Chapter 3.20
PURCHASING POLICY
Sections:
3.20.010 Purpose.
3.20.020 Exemptions.
3.20.030 Definitions.
3.20.040 Authority of city administrator.
3.20.050 General policy.
3.20.060 Purchases not requiring sealed bids.
3.20.070 Purchases requiring sealed bids.
3.20.080 Requirements for bids.
3.20.090 Award of contract.
3.20.100 Rejection of bids.
3.20.110 Disqualification of bidders.
3.20.120 Prequalification of bidders.
3.20.130 Appeals procedure.
3.20.140 Accounts payable.
3.20.150 Cancellation and rejection of bids.
3.20.160 Cost-plus-a-percentage-of-cost profit contracts prohibited.
3.20.170 Required contract clauses.
3.20.180 Appeals.
3.20.190 Conflicts prohibited.
3.20.010 Purpose.
The underlying purpose of this chapter is:
A. To ensure that purchases and services contracted for the city are in the best interest of the public and to assure fair and equitable treatment of all persons who wish to or do conduct business with the city.
B. To provide for the greatest possible economy in procurement activities for the city.
C. To foster effective broad-based competition within the free enterprise system to ensure that the city will receive the best possible service or product at the lowest possible price.
D. To provide a systematic and uniform method of purchasing goods and services for the city. [Ord. O-24-2002 § 2].
3.20.020 Exemptions.
The following transactions are exempt from the competitive bidding requirements of this chapter. The city administrator shall determine whether or not a particular contract or purchase is exempt under the following criteria:
A. This chapter shall not prevent the city from complying with the terms and conditions of any grant, gift, or bequest that is otherwise consistent with law.
B. When a procurement involves the expenditure of federal assistance funds, the city shall comply with applicable federal law and regulations, when required to do so, to achieve the goal of the use of the desired funds.
C. Emergency contracts which require prompt execution of the contract because of an imminent threat to the safety or welfare of the public, or public or private property; circumstances which place the city or its officers and agents in a position of serious legal liability; or circumstances which are likely to cause the city to suffer financial harm or loss, the gravity of which clearly outweighs the benefits of competitive bidding in the usual manner. The city council shall be notified of any emergency contract which would have normally required their approval as soon as reasonably possible.
D. Projects which are acquired, expanded, or improved under the Municipal Buildings Authority Act are not subject to competitive bidding requirements.
E. Purchases from vendors who are a sole source of the goods or services under procurement.
F. Purchases from state or local surplus property agencies or entities or purchases from entities under state-awarded equipment contracts. [Ord. O-24-2002 § 3].
3.20.030 Definitions.
“Business” means any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture, or any other private legal entity.
“Change order” means a written order signed by the city administrator, directing the contractor to suspend work or make changes, which the appropriate clauses of the contract authorize the city administrator to order without the consent of the contractor or any written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of any contract accomplished by mutual action of the parties to the contract.
“City” means Eagle Mountain City and all other reporting entities controlled by or financially dependent upon the city council.
“City administrator” means the city administrator of Eagle Mountain City or an agent of the city administrator designated to perform the functions of the city administrator described in this chapter.
“Contract” means an agreement for the delivery or disposal of supplies, services, or construction over a period of time greater than 15 days.
“Invitation for bids” means all documents, whether attached or incorporated by reference, used for soliciting bids.
“Person” means any business, individual, union, committee, club, other organization, or group of individuals.
“Procurement” means buying, purchasing, renting, leasing, leasing with an option to purchase, or otherwise acquiring any supplies, services, or construction.
“Public improvement” means projects for construction, reconstruction or major renovation on real property (building or public work) by or for a public agency. “Public improvement” does not include emergency work, minor alteration, ordinary repair or maintenance necessary to preserve a public improvement (such as lowering or repairing water mains; making connections with water mains; grading, repairing, or maintaining streets, sidewalks, bridges, culverts or conduits).
“Purchase” means the acquisition of goods (supplies, equipment, etc.) in a single transaction such that payment is made prior to receiving or upon receipt of the goods.
