Chapter 2.68
CONTRACTS AND PURCHASING*
Sections:
Article I. General
2.68.010 Purpose.
2.68.020 City council approval required.
2.68.030 General procedural requirements.
2.68.040 Definitions.
Article II. Contract Authority
2.68.060 City manager authority.
2.68.070 City attorney authority.
2.68.075 Assistant city manager authority.
2.68.080 Finance director authority.
2.68.090 Public works director and community development director authority.
2.68.100 City librarian authority.
Article III. Supplies, Equipment and General Services
2.68.340 Purchases of general services or supplies and equipment for $5,000 or less.
2.68.350 Purchases of general services or supplies and equipment for between $5,000 and $50,000.
2.68.360 Purchases of general services or supplies and equipment for more than $50,000.
2.68.370 Negotiated purchases.
2.68.380 Purchases of supplies and equipment through cooperative purchasing arrangements.
2.68.390 Equipment leasing.
2.68.400 Inspection and testing.
2.68.410 Repealed.
2.68.420 Surplus supplies and equipment.
Article IV. Public Projects
2.68.500 Bidding requirement.
2.68.520 Exceptions.
2.68.530 Modification of public project contracts.
*Prior legislation: Ord. 1450.
Article I. General
2.68.010 Purpose.
The purpose of this chapter is to:
A. Provide for the authority of city officers to enter into contracts and to set forth procedural requirements; and
B. Establish efficient procedures for the purchase of supplies, equipment and general services at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function, and to assure the quality of purchases. (Reference: Government Code Sections 54201 through 54205.) (Ord. 1556 § 3, 1999)
2.68.020 City council approval required.
City council approval is required for all contracts unless otherwise specified in this chapter or code, or in another provision of federal or state law. (Ord. 1556 § 3, 1999)
2.68.030 General procedural requirements.
All contracts shall conform with the procedural requirements set forth in this section unless otherwise specified in this chapter or code, or in another provision of federal or state law.
A. All contracts must be in writing and be signed in the name of the city.
B. All contracts must include appropriate insurance and indemnification provisions and be reviewed by the city’s risk manager.
C. All contracts must be approved as to form by the city attorney.
D. A signed original of each contract entered into must be filed with the city clerk’s office, except for a contract for the purchase of supplies, equipment or general services which must be filed in the office of the finance director. (Ord. 1556 § 3, 1999)
2.68.040 Definitions.
For the purposes of this chapter, the following definitions shall apply:
A. “Best value” means the best value to the city based on all factors, including, but not limited to, the following:
1. Cost;
2. The ability, capacity, and skill of the contractor to perform the contract or provide the supplies, services or equipment required;
3. The ability of the contractor to provide the supplies, services, or equipment promptly or within the time specified without delay or interference;
4. The character, integrity, reputation, judgment, experience, and efficiency of the contractor;
5. The quality of the contractor’s performance on previous purchases or contracts with the city; and
6. The ability of the contractor to provide future maintenance, repair, parts, and services for the use of the supplies purchased.
B. “Change order” means a change or addendum to an executed contract.
C. “Consultant or professional services” means the services of an attorney, engineer, doctor, financial consultant, planning or environmental consultant, investment advisor, bank or trustee officer, or other professional.
D. “Contract” means any agreement to do or not do a certain thing. “Contract” and “agreement” are synonymous. The term “contract” includes, but is not limited to, a purchase order, a contract for services, an addendum or change order, a letter agreement or a memorandum of understanding.
