Chapter 4.30
CONTRACT AND PURCHASE PROCEDURES

Sections:

4.30.010    Authority.

4.30.020    Procedures, generally.

4.30.030    Definitions.

4.30.040    Limitations on contractual power.

4.30.050    Purchase orders.

4.30.060    Contracts/purchases of under two thousand dollars.

4.30.070    Contracts/purchases of two thousand dollars to seven thousand nine hundred ninety-nine dollars.

4.30.080    Contracts/purchases of eight thousand dollars to twenty-nine thousand nine hundred ninety-nine dollars.

4.30.090    Contracts/purchases of thirty thousand dollars or more.

4.30.100    Competitive sealed bid or proposal procedure.

4.30.110    Contract clauses.

4.30.120    Negotiation for professional services.

4.30.130    Exemptions.

4.30.010 Authority.

In compliance with the provisions of this section, the city manager, or his/her designee, shall provide for the:

A.    Contract for purchase, or issue of purchase authorizations for all supplies, materials, equipment and services for the city;

B.    Sale of surplus, obsolete or unusable personal property of the city;

C.    Transfer of supplies, materials or equipment to or between the various offices, departments or agencies of the city; and

D.    Contract for the construction, repair or improvement of city facilities. (Ord. 86-10 § 1, 1986.)

4.30.020 Procedures, generally.

A.    Every undertaking of the city involving the expenditure of city money shall be in writing in the form of a purchase order, credit card, travel voucher or of a contract, as may be appropriate, and no officer or employee of the city shall have authority to enter into any oral agreement involving the expenditure of money. The city manager and city clerk shall sign all contracts on behalf of the city, and the city manager and the treasurer shall sign all purchase orders.

B.    The city manager shall establish procedures for emergency purchases and may provide for a petty cash fund and purchases.

C.    The treasurer shall examine all payrolls, bills, claims and other demands of the city, and shall issue no warrant for payment unless the claim is in proper form, correctly computed and approved, and is legally due and payable and appropriation has been made thereof which has not been exhausted and unless there is sufficient money in the city treasury to make payment.

D.    The city shall not contract for purchase, or issue purchase authorization for any supplies, materials, equipment or services for the city, or contract for the construction, repair or improvement of city facilities with any person and/or business on the delinquent list maintained by the Port of Dillingham pursuant to Rule 34.1 of the Port of Dillingham Terminal Tariff No. 400 or on the denied services list maintained by the city pursuant to Section 4.40.010.

E.    The city shall not sell surplus, obsolete or unusable personal property of the city or personal property seized by the city for payment of debts owed to the city to any person and/or business on the delinquent list maintained by the Port of Dillingham pursuant to Rule 34.1 of the Port of Dillingham Terminal Tariff No. 400, or on the denied services list maintained by the city pursuant to Section 4.40.010. (Ord. 86-10 § 1, 1986; Ord. 99-9 § 1, 1999; Ord. 13-10 § 5, 2013.)

4.30.030 Definitions.

Whenever the following words or terms are used in this section, they shall be construed as follows unless the context clearly indicates otherwise:

A.    Lowest Responsible Bidder. The successful low bidder shall possess financial ability to complete the contract; integrity, trustworthiness, skill, judgment and ability to perform faithful and conscientious work; experience and necessary facilities and equipment for doing the work, together with other essential factors. The qualifications of the bidder may be determined by but are not limited to the following criteria:

1.    Bidder is a manufacturer or regular dealer;

2.    Bidder is a bona fide manufacturer’s agent or regularly employed on a salary or commission basis by one or more manufacturers of supplies or services being procured;

3.    Bidder is a producer of the items under consideration;

4.    Bidder is considered responsible and qualified because of:

a.    Demonstrated judgment and integrity;

b.    Experience rating on the basis of prior work or activity of a similar nature.

B.    Public Improvement. For the purpose of competitive bidding, means and includes the erection, building, construction, placement, creation and expansion of an improvement to land.

C.    Public Necessity. An urgent public need that could not have been anticipated or foreseen; the term also includes emergency situations when work is necessary to protect life or property.

D.    Professional Services. Professional technical or consultant’s services that are predominantly intellectual in character and that includes:

1.    Analysis, evaluation, prediction, planning or recommendations;

2.    Results in the production of a report or the completion of a task.1

E.    Services. Means and includes labor, professional services and consulting services.

F.    Supplies. Means and includes all supplies, materials and equipment.

G.    Used Equipment. Machinery and vehicles which have been in the active service of the proposed seller for a period of not less than six months preceding its purchase by the city. (Ord. 86-10 § 1, 1986; Ord. 15-16 § 2 (part), 2015.)

