Chapter 3.08
PURCHASING*

*    For charter provisions covering contracts for public works, see Charter §§ 1414 et seq.

    Prior ordinances codified in this chapter include prior code §§ 2530-2539, Ord. NS 689, Ord. 79-15, Ord. 79-35, and Ord. 87-05.

Sections:

3.08.010    Purpose.

3.08.020    Application.

3.08.030    Definitions.

3.08.040    Establishment of the position of purchasing manager.

3.08.050    Authority and duties.

3.08.060    Delegations to other city officials.

3.08.070    Collection of data concerning public procurement.

3.08.080    Award of contracts – Supplies and services.

3.08.090    Award of contracts – Construction.

3.08.100    Methods of source selection.

3.08.110    Competitive sealed bidding.

3.08.120    Competitive sealed proposals.

3.08.130    Contracting for designated professional services.

3.08.140    Informal bid and small purchases.

3.08.150    Sole source procurement.

3.08.160    Emergency procurement.

3.08.170    Cooperative purchasing.

3.08.180    Cancellation of invitations for bids or requests for proposals.

3.08.190    Bid and performance bonds on supply or service.

3.08.200    Specifications.

3.08.210    Requisitions.

3.08.220    Purchase orders.

3.08.230    Encumbrance of funds.

3.08.240    Surplus supplies and equipment.

3.08.250    Bid protests.

3.08.010 PURPOSE.

The purpose of this chapter is to provide for the fair and equitable treatment of all persons involved in public purchasing by the city of Santa Cruz, to maximize the purchasing value of all public funds in procurement, and to provide safeguards for maintaining a procurement system of quality and integrity.

(Ord. 91-19 § II (part), 1991).

3.08.020 APPLICATION.

This chapter applies to contracts for the procurement of supplies, services, and construction, entered into by the city after the effective date of this chapter, unless the parties agree to its application to contracts entered into prior to the effective date. It shall apply to every expenditure of public funds by the city for public purchasing irrespective of the source of the funds. When the procurement involves the expenditure of federal or state assistance or contract funds, the procurement shall be conducted in accordance with any mandatory applicable federal or state law and regulations. Nothing in the chapter shall prevent any public agency from complying with the terms and conditions of any grant, gift, or bequest that is otherwise consistent with law.

(Ord. 91-19 § II (part), 1991).

3.08.030 DEFINITIONS.

(1)    “Appointing authority” means the city manager who may delegate his or her power to any department head.

(2)    “Construction,” also known as “public works and improvements,” means the process of building, altering, repairing, improving, or demolishing any public structure or building, or other public improvements of any kind to any public real property. It does not include routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property.

(3)    “Contract” means all types of city agreements, regardless of what they may be called, for the procurement of supplies, services, or construction.

(4)    “Invitation for bids” means all documents, whether attached or incorporated by reference, utilized for soliciting bids.

(5)    “Procurement” means the buying, purchasing, renting, leasing, or otherwise acquiring of any supplies, services, or construction. It also includes all functions that pertain to the obtaining of any supply, service, or construction, including description of requirements, selection, and solicitation of sources, preparation and award of contract, and all phases of contract administration.

(6)    “Professional services” means services provided by persons performing professional services including, but not limited to, accountants, appraisers, archaeologists, architects, attorneys, consultants, engineers, physicians, and real estate brokers.

(7)    “Public works and improvements.” See “Construction.”

(8)    “Request for proposals” means all documents, whether attached or incorporated by reference, utilized for soliciting proposals.

(9)    “Responsible bidder or offeror” means a person who has the capability in all respects to perform fully the contract requirements, and the tenacity, perseverance, experience, integrity, reliability, capacity, facilities, equipment, and credit which will assure good faith performance.

(10)    “Responsive bidder” means a person who has submitted a bid which conforms in all material respects to the requirements set forth in the invitation for bids.

(11)    “Services” means the furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. This term shall not include employment agreements or collective bargaining agreements.

(12)    “Supplies” means all property, including but not limited to equipment, materials, printing, insurance, and leases of real property, excluding land or a permanent interest in land.

(Ord. 91-19 § II (part), 1991).

3.08.040 ESTABLISHMENT OF THE POSITION OF PURCHASING MANAGER.

(1)    Establishment. There is hereby created the position of purchasing manager, who shall be the city’s principal public purchasing official.

(2)    Appointment. The purchasing manager shall be appointed by the appointing authority.

(3)    Tenure. The purchasing manager shall be appointed to serve an indefinite term and may be removed from office by the appointing authority only upon a showing of just cause in accordance with the city’s personnel rules and regulations.

(Ord. 91-19 § II (part), 1991).