E. “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 public services.
F. “Finance director” means the finance director of the city or his or her designee.
G. “General services” means and includes any work performed or services rendered by an independent contractor, with or without the furnishing of materials, including, but not limited to, the following:
1. Maintenance or nonstructural repair of city buildings, structures or improvements which does not require engineering plans, specifications or design, including, but not limited to, unscheduled replacement of broken window panes, fire extinguisher maintenance, minor roof repairs, plumbing, elevator maintenance, custodial services and pest control;
2. Repair, modification and maintenance of city equipment and software;
3. Cleaning, analysis, testing, moving, removal or disposal (other than by sale) of city supplies and equipment;
4. Repainting, care or maintenance of public grounds, including, but not limited to, trees, shrubbery, flowers, lawns;
5. Providing temporary personnel services;
6. Providing other miscellaneous services to facilitate city operations;
7. Performing repair, demolition or other work required to abate nuisances under this code;
8. Licensing software;
9. Leasing or rental of equipment (personal property) for use by the city;
10. A maintenance agreement for equipment owned or leased by the city.
“General services” does not include work defined as a public project.
H. “Public project” means:
1. A project for the erection, improvement, painting or repair of public buildings and works;
2. Work in or about streams, bays, waterfronts, embankments or other work for protection against overflow;
3. Street or sewer work except maintenance or repair;
4. Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers. (Reference: Public Contract Code Section 20161.)
I. “Supplies and equipment” means and includes all such items purchased on behalf of the city except for supplies or materials finished for a public project.
J. “Technology product” means hardware, software, or communications equipment; or related equipment or goods which incorporate any such items. (Ord. 1637 § 1, 2001; Ord. 1556 § 3, 1999)
Article II. Contract Authority
2.68.060 City manager authority.
A. The city manager is authorized to enter into and sign for and on behalf of the city, without the prior approval of the city council, a contract:
1. Which contains an initial maximum compensation figure of $100,000 or less. As to a change order, the limit of authority may not exceed an additional $100,000. Cumulative additional orders exceeding $100,000 must be approved by the city council; and
2. For which moneys have been appropriated or will be appropriated at the earliest practicable time; and
3. Which are for consultant or professional services, general services or supplies and equipment.
B. In addition to the authority in subsection A of this section, the city manager is authorized to enter into and execute, for and on behalf of the city, the following contracts:
1. Contracts with public agencies or public utility companies regarding construction or use of public improvements or utility facilities, which require no payment of money by the city or which provide for payment of money to the city in an amount not in excess of $100,000 under each contract; and
2. Contracts for community social or recreational services, or for the use of city property or facilities, in accordance with established administrative guidelines, which require no payment of money by the city or which provide for payment of money to the city in an amount not in excess of $100,000 under each contract; and
3. Contracts for professional services in an amount up to $150,000 if:
a. A developer has deposited the full amount of the contract into a trust fund account; and
b. The funds are to be used for a city-managed professional services contract, such as an environmental impact report.
C. In an emergency endangering the lives, property or welfare of the people of the city or the property of the city, the city manager may authorize the expenditure of any unencumbered moneys in the emergency reserve fund, notwithstanding the fact that such moneys may not have been appropriated for such purpose, to the extent that other moneys have not been appropriated or are otherwise unavailable therefor.
D. In addition to the authority in subsection A of this section, alterations, deviations, additions or deletions from the original scope of work for a professional services contract, which are determined by the city to be necessary during the progress of work, shall be documented by a supplemental agreement. The city manager is authorized to enter into and execute, for and on behalf of the city, supplemental agreements for professional service contracts in the amount up to $50,000 or 10 percent of the overall contract price, whichever is greater. (Ord. 1746 § 1, 2004; Ord. 1642 § 1, 2001; Ord. 1556 § 3, 1999)
2.68.070 City attorney authority.
A. The city attorney is authorized to enter into and execute for and on behalf of the city, without the prior approval of the city council, a contract:
1. Which contains a maximum compensation figure of $50,000 or less. As to a change order, the limit of authority is 100 percent of the original contract, not to exceed a cumulative amount of $50,000; and
