Chapter 3.08
PURCHASING SYSTEM1
Sections:
3.08.010 Adoption.
3.08.020 Definitions.
3.08.030 Creation of centralized purchasing division.
3.08.040 Purchasing officer.
3.08.050 Exemptions from centralized purchasing.
3.08.060 Requisitions.
3.08.070 Purchase orders.
3.08.080 Encumbrance of funds.
3.08.090 Bidding – Required when.
3.08.100 Bidding – Open market procedure.
3.08.110 Bidding – Procedure.
3.08.120 Preference for local business.
3.08.130 Inspection and testing.
3.08.140 Surplus supplies and equipment.
3.08.010 Adoption.
A purchasing system is adopted in order to establish efficient procedures for the purchase of supplies and equipment, to secure supplies and equipment at the lowest possible cost commensurate with the quality needed, to exercise positive financial control over purchases and to define authority for the purchasing function. (Ord. 03-4).
3.08.020 Definitions.
As used in this chapter, the following terms, phrases, words and their derivations shall be construed as herein stated, or have the meanings given herein:
"Awarding authority" means the city council or person authorized to award the contract and to execute the agreement unless delegated to another person.
"Bidder" means any person submitting a competitive bid in response to a solicitation.
"Bidders’ list" means a list maintained by the purchasing office setting out names and addresses of suppliers of various goods and services, from whom bids, proposals, and quotations can be solicited.
"Bid security" means a guarantee, in the form of a bond or deposit, that the bidder, if awarded the contract, will accept the contract as bid, otherwise the bidder (in the case of a deposit) or his/her guarantor (in the case of a bond) will be liable for the amount of the bond or deposit.
"Contract" means a binding agreement based upon mutual assent of the parties, made for a lawful purpose, between competent parties, in the form required by law, and generally supported by consideration.
"Emergency purchase" means a purchase made without following normal purchasing procedures in order to obtain goods or services to meet an urgent and previously unexpected requirement where health and public safety or the conservation of public resources is at risk.
"Equipment" means personal property of a durable nature that retains its identity throughout its useful life.
"Evaluation of bid" means the process of examining a bid after the opening to determine the bidder’s responsibility, responsiveness to requirements, and to ascertain other characteristics of the bid that relate to determination of the successful bidder.
"Formal bid" or "offer" means a bid that must be submitted in a sealed envelope and in conformance with a prescribed format, to be opened at a specific time.
"Governmental agency" means another governmental body other than the city of Benicia such as a public agency as defined by California Government Code Section 6500 including federal, state, county, city and local government agencies such as school districts and special districts.
"Informal bid" means an unsealed competitive offer conveyed by letter, telephone, facsimile/telegram, or other means and under conditions different from those required of formal bidding.
"Negotiation" means contracting through the use of either competitive or other than competitive proposals and discussions. Any contract/purchase order awarded without using sealed bidding procedures is a negotiated contract/purchase order. Further, negotiation is a procedure that includes the receipt of proposals from offerors, permits bargaining, and usually affords an opportunity to revise offers before award of a contract/purchase order. Bargaining in the sense of discussion, persuasion, alteration of initial assumptions of positions, and give-and-take may apply to price, schedule, technical requirements, type of contract/purchase order, or other terms of a proposed contract/purchase order.
"Payment bond" means a contract of guarantee executed subsequent to award by the successful bidder to satisfy claims of material suppliers and of mechanics and laborers employed under the contract.
"Performance bond" means a contract of guarantee executed subsequent to award by the successful bidder to protect the city from loss due to contractor’s inability to complete the contract as agreed.
"Personal property" means everything that is not real property, is subject to ownership, and has exchange value.
"Purchasing office" means the office at the city occupied by the purchasing agent.
"Responsible bidder or offeror" means a firm/person who has the capability in all aspects to perform, in full, contract requirements, and the integrity and reliability that will assure good faith performance.
"Responsive bidder" means:
1. A firm/person who has submitted a bid that conforms in all material respects to the invitation for request for proposal;
2. One whose bid conforms in all material respects to the terms and conditions, the specifications and other requirements of the invitation for bid/request for proposal.
"Sealed bidding" means a method of contracting that employs competitive bids, public opening of sealed bids and award.
"Sole source procurement" means an award for a commodity or service to the only known capable supplier, occasioned by the unique nature of the requirement, the supplier, or market conditions.
"Supplies" means all property, including, but not limited to, equipment, materials, printing, insurance, and leases of real property, excluding land or permanent interest in land.
"Surplus property" means inventory not needed by the city at the present time or in the foreseeable future. This includes obsolete supplies, equipment, or scrap materials that have completed their useful life. (Ord. 03-4).
3.08.030 Creation of centralized purchasing division.
There is a centralized purchasing division created that has authority for the purchase of supplies and equipment. (Ord. 03-4).
