (formal procurement) is the acquisition of supplies or services, the aggregate dollar amount of which exceed one hundred fifty thousand dollars. Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in subsection (E)(5)(c)(i) of this section apply.

i. In order for sealed bidding to be feasible, the following conditions should be present:

(A) A complete, adequate, and realistic specification or purchase description is available;

(B) Two or more responsible bidders are willing and able to compete effectively for the business; and

(C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.

ii. If sealed bids are used, the following requirements apply:

(A) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids; for local and tribal governments, the invitation for bids must be publicly advertised;

(B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;

(C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly;

(D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and

(E) Any or all bids may be rejected if there is a sound, documented reason.

d. Procurement by Competitive Proposals (RFP). The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply:

i. Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;

ii. Proposals must be solicited from an adequate number of qualified sources;

iii. City staff must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;

iv. Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and

v. City staff may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort.

e. [Reserved by Code of Federal Regulations]

f. Procurement by Noncompetitive Proposals (Sole/Single Source). Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:

i. The item is available only from a single source;

ii. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;

iii. The federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from city staff; or

iv. After solicitation of a number of sources, competition is determined inadequate.

F. Contracting With Small and Minority Businesses, Women’s Business Enterprises, and Labor Surplus Area Firms—CFR Reference: 2 CFR 200.321.

1. City staff must take all necessary affirmative steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible.

2. Affirmative steps must include:

a. Placing qualified small and minority businesses and women’s business enterprises on solicitation lists;

b. Assuring that small and minority businesses, and women’s business enterprises are solicited whenever they are potential sources;

c. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women’s business enterprises;

d. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women’s business enterprises; and

e. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and

f. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in subsections (F)(2)(a) through (e) of this section.

G. Procurement of Recovered Materials—CFR Reference: 2 CFR 200.323. Contracts must contain a clause stating contractors must comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds ten thousand dollars or the value of the quantity acquired during the preceding fiscal year exceeded ten thousand dollars; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.

H. Contract Cost and Price—CFR Reference: 2 CFR 200.324.

1. City staff must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, city staff must make independent estimates before receiving bids or proposals.

2. City staff must negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor’s investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.

3. Costs or prices based on estimated costs for contracts under the federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for city staff under 2 CFR Part 200, Subpart E, Cost Principles. City staff may reference its own cost principles that comply with the federal cost principles.

4. The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used.

I. Federal Awarding Agency or Pass-Through Entity Review—CFR Reference: 2 CFR 200.324.

1. City staff must make available, upon request of the federal awarding agency or pass-through entity, technical specifications on proposed procurements where the federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if city staff desires to have the review accomplished after a solicitation has been developed, the federal awarding agency or pass-through entity may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase.

2. City staff must make available upon request, for the federal awarding agency or pass-through entity pre-procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, when:

a. City staff’s procurement procedures or operation fails to comply with the procurement standards in this section;

b. The procurement is expected to exceed the simplified acquisition threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation;

c. The procurement, which is expected to exceed the simplified acquisition threshold, specifies a “brand name” product;

d. The proposed contract is more than the simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or

e. A proposed contract modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold.

3. City staff is exempt from the pre-procurement review in subsection (I)(2) of this section if the federal awarding agency or pass-through entity determines that its procurement systems comply with the standards of this section.

4. City staff may request that its procurement system be reviewed by the federal awarding agency or pass-through entity to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high-dollar funding, and third-party contracts are awarded on a regular basis.

5. City staff may self-certify its procurement system. Such self-certification must not limit the federal awarding agency’s right to survey the system. Under a self-certification procedure, the federal awarding agency may rely on written assurances from city staff that it is complying with these standards. City staff must cite specific policies, procedures, regulations, or standards as being in compliance with these requirements and have its system available for review.

J. Bonding Requirements—CFR Reference: 2 CFR 200.325. For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold—two hundred fifty thousand dollars (one hundred fifty thousand dollars as previously defined in CFR reference: 2 CFR 200.88; Federal Acquisition Circular (FAC) 2020-07 amended Federal Acquisition Regulation (FAR) to reflect the increases to the micro-purchase threshold to ten thousand dollars and the simplified acquisition threshold to two hundred fifty thousand dollars), the federal awarding agency or pass-through entity may accept the bonding policy and requirements of city staff; provided, that the federal awarding agency or pass-through entity has made a determination that the federal interest is adequately protected. If such a determination has not been made, the minimum requirements must be as follows:

1. A bid guarantee from each bidder equivalent to five percent of the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified (to be submitted with the bidding documents).

2. A performance bond on the part of the contractor for one hundred percent of the contract price. A “performance bond” is one executed in connection with a contract to secure fulfillment of all the contractor’s obligations under such contract (to be submitted at time of contract award).

3. A payment bond on the part of the contractor for one hundred percent of the contract price. A “payment bond” is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract (to be submitted at time of contract award).

K. Contract Provisions—CFR Reference: 2 CFR 200.326. City staff’s contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.

(Ord. 1118 § 6, 2024)