Hawthorne Municipal Code Art. 2 Purchasing System

There is hereby created within the finance department of the city a centralized purchasing division, in which is vested authority for the purchase of supplies, materials, equipment, and services.

(Ord. 2210 § 1, 2021)

The centralized purchasing division shall be overseen by the purchasing manager, who shall be under the general supervision of the city manager in his or her capacity as the city's purchasing agent.

The director of finance shall serve as purchasing manager, unless the city manager, as purchasing agent: (A) removes the director of finance from the position of purchasing manager; and (B) either opts to serve as purchasing manager or appoints some other city employee to serve as purchasing manager. Any action by the city manager to remove or replace the purchasing manager pursuant to the previous sentence shall be documented, in writing, by a letter that is distributed to all members of the city council.

Except where such authority is specifically assigned by this code to some other person, the purchasing manager shall have authority to:

A. Purchase or contract for supplies, materials, equipment, and services required by departments in accordance with the requirements of Section 54201 et seq., of the California Government Code, the requirements of this chapter and this code, and such other rules and regulations as shall be established by the city council and the city manager;

B. Establish such rules, methods and procedures for the centralized purchasing division as he or she finds necessary to: (1) procure for the city the needed quantity of supplies, materials equipment and services; (2) discourage collusion and encourage competition in bidding; and (3) otherwise further the purposes of this chapter;

C. Negotiate and recommend execution of contracts for the purchase of supplies, materials, equipment, and services;

D. Prepare and recommend to the council revisions and amendments to the chapter;

E. Keep informed of current developments in the field of purchasing, prices, market conditions and new products;

F. Prescribe and maintain such forms as are reasonably necessary to the operation of this chapter and other rules and regulations;

G. Recommend the transfer of surplus or unused supplies and equipment between departments as needed and the sale of all supplies and equipment which cannot be used by any agency and which have become unsuitable for city use;

H. Exercise any purchasing authority reserved to him or her by this chapter.

(Ord. 2210 § 1, 2021)

A. Except as otherwise provided in this article, all purchases or contracts for supplies, materials, equipment or services must be made through the centralized purchasing division.

B. The city manager may, and where legally required to do so, shall, authorize in writing, any department to purchase or contract for certain specified classes of supplies, materials, equipment, or services, independently of the centralized purchasing division. Any such authorization shall establish a financial limit for such authorization, and any purchase or contract made pursuant to such authorization shall be made in conformity with the applicable provisions of this chapter. The city manager may also rescind such authorization to purchase independently, by written notice to the department or departments concerned, unless otherwise prohibited by law.

C. The city manager or the purchasing manager (with the approval of the city manager) may obtain the assistance of any staff member for negotiating purchases or contracts for supplies, materials, equipment or services.

D. At all times, all persons involved in the approval of purchases, contracts and purchase orders shall make their decisions with the goals of: (1) achieving the most cost-effective result for the city; (2) avoiding improvidence, extravagance, and any other waste of public funds or public property; and (3) achieving an appropriate balance between the costs and benefits of maximizing quality within available resources. Each person involved in the purchasing process is authorized to question any proposed purchase or contract that does not achieve these goals and to report such proposed purchase or contract to the city manager or the city council as appropriate.

(Ord. 2210 § 1, 2021)

A. Numbered Purchase Orders Required. Except as otherwise provided in this chapter, purchases of supplies, materials, equipment, and services shall be made only by a numbered purchase order issued by the centralized purchasing division.

B. Request for Purchase Order. The centralized purchasing division shall not process a request for a purchase order unless the request is submitted to the centralized purchasing department in the manner approved for such purpose by the purchasing manager.

C. Appropriation Required. The centralized purchasing division shall not issue any purchase order unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged.

D. Department Head Approval Required. The centralized purchasing division shall not issue any purchase order unless the request for such purchase order has been approved by the head of the department making the request.