“Purchase description” means the words used in a solicitation to describe the supplies or services to be acquired, and includes specifications attached to or made a part of the solicitation.
“Request for proposals” means all documents, whether attached or incorporated by reference, used for soliciting proposals.
“Sealed bids” means written proposals from persons or entities offering to contract with or to sell to the city which are received in sealed envelopes to be opened after the deadline for receipt of bids as defined in an invitation to bid. [Ord. O-24-2002 § 4].
3.20.040 Authority of city administrator.
The city administrator or a person designated by the city administrator shall be responsible for the following:
A. Ensure that all purchases for services comply with this chapter;
B. Review and approve all purchases of the city;
C. Establish necessary additional procedures for the efficient and economical management of the contracting and purchasing functions authorized by this chapter. Such procedures shall be in writing and on file in the office of the city administrator as a public record;
D. Maintain accurate and sufficient records concerning all city purchases and contracts for services;
E. Maintain a list of contractors for public improvements and personal services who have made themselves known to the city and are interested in soliciting city business;
F. Make recommendations to the city council concerning amendments to this chapter. [Ord. O-24-2002 § 5].
3.20.050 General policy.
A. All city purchases and contracts for goods and services shall be subject to this chapter.
B. No contract or purchase shall be so arranged, fragmented or divided with the purpose or intent to circumvent this chapter.
C. No purchase shall be contracted for, or made, unless sufficient funds have been budgeted in the years in which the funds are to be expended.
D. All reasonable attempts shall be made to publicize anticipated purchases or contracts in excess of $10,000 to known vendors, contractors and suppliers.
E. When it is advantageous to the city, annual contracts for services and supplies regularly purchased should be approved.
F. All purchases and contracts must be approved by the city administrator unless otherwise specified in this chapter.
G. All contracts for services shall be approved as to form by the city attorney.
H. The following purchases require city council approval unless otherwise exempted in this chapter:
1. All contracts (as defined) over $20,000.
2. All contracts and purchases awarded through the formal bidding process.
3. Any item over $10,000 which is not anticipated in the current budget.
4. Accumulated “change orders” which would increase a previously approved contract by $5,000 or more, taking into consideration all previously approved change orders to the contract under consideration.
I. Acquisition of the following specific items must be awarded through the formal sealed bid process:
1. All contracts for public improvements over the amount specified by state law (currently $25,000).
2. Contracts for grading, clearing, demolition or construction in excess of the amount specified by state law (currently $2,500) undertaken by the community redevelopment agency.
J. Purchases of materials, supplies and services are those items regularly purchased and consumed by the city. These items include, but are not limited to, office supplies, janitorial supplies, maintenance contracts for repairs to equipment, asphalt, printing services, postage, fertilizers, pipes, fittings and uniforms. These items are normally budgeted within the operating budgets. Purchases of this type do not require formal competitive quotations or bids.
K. Capital assets are equipment-type items which are normally included in a fixed asset accounting system having a material life of three years or more and which cost in excess of $5,000. Capital assets are normally budgeted within the normal annual budgets. Purchases of capital assets in amounts less than $20,000 under this subsection do not require formal bids. All reasonable attempts shall be made to obtain at least three written quotations on all purchases of capital assets and the provisions of EMMC 3.20.060(B) shall apply.
L. Contracts for professional services are usually contracts for services performed by an independent contractor in a professional capacity who produces a service predominately of an intangible nature. These include, but are not limited to, the services of an attorney, physician, engineer, accountant, architectural consultant, dentist, artist, appraiser or photographer.
Professional service contracts are exempt from competitive bidding. The selection of personal service contracts shall be based on an evaluation of the services needed, the abilities of the contractors, the uniqueness of the service and the general performance of the contractor. The lowest quote need not necessarily be the successful contractor. Usually, emphasis will be placed on quality, with cost being the deciding factor when everything else is equal. The administrator shall determine which contracts are personal service contracts. Major personal service contracts for single projects ($20,000 and over) must be approved by the city council.
M. Contracts for public improvements are usually those contracts for the construction or major repair of roads, highways, parks, water lines and systems, buildings and building additions. Where a question arises as to whether or not a contract is for public improvement, the administrator shall make the determination.
