Chapter 3.04
PURCHASING SYSTEM
Sections:
3.04.020 Purchasing officer – Office created – Designated – Duties generally.
3.04.030 Purchasing officer – Duties.
3.04.041 Informal bid procedures.
3.04.043 Notice inviting informal bids.
3.04.050 Formal bidding procedure for work other than public projects.
3.04.100 Competitive negotiation.
3.04.110 Cooperative purchasing.
3.04.120 Award and execution of contracts.
3.04.130 City business credit.
3.04.140 Use of purchase orders required.
3.04.150 Encumbrance of funds.
3.04.010 Adopted – Purpose.
The purchasing system set out in this chapter is adopted in order to establish efficient procedures for the purchase of supplies, services and equipment at the lowest possible cost commensurate with quality needed; to exercise positive financial control over purchases; to clearly define authority for the purchasing function; and to assure the quality of purchases. No obligation for the payment of supplies, services and equipment shall be incurred by the city except as prescribed by this chapter. (Ord. 587 § 2, 1981; prior code § 2-301)
3.04.020 Purchasing officer – Office created – Designated – Duties generally.
A. There is created the position of purchasing officer. The city manager will appoint the purchasing officer, and in the absence of the purchasing officer, the functions of such position shall be performed by the appointed assistant purchasing officer.
B. The purchasing officer shall exercise general supervision of the city’s purchasing and shall exercise general supervision of the purchasing system set out in this chapter. The duties of the purchasing officer may be combined with those of any other office or position.
C. Repealed by Ord. 1042.
D. The purchasing officer or a designated representative shall have authority to require chemical and physical tests of samples submitted with the bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. When purchasing for the city, the purchasing officer will do so in accordance with the affirmative action plan of the city. (Ord. 1042 § 2 (Att. B), 2017; Ord. 587 § 2, 1981; prior code § 2-302)
3.04.030 Purchasing officer – Duties.
The purchasing officer shall have the authority to:
A. Purchase or contract for supplies, services and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, and such administrative regulations as the purchasing officer shall adopt for the internal management and operation of the purchasing system;
B. Negotiate and recommend execution of contracts for the purchase of supplies, services, and equipment;
C. Act to procure for the city the needed quality in supplies, services and equipment at the least expense to the city;
D. Discourage uniform bidding and endeavor to obtain as full and open competitions as possible on all purchases;
E. Prepare and recommend to the city council rules and revisions, and amendments to such rules, governing the purchase of supplies, services 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 such forms as reasonably necessary to the operation of this chapter and other rules and regulations;
H. Supervise the inspection of all supplies and equipment purchased to ensure conformance with specifications;
I. Recommend to the city manager the transfer of surplus or unused supplies and equipment between departments as needed;
J. Maintain a bidders’ list, vendors’ catalog file and such other records needed for the efficient operation of the purchasing function;
K. Prepare in consultation with using departments specifications for supplies, services and equipment for the city. (Ord. 587 § 2, 1981; prior code § 2-303)
3.04.040 Public projects.
Notwithstanding any alternative procedures contained in this chapter, contracts for all “public projects,” as defined in California Government Code Sections 37901 through 37907, shall be administrated through procedures established by the public works department, pursuant to state law. All questions regarding the requirement of utilizing this bidding procedure shall be referred to the city attorney for his ruling. The utilization of the exceptions contained in the Government Code or any exception procedure contained in this chapter shall not proceed without consulting the city attorney. (Ord. 587 § 2, 1981; prior code § 2-304)
3.04.041 Informal bid procedures.
Public projects, as defined by the Uniform Public Construction Cost Accounting Act and in accordance with the limits listed in Section 22032 of the Public Contract Code, may be let to contract by informal procedures as set forth in Section 22032 et seq. of the Public Contract Code. (Ord. 980, 2009)
3.04.042 Contractors list.
A list of contractors shall be developed and maintained in accordance with the provisions of Section 22034 of the Public Contract Code and criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission. (Ord. 980, 2009)
3.04.043 Notice inviting informal bids.
Where a public project is to be performed which is subject to the provisions of this chapter, a notice inviting informal bids shall be mailed to all contractors for the category of work to be bid, as shown on the list developed in accordance with SMC 3.04.042, and to all construction trade journals as specified by the California Uniform Construction Cost Accounting Commission in accordance with Section 22036 of the Public Contract Code. Additional contractors and/or construction trade journals may be notified at the discretion of the department/agency soliciting bids, provided however:
A. If there is no list of qualified contractors maintained by the city for the particular category of work to be 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. (Ord. 980, 2009)
3.04.044 Award of contracts.
The city manager or designee is authorized to award informal contracts pursuant to this section. (Ord. 980, 2009)
3.04.050 Formal bidding procedure for work other than public projects.
Except as otherwise provided in this chapter, purchases of supplies, services and equipment of an estimated cost greater than twenty-five thousand dollars, where such work is not a public project, shall be by written contract with the lowest responsive bidder who submits a responsive bid pursuant to the following procedure:
A. Allocation has been provided in the adopted annual city budget or the city council has made available funds for such a purchase and its expense.
