Chapter 3.08 CENTRALIZED PURCHASING

Chapter 3.08
CENTRALIZED PURCHASING

Sections:

3.08.010 Adoption of centralized purchasing system.

3.08.020 Definitions.

3.08.030 Chief Procurement Officer.

3.08.040 Delegation to other departments.

3.08.050 Requisitions.

3.08.060 Exceptions to competitive procurement requirements.

3.08.070 Cooperative purchasing authorized.

3.08.080 Negotiated contract procurement – Direct select.

3.08.090 Vendors list.

3.08.100 Open market procurement (informal bidding).

3.08.110 Procurement by formal sealed bid.

3.08.120 Written contracts required.

3.08.130 Funding of purchases.

3.08.140 Approval of purchase orders or contracts.

3.08.150 Approval of change orders by City Manager.

3.08.160 Public projects – Informal and formal bidding procedures.

3.08.170 Uniform cost accounting procedures.

Prior legislation: Ords. 415 § 1, 779, 805, 837, 991, 1121, 1309 and 1310.

3.08.010 Adoption of centralized purchasing system.

In order to establish efficient procedures for the purchase of services, supplies and equipment, to secure for the City services, supplies and equipment at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority of the purchasing function and to assure the quality of purchases, a centralized purchasing system is adopted. (Ord. 1347 § 1, 2008)

3.08.020 Definitions.

As used in this chapter, unless the context otherwise clearly indicates:

(A) “Contract” means a written agreement between the City and a vendor, including a purchase order issued to a vendor.

(B) “Chief Procurement Officer” means the person appointed by the Director of Finance to manage the City’s central purchasing office to procure goods, services and equipment for the City.

(C) “Using agency” means any office, department, bureau, commission, board or other agency of the City using services, supplies or equipment. (Ord. 1347 § 1, 2008)

3.08.030 Chief Procurement Officer.

The Chief Procurement Officer shall be appointed by the Director of Finance, who may combine those duties with the duties of any other office or position. Except as specifically exempted herein, the Chief Procurement Officer shall have authority to:

(A) Purchase and contract for all services, supplies and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, such administrative regulations as the Chief Procurement Officer shall adopt, and such other rules and regulations as shall be prescribed by the Director of Finance or the City Manager;

(B) Negotiate and recommend execution of contracts for the purchase of services, supplies and equipment;

(D) Discourage collusive bidding and endeavor to obtain as full and open competition as possible on all purchases;

(E) Prepare and recommend to the Director of Finance, rules governing purchasing, maintaining an inventory, and warehousing of services, supplies and equipment of the City;

(F) Keep informed of current developments in the fields of purchasing, prices, market conditions and new products;

(G) Prescribe and maintain such forms as are reasonably necessary to the operation of this chapter and other rules and regulations;

(H) Be responsible for the inspection of all services, supplies and equipment purchased to ensure conformance with specifications, and, where necessary, to require chemical and physical tests of samples submitted with bids and samples of deliveries to determine their quality and conformance with specifications;

(I) Recommend the transfer of surplus or unused supplies and equipment between City departments as needed and the sale or other disposition of all supplies and equipment which cannot be used by any using agency or which have become obsolete or otherwise unsuitable for City use;

(J) Maintain a bidder’s list, vendors catalog file and records needed for the efficient operation of the Central Purchasing Office and as required by state law;

(K) Perform such other duties and functions as may be assigned by the Director of Finance. (Ord. 1347 § 1, 2008)

3.08.040 Delegation to other departments.

(A) The Chief Procurement Officer, with approval of the Director of Finance, may authorize, in writing, any using agency to purchase and contract for specified services, supplies and equipment independently of the Central Purchasing Office; but the Chief Procurement Officer shall require that such purchases and contracts be made in conformity with the procedures established by this chapter, and shall further require periodic reports from the using agency on the purchases and contracts made under such written authorization.

