National City Municipal Code Ch. 2.60 Public Contracts and Purchasing System

The city council adopts a public contract and purchasing system through this chapter in order to establish efficient procedures for the purchase of supplies, equipment, materials and professional and other services at the lowest possible cost at the best value commensurate with the quality needed, to exercise positive financial control and assure quality of procurement and to clearly define the authority for purchasing and contracting functions.

(Ord. 2262 § 1 (part), 2005)

A. Centralized purchasing and contracting is established under the authority of the city manager for the purchase of supplies, equipment and professional and other services. The city manager shall have and may exercise all authority delegated in this chapter, and may further approve alternate methods of procurement on a trial basis and recommend changes to the city council regarding the city's procurement methods.

B. The city manager shall have the authority to approve and execute contracts and awards as set forth in Section 2.60.035 of this chapter.

(Ord. 2262 § 1 (part), 2005)

A. Through the city manager, a purchasing agent may be designated to purchase supplies, equipment and services pursuant to this chapter on behalf of the city. The purchasing agent may assign employees to perform the functions and duties provided for in this chapter, with the concurrence of the city manager.

B. Under the direction of the city manager, the purchasing agent shall have the authority to approve and execute contracts and awards as set forth in Section 2.60.035 of this chapter.

(Ord. 2262 § 1 (part), 2005)

A. Formal bid limits and requirements are established for purchases and contracts exceeding fifty thousand dollars. Informal bid limits are established for purchases and contracts exceeding two thousand five hundred dollars.

B. The city manager shall have the authority to approve, execute, and award purchases and contracts not exceeding fifty thousand dollars. The purchasing agent shall have the authority to approve, execute, and award purchases and contracts not exceeding fifteen thousand dollars. The city council shall, by resolution, approve all purchases and contracts exceeding fifty thousand dollars.

(Ord. 2262 § 1 (part), 2005; Ord. No. 2016-2417, § 1, 12-20-2016)

The purchasing agent shall have the following powers and duties:

A. Negotiate, purchase and obtain supplies, contractual services and equipment used by the city in accordance with city and state law and the various rules, regulations and authority currently or previously prescribed by the city manager and city council;

B. Procure for the city the needed quality in supplies, services and equipment at the best value to the city, utilizing such technical or functional specifications, or combination, as will best meet the city's requirements;

C. Discourage uniform bidding and endeavor to obtain full and open competition on all purchases;

D. Prepare and recommend to the city manager rules and regulations governing purchase of supplies, services and equipment for the city, and revisions as necessary;

E. Keep informed of current developments in the field of purchasing, pricing, market conditions and new products, and secure for the city the benefits of research done in the field of purchasing by other governmental jurisdictions, national technical societies, trade associations having national recognition, and by private businesses and organizations;

F. Prescribe and maintain such forms as are reasonably necessary for the operation of the purchasing system, and utilize electronic data processing and technology in the administration and discharge of procurement and contracting duties;

G. Prepare and maintain a vendors' catalog file or as appropriate, utilize and maintain electronic database files and the Internet media for procurement;

H. Exercise proprietary review over all purchases and make recommendations to the city manager as appropriate;

I. Utilize electronic data management systems and programs in coordination with the finance and information management directors for requisition, invoice management and payment;

J. Promulgate rules and procedures as may be necessary to implement this chapter.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent, when authorized by the city manager, may authorize a department to directly purchase supplies and equipment when such purchases may be made more advantageously or expeditiously by the respective department.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent may request all using city departments or offices to file detailed estimates of their anticipated requirements in order to take advantage of volume or selective buying.

(Ord. 2262 § 1 (part), 2005)

City departments or offices shall submit requests for supplies, equipment and services to the purchasing agent on standard requisition forms prescribed by the purchasing agent. The purchasing agent shall examine each requisition and estimate and shall have the authority to revise it as to quantity, quality or estimated cost; provided, however, that any change in quality does not vary substantially from the standards of the using department or office.