B. Department heads and the purchasing officer will develop written specifications for supplies, services and equipment to be procured. Services identified in SMC 3.04.100 may be purchased by the competitive negotiation process. Written specifications must be adequately detailed to avoid ambiguity. Trade definitions/terminology are suggested for clarity in developing concise specifications. Adequate specification research is necessary to enable bidders to be responsive.
C. The purchasing officer will solicit sealed bids from all known responsive prospective suppliers. When deemed necessary by the city, bidders’ security may be prescribed in the specifications provided bidders. Bidders shall be entitled to return of bid security upon successful execution of his contractual obligation. The purchasing officer will arrange publishing legal notice inviting bids. Legal notice and solicitation will specify the hour and date sealed bids must be received by the purchasing officer, and the bid opening time. Bids received as unsealed or after the specified hour and date will be rejected and returned to the bidder as a nonresponsive bid.
D. Bid opening will be conducted by the purchasing officer and attended by the department head requesting the bidded supplies, services, or equipment, and one additional individual designated by the city manager. This group will serve as the source selection committee for the bidded supplies, services, or equipment. The purchasing officer will open, announce, and record the sealed bids submitted. After bid opening and recording, the source selection committee will scrutinize accepted bids for specification conformance and responsiveness. The source selection committee will recommend for city council approval, the lowest submitted bid meeting specification conformance.
E. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsive 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 contract price differential between the lowest bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. If the city council rejects all bids presented, due to the failure of the successful bidder to execute the contract, and readvertises, the amount of the lowest bidder’s security may be used to offset the cost of soliciting and receiving new bids and the surplus, if any, shall be returned to the lowest bidder.
F. At its discretion, the city council may reject any and all bids presented and readvertise for bids pursuant to the procedure prescribed in this section. In the event no bids are received or that all bids substantially exceed the city’s estimate of cost for the purchase, the city council may reject all bids and direct the purchasing officer to proceed pursuant to open market or competitive negotiation sections of this chapter.
G. If two or more bids received are the same amount or unit price, quality and service being equal, and if the public interest will not permit the delay of readvertising for bids, the city council may, in its discretion, accept the lowest bid made by and after negotiation with the tie bidders at the time of the bid opening.
H. The city shall have authority to require a performance, and labor and materials bond before entering into a contract in such amount as it finds reasonably necessary to protect the best interests of the city. If the city requires a performance bond, the form amount of the bond shall be described in the notice inviting bids. (Ord. 950 § 1, 2006; Ord. 587 § 2, 1981; prior code § 2-305)
3.04.060 Open market procedures – Departmental proprietary supplies, services and equipment costing more than five thousand dollars and less than twenty-five thousand dollars.
A. “Departmental proprietary supplies, services and equipment” are defined as goods and services professionally unique to one using department or primarily used by one department. In the latter case, the primary using department will act as procurement coordinator. Examples of professionally unique goods and services are:
1. Police equipment and ammunition;
2. Arrest/citation forms;
3. Fire hose/firefighting apparatus;
4. Accounting forms, city checks, purchase orders;
5. Vehicle parts and equipment;
6. Street maintenance materials;
7. Parks/gardening supplies and equipment.
B. Department heads will solicit at least three price quotes by telephone or by other means from vendors. Department heads are encouraged to collaborate with the purchasing officer in identifying appropriate vendor sources. Vendors contacted and prices quoted will be recorded on the city telephone price quote form and submitted with the properly completed city purchase order form to the purchasing officer. The bid will be awarded to the lowest responsive bidder when most advantageous to the city. When awards are given to someone other than the lowest responsive bidder, a statement as to why another vendor was more advantageous to the city shall be kept on file for a period of one year, and shall be open to public inspection. Whenever a purchase is awarded to someone other than the lowest responsive bidder, it must be approved by the purchasing officer. (Ord. 1042 § 2 (Att. B), 2017; Ord. 950 § 2, 2006; Ord. 587 § 2, 1981; prior code § 2-306)
3.04.070 Open market procedures – Supplies, services and equipment other than departmental proprietary items costing more than five thousand dollars and less than twenty-five thousand dollars.
