Chapter 2.20
PURCHASING SYSTEM
Sections:
2.20.010 Purchasing system – Purposes and objectives.
2.20.020 Designation of purchasing agent – Powers and duties.
2.20.030 Filing of estimated requirements.
2.20.040 Professional services.
2.20.050 Supplies, nonprofessional services, and equipment.
2.20.060 Public projects and maintenance work.
2.20.070 Encumbrance of funds.
2.20.080 Inspection and testing of materials and services.
2.20.100 Surplus supplies and equipment.
2.20.110 Splitting orders to avoid competitive bidding prohibited.
2.20.120 Cooperative purchasing agreements with other agencies.
2.20.130 Exceptions to formal contracting procedures.
2.20.140 Revenue-generating contracts/concessions.
Prior legislation: Ords. 443 and 503.
2.20.010 Purchasing system – Purposes and objectives.
This chapter is adopted in order to promote the greatest economy and efficiency to the city, to clearly define authority and purchasing procedures for the city, to ensure the quality of purchases, and to maintain appropriate safeguards to preserve fairness and accountability in all of the city’s procurement activities. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.01).
2.20.020 Designation of purchasing agent – Powers and duties.
A. The city manager is designated as the city’s purchasing agent. The city manager shall be the head of, and have general supervision over, all city purchases as more particularly set forth in this chapter and may adopt forms, documents, rules, regulations, guidelines, and policies to implement and enforce this chapter (“administrative regulations”). The city manager may delegate purchasing responsibilities to another staff person(s). The duties of the city manager may be combined with those of any other office or position.
B. The city manager or his/her designee shall:
1. Negotiate purchases and contracts for equipment, supplies (other than library books and periodicals), materials, nonprofessional services or services not involving unique ability required by any office or department of the city in accordance with purchasing procedures prescribed by this chapter, and such other administrative regulations as shall be prescribed by the city;
2. Act to procure for the city the needed quality in equipment, supplies, nonprofessional services or services not involving unique ability, at least expense to the city;
3. Endeavor to obtain as full and open competition as possible on all purchases;
4. Oversee the retention of professional services in accordance with the administrative regulations;
5. Prepare and recommend to the city council rules governing the purchase of supplies, services and equipment for the city;
6. Keep informed of current developments in the field of purchasing prices, market conditions and new products;
7. Recommend the transfer of surplus or unused supplies and equipment between departments as needed, and the sale of all supplies and equipment which cannot be used by any department, or which have become unsuitable for city use;
8. Maintain a bidders list, vendors catalogue file, and records needed for the efficient operation of the purchasing system. Join with other governmental agencies in joint purchasing endeavors where the purchasing procedures substantially conform to this chapter and state law. (Ord. 566, § 1, Amended by Ord. 698, § 1; Ord. 770, § 1; 1976 Code § 2-4.03. Formerly 2.20.030).
2.20.030 Filing of estimated requirements.
All city departments shall file detailed estimates of their requirements in supplies, services and equipment in such manner, at such time, and for such future periods as the city manager shall prescribe. The requirements for preparing estimates shall not prevent any city department from filing with the city manager at any time a requisition for any supplies, services, or equipment, the need for which was not foreseen when the detailed estimates were filed. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.04. Formerly 2.20.040).
2.20.040 Professional services.
The city shall not be required to engage in a competitive bidding procedure when seeking to retain specially trained persons or firms to provide services in connection with financial, economic, accounting, engineering, administrative, or other matters involving specialized expertise or unique skills. In securing professional services and depending on the size of the contract, the city shall utilize informal or formal procedures that seek to obtain more than one proposal, where possible and appropriate. The method and details of these procedures shall be outlined in administrative regulations adopted by the city. The city manager may award any contract for professional services when the cost of such contract is equal to or less than fifty thousand dollars. Any contract for professional services which exceeds the cost of fifty thousand dollars shall be awarded by the city council. (Ord. 566, § 1; Amended by Ord. 697, § 1; Ord. 770, § 1; 1976 Code § 2-4.06. Formerly 2.20.060).
2.20.050 Supplies, nonprofessional services, and equipment.
A. Contracts for Fifty Thousand Dollars or Less. Open market procedures may be dispensed with as defined in MMC 2.20.130 or when the amount is ten thousand dollars or less.
For contracts for supplies, nonprofessional services, and equipment for an estimated value of fifty thousand dollars or less, exclusive of sales tax and freight, the city manager shall solicit open market quotes or bids by written requests to prospective vendors, by telephone, mail, e-mail, or by public notice posted on a public bulletin board in the City Hall or on the city’s website. Whenever possible, and in the best interest of the city, the city manager will obtain at least three quotes and a contract shall be awarded to the lowest responsible quote.