2. The object or purpose of which is related to the activities or functions of the office of the city attorney; and
3. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract; and
4. Which is for consultant or professional services, or for books, periodicals or other legal reference materials.
B. The city attorney is authorized to (1) appoint and retain outside legal counsel to defend lawsuits against the city; and (2) agree to the settlement of litigation against the city for an amount not to exceed $50,000, without prior approval of the city council. A legal settlement in excess of $10,000 requires the concurrence of the city manager. (Ord. 1556 § 3, 1999)
2.68.075 Assistant city manager authority.
A. The city assistant city manager is authorized to enter into and execute for and on behalf of the city, without the prior approval of the city manager or city council, a contract for the purchase of general services or supplies and equipment:
1. Which contains a maximum compensation amount of $50,000. As to a change order, the limit of authority is 100 percent of the original contract, not to exceed a cumulative additional amount of $50,000; and
2. For which moneys have been appropriated and for which there is unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.
B. The assistant city manager, with approval of the city manager, may delegate in writing any city department head to purchase or contract for specified supplies, services and equipment as long as such purchases or contracts are made in conformity with the procedures established by this chapter. (Ord. 1746 § 3, 2004)
2.68.080 Finance director authority.
A. The city finance director is authorized to enter into and execute for and on behalf of the city, without the prior approval of the city manager or city council, a contract for the purchase of general services or supplies and equipment:
1. Which contains a maximum compensation amount of $25,000. As to a change order, the limit of authority is 100 percent of the original contract, not to exceed a cumulative additional amount of $25,000; and
2. For which moneys have been appropriated and for which there is unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.
B. The finance director, with approval of the city manager, may delegate in writing any city department head to purchase or contract for specified supplies, services and equipment as long as such purchases or contracts are made in conformity with the procedures established by this chapter. (Ord. 1556 § 3, 1999)
2.68.090 Public works director and community development director authority.
A. The public works director and the community development director are authorized to enter into and sign for and on behalf of the city, without the prior approval of the city council or the city manager, a contract:
1. Which does not exceed $25,000. As to a change order, the limit of authority is 100 percent of the original contract, not to exceed a cumulative additional amount of $25,000; and
2. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract; and
3. Which is for consultant or professional services; or
4. Which is any one of the following:
a. Is required as a condition of approval by the city council or the planning commission; or
b. The consideration to be paid by the city is to be reimbursed in full by an applicant for a land use permit; or
c. Is between the city and a public utility for work to be done for the city on property that is the direct concern to both the city and the public utility and, in addition, in the director’s opinion, can be best or better performed, or more efficiently or expeditiously performed, or performed with less inconvenience to the public, or be more inexpensively performed, or be more safely performed, by the public utility than by others.
B. In addition to the authority in subsection A of this section, the public works director and community development director are authorized to enter into and execute, for and on behalf of the city, a contract for a public project which does not exceed $5,000.
C. In addition to the authority in subsection A of this section, alterations, deviations, additions or deletions from the original scope of work for a professional services contract, which are determined by the city to be necessary during the progress of work, shall be documented by a supplemental agreement. The community development director and public works director or their designee may authorize supplemental agreements to the professional services contract not exceeding $25,000. (Ord. 1780 § 1, 2005; Ord. 1642 § 2, 2001; Ord. 1556 § 3, 1999)
2.68.100 City librarian authority.
The city librarian is authorized to enter into and execute for and on behalf of the city contracts to purchase library books, tapes, periodicals, and other information delivery formats (such as microfilm, CD-ROM, online information) in accordance with the budget approved by the city council, as long as sufficient unencumbered funds exist to pay the expense. (Ord. 1556 § 3, 1999)
Article III. Supplies, Equipment and General Services
2.68.340 Purchases of general services or supplies and equipment for $5,000 or less.
For purchases of general services or supplies and equipment for $5,000 or less, additional purchasing procedures shall be established by an administrative regulation of the city manager. (Ord. 1556 § 3, 1999)
2.68.350 Purchases of general services or supplies and equipment for between $5,000 and $50,000.
A. Quotation Requirement. The purchase of supplies, equipment and general services of a value from $5,000 to $50,000 may be made by the finance director in the open market, following the procedure prescribed in this article.
