Rancho Santa Margarita Municipal Code Ch. 3.07 Procurement Code

Footnotes:

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Editor's note— Ord. No. 15-01, § 1, adopted May 13, 2015, amended Chapter 3.07 in its entirety to read as herein set out. Formerly, Chapter 3.07, §§ 3.07.010—3.07.110, pertained to similar subject matter, and derived from Ord. No. 01-02, § 1(2.50.010—2.50.110), adopted December 6, 2001.

State Law reference— Purchasing policies required, Government Code § 54201 et seq.; Local Agency Public Construction Act, Public Contract Code § 20100 et seq.

In order to establish efficient procedures for the purchase of goods and supplies, equipment, and services for the City 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 suitability and fitness of purchases, the purchasing system set forth in this chapter is adopted for the City of Rancho Santa Margarita. Except as otherwise provided herein, the procurement regulations, policies, and procedures set forth in this chapter shall apply only to the purchase of goods and supplies, equipment, and professional and nonprofessional services, and shall not apply to public works construction projects. Procedures and processes for the procurement of public works construction contracts are set forth in Chapter 3.08 and are subject to the California Public Contract Code.

(Ord. No. 15-01, § 1, 5-13-2015)

(a) The authority and responsibility for the purchase of goods and supplies and equipment, procurement of professional and nonprofessional services, and disposition of surplus supplies and equipment, is vested in the City Manager and City Council. The Purchasing Officer shall be the City Manager or the City Manager's designee. The Purchasing Officer may promulgate additional administrative rules, procedures, and orders necessary to implement the policies and procedures established by this chapter with regard to the purchase of goods and supplies, equipment, and services on behalf of the City. Each City department head is responsible for administering and implementing for that department the purchasing policies and procedures set forth in this chapter.

(b) In addition to administering these policies and procedures, the Purchasing Officer and each City department head shall:

(1) Consider that the City Council has encouraged all residents and businesses located within the City to shop locally at businesses located in the City. In keeping with this policy, the Purchasing Officer should make every attempt to purchase goods and supplies and equipment from Rancho Santa Margarita businesses. Except as otherwise required by law, where other factors are equal, goods and supplies and equipment should be procured from Rancho Santa Margarita businesses.

(2) Keep informed of current developments in market conditions and new products and maintain a bidder's list, vendor catalogue files, or other records needed for the efficient purchase of goods and supplies, equipment, and services.

(3) Cause goods and supplies and equipment delivered to the City, as well as contract services, to be inspected or reviewed to determine their conformance with specifications.

(4) Evaluate contract services performed to determine conformance to the specifications set forth in the contract.

(5) Consider and encourage the purchase and use of recycled and recyclable materials and products, whenever practicable and cost effective or efficient.

(c) The term "City department head" as used in this chapter means the person who is designated by the City Manager as being responsible for each particular City department, including, but not limited to, Administration, Development Services, City Attorney, City Clerk, Community Services, Finance, Police Services, and Public Works.

(d) The term "estimated value" means the estimated total value as determined by the Purchasing Officer at the beginning of the procurement process for the proposed acquisition of goods and supplies, equipment, and services. When making this initial threshold determination, the Purchasing Officer shall make reasonable use of all available market data and pricing information to estimate the total cost to the City, inclusive of taxes, licenses, freight charges, installation charges, fees, and other consideration, for the proposed procurement. The Purchasing Officer shall not use the value of any anticipated exchange or trade-in amount to reduce the estimated value of the proposed procurement.

(Ord. No. 15-01, § 1, 5-13-2015)

(a) The City Council is responsible for and shall appropriate such funds as are necessary to implement the provisions of this chapter. The adopted budget for each City department for each fiscal year shall include funding for the necessary goods and supplies, equipment, and services for that department during the fiscal year. Except in cases of emergency, the City Manager shall not issue any purchase order or contract for goods and supplies, equipment, or services unless there exists an unencumbered appropriation in the department's account against which such purchase may be charged. The City Manager has the authority to transfer unencumbered funds between and among City departments and divisions as necessary for the procurement of goods and supplies, equipment, and services as necessary to implement the provisions of this chapter.

(b) Each City department head shall ensure that sufficient documentation is submitted to the Purchasing Officer with the proper purchase request form to demonstrate compliance with these policies and procedures and to justify the acquisition of goods and supplies, equipment, and services.

(c) Each City department head 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 surplus equipment in accordance with the procedures set forth in this chapter.

(Ord. No. 15-01, § 1, 5-13-2015)

The procurement of goods and supplies, equipment, and nonprofessional services may be made by the employees designated in this section subject to compliance with the procedures and limitations contained in this section.