(B) Contracts to implement the capital improvement program and for construction services for public projects as defined in Public Contract Code Section 20161 shall be procured by the Director of Public Works/designee in cooperation with the Chief Procurement Officer and in compliance with the requirements of this chapter and state law. For contracts to be procured by the Public Works Department, the references in this chapter to Chief Procurement Officer shall mean the Director of Public Works/designee, unless by mutual agreement between the departments, the Chief Procurement Officer agrees to perform such tasks. (Ord. 1347 § 1, 2008)

3.08.050 Requisitions.

Using agencies shall submit requests for services, supplies and equipment (other than construction-related requests covered by PMC 3.08.040) to the Chief Procurement Officer using standard purchase requisition forms. (Ord. 1347 § 1, 2008)

3.08.060 Exceptions to competitive procurement requirements.

(A) Professional Services. The procurement of services from professional classifications, without regard to the dollar amount of the contract, is exempt from the competitive process, but shall be selected based on qualifications. Such professional classes shall include, but not be limited to: engineers, management services for construction projects, architects, geologists, hydrologists, land surveyors, landscape architects and assayers, real estate appraisers, licensed environmental assessors and ecologists, accountants and financial services, actuaries, personnel and insurance consultants; psychologists, medical doctors, entertainers and performers, claims consultants and attorneys-at-law.

(B) Sole Source. A purchase may be made or contract awarded without competition when the Director of Finance determines that there is only one reasonable and practicable source for the required goods, equipment or service because of its uniqueness, quality, durability, availability, or fitness for a particular use.

(C) City’s Best Interest. Except where competitive bidding is required by state law, services, supplies and equipment may be procured by negotiated contract and without competition, when the Director of Finance determines that due to the nature of the supplies or equipment, bidding is not likely to serve the best interests of the City or to result in the lowest price.

(D) Emergencies. Emergency procurement means the procurement of services, supplies, materials or equipment which are required to remedy a situation where the health, safety, welfare or quality of welfare of the public or public property is endangered or severely reduced if immediate corrective or preventive action is not taken and the emergency will not permit a delay resulting from a competitive solicitation of bids and that the action is necessary to respond to the emergency. Notwithstanding any other provisions of this chapter, the City Manager, upon finding that there exists an emergency situation as described herein, may authorize the Chief Procurement Officer/designee and/or Public Works Director/designee to make emergency procurements of services, supplies, materials, or equipment; provided, that such emergency procurements shall be made with such competition as is practicable under the circumstances. An emergency procurement shall be limited to those services, supplies, materials or equipment necessary to satisfy the emergency need.

(E) Other. Competitive procurement may be dispensed with in accordance with any other section of this code or state law, which provides such an exemption. (Ord. 1347 § 1, 2008)

3.08.070 Cooperative purchasing authorized.

The Central Purchasing Office may participate in, sponsor, conduct, or administer cooperative purchasing with other public agencies and with nonprofit groups or organizations established by public entities for the purpose of cooperative purchasing; provided, that competitive purchasing procedures similar to those required in the City of Palmdale are employed. Such participation may also consist of the following:

(A) Purchasing supplies, services or equipment through contracts or bid award list of others; provided, that competitive purchasing procedures similar to those required in the City of Palmdale were employed to create such contracts or bid award lists.

(B) Purchasing supplies and equipment through federal programs when authorized by City Council.

3.08.080 Negotiated contract procurement – Direct select.

Services, supplies and equipment valued at $30,000 or less may be procured by negotiated contract and need not be publicly bid but shall be procured at a reasonable price in a manner that best meets the needs of the City. Care shall be taken to avoid the appearance of favoritism, bias or preclusion of new vendors. (Ord. 1347 § 1, 2008)

3.08.090 Vendors list.

The Central Purchasing Office shall develop and maintain a list of qualified vendors and contractors, identified as to categories of the types of services, supplies or equipment for which they are qualified. For construction services, the list shall be developed and maintained in accordance with the provisions of California Public Contract Code Section 22034 and the criteria promulgated from time to time by the California Uniform Cost Accounting Commission. (Ord. 1347 § 1, 2008)

3.08.100 Open market procurement (informal bidding).

Except as otherwise provided herein, services, supplies and equipment valued at more than $30,000 but less than or equal to $125,000 may be procured by the open market procedure described herein.

(A) Notice Requesting Quotations or Informal Bids. At least 10 days prior to the date the contract will be awarded, the Chief Procurement Officer/designee shall mail a notice requesting quotations to those vendors or contractors listed as qualified to provide the required type of service, supplies or equipment. If there are no vendors or contractors on the vendors list qualified to provide services for a public project, the notice shall be sent to the construction trade journals specified by the California Uniform Construction Cost Accounting Commission. The notice shall generally describe the service, supplies or equipment being sought, describe how to obtain more detailed information and state the time and place for submission of quotations or informal bids. Quotations and informal bids must be in writing but may be submitted by mail, by fax or electronically.

