Atwater Municipal Code Ch. 3.04 Purchasing System

Footnotes:

--- (1) ---

Editor's note— Ord. CS 987, § 2, adopted Dec. 11, 2017, amended Ch. 3.04 in its entirety to read as herein set out. Former Ch. 3.04, §§ 3.04.010—3.04.300, pertained to similar subject matter and derived from Prior Code §§ 2-5.101—2-5.103, 2-5.105—2-5.110; Prior Code, §§ 3.04.030—3.04.170; Ord. CS 391, adopted in 1979; Ord. CS 472, adopted in 1981; Ord. CS 704, adopted in 1993; Ord. CS 800, adopted March 25, 2005; and Ord. CS 884, § 1, adopted May 29, 2007.

In order to establish efficient regulations, policies, and procedures for the purchase of supplies, equipment, materials and services for the City 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, a purchasing system is adopted.

The acquisition of supplies, equipment, materials and services is adopted with authority and pursuant to California Government Code Sections 54201—54205.

Although "public projects" or "public works projects", as defined in California Public Contract Code Section 22002, are exempt from the City's Centralized Purchasing System their provision has an impact on effectively implementing the City's Capital Improvement and in some cases Capital Expenditure Programs. The procedures for the solicitation of contractors or other individuals qualified to complete "public projects" or "public works projects" shall be pursuant to California Public Contract Code Sections 20160—20174. In addition to these procedures, the City recognizes the ability to initiate "design—build" public projects or public works projects pursuant to California Government Code Section 5956 through 5956.10 and California Public Contract Code Sections 22160 et seq., and 20194. Procedures for the solicitation of professional or consultant services through a qualifications based selections process for "design—build" projects or other professional activities is adopted pursuant to California Government Code Sections 4525—4529.5.

In some instances adherence to the City's purchasing system may be dispensed with or modified when necessary to comply with State or Federal Regulations as provided in this chapter or in the Purchasing Manual.

Additionally, this chapter may not cover every possible situation that may arise but every attempt should be made to utilize the established Purchasing System and exercise sound judgment to ensure fair and open competition and securing the best price and quality to the City.

(Ord. CS 987, § 2, 12-11-2017)

The City Manager, or his/her designee, shall serve as the City's Purchasing Officer as per Atwater Municipal Code Section 2.04.050. The City Manager shall develop a Purchasing Manual setting forth the City's purchasing policies, definitions, responsibilities, and procedures.

(Ord. CS 987, § 2, 12-11-2017)

The Finance Department shall be recognized as the Purchasing Division which shall be responsible for the roles and responsibilities as outlined in the Purchasing Manual.

(Ord. CS 987, § 2, 12-11-2017)

Any officer, agent, or employee of the City or any department thereof who shall aid or assist a bidder or vendor in securing a contract to furnish supplies, materials, equipment or contractual services at a higher price than that proposed by any other bidder/vendor, or who shall favor one bidder vendor over another by giving or withholding information, or who shall willfully mislead any bidder/vendor in regard to the character of the materials or supplies called for, or who shall knowingly accept commodities of a quality inferior to those called for by the contract, or who shall knowingly certify to a greater amount of labor performed than has actually been performed, or to the receipt of a greater amount or different kind of materials or supplies than have actually been received, shall be deemed guilty of malfeasance and the City Manager shall have the authority pursuant to the City of Atwater's Personnel System Rules and Regulations to take appropriate disciplinary action.

(Ord. CS 987, § 2, 12-11-2017)

If at any time it shall be found that the person to whom a contract has been awarded has in presenting any bid(s), or quote(s) colluded with any other party or parties for the purpose of preventing any other bid(s) or quote(s) being made or in any other way manipulated fair and open competition then the contract so awarded shall be null and void.

(Ord. CS 987, § 2, 12-11-2017)

The City's Conflict of Interest Code and other Federal, State, and local laws shall apply to each transaction entered into pursuant to this chapter.

(Ord. CS 987, § 2, 12-11-2017)

Except for urgencies or other authorized exemptions stated elsewhere in the chapter or in the Purchasing Manual no purchase of supplies, services, equipment, professional, or consulting services may be made which are done outside of the requirements of this chapter or the Purchasing Manual. If an agent of the City makes an unauthorized purchase the following shall apply:

A. Such purchases are void and shall not be considered an obligation of the City;

B. Invoices which are associated with an unauthorized purchase may be returned to the vendor or bidder unpaid; and

C. The person who is found as initiating the unauthorized purchase may be held personally liable for the costs of the purchase or contract.

