Chapter 3.04
PURCHASING SYSTEM*
Sections:
3.04.010 Adoption.
3.04.030 Purchasing policies, procedures, limits and functions.
3.04.040 Estimates of requirements.
3.04.050 Available funds required.
3.04.060 Open market purchases of supplies, services and equipment.
3.04.070 Informal bid procedures—Purchase of supplies, services and equipment.
3.04.080 Formal bid procedures for purchases of supplies, services and equipment.
3.04.090 Minimum number of bids, waiver of irregularities, rejection of bids, failure to receive bids for purchase of supplies, services and equipment by formal or informal bid procedure.
3.04.095 Procurement of recovered organic waste product and recycled-content paper.
3.04.100 Emergencies—Purchase of supplies, services or equipment.
3.04.110 Authorized purchasing alternatives for supplies, services and equipment.
3.04.120 Inspection and testing of supplies, services and equipment.
3.04.130 Surplus supplies and equipment.
3.04.140 Purchase of professional services.
3.04.150 Architectural design service—Disclosure statement.
3.04.160 Emergencies—Purchase of professional services.
3.04.170 Public projects—Definitions.
3.04.180 Force account—Public projects.
3.04.190 Informal bid procedures—Public projects.
3.04.200 Formal bid procedures—Public projects—Notice inviting bids.
3.04.210 Bidder’s security—Public projects.
3.04.220 Bid opening procedure—Public projects.
3.04.230 Tie bids—Public projects.
3.04.240 Waiver of irregularity, rejection of bids—Failure to receive bids—Options on public projects.
3.04.250 Performance bonds—Public projects.
3.04.260 Lowest responsible bidder determination—Public projects.
3.04.270 Change orders to public projects.
3.04.280 Emergencies—Public projects.
3.04.290 Affirmative action—Penalty for noncompliance.
* Prior ordinance history: Ords. 86, 202, 413, 466, 488 and 519.
3.04.010 Adoption.
In order to establish efficient procedures for the purchase of supplies, services, equipment and public projects for the city, at the lowest cost commensurate with required quality, to exercise positive financial control over purchases that meet legal requirements and generally accepted accounting principles, and to define authority for the purchasing function, a purchasing system is adopted. (Ord. 536 § 2 (part), 2007)
3.04.030 Purchasing policies, procedures, limits and functions.
The city manager shall recommend and the city council shall approve policies and procedures necessary to implement a purchasing system compliant with Section 3.04.010, which will include the necessary assignment of duties in order to carry out those policies and procedures.
Those policies and procedures shall include dollar limits associated with the purchase of goods, supplies and services, professional services agreements, and public projects as defined in this chapter. Such dollar limits shall be reviewed and modified based upon city council resolution on a periodic basis as determined by the city manager.
Those policies and procedures shall include designating city staff, known as the “purchasing authority,” who are authorized and obligated pursuant to the authority granted by this chapter to:
A. Purchase or contract for supplies, services, equipment and public projects required by operating departments;
B. Negotiate and recommend execution of contracts for the purchase of supplies, services, equipment and public projects;
C. Comply with the requirements of the California Public Contracts Code, including the provisions of the California Uniform Public Construction Cost Accounting Act for competitive bidding of public projects except where alternative procurement processes are allowed by state law (e.g., California Government Code Section 4217);
D. Prescribe and maintain forms required by this chapter;
E. Supervise the inspection of all supplies and equipment purchased to ensure conformance with contract documents;
F. Maintain a bidders’ list of the vendors that are capable of supplying the various goods, supplies and services required by the city;
G. Encourage competitive bidding as set forth in this chapter;
H. Act to procure for the city the necessary quality in supplies, services, equipment and public projects at the lowest cost to the city;
I. Execute the provisions contained in this chapter and provide administrative interpretation and advise on the provisions contained herein. (Ord. 586 § 1 (part), 2014: Ord. 536 § 2 (part), 2007)