(Ord. 2262 § 1 (part), 2005)

Except in cases of emergency or when otherwise authorized by the city manager, all purchases, other than those made pursuant to Section 2.60.050 of this chapter, shall be made by purchase order issued by the purchasing agent upon certification that:

A. There is to the credit of each using department concerned a sufficient unencumbered appropriated balance in excess of all unpaid obligations to defray the amount of the order;

B. The order is provided for in the budget of the using department or has been approved by city council resolution; or

C. Purchases of capital equipment and assets or services, if not provided for in the budget, have been previously approved by city council resolution.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent shall standardize procurement of supplies, equipment and material in cooperation with using departments.

(Ord. 2262 § 1 (part), 2005)

No city officer or employee shall order or purchase any supplies, equipment, materials or contractual services or make any contract within the purview of this chapter, except in accordance with the provisions of this chapter, the regulations and procedures established thereunder and the approval of the purchasing agent. Any purchase or contract made contrary to this chapter is null and void.

(Ord. 2262 § 1 (part), 2005)

A. Except as provided in subsection B of this section or Section 2.60.230 of this chapter, all city purchases exceeding the formal bid limit, as adjusted pursuant to Section 2.60.280, shall be purchased only after a formal competitive bid process by formal written contract with the lowest responsible bidder submitting the best responsive bid, after due notice inviting bids.

B. Formal competitive bidding may be waived by the city council, or the city manager within the limits of contracting authority, where it has been determined that: (1) competitive bidding is or would be impractical or impossible; (2) the circumstances are such that no obvious, ascertainable advantage to the city could result; or (3) in the case of technology and computer systems and software acquisition, delay would unduly impair or jeopardize the city's ability to efficiently operate its data management systems.

(Ord. 2262 § 1 (part), 2005)

A. The purchasing agent shall ensure that the procurement of city systems and equipment is made by technical or functional specifications, or such combination thereof as the purchasing agent shall determine which will best meet particular functional needs or objectives required by the city. The requesting department shall be responsible for preparing adequate specifications, with the assistance of the purchasing agent when necessary.

B. Specifications shall normally describe a system or commodity in terms of its dimensions, physical characteristics, performance criteria, system compatibility, maintenance objectives and requirements, adaptability criteria, and any other factors that will allow a particular item to be offered by a vendor at a stated price. Specifications may include reference to a brand name and type or model for illustrative purposes on an "or equal" basis. When described in an "or equal" manner, the description shall be construed as a term of specification which describes an item or component that has been evaluated by the city as best meeting the specific operational, design, performance, maintenance, quality, compatibility or reliability standards and requirements of the city, thereby incorporating these requirements by reference within the specification. Whenever possible, at least two brand names should be used for specification purposes, followed by the words "or equal." Exceptions to an "or equal" designation are permissible for replacement parts, for testing and evaluation purposes, or for system compatibility. A bid offering an equivalent ("or equal") shall be subject to evaluation by the city prior to award that the item meets the city's requirements. Any product testing shall be at the bidder's expense, and the burden shall be on the bidder to establish that the item meets the city's needs. The city reserves the right in its absolute and sole discretion to reject a proposed item that does not meet city requirements.

C. Functional specifications may be issued to allow for a particular operational or functional need to be best met by current technology, without the need for specific description of each component. Specifications shall include, as applicable, the particular functions to be served or the results to be obtained, operational requirements, any fiscal, mechanical or structural constraints and the operating environment.

(Ord. 2262 § 1 (part), 2005)

When formal bidding is required, a notice inviting bids for city specifications shall be published by the purchasing agent at least ten calendar days before the date set for the receipt of bids designated in the notice. All notices shall be published by the purchasing agent in a commercially reasonable manner, using any appropriate medium of printed or electronic commerce which, in the opinion of the purchasing agent, are reasonably likely to ensure an optimum bidding process.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent shall also solicit bids from all responsible prospective suppliers who have requested to be placed on a bidder's list. The bidder's list may be kept in an electronic format.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent may require each bidder to post security in a predetermined amount in cash, certified or cashier's check, surety bond or in any other form of security approved by the city attorney. If a bidder's security is required, no bid shall be considered submitted until the required security is submitted therewith. All bidders' security is refundable, except that a successful bidder shall forfeit the deposited security if the bidder fails to execute a contract within ten calendar days after notice of award has been mailed or given, or fails to otherwise complete the transaction.