(1) For purchases of $150 or less, petty cash may be used and the respective City department head must approve the purchase. It is not required that quotes or bids be obtained for such purchases.

(2) For purchases that are greater than $150, up to and including $2,500, the respective City department head must approve the purchase. No purchase order is necessary, and it is not required that quotes or bids be obtained for such purchases. Requests for payment shall be made on forms prescribed and provided by the Purchasing Officer (check request forms).

(3) For purchases that have an estimated value greater than $2,500, up to and including $7,500, the Purchasing Officer shall approve and execute the purchase order or contract for the purchase. Contracts shall be subject to approval as to form by the City Attorney. At least three informal quotes should be obtained for such purchases when practicable. Requests for purchases shall be made on forms prescribed and provided by the Purchasing Officer (purchase requisition forms and purchase orders forms).

(4) For purchases that have an estimated value greater than $7,500, up to and including $30,000, the City Manager shall approve and execute the purchase order or contract for the purchase. Contracts shall be subject to approval as to form by the City Attorney. Before the purchase is made, three written informal bids must be obtained from vendors and each of these bids must be documented in accordance with Section 3.07.050. Verbal bids shall not satisfy this requirement. Requests for purchases shall be made on forms prescribed and provided by the Purchasing Officer (purchase requisition forms and purchase order forms).

(5) For purchases that have an estimated value greater than $30,000, the City Council shall approve the purchase order or contract for the purchase. Contracts shall be subject to approval as to form by the City Attorney. Prior to City Council approval, three written formal bids must be obtained from prospective vendors in accordance with Section 3.07.060. Verbal bids shall not satisfy this requirement. The City Council may authorize that such purchase orders or contracts be executed by either the Mayor or the City Manager, or the City Council may otherwise delegate such signature authority.

(Ord. No. 15-01, § 1, 5-13-2015)

Except as otherwise provided in this chapter, for purchases of goods and supplies, equipment, or nonprofessional services that have an estimated value greater than $7,500, up to and including $30,000, at least three informal bids or proposals must be obtained, and each City department shall solicit such informal bids or proposals by written request to qualified prospective bidders or proposers. The purchase order or contract for such purchases shall be awarded to the lowest responsible bidder consistent with the best qualified vendor selection criteria set forth in Section 3.07.111. Informal bids or proposals shall be submitted to the requesting City department, which shall keep a record of all informal orders and bids for a period of no less than two years after placement of the order. This record, while kept, shall be open to public inspection.

(Ord. No. 15-01, § 1, 5-13-2015)

Except as otherwise provided in this chapter, for purchases of goods and supplies, equipment, and nonprofessional services that have an estimated value greater than $30,000, such procurements shall be let by the formal procedures set forth in this section.

(1) Notice inviting bids. Notices inviting formal bids from prospective vendors shall be publicly noticed and posted and mailed no later than ten calendar days before the submission date for formal bids. The notices shall describe the requested goods or supplies, equipment, or nonprofessional services in general terms, how to obtain more detailed information concerning the procurement, and state the time, place, and deadline for submission of sealed bids. The notices shall be mailed to all qualified vendors on the bid list or who have requested their name to be added to thereto.

(2) Public notice. The notice inviting formal bids shall be noticed in any generally accepted manner of public notification and posted in at least three public places in the City that have been duly designated by the City Clerk as the official places for the posting of public notices and on the City's official website. In addition, such notice may include trade publications when practicable.

(3) Bid opening procedure. Sealed bids shall be submitted to the office of the City Clerk and shall be identified as formal competitive bids on the outside of the sealed envelope. The City Clerk shall store all sealed bids in a secure location until opening. The City Clerk shall open all bids in public at the time and place stated in the notice inviting bids. A tabulation of all bids received shall be open for public review and inspection in the office of the City Clerk during regular business hours for a period of not less than 30 calendar days after the bid opening.

(4) Rejection of bids. In its sole discretion, the City Council may reject any and all bids for any reason or for no reason, and may suspend, delay, or otherwise cancel the procurement, or may order the re-advertisement of the request for bids. If all formal bids are rejected and the City Council resolves by a recorded majority vote of the total membership of the City Council that the procurement can be performed more economically by informal procedures or through open market purchases, then it may dispense with further formal competitive formal bidding.

(5) Tie bids. If two or more formal bids received are the same and are the lowest, the City Council may accept the one it chooses.

(6) Award of contracts. Contracts shall be awarded by the City Council to the lowest responsible bidder consistent with the best qualified vendor selection criteria set forth in Section 3.07.111. The decision of the City Council shall be final.