A. “Supplies, services and equipment other than departmental proprietary items costing more than five thousand dollars and less than twenty-five thousand dollars” are defined as goods and services which are not unique to one using department or primarily used only by one department. Examples of this category are nonspecialty vehicles, small office copy machines, electric typewriters, file cabinets, etc.
B. Department heads will provide the purchasing officer a description or brochure sample of the required item. The purchasing officer will coordinate with the department head in identifying the suitable commercial item. The purchasing officer will obtain a minimum of three price quotes by telephone or other means from vendors. When deemed more advantageous to the city, the purchasing officer may use formal bidding procedures. Department heads are responsible for preparation of the city purchase order for processing. The bid will be awarded to the lowest responsive bidder when most advantageous to the city. When awards are given to someone other than the lowest responsive bidder, a statement as to why another vendor was more advantageous to the city shall be kept on file for a period of one year, and shall be open to public inspection. (Ord. 950 § 2, 2006; Ord. 587 § 2, 1981; prior code § 2-307)
3.04.090 Open market procedures – Supplies, services and equipment costing less than five thousand dollars.
A. Department heads will be responsible for procuring items other than office supplies and reproduction paper costing less than five thousand dollars.
B. Department heads should make every effort to obtain the least possible price to the city for items in this category. Department heads are encouraged to consult with the purchasing officer in identifying vendor sources resulting in the least possible price to the city.
C. Purchases in this category do not require the use of purchase orders. (Ord. 1042 § 2 (Att. B), 2017; Ord. 950 § 4, 2006; Ord. 587 § 2, 1981; prior code § 2-309)
3.04.100 Competitive negotiation.
A. The city manager may authorize the purchase of highly technical supplies and equipment, and personal services by competitive negotiations when:
1. The service involves a specialized knowledge or personal skill, such as attorneys, architects, accountants and specialized consultants; or
2. The supplies or equipment are such that suitable technical or performance specifications are not readily available, the city is not able to develop descriptive specifications, and proposals for the purchase would be more advantageous to the city.
B. When the purchases are made by competitive negotiations, the best offer as judged against proposal evaluation criteria shall be accepted. The use of competitive negotiations is not intended to be used for the purpose of avoiding the bidding procedures as set forth in this chapter. (Ord. 587 § 2, 1981; prior code § 2-310)
3.04.110 Cooperative purchasing.
Purchase of supplies, services and equipment by contract, arrangement and agreement for cooperative purchasing programs with the state, the county, or any other public or municipal corporation of the state may be made by the purchasing officer when the administering agency has made their purchases in a competitive manner. (Ord. 587 § 2, 1981; prior code § 2-311)
3.04.120 Award and execution of contracts.
Except in emergency situations, all contracts for supplies, services and equipment in an estimated amount of twenty-five thousand dollars or more shall be awarded by the city council. Contracts for supplies, services and equipment in an estimated amount of less than twenty-five thousand dollars shall be executed by the city manager. (Ord. 1042 § 2 (Att. B), 2017; Ord. 950 § 5, 2006; Ord. 587 § 2, 1981; prior code § 2-312)
3.04.130 City business credit.
Whenever a bid is received by a vendor that is located within the city limits of Seaside, a two percent reduction factor shall be awarded when determining the lowest responsive bidder. The purpose of this two percent reduction factor is to offset the sales tax, business license fees and any other advantages that exist when the city purchases within its boundaries. (Ord. 940, 2005; Ord. 587 § 2, 1981; prior code § 2-313)
3.04.140 Use of purchase orders required.
The purchase of supplies, services and equipment over five thousand dollars shall be made only by purchase orders. Except as otherwise provided in this chapter, no purchase order shall be issued unless the prior approval of the purchasing officer has been obtained. (Ord. 1035 § 1, 2017; Ord. 587 § 2, 1981; prior code § 2-314)
3.04.150 Encumbrance of funds.
Except in cases of emergency or in cases where specific authority has been first obtained by the city council, the purchasing officer shall not issue any purchase order over five thousand dollars for supplies, services or equipment unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged. (Ord. 1035 § 2, 2017; Ord. 587 § 2, 1981; prior code § 2-315)