Diamond Bar Municipal Code Ch. 3.24 Purchasing

Footnotes:

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Editor's note— Ord. No. 02(2018), § 1, adopted July 17, 2018, repealed the former Ch. 3.24, §§ 3.24.010—3.24.160, and enacted a new Ch. 3.24 as set out herein. The former Ch. 3.24 pertained to similar subject matter. See Code Comparative Table for complete derivation.

State Law reference—

To establish efficient procedures for the purchase of supplies, services, personal property, equipment, and professional services; to secure for the city supplies, services, and equipment at the lowest cost commensurate with the quality needed and with due consideration to usability; to exercise positive financial control over purchases; to clearly define authority for the purchasing functions; to assure the quality of purchases; and to buy without favor or prejudice, a purchasing system is adopted and shall control the procedures for all purchases except as otherwise provided by law.

(Ord. No. 02(2018), § 1, 7-17-18)

As used in this chapter, the following words and terms shall be defined as follows unless the context indicates that a different meaning is intended:

Bid means the response submitted by a bidder to an invitation for bids issued by the city for goods, services or public projects.

Budget authority means that with the exception of emergency procedures, no purchase shall be made without prior approval and appropriation in the city's annual budget.

Capital asset means land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure and all other tangible assets that are used in operations, cost in excess of $5,000.00 and that have initial useful lives extending beyond one year.

Competitive bidding means the process whereby bids are solicited from potential bidders in accordance with applicable law to foster cost effective competition within the private sector providing goods, services, or public projects to the city.

Contract means an agreement, in writing, between two or more persons with the requisite authority, which creates an obligation to provide supplies, services, personal property, equipment or professional services.

Encumbrance means a contingent liability and reservation of a budget appropriation incurred as a result of the issuance of a purchase order and/or contract.

Informal bid or quotation means a competitive bid that is submitted by a bidder for procurement of goods or services for which formal bidding is not required.

Local bidder/vendor means a business, firm, or enterprise with fixed offices and locally taxable distribution points within the city, which holds a valid business license issued by the city, and bearing a street address within the city.

Personal property means any tangible property not including land or real estate, including any furniture, fixtures or equipment. This includes but is not limited to vehicles, equipment, and supplies.

Professional services means, but is not limited to, any type of services that may be lawfully rendered including those of architects, attorneys, auditors, consultants, engineers, physicians, accountants, information technology professionals or other individuals or organizations possessing a high degree of professional, unique, specialized, technical skill or expertise.

Purchase requisition shall mean the city's written request submitted to initiate the procurement process for specified goods, services or a public project. Includes the procurement of supplies, equipment and personal property, including leases or rentals of such items.

Purchase order means the city's written documentation provided to a vendor formalizing the terms and conditions associated with the ordering of the goods, services, or public project required by the city.

Responsive bid means a bid which meets all of the specifications set forth in the request for a bid proposal.

Responsible bidder shall mean a bidder who submits a responsive bid, and has furnished, when requested, information and data to prove that the bidder has the financial resources, production or service facilities, service reputation and experience necessary to make satisfactory delivery of supplies, materials, equipment or contractual services on which the bids are made, and who has not violated, or attempted to violate, any provision of this chapter.

Services shall mean any and all services, with the exception of professional services as defined above, including but not limited to equipment service contracts.

Splitting shall mean dividing a purchase or contract into two or more parts in order to avoid the provisions of this chapter requiring work to be done by contract after competitive bidding.

Sole source means a non-competitive procurement decision whereby acceptable justification exists to support public works or non-public works related purchases provided by one particular supplier or contractor.

Surplus personal property means any personal property that is no longer needed or useable by the city.

Use tax means the tax on the use, storage or consumption of personal property in California which was purchased out of state.

(Ord. No. 02(2018), § 1, 7-17-18)

The purchase of supplies, services, personal property, equipment and professional services is the responsibility of the individual departments making such purchases. It is the responsibility of the purchasing manager described in section 3.24.040(a) to ensure the adherence to the provisions prescribed in this chapter.

(Ord. No. 02(2018), § 1, 7-17-18)

(a) Creation of position of purchasing manager. There is hereby created the position of purchasing manager, who shall be the city manager or designee.

(b) Power and duties.

(1) Purchasing manager. The purchasing manager shall direct and supervise the acquisition of all goods and services under this chapter and may delegate any of the powers and duties conferred upon him/her as provided herein.