(Ord. 2262 § 1 (part), 2005)

Bids shall be submitted to the purchasing agent or designate. Bids may be opened in public, when so designated by the purchasing agent in the public notices. All bids must be signed by an authorized signatory of the bidder. The purchasing agent may accept electronic or facsimile signatures on electronically submitted bids when followed up by receipt of an original signature.

(Ord. 2262 § 1 (part), 2005)

A. The purchasing agent shall compile the bids and submit them to the city manager together with a recommendation for award, taking into consideration any recommendation of the department head involved, the amount of bid, compliance with specifications, the responsibility of bidder, and any other factors that determine the best value and optimum procurement for the city. In determining the responsibility of the bidder to perform and provide best value, the purchasing agent will be guided by, but not be limited to, a consideration of the following factors:

1. The experience of the city in dealing with the bidder;

2. The experience of other governmental agencies in their previous transactions with the bidder;

3. Knowledge of the quality and fitness of the product offered by the bidder, substantiated by reports of using departments within the city or other governmental agencies, whenever possible;

4. The availability of options to renew contracts for continuing purchases at the same bid price, in those circumstances where price increases are expected or have been experienced in the past;

5. A determination as to whether the quoted price represents "best value" for the city, and is both realistic and feasible in terms of vendor performance and potential city satisfaction. "Best value" shall include consideration of sales tax rebate, when applicable, warranty protection, costs of maintenance and availability of parts and services.

B. Within the limits of their contracting authority, the city manager or the purchasing agent may reject any or all bids or accept a part of a bid for any one or more commodities or contractual services included in the proposed contract, when it is determined that the public interest will be best served thereby. The purchasing agent may waive any irregularity in bid submission when it is in the best interests of the city to do so.

C. Upon compliance with the formal competitive bidding process, the city manager is authorized to award and execute contracts within established approval authority, and any contracts exceeding that authority for a procurement previously authorized in the budget or by resolution of the city council.

D. The city manager shall forward the compilation of bids and recommendations with respect to any awards exceeding his or her authority to the city council for review and award.

E. Documents submitted by bidders shall not be available for public review until the purchasing agent or city manager awards the contract, or a recommendation is forwarded by the city manager to the city council for award.

(Ord. 2262 § 1 (part), 2005)

Protests concerning an award or proposed award may be presented by an unsuccessful bidder to the purchasing agent in writing, only within the five days following the announcement of award or the bid opening, whichever shall occur last. Any protest filed after that time shall be invalid and shall be disregarded. A protesting bidder must submit complete supporting documentation at the time of protest. The purchasing agent shall determine whether the protest is justified, and may either amend or rescind the award, if justified, and take no action when the protest is not justified. The decision of the purchasing agent shall be final regarding the recommendation for the award of the contract, except that the city manager may review and take further action on any timely filed protest, or forward the protest to the city council when authority for award rests with the council.

(Ord. 2262 § 1 (part), 2005)

The city council or the city manager within authorized limits, may award a contract to the lowest responsible bidder submitting the best value bid that optimally meets the city's criteria in all respects. The decision to select the lowest responsible bidder shall be administratively final at the level where the award of the contract is authorized.

(Ord. 2262 § 1 (part), 2005)

The city council or the city manager within authorized limits, may reject any or all bids and authorize the readvertising of bids or, in the alternative, purchase commodities or services pursuant to the open market procedure set forth in this chapter, when any of the following circumstances are found to exist:

A. That the supplies or services may be purchased at less cost in the open market;

B. That the services or supplies are urgently required for the preservation of life, health or property or that the public interest would be best served by using the open market procedure; or

C. That the city manager within contracting authority, or the city council by resolution, has determined that it is in the city's best interests to do so.