4.30.040 Limitations on contractual power.

A.    Any contract, other than a franchise, which will not be fully executed within a period of five years, shall first receive the approval of a majority of the qualified electors of the city who vote thereon. This restriction shall not apply to contracts involving real property, contracts for services with a public utility or with other governmental units, nor to contracts for debt secured by the bonds or notes of the city.

B.    Where a contract may require payment of funds from appropriations of a later fiscal year, or more than one fiscal year not appropriated in an ordinance appropriating the proceeds of a bond sale, the contract must be approved by the city council, by ordinance; provided, however, that the city council may by majority vote, enter into contracts for professional services to assist it in the performance of its legislative duties, and provided further, that such contracts do not require the payment of funds from the appropriations of a later fiscal year.

C.    Professional service contracts shall not have a term which is in excess of two years. (Ord. 86-10 § 1, 1986.)

4.30.050 Purchase orders.

A.    The city manager is responsible for the establishment of a purchasing system under which all merchandise, supplies and services will be purchased for the city, except for the school district.

B.    Purchase orders shall be issued upon requisitions signed by the head of the division requesting the purchase. All requisitions shall be filed with the purchasing agent and no purchase shall be made until an order has been obtained from him/her.

C.    In the absence of the city manager, a person designated in writing by him/her is hereby authorized to sign purchase orders for supplies which do not exceed two thousand dollars in value, in conformance with control procedures to be established by the city manager for that purpose. (Ord. 86-10 § 1, 1986; Ord. 20-01 § 2, 2020; Ord. 20-04 § 2 (part), 2020.)

4.30.060 Contracts/purchases of under two thousand dollars.

Unless otherwise required by law, contracts and purchases estimated by the city manager to be not in excess of two thousand dollars may be made on the open market without competitive bidding or quotations. (Ord. 86-10 § 1, 1986; Ord. 20-04 § 2 (part), 2020.)

4.30.070 Contracts/purchases of two thousand dollars to seven thousand nine hundred ninety-nine dollars.

Unless otherwise required by law, contracts and purchases estimated by the city manager in writing to be between two thousand dollars and seven thousand nine hundred ninety-nine dollars may be made in the open market without competitive sealed bid or public notice; however, whenever possible the city manager shall obtain at least three price quotes and shall award the contract purchase to the lowest responsible bidder. The city manager shall maintain a written record of the price quotations requested and received. (Ord. 86-10 § 1, 1986; Ord. 20-04 § 2 (part), 2020.)

4.30.080 Contracts/purchases of eight thousand dollars to twenty-nine thousand nine hundred ninety-nine dollars.

Unless otherwise required by law, contracts and purchases estimated by the city manager in writing to be between eight thousand dollars and twenty-nine thousand nine hundred ninety-nine dollars may be made in the open market without competitive sealed bid or public notice, subject to the following:

A.    Quotations and Award. Such open market contracts and purchases, whenever possible and practicable, shall be based upon at least three competitive written quotations from interested bidders and shall be awarded to the lowest qualified and responsible bidder.

B.    Interested Bidder’s List. The city manager shall create and maintain a list of interested bidders, which list shall contain the names of suppliers who have declared their interest in being solicited for quotations on specific classes of supplies or services. Names of suppliers who have become inactive in submitting quotations may be removed from the list.

C.    Written Quotations. Written quotations may be solicited by telephone, in person or in writing from bidders in the interested bidders list and from others known to be interested in submitting quotations. All quotations shall be submitted in writing and a detailed record shall be made of the quotations received. The city manager may consider the prices in published mail order catalogs as written quotations.

D.    City Council Approval. The city manager shall review all quotations and award the contract or purchase in writing. The city manager shall notify the city council of the award of such contract or purchase at the next regular city council meeting.

E.    Records. The city manager shall keep a written record of all such open market contracts and purchases and the quotations submitted in competition thereon. Such records shall be open to public inspection during regular business hours. Records of such open market purchases may be disposed of two years following the action. (Ord. 86-10 § 1, 1986; Ord. 96-20 § 1, 1997; Ord. 15-16 § 2 (part), 2015; Ord. 20-04 § 2 (part), 2020.)

4.30.090 Contracts/purchases of thirty thousand dollars or more.

A.    Unless exempt under the provisions of Section 4.30.130, contracts for and purchases of supplies estimated by the city manager in writing to exceed thirty thousand dollars shall be made by competitive sealed bid.