Minor public improvements (less than the amount specified by state law): The department shall make a reasonable attempt to obtain at least three written competitive quotations. A written record of the source and the amount of the quotations must be kept. The administrator may require formal bidding if it is deemed to be in the best interest of the city.
Major public improvements (greater than or equal to the amount specified by state law): Unless otherwise exempted, all contracts of this type require competitive bidding. [Ord. O-24-2002 § 6].
3.20.060 Purchases not requiring sealed bids.
A. Expenditures of less than $1,000 in total shall not require bids of any type, but are subject to the general policy in this chapter. (Purchases shall not be artificially divided so as to constitute a small purchase under this section.)
B. Expenditures of more than $1,000 but less than $25,000 in total shall require three documented price quotes.
C. Purchases made through the cooperative purchasing contracts administered by the State Division of Purchasing. [Ord. O-24-2002 § 7].
3.20.070 Purchases requiring sealed bids.
A. Bids for purchases exceeding $25,000.
B. Bids shall be unconditionally accepted without alteration or correction except as authorized in this chapter. Bids shall be evaluated based on the requirements set forth in the invitation for bids.
C. Bid Specifications. Specifications for public contracts shall not expressly or implicitly require any product by any brand name or make, nor the product of any particular manufacturer or seller, unless the product is exempt by these regulations or the city council.
D. Advertising Requirements. An advertisement for bids is to be published at least twice in a newspaper of general circulation, in the city, and in as many additional issues and publications as the city administrator may determine, at least five days prior to the opening of bids.
E. All advertisements for bids shall state:
1. The date and time after which bids will not be accepted;
2. The date that prequalification applications must be filed, and the class or classes of work for which bidders must be prequalified if prequalification is a requirement;
3. The character of the work to be done or the materials or things to be purchased;
4. The office where the specifications for the work, material or things may be seen;
5. The name and title of the person designated for receipt of bids;
6. The type and amount of bid security if required;
7. The date, time and place that the bids will be publicly opened. [Ord. O-24-2002 § 8].
3.20.080 Requirements for bids.
All bids made to the city shall be:
A. In writing;
B. Filed with the city administrator;
C. Opened publicly by the city administrator at the time designated in the advertisement and filed for public inspection;
D. Have the appropriate bid security attached, if required by the specifications for the project. [Ord. O-24-2002 § 9].
3.20.090 Award of contract.
After bids are opened, and a determination made that a contract be awarded, the award shall be made to the lowest responsible bidder. “Lowest responsible bidder” shall mean the lowest bidder who has substantially complied with all prescribed requirements, has submitted the bid in good faith, has a history of fully performing work at the bid price, and who has not been disqualified as set forth herein.
The successful bidder shall promptly execute a formal contract and, if required, deliver a performance and payment bond to the city in a sum equal to the contract price, together with proof of appropriate insurance. Upon execution of the contract, bond, and insurance, bid security shall be returned. Failure to execute the contract, bond, or insurance shall be cause to forfeit the bid security. [Ord. O-24-2002 § 10].
3.20.100 Rejection of bids.
The city administrator or the city council may reject any bid not in compliance with all prescribed requirements, and reject all bids if rejection of all bids is determined to be in the best interest of the city. [Ord. O-24-2002 § 11].
3.20.110 Disqualification of bidders.
The city administrator, upon investigation, may disqualify a bidder if:
A. The bidder does not have sufficient financial ability to perform the contract;
B. The bidder does not have equipment available to perform the contract;
C. The bidder does not have key personnel available, of sufficient experience, to perform the contract;
D. The person has repeatedly breached contractual obligations with public and private agencies;
E. The bidder fails to comply with the requests of an investigation by the city administrator. [Ord. O-24-2002 § 12].
3.20.120 Prequalification of bidders.
The city may require prequalification of bidders.
A. Upon establishment of the applicant’s qualifications, the city administrator shall issue a qualification statement. The statement shall inform the applicant of the project for which the qualification is valid, as well as any other conditions which may be imposed on the qualification. It shall advise the applicant to notify the city administrator promptly if there has been any substantial change of conditions or circumstances which would make any statement contained in the prequalification application no longer applicable or untrue.