(Ord. 2262 § 1 (part), 2005)

In the event two or more bids are received which are for the same total amount or unit price and in all other respects are equal, the contract may be awarded to a local bidder, or by draw when there is no local bidder or more than one local bidder is available.

(Ord. 2262 § 1 (part), 2005)

The purchasing agent may require a performance bond or other form of security in an amount reasonably necessary to protect the best interests of the city. If a performance bond or security is required, the form and amount shall be described in the notice inviting bids.

(Ord. 2262 § 1 (part), 2005)

Purchases of supplies, services and equipment of an estimated value not exceeding the formal bid limit, as adjusted pursuant to Section 2.60.280, may be made by the purchasing agent in the open market without observing the formal bidding procedure prescribed in Sections 2.60.110 through 2.60.200 of this chapter. However, informal bidding shall be required and whenever practicable, shall be based on at least three bids, and be awarded to the lowest responsible bidder submitting in all respects the best bid for best value. When it is not practicable or possible to obtain bids from at least three vendors, the purchasing agent may then select the lowest responsible bid from those available and qualified vendors submitting responsive bids. The purchasing agent may solicit bids by direct mail request to prospective vendors, by telephone, by public notice on a bulletin board in the civic center, by any feasible electronic medium, or by any combination of the preceding. The purchasing agent shall keep a record of all purchases in accordance with the city records retention schedule, and such records shall be open to public inspection.

(Ord. 2262 § 1 (part), 2005)

In any of the following instances, the city manager or purchasing agent may dispense with the requirements of bidding when any of the following applies, provided the circumstances are completely documented:

A. The estimated amount involved is less than the informal bid limit;

B. The commodity, regardless of value, can be obtained from only one source. Sole source procurements may be used when there is only one source from which a particular commodity is available and there is no adequate substitute. Sole source procurement may also be used when it is clear that competitive bidding will not produce any competitive advantage or would be impractical or not meet an urgent city procurement need;

C. The commodity or service to be procured, regardless of value, is required to integrate with or be compatible with existing furnishings, materials, systems, programs or equipment and the procurement can be timely made from a manufacturer or supplier who previously satisfactorily supplied the particular commodity or service;

D. The purchasing agent or city manager within the limits of contracting authority, or the city council by resolution, determines by best business judgment that due to special circumstances, it is to the city's best interest to purchase a commodity directly or enter into a contract without compliance with the bidding procedure;

E. Due to the exigencies and availability of state and federal grants, immediate action is necessary to take advantage and allow receipt of those grants for procurement of equipment, materials or services, and compliance with the normal time limits established within this chapter would therefore be impossible or impracticable; provided, however, that the city manager shall notify the council at the first available opportunity thereafter; or

F. A particular type or make of commodity, furnishing and type of material, system or equipment has been standardized by the city manager or city council by written directive or resolution.

(Ord. 2262 § 1 (part), 2005)

A. In case of an emergency which requires immediate purchase of supplies, materials, equipment or contractual services, the city manager may authorize the purchasing agent to secure in the open market at the lowest obtainable price any supplies, materials, equipment or contractual services, regardless of the amount of the expenditure; provided, however, that any expenditure exceeding the city manager's established approval authority shall be later ratified by resolution of the city council after the emergency is resolved.

B. In case of emergency, and when the prior consent of the purchasing agent or city manager is impracticable, any using department may purchase directly any supplies, materials or equipment without competitive bid, provided that the immediate procurement is essential to prevent delays in the work of the using department which may affect the life, health or convenience of citizens. The head of the using department shall send the purchasing agent a requisition and a copy of the delivery record, together with a full written explanation of the circumstances of the emergency as soon as the emergency has been resolved, which shall thereafter be filed by the purchasing agent as a permanent public record of the purchase. The city manager's signature shall be required on all procurements exceeding the formal bid limit, and the city council's action by way of ratification shall be required for all procurements exceeding the city manager's authority.