3.08.050 AUTHORITY AND DUTIES.

(1)    Principal Public Purchasing Official. Except as otherwise provided herein, the purchasing manager shall serve as the principal public purchasing official for the city, and shall be responsible for the procurement of supplies, services and construction in accordance with this chapter, as well as the management and disposal of surplus supplies and equipment.

(2)    Duties. In accordance with this chapter, and subject to the approval of the appointing authority, the purchasing manager shall:

(a)    Procure or supervise the procurement of all supplies, services, and construction needed by the city;

(b)    Exercise general supervision and control over all inventories of supplies belonging to the city;

(c)    Sell, trade, or otherwise dispose of surplus supplies belonging to the city;

(d)    Establish and maintain programs for specifications development, contract administration and inspection and acceptance, in cooperation with the departments using the supplies, services, and construction;

(e)    Endeavor to obtain as full and open competition as possible on all purchases;

(f)    Prepare and recommend to the appointing authority rules governing the procurement of supplies, services, and construction; and

(g)    Recommend the adoption of formal and informal purchase dollar limits which establish the methods of source selection and contract award.

(3)    Operational procedures. Consistent with this chapter, and with the approval of the appointing authority, the purchasing manager may adopt operational procedures relating to the execution of its duties.

(Ord. 91-19 § II (part), 1991).

3.08.060 DELEGATIONS TO OTHER CITY OFFICIALS.

With the approval of the city manager, the purchasing manager may delegate authority to purchase certain supplies, services, or construction to other city officials, if such delegation is deemed necessary for the effective procurement of those items. Notwithstanding the provisions of Section 3.08.050, Authority and Duties, procurement authority with respect to certain supplies, services, or construction may be delegated to other city officials by the city manager when such delegation is deemed necessary for the effective procurement of these supplies, services, or construction.

(Ord. 91-19 § II (part), 1991).

3.08.070 COLLECTION OF DATA CONCERNING PUBLIC PROCUREMENT.

The purchasing manager shall cooperate with the city’s director of finance in the preparation of statistical data concerning the procurement, usage, and disposition of all supplies, services, and construction. All departments shall furnish such reports as the purchasing manager may require concerning usage, needs, and stocks on hand, and the purchasing manager shall have authority to prescribe forms to be used by the departments in requisitioning, ordering, and reporting of supplies, services, and construction.

(Ord. 91-19 § II (part), 1991).

3.08.080 AWARD OF CONTRACTS – SUPPLIES AND SERVICES.

The city council shall establish the estimated value of service and supply contracts for which formal bidding is required. Any such contracts requiring a formal bid shall be awarded by the city council. The purchasing manager is authorized to award contracts for services and supplies for which formal bidding is not required pursuant to Section 3.08.140, Informal Bid and Small Purchases.

(Ord. 91-19 § II (part), 1991).

3.08.090 AWARD OF CONTRACTS – CONSTRUCTION.

Unless otherwise authorized by law, all city public works or improvements of estimated value greater than the formal bid amount established pursuant to Section 3.08.080 shall be executed by contract and awarded by the city, except where a specific work or improvement is authorized by the city to be performed directly by a city department or officer in conformity with detailed plans, specifications and estimates. The purchasing manager is authorized to award contracts for public works or improvements of estimated value less than said formal bid limit pursuant to Section 3.08.140 (Informal Bid and Small Purchases).

(Ord. 2002-44 (part), 2002: Ord. 2002-15 § 1, 2002: Ord. 91-19 § II (part), 1991).

3.08.100 METHODS OF SOURCE SELECTION.

Unless otherwise authorized by law, all contracts shall be awarded by competitive sealed bidding, pursuant to Section 3.08.110, Competitive Sealed Bidding, except as provided in:

(1)    Section 3.08.120, Competitive Sealed Proposals;

(2)    Section 3.08.130, Contracting for Designated Professional Services;

(3)    Section 3.08.140, Informal Bid and Small Purchases;

(4)    Section 3.08.150, Sole Source Procurement;

(5)    Section 3.08.160, Emergency Procurement; and

(6)    Section 3.08.170, Cooperative Purchasing.

(Ord. 91-19 § II (part), 1991).

3.08.110 COMPETITIVE SEALED BIDDING.

(1)    Conditions for Use. All contracts of the city for supplies, services, and construction requiring formal bids shall be awarded by competitive sealed bidding except as otherwise provided in Section 3.08.100, methods of source selection.

(2)    Invitation for Bids. An invitation for bids shall be issued and shall include specifications, and all contractual terms and conditions applicable to the procurement.