(Ord. CS 987, § 2, 12-11-2017)

If any section, subsection, sentence, clause, word or phrase of this ordinance is held to be unconstitutional or otherwise invalid for any reason, such decision shall not affect the validity of this ordinance. The City Council of the City of Atwater hereby declare that they would have passed this ordinance, and each section, subsection, sentence, clause, word, or phrase thereof, irrespective of the fact that one or more section, subsection, sentence, clause, word, or phrase be declared invalid or unconstitutional.

(Ord. CS 987, § 2, 12-11-2017)

For purposes of determining the value of a proposed purchase or acquisition so that it may be categorized for processing through the City's Centralized Purchasing System, the value of all proposed purchases or acquisitions shall be predicated upon a separate cost—price basis. Price shall be the value of an item but the cost may be different. Cost shall be the total dollar quantity that the City expends to acquire supplies, equipment, materials or services. In determining whether or not supplies or equipment fall into the exempt category—"over the counter" classification, the open market procedure, or the formal contract procedure the total cost of the supplies, equipment, or materials shall not be used. Instead the price of the supplies, equipment, or materials alone shall be the deciding factor. Excluded from the price shall be the related costs in acquiring the supplies, equipment or materials such as shipping fees, postage, delivery charges, handling, sales taxes, or other fees or charges related to the acquiring of the supplies, equipment or materials. With regard to consultant services or professional services the price or value of services shall include the combined costs of the services provided plus any materials, equipment or supplies that will be provided to the City through the consultant or professional's services to the City. Other related costs such as staff time, postage, communications, or other administrative costs bore by the City to oversee the completion of the contract for consultant or professional services shall not be included in its value.

(Ord. CS 987, § 2, 12-11-2017)

Purchases of supplies, equipment, materials and services shall be by bid through the formal contract procedure if they exceed $25,000.00 in price, pursuant to Section 3.04.170, or by quote through the open market procedure if they are between $1,001.00 and $25,000.00 in price by procedures pursuant to Section 3.04.130, in other cases, specifications of the supplies, equipment, materials or services being solicited should be developed in accordance with the guidelines in the City of Atwater Purchasing Manual. Centralized purchasing shall be dispensed with only when an urgent situation requires that an order be placed with the nearest available source of supply, when an over the counter purchase is being made, or when the commodity is a sole source purchase, or when approved by the City Council to take advantage of unique cost saving opportunities, or as listed as being exempt from centralized purchasing as provided elsewhere in this chapter or the Purchasing Manual. Splitting of a purchase to circumvent the limits set under centralized purchasing is specifically prohibited.

(Ord. CS 987, § 2, 12-11-2017)

A. Purchase Amounts of $5,000.00 or Less. Purchases of supplies, equipment, materials and services with a price of $5,000.00 or less may be made through a using department of the City without City Manager or City Council approval and does not require the following of either the open market procedure or formal bidding procedure as established in this chapter provided that there is an unencumbered appropriation in the fund account against which the purchase is to be charged and that department head approval by the using department is obtained. Purchases made under the $5,000.00 limit shall be referred to as "over the counter purchases."

B. Professional Services—Consulting Services. The selection of vendors or bidders to provide professional services—consulting services shall be done in accordance with procedures established in the City of Atwater Purchasing Manual and shall be predicated upon the qualifications based selections process, Section 3.04.300.

C. Sole Source Purchases. Commodities and services which may be obtained only from one bidder or vendor are exempt from the centralized purchasing process. Sole source purchases may include proprietary items sold directly from the manufacturer, items that have only one distributor authorized to sell in a geographic area or a certain product that has been proven to be the only product that is acceptable. All sole source purchases shall be supported by written documentation signed by the appropriate department head and forwarded to the Purchasing Division. Final determination that an item is a valid sole source purchase shall be made by the Purchasing Officer, or his/her designee.