E. Additional Approval Requirement. The centralized purchasing division shall not issue any purchase order unless the request has received such additional approvals as are required by Section 3.20.100.

F. Petty Cash. Notwithstanding any other requirement of this section, purchases for supplies, materials and services and payments and advances for incidental meeting and travel expenses may be made and paid for out of the petty cash fund without a purchase order, subject to the limitations on the use of petty cash funds established by resolution of the city council.

(Ord. 2210 § 1, 2021)

A. Blanket Purchase Orders. The city may, when pricing and terms are favorable, and as a convenience for users, establish an account with a vendor by means of a blanket purchase order. When a blanket purchase order has been established with a vendor, subsequent budgeted purchases may be made from that vendor.

The city will, when satisfied regarding the need, pricing, and terms, issue a blanket purchase order with the approval of the city manager or city council, based on the total planned value of the purchase. The blanket purchase order will be "open" in that only the general nature of the purchases will be specified. The annual value limit will be defined prior to issuance of the blanket purchase order and renewed each fiscal year.

B. Change Orders. Any change order for an approved purchase or contract shall be documented by a purchase order addendum, which shall be subject to the same requirements as a purchase order.

(Ord. 2210 § 1, 2021)

The centralized purchasing department shall not issue a purchase order unless, in addition being approved by the head of the department requesting the purchase order, the applicable purchase or contract has been approved by:

A. The purchasing manager, if the purchase or contract is for between five thousand dollars and one cent and fifteen thousand dollars;

B. The city manager, if the purchase or contract is for between fifteen thousand dollars and one cent and twenty-five thousand dollars; or

C. The city council, if the purchase or contract is for more than twenty-five thousand dollars.

(Ord. 2210 § 1, 2021)

Except as provided in Section 3.20.140, no purchase order shall be approved by any city employee or issued by the central purchasing department and no purchase or contract may be made unless the purchase or contract is supported by evidence that the vendor was selected as set forth in this section.

A. Purchases or Contracts Under Five Thousand Dollars. No special requirements.

B. Purchases or Contracts Between Five Thousand Dollars and Fifteen Thousand Dollars. Purchases valued at five thousand dollars and one cent or more but less than fifteen thousand dollars must be supported by evidence that the department requesting the purchase order has obtained quotes (which may be oral, written, or in electronic form) from at least three different vendors (or by quotes from two vendors if it is not possible to locate three vendors).

C. Purchases or Contracts Between Fifteen Thousand Dollars and Twenty-Five Thousand Dollars. Purchases valued between fifteen thousand dollars and one cent and twenty-five thousand dollars must be supported by evidence that the department requesting the purchase order has obtained quotes (which must be in written or electronic form) from at least three different vendors (or by quotes from two vendors if it is not possible to locate three vendors).

D. Purchases or Contracts Above Twenty-Five Thousand Dollars. Purchases valued at more than twenty-five thousand dollars shall be made using the formal bidding process set forth in Section 3.20.130.

(Ord. 2210 § 1, 2021)

A. The city manager (or the purchasing manager, with respect to purchases or contracts of fifteen thousand dollars or less) may, in writing, authorize the selection of a vendor via a process other than that which would otherwise be required by Section 3.20.130 of this chapter if he or she determines, in writing based on a written explanation of the circumstances, that any of the following circumstances exist:

1. An essential/critical need requires that an order be placed with the nearest available source of supply due to time constraints;

2. The commodity or service can be obtained from only one vendor;

3. There is a break-down in essential machinery or in an essential service, or when unforeseen circumstances arise including delays by contractors, delays in transportation, and unanticipated volume of work which requires the immediate attention of a professional or immediate service/repair in order to protect the public health, safety or welfare;

4. An essential operation affecting the preservation of life or property, public health, safety or welfare would be greatly hampered if the prescribed procedure would cause an undue delay in the procurement of the needed services or materials;

5. The city is already using a certain product or service and would be disruptive of existing operations to obtain additional products or services of the same type from other than the current vendor;