B. Contracts Greater Than Fifty Thousand Dollars. Except as otherwise provided herein, contracts greater than fifty thousand dollars for supplies, equipment, nonprofessional services, or services not involving a unique ability shall be by written contract with the lowest responsive and responsible bidder, pursuant to the procedure prescribed in this section.
1. Notice Inviting Bids or Proposals. The notice inviting bids or proposals shall:
a. Include a general description of the supplies, equipment, or services to be purchased.
b. State where bid forms and specifications (“contract documents”) may be secured.
c. Identify the time and place for opening bids.
2. Publish Notice. Notice inviting bids or proposals shall be published at least ten days before the date of opening of the bids at least once in a newspaper of general circulation, circulated in the city.
3. Bidders List. The city manager shall also solicit sealed bids from responsible prospective suppliers whose names are on the bidders list.
4. Bidder’s Security. When deemed necessary by the city manager, bidder’s security shall be required in an amount that the city manager deems appropriate for the procurement. Bidders shall be entitled to a return of the bid security upon the city’s execution of the contract with the successful bidder or upon the readvertisement for bids; except that a successful bidder shall forfeit its bid security upon refusal or failure to execute the contract within the time period specified in the contract documents after the notice of award of contract has been mailed, unless the city is responsible for the delay.
5. Bid Opening Procedure. Sealed bids shall be submitted to the city manager, and shall be identified as bids on the envelope. Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty calendar days after the bid opening.
6. Rejection of Bids. In its discretion, the city council may waive any minor irregularities in the bids or in the bidding procedures. The city council may reject any and all bids presented, and readvertise for bids.
7. Award of Contracts. Contracts shall be awarded by the city council to the lowest responsible bidder.
8. Tie Bids. If two or more bids received are for the same total amount or unit price with quality, service and delivery being equal, and if the public interest will not permit the delay of readvertising for bids, the city council may accept the bid it chooses, or accept the lowest bona fide offer by negotiation with the tie bidders following the bid opening.
9. Performance Bonds. The city manager shall have authority to require a performance bond in such amount as it shall be found reasonably necessary to protect the best interests of the city. If the city manager requires a performance bond, the form and amount of the bond shall be set forth in the contract documents. (Ord. 770, § 1; Amended by Ord. 789, § 1).
2.20.060 Public projects and maintenance work.
A. Adoption of Uniform Public Construction Cost Accounting Act. City contracts for public projects and maintenance work shall be governed by applicable state laws including the uniform public construction cost accounting procedures set forth in the Uniform Public Construction Cost Accounting Act, Public Contract Code Section 22000 et seq. (Act), and the California Uniform Construction Cost Accounting Commission’s (Commission) policies and procedures manual and cost accounting review procedures, as amended from time to time.
The term “public project,” as defined by the Act, means any of the following: (1) construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility; (2) painting or repainting of any publicly owned, leased, or operated facility; and (3) in the case of a publicly owned utility system, “public project” shall include only the construction, erection, improvement, or repair of dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.
The term “maintenance work,” as defined by the Act, includes: (1) routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes; (2) minor repainting; (3) resurfacing of streets and highways at less than one inch; (4) landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; and (5) work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems, including, but not limited to, dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.
Public projects and maintenance work shall be procured through the procedures and at the monetary thresholds set forth in the Act and as further described in this chapter.
B. Pre-Bid Contractors List for Public Projects and Maintenance Work. The city shall develop and maintain a list of qualified contractors, identified according to categories of work for all projects and any scheduled projects, on an annual basis in accordance with the Act.
C. Contracts for Public Projects and Maintenance Work of Sixty Thousand Dollars or Less. Public projects and maintenance work of sixty thousand dollars or less (or the current amount specified in the Act) may be performed by city employees, by force account, by negotiated contract or by purchase order. Where it is anticipated that a project may be conducted and finished at a cost of sixty thousand dollars (or the amount as specified in the Act) or less, the city manager or his/her designee is authorized to approve the project, provided the expenditure is within the approved budget.
D. Contracts for Public Projects and Maintenance Work of Two Hundred Thousand Dollars or Less. Public projects and maintenance work estimated to cost two hundred thousand dollars (or the amount as specified in the Act) or less may be procured through the following informal procedures prescribed by the Act:
1. Notice Inviting Informal Bids. The city manager or his/her designee shall send a notice inviting informal bids not less than ten calendar days before bids are due to (a) all contractors on the list of qualified contractors or (b) all contractors on the list of qualified contractors and to the designated construction trade journals. The notice inviting informal bids shall describe the project, how to obtain more detailed information about the project, and the time, date and place for the submission of bids. Additional contractors and/or construction trade journals may be notified at the discretion of the department soliciting bids; provided, however:
a. If there is no list of qualified contractors maintained by the city for the particular category of work performed, the notice inviting bids shall be sent only to the construction trade journals specified by the Commission.
b. If the product or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors.