(7) No bids received. If no bids are received, the purchase may be let in the open market or by the informal procedures set forth in Section 3.07.050, subject to City Council approval.

(8) Performance bonds. The Purchasing Officer shall have authority to recommend that a performance bond or other form of security or guarantee be required before entering into a contract in such amount as may be reasonably necessary to protect the best interests of the City. If a performance bond or other form of security or guarantee is required, the form and amount of the bond, security or guarantee shall be described in the notice inviting bids, and the performance bond, security or guarantee shall be in a form approved by the City Attorney.

(9) Defects, irregularities, and informalities. The City Council may, in its sole discretion, waive any defect, irregularity, or informality in the formal bids or in the competitive procedures established in this section, and no such defect, irregularity, or informality shall void any contract entered into by the City.

(Ord. No. 15-01, § 1, 5-13-2015)

Except as otherwise provided below, the requirements and procedures set forth in Sections 3.07.050 and 3.07.060 may be waived, at the discretion of the Purchasing Officer or City Council, when any of the following are applicable:

(1) When goods and supplies, equipment, or nonprofessional services are of a unique, sole source nature because of their quality, durability, availability, or fitness for a particular use and are available only from one source. A sole source procurement is a procurement where only one source is practicably available for the type of procurement required;

(2) When the goods and supplies, equipment, or nonprofessional services are proprietary. A proprietary procurement is a procurement where the desired good or service must be restricted to one manufacturer because the good or service is compatible with or is an integral component of existing equipment or products, is necessary to support a specific need of a program, is covered by patent or copyright, must yield continuity of results, or is one with which a user has extensive experience and the use of any other similar good or service would require considerable reorientation and training. Under such circumstances, an equitable evaluation of comparable goods or services should be made showing that rejection of other goods or services is based solely on their failure to meet that need;

(3) When after a reasonable attempt has been made to obtain informal bids or proposals, and it has been determined by the Purchasing Officer that three informal bids or proposals cannot be obtained;

(4) When the Purchasing Officer finds that emergency conditions require the immediate purchase of goods and supplies, equipment, or services. For purposes of this section, emergency purchases are those procurements that are required to prevent immediate interruption or cessation of necessary City services or to safeguard life, property, or the public health and welfare. The Purchasing Officer shall file promptly with the City Council a report showing such conditions and the necessity for such action, together with an itemized account of all expenditures;

(5) When in the opinion of the Purchasing Officer competitive formal bidding is not likely to result in the lowest price;

(6) When in the opinion of the Purchasing Officer a specific make, model, or brand is necessary to match existing city goods and supplies or equipment or to facilitate the continuity of effective maintenance and support;

(7) When the goods and supplies, equipment, or nonprofessional services are available from a vendor who has been selected as the lowest bidder through a procurement with another government entity using competitive bidding procedures substantially the same as or similar to those normally utilized by the City for the acquisition of such goods and supplies, equipment, or services, and when the price offered to the City is substantially equivalent to that offered to the other public agency;

(8) When the goods and supplies, equipment, or nonprofessional services are available from suppliers who have been awarded contracts by the State of California for the purchase of goods and supplies, information technology, and services where State procurement is made in the form of master agreements, price schedules, or multiple award schedules that allow the State to take advantage of leveraged pricing that can be obtained through the State's buying power and where the State has determined that such vendor pricing is deemed to be reasonable, fair, and competitive. Pursuant to such State multiple award programs, the Purchasing Officer or City Council may make these purchases directly from the vendors without competitive bidding, or the State may provide assistance to the City in making such purchases;

(9) When in the opinion of the Purchasing Officer it is determined that an unusual or unique situation exists, in that due to experience, specialized qualifications, the unique nature of the goods and supplies, equipment, or nonprofessional services, particular expertise, performance history, and/or reputation, a particular vendor is uniquely qualified for a particular task or project, which makes application of the requirements for competitive solicitation under this chapter contrary to either the intended purpose of the project or the public interest;

(10) When in the opinion of the City Council, it is determined that compliance with the requirements and procedures is not in the best interest of the City;

(11) When goods and supplies, equipment, or nonprofessional services are for information technology, computer hardware, software, or related equipment and devices, government affairs, public relations, legislative advocacy or affairs, or economic development, irrespective of their estimated value, such procurements shall be subject to the informal bidding procedures set forth in Section 3.07.050.