(3)    Public Notice. Adequate public notice of the invitation for bids shall be given a reasonable time, not less than fifteen calendar days prior to the date set forth therein for the opening of bids. Such notice may include publication in a newspaper of general circulation a reasonable time prior to bid opening. The public notice shall state the place, date, and time of bid opening.

(4)    Bidders’ List. The purchasing manager shall issue invitations for bids to all responsible prospective bidders whose names are on the bidders’ list or who have requested their names be added thereto.

(5)    Bid Opening. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. The amount of each bid, and such other relevant information as the purchasing manager deems appropriate, together with the name of each bidder shall be recorded; the record and each bid shall be open to public inspection.

(6)    Bid Acceptance and Bid Evaluation. 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, which may include criteria to determine acceptability such as inspection, testing, quality, workmanship, delivery, and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. The invitation for bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluation that are not set forth in the invitation for bids.

(7)    Correction or Withdrawal of Bids – Cancellation of Awards. Correction or withdrawal of inadvertently erroneous bids before or after bid opening, or cancellation of awards or contracts based on such mistakes, may be permitted where appropriate. Mistakes discovered before bid opening may be modified or withdrawn by written or telegraphic notice received in the office designated in the invitation for bids prior to the time set for bid opening. After bid opening, corrections in bids shall be permitted only to the extent that the bidder can show by clear and convincing evidence that the bidder made a material mistake of fact that is evident on the face of the bid. After bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the city or fair competition shall be permitted. In lieu of bid correction, a low bidder alleging a material mistake of fact may be permitted to withdraw its bid if:

(a)    The mistake is clearly evident on the face of the bid document, and the actual intended bid is not evident; or

(b)    The bidder submits evidence which clearly and convincingly demonstrates that a mistake was made.

All decisions to permit the correction or withdrawal of bids, or to cancel awards or contracts based on bid mistakes, shall be supported by a written determination made by the purchasing manager.

(8)    Award. The contract shall be awarded with reasonable promptness. Appropriate written notice of the city’s intention to award the bid, subject to the city council’s adoption of a resolution awarding the bid, shall be mailed or otherwise transmitted to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation for bids. Said notice of intention shall likewise be mailed or otherwise transmitted to each unsuccessful bidder. Upon adoption of the city council resolution awarding the bid, written notice of the award shall be mailed or otherwise transmitted to the successful bidder. In the event, the low responsive and responsible bid for a construction project exceeds available funds as certified by the director of finance, and such bid does not exceed such funds by more than ten percent, the purchasing manager is authorized, when time and economic considerations preclude resolicitation of work of a reduced scope, to negotiate an adjustment of the bid price with the low responsive and responsible bidder, in order to bring the bid within the amount of available funds. Any such negotiated adjustment shall be based only upon eliminating independent deductive items specified in the invitation for bids.

(9)    Multistep Sealed Bidding. When it is considered impractical to initially prepare a specification to support an award based on price, an invitation for bids may be issued requesting the submission of unpriced offers to be followed by an invitation for bids limited to those bidders whose offers have been determined to be technically acceptable under the criteria set forth in the first solicitation.

(Ord. 97-08 § 1, 1997: Ord. 91-19 § II (part), 1991).

3.08.120 COMPETITIVE SEALED PROPOSALS.

(1)    Conditions for Use. When the purchasing manager determines that the use of competitive sealed bidding is either not practicable or not advantageous to the city, a contract for supplies, services or construction requiring formal bids may be entered into by use of the competitive sealed proposals method.

(2)    Request for Proposals. Proposals shall be solicited through a request for proposals.

(3)    Public Notice. Adequate public notice of the request for proposals shall be given in the same manner as provided in Section 3.08.110, Competitive Sealed Bidding; provided, the minimum time shall be twenty calendar days.

(4)    Receipt of Proposals. No proposals shall be handled so as to permit disclosure of the identity of any offeror or the contents of any proposal to competing offerors during the process of negotiation. A register of proposals shall be prepared containing the name of each offeror and a description sufficient to identify the item offered. The register of proposals shall be open for public inspection only after contract award.

(5)    Evaluation Factors. The request for proposals shall state the relative importance of price and other evaluation factors.

(6)    Discussion with Responsible Offerors and Revisions to Proposals. As provided in the request for proposals, discussions may be conducted with responsible offerors who submit responsive proposals determined to be reasonably susceptible of being selected for award for the purpose of clarification to assure full understanding of, and conformance to, the solicitation requirements. Offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals. Such revisions may be permitted after submissions and prior to award for the purpose of obtaining best and final offers. In conducting discussions, there shall be no disclosure of the identity of competing offerors or of any information derived from proposals submitted by competing offerors.