3.04.040 Estimates of requirements.
All departments shall be responsible for estimating their requirements for supplies, services, equipment, and public projects in such manner, at such time and for such periods as necessary for the appropriation of funds and to carry out city business. (Ord. 536 § 2 (part), 2007)
3.04.050 Available funds required.
Except in cases of emergency or in cases where specific authority has been first obtained from the city manager, the purchasing authority shall not purchase supplies, services, equipment or public projects unless there exists an unencumbered appropriation in the departmental fund budget against which the purchase is to be charged. (Ord. 536 § 2 (part), 2007)
3.04.060 Open market purchases of supplies, services and equipment.
Purchases of supplies, services and equipment of an estimated value as specified in the purchasing policy (Level A) may be made by the purchasing authority in the open market. (Ord. 536 § 2 (part), 2007)
3.04.070 Informal bid procedures—Purchase of supplies, services and equipment.
A. For purchase of supplies, services and equipment of an estimated value as specified in the purchasing policy (Level B):
1. Purchasing authority issues bid request, or, in the alternative, the city manager authorizes negotiation directly with sole source vendor.
2. Purchasing authority publishes bid request to potential qualified vendors.
3. Purchasing authority analyzes bid responses received and makes recommendation to city manager.
4. City manager approves contract if funds are available in department budget.
5. If funds are not available in a department’s budget, a proposal goes to the city council to approve funding and award the contract to purchase supplies, services and equipment. (Ord. 536 § 2 (part), 2007)
3.04.080 Formal bid procedures for purchases of supplies, services and equipment.
A. For purchase of supplies, services and equipment of an estimated value as specified in the purchasing policy (Level C):
1. City council authorizes the issuance of a bid request, or, in the alternative, the city council authorizes the purchasing authority to negotiate directly with sole source vendor.
2. Purchasing authority publishes bid request to potential qualified vendors.
3. Purchasing authority analyzes proposals received and makes recommendation to city council.
4. City council approves contract for purchase of the supplies, services and equipment. (Ord. 536 § 2 (part), 2007)
3.04.090 Minimum number of bids, waiver of irregularities, rejection of bids, failure to receive bids for purchase of supplies, services and equipment by formal or informal bid procedure.
A. Minimum Number of Bids. Purchase of supplies, services and equipment shall, wherever possible, be based on at least three bids and shall, unless otherwise determined by the awarding authority for good cause, be awarded to the lowest responsible bidder consistent with the quality of supplies, services, equipment required.
B. Notice Inviting Bids. The purchasing authority shall solicit bids by written requests to prospective vendors, including written electronic communications such as e-mail, or by telephone.
C. Written Bids and Phone Bids. The purchasing authority shall keep records of all bids for a period of one year after submission of bids or the placing of orders.
D. Waiver of Irregularities. Irregularities in any bid received may be waived and the contract awarded.
E. Rejection of Bids. All bids may be rejected.
F. Failure to Receive Bids. If no bids are received, the services may be performed by city employees by force account or by negotiated contract entered into without need for further bidding. (Ord. 536 § 2 (part), 2007)
3.04.095 Procurement of recovered organic waste product and recycled-content paper.
A. All vendors providing paper products and printing and writing paper to the city of Foster City shall:
1. If fitness and quality are equal, provide recycled-content paper products and recycled-content printing and writing paper that consists of at least thirty percent, by fiber weight, postconsumer fiber instead of nonrecycled products whenever recycled paper products and printing and writing paper are available at the same or lesser total cost than nonrecycled items.
2. Provide paper products and printing and writing paper that meet Federal Trade Commission recyclability standard as defined in 16 CFR Section 260.12.
3. Certify in writing, under penalty of perjury, the minimum percentage of postconsumer material in the paper products and printing and writing paper offered or sold. This certification requirement may be waived if the percentage of postconsumer material in the paper products, printing and writing paper, or both can be verified by a product label, catalog, invoice, or a manufacturer or vendor internet website.
4. Certify in writing, on invoices or receipts provided, which may be electronic, that the paper products and printing and writing paper offered or sold is eligible to be labeled with an unqualified recyclable label as defined in 16 CFR Section 260.12 (2013).