2. Distribution of Bid Documents. Bid documents may be transmitted and/or received over the Internet, by facsimile and/or electronic mail.
3. Award of Contracts. The city manager or his/her designee is authorized to award such informal public projects and maintenance work, provided the expenditure is within the approved budget and in a form approved by the city attorney. The city manager or his/her designee may, at his/her sole discretion, reject any or all bids presented and waive any minor irregularity or informality in such bids. The contract shall be awarded to the lowest responsive, responsible bidder. If two or more bids are the same and the lowest, the city manager may accept the one he/she chooses. If no bids are received through the informal procedure, the project may be performed by city employees, by force account or negotiated contract without further complying with this section.
4. Informal Bids Between Two Hundred Thousand Dollars and Two Hundred Twelve Thousand Five Hundred Dollars. If all bids received are in excess of the amount specified in this section, the city council may, by adoption of a resolution by a four-fifths vote, award the contract, at two hundred twelve thousand five hundred dollars or less, to the lowest responsible bidder, if it determines the cost of the estimate of the city was reasonable.
E. Contracts for Public Projects and Maintenance Work Greater Than Two Hundred Thousand Dollars. Public projects and maintenance work of more than two hundred thousand dollars (or the current amount as specified in the Act) shall be procured through the following formal bidding procedures prescribed by the Act:
1. Notice Inviting Formal Bids. The city manager or his/her designee shall publish a notice inviting formal bids for public projects and maintenance work at least fourteen calendar days before the bid opening date in a newspaper of general circulation in the city. Additionally, the city manager or his/her designee shall send a notice inviting informal bids to all contractors on the list of qualified contractors and to the designated construction trade journals at least fifteen calendar days before bids are due. The notice shall describe the project, how to obtain more detailed information about the project, and the time and place for submission of bids.
2. Bidder’s Security. All bids presented in connection with the public project shall be accompanied by bidder’s security in the form and amount prescribed by Public Contract Code Section 20170, which security shall be dealt with as prescribed therein. In all cases 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 ten days after the notice of award of contract has been mailed, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the city council 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.
3. Bid Opening Procedure. Sealed bids shall be submitted to the department identified in the invitation for bid documents 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 open for public inspection during regular business hours for a period of not less than thirty calendar days after the bid opening.
4. Award of Contracts. Contracts shall be awarded by the city council to the lowest responsible bidder. The city council may, in its sole discretion, waive minor irregularities in the bids or in the bidding procedures. The city council may reject all bids presented, and readvertise for bids.
5. Tie Bids and No Bids. If two or more bids are the same and the lowest, the city council may accept the one it chooses. If no bids are received through the formal procedure, the project may be performed by city employees, by force account or negotiated contract without complying with this section.
6. Rejecting Bids and Performing Project Through City Employees. In its discretion, the city council may reject any bids presented, if the city, prior to rejecting all bids and declaring that the project can be more economically performed by employees of the city, furnishes a written notice to an apparent low bidder. The notice shall inform the bidder of the city’s intention to reject the bid and shall be mailed at least two business days prior to the hearing at which the city intends to reject the bid. If after the first invitation of bids, all bids are rejected, the city shall reevaluate its cost estimates of the project and either:
a. Abandon the project or readvertise for bids in the manner described by this section; or
b. May have the project completed by force account without further complying with this section, if it passes a resolution by a four-fifths vote of the city council declaring that the project can be performed more economically by the employees of the city.
7. Performance Bonds. The department head shall have authority to require a performance bond before entering a contract in such amount as he or she finds reasonably necessary to protect the best interests of the city. If the city manager requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids. (Ord. 770, § 1; Amended by Ord. 789, § 2).
2.20.070 Encumbrance of funds.
Except in cases of emergency purchases, the city manager shall not issue any purchase order for supplies, equipment, nonprofessional services or services involving unique ability for which there is an insufficient appropriation in the budgetary account against which said purchase is to be charged. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.09. Formerly 2.20.090).
2.20.080 Inspection and testing of materials and services.
The ordering department shall inspect supplies and equipment delivered, and determine their conformance with the specifications set forth in the order or contract. The city manager 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. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.11. Formerly 2.20.110).