6. The contract is for professional services or the services of a specially trained person;

7. The contract involves the purchase of supplies, equipment or services with another governmental entity;

8. Emergency procurement as set forth in Section 3.20.140 of this policy;

9. The purchase involves real property leases or purchases and related title and escrow fees, to the extent permitted by law and authorized by the city council;

10. The purchase is for insurance and bonds;

11. The purchase is for advertising in magazines, newspapers or other media;

12. The purchase is for works of art, entertainment or performers;

13. The purchase is for library collection materials or services or other books or periodicals;

14. The purchase is for memberships in professional organizations, attendance at meetings or conventions, travel;

15. The needed equipment, supplies or services are proprietary items of original equipment manufacturers and/or their authorized exclusive distributors.

B. In granting an exception pursuant to subsection A of this section, the purchasing manager or city manager shall, as circumstances allow, and in the application of his or her best judgment, require that quotations be obtained from multiple vendors even if the formal bidding process is not required. Any such requirements, and the quotations obtained, shall be documented.

C. Nothing in this section shall be interpreted to alter any requirements of this chapter other than the requirements of Section 3.20.110.

(Ord. 2210 § 1, 2021)

Where the formal bidding process is required by this article, the following shall apply:

A. Notices Inviting Bids. The purchasing manager shall be responsible for posting notification of solicitation of bids, which shall include a general description of the articles to be purchased, state where bid specifications may be secured and the time and place for opening of the bids. The notice shall specify the factors referred to in subsection H of this section, which factors will be given special consideration in determining the lowest responsible bid for the supplies or equipment to be purchased. Notices shall be posted on the city's website as well as other online locations as determined by the purchasing manager.

B. Bidders' Security. When deemed necessary by the purchasing manager, bidders' security may be prescribed in the notices inviting bids. Bidders shall be entitled to the return of bid securities; provided, however, a successful bidder shall forfeit his bid security upon his refusal or failure to execute the contract within the time designated in the bid specifications unless the city is solely responsible for the delay in executing the contract. The council, on the refusal or failure of the successful bidder to execute the contract, may award the contract to the next lowest responsible bidder or reject all bids. If the 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 and readvertises, the amount of the lowest bidder's security may be used to offset the cost of receiving new bids, and the surplus, if any shall be returned to the lowest bidder.

C. Performance Bonds. The purchasing manager shall have authority to require a performance bond before entering a contract in an amount reasonably necessary to protect the best interests of the city. If a performance bond will be required, the form and the amount of the bond shall be described in the notice giving bids.

D. Bid Opening Procedure. Sealed bids shall be submitted to the city clerk's office and shall be identified as bids on the envelopes. Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be available for public inspection.

E. Confidentiality of Bids. Any written bid received pursuant to the provisions of this chapter shall not be revealed directly or indirectly to any other bidder until the bidding process is completed and all submitted bids have been received and opened. A tabulation of all bids received shall be open for public inspection during regular business hours after the bid opening.

F. Rejection of Bids. The purchasing manager may reject any and all bids presented and re-advertise for bids.

G. Award of Contracts. Any resulting contract shall be awarded by the council to the lowest responsible bidder as defined in subsection H of this section. At its discretion, the city council may reject any and all bids presented and re-advertise for bids. If two or more bids received are for the same total amount or unit price, quality and service being equal and if the public interest will not permit the delay of re-advertising for bids, the city council may accept the one it chooses or accept the lowest bid made by negotiation with the tie bidders at the time of the bid opening.

H. Definition. "Lowest responsible bidder," as used in this section, means bidder who best responds in price, quality, service, fitness, or capacity to the particular requirements of the city. Price alone shall not be the determining factor but shall be considered along with the other factors, including, but not limited to, the ability of the bidder to deliver, availability of parts or service, prior experience and other factors relating to the particular needs of the city for the supplies, equipment or services to be purchased.