5. Provide records to Foster City’s recovered organic waste product procurement recordkeeping designee, in accordance with this section and the city’s procurement policy, of all paper products and printing and writing paper purchases within thirty days of the purchase (both recycled content and nonrecycled content, if any is purchased) made by any division or department or employee of the city of Foster City. Records shall include a copy (electronic or paper) of the invoice or other documentation of purchase, written certifications as required in subsections (A)(3) and (4) of this section for recycled-content purchases, purchaser name, quantity purchased, date purchased, and recycled content (including products that contain none), and if nonrecycled-content paper products or printing and writing papers are provided, include a description of why recycled-content paper products or printing and writing papers were not provided.
B. All vendors providing compost to the city of Foster City shall provide compost that meets the definition in 14 CCR Section 17896.2(a)(4), which stated, as of the effective date of this section, that “compost” means the product resulting from the controlled biological decomposition of organic solid wastes that are source separated from the municipal solid waste stream, or which are separated at a centralized facility. Compost eligible for meeting the city’s annual recovered organic waste product procurement target must be produced at a compostable material handling operation or facility permitted or authorized under 14 CCR Chapter 3.1 of Division 7 or produced at a large volume in-vessel digestion facility that composts on site as defined and permitted under 14 CCR Chapter 3.2 of Division 7. Compost shall meet the state’s composting operations regulatory requirements.
C. All vendors providing mulch to the city of Foster City shall provide SB 1383 eligible mulch pursuant to 14 CCR Chapter 12 of Division 7 that meet the conditions for the duration of the applicable procurement compliance year, as specified by 14 CCR Section 18993.1(f)(4). (Ord. 643 § 3, 2021)
3.04.100 Emergencies—Purchase of supplies, services or equipment.
A. General. Emergency purchases should be made under the provisions of Chapter 2.40 of the municipal code pertaining to emergency organization and functions.
B. Purchases of Supplies, Services and Equipment. When an emergency exists which, in the judgment of the department head, requires immediate action to insure the public health, safety and welfare, and the city manager and the city treasurer are not available, the department head may authorize the purchase of the necessary supplies, services and equipment to respond to the emergency. The city manager and city treasurer shall have similar authority in the event of the necessity for immediate emergency action. (Ord. 536 § 2 (part), 2007)
3.04.110 Authorized purchasing alternatives for supplies, services and equipment.
Requirements for bids may be dispensed with for:
A. Purchases, supplies, services and equipment are of an estimated value as specified in the purchasing policy (Level A);
B. Commodities that can be obtained from only one vendor;
C. Emergency purchases as defined in Section 3.04.100 are required;
D. Purchase of insurance coverage;
E. Franchises that are awarded by the city council;
F. Purchases that use bids of the state of California not older than twelve months;
G. Purchases that use bids from other public agencies that are not older than six months;
H. Purchases that qualify for alternative purchasing process under state law, such as energy procurement and efficiency projects that meet the requirements of California Government Code Section 4217. (Ord. 586 § 1 (part), 2014: Ord. 536 § 2 (part), 2007)
3.04.120 Inspection and testing of supplies, services and equipment.
The purchasing authority or designated representative shall inspect supplies and equipment delivered to determine their conformance with the contract documents or specifications set forth in the order. The purchasing authority shall have the authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications, including OSHA and/or California industrial safety standards. (Ord. 536 § 2 (part), 2007)
3.04.130 Surplus supplies and equipment.
All departments shall submit to the city manager or designated representative, at such time and in such forms as prescribed, reports showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The purchasing authority shall have authority to sell or exchange for or trade in on new supplies and equipment which cannot be used by any agency or which have become unsuitable for city use. Trade-in values shall not be used in offsetting the gross cost of purchased supplies, services or equipment in determining the appropriate bidding procedures required by this chapter. All sales, exchanges or trade transactions shall be reported to the city manager. (Ord. 536 § 2 (part), 2007)
3.04.140 Purchase of professional services.
A. Definition. Professional services is generally defined as related to: architectural; landscape architectural; engineering (including but not limited to civil, electrical, computer hardware/software, or audiovisual system); environmental; land surveying; professional management services (including but not limited to human resources, training, group facilitation, or legislative analysis); construction project management services; or legal, expert or auditing services.
