Lathrop Municipal Code Ch. 2.36 Purchasing System

For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

"Agency" and "Using agency"

means any department, agency, commission, bureau or other unit of the city government of the city which derives its support wholly or in part from the city.

"Authorization"

means consideration and approval of the city council is necessary (a) prior to executing any contract for which the purchase price, exclusive of sales tax, use tax, deliver charges, shipping and/or handling exceeds the limits defined in Sections 2.36.060 and 2.36.090 or (b) that requires a budgetary appropriation. Proposed contracts discussed during the budget process will meet this requirement of prior authorization.

"Emergency purchase"

means an emergency purchase arising out of a situation in which the delay in procurement or material, equipment or service may jeopardize the life, property, health or safety of local citizens, the city and/or its employees.

"Lowest Responsible Bidder."

In addition to price, the lowest responsible bidder will be determined after the following factors have been considered:

The ability, capacity and skill of the bidder to perform the contract or provide the service required;

Whether the bidder has the facilities to perform the contract or provide the service promptly, or within the time specified, without delay or interference;

The bidder's record of performance of previous contracts or services;

The previous and existing compliance by the bidder with laws and ordinances relating to the contract or service;

The sufficiency of the financial resources and ability of the bidder to perform the contract or service;

The quality, availability and adaptability of the supplies, equipment or services to the particular use required;

The ability of the bidder to provide future maintenance and service for the use of the subject of the contract;

The number and scope of conditions attached to the bid.

"Open purchase order"

means a purchase order document placed with a vendor for a specified period of time which authorizes the delivery of specified merchandise or the rendering of certain services at a specified price.

"Professional services"

means the services of attorneys, physicians, architects, engineers, consultants, auditors, specialized printers or other individuals or organizations possessing a high degree of professional, unique, specialized, and/or technical skill or expertise not adaptable to competitive bidding.

"Purchase order"

means a form prepared by the department and approved by the purchasing officer that includes copies of the written quotations and the purchase requisition.

"Purchase requisition"

means a form prepared by the department that identifies the vendor with address, telephone number, contact name, and tax I.D. number and includes copies of written quotations or reference to verbal quotations.

"Purchases"

refers to purchases of supplies, equipment and personal property, and includes leases or rentals as well as transactions by which the city acquires ownership.

"Request for proposal (RFP)"

means all documents, whether attached or incorporated by reference, utilized for soliciting competitive proposals. The RFP procedure permits negotiation of proposals and prices as distinguished from competitive bidding. The RFP procedure allows changes to be made after proposals are opened and contemplates that the nature of the proposals and/or prices offered will be negotiated prior to award.

"Responsible bid"

means an offer submitted by a responsible bidder to furnish supplies, equipment or services in conformity with the specifications, delivery terms and conditions and other requirements included in the invitation for bids.

"Responsible bidder"

means a bidder who submits a responsible bid and who is not financially responsible, but is possessed of the resources, judgment, skill, ability, capacity and integrity requisite and necessary to perform the contract according to its terms.

"Services"

means all services, including, but not limited to, the following: the repair or maintenance of equipment, machinery and other city-owned or operated property, and towel and cleaning services. Services does not include services rendered by city officers or employees, nor professional and other contractual services which are in their nature unique and not subject to competition.

"Sole source"

means products or services for which only one vendor can be located.

"Supplies and equipment"

means all articles, things or personal property furnished to or used by any agency.

(Prior code § 35.01; Ord. 02-199 § 1)

In order to establish an efficient procedure for the purchase of supplies, services and equipment, to secure for the city supplies services and equipment at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function and to assure the quality of purchases, a purchasing system is adopted.

(Prior code § 35.02)

There is created a system of centralized purchasing by which supplies, services and equipment may be purchased.

(Prior code § 35.03)

There is created the position of purchasing officer. The purchasing officer shall be the city manager or designated representative. The duties of purchasing officer may be combined with those of any other office or position. The purchasing officer shall have authority to:

A. Purchase or contract for supplies, services and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, such administrative regulations as the purchasing officer shall adopt for the internal management and operation of the purchasing department and such other rules and regulations as shall be prescribed by the city council;

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

C. Act to procure for the city the needed quality in supplies, services and equipment at the least expense to the city;

D. Discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases;

E. Prepare and recommend to the city council rules governing the purchase of supplies, services and equipment for the city;

F. Prepare and recommend to the city council revisions and amendments to the purchasing rules;

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

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

I. Assure that department heads, or their designated representatives, conduct the inspection of all supplies, services and equipment purchased to insure conformance with specifications;

J. 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 or which have become unsuitable for city use.

(Prior code § 35.04; Ord. 02-199 § 2)

A. General. Except as otherwise provided for "public project" contracts defined in Chapter 3.30, the following purchase procedure limits shall apply for the purchase of any supplies, equipment and/or services, as the case may be, pursuant to the procedure described in this chapter.

