Chapter 3.20
PURCHASING SYSTEM
Sections:
3.20.010 Purpose and implementation.
3.20.020 Expenditure authority.
3.20.030 Designation of and responsibility of purchasing officer.
3.20.040 Purchasing amount authority and signature.
3.20.050 Purchases and contracts that are not public projects.
3.20.060 Procedures for public projects.
3.20.070 Sole-source purchases.
3.20.080 Prevailing wages and public works projects.
3.20.090 Consultant and professional services.
3.20.100 Standing supply purchase agreements and master service agreements.
3.20.110 Conflict of interest.
3.20.120 Credit card purchasing policy.
3.20.010 Purpose and implementation.
A. Title. This chapter shall be known as the city of Kerman purchasing ordinance ("purchasing ordinance"). The purpose of this purchasing ordinance is to establish efficient procedures for the purchase of supplies, equipment, and services at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to define purchasing authority, and to assure the quality of purchases.
B. Compliance with Laws. The adoption of this purchasing ordinance is intended to meet the requirements of state law including but not limited to the following: (1) Government Code Sections 54201 to 54205 regarding the purchase of supplies and equipment; (2) Public Contract Code Sections 20160 to 20174 regarding city public works construction projects; (3) Public Contract Code Sections 22000 to 22045 regarding the uniform public construction cost accounting procedures; (4) Government Code Section 4526 regarding professional services; (5) Labor Code requirements for prevailing wages; and (6) other applicable laws.
C. Superseding Procurement Requirements. The procurement requirements under this purchasing ordinance shall be followed. However, in the event stricter procurements are required by a state or federal funding source, those requirements shall be met to ensure funding compliance.
D. Administrative Purchasing Policy. The city’s purchasing functions shall be governed by this purchasing ordinance and by the city’s administrative purchasing policy which shall be established by the city manager, both as may be amended from time to time. The administrative purchasing policy will supplement and amplify the provisions of the purchasing ordinance and will generally contain administrative requirements, responsibilities, and updated best practices to meet the city’s needs. (Ord. 21-03 §3, 2021).
3.20.020 Expenditure authority.
Purchase and contract expenditures must be authorized in the city’s annual budget or pursuant to amendment to the annual budget approved by the city council. (Ord. 21-03 §3, 2021).
3.20.030 Designation and responsibility of purchasing officer.
The city manager shall be designated as the purchasing officer. The city manager may delegate his or her authority as purchasing officer to another city employee. Such designation must be made in writing and specifically delegate to that person the responsibility of purchasing officer under this chapter.
The purchasing officer shall have authority to:
A. Purchase or contract for supplies, equipment and services required by city in accordance with purchasing procedures prescribed by this purchasing ordinance, the administrative purchasing policy, and any requirement as shall be prescribed by state or federal funding agencies.
B. Negotiate and recommend execution of contracts for the purchase of supplies, equipment, and services at least expense to the city.
C. Act to procure for the city the needed quality in supplies, equipment, and services at least expense to the city.
D. Discourage uniform bidding and endeavor to obtain as full and open competition as possible on purchases.
E. Prepare and recommend to the city council revisions and amendments to the purchasing ordinance.
F. Prescribe and maintain the forms as are reasonably necessary to the operation of the purchasing ordinance and other laws.
G. Supervise the inspection of all supplies, equipment and services purchased to ensure conformance with specifications.
H. Maintain a bidders list, vendors catalog file, and records needed for the efficient operation of the purchasing system.
I. Require that department heads verify and ensure purchases are made in accordance with the purchasing system and with state or federal funding sources. (Ord. 21-03 §3, 2021).
3.20.040 Purchasing amount authority and signature.
A. City Manager. Purchases and contracts of less than thirty thousand dollars may be awarded and signed by the city manager unless the city council expressly reserves approval on a particular purchase or contract or the city manager requests council approval.
B. City Council. If the amount of any purchase or contract is thirty thousand dollars or more, the contract shall be awarded by the city council and signed by the mayor unless a resolution authorizes the city manager to sign the contract. (Ord. 21-03 §3, 2021).
