Modesto Municipal Code Art. 2 Central Purchasing

A central purchasing system is hereby established in order:

(a) To establish efficient procedures for the purchase of the City's supplies, materials, nonprofessional services and equipment at the lowest possible cost commensurate with quality needed;

(b) To exercise positive financial control over purchases;

(c) To clearly define authority for the purchasing function;

(d) To establish procedures for contracting for services needed by City from the most qualified persons at the most reasonable cost;

(e) To assure the quality of the purchases.

(Ord. 3253-C.S., § 1, effective 5-16-02)

The central purchasing system shall be a division of the Finance Department of the City under the supervision of the Finance Director.

(Ord. 3253-C.S., § 1, effective 5-16-02)

The position of Purchasing Manager is established by the Personnel Rules. The Purchasing Manager shall be appointed in accordance with the Personnel Rules and shall have the following responsibilities and duties:

(a) Subject to the provisions of this article, shall be responsible to the Finance Director for contracting for and purchasing supplies, equipment, materials and contractual services, except professional services, required by all City departments and for the administration of the rules established by this chapter or by the City Charter not applicable to public work projects.

(b) Encourage bulk and seasonal buying and prevent to the extent possible the subdivision of contracts and purchases to avoid the requirements of this chapter.

(c) Be responsible for assuring written specifications for supplies, materials, equipment and contractual services as may be needed to conform to good and accepted purchasing practices and to the provisions of this article.

(d) Prepare and maintain vendors' and contractors' files of persons, firms and corporations dealing in supplies, materials, equipment or services used by the City.

(e) Strive to obtain all federal and other tax exemptions to which the City is entitled.

(f) Require that all supplies, materials, equipment or services purchased by the City be inspected by the respective receiving departments and that the procurement complies with the specifications.

(g) Make such recommendations as may be necessary to implement the rules and regulations of the central purchasing system.

(h) With the approval of the Council, join with the State of California and other units of government in cooperative purchasing plans when the best interest of the City would be served thereby.

(i) Adhere to formal bidding requirements in accordance with this article.

(j) Ensure that purchases which can or should, in the best interest of the City, be made by a single contract shall not be divided or segmented into more than one (1) contract in order to defeat the dollar limit authority provided in this chapter.

(Ord. 3253-C.S., § 1, amended by Ord. 3415-C.S., § 1, effective 7-27-06)

This formal bid procedure shall apply to all purchases whose total maximum cost to City exceeds one hundred thousand dollars ($100,000.00), and shall include at least the following:

(a) Preliminary approval by the City Manager of a staff proposed bid package, including all project, material, supply and/or equipment specifications, requirements and all other matters reasonably required of bidders, including, but not limited to, all contractual terms proposed. The total maximum cost to the City if a bid is accepted by the Purchasing Manager, and a contract is executed by the City Manager or designee, shall be set forth.

(b) Notice Inviting Bids. Notice inviting bids shall be published in the official newspaper by one (1) or more insertions, the first of which shall be at least seven (7) days before the time of bid opening, for public works projects only, in accordance with the provisions of Section 1307 of the City Charter. All other bids for which formal bid procedures are required shall be noticed in a manner or manners appearing to the Purchasing Manager to assure as broad a vendor response as reasonably possible. The required notice shall include a general description of the supplies, materials, equipment, and contractual services to be purchased, state where bid blanks and specifications may be secured and the time and place for opening bids.

Wherever feasible, the Purchasing Manager shall send notices inviting bids to prospective vendors and contractors. It shall be the responsibility of the Purchasing Manager to encourage as wide a response as possible from prospective vendors or contractors.

(c) Bid Deposits. Where required by the City Charter and when not so required but deemed necessary or desirable by the Purchasing Manager, all bids shall be accompanied by either a certified or cashier's check, or a bidder's bond executed by a corporate surety authorized to engage in such business in California, made payable to the City. Such security shall be in an amount not less than the amount specified in the notice inviting bids or in the specifications referred to therein, or if no amount is specified by the notice inviting bids, then in an amount not less than ten (10) percent of the aggregate amount of the bid. If the successful bidder neglects or refuses to enter into the contract, provide supplies, materials, equipment, or contractual services according to specifications within the time specified in the notice inviting bids or specifications referred to therein, the amount of the bidder's security shall be declared forfeited to the City, and shall be collected and paid into its General Fund, and all bonds forfeited shall be prosecuted and the amount thereof collected and paid into such fund.