B.    Unless exempt under the provisions of Section 4.30.130, contracts for professional services estimated by the city manager in writing to exceed thirty thousand dollars shall be made by competitive sealed proposal.

C.    The city manager may provide for a process whereby interested bidders/proposers submit statements of qualifications. From these statements, the manager shall determine those who appear to satisfy the “responsible bidder” criteria as set forth at Section 4.30.030(A) and may limit the submittal of bids and proposals pursuant to Section 4.30.100 to only those parties. (Ord. 86-10 § 1, 1986; Ord. 20-04 § 2 (part), 2020.)

4.30.100 Competitive sealed bid or proposal procedure.

A.    Publication. Sealed bids or proposals shall be solicited by publication in a newspaper or newspapers reasonably calculated to reach prospective bidders. Such publication shall contain at least a general description of the supplies or services required and shall designate the place where detailed information may be obtained, the time and place for submittal of the bids and the time and place for opening said bids. The bids shall be opened publicly. Such publication shall be made twice, with at least one week, but not more than two weeks, intervening between publications, and there shall be sufficient time between the date of last publication and the bid opening for preparation of bids, which time shall not be less than two weeks, unless the city manager finds that an emergency exists. The manager may also solicit bids by sending notice by mail to any active prospective bidders known to him.

B.    Bid Security.2

1.    All bids shall be accompanied by cash, a certificate of deposit, certified check or draft, or a cashier’s check or a draft on some responsible bank of the U.S. in favor of and payable on demand to the city, in an amount not less than five percent of the aggregate amount of the bid, or a surety bond in said amount satisfactory to the city attorney and furnished by a corporate surety authorized to do business in the State of Alaska, guaranteeing that the bidder will enter into the contract and file the required bonds, insurance policies and other required documents within the terms required by the bid and contract documents.

2.    The city shall determine whether the contractor shall file performance and payment bonds pursuant to AS 36.25.010 or whether it is in the public interest for the city to exercise the waiver provisions as set forth at AS 36.25.025.

If the bidder to whom the contract is awarded shall for fifteen days after such award, fail or neglect to enter into a contract, the city clerk shall draw the money due on the certificate of deposit, check or draft, and pay the same, or any cash deposit, into the city treasury and under no circumstances shall it be returned to the defaulting bidder. Without limiting the foregoing, no plea or defense or error by a bidder shall be available in any action by the city for the recovery of any deposit, or in any action or any surety bond or as a defense to any action based upon any refusal to execute a contract.

Notwithstanding the requirements set forth above, the city manager, with the consent of council, may waive the bid security requirements in situations in which the city manager deems the interests of the city and the public to be adequately protected without enforcing the bid security requirements.

C.    Bid Opening. All bids shall be sealed, identified as bids on the envelope and must be submitted to the city manager or his/her designee at the place and time specified in the public notice inviting bids. Upon receipt, the city manager or his/her designee shall note the date and time of receipt on the envelope. In the event that there are identical low bids, and other factors being equal, the bid bearing the earliest date of receipt shall be awarded the contract.

Bids shall be opened by the city manager, or his/her designee in public, at the time and place designated in the notice inviting bids. Bids received after the specified time shall not be accepted and shall be returned to the bidder unopened.

D.    Disposition of Bid Bond or Deposit. At the time bids have been duly received and opened, the city manager shall return to all bidders, except the low three bidders, the submitted bid bonds or deposits. All bid deposits and bonds shall be returned to the unsuccessful bidders after execution of the contract and the deposit of the required bonds by the successful bidder.

E.    Award/Protest.

1.    The city manager or city representative (e.g., engineer or consultant to the city) shall provide a written evaluation of the bids received to the city council. Such evaluation shall take into consideration conformity with the specifications, terms of delivery, and direct response to other factors addressed and conditions imposed on the call for bids. The bid of a bidder who has failed to satisfactorily perform on a previous contract may be rejected. If the city manager reports to the city council that the lowest bidder was not responsible, notice shall be sent to the three apparent low bidders and the report shall be placed on the agenda of the next regularly scheduled council meeting; provided, however, that the bidders shall be allowed at least two weeks’ notice of the meeting date.

2.    Notice of intent to award does not constitute a formal award of a contract. The notice of intent to award must include:

a.    A statement of a bidder’s right to protest award, including the time within which the protest must be received, which is five days from the date of the notice; and

b.    The name of the successful bidder.