(2) Purchasing agents. The purchasing manager may delegate the responsibility for administering purchasing policies and procedures to one or more purchasing agents. The authorized purchasing agents may include:

i. Assistant city manager.

ii. Finance director.

iii. Public works director.

iv. Community development director.

v. Parks and recreation director.

vi. Information services director.

(3) Purchasing delegates. The purchasing manager may delegate authority to the purchasing agents to delegate authority to additional individuals within their supervision who shall be authorized to make purchases. Individuals delegated purchasing authority hereunder are referred to as "purchasing delegates" in accordance with the following requirements:

i. A written list of purchasing delegates must be submitted to the finance director and include the name and maximum dollar purchasing authority authorized for each individual.

ii. A written list of purchasing delegates must be approved on an annual basis or upon changes in employment status, whichever is more frequent, by the city manager, the finance director and the department director.

iii. The finance director must maintain a written record of all approved purchasing delegates.

(Ord. No. 02(2018), § 1, 7-17-18)

Provided there is adequate unencumbered appropriations in the account against which the expenditure is to be charged, purchases of supplies, services, personal property and equipment shall be as specified in Table 3.24A and subject to the following provisions:

Table 3.24A - Authority and Purchasing Limitations; Supplies, Services, Property and Equipment

(a) Public projects. Procurement of public projects is provided for in chapter 3.25 of this Code.

(b) Professional services. Procurement of professional services is provided for in section 3.24.070.

(c) Purchase orders. Purchased orders are required when:

(1) A single item or aggregate purchase with an estimated value of $5,000.00 or greater.

(2) When the purchasing manager, purchasing agent or purchasing delegate expects to make multiple purchases with a single vendor and such purchases are expected to exceed $5,000.00 within a fiscal year.

(d) Purchase amount. The following provisions apply in determining the purchasing authority identified in Table 3.24A:

(1) Cumulative amounts. The amount of multiple purchases or contracts from the same vendor shall be aggregated on a department basis for each fiscal year.

(2) The splitting of purchases to circumvent the purchasing authority thresholds shall be prohibited.

(3) Multi-year contracts. The total not to exceed amount for the entire term of a multi-year contract shall be used to determine the purchase amount and purchasing authority.

(4) Out of state purchases. Out of state purchases for goods that would normally incur sales tax charges must accrue use tax (at the same rate as the current sales tax charged within Diamond Bar) and be included in the calculation to determine the lowest responsible bidder and/or amount.

(e) Competitive bids required. The following provisions shall apply in soliciting competitive bids when required in Table 3.24A:

(1) A minimum of three bids or quotes shall be obtained unless an exception is granted pursuant to section 3.24.090.

(2) The lowest responsible bidder shall be selected unless an exception is granted pursuant to section 3.24.090.

(3) The city reserves the right to reject all bids with or without cause, abandon the purchase process, and/or start a new procurement process for the same or substantially the same purchase at any time during the solicitation period.

(4) When bids are not required, it shall be the responsibility of the purchasing delegate or purchasing agent to ensure that purchases are procured at competitive rates.

(5) Nothing in the section precludes the solicitation of bids or quotes for purchases that would otherwise not be required.

(6) Informal bids.

i. Three competitive informal bids or quotes may be solicited from vendors. The solicitation may either be a verbal or written format

ii. Bids received from the vendor must be in writing.

iii. Written documentation of all bids received and the selection of the lowest responsible bidder shall be submitted in a format prescribed by the finance department and attached to the requisition to issue a purchase order.

(7) Formal bids.

i. To initiate the formal bids process, a written scope of work, with the product description, and specifications or a request for proposal which adequately describes the intended purchase shall be prepared.

ii. Such written documentation shall be made, advertised on the city's bid system to solicit bids or quotes from qualified vendors. In addition, such written documentation may also be sent to vendors directly soliciting bids or quotes at the discretion of the department making the purchase.

iii. All written bids received by the stated submittal deadline shall be reviewed for conformance with the written documentation. Any deviations from the specifications shall be evaluated for suitability, performance, longevity or unique needs of the city to meet its intended purpose. Any bids or quotes determined to not comply with the specifications may be rejected.

iv. Written documentation of all bids received and the selection of the lowest responsible bidder shall be submitted in a format prescribed by the finance department and attached to the requisition to issue a purchase order.

v. Formal bids are awarded by the city council.

(Ord. No. 02(2018), § 1, 7-17-18)

(a) W-9 requirement. A completed IRS Form W-9 is required for any vendor not previously used for city purchases. This information must be validated by the finance department before any purchases can be made with the new vendor.

(b) Business license. Vendors, other than those whose services or supplies are being procured by purchase order, shall have a valid city business license when required prior to the approval of any purchase.