D. Public Projects or Public Works Projects. Pursuant to Sections 20160—20174 of the California Public Contract Code, contracts for "public projects" or "public works projects" which have an estimated value greater than $5,000.00 shall be contracted for and let to the lowest responsible bidder by the procedures set forth in State Law. The Public Contract Code defines a public project as (a) a project for the erection, improvement, painting, or repair of public buildings and works, (b) work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow, (c) street or sewer work except maintenance or repair, and (d) furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers. Pursuant to Sections 1720—1743 of the California Labor Code, public works are defined as the construction, alteration, repair, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by any public utility company pursuant to order of the Public Utilities Commission or other public authority. As an alternative to initiating a public project or public works project through the bid procedures described by State Law the City may initiate a "design - build," process through the selection of a qualified consultant, pursuant to California Government Code Sections 5956 through 5956.10 10 and California Public Contract Code Sections 22160 et seq., and 20194. Under the "design - build," process a public works project or public project may be exempt from bidding requirements and other requirements provided that the selected consultant was chosen on the basis of competence and professional qualifications and that the work to be completed is to be paid through fee producing infrastructure. To this end, should the City of Atwater initiate a "design - build" project, the process for obtaining professional services is outlined in Section 3.04.300 and shall be adhered to.

E. Other Exemptions. The City's purchasing system may be dispensed of when other State or Federal statutes or regulations prescribe a separate specific purchasing process such as in the case of public works projects and public projects, Federal and State funded grant activities, or other such instances which specify that as a condition of contract award or funding that a specific purchasing process other than the City's is to be followed.

(Ord. CS 987, § 2, 12-11-2017)

Minor modifications or deviations from the City's Centralized Purchasing System may be necessary to carry out the functions of the City or to comply with State, Federal, or other intergovernmental regulations. These situations shall be determined on a case by case basis and shall require the approval by the Purchasing Officer, or his/her designee, prior to initiating a purchase. Modifications or deviations should only be considered in situations where it will allow the City's Centralized Purchasing System to be modified or deviated from slightly in such a manner that it would permit the carrying out of functions of the City when acting under a State, Federal, or other intergovernmental grant or in the carrying out of State, Federal, or other intergovernmental funded activities in which the City is involved.

(Ord. CS 987, § 2, 12-11-2017)

Purchases of supplies, equipment, materials and services with a price of $25,000.00 or less may be made in accordance with the following procedure:

A. Minimum Number of Quotes. The open market purchase shall be based on at least three quotes whenever possible and shall be awarded to the lowest responsible vendor.

B. Notice Requesting Quotes. The using department shall solicit to prospective vendors by writing, electronic mail, by telephone, posting of the notice at City Hall, placement of an ad in an appropriate journal or other periodical or publication, or by other formal notice.

C. Written Quotes. Quotes shall be kept for a period of one year after the submission of the quotes. This record, while so kept, shall be open to public inspection.

D. If the City Manager deems necessary, items which have a price or estimated value of $25,000.00 and under may be purchased according to Formal Contract Procedure outlined under Sections 3.04.170 through 3.04.280, or by other means as established in the Purchasing Manual.

E. The City Manager shall have the only authority to award a purchase contract under the open market procedure, this authority may also be delegated.

(Ord. CS 987, § 2, 12-11-2017)

A. Preferred Method. The use of purchase orders to effectuate the purchases of all supplies, equipment, materials and services shall be made by purchase order when possible and may be paid for using a credit or debit card issued to the City of Atwater when procedures as outlined in the Purchasing Manual or other adopted procedures.

B. Open Purchase Orders. An open purchase order is an agreement whereby the City contracts with a vendor or bidder to provide equipment or supplies on an as-needed and often over-the-counter basis. Open purchase orders provide a mechanism whereby items which are uneconomical to stock may be purchased in a manner that allows operations timely access to necessary materials. Open purchase orders shall not be used to purchase services, capital assets or items maintained in stock. The Purchasing Division shall request confirmation of open purchase orders annually, before the beginning of the fiscal year. Requests for open purchase orders may also be submitted to the Purchasing Division on an as-needed basis. The Purchasing Division shall review open purchase order requests based upon criteria developed in the City of Atwater Purchasing Manual. Once an open purchase order is issued to a bidder or vendor, any authorized City employee may contact the bidder or vendor directly to place orders per the terms and conditions specified in the open purchase order unless otherwise stated in the contract to execute the open purchase order.

C. Contract Purchase Orders. Contract purchase orders are the preferred method of purchasing repetitive-use items or services which may be common to several departments or within one department or provide generalized services to the City which shall be needed on an ongoing basis. Establishing contract purchase orders provides a means of obtaining volume pricing based upon the combined needs of all departments, reduces the administrative costs associated with seeking redundant competitive bids and processing a purchase order each time an order is placed, and allows departments to order as needed, reducing the requirement to maintain large inventories of stock. If a contract purchase order exists, departments shall order all of their requirements from the successful vendor. No other source shall be used without prior approval of the Purchasing Officer, or his/her designee. Using departments shall submit, in writing to the Purchasing Division, any performance problem encountered immediately following the occurrence so that corrective action may be taken. Contract purchase orders are annual and may include option for renewal for specific products, product types, or services at agreed upon prices or pricing structure and for a specified period of time.