(B) Minimum Number of Quotations. If fewer than three quotations or informal bids are received, the purchasing officer shall determine whether to use a formal request for bids procurement or to make the award based on less than three quotations because there are fewer than three vendors qualified to provide the services, supplies or equipment.

(D) Quotations and Bids Exceeding $125,000. If all of the quotations or informal bids received exceed $125,000, a contract may be awarded for not more than $137,500 if the City Council determines, by a four-fifths vote, that the City’s cost estimate was reasonable. Otherwise the services, supplies or equipment must be procured through a formal bid procurement.

(E) Records. Quotations shall be submitted to the Chief Procurement Officer who shall keep a record of all open market quotations and contracts for a period of two years after submission of quotations or the execution of contracts. This record, while so kept, shall be open to public inspection, except that vendor proprietary data shall not be open to public inspection. (Ord. 1347 § 1, 2008)

3.08.110 Procurement by formal sealed bid.

Except as otherwise provided herein, purchases of services, supplies and equipment of an estimated dollar value greater than $125,000 shall be procured by a formal invitation for sealed bids and awarded to the lowest responsive, responsible bidder, as set forth herein. In the event there is any conflict between these provisions and the requirements of the Public Contract Code for procurement of construction services for public projects, such state law requirements shall prevail for those projects to which they apply.

(A) Notice Inviting Bids. Notices inviting sealed bids shall include a general description of the articles or services to be purchased, shall state where bid forms and specifications may be obtained, and the time and place for opening bids.

(1) Published Notice. Notice inviting bids shall be published at least 14 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 in the City, or if there is none, it shall be posted in at least three public places in the City that have been designated by ordinance as the places for posting public notices.

(2) Additional Mailed Notice. The Chief Procurement Officer may also mail notice of the invitation to bid to prospective vendors and contractors whose names are on the vendors list. For procurement of construction services for public works projects, the notice shall also be mailed to the construction trade journals as specified by the California Uniform Cost Accounting Commission in accordance with California Public Contract Code Section 22036 at least 30 days before bids are due.

(B) Bidder’s Security. For procurement of construction services for public works projects, bidder’s security in an amount equal to at least 10 percent of the amount of the bid shall be submitted with a bid. When deemed necessary or appropriate by the Chief Procurement Officer for other procurements, bidder’s security in an amount deemed appropriate may also be required. Bidders shall be entitled to return of bid security; provided, that a successful bidder shall forfeit its bid security upon refusal or failure to execute the contract within the time specified in the invitation to bid, unless the City is responsible for the delay. The City may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsive, responsible bidder. If the City awards the contract to the next lowest bidder, the amount of the lowest bidder’s security shall be applied by the City to the difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder.

(C) Bid Opening Procedure. Sealed bids shall be submitted to the Chief Procurement Officer/designee, and shall be identified as bids on the envelope. Bids shall be opened in public at the time and place stated in the public notice. A tabulation of all bids received shall be opened for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening.

(D) Rejection of Bids. Any and all bids may be rejected at the discretion of the City. If the City intends to reject all bids, the Chief Procurement Officer/designee must mail notice of the City’s intent to reject the bid at least two business days prior to the Council meeting at which the bids will be considered. After rejecting all bids, the City may:

(1) Abandon the project;

(2) Re-advertise the project; or

(3) Perform the work with City employees, after passing a resolution by a four-fifths majority vote of the City Council declaring that the project can be performed more economically by City employees.

(E) Award of Contracts. The City shall award a contract to the lowest responsive, responsible bidder, except as otherwise provided herein.

(F) Tie Bids. If two or more bids received from responsible bidders are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay of re-advertising for bids, the City may accept the one it chooses.

(G) Performance Bonds. The Chief Procurement Officer shall have the authority to require a performance and/or a payment bond before entering into a contract in such an amount as may be reasonably necessary to protect the best interests of the City. If a performance and/or a payment bond is required, the form and amount of the bond shall be described in the notice inviting bids.