(Ord. No. 02(2018), § 1, 7-17-18)

Provided there is adequate unencumbered appropriations in the account against which the expenditure is to be charged, the provisions contained in Table 3.24B shall also apply to the procurement of professional services, and be subject to the following provisions:

Table 3.24B - Authority and Purchasing Limitations; Professional Services

(a) Competitive bids required. The following provisions shall apply in soliciting competitive bids as required in Table 3.24B:

(1) A minimum of three bids or quotes shall be obtained unless an exception is granted pursuant to section 3.24.090.

(2) Contracts for professional services shall be awarded on the basis of demonstrated competence and professional qualifications necessary for the satisfactory performance of services at the best overall value to the city, and shall not be awarded solely on the lowest cost.

(3) The city reserves the right to reject all bids with or without cause, abandon the purchase process, and/or start a new procurement process for the same or substantially the same purchase at any time during the solicitation period.

(4) Informal bids.

i. Informal bids or quotes for a professional service may be solicited from firms or individuals in either a verbal or written format. Bids received from a firm or individual must be in writing.

ii. Bids or quotes may be solicited from firms or individuals at the discretion of the department needing such professional services.

iii. Written documentation of all bids received and justification for the selection of the firm or individual selected shall be submitted in a format prescribed by the finance department and attached to the requisition to issue a purchase order.

iv. Informal bids are awarded by the purchasing manager.

(5) Formal bids.

i. A written scope of work and/or a request for proposal which adequately describes the intended professional services desired, any required qualifications, and the evaluation criteria shall be prepared. Such written documentation shall be made available on the city's bid system to solicit bids or quotes from qualified firms or individuals. In addition, such written documentation may also be sent to firms or individuals directly soliciting bids or quotes at the discretion of the department needing such professional services.

ii. All written bids received by the stated submittal deadline shall be reviewed for conformance with the written documentation. Evaluation of proposals received may be conducted by either an individual or a review committee. Interviews may be conducted, at the discretion of the city. Any deviations from the requested services shall be evaluated for suitability, performance, or unique needs of the city to meet its intended purpose. Any bids or quotes determined to not comply with the requested services may be rejected.

iii. Written documentation of all bids received and justification for the selection of the firm or individual selected shall be submitted in a format prescribed by the finance department and attached to the requisition to issue a purchase order.

iv. Formal bids are awarded by the city council.

(Ord. No. 02(2018), § 1, 7-17-18)

(a) Any change to a contract or approved purchase which results in a cost in excess of the award amount shall be documented in writing. If an increase in the contract amount results in a cumulative total contract amount of more than $45,000.00, substantially changes the terms of a contract approved by the city council, or results in a cost in excess of the city council award amount plus any city council approved contingencies, the change order or contract amendment must be approved by the city council as soon as staff becomes aware as to avoid any delays in the project.

(b) The purchasing manager may approve change orders or amendments to contracts approved by the city council in an amount up to ten percent of the contract amount or $45,000.00 whichever is less; or an amount otherwise authorized by the city council.

(c) No change order may exceed budgetary authorization without city council approval.

(d) The cumulative amount of any contract or purchase order, plus all amendments and change orders are subject to the approval authority set forth in section 3.24.050.

(Ord. No. 02(2018), § 1, 7-17-18)

The bidding requirements contained in this chapter may be waived upon authorization of the purchasing manager or city council for the following:

(a) Where sufficient or satisfactory bids cannot be reasonably obtained making competitive bidding impossible or impractical.

(b) The amount of the purchase has a total estimated value of less than $5,000.00.

(c) Where the commodity or service can be obtained from only one vendor provided that appropriate sole source documentation is provided and approved on forms as established by the finance department.

(d) Where the price of the commodity or service is controlled by law such that bidding would be unlikely to result in any cost savings.

(e) Annual maintenance contracts for existing products, services, equipment and software provided there is an adequate appropriation included in the adopted budget for such expense.

(f) When supplies, personal property, services or equipment can be more efficiently or more cost efficient obtained through a cooperative purchasing program with a federal, state, county, local or other government purchasing program. Such purchases through a cooperative purchasing program shall be authorized by resolution of the city council.

(g) The bidding requirements for any other reason are specifically waived by the city council.

(h) Purchases made necessary from an emergency situation that poses an immediate threat to public health, welfare or safety as determined by the purchasing manager for which no time exists to seek city council action or approval, if such action or approval were otherwise required, subject to the following:

(1) An emergency situation includes, but is not limited to:

i. A public disaster.

ii. An immediate need to prepare for national or local defense.

iii. A breakdown of machinery or an essential service immediately affecting public health, safety or welfare.