B. The following procedures shall be followed in obtaining requests for qualifications or proposals for professional services contracts:
1. For professional services contracts of an estimated value as specified in the purchasing policy (Level D):
a. Purchasing authority issues request for qualifications or proposals, or, in the alternative, the city manager authorizes negotiation directly with sole source provider.
b. Purchasing authority publishes request for qualifications or proposals to potential service providers.
c. Purchasing authority analyzes proposals received and makes recommendation to city manager.
d. City manager approves contract if funds are available in department budget.
e. If funds are not available in department budget, proposal goes to the city council to approve funding and award contract for professional services.
2. For professional services contracts of an estimated value as specified in the purchasing policy (Level E):
a. The city council authorizes issuing of request for qualifications or proposals (including specifications and/or scope of work), or, in the alternative, authorizes the purchasing authority to negotiate directly with a sole source provider.
b. Purchasing authority publishes request for qualifications or proposals to potential service providers.
c. Purchasing authority analyzes proposals received and makes recommendation to city council.
d. City council approves contract for professional services. (Ord. 536 § 2 (part), 2007)
3.04.150 Architectural design service—Disclosure statement.
In the procurement of architectural design services requiring an expenditure in excess of ten thousand dollars, the request for qualifications or proposals shall include a specific disclosure, in bold type, of any contract provision that would require the contracting architect to indemnify and hold harmless the city against any and all liability, whether or not caused by the activity of the contracting architect. (Ord. 536 § 2 (part), 2007)
3.04.160 Emergencies—Purchase of professional services.
A. General. Emergency purchases shall be conducted under the provisions of Chapter 2.40 of the municipal code pertaining to emergency organization and functions.
B. Purchases of Professional Services. When an emergency exists which, in the judgment of the department head, requires immediate action to insure the public health, safety and welfare, and the city manager and the city treasurer are not available, the department head may authorize the purchase of the necessary professional services to respond to the emergency. The city manager and city treasurer shall have similar authority in the event of the necessity for immediate emergency action. (Ord. 536 § 2 (part), 2007)
3.04.170 Public projects—Definitions.
A. General. Contracts for public projects as defined in the California Uniform Public Construction Cost Accounting Act shall be in writing and awarded by the city council to the lowest responsible and responsive bidder, except as otherwise provided herein.
B. “Public project” is generally defined as:
1. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility;
2. Painting or repainting of any publicly owned, leased, or operated facility;
3. In the case of a publicly owned utility system, “public project” shall include only the construction, erection, improvement, or repair of dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.
C. “Public project” does not include maintenance work. For purposes of this section, “maintenance work” is generally defined as:
1. Routine, recurring, and usual work for the preservation or protection of any city-owned or publicly operated facility for its intended purposes;
2. Minor repainting;
3. Resurfacing of streets and highways at less than one inch;
4. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems;
5. Work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems, including, but not limited to, dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.
D. “Facility” is generally defined as any plant, building, structure, ground facility, utility system, real property, streets and highways, or other public work improvement. (Ord. 586 § 1 (part), 2014: Ord. 536 § 2 (part), 2007)
3.04.180 Force account—Public projects.
Public projects of an estimated value less than or equal to the amount specified in the purchasing policy (Level 1) may be performed by city employees by force account, by negotiated contract or by purchase order. (Ord. 536 § 2 (part), 2007)
3.04.190 Informal bid procedures—Public projects.
A. For public projects of an estimated value as specified in the purchasing policy (Level 2):
1. A list of contractors shall be developed and maintained in accordance with the provisions of Section 22034 of the Public Contract Code and criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission.