3.08.040 Purchasing officer.
The position of purchasing officer is created. He is appointed by the city manager. The purchasing officer has general supervision of the city’s purchasing program. The duties of the purchasing officer may be combined with those of any other officer or position. The purchasing officer shall:
A. Purchase and contract for supplies and equipment required by the city in accordance with purchasing procedures;
B. Negotiate and recommend execution of contracts for the purchase of supplies and equipment;
C. Procure for the city the needed quality in supplies and equipment at least expense to the city;
D. Maintain the highest levels of efficiency and effectiveness by assuring compatibility among the city’s equipment, such that existing parts inventory, tools inventory, and staff expertise are utilized to the greatest extent possible;
E. Prepare and recommend to the city council rules governing the purchase of supplies and equipment for the city;
F. Keep informed of current developments in the field of purchasing prices, market conditions and new products;
G. Prescribe and maintain forms as reasonably necessary to the operation of this chapter and other rules and regulations;
H. Supervise the inspection of supplies and equipment purchased to ensure conformance with specifications;
I. Recommend the transfer of surplus or unused supplies and equipment between departments as needed; and
J. Maintain a bidders’ list, vendors’ catalog file and records needed for the efficient operation of the purchasing division. (Ord. 03-4).
3.08.050 Exemptions from centralized purchasing.
The purchasing officer, with the approval of the city council, may authorize in writing each department to purchase specified supplies and equipment independently of the purchasing division; however, the purchasing officer shall require that such purchases be made in conformity with the established procedures and may require periodic reports from the department on the purchases made under this written authorization. (Ord. 03-4).
3.08.060 Requisitions.
Each department shall submit requests for supplies and equipment to the purchasing officer either by standard requisition forms or by other means established by the purchasing officer. (Ord. 03-4).
3.08.070 Purchase orders.
A purchase of supplies and equipment in the aggregate amount of more than $5,000 may be made only by purchase order. A purchase order shall not be issued until the purchasing officer first approves it. (Ord. 03-4).
3.08.080 Encumbrance of funds.
Except in case of an emergency or where specific authority is first obtained from the city manager, the purchasing officer may not issue a purchase order for supplies or equipment unless there exists an unencumbered appropriation in the fund account against which the purchase is to be charged. (Ord. 03-4).
3.08.090 Bidding – Required when.
Each purchase of supplies and equipment shall be by bid procedures set forth in BMC 3.08.100 and 3.08.110. The purchasing officer may dispense with bidding only when:
A. An emergency requires that an emergency purchase be placed with the nearest available source of supply;
B. When the amount involved is less than $1,000; or
C. The commodity can only be obtained via sole source procurement. (Ord. 03-4).
3.08.100 Bidding – Open market procedure.
If the estimated value of the purchase of supplies and equipment is less than $5,000, the purchasing officer may make the purchase in the open market under the following procedures:
A. Minimum Number of Bids. The purchasing officer shall obtain at least three informal or written bids and shall make the purchase from the lowest responsible bidder.
B. Notice Inviting Bids. The purchasing officer shall solicit bids by written request to prospective vendors, by telephone, or by public notice posted on a public bulletin board in City Hall. (Ord. 03-4).
3.08.110 Bidding – Procedure.
Except as provided in BMC 3.08.090, the purchase of supplies and equipment of an estimated value equal to or greater than $5,000 shall be by written contract with the lowest responsive and responsible bidder after following this procedure:
A. Notice Inviting Bids. The purchasing officer shall prepare a notice inviting bids. The notice shall include a general description of the article to be purchased, shall state where bid blanks and specifications may be secured, the time and place for opening bids and the security required, if any.
1. Published Notice. The notice inviting bids shall set a date for the opening of bids. The first publication or posting of the notice shall be at least 10 days before the date of opening the bids. Notice shall be published at least twice, not less than five days apart, in a newspaper of general circulation, printed and published in the city.
2. Bidders’ List. The purchasing officer shall also solicit sealed bids from responsible prospective suppliers, whose names are on the bidders’ list or who have made written request that their names be added to it.
3. Bulletin Board. The purchasing officer shall also advertise pending purchases by a notice posted on a public bulletin board in the City Hall.
B. Written Bids. For purchase of property estimated to cost over $25,000, written bids shall be submitted to the purchasing department, who shall require all bids to be sealed, in writing, identified as "bids" on the envelope. The purchasing department shall keep a record of all open market orders and bids for a period of one year after the submission of bids or the placing of orders. This record is open to public inspection.
C. Bidder’s Security. When the purchasing officer considers it necessary, he shall prescribe bidder’s security and a statement of the security shall be included in the notice inviting bids. Typically, such bidder’s security shall be provided for property estimated to cost over $25,000. Each bidder is entitled to a return of the bid security. However, a successful bidder forfeits his bid security if he refuses or fails to execute the contract within 10 days after the notice of award of contract is mailed. If the successful bidder fails or refuses to execute the contract, the awarding authority may award it to the next lowest responsible bidder or re-advertise.