1. Minimum Number of Quotations. Open-market purchases shall, whenever possible, be based on at least three quotations.
2. Notice Inviting Quotations. The finance director shall solicit quotations by written request (including facsimile or electronic mail) or telephone to prospective vendors.
3. Quotations. Quotations shall be submitted to the finance director, who shall keep a record of all open-market orders and quotes for a period of one year after the submission of quotes or placing of orders. This record is open to public inspection. For a purchase of up to $15,000, the quotations may be verbal or written. For a purchase in an amount over $15,000 to $50,000, the quotations shall be written (including facsimile and electronic mail).
4. No Responsive Bid. If no bid, or no responsive bid, is received after inviting quotations under this section, the finance director or city manager may proceed to hire or have services performed or purchase the supplies in the open market.
5. Award of Contract. The finance director is authorized to award a contract for $25,000 or less when the city council has budgeted funds for the item(s) and the amount of the award is not more than the quoted amount. The city manager is authorized to award a contract for $50,000 or less when the city council has budgeted funds for the item(s) and the amount of the award is not more than the quoted amount. Under this section, a contract shall be awarded to the quotation representing the best value as defined in LMC 2.68.040. The basis upon which the award is made shall be in writing.
B. Exceptions. The quotation procedure under this section may be dispensed with:
1. In an emergency as defined in LMC 2.68.040;
2. Where it is determined that supplies and equipment are unique and available only from one source, so that the quotation procedure required by this section would be meaningless. The basis upon which this determination is made shall be in writing;
3. Where supplies and equipment are purchased through a cooperative purchasing arrangement pursuant to LMC 2.68.380;
4. Where supplies and equipment are purchased through competitive or noncompetitive negotiations pursuant to LMC 2.68.370. (Ord. 1637 § 2, 2001; Ord. 1578 § 1, 2000; Ord. 1556 § 3, 1999)
2.68.360 Purchases of general services or supplies and equipment for more than $50,000.
A. Bidding Requirement. The finance director shall purchase supplies, equipment and general services of a value greater than $50,000 following the formal bid procedure prescribed in this section.
1. Notice Inviting Bids. The notice inviting bids shall include a general description of the articles or general services to be purchased, and shall state where bid forms and specifications may be secured, and the final time and place for submitting bids.
a. Published Notice. The notice inviting bids shall be published at least 10 days before the date of opening of the bids. Notice shall be published at least once in a newspaper of general circulation, printed and published locally.
b. Bidders’ List. The finance director shall also solicit sealed bids from responsible prospective suppliers whose names are on the bidders’ list.
2. Bidders’ Security. When deemed necessary, the finance director shall require bidders’ security. Bidders are entitled to the return of bid security upon execution of the contract or upon the readvertisement for bids; provided, that a successful bidder forfeits his bid security upon refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed, unless the city is responsible for the delay.
3. Bid Opening Procedure. Bidders shall submit sealed bids to the finance director, and shall identify them as bids on the envelope. A tabulation of all bids received shall be open for public inspec-tion during regular business hours for a period of not less than 30 calendar days after the bid opening.
4. Rejection of Bids. In their discretion, the city manger or city council may reject any and all bids presented, and may readvertise for bids.
5. No Responsive Bid. If no bid, or no responsive bid, is received after inviting bids under this section, the finance director or city manager may proceed to hire or have services performed or purchase the supplies in the open market.
6. Award of Contract. The city manager shall award a contract for the purchase of supplies, equipment or general services of a value of $100,000 or less. The city council shall award a contract for the purchase of supplies or equipment or general services of a value greater than $100,000. Under this section, a contract shall be awarded to the bid representing the best value as defined in LMC 2.68.040. The basis upon which the award is made shall be in writing.
7. Performance Bonds. The finance director has the authority to require a performance bond before entering a contract, in such amount as is reasonably necessary to protect the best interests of the city. If the finance director requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids.