2. A notice inviting informal bids shall be mailed to all contractors for the category of work to be bid, as shown on the list developed in accordance with Public Contracts Code Section 22034, and to all construction trade journals as specified by the California Uniform Construction Cost Accounting Commission in accordance with Section 22036 of the Public Contract Code. Additional contractors and/or construction trade journals may be notified when soliciting bids; provided however:
a. If there is no list of qualified contractors maintained by the city for the particular category of work to be performed, the notice inviting bids shall be sent only to the construction trade journals specified by the California Uniform Construction Cost Accounting Commission.
b. If the product or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors. (Ord. 536 § 2 (part), 2007)
3.04.200 Formal bid procedures—Public projects—Notice inviting bids.
A. For public projects of an estimated value as specified in the purchasing policy (Level 3).
1. The city council shall authorize issuance of notices inviting formal bids which shall include a general description of the public project to be constructed, shall state where bid forms and specifications may be secured, and the time and place for opening bids.
2. Notices inviting bids published and posted at least fourteen calendar days before the date of opening the bids in a newspaper of general circulation as provided for in California Public Contracts Code Section 22037.
3. The city council may require a bid to include prices for items that may be added to, or deducted from, the scope of work in the contract for which the bid is being submitted. Whenever additive or deductive items are included in a bid, the bid solicitation shall specify which one of the following methods will be used to determine the lowest bid. In the absence of a specification, only the method provided by subsection (A)(3)(a) of this section will be used.
a. The lowest bid shall be the lowest bid price on the base contract without consideration of the prices on the additive or deductive items.
b. The lowest bid shall be the lowest total of the bid prices on the base contract and those additive or deductive items that were specifically identified in the bid solicitation as being used for the purpose of determining the lowest bid price.
c. The lowest bid shall be the lowest total of the bid prices on the base contract and those additive or deductive items that when taken in order from a specifically identified list of those items in the solicitation, and added to, or subtracted from, the base contract, are less than, or equal to, a funding amount publicly disclosed by the city before the first bid is opened.
d. The lowest bid shall be determined in a manner that prevents any information that would identify any of the bidders or proposed subcontractors or suppliers from being revealed to the public entity before the ranking of all bidders from lowest to highest has been determined.
4. A responsible bidder who submitted the lowest bid as determined by this section shall be awarded the contract, if it is awarded. This section does not preclude the city from adding to or deducting from the contract any of the additive or deductive items after the lowest responsible bidder has been determined.
5. Nothing in this section shall preclude the prequalification of general contractors or subcontractors.
6. The city council shall also solicit sealed bids from all responsible prospective bidders whose names are on the bidders’ list or who have made written request that their names be added thereto.
7. The city council shall also advertise bids by a notice posted at a publicly accessible location at city offices. Such posting places can include, but shall not be limited to, electronically accessible locations such as the city’s web site or by other means that reasonably allow prospective bidders to be notified of pending purchases. (Ord. 536 § 2 (part), 2007)
3.04.210 Bidder’s security—Public projects.
When deemed necessary, bidder’s security may be prescribed in the formal or informal notices inviting bids. Bidders shall be entitled to return of bid security; provided, however, that a successful bidder shall forfeit his bid security upon his refusal or failure to execute the contract within ten days after the notice of award of contract. The city council may, at its option, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible and responsive bidder, and if the city council awards the contract to the next lowest bidder, the amount of the lowest bidder’s security shall be applied by the city to the contract price differential between the lowest bid and the second lowest bid, subtracting actual administrative costs, and any surplus, if any, shall be returned to the defaulted bidder. (Ord. 536 § 2 (part), 2007)
3.04.220 Bid opening procedure—Public projects.
Sealed bids shall be submitted to the city and shall be identified as “bids” on the envelope. Bids shall be opened in public at the time and place stated in the bid notices by the city clerk, purchasing authority, or their authorized representatives. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty calendar days after the bid opening. (Ord. 536 § 2 (part), 2007)
3.04.230 Tie bids—Public projects.
If two or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay for readvertising for bids, the city council may, in its discretion, accept the bid it chooses or accept the lowest bid made by and after negotiations with the tie bidders. (Ord. 536 § 2 (part), 2007)
3.04.240 Waiver of irregularity, rejection of bids—Failure to receive bids—Options on public projects.
A. At its discretion, the city council may waive any irregularity in any bid received and award the contract.
B. At its discretion, the city council may reject all bids presented. If the city council, prior to rejecting all bids, declares that the project can be more economically performed by city employees and furnishes a written notice to an apparent low bidder mailed at least two business days prior to the hearing at which the city intends to reject the bid, the city council may:
1. Abandon the project or readvertise for bids.
2. By a four-fifths vote declare by resolution that the project can be performed more economically by city employees, and order the project done by force account.