If the awarding authority awards the contract to the next lowest bidder, the city shall apply the amount of the lowest bidder’s security to the contract price difference between the lowest bid and the second lowest bid. The surplus, if any, shall be returned to the lowest bidder. If the awarding authority rejects all bids and re-advertises, the amount of the lowest bidder’s security may be used to offset the cost of receiving new bids and the surplus, if any, shall be returned to the lowest bidder.
D. Bid Opening Procedures. For purchase of property estimated to cost over $25,000, the purchasing officer shall open the bids in public at the time and place stated in the public notice. The purchasing officer shall tabulate the bids received and shall keep the tabulation open for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening.
E. Rejection of Bids. In its discretion, the awarding authority may reject all bids presented and re-advertise for bids.
F. Award of Contracts. For purchase of supplies and equipment estimated to cost over $25,000, the city council shall award the contract to the responsive bidder who is also the lowest responsible bidder. For purchase of supplies and equipment costing less than $25,000, the city manager and finance director shall award the contract to the responsive bidder who is also the lowest responsible bidder.
G. Tie Bids. If two or more bids received are for the same total amount or unit price, quality being equal, and if the public interest will not permit the delay of re-advertising for bids, the awarding authority may accept the one it chooses or accept the lowest bid made after negotiation with the bidders at the time of the bid opening.
H. Payment and Performance Bonds. For purchase of property estimated to cost over $25,000, the city council may require a payment and/or performance bond before entering a contract in such amount as it finds reasonably necessary to protect the best interests of the city.
I. Use of Vendors Selected by Another Governmental Agency. The city purchasing officer may purchase supplies and equipment for which the city would normally follow its own bid procedures from a vendor awarded a bid by another governmental agency if said agency used procedures substantially the same as those normally used by the city. The amount of said purchase shall be based on the price bid in the other agency.
J. Joint Purchase with Other Governmental Agencies. Notwithstanding any other provision of this chapter, the city may enter into lawful agreements with other governmental agencies for the joint purchase of equipment and supplies. (Ord. 03-4).
3.08.120 Preference for local business.
In the case of contracts for purchase of supplies and equipment, whether by formal bid or otherwise, a preference not to exceed 10 percent – with an absolute limit of $500.00 – shall be allowed to firms or individuals who regularly maintain a place of business and transact business in the city. In order to qualify for such a preference, a firm or individual shall have maintained a place of business in the city and have been issued a business license by the city for one year prior to the date for the opening of bids for the contract or prior to submission of the proposal by the firm or individuals in the case of contracts not subject to competitive bidding. (Ord. 03-4).
3.08.130 Inspection and testing.
The purchasing officer shall inspect supplies and equipment delivered to determine their conformance with the specifications set forth in the order. The purchasing officer shall have 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. 03-4).
3.08.140 Surplus supplies and equipment.
All departments shall submit to the purchasing officer, at such times and in such forms as he shall prescribe, reports showing all supplies and equipment that are no longer used or which have become obsolete or worn out. The purchasing officer shall have authority to exchange for, or trade in on, new supplies and equipment all supplies and equipment that cannot be used by any department or which have become unsuitable for city use. Surplus supplies and equipment with no appreciable value, in the opinion of the purchasing agent, may be discarded as junk.
Supplies and equipment with an estimated value of $5,000 or less may be sold as surplus by the purchasing officer. Supplies and equipment with an estimated value greater than $5,000 shall be placed with a duly licensed public auctioneer or reputable on-line auctioneer for disposal and sale on behalf of the city. Proceeds from such public auction sales shall be deposited into the city fund that was originally used to purchase the supplies or equipment.
Surplus supplies and equipment may be offered for sale to other public agencies without the use of a duly licensed public auctioneer or reputable on-line auctioneer. Sale of supplies and equipment with an estimated value of less than $25,000 may be offered for sale by either the city manager or finance director. Sale of supplies and equipment with an estimated value greater than $25,000 shall be sold only upon city council approval.
All surplus or worn out supplies or equipment with an estimated value of $25,000 or less may be transferred, donated or dedicated to, or may be permitted to be used by, community service or public benefit organizations, which, in the opinion of the purchasing officer, would use such supplies or equipment exclusively to promote the general municipal welfare or otherwise use the surplus supplies or equipment for purposes that clearly are to the public benefit.
All surplus or worn out supplies or equipment with an estimated value greater than $25,000 may be transferred, donated, or dedicated to, or may be permitted to be used by, community service or public benefit organizations upon city council approval. (Ord. 03-4).
Prior legislation: Ord. 99-4 N.S.; Ord. 87-8 N.S. § 2, 1987; amended during 1980 codification; prior code §§ 2-601 – 2-613.