Laguna Niguel Municipal Code Div. 6 Policies and Procedures for Purchasing of Supplies and Equipment, For…

In order to establish efficient procedures for the purchase of supplies, equipment and services, to secure supplies, equipment and services at the lowest possible cost commensurate with quality and quantity needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function through the use of purchase orders, contracts and other authorized procedures, the purchasing system set forth in this division is adopted for the city.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 1, 3-19-19)

(a) The authority and responsibility for the purchase of supplies and equipment; procurement of services; and disposition of surplus property is vested in the city manager. The city manager may designate a department director to serve as the purchasing officer and delegate to that person the duties and responsibilities imposed by this division on the purchasing officer. The director of each city department is responsible for administering and ensuring compliance with the purchasing policies for his/her department.

(b) In addition to administering these policies and procedures, each department director or his/her designee shall do each of the following:

(1) Before purchasing supplies and equipment, first consider sources of supplies and equipment located within the city. The city council has encouraged all residents and businesses located within the city to shop locally at businesses located within the city. In keeping with this policy, city staff shall make every attempt to purchase supplies and equipment from city businesses whenever practicable. The purchasing officer shall maintain a list of city vendors offering the types of supplies and equipment used by the city and shall circulate this list to all city departments. For purposes of bid comparison, bids submitted by local vendors shall be reduced by one percent for that part of the purchase upon which the city will pay sales tax. The one-percent adjustment is afforded to local vendors to recognize the sales tax reimbursement to the city on such purchases.

(2) Direct the inspection of supplies and equipment delivered to determine their conformance with specifications.

(3) Consider and encourage the purchase and use of recycled and recyclable materials and products, whenever practicable.

(c) The term "department director" as used in this division means the person who is designated by the city manager as being responsible for each particular city department, including, but not limited to, administration, community development, finance, public works, parks and recreation, city clerk, city attorney, and police services.

(d) City staff is specifically prohibited from engaging in any unlawful activity, including, but not limited to, receipt of rebates, kickbacks, or other unlawful consideration. City staff is specifically prohibited from participating in the selection process when those employees have a relationship with a person or firm seeking a contract which would subject those employees to the prohibitions of Government Code § 87100 et seq. or Government Code § 1090.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 2, 3-19-19)

(a) The adopted budget for each department for each fiscal year shall include funding for the necessary supplies, equipment and services for that department during the fiscal year.

(b) Each department director or his/her designee shall ensure that sufficient documentation is submitted with a request for purchase to demonstrate compliance with established policies and procedures and to justify the acquisition and acceptance supplies, equipment and services.

(c) Each department director shall notify the city manager of all equipment on hand in the department that is no longer useful to the department. The city manager may direct the transfer of such equipment to another city department, or the trade-in, disposal or donation of such equipment in accordance with the procedures set forth in this division.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 3, 3-19-19)

For the purchase of supplies and equipment, such purchases may be made by the city officers and employees designated in this section subject to compliance with the procedures and limitations contained in this section. All purchases over $3,000.00 require a purchase order or contract, regardless of whether paid by a credit card. Purchases of supplies and equipment that include a service component, such as installation or maintenance, require a contract when the service component cost equals or exceeds the purchase cost of the supplies and equipment.

(1) For purchases of $100.00 or less, petty cash or a credit card may be used and the applicable department director must approve the purchase. It is not required that bids be obtained for such purchases.

(2) For purchases over $100.00 but less than $3,000.00, the applicable department director must approve the purchase. No purchase order nor contract is necessary, and it is not required that bids be obtained for such purchases.

(3) For all purchases, including credit card purchases, that are equal to or exceed $3,000.00 but are less than $10,000.00, the department director must approve and execute the purchase order, and contract if applicable, for the purchase. Before the purchase is made, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented.

(4) For purchases that are equal to or exceed $10,000.00, but are less than $50,000.00, the purchasing officer must approve and execute the purchase order, or contract if applicable, for the purchase. Before the purchase is made, three written bids must be obtained from vendors and each of these bids must be documented.

(5) For purchases of more than $50,000.00, the city council must approve the purchase order and/or contract for the purchase. Prior to city council approval, three written bids must be obtained from prospective vendors. The city council may authorize that such purchase orders or contracts be executed by the city manager or the purchasing officer.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 4, 3-19-19)

(a) For purchases of supplies or equipment with a value of more than $3,000.00 but less than $10,000.00, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented. For purchases of supplies or equipment with a value of more than $10,000.00, three written bids must be obtained; and the applicable department shall solicit bids by telephone or written request to prospective vendors. Further the purchase order, and contract if applicable, for such purchases shall be awarded to the lowest responsible bidder, consistent with the quality, quantity, and delivery requirements. The lowest responsible bidder shall be determined by such factors as reputation, ability, references, quality of supplies and equipment, and price.