(Ord. CS 987, § 2, 12-11-2017)

The Purchasing Division and any using department may participate in purchases and contracts established by other political jurisdictions, provided the cooperative agreement is established following a competitive bid process similar to the City's Formal Contract Procedure. The City Manager may authorize the award of cooperative purchase agreements up to $25,000.00. City Council approval is required for the award of any cooperative purchase of $25,001.00 or more. This process is often called "piggy backing."

(Ord. CS 987, § 2, 12-11-2017)

Except in cases of an urgency, no purchase order for supplies, or equipment, contracts for public projects or public works project, contracts for professional or consulting services, shall be issued unless there exists an unencumbered appropriation in the fund account against which the purchase is to be charged.

(Ord. CS 987, § 2, 12-11-2017)

Purchases and contracts for equipment and/or supplies which have a cost or value greater than $25,001.00 shall be made by the procedures as set forth in Sections 3.04.180 through 3.04.280.

(Ord. CS 987, § 2, 12-11-2017)

For the acquisition of equipment, professional or consulting services, and supplies or other capital expenditures with a cost or value greater than $25,000.00, or for the award of contract to complete a public project or public works project with a value greater than $5,000.00 (California Public Contract Code Sections 20160—20174), the City Council must authorize the call for bids and approve the specifications for which the request for bids will be based upon.

(Ord. CS 987, § 2, 12-11-2017)

A. Notice inviting bids or quotes shall include a general description of the articles to be purchased or services to be rendered; shall state where bid blanks and specifications may be secured; bonding, deposit and insurance requirements, if any; and a time and place for opening bids or final date and time for accepting quotes.

B. Published Notice. Notice inviting bids or quotes shall be published at least ten days before the date of opening of the bids or the final date for accepting quotes. Notice shall be published at least once in a newspaper of general circulation, printed and published in the City. Notices may be published in other publications as the purchasing agent may deem necessary.

C. Bidders' List. Sealed bids or quotes shall be solicited from all responsible prospective suppliers whose names are on the bidders' list or other eligibility list or who have made written request that their names be added thereto.

(Ord. CS 987, § 2, 12-11-2017)

When deemed necessary by the City, security in an amount up to ten percent of the bid determined by the City Council may be prescribed in the public notices inviting bids. Unsuccessful bidders shall be entitled to return of bid security. The successful bidder shall forfeit his bid security upon his refusal or failure to execute the contract within ten days after the notice of the award of contract has been mailed unless in the latter event the City is solely responsible for the delay in executing the contract. The Council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder.

(Ord. CS 987, § 2, 12-11-2017)

Sealed bids shall be submitted to the City Clerk 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 bids received shall be prepared and shall be available for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening.

(Ord. CS 987, § 2, 12-11-2017)

In its discretion, the City Council may reject all bids and quotes.

(Ord. CS 987, § 2, 12-11-2017)

If no bids or quotes are received through either the formal contract procedures or the open market procedures the City Council may at its discretion re-advertise or take other actions which are appropriate these may include negotiating with a bidder or vendor to acquire the desired goods or services or other actions which are consistent with this chapter.

(Ord. CS 987, § 2, 12-11-2017)

If two or more bids or quotes received are for the same amount or unit price, quality and service being equal and the public interest will not permit the delay of re-advertising for bids or soliciting for price quotes, the City Council may accept the one it chooses except in the case where a local bidder/vendor and non-local bidder/vendor are tied, in that case the City Council shall follow the requirements of the local business preference and shall award the purchase contract accordingly.

(Ord. CS 987, § 2, 12-11-2017)

The City Council shall have authority to require a performance bond before entering a contract in the amount as it finds reasonably necessary to protect the interests of the City. If the City Council requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids or quotes.

(Ord. CS 987, § 2, 12-11-2017)

Contracts under the formal contract procedure, those exceeding $25,000.00 shall be awarded by the City Council to the lowest responsible bidder or vendor except as otherwise provided in this chapter.