3.    Unless only one responsive bid is received the notice of intent to award shall be issued to each bidder at least five days before formal award of the contract. If only one responsive bid is received, the contract may proceed as soon as practical after the notice of intent to award is issued.

4.    Any unsuccessful bidder may appear at the council meeting at which a motion for award of contract is to be considered and present testimony to council regarding his/her bid and the city manager’s recommendation of award.

5.    The city council shall then determine whether it is in the best interest of the public to affirm, reject or modify the city manager’s evaluation and recommendation and in so doing, make written findings to support its determination. The written findings shall be based on, but not limited to the definition of “lowest responsible bidder” at Section 4.30.030.

6.    Notwithstanding other provisions of this chapter, the city may reject defective or nonresponsive bids; waive any irregularities in any and all bids; reject all bids; negotiate with two or more of lowest bidders, if bid prices are in excess of the money available or authorized, for a reduction in the scope, quality or quantity of the supplies or services; or readvertise for bids with or without making changes in the plans or specifications.

7.    The city council shall award a contract under this chapter in the form of a resolution authorizing the city manager to enter into the contract under the terms and conditions as set forth in the bid documents, as established in this chapter and any other conditions as may be deemed necessary to protect the public interest. (Ord. 86-10 § 1, 1986; Ord. 15-16 § 3, 2015.)

4.30.110 Contract clauses.

A.    All contracts for supplies and services having a value in excess of twenty thousand dollars shall contain, but not be limited to, protective clauses providing for:

1.    Adjustments in process and time of performance;

2.    Submittal of change orders;

3.    Liquidated damages;

4.    Specified excuses for delay or non-performance;

5.    Termination of the contract for default;

6.    Termination of the contract in whole or in part for the convenience of the city;

7.    Control and performance of subcontractors if any;

8.    Inspection of contractor’s and/or records by city personnel;

9.    Audit of the contractors and/or subcontractors. All contracts and faithful performance bonds or labor and material bonds required therein shall be approved as to form by the city attorney.

B.    The city shall determine whether the contractor shall file performance and payment bonds pursuant to AS 36.25.010 or whether it is in the public interest for the city to exercise the waiver provisions as set forth at AS 36.25.025. (Ord. 86-10 § 1, 1986.)3

4.30.120 Negotiation for professional services.

If the city council finds, as provided under Section 4.30.130 that it is not in the public interest to follow the procurement procedures as established herein for the contracting of professional services, the city council may, following approval of a resolution stating such, proceed to negotiate with a selected supplier or suppliers for subject services.

Nothing in this chapter shall prohibit the city council from determining, after initiating the competitive proposal process, that it is in the best interest of the public to waive the procedure and negotiate a contract/purchase. (Ord. 86-10 § 1, 1986.)

4.30.130 Exemptions.

A.    Restrictions and provisions of this chapter shall not apply:

1.    To the purchase of a patented article;

2.    To the placement of insurance coverage;

3.    To supplies, materials, equipment or contractual services which can only be furnished by a single dealer, or which have a uniform published price;

4.    To supplies, materials, equipment or contractual services purchased from another governmental unit at a price determined to be below that obtainable from private dealers, including war surplus;

5.    To contractual services purchased from a public utility corporation at a price or rate fixed by state or other government authority;

6.    To professional services retained on a continuing as opposed to a project basis, i.e., accounting, appraisal, legal and civil engineering services.

B.    Restrictions and provision of this chapter may be waived where the city council determines that the public interest would best be served by waiving the procedures herein established. Such determination must be made in the form of a resolution adopted prior to the proposed action. The waiver may be based upon, but is not limited to, the following findings of public interest:

1.    An emergency exists where the delays required for compliance with this section would jeopardize the public health, safety or welfare;

2.    The services or articles can be procured at a lower cost without competitive bidding;

3.    The services or articles are budget items which were approved by the city council when the budget was adopted;

4.    The services are of a professional nature requiring specialized knowledge and judgment;

5.    The purchase involves used heavy equipment. (Ord. 86-10 § 1, 1986.)


1

For statutory authority, see AS 36.98.080.


2

For statutory requirements requiring contractor bonds on public buildings and public works projects in excess of $100,000, see AS 36.25.010, 36.25.025, and 29.25.010(a)(10).


3

Editor’s note: Amendment to Section 4.30.030 at draft stage caused Section 4.30.110 re: local hire to be inapplicable; 8. deleted by codifiers and 8. and 9. renumbered.