(Ord. 2210 § 1, 2021)

When a local emergency or disaster is proclaimed, the city is not required to engage in either informal or formal competitive bidding. During such an emergency or disaster, the city council delegates to the city manager the authority to waive any procedures in this policy that are not statutorily mandated when making emergency purchases of supplies, equipment, materials or services.

"Emergency purchases" are those procurements required to prevent the immediate interruption or cessation of necessary city services or to safeguard life, property or the public health and welfare and are subject to the following conditions:

A. If the purchase exceeds twenty-five thousand dollars, those expenditures will be presented to the council for ratification within sixty days.

B. If the emergency purchase exceeds five thousand dollars and can only be made by use of the city's credit card, either due to the practicality of the situation or a vendor's refusal to accept the city purchase orders, the city manager is authorized to make those expenditures, subject to the presentation of the purchase to the city council for ratification within sixty days.

C. If the emergency requires the immediate procurement of supplies, equipment or services needed to preserve life and/or property, the purchase may be made without following bidding procedures. However, written justification enumerating one or more of the following rationale, must be included with the purchase request: emergency protective measure, scarce commodity, emergency consulting services, emergency road clearance, other emergency requirement, and/or lack of bids. The use of a preexisting contract may be utilized under these circumstances.

D. During a declared emergency or disaster, the purchasing manager has the authority to rescind a contract for non-performance within twenty-four hours when a contractor or vendor, once awarded a contract, is unable to perform under the terms of the contract and the resulting delay or nonperformance present an immediate threat to life, safety or improved property.

E. All purchases made under emergency or disaster conditions shall require separate invoicing from routine (non-disaster related) purchases. All invoices shall state the goods, services or equipment provided and shall specify where the purchases were delivered and/or used.

(Ord. 2210 § 1, 2021)

At its discretion, the council may, at any time by majority vote and without amending this policy, waive purchasing procedures or alter these proceedings to fit a specific purchase when such waiver is not in violation of California law.

(Ord. 2210 § 1, 2021)

Cooperative purchasing is used by municipalities in the purchase of goods and services. This arrangement offers the participants significant economies of scale. Although one municipality may issue specifications and receive bids, each entity independently executes its own contract, administers the procurement function, and finances the purchase.

This is an acceptable practice that allows municipal agencies to "piggy-back" on contracts for services and supplies, issued by a wide range of other governmental agencies. Cooperative purchasing agreements may be entered into with state, city governments, public or quasi-public entities, and non-profit entities.

Where purchases are to be made in concert with or through agreements executed by other governmental agencies, formal bid requirements of this chapter may be waived with city council approval.

(Ord. 2210 § 1, 2021)

The city manager shall have the authority to sell, exchange, or otherwise dispose of all unneeded, unsuitable, or obsolete supplies and equipment, provided the item sold or disposed of does not have a current salvage value, as reasonably estimated by the city manager of more than twenty-five thousand dollars. The city manager is charged with the responsibility to secure the highest value possible in the disposal of city goods.

(Ord. 2210 § 1, 2021)

The city maintains a credit card program to provide a convenient method of making small purchases and to reduce the need for purchase orders, expense reimbursements, and the use of petty cash. Credit cards may be issued to each department head, and with the approval of the city manager, may be issued to other employees on the recommendation of their department head. The city manager or the purchasing manager may cancel or suspend any credit card at any time.

Such purchases are subject to the following restrictions:

A. The amount of any single purchase cannot exceed five thousand dollars.

B. Purchases may not be split in order to stay within the single purchase limit.

C. The credit card may not be used for services, unless the services have an approved contract on file, the contract amount does not exceed five thousand dollars, and the use is approved in writing by the city manager.

D. Purchases related to lodging, airfare, and other travel-related expenses shall only be made after receiving prior written approval from the city manager. The city manager may, in writing, delegate to department heads the authority to grant such approval for the members of their departments; however the travel of a department head must be personally approved by the city manager.

(Ord. 2210 § 1, 2021)