2.20.090 Change orders.
Following the award of a contract for materials, supplies, equipment, services, public projects or maintenance work pursuant to this chapter, the contract may be amended by the issuance of a change order, provided the change which is the subject of amendment is reasonably related to the scope of the original contract. The city manager or designee will maintain control relative to the scoping, estimating and negotiating of the proposed change(s) and the finance director will certify the availability of funds for the proposed change in the event that the change order increases the contract cost. The total contract budget may include a council-authorized contract contingency. Any change order that exceeds the authority limits granted herein shall be submitted to the city council for approval. (Ord. 566, § 1, Amended by Ord. 728, § 1; Ord. 770, § 1; 1976 Code § 2-4.12. Formerly 2.20.120).
2.20.100 Surplus supplies and equipment.
All using departments shall submit to the city manager, at such times and in such forms as shall be prescribed, reports showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The city manager shall have authority to sell by auction, advertisement for sealed bids or negotiation all supplies and equipment which cannot be used by any department, or which have become unsuitable for city use. The city manager shall also have authority to exchange or trade the same for new supplies and equipment. The city manager shall also have the authority to make transfers between departments of any usable surplus supplies or equipment. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.13. Formerly 2.20.130).
2.20.110 Splitting orders to avoid competitive bidding prohibited.
It is unlawful to split or separate into smaller orders the purchase of supplies, materials, equipment or services for the purpose of evading the competitive bidding provisions of this chapter. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.14. Formerly 2.20.140).
2.20.120 Cooperative purchasing agreements with other agencies.
To foster greater economy and efficiency, the city may avail itself of state and local intergovernmental agreements for procurement or use of common goods and services. Joint procurements, state cooperative purchasing programs, and assignment of existing contract rights (“piggyback” procurements) with other public agencies may be used when consistent with applicable state and federal statutory or grant requirements. The city manager is empowered and authorized to act under the provisions of this chapter to procure for the city supplies, equipment, and services in conjunction with such voluntary cooperative purchasing agreements or programs which may be available and advantageous to the city. (Ord. 566, § 1, Amended by Ord. 770, § 1; 1976 Code § 2-4.15. Formerly 2.20.150).
2.20.130 Exceptions to formal contracting procedures.
A. Sole and Single (Noncompetitive) Source. Regardless of the estimated cost of the procurement, when permissible under applicable law, the city is not required to engage in the competitive bidding process when procuring materials, equipment, supplies or services for which there exists only a sole source of supply or when other factors, including financial, schedule, or performance requirements, make the use of competitive procurement procedures unavailing.
B. Emergency Procedures. In accordance with Public Contract Code Sections 20168 and 22050, in the case of an emergency, the city manager may repair or replace a public facility, take any directly related and immediate action required by that emergency, and procure the necessary equipment, services, and supplies for those purposes without giving notice for bids to let contracts. “Emergency,” as used in this chapter and as defined by Public Contract Code Section 1102, 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.
The city manager must report the emergency action to the city council no later than seven days after the action, or at the next regularly scheduled city council meeting, provided it is no later than fourteen days after the emergency action was taken. The city manager’s report must explain why the action was necessary to respond to the emergency and why the emergency did not permit a delay resulting from a competitive solicitation for bids. The city council shall review the emergency action and determine by a four-fifths vote where such emergency action is still needed.
C. Discretion to Waive Competitive Process. The city council, or the city manager for procurements within his/her procurement authority, may waive the requirements for formal competitive bidding or other procedures set forth in this chapter, when permissible under applicable law, when a determination is made that the best interests of the city are served thereby, and provided there is adequate documentation of the need for the procurement. These circumstances shall be evaluated on a case-by-case basis, and the findings justifying the waiver must be documented in the record. (Ord. 770, § 1).
2.20.140 Revenue-generating contracts/concessions.
To the extent they are not otherwise governed by city policies, concession agreements are contracts where the city grants permission to use city facilities or property to vendors to sell products or services, for which the city receives a percentage of the proceeds and/or a flat rate of compensation. Generally, these arrangements are at no direct cost to the city.
Where it is determined that a number of potential vendors are available to provide similar products or services, a competitive negotiations procedure should be followed, and the city manager may award a contract to the highest ranked proposer, taking into consideration the economic return to the city, quality of the product, service and experience of the vendor.
The city council shall approve revenue-generating concessions/contracts that exceed one hundred fifty thousand dollars in value. (Ord. 770, § 1).
2.20.150 Recovered organic waste product procurement requirements for city departments, direct service providers, and vendors.
The city manager, or designee, is authorized to adopt and enforce a recovered organic waste product procurement policy for the city in compliance with state laws and regulations. (Ord. 791, § 2).