(7)    Award. Award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the city, taking into consideration price and the evaluation factors set forth in the request for proposals. No other factors or criteria shall be used in the evaluation. The contract file shall contain the basis on which the award is made.

(Ord. 91-19 § II (part), 1991).

3.08.130 CONTRACTING FOR DESIGNATED PROFESSIONAL SERVICES.

(1)    Authority. For the purpose of procuring the services of persons providing professional services including, but not limited to, accountants, appraisers, archaeologists, architects, attorneys, consultants, engineers, physicians, and real estate brokers, any department requiring such service of estimated value greater than that established for formal bids may procure them on its own behalf, in accordance with the selection procedures specified in this section. The department procuring such services may consult with the purchasing manager.

(2)    Selection Procedure.

(a)    Conditions for Use and Exceptions. Except as provided under Section 3.08.150, Sole Source Procurement, or Section 3.08.160, Emergency Procurement, the professional services designated in subsection (1) of this section shall be procured in accordance with this subsection. The city manager may authorize in writing any department to contract for specified professional services without complying with the selection procedures specified in this section when it is for good cause and in the best interests of the city.

(b)    Statement of Qualifications. Persons engaged in providing the designated types of professional services may submit statements of qualifications and expressions of interest in providing such professional services. A department using such professional services may specify a uniform format for statements of qualifications. Persons may amend these statements at any time by filing a new statement.

(c)    Public Announcement and Form of Request for Proposals. Adequate notice of the need for such services shall be given by the department requiring the services through a request for proposals. The request for proposals shall describe the services required, list the types of information and data required of each offeror, and state the relative importance of particular qualifications.

(d)    Discussions. The head of the department procuring the required professional services or a designee of such officer may conduct discussions with any offeror who has submitted a proposal to determine such offeror’s qualifications for further consideration. Discussions shall not disclose any information derived from proposals submitted by other offerors.

(e)    Award. Award shall be made to the offeror determined in writing by the head of the department procuring the required professional services or a designee of such officer to be best qualified based on the evaluation factors set forth in the request for proposals, and negotiation of compensation determined to be fair and reasonable. If compensation cannot be agreed upon with the best qualified offeror, then negotiations will be formally terminated with the selected offeror. If proposals were submitted by one or more other offerors determined to be qualified, negotiations may be conducted with such other offeror or offerors, in the order of their respective qualifications ranking, and the contract may be awarded to the offeror then ranked best qualified if the amount of compensation is determined to be fair and reasonable.

(Ord. 91-19 § II (part), 1991).

3.08.140 INFORMAL BID AND SMALL PURCHASES.

(1)    General. Any contract not exceeding the amount established for formal bid purchases by city council in Sections 3.08.080 and 3.08.090 may be made in accordance with the informal bid and small purchase procedures authorized in this section. Contract requirements shall not be artificially divided so as to constitute a small purchase under this section.

(2)    Informal Bid Purchases. Insofar as it is practical for purchases in excess of the amount established for informal bid purchases by city council no less than three businesses shall be solicited to submit quotations. Award shall be made to the business offering the lowest acceptable quotation. The names of the businesses submitting quotations, and the date and amount of each quotation, shall be recorded and maintained as a public record for no less than one year after the submission of quotations.

(3)    Small Purchases. The purchasing manager shall adopt operational procedures for making small purchases of an amount less than that established for informal bid purchases by city council. Such operational procedures shall provide for obtaining adequate and reasonable competition for the supply, service, or construction being purchased.

(Ord. 91-19 § II (part), 1991).

3.08.150 SOLE SOURCE PROCUREMENT.

A contract may be awarded without competition when the purchasing manager or its designee determines in writing, after conducting a good faith review of available sources, that there is only one source for the required supply, service, or construction item. The purchasing manager or its designee shall conduct negotiations, as appropriate, as to price, delivery, and terms.

(Ord. 91-19 § II (part), 1991).

3.08.160 EMERGENCY PROCUREMENT.

(1)    Supplies and Services. Notwithstanding any other provisions of this chapter, the purchasing manager may make or authorize others to make emergency procurement of supplies and services items when there exists a threat to public health, welfare, or safety; provided that such emergency procurement shall be made with such competition as is practicable under the circumstances.

(2)    Construction. Notwithstanding any other provisions of this chapter, the city council may pass a resolution authorizing the execution of contracts without formal bids for construction in excess of $25,000.00 to correct emergency conditions when there exists a threat to public health, welfare, or safety; provided that such emergency procurement shall be made with such competition as is practicable under the circumstances. Such resolution shall state the facts constituting the emergency.

(Ord. 91-19 § II (part), 1991).