(b) For the procurement of services with a value of more than $3,000.00 but less than $10,000.00, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented. For the procurement of services with a value more than $10,000.00, a request for proposal shall be prepared and submitted to prospective bidders. Contracts awarded for the performance of services in the above-listed areas shall be awarded on the basis of the demonstrated competence of the service providers, and on the service provider's professional qualifications necessary for the satisfactory performance of the services required, and on the fairness and reasonableness of the cost of the services to the city, and shall not be awarded solely on the basis of cost.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 5, 3-19-19)

The purchasing officer may authorize the purchase of supplies, equipment, or services for which the city would normally follow its own bid procedures from a vendor who has been awarded by another public agency a contract for the purchase of the same supplies, equipment, or services if said agency utilized procedures substantially the same as those normally utilized by the city in awarding its contract to the vendor. The amount of said purchase shall be based upon the price bid in the other jurisdiction.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 6, 3-19-19)

The bidding requirements set forth in this division may be waived, at the discretion of the city manager, when any of the following is applicable:

(1) The product is proprietary.

(2) After a reasonable attempt has been made to obtain bids, and it has been determined by the city manager that no additional vendors can be located.

(3) The city manager finds that emergency conditions require the immediate purchase of supplies or equipment.

(4) Sufficient, satisfactory bids are not received.

(5) Supplies or equipment are procured through a cooperative purchasing program with the federal, state, county, or other public agencies.

(6) The product can be obtained from only one vendor (sole source).

(7) The purchase of a specific brand name, make or model is necessary to match existing city equipment or facilitate effective maintenance and support.

(8) The bidding requirements of this division are waived by the city council.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 7, 3-19-19)

(a) Professional services are defined as services provided by any specially trained and experienced person or firm in the areas of accounting, administration, architecture, construction management, economics, environmental analysis, engineering, finance, landscape architecture, law, surveying, or other matters involving specialized expertise or licenses, or unique skills.

(b) Contracts awarded for the performance of services in the above-listed areas shall be awarded on the basis of the demonstrated competence of the service providers, and on the service provider's professional qualifications necessary for the satisfactory performance of the services required, and on the fairness and reasonableness of the cost of the services to the city, and shall not be awarded solely on the basis of cost. The competitive bidding requirements set forth in section 3-6-5 are applicable to the procurement of professional services.

(c) For contracts for which the estimated cost of services is less than $3,000.00, the department director may enter into and execute contracts or purchase orders procuring professional services. It is not required that bids be obtained for such services.

(d) For contracts for which the estimated cost of services is more than $3,000.00 but less than $10,000.00, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented. The department director may enter into and execute contracts or purchase orders for procuring professional services when the cost of such services does not exceed $10,000.00.

(e) For contracts for which the estimated cost of services is more than $10,000.00, a request for proposal shall be prepared and submitted to prospective bidders and bids shall be obtained from prospective bidders and reviewed.

(f) The purchasing officer may enter into and execute contracts or purchase orders for procuring professional services when the cost of such services does not exceed $50,000.00.

(g) City council approval is required for all contracts for professional services when the cost of the services is more than $50,000.00. The city council may authorize that such contracts be executed by the city manager or the purchasing officer.

(h) If the city council has approved an "on call" agreement for professional services, individual amendments to that agreement that provide for different scopes of work between the amendments, such as work on separate projects or for different types of professional services, and which do not exceed $50,000.00, may be approved by the city manager even if the cumulative amount of the amendments to the on-call agreement exceeds $50,000.00.

(i) Notwithstanding the above provisions of this section, all contracts for the performance of the annual audit of the city's financial statements shall be competitively bid by obtaining at least three proposals for providing the required services, evaluating the proposals pursuant to criteria set forth in subsection (b), and awarding the contract based on the best proposal. Further, the award of all such contracts regardless of cost shall be approved by the city council.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 8, 3-19-19)

For the award of contracts for the maintenance and repair of city equipment and facilities, the following procedures shall be followed:

(1) For contracts for which the estimated cost of services is less than $3,000.00, the department director may enter into and execute contracts or purchase orders procuring professional services. It is not required that bids be obtained for such services.