B. If the city administrator does not qualify an applicant, written notice to the applicant is required stating the reasons the prequalification was denied and informing the applicant of the right to appeal the decision within five business days after receipt of the notice. Appeals shall be made to the city council. The city administrator may, upon discovering that a prequalified party is no longer qualified, revoke prequalification by sending notification of the revocation to the party subject to the revocation. The notice shall state the reason(s) for revocation, and that the revocation will be effective immediately. [Ord. O-24-2002 § 13].
3.20.130 Appeals procedure.
Any supplier, vendor, or contractor subject to an adverse procurement decision by the city, in violation of this chapter, may appeal that decision to the city council.
A. The complainant shall promptly file a written appeal letter, with the city administrator, within five working days from the time the alleged incident occurred. The letter of appeal shall state all relevant facts of the matter and the remedy sought.
B. Upon receipt of the notice of appeal, the city administrator shall forward, to the city council, the appeal notice, his investigation of the matter and any other relevant information.
C. The city council shall conduct a hearing on the matter and provide the complainant an opportunity to be heard. A written decision shall be sent to the complainant. [Ord. O-24-2002 § 14].
3.20.140 Accounts payable.
The city’s finance director will be responsible for establishing a system/process for the accurate and timely processing of all disbursements of city funds with emphasis on taking advantage of discounts when available and avoidance of late charges. The city council will be provided a check register detailing all checks issued by the city’s accounts payable once a month at the first council meeting of the month for the preceding month. [Ord. O-24-2002 § 15].
3.20.150 Cancellation and rejection of bids.
A. An invitation for bids, a request for proposals, or other solicitation may be canceled, or any or all bids or proposals may be rejected, in whole or in part, as may be specified in the solicitation, when it is in the best interest of the city; the reasons for cancellation or rejection shall be made part of the contract file.
B. Bids will not be invited or solicited from and contracts will not be concluded or made with persons or entities controlled by, or in which persons have a financial interest who are elected officials of the city, employees, or persons under professional services contracts with the city or members of the immediate family of such elected officials, employees or consultants, or other persons or entities which violate other provisions of law; the city shall not contract for professional services with any person or entity which provides professional services to any person or entity engaged in development in the city or otherwise contracting with the city for goods and/or services. [Ord. O-24-2002 § 16].
3.20.160 Cost-plus-a-percentage-of-cost profit contracts prohibited.
Subject to the limitations of this section, any type of contract which will promote the best interests of the city may be used; provided, that the use of a cost-plus-a-percentage-of-cost profit contract is prohibited unless specifically approved by the city council under special circumstances which clearly justify the use of such contracts because the scope of work or the nature of the work is to be closely supervised by the city and the city council so finds in writing. A cost-reimbursement contract may be used only when a determination is made in writing that such contract is likely to be less costly to the city than any other type or that it is impracticable to obtain the supplies, services, or construction required except under such a contract. [Ord. O-24-2002 § 17].
3.20.170 Required contract clauses.
A. The unilateral right of the city to order, in writing, changes in the work within the scope of the contract and changes in the time of performance of the contract that do not alter the scope of the contract work.
B. Variations occurring between estimated quantities of work in a contract and actual quantities.
C. Suspension of work ordered by the city.
D. Requirements for performance bonds and labor and material payment bonds as required by law for construction projects.
E. Other provisions required for compliance with federal or state law.
F. All specifications shall seek to promote overall economy and best use for the purposes intended and encourage competition in satisfying the needs of the city and shall not be unduly restrictive. Where practical and reasonable, and within the scope of this chapter, Utah products shall be given preference as required by Utah law. [Ord. O-24-2002 § 18].
3.20.180 Appeals.
The city council shall be the final appeal entity on the city level. [Ord. O-24-2002 § 20].
3.20.190 Conflicts prohibited.
No person involved in making procurement decisions may have personal investments or derive any income from any business entity which may create a conflict between their private interests and their public duties. [Ord. O-24-2002 § 21].