B. No Purchase Order Required Procedure. For the purchase of any covered supplies, equipment, and/or services with a purchase price of $2,499.99 or less, exclusive of sales tax, use tax, shipping, handling or delivery charges, department heads may exercise discretion in selecting and purchasing such supplies, equipment and/or services. Purchases falling within this subsection shall not be required to obtain a purchase order, as described in Section 2.36.070.

C. Verbal Quotation Procedure. For the purchase of any covered supplies, equipment, and/or services with a purchase price, exclusive of sales tax, use tax, shipping, handling or delivery charges between $2,500 to $4,999.99, department heads shall obtain verbal (or written) quotations from three vendors. The department head shall then review the quotations, make a selection, and attach copies of any written quotations to the purchase order form, as described in Section 2.36.070.

D. Written Quotation Procedure. For the purchase of any covered supplies, equipment, and/or services with a purchase price, exclusive of sales tax, use tax, shipping, handling or delivery charges from five thousand ($5,000.00) to $75,000. Department heads shall then review the quotations, make a selection, and attach copies of the written quotations to the purchase order form, as described in Section 2.36.070.

(Prior code § 35.05; Ord. 02-199 § 3; Ord. 18-385 § 1; Ord. 19-406 § 1)

A. General. Except as otherwise provided by this chapter or in Chapter 3.30, purchases and contracts for supplies, services, equipment, and sale of personal property of estimated value of $75,000 or more shall be by written contract with the lowest or highest responsible bidder, as the case may be, pursuant to the procedure described in this chapter.

B. Notice Inviting Bids. Notices inviting bids shall include a general description of the articles to be purchased or sold, shall state where bid blanks and specifications may be secured, and the time and place for opening bids. Notice inviting bids shall be published at least 10 days before the date of opening of the bids. Notice shall be published at least once in a trade paper, magazine or a newspaper of general circulation.

C. Bidder's Security. When deemed necessary by the purchasing officer, bidder's security may be prescribed in the public notices inviting bids. Bidders shall be entitled to return of bid security; provided, that a successful bidder shall forfeit the bid security upon refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the city council awards the contract to the next lowest bidder, the amount of the lowest bidder's security shall be applied by the city to the difference between the low bid and the second lowest bid, and the surplus if any, shall be returned to the lowest bidder.

D. Bid Opening Procedure. Sealed bids shall be properly identified on the envelope and submitted to the purchasing officer. Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than 30 calendar days after the bid opening.

E. Rejection of Bids. In its discretion, the city council may reject any and all bids presented and readvertise for bids.

F. Awards of Bids. Bids shall be awarded by the city council to the lowest responsible bidder except as otherwise provided in this chapter.

G. Tie 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 readvertising for bids, the city council may accept the bid it chooses.

H. Performance Bonds. The city council or purchasing officer shall have authority to require a performance bond before entering a contract in such amount as it shall find reasonably necessary to protect the best interests of the city. If the city council or purchasing officer requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids.

(Prior code § 35.06; Ord. 02-199 § 4; Ord. 18-385 § 1; Ord. 19-406 § 1)

Purchases falling within the limits of Section 2.36.050(A) shall be required to submit purchase requisition orders to complete those purchases. Purchases falling within the limits of Sections 2.36.050(B), 2.36.050(C), and 2.36.060 shall be required to submit purchase order forms to complete those purchases.

(Prior code § 35.07; Ord. 02-199 § 5)

A. Purchasing procedures may be eliminated for the following reasons as determined by the department head:

1. Public calamity, such as an extraordinary fire, flood, storm, epidemic or other disaster;

2. To efficiently and timely maintain essential public services;

3. Other unforeseeable events affecting the preservation of life, property, public health, safety or welfare.

B. Any emergency purchases exceeding $5,000 should first be cleared by the city manager.

(Prior code § 35.08)

An open purchase order may be placed with a vendor for a specified length of time authorizing the purchase of materials or services.

A. Placement. Open purchase orders shall be issued on an annual basis, unless otherwise specified, with vendors who deal with the city on a regular basis. The open purchase order shall include a list of those employees authorized to make purchases on the city's behalf.

B. Spending Limit. Purchases on an open purchase order shall be limited to $200 per day per department. This is intended to facilitate efficient operations in situations where personnel responsible for repair work frequently find it necessary to purchase material or services without the benefit of advance planning. Each department head, or designated representative, shall be responsible for monitoring the monthly purchases using open purchase orders made so as not to exceed budgetary appropriations.

C. Invoice—Receipts. The city employee authorized to make purchases on an open purchase order shall acquire an invoice or receipt for the materials purchased. It shall clearly list and describe the materials purchased, be dated and the price fully detailed. The employee shall sign the invoice or receipt and promptly deliver it to the department head or designee. The department head or designee shall indicate on the invoice or receipt the appropriate account code and number, initial and route to the finance department for processing.

D. Open Purchase Order Exceptions.

1. The following items shall not be purchased on an open purchase order:

a. Office furniture and office large equipment;

b. Tools, both power and hand types, regardless of cost;

c. Material with value in excess of $200;

d. Capital outlay and improvement items.