3.20.050 Purchases and contracts that are not public projects.
A. Procedures for Specific Amounts. The following procedures shall be followed when purchasing or leasing materials, supplies, equipment, or services:
$0 to $1,000--The purchasing officer shall ensure that the city pays fair prices and receives commensurate value for amounts expended.
$1,001 to $10,000--Price quotes must be solicited, either verbally or in writing, from a minimum of three vendors, if available. The low price quote must be confirmed in writing.
$10,001 to $30,000--Written specifications describing the delivery schedule, materials, supplies, equipment, or services must be prepared. Price quotes must be solicited in writing from a minimum of three vendors, if available. The low price quote must be confirmed in writing.
$30,001 or higher--The informal bidding requirements under Section 3.20.060 relating to public projects shall be followed except that city is not required to award to the lowest bidder as other factors may be considered. The city may award to the best qualified vendor. In determining "best qualified vendor" as used in this section, consideration is to be given to quality and performance of the goods and supplies, equipment or materials to be purchased or nonprofessional services to be provided by the vendor. Criteria for determining best qualified vendor includes, but is not limited to, the following:
1. The cost or best value of the goods and supplies, equipment, materials, or nonprofessional services;
2. The ability, capacity, and skill of the vendor to perform the contract and to provide the goods and supplies, equipment, materials, or nonprofessional services requested;
3. The ability of vendor to provide the goods and supplies, equipment, materials, or nonprofessional services promptly or within the time specified and without delay; and
4. The quality of vendor’s performance on previous purchases or contracts by city.
B. Purchase Order or Contract Required. Purchases of supplies, equipment, and services of ten thousand dollars or more shall be made only by written purchase order or contract.
C. Emergency Purchases. In the case of an emergency, the purchasing officer may determine to proceed with the immediate purchase of goods, and supplies, equipment, materials, or services. The term "emergency" means a sudden, unexpected occurrence that poses a clear and imminent danger requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential services.
1. If the dollar amount is within the city manager’s authority, the purchasing officer shall promptly file with the city council a signed declaration showing that emergency conditions existed and created the necessity for such action, together with an itemized account of all expenditures.
2. If the dollar amount is above the city manager’s authority, the purchasing officer shall at the next regular meeting of the council seek ratification of the purchase by resolution which includes the emergency conditions which existed and the immediate need to take action together with an itemized account of all expenditures. (Ord. 21-03 §3, 2021).
3.20.060 Procedures for public projects.
A. Uniform Public Construction Cost Accounting Act Adopted. The city council of the city of Kerman, California hereby readopts the California Uniform Public Construction Cost Accounting Act (California Public Contract Code Section 22000 et seq.) for the purpose of prescribing regulations governing contracts awarded by the city for public projects. However, nothing contained herein shall preclude the city from utilizing more restrictive procedures if and when required by federal or state law, or when federal or state funds are involved in the contract to be awarded and the funding agency requires more restrictive procedures.
B. Definitions of Terms. As used in this section, the words, terms, and phrases shall have the following meanings, as defined in Public Contract Code Section 22002, unless otherwise apparent from the context:
1. "Facility" means any plant, building, structure, ground facility, real property, street, highway, or other public works improvement.
2. "Maintenance work" includes all of the following:
a. Routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes.
b. Minor repainting.
c. Resurfacing of streets and highways at less than one inch.
d. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems.
e. Work performed to keep, operate, and maintain city-owned water and water systems.
3. "Public project" means any of the following:
a. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility.
b. Painting or repainting any publicly owned, leased, or operated facility.
c. "Public project" does not include maintenance work, as defined above.
d. Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.
C. Dollar Amount of Public Project Determines Process to Be Used. The dollar amount thresholds provided in this section shall automatically adjust upon the effectiveness of any adjustment notification by the State Controller in accordance with Public Contract Code Section 22020 et seq., without the necessity of amending this section or any subdivision herein to reflect any such adjustment.
1. Public projects of sixty thousand dollars or less may be performed by city employees by force account, by negotiated contract, or by purchase order.
2. Public projects of two hundred thousand dollars or less may be let to contract by informal bidding procedures as set forth in subsection D of this section.
3. Public projects of more than two hundred thousand dollars shall, except as otherwise provided in this section, be let to contract by formal bidding procedure as set forth in subsection D of this section.