(2) A report of the circumstances constituting the emergency and the related purchases made shall be submitted to the purchasing manager as soon as possible. The report will be filed with the city council and will be entered in the minutes of the council at its next regular meeting.

(Ord. No. 02(2018), § 1, 7-17-18)

In order to promote the economic health of the city and to encourage local participation in the procurement process, every attempt shall be made to purchase supplies, services, personal property and equipment from businesses located within the City of Diamond Bar to the greatest extent possible, subject to the following:

(a) Local preference. In awarding purchase orders and contracts for supplies and equipment, the city may grant a preference of one percent of taxable sales to local bidder/vendors in determining the lowest responsible bidder.

(b) Identical bids. If after applying the preference provided for in subsection (a) of this section, identical bids are submitted by a local bidder/vendor and a bidder who is not local, the contract shall be awarded to the local bidder/vendor. Identical bids by two or more local bidder/vendors shall be determined by the toss of a coin. In the event city council approval is required for the bid, this provision shall not apply and the city council shall award the bid in its discretion.

(c) Exceptions. Notwithstanding the foregoing, the provisions of this section shall not apply under any of the following circumstances:

(1) When application of the provisions of this section is prohibited by state or federal law or the requirements of a state or federal grant.

(d) Good faith effort to contact local merchants. The city shall make a good faith effort when soliciting bids for supplies or equipment to solicit bids or proposals from local merchants.

(e) Purchasing manager authorization. The purchasing manager, or his or her designee, may promulgate rules and regulations to implement the provisions of this section.

(f) Enforcement and penalties. In the event that the purchasing manager, or his or her designee, makes a finding that a bidder for a contract has made an intentional misstatement in order to obtain a local merchant preference under regulations adopted pursuant to this section, the bidder may be subject to any remedy available to the city at law or equity.

(1) A finding by the purchasing manager, or his or her designee, that a bidder for a contract has made an intentional misstatement in order to obtain a local merchant preference shall be regarded by the city council or purchasing manager, as the case may be, as a basis for determining whether the bidder is a responsible bidder for the present contract or for future contracts.

(2) A bidder who has been disqualified as a responsible bidder by a determination of the city council, based on a finding by the purchasing manager, or his or her designee, that the bidder made an intentional misstatement in order to obtain a local merchant preference, shall be disqualified from bidding on all contracts with the city for a period of one year from the date of the disqualification, as determined by the city council or purchasing manager.

(Ord. No. 02(2018), § 1, 7-17-18)

(a) All departments shall purchase and use recycled products and recycled materials when available unless determined by the city manager to be financially infeasible.

(b) The city may at its option require its contractors and consultants to use recycled products in fulfilling contractual obligations.

(Ord. No. 02(2018), § 1, 7-17-18)

Each department shall periodically review its equipment and inventory and complete a surplus property list for items deemed surplus or have become obsolete or worn out. The completed list shall be submitted to the purchasing manager. Upon approval, a copy of the list shall also be given to the finance department in order to remove any items on the fixed asset inventory list.

(a) Trade in. The purchasing manager or designee shall have the authority to exchange for or trade in on new equipment surplus personal property.

(b) Sale. The purchasing manager shall have the authority to dispose of surplus personal property by auction, sealed bids, for scrap or negotiated sale, whichever in the purchasing manager's judgment will provide the maximum return to the city.

(c) Disposed as trash. When the cost of locating a buyer exceeds the estimated sale price of surplus personal property or the item is obsolete or worn out or of minimal value, the purchasing manager may recycle, destroy or dispose of the item as trash.

(d) Disposed as gifts. The purchasing manager subject to the approval of the city council may give surplus personal property to another public agency, special district such as a school district or library, or not for profit organization to the extent the gift does not constitute a gift of public funds.

(Ord. No. 02(2018), § 1, 7-17-18)

In addition to the provisions of this chapter, the procurement of all contracts for public projects that are funded in whole or in part with federal grant funds shall be subject to applicable Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards promulgated by the United States Office of Management and Budget, 2 U.S. Code of Federal Regulations part 200.

(Ord. No. 02(2018), § 1, 7-17-18)

The city manager shall have the power and authority to make such rules, regulations and criteria as may be necessary to effect the provisions of this chapter, and to make such other reasonable rules and regulations as he or she may deem proper to implement the provisions of this chapter and which shall not be inconsistent with the terms and provisions of this chapter.

(Ord. No. 02(2018), § 1, 7-17-18)