All bids not submitted with the required deposit shall be rejected. Unsuccessful bidders shall be entitled to the return of deposits when such have been required after acceptance of the contract by the selected bidder.

(d) Sealed Bids. Physical bids shall be sealed and shall be identified as bids on the envelope. If the Finance Director authorizes, pursuant to Section 8-3.402, the submission of bids through electronic means, electronic bids shall be submitted in a manner that keeps the bid confidential until opened by the City. All bids shall be submitted, whether in person or electronically, at the place and no later than the time stated in the public notice inviting bids. Except for bids for services, bids shall be opened at a public meeting at the time and place stated in the public notice in the manner authorized by this Chapter. Bids received after the stated time shall not be accepted, whether or not a bid is late through any fault of the late bidder, and shall be returned to the bidder unopened.

(e) Council May Reject Bids. The Council shall have the authority to accept or reject any or all bids, or to waive any informalities or minor irregularities in a bid. The Council, after rejecting bids, or if no bids are received, may declare and determine that, in its opinion, based on estimates approved by the City Manager, the purchase in question may be made without a formal bid procedure and, after the adoption of a resolution to this effect by at least five (5) affirmative votes of the Council, may proceed to have said purchase made in the manner stated without further observation of the provisions of this section. No Council action is required to reject bids or proposals other than for public works projects.

(f) Lowest Responsive and Responsible Bidder. For non-public works contracts, in addition to price in determining the "lowest responsive and responsible bidder", consideration will be given to quality and performance of the commodity to be purchased, or service provided by the seller. Criteria for determining low bid shall include, but not be limited to, the following:

(1) The ability, capacity and skill of the bidder to provide the supplies, materials, equipment or contractual services as required.

(2) The ability of the bidder to provide the supplies, materials, equipment or contractual services within the time specified.

(3) The character, integrity, reputation, judgment, experience and efficiency of the bidder.

(4) The quality or performance of previous purchases from said bidder.

(5) The ability of the bidder to provide future maintenance, repair parts and services for the use of the commodity purchased.

(6) Local vendor as defined in Section 8-3.206(c).

(g) Faithful Performance Bond. When the specifications so provide, the successful bidder shall furnish surety in the form of certified or cashier's check, corporate surety bond or savings and loan certificate for faithful performance of the contract.

(Ord. 3253-C.S., § 1, amended by Ord. 3415-C.S., § 1, effective 7-27-06)

(Amended by Ord. 3518-C.S., § 1, 8-14-09; amended by Ord. 3536-C.S., § 1, effective 10-7-10; amended by Ord. 3571-C.S., § 1, effective 8-3-12; Ord. No. 3766-C.S., § 1(Exh. A), effective 11-9-23)

Except as otherwise provided by this chapter or when directed by the City Manager, all purchases involving an expenditure of City funds in the amount of one hundred thousand dollars ($100,000.00) or less, shall be purchased, when feasible and when in the best interest of the City, in the open market by letter inquiry, informal solicitation, or telephone or facsimile solicitations, with or without newspaper advertisement, and without observation of prescribed formal bid procedures.

Open market purchases, whenever possible and practicable, shall be based on at least three (3) competitive quotations (letter inquiries and/or telephone solicitations), and shall be awarded to the person, firm or corporation submitting the lowest responsible quotation. In determining the lowest quotation, the City shall do so on the basis defined in Section 8-3.203 for establishing the lowest responsible bid used in formal bid purchases.

The Purchasing Manager shall keep a record of all open market orders and the quotations submitted in competition thereof. Such records shall be open to public inspection during business hours. Records of said open market orders or purchases may be disposed of by the Purchasing Manager following two (2) years from the date of the purchase.

All purchases in excess of one hundred thousand dollars ($100,000.00), or when directed by the City Manager for any purchase of one hundred thousand dollars ($100,000.00) or less, shall follow formal bid procedures, except for the following, which shall be exempt from the bid requirement:

(a) Contracts for professional services as defined in Section 8-3.103, if competitive quotations or proposals have been sought informally from at least three (3) qualified entities;

(b) Where the Purchasing Agency's requirements can be met solely by a single article or process;

(c) Where the Purchasing Manager, in his or her discretion, determines that calling for bids on a competitive basis as set forth in Section 8-3.203 is undesirable due to exigent or emergency circumstances;

(d) Where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible cost commensurate with the desired quality. Such alternatives may include, but are not limited to, a "two-step" procurement process or a procurement based solely on a technical evaluation.