(2) For contracts for which the estimated cost of services is more than $3,000.00 but less than $10,000.00, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented. Such contracts shall be awarded based on the qualifications and experience of the contractor and the amount of the contract prices. Such contracts may be awarded and executed by the department director for the provision of such services.

(3) For contracts for which the estimated cost of services is more than $10,000.00, a request for proposal shall be prepared and submitted to prospective bidders, bids shall be obtained from prospective bidders and reviewed, and the contract shall be awarded based on the responsiveness of the bids to the request for proposal, the qualifications and experience of the contractors and the amount of the price or prices included in the bids.

(4) Contracts in which the estimated cost of services is more than $10,000.00 and less than $50,000.00 may be awarded and executed by the city manager or the purchasing officer.

(5) Maintenance and repair contracts for which the cost of services is $50,000.00 or more shall be awarded by the city council, and the city council may authorize the city manager or the purchasing officer to execute such contracts.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 9, 3-19-19)

(a) Miscellaneous services are defined to include the services that are not professional services or maintenance and repair services as those terms are used in this division. For contracts for which the estimated cost of services is less than $3,000.00, the department director may enter into and execute contracts. It is not required that bids be obtained for such services.

(b) For contracts for which the estimated cost of services is more than $3,000.00 but less than $10,000.00, the applicable department shall attempt to receive three verbal bids from vendors and each of these bids and the efforts to obtain them must be documented. Such contracts shall be awarded based on the qualifications and experience of the contractor and the amount of the contract prices. Such contracts may be awarded and executed by the department director who is responsible for the department for which the services are used.

(c) For contracts for which the estimated cost of services is more than $10,000.00, a request for proposal shall be prepared and submitted to prospective bidders, bids shall be obtained from prospective bidders and reviewed, and the contract shall be awarded based on the responsiveness of the bids to the request for proposal, the qualifications and experience of the contractors and the amount of the price or prices included in the bids.

(d) Contracts in which the estimated cost is more than $10,000.00 and less than $50,000.00 may be awarded and executed by the city manager or the purchasing officer.

(e) Miscellaneous service contracts for which the cost of service is more than $50,000.00 shall be awarded by the city council and the city council may authorize the city manager or the purchasing officer to execute such contracts.

(Ord. No. 95-83, § 1, 7-18-95; Ord. No. 2001-120, § 1, 10-16-01; Ord. No. 2019-196, § 10, 3-19-19)

(a) The director of any city department may declare supplies or equipment held by such department surplus. Such declaration shall be in writing and the written declaration shall be delivered to the purchasing officer who shall maintain a written inventory for circulation to and review by each department. If any department has use of such property, the department director may request reassignment of such property from the purchasing officer. The purchasing officer shall have the authority to assign the property to the department best able to make use of such property. If no department director makes a request for use of such property after the inventory has been circulated once, the property shall be deemed surplus.

(b) The purchasing officer shall have the authority to exchange for or trade in on new supplies or equipment all supplies or equipment which have been deemed surplus.

(c) The purchasing officer shall have the authority to dispose of surplus property or equipment by auction or sale or otherwise after receiving bids or proposals which, in his judgment, provide the best return to the city.

(1) Sale on the open market. The purchasing officer shall cause to be published at least three days before the sale, in a locally adjudicated newspaper, a notice of sale setting forth a general description of the property to be sold, and the day, time and location of the sale. The terms of all such sales shall be cash in the amount of the full purchase price.

(2) Sale by sealed bid or auction. As an alternative to the sale on the open market, the purchasing officer may, when in his judgment it is in the best interest of the city, sell surplus property by means of sealed bid or public auction.

In the case of sale by sealed bid or public auction, the purchasing officer shall cause to be published at least three days before the sale, in a locally adjudicated newspaper, a notice setting forth a general description of the property to be sold, and the day, time and location of the sale. The terms of all such sales shall be cash in the amount of the full purchase price.

In conducting an auction, the purchasing officer may contract with a professional auctioneer and allow a flat fee, hourly fee or percentage of the amount of the sale to be paid based upon that which is common and customary method and rate for such auctioneering services.

(d) The purchasing officer may, when in his judgment, sale or auction of surplus property is infeasible or will result in minimal return to the city, recommend to the city council that such surplus property be donated to any non-profit corporation or school located within or serving the city, or sold to city employees at fair market value. Such surplus property shall only be donated or sold upon approval of the city council.

(Ord. No. 2019-196, § 11, 3-19-19)