2. Notwithstanding any of the foregoing, to avoid storing excessive amounts of emergency repair and replacement parts and caustic chemicals, the water, wastewater and streets divisions of the public works department shall be allowed the following altered open purchase order limits:

a. Open purchase orders shall be placed on a fiscal year basis, with an amount not to be exceeded in any given fiscal year. Such open purchase orders shall be based upon written quotes for the estimated quantity of supplies needed during that fiscal year.

b. There is no daily spending limit on purchase orders issued under this subsection.

(Prior code § 35.10; Ord. 02-199 § 7)

A. The contracting of service from other governmental agencies, sole source purchases and professional services shall be exempt from bidding procedures.

B. The contracting for the purchase of any item less than $75,000, exclusive of sales or use tax, shipping, handling or delivery charges from other governmental agencies, sole source purchases, or from the Office of Procurement, Department of General Services of the state of California shall be exempt from the bidding procedures.

C. For any exemption to the procedures set forth in this chapter, the department head responsible for the purchase shall certify in writing to the purchasing officer the reason for the exemption claimed.

D. Without complying with the requirements of Sections 2.36.050, 2.36.060, and 2.36.140, the purchasing officer may participate in, use, sponsor, conduct or administer a cooperative purchasing agreement for the procurement of any supplies, equipment, or service with one or more public procurement units in accordance with an agreement entered into between the participants. Such cooperative purchasing may include, but is not limited to, joint or multiparty contracts between public procurement units and open-ended state and/or federal public procurement unit contracts which are made available to the city.

(Prior code § 35.11; Ord. 02-199 § 8; Ord. 18-385 § 1; Ord. 23-448 § 1)

Department heads, or their designated representative, shall inspect supplies and equipment delivered and contractual services performed to determine their conformance with the specifications set forth in the order or contract. Department heads, or their designated representative, shall have authority to require chemical and/or physical tests or samples of deliveries, which are necessary to determine their quality and conformance with specifications.

(Prior code § 35.12; Ord. 02-199 § 9)

A. Department heads and/or the purchasing officer shall implement the use of recycled products whenever possible. All departments are encouraged to use products containing recycled content whenever possible.

B. Specifications for supplies and materials shall not include language which will prohibit use of items containing recycled content.

C. At the discretion of the department heads and/or the purchasing officer, items containing recycled content which do not exceed the lowest responsible bid or quote by more than five percent may be purchased in place of the lowest responsible bid or quote.

(Prior code § 35.13; Ord. 02-199 § 10)

For the provision of goods and services under this section for which the city requires a written agreement or contract, the following rules shall apply:

A. For any contracts for which the purchase price, exclusive of sales tax, use tax, delivery charges, shipping and/or handling is less than $2,499.99 or less, and the cost of which is included within the budgetary appropriations, department heads shall have the authority to negotiate and execute contracts on behalf of the city without prior authorization from the city council.

B. For any contracts for which the purchase price, exclusive of sales tax, use tax, delivery charges, shipping and/or handling is $2,500 to $75,000, or for public works contracts required in Section 2.36.090, and the cost of which is included within the budget appropriations for that department, the city manager shall have the authority to negotiate and execute contracts on behalf of the city without prior authorization from the city council.

C. For any contracts for which the purchase price, exclusive of sales tax, use tax, delivery charges, shipping and/or handling exceeds $75,000 or which requires a budgetary appropriation, city council authorization shall be required prior to the execution of any agreement.

(Prior code § 35.14; Ord. 02-199 § 11; Ord. 18-385 § 1)

A. Process.

1. The department head or designee shall identify the budget accounts that will be used for this service. The requesting department then prepares a RFP (Request for Proposal), which shall be sent to appropriate professional service individuals and firms. The RFP shall include a description of the project and a scope of the work to be performed. As a rule, proposals from a minimum of three prospective firms shall be solicited. However this requirement may be waived by the city manager depending upon the nature of the service to be provided.

2. This policy specifically prohibits splitting a purchase to circumvent the limits set forth in Section 2.36.050 and/or Section 2.36.060.

3. The department shall review all proposals received. The general selection criteria for determining which firm is to be selected includes:

a. Qualifications;

b. The firm's experience with similar projects;

c. Schedule for completion of project; and

d. Price (unless precluded by state of federal law).

4. Based on the results of the initial screening process, the top firm(s) may be invited to an oral interview. Based upon the qualifications and the oral interview, the city shall rank order the firms. The city may negotiate the price, terms and conditions of the project with the top firm. The city also reserves the right to negotiate with another top-ranked firm if an agreement cannot be reached with the number one ranked firm.

5. The contract with the recommended firm is forwarded to the city attorney for approval.

6. When city council authorization is required, a staff report with recommendations shall be prepared by the department head or designee and presented to the city council. The city council shall consider approval of the contract with the recommended firm.

7. Upon council approval, the department head or designee shall prepare a purchase order form for purchasing officer approval. The city clerk shall retain the original contract.

(Ord. 02-199 § 12)