D. Procedures to Be Used for Contracts Regarding Public Projects.
1. No Bidding Required. Per Public Contract Code Section 22032, public projects of sixty thousand dollars or less may be performed by the employees of the city by force account, by negotiated contract, or by purchase order consistent with the procedures in Section 3.20.050(A).
2. Informal Bidding Procedures. Public works projects of two hundred thousand dollars or less per subsection (C)(2) of this section shall be awarded to the lowest responsive and responsible bidder in accordance with the Uniform Construction Cost Accounting Act, Section 22034 et seq. of the Public Contract Code, as follows:
a. Contractors List. A list of qualified 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.
b. Notice Inviting Informal Bids. A notice inviting informal bids shall be prepared, which shall describe the project in general terms, describe how to obtain more detailed information about the project, and state the time and place for the submission of bids. The notice shall be mailed, not less than ten days before bids are due, to either all the contractors on the contractors list for the category of work to be bid, or to all construction trade journals specified in the California Public Contract Code Section 22036, or both, unless the product or service delivery is proprietary.
c. The informal bids for public projects shall be awarded by the city council and signed by the mayor or by city council designee.
d. If all bids received are in excess of two hundred thousand dollars, the city council may, by adoption of a resolution of four-fifths vote, award the contract, at two hundred twelve thousand five hundred dollars or less, to the lowest responsible bidder, if it determines the cost estimate of the public agency was reasonable.
3. Formal Bidding Procedures. Public work projects of more than two hundred thousand dollars per section (C)(3) of this section shall be awarded pursuant to formal bidding procedures to the lowest responsive and responsible bidder in accordance with, but not limited to, the procedures set forth below. The bid package will typically include the following:
a. Notice inviting bids--Setting the time and place for receiving and opening of sealed bids and describing the contract/project.
b. Instructions to bidders-–Identifying the contract documents to be considered, the availability of information, any scheduled pre-bid meetings, bid protest procedures, and any other procedures to be followed for bids to be considered.
c. Publication of notice inviting bids--At least fourteen days prior to bid opening, and sent electronically, if available, and mailed to all construction trade journals specified in Public Contract Code Section 22036, at least fifteen days prior to bid opening. The notice inviting bids shall include all of the following:
i. The proposal form.
ii. Submission of sealed bids.
iii. A public bid opening.
iv. Award to the lowest, responsive and responsible bidder.
v. City reservation in notice inviting bids of the right to reject any or all bids and to waive minor irregularities.
vi. Award and execution of a written contract.
vii. Reference to applicable state or federally funded project requirements.
viii. Bid security.
ix. Performance and payment bonds.
x. Listing of subcontractors.
E. Authority to Prepare and Issue Notice Inviting Bids. The city engineer is authorized to prepare and issue notices inviting bids and to establish such additional bidding procedures as are not inconsistent with those stated herein.
F. Prohibition Against Splitting or Separating Projects. It shall be unlawful to split or separate into smaller work orders or projects any project for the purpose of evading the provisions of this purchasing ordinance requiring work to be done by contract after competitive bidding. Under Public Contract Code Section 22033, "It shall be unlawful to split or separate into smaller work orders or projects any project for the purpose of evading the provisions of this article requiring work to be done by contract after competitive bidding."
G. City Council Authority to Reject, Readvertise, or Otherwise Award.
1. In its discretion, the city council may reject any and all bids presented under the informal and formal bidding procedures described above for public projects, if the city, prior to rejecting all bids, furnishes a written notice to the apparent low bidder. The notice shall inform the bidder of the city’s intent to reject the bid and shall be mailed at least two business days prior to the council meeting at which the city intends to reject the bid. If after the first invitation for bids all bids are rejected, after reevaluating its cost estimates of the project, the city shall have the option of either of the following:
a. Abandoning the project or readvertising for bids in the manner described in this section.
b. By passage of a resolution by a four-fifths vote of the city council declaring that the project can be performed more economically by the employees of the city, the city may have the project done by force account without further complying with this section.
2. If the contract is awarded, it shall be awarded to the lowest responsive and responsible bidder. If two or more bids are the same and the lowest, the city may accept the one it chooses.