C. If no bids are received, the project may be performed by the city employees by force account or by negotiated contract entered into without need for further bidding. (Ord. 536 § 2 (part), 2007)
3.04.250 Performance bonds—Public projects.
The city council shall have authority to require a performance bond before entering a contract in such amount as it finds reasonably necessary to protect the best interests of the city. If the city council requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids. (Ord. 536 § 2 (part), 2007)
3.04.260 Lowest responsible bidder determination—Public projects.
In determining the “lowest responsible bidder,” the following factors may be considered in addition to price:
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 demonstrated in previous contracts or services for the city or other contracting parties;
C. The quality of performance demonstrated in previous contracts or services for the city or other contracting parties;
D. The previous and existing compliance by the bidder with the laws and ordinances relating to a contract or service;
E. The sufficiency of the financial resources and ability of the bidder to perform the contract or provide the services;
F. The ability of the bidder to provide future maintenance and service for the use of the subject of the contract. (Ord. 536 § 2 (part), 2007)
3.04.270 Change orders to public projects.
The city manager is delegated authority to approve, without seeking new bids, contract change orders to public projects up to the combined amounts funded for construction or purchase and for contingency as established in the project authorization. (Ord. 536 § 2 (part), 2007)
3.04.280 Emergencies—Public projects.
A. The following procedures apply in cases where public projects must be conducted on an emergency basis:
1. In cases of emergency when repair or replacements are necessary, the city council may proceed at once to replace or repair any public facility without adopting plans, specifications, working details, or giving notice for bids. The work may be done by day labor under the direction of the city council, by contractor, or by a combination of the two.
a. In the case of an emergency, a city council, pursuant to a four-fifths vote, may repair or replace a public facility, take any directly related and immediate action required by that emergency, and procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts.
b. Before the city council takes any action pursuant to subsection (A)(1) of this section, it shall make a finding, based on substantial evidence, that the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency. The city council, by a four-fifths vote, may delegate, by resolution or ordinance, to the city manager or other nonelected agency officer, the authority to order action.
c. If the city council orders emergency action, it shall review the emergency action at its next regularly scheduled meeting and, except as specified below, at every regularly scheduled meeting thereafter until the action is terminated, to determine, by a four-fifths vote, that there is a need to continue the action.
d. If the city manager, pursuant to the provisions of Chapter 2.40 of the municipal code, orders emergency action, the city council shall review the emergency action not later than seven days after the action, or at its next regularly scheduled meeting if that meeting will occur not later than fourteen days after the action, and at every regularly scheduled meeting thereafter until the action is terminated, to determine, by a four-fifths vote, that there is a need to continue the action.
e. When the city council reviews the emergency action, it shall terminate the action at the earliest possible date that conditions warrant so that the remainder of the action may be completed by giving notice for bids to let contracts. (Ord. 536 § 2 (part), 2007)
3.04.290 Affirmative action—Penalty for noncompliance.
Any contractor who is found by a court of competent jurisdiction or by a federal or state agency empowered to make such findings to be in substantial or material violation of the Fair Employment Practices Act of the state, or of similar federal law or executive order in the performance of a contract with the city, thereby shall be found in material breach of such contract; and thereupon the city shall have power to cancel or suspend the contract, in whole or in part, or to deduct from the amount payable to such contractor a sum as specified by purchasing policy for each person for each working day during which such person was discriminated against, as damages for such breach of contract, or both. (Ord. 536 § 2 (part), 2007)