3.08.170 COOPERATIVE PURCHASING.

(1)    Authority. The purchasing manager may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of any supplies, services, or construction with one or more public procurement units in accordance with an agreement entered into between the participants. Such cooperative purchasing may include, but is not limited to, joint or multiparty contracts between public procurement units and open-ended state public procurement unit contracts which are made available to local public procurement units.

(2)    Acquisition or Use of Supplies by a Public Procurement Unit. The purchasing manager may acquire from or use any supplies belonging to another public procurement unit independent of the requirements of Section 3.08.080, Award of Contracts – Supplies and Services, Section 3.08.100, Methods of Source Selection, and Section 3.08.110, Competitive Sealed Bidding.

(3)    Cooperative Use of Supplies and Services. The purchasing manager may enter into an agreement independent of the requirements of Section 3.08.080, Award of Contracts – Supplies and Services, Section 3.08.100, Methods of Source Selection, and Section 3.08.110, Competitive Sealed Bidding, of this chapter, with any other public procurement unit for the cooperative use of supplies or services under the terms agreed upon between the parties.

(Ord. 91-19 § II (part), 1991).

3.08.180 CANCELLATION OF INVITATIONS FOR BIDS OR REQUESTS FOR PROPOSALS.

The city may cancel an invitation for bids, a request for proposals, or other solicitation, or the city may cancel any or all bids or proposals in whole or in part as may be specified in the solicitation, when it is for good cause and in the best interests of the city. The reasons therefor shall be made part of the contract file.

(Ord. 91-19 § II (part), 1991).

3.08.190 BID AND PERFORMANCE BONDS ON SUPPLY OR SERVICE.

Bid and performance bonds or other security may be required for contracts as the purchasing manager or head of department deems advisable to protect the city’s interests. Any such bonding requirements shall be set forth in the solicitation. Bid or performance bonds shall not be used as a substitute for a determination of a bidder’s or offeror’s responsibility.

(Ord. 91-19 § II (part), 1991).

3.08.200 SPECIFICATIONS.

All specifications shall be drafted so as to promote overall economy for the purposes intended and encourage competition in satisfying the city’s needs, and shall not be unduly restrictive. The policy enunciated in this section applies to all specifications including but not limited to those prepared for the city by architects, engineers, designers, and draftsmen.

(Ord. 91-19 § II (part), 1991).

3.08.210 REQUISITIONS.

Departments shall submit requests for supplies, services, and construction items to the purchasing manager by standard means prescribed by the purchasing manager.

(Ord. 91-19 § II (part), 1991).

3.08.220 PURCHASE ORDERS.

Procurement of supplies, services, and construction items shall be made only by purchase order.

(Ord. 91-19 § II (part), 1991).

3.08.230 ENCUMBRANCE OF FUNDS.

The purchasing manager shall not issue any purchase order for supplies, services, and construction items unless there exists an unencumbered appropriation in the proper account against which the purchase is charged.

(Ord. 91-19 § II (part), 1991).

3.08.240 SURPLUS SUPPLIES AND EQUIPMENT.

All departments shall submit to the purchasing manager, at such time and in such form as he/she shall prescribe, reports showing all supplies, materials, and equipment which are no longer used or which have become obsolete or worn out. The purchasing manager shall have authority to sell all supplies, materials, and equipment which cannot be used by any agency or which have become unsuitable for city use, or to exchange the same for, or trade in the same on, new supplies and equipment. Sales of surplus supplies and equipment shall be made pursuant to Section 3.08.110, Competitive Sealed Bidding, and Section 3.08.140, Informal Bid and Small Purchases, or by public auction.

(Ord. 91-19 § II (part), 1991).

3.08.250 BID PROTESTS.

Any contractor who unsuccessfully bids on a city contract awarded by the city in accordance with the provisions of this chapter or any trade association representing workers who would have potentially been employed by such a contractor may file a protest. The bid protest shall be in writing and filed with the city clerk within five days of the date of the city’s written notice of intention to award the bid. The city council shall hear the bid protest prior to award of the contract. The protesting party may protest the bid award for the city’s or successful bidder’s failure to comply with the requirements of this chapter, the bid documents, or any other applicable provision of this code. The bid protest shall clearly set forth the basis for the bid protest. Grounds not set forth in the written protest may not be considered by the city council at the bid protest hearing. The city council shall sustain a bid protest if the protesting party demonstrates by clear and convincing evidence that, as specified above, the city would act improperly in awarding the bid. The decision of the city council shall be final.

(Ord. 2002-44 (part), 2002: Ord. 97-13 § 1, 1997: Ord. 97-08 § 2, 1997: Ord. 96-15 § 1, 1996).