3. If no bids are received through the informal or formal bidding procedures described above, the project may be performed by employees of the city by force account or by informal bidding procedures set forth above.
H. Emergency.
1. In case of an emergency regarding a public project which requires competitive bidding, the city council may pass a resolution by a four-fifths vote of its members declaring that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. The resolution shall specify findings as required in Public Contract Code Section 22050.
2. "Emergency" as used in this section means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.
I. Written Contracts Required. All contracts for public projects shall be in writing; all amendments to contracts shall be in writing. The city manager shall work with the city attorney to ensure that the contract includes language protecting the city’s interest and language required by law. This language shall include, but is not limited to: specified term, scope of services, termination language, insurance, warranties, indemnification, noncollusion, contractor license, security, bonds, liquidated damages, change orders, retention, delays, claims process, prevailing wages, and compliance with applicable laws.
J. Exception to Competitive Bidding for Purchases from Governmental Entities. In accordance with Public Contract Code Section 10299, the city may, without formal or informal bidding, contract with suppliers who have been awarded contracts by governmental entities for the purchase of goods, information technology, and services under the competitive process in Public Contract Code Sections 12100 to 12113. Such contracts typically take the form of master agreements, price schedules, or multiple award schedules. The city may make these purchases directly from the vendors or the state may provide assistance to the city in making these acquisitions. All such contracts are subject to council approval.
K. Change Order Limits. The award of contracts for public projects shall include a recommended contingency amount not to exceed fifteen percent. Any change order must be reasonably related to the scope of the original contract and based on post-award information that requires modification based on unforeseen conditions or by mutual agreement of the parties. Any change order which results in a total contract amount greater than the limits in this provision shall require city council approval. (Ord. 21-03 §3, 2021).
3.20.070 Sole-source purchases.
In the event that there is one, and only one, source for a product in excess of ten thousand dollars, a sole-source contract may be used. When a department head wishes to make a sole-source purchase, he or she must make the findings set forth below and file such certification with the finance department. If the purchase exceeds the purchasing officer’s monetary authority to contract, a resolution making the findings set forth below must be submitted with the staff’s request for award of a contract. In order to establish a legal basis for a sole-source exception, the following statements and findings must be made:
A. A statement describing every unique or specialized feature of the product in question;
B. A statement of the department head’s efforts to locate all possible suppliers of such product;
C. A statement that, in spite of its efforts, the department head has been able to locate only one supplier of the product in question;
D. A statement that indicates the ultimate cost of the product and the process used to determine the cost of the product; and
E. A finding that it is, therefore, proper for the city to dispense with a competitive bidding requirement and to authorize the city to purchase the product in question under the sole-source exception. (Ord. 21-03 §3, 2021).
3.20.080 Prevailing wages and public works projects.
A. Under Labor Code Section 1771, all work performed under contract for "public works" projects of more than one thousand dollars shall be subject to prevailing wages. The Labor Code defines the term "public works project" more broadly than the Public Contract Code and Section 3.20.060. There may be instances in which bidding is not required but payment of prevailing wages is required.
B. "Public works project," for the purpose of prevailing wages, means:
1. Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part from city funds. For purposes of this subsection (B)(1), "construction" includes work performed during the design and preconstruction phases of construction, including, but not limited to, inspection and land surveying work. For purposes of this subsection (B)(1), "installation" includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems.
2. The laying of carpet done under a building lease-maintenance contract and paid for out of public funds.
3. Street, sewer, or other improvement work done under the direction and supervision of the city.
4. Hauling refuse from a public works site to an outside disposal location.
5. Maintenance work, including routine, recurring, and usual work for the preservation of a city-owned or operated facility, and landscape maintenance work per Labor Code Section 1771.
C. Prevailing wage requirements do not apply to work performed by the city with its own forces.
D. The city manager is authorized to establish guidelines for implementing prevailing wages requirements that are consistent with this section and with the Labor Code.
E. The city manager shall designate a person to comply with the contractor registration requirements on all contracts requiring prevailing wages. (Ord. 21-03 §3, 2021).