C. Determination of an "emergency" under this section is defined as any breakdown in machinery or equipment, the interruption of an essential service, or any threat to public health, safety or welfare. Determination of emergency shall not require a formal proclamation, but shall be based upon the sound judgment and discretion of the city manager or purchasing agent, as applicable.

(Ord. 2262 § 1 (part), 2005)

Nothing contained in this chapter shall limit the authority of the director of emergency services to make emergency purchases and take such other emergency steps as are or may be authorized by the city council.

(Ord. 2262 § 1 (part), 2005)

The following services, supplies, and equipment shall not be subject to the competitive bidding provisions of this chapter, except that the procurement and contracting authority based on the monetary limits specified in this chapter shall also be applicable to the authority to execute contracts for such procurements:

A. "Public projects" as defined in Section 22002 of the California State Public Contract Code and as referenced in section 22030, et seq.

B. Utility services and related charges;

C. Work or services performed by another public or quasi-public entity;

D. Real property purchases and related title and escrow fees;

E. Credit card purchases of gasoline, oil or emergency automotive needs;

F. Transportation and freight charges when not specifically included on a purchase order;

G. Insurance and bond premiums;

H. Advertising;

I. Real property leases;

J. Demolition or abatement of dangerous structures or hazardous or unsafe conditions;

K. Professional services agreements governed by Section 2.60.270 of this chapter; or

L. Alternative bid procedures for public projects governed by Chapter 2.62.

(Ord. 2262 § 1 (part), 2005; Ord. No. 2016-2417, § 1, 12-20-2016)

The purchasing agent shall have authority to join with other public jurisdictions to take advantage of cooperative purchasing opportunities, including but not limited to any federal, state or local agency pricing program or structure that is determined by the purchasing agent to allow a procurement that is in the best interests of the city. The purchasing agent may buy directly from a vendor at a price established through competitive bidding by another public agency whose procedures have been determined by the purchasing agent to be in substantial compliance with the city's procurement procedures, irrespective of the contracting limits of that jurisdiction or agency, even if the city had not initially joined with that public agency in the cooperative purchase.

(Ord. 2262 § 1 (part), 2005)

In addition to the authority granted for procurement of supplies and equipment, the city manager is authorized to execute public works contracts, agreements for professional services for architectural, engineering, environmental, land surveying or construction project management pursuant to Section 4526 of the Government Code, and agreements for services of other professionals required for the proper, efficient administration of the city. The city manager shall approve and execute all contracts according to the limits of the manager's approval authority established in Section 2.60.035 of this chapter, and may approve change orders for previously authorized procurements of supplies and equipment, professional services agreements and public works contracts in amounts not exceeding an aggregate of twenty-five percent over the original authorized contract price or the limits established in Section 2.60.035 of this chapter for the city manager, whichever is greater, without prior city council approval. Engagement of qualifying professional vendors shall be based upon demonstrated competence and the qualifications necessary for the satisfactory performance of the city's requirements in accordance with the procedures set forth in the document entitled "Procedures for Selection of Professional Services Firms" on file in the office of the city clerk.

(Ord. 2262 § 1 (part), 2005; Ord. No. 2016-2417, § 1, 12-20-2016)

The bid limits for formal and informal bidding and award and the authority of the city manager and purchasing agent may be adjusted annually in response to the San Diego All Urban Consumers Consumer Price Index (CPI). The purchasing agent shall calculate the effect of the cumulative change in the CPI to authorized bid limits. Adjustments to the formal bid limit will be made in five thousand-dollar increments whenever the calculated value exceeds a previously set limit by more than two thousand five hundred dollars. Adjustments to the informal bid limit will be made by one thousand-dollar increments whenever the calculated value exceeds a previously set bid limit by more than five hundred dollars. The contracting authority of the city manager and purchasing agent and other limits set forth in this chapter may be adjusted upwards accordingly, pursuant to ordinance.

(Ord. 2262 § 1 (part), 2005)