(H) Whenever the City uses its own employees to perform a public works or maintenance project valued at more than the monetary limit on informal bidding projects described in Public Contract Code Section 22032 (as amended from time to time by the Commission) it must implement the Uniform Construction Cost Accounting Policies and Procedures described in Public Contract Code Section 22042 et seq. and the Commission’s policies and procedures manual. (Ord. 1347 § 1, 2008)

3.08.120 Written contracts required.

Purchases of services, supplies and equipment valued at greater than $2,500 shall be made only by written contract executed by an authorized representative of the City. No verbal agreement greater than such amount shall be binding on the City and no City employee has authority to verbally bind the City of Palmdale to any course of action. Written contracts may include a purchase order or an executed credit card purchase form. (Ord. 1347 § 1, 2008)

3.08.130 Funding of purchases.

The Chief Procurement Officer shall not authorize or issue a written contract for supplies or equipment unless there exists a sufficient unencumbered appropriation in the fund account against which the purchase is to be charged. (Ord. 1347 § 1, 2008)

3.08.140 Approval of purchase orders or contracts.

(A) Except as provided in PMC 3.08.150, the approval authority for all purchase orders or contracts shall be as follows:

(1) The City Manager shall have the authority to review, approve, award and execute, on behalf of the City, all purchase orders or contracts for the purchase of services, equipment or supplies, the retention of professional services, or work on a public project in an amount not exceeding $50,000. The City Manager shall have the authority to approve in writing any change order directing an addition, deletion or revision to such purchase orders or contracts; however, in no event shall the sum total of the purchase order or contract, including all such change orders, exceed $50,000.

(2) All purchase orders or contracts in excess of $50,000, or change orders which cause the total contract or purchase order to exceed $50,000, shall be submitted to the City Council for approval.

(3) The City Manager shall have the authority and discretion to delegate to department directors and division managers such authority as the City Manager deems appropriate up to $25,000 to review, approve and execute contracts, purchase orders, contract amendments and change orders.

(B) The City Manager shall periodically report to the City Council on purchase orders, contracts or change orders which are approved pursuant to this section. (Ord. 1347 § 1, 2008)

3.08.150 Approval of change orders by City Manager.

(A) After the effective date of any contract approved by the City Council for the purchase of services, equipment or supplies, the retention of professional services, or work on a public project, the City Manager shall have authority to approve in writing any amendment or change order directing an addition, deletion or revision in such contract, including, without limitation, plans, specifications, and the nature or quantity of services, equipment, supplies or work, subject to the following limitations:

(1) The cumulative dollar value of all such change orders relating to any one contract having a contract price of $1,000,000 or less shall not exceed 20 percent of the contract price as approved by the City Council.

(2) The dollar value of all such change orders relating to any one contract having a contract price of more than $1,000,000 shall not exceed $200,000.

(3) The City Manager shall periodically report to the City Council on change orders, which are approved pursuant to this section.

(B) Any change order exceeding the limitations set forth in subsection (A) of this section shall be submitted to the City Council for approval in the form of a supplemental agreement. Such supplemental agreement shall set forth the amended contract price which will constitute the new contract price for purposes of the authority for City Manager-approved change orders or amendments in accordance with subsection (A) of this section. (Ord. 1347 § 1, 2008)

3.08.160 Public projects – Informal and formal bidding procedures.

(A) Public projects, as defined by Public Contract Code Section 22002 and in accordance with the monetary limits described in Public Contract Code Section 22032 (as amended from time to time by the California Uniform Construction Cost Accounting Commission) shall be let to contract by procedures described in Public Contract Code Section 22030 et seq.

(B) When the Uniform Public Construction Cost Accounting Act (Public Contract Code Section 22030 et seq.) does not establish a procedure for bidding public projects, the procedures described in Public Contract Code Section 20161 et seq. shall govern. (Ord. 1347 § 1, 2008)

3.08.170 Uniform cost accounting procedures.

Whenever the City uses its own employees to perform a public works or maintenance project valued at more than the monetary limit on informal bidding projects described in Public Contract Code Section 22032 (as amended from time to time by the California Uniform Construction Cost Accounting Commission), it must implement the Uniform Construction Cost Accounting Policies and Procedures described in Public Contract Code Section 22042 et seq. and the California Uniform Construction Cost Accounting Commission’s policies and procedures manual. (Ord. 1347 § 1, 2008)