B. Exceptions. The bidding procedure under this section may be dispensed with:
1. In an emergency as defined in LMC 2.68.040;
2. Where it is determined that the supplies and equipment are unique and available only from one source, so that the bidding required by this section would be meaningless. The basis upon which this determination is made shall be in writing;
3. Where supplies and equipment are purchased through a cooperative purchasing arrangement pursuant to LMC 2.68.380;
4. Where supplies and equipment are purchased through competitive or noncompetitive negotiations pursuant to LMC 2.68.370.
C. It is unlawful to split into smaller orders the purchase of supplies, equipment or general services for the purpose of evading the competitive bidding provisions of this section. (Ord. 1746 § 2, 2004; Ord. 1637 § 3, 2001; Ord. 1578 § 2, 2000; Ord. 1556 § 3, 1999)
2.68.370 Negotiated purchases.
A. Applicability. A purchase may be had by negotiations when the purchase is for:
1. A technology product, as defined in LMC 2.68.040;
2. An addition to, or repair or maintenance of, existing equipment which can be more efficiently added to, repaired or maintained by a particular company or manufacturer;
3. Equipment which must be compatible with existing equipment, by reason of the training of the personnel or an inventory of existing replacement parts kept by the city;
4. Public art (which may or may not also fall within the “sole source” exception);
The affected department head shall state in writing the basis for a determination that this section applies. Before any purchase is made, that determination and the method of negotiation (competitive or noncompetitive) must first be approved by (1) the city manager, when the purchase involves $25,000 or more, or (2) the finance director, when the purchase involves less than $25,000.
B. Method of Negotiation. When a negotiated purchase is approved under subsection A of this section, the purchase may be made by either (1) competitive negotiation following a request for proposals or (2) noncompetitive negotiation.
C. Competitive Negotiation Following a Request for Proposals.
1. Request for Proposals. Under this method, proposals are requested from a number of sources and the request for proposals is publicized. The request for proposals must identify all the significant evaluation factors, including price or cost and their relative importance. Proposals must be solicited from an adequate number of qualified sources to permit reasonable competition.
2. Receipt of Proposals. Sealed proposals must be submitted by the date and time specified on the prescribed forms and shall be identified by the Request-for-Proposal number.
3. Negotiation. The most qualified and responsive offeror will be selected for contract negotiation. If agreement cannot be reached with the first choice offeror, the second choice offeror (and then the third, and so on) will be contacted, with the first choice offeror (or other offerors, in order) dismissed from further consideration on that particular project. All elements of the negotiation process shall be documented by the negotiating department and submitted to the finance director. Responsible offerors shall be accorded fair and equal treatment with respect to opportunity for discussion and revision of proposals. Any revisions are permitted after submission in writing and prior to the award of a contract.
4. Award and Notification. An award may be made to the responsible offeror whose proposal will be the best value to the city, as defined in LMC 2.68.040. All offerors participating in the process shall be notified in writing on the terms and conditions of the successful award.
D. Noncompetitive Negotiations. When there is only one source, purchase can be made through solicitation and negotiation directly with that source. The affected department head shall state in writing the basis for the determination that this subsection applies, and before any purchase is made, that determination must be approved in writing by the city manager (for $25,000 or more) or the finance director (for less than $25,000). (Ord. 1637 § 4, 2001)
2.68.380 Purchases of supplies and equipment through cooperative purchasing arrangements.
The finance director may purchase supplies and equipment without complying with the quotation or bidding requirements of this chapter, if such purchases are based on an agreement or cooperative purchasing program entered into by any of the following public agencies, regardless of whether the city is a named party to the agreement or an actual participant in such a program:
A. Any public agency situated within the state, if the underlying purchase was made using quotation or bid procedure at least as restrictive as the city’s;
B. The California Multiple Award Schedules (CMAS), the California Communities Purchasing Program, the County of Los Angeles, the County of Alameda, the County of Contra Costa;
C. The U.S. Communities Government Purchasing Alliance or the Federal GSA Contracts.
In all such cases, the supplies and equipment purchased must be the same and be offered at the same price as the supplies and equipment subject to the agreement or program, except that (1) up to 10 percent variation is allowed for customizing the order or for desirable options, and (2) in addition, a cost of living adjustment (using San Francisco-Oakland-San Jose Consumer Price Index – Urban, All Items) can be added for up to three years. (Ord. 1637 § 5, 2001; Ord. 1556 § 3, 1999. Formerly 2.68.410.)