(e) Where the Purchasing Manager, in his or her discretion, determines that the term of an existing agreement should be extended for a period of no greater than one (1) year to allow the City to complete a formal bidding process for a long term agreement or to avoid disruption to City projects or services.

(f) When the Purchasing Manager, in his or her discretion, determines that it is appropriate to amend the services or goods provided under an existing agreement to include additional similar goods or services, of limited quantity or scope, in order to increase efficiency and avoid delays or disruptions to City projects or services.

(Ord. 3253-C.S., § 1, amended by Ord. 3415-C.S., § 1, effective 7-27-06; Ord. No. 3766-C.S., § 1(Exh. A), effective 11-9-23)

All supplies, materials, equipment or contractual services shall be adequately inspected or tested by the receiving department (assisted by the using department when necessary) upon delivery to the City. Approval of commodities purchased shall be indicated in writing by the receiving department to the Accounting Division on forms provided by the Central Purchasing Division.

(Ord. 3253-C.S., § 1, effective 5-16-02)

(a) Should the bidder that submits the lowest responsive bid or quote and would otherwise normally qualify to receive the bid pursuant to Sections 8-3.203 and 8-3.204 of the Modesto Municipal Code not be a local business as defined herein, the lowest bid or quote submitted by a local business that is within five (5) percent of the lowest bid or quote, whether or not that bidder is the second lowest bidder, may be deemed to be the lowest bidder if the bidder agrees to reduce its bid to match the bid or quote of the lowest bidder in writing within five (5) business days after notification by City Purchasing staff, and providing that the Purchasing Manager, or designee, determines that said local bidder is a responsible bidder submitting a bid or quote that is responsive to the City's specifications, terms, and conditions and the application of this section is appropriate.

(b) If the lowest local bidder within five (5) percent of the lowest bid or quote does not elect to reduce its bid or quote to match the bid or quote of the lowest bidder, then the next lowest local bidder shall be given the opportunity to match the bid or quote of the lowest bidder as set forth above, providing that this bidder is also within five (5) percent of the lowest bid or quote that has been deemed responsive.

(c) To qualify as a local bidder, the bidder must have a physical business location within the City of Modesto and a current City of Modesto business license.

(d) This support of local vendor's policy shall only apply to supplies, materials, equipment and non-professional contractual services required for the conduct of City business.

(e) Exceptions shall include contracts valued at less than one thousand dollars ($1,000.00) and those contracts which Federal, State or City Charter law forbid from granting such support, such as public works agreements and Federal Transit Administration expenditures.

(f) Solicitations for bids or quotes must include notice of this section.

(Ord. 3253-C.S., § 1, as amended by Ord. 3340-C.S., § 1, and Ord. 3389-C.S., § 1, effective 7-28-05)

(Amended by Ord. 3507-C.S., § 1, effective 5-29-09; amended by Ord. 3536-C.S., § 1, effective 10-7-10)

Editor's note— Ord. No. 3536-C.S., § 1, effective October 7, 2010, changed the title of Section 8-3.206 from "Preference to Local Merchants" to "Support of Local Vendors." The historical notation has been preserved for reference purposes.

When replacing personal property belonging to the City, the Purchasing Manager is authorized to request quotations for trade-in allowances. Where the trade-in allowance is determined to be adequate and advantageous, the City Manager is authorized to accept said quotation. In those instances, the Purchasing Manager is authorized to make the purchase.

(Ord. 3253-C.S., § 1, amended by Ord. 3415-C.S., § 1, effective 7-27-06)

A Purchasing-Revolving Fund has been created and is authorized for the use of the Purchasing Manager for the purchase of office, janitorial and other supplies for the use of all departments of the City. Said funds shall be accounted for as recommended by GAAP standards. By resolution, the Council may provide the amount needed for the Purchasing-Revolving Fund and may, by resolution, increase or decrease the amount as the needs of the City change.

(Ord. 3253-C.S., § 1, amended by Ord. 3415-C.S., § 1, effective 7-27-06)