(Ord. CS 987, § 2, 12-11-2017)

In evaluating competitive bids or quotes to determine the lowest responsible vendor/bidder any local vendor/bidder shall be granted a preference in an amount equal to five percent off of their bid or quote if a non-local bidder/vendor is initially determined to be the lowest responsible bidder/vendor of a good or services being solicited. If after deduction of the five percent preference from a local vendor/bidder's bid or quote, it is equal to or less than the lowest bid or quote submitted by the non-local bidder or vendor, the purchase award shall be awarded to the local vendor/bidder. In the event that a non-local bidder/vendor and a local bidder/vendor have the same bid or quote and it is the lowest responsible bid or quote the five percent preference need not be applied the local business shall be selected to receive the purchase award. For purposes of this section, a qualified local vendor/bidder is defined as any individual, partnership, or corporation which regularly maintains a place of business and an inventory of merchandise for sale within the incorporated City limits of the City of Atwater and has a valid business license issued by the City of Atwater during when the bid or quote is provided. All contractors who submit bids or proposals to construct or provide work on any City Public Works Project, or for any other Public Works construction, or improvement, on City property, and who are seeking a local business preference, must make a good-faith effort to hire qualified individuals who are residents of the City of Atwater or Merced County in sufficient numbers so that no less than 50 percent of the contractor's total construction work force, including subcontractor work force, measured in labor work hours, is comprised of Atwater residents. This same requirement applies to all subcontractors. A non-local bidder or vendor shall be all others which may do business with the City of Atwater. The local business preference may not apply and may be dispensed with when prohibited by State or Federal Statutes, or regulations requiring that a bid or quote be awarded to the lowest responsible bidder or vendor, or as otherwise exempted from local preferences. The local business preference shall not apply to purchases made through the over the counter process since items less than $5,000.00 are exempt from the purchasing system, however a using department making a purchase under the over the counter process shall make every attempt possible to purchase through local businesses. Under no circumstances shall the local business preference granted in a single bid or quote exceed $5,000.00. The local business preference will not apply when bids or quotes are done with other public agencies through cooperative purchases.

(Ord. CS 987, § 2, 12-11-2017)

The using department shall inspect supplies, equipment, materials and services delivered to determine their conformance with the specifications set forth in the order or contract. The using department 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. CS 987, § 2, 12-11-2017)

Pursuant to California Labor Code Sections 1770—1780 for "public projects" or "public works project" in excess of $1,000.00, the general prevailing wage rate of per diem wages shall be paid and shall apply to all public projects and public works project as defined in Sections 20160—20174 of the California Public Contract Code and Sections 1720—1743 of the California Labor Code. The City shall also comply with the Federal Davis Bacon Act when appropriate and required to do so.

(Ord. CS 987, § 2, 12-11-2017)

Pursuant to California Government Code Sections 4525—4529.5 various professional services are prescribed by State law to be selected by local agencies based upon demonstrated competence and on professional qualifications, cost of the services shall be secondary to the qualifications to perform the required professional or consulting services. The City finds that in addition to the types of services specified in the California Government Code Sections 4525—4529.5 other professional or consulting services should also be awarded based on competence and professional qualifications. These may include, but are not limited to, professional or consulting services by a person or firm engaged in a profession based on a generally recognized special knowledge or skill, including, but not limited to, the professions of accountant, attorney, artist, architect, landscape architect, construction manager, engineer, environmental consultant, dentist, physician, training or educational consultant, or land surveyor, and whose services are considered distinct and unique to such a degree that bidding of such services would not be feasible. In order to ensure compliance with State law and that selection is done in an unbiased manner promoting the merits of qualifications and competence the City shall follow procedures as included in the Purchasing Manual. Additionally, the criteria to be used in making the selection shall be:

A. The ability, capacity, and skill of the bidder to perform the contract;

B. Whether the vendor has the facilities to perform the contract promptly, or within the time specified, without delay or interference;

C. The character, integrity, reputation, judgment, experience, and efficiency of the vendor;

D. The vendor's record of performance of previous contracts;

E. The previous and existing compliance by the vendor with laws and ordinances relating to the contract;

F. A recommendation to the City Council by an appropriate standing committee of the City Council or other formally adopted City Committee which has reviewed all qualified applicants as determined by the appropriate City department head, unless the review by the standing City Council Committee has been waived.

(Ord. CS 987, § 2, 12-11-2017)

No acquisition of equipment, materials, supplies or contractual services from a single vendor or provider shall be accomplished by the issuance of several purchase orders for portions thereof.

(Ord. CS 987, § 2, 12-11-2017)