2.68.390 Equipment leasing.
A. Leasing of purchasable or nonpurchasable equipment shall be in accordance with LMC 2.68.340, 2.68.350 or 2.68.360, depending upon the cost of an annual lease.
B. Each contract for the leasing or rental of equipment for the city shall contain a provision permitting the city to terminate the contract at the end of any fiscal year during the term of the contract upon not less than 30 days’ written notice to the other party. (Ord. 1556 § 3, 1999)
2.68.400 Inspection and testing.
The finance director may inspect supplies, equipment and general services delivered, and determine their conformance with the specifications set forth in the order or contract. The finance director has 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. (Ord. 1556 § 3, 1999)
2.68.410 Purchases of supplies and equipment through cooperative purchasing arrangements.
Repealed by Ord. 1637. (Ord. 1556 § 3, 1999)
2.68.420 Surplus supplies and equipment.
Each department shall submit to the finance director, at such times and in such forms as the director prescribes, reports showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The finance director has the authority to sell or otherwise dispose of all supplies and equipment which cannot be used by any department or which have become unsuitable for city use, or to exchange the same for or trade the same in on new supplies and equipment.
Disposition may include abandonment, destruction or donation to public bodies, charitable, civic or nonprofit organizations and may include city property which has no commercial value or for which the estimated cost of continued care, handling, maintenance or storage would exceed the estimated proceeds of sale. Sales procedures may include negotiated sales, acceptance of sealed bids or public auction. Services of a paid auctioneer may be used, as appropriate. City manager approval is needed for disposition of supplies and/or equipment when the total estimated value exceeds $5,000. The finance director also has the authority to make transfers between departments of any usable surplus supplies or equipment. (Ord. 1556 § 3, 1999)
Article IV. Public Projects
2.68.500 Bidding requirement.
When the expenditure required for a public project exceeds $5,000, it shall be contracted for and let to the lowest responsible bidder after notice. Each public project which exceeds $5,000 is subject to the procedural requirements of the California Public Contract Code. Bids for public projects shall be opened in public at the time and place stated in the public notices. It is unlawful to split or separate a public project into smaller work orders to evade the Public Contract Code requirements. (Ord. 1578 § 3, 2000; Ord. 1556 § 3, 1999)
2.68.520 Exceptions.
Bidding required by LMC 2.68.500 may be dispensed with:
A. In an emergency as defined in LMC 2.68.040, pursuant to the procedures contained in the Public Contract Code; or
B. Where it is determined that the supplies and equipment are unique and available only from one source, so that the bidding requirement required by this section would be meaningless. The basis upon which this determination is made shall be in writing. (Ord. 1556 § 3, 1999)
2.68.530 Modification of public project contracts.
Alterations, deviations, additions or deletions from the original scope of work for public works projects, which are determined by the city to be necessary during the progress of work, shall be documented by written change orders.
A. The community development director and public works director or their designee may authorize change orders not exceeding $25,000.
B. The city manager may authorize change orders not exceeding $50,000 or 10 percent of the overall contract price, whichever is greater.
C. The cost of each change order shall be determined by a fair and reasonable valuation, agreed to in writing by the community development director or public works director or their designees, and an authorized representative of the contractor, and shall be added to or deducted from the contract price.
D. In the event the city and the contractor are unable to agree upon the cost of a change order, the contractor will be paid the actual costs for labor, materials and equipment used in performing the work plus a mark-up as set forth in the contract. (Ord. 1780 § 1, 2005; Ord. 1642 § 3, 2001)