3.20.090 Consultant and professional services.
The selection of consultant and professional services including but not limited to private architectural, landscape, architectural, engineering, environmental land surveying, or construction management firms, and law firms shall be on the basis of demonstrated competence, on the professional qualifications necessary for the satisfactory performance of the services required, and at a fair and reasonable price to the city. To obtain the best competitive value for services, the city manager shall determine at his or her discretion whether to employ an RFP or RFQ process dependent on nature of the services, complexity, estimated cost, and immediate needs. If a state or federal funding source requires an RFP or RFQ process, the city shall comply with said process to secure funding. (Ord. 21-03 §3, 2021).
3.20.100 Standing supply purchase agreements and master service agreements.
A. Standing supply purchase agreements may be entered into with specific vendors for purchase of repetitive-use goods, materials, equipment, and/or supplies common to one or several departments. The standing supply purchase agreements will be subject to the informal bidding procedures in Section 3.20.060 except that factors other than low price may be considered.
B. Master service agreements may be entered into with specific vendors for support services on an "as needed" basis. The master service agreements will be subject to a request for proposal process as set forth in the city’s administrative purchasing policy. (Ord. 21-03 §3, 2021).
3.20.110 Conflict of interest.
No person shall recommend, participate in any contract evaluation, selection, purchase, or lease which would constitute a conflict of interest defined in the city conflict of interest code or applicable state law. (Ord. 21-03 §3, 2021).
3.20.120 Credit card purchasing policy.
A. Credit Card Policy.
1. This section shall be deemed the city’s credit card purchasing policy.
2. The finance director shall be responsible for the city’s credit card issuance, accounting, monitoring, retrieval, and for general oversight of compliance with this credit card use policy.
3. Credit cards may be used for the purchase of goods and services that are for the official business of the city when standard accounts payable procedures cannot be utilized. Examples include fuel purchases, travel-related expenses, conference registration fees, and purchases wherein vendor requires immediate payment and the purchase is immediately necessary for city business.
4. City credit cards may be used only by those authorized and only for the purchase of goods or services for the official business of the city.
5. Purchases made via the credit card must comply with the city’s purchasing and expenditure policies. The card in no way changes such policies.
6. The finance department will follow established accounts payable internal control procedures for approval, documentation, and payment of credit card charges.
7. Unauthorized use of a city credit card shall result in disciplinary measures to the fullest extent of the law.
B. Procedures.
1. Issuance of Credit Cards.
a. Credit cards may be issued to the city manager, finance director, police chief, lieutenant, parks and recreation director, public works director, and city clerk. Only one card will be issued in an individual’s name. Cards are nontransferable. It is understood that each individual issued a credit card may designate support staff to process credit card purchases.
b. The finance director may authorize credit card purchases of up to two thousand five hundred dollars. Contracts and purchases in excess of that amount which have been authorized by the finance director may be paid with credit cards if specifically authorized by city manager. The authorized credit limit of each credit card issued by the city shall not exceed five thousand dollars.
2. Card Holder Responsibilities and Liability.
a. Each credit card holder must comply with the following requirements:
i. Ensure the card is used only for legitimate city business purposes.
ii. Maintain the card in a secure location at all times.
iii. Not allow other individuals to use the card.
iv. Adhere to city purchase limits and restrictions as set forth in this chapter and as required by the city manager.
v. Submit documentation to the finance director including sales slips, register receipts, and/or credit card slips and other documentation detailing the goods or services purchased, the cost of the goods or services, the date of the purchase and the official business for which it was purchased. Such documentation shall be submitted within five days of purchase.
vi. Attempt to resolve disputes related to billing errors with a vendor directly or in conjunction with the finance department.
vii. Ensure that the appropriate credit is issued for disputed items or billing errors on a subsequent credit card statement.
viii. Immediately report a lost or stolen card to the card issuer and notify the finance director of the lost or stolen card at the first opportunity available.
ix. Return the card to the finance director upon termination of employment with the city.
b. Card Holder Liability. The credit card is a corporate charge card that will not affect the card holder’s personal credit; however, it is the card holder’s responsibility to ensure that the card is used within stated guidelines, policies, and procedures of the city. Failure to comply with program guidelines may result in the permanent revocation of the card, charge-back of an improper or unsupported transaction to the card holder for reimbursement to the city, notification of the situation to management, and further disciplinary measures, which may include termination. (Ord. 21-03 §3, 2021).