(12) When goods and supplies, equipment, and professional or nonprofessional services are for any of the following, irrespective of their estimated value, such procurements shall not be subject to the informal or formal bidding procedures set forth in Sections 3.07.050 or 3.07.060, or the procedures set forth in Section 3.07.080, but are otherwise subject to the purchasing limitations set forth in this chapter:

a. Contracts for professional or other expert witnesses if the purpose of such contracts is to provide for professional services or testimony relating to an existing or probable judicial proceeding in which the City is or may become a party, including contracts for special investigative services;

b. Contracts to commission original works of art, and for fine art or any form of public art;

c. The purchase of miscellaneous books, magazines, newspapers, subscriptions, on-line library reference services, film, videos, and assorted materials;

d. Intergovernmental payments, purchases, and agreements, including but not limited to contracts for the procurement of law enforcement or other public safety services;

e. Specialized seminar, training, and educational classes;

f. Contracts for election services;

g. Contracts for appraisal services;

h. Contracts for entertainment services;

i. Contracts for community support and/or recreation services;

j. Contracts for printing and/or graphical design services.

(Ord. No. 15-01, § 1, 5-13-2015)

(a) The informal and formal bidding procedures contained in this chapter shall not apply to contracts for professional services. Rather, to secure professional services, the City shall utilize a request for proposals procedure, which may be promulgated by the Purchasing Officer in the form of administrative regulations. The Purchasing Officer may award any contract for professional services when the total not to exceed contract amount of such services is $30,000 or less. Any contract for professional services having an aggregate contract amount greater than $30,000 shall be awarded by the City Council, and the City Council may authorize that such contracts be executed by either the Mayor or the City Manager, or the City Council may otherwise delegate such signature authority.

(b) For purposes of this chapter, the term professional services means those services provided by any specially trained and/or experienced person, company, corporation, or firm in areas including but not limited to private architectural, landscape architectural, engineering, environmental, land surveying, construction project management, management and administration, financial, accounting, auditing, actuarial, and/or development and planning, which involve the exercise of discretion and independent judgment together with an advanced or specialized knowledge, expertise, training, or unique skills gained by formal studies or experience.

(c) Notwithstanding any provision in this chapter to the contrary:

(1) Selection by the City of professional services in areas including but not limited to private architectural, landscape architectural, engineering, environmental, land surveying, construction project management, management and administration, financial, accounting, auditing, actuarial, and/or development and planning, which involve the exercise of discretion and independent judgment together with an advanced or specialized knowledge, expertise, training, or unique skills gained by formal studies or experience, shall be on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required, and shall not be awarded solely on the basis of cost.

(2) In order to implement this method of selection, the Purchasing Officer may promulgate administrative regulations concerning contracting for professional services to ensure that such services are engaged on the basis of demonstrated competence and qualifications for the types of services to be performed and at fair and reasonable prices to the City. In accordance with State law, the City shall consider price after the City is satisfied that the would-be person, company, corporation, contractor, consultant, or firm has demonstrated the competence and professional qualifications necessary for the satisfactory performance of the services required. Price alone shall not be the determining factor, but shall be considered along with qualifications.

(3) Notwithstanding the foregoing, all contracts for the performance of the annual audit of the City financial statements shall be competitively bid by the Purchasing Officer by utilizing the informal competitive bidding method set forth in Section 3.07.050 and by evaluating the bids or proposals received and making the contract award in accordance with the selection criteria set forth in subsection (2) above. The award of all contracts for municipal financial audit services, regardless of cost, shall be approved by the City Council.

(Ord. No. 15-01, § 1, 5-13-2015)

City officers and employees are prohibited from engaging in any unlawful activity in the procurement of goods and supplies, equipment, and services, including, but not limited to, receipt of any form of compensation, rebates, kickbacks, or any other unlawful consideration. City officers and employees are prohibited from participating in the selection process when those persons have a financial interest in the purchase or contract as proscribed in Government Code Section 1090 et seq. or 87100 et seq.

(Ord. No. 15-01, § 1, 5-13-2015)

(a) Following the award of a contract or issuance of a purchase order for goods and supplies, equipment, services, or public works construction contracts, the contract or purchase order may be amended by the issuance of a change order or contract amendment. A change order may be issued provided that the change is reasonably related to the scope of the original contract. An amendment to a contract is required when the subject of the change order alters or is outside the scope of the original contract.

(b) The Purchasing Officer will maintain control relative to the scoping, estimating, and negotiating of the proposed change(s) of a change order or contract amendment. The Finance Director will certify the availability of funds for the proposed change(s) in the event the change increases the contract cost.

(c) Any public works construction contract change order where the original contract cost is in the amount of $30,000 or less may be approved by the Purchasing Officer, provided the aggregate amount of all changes to that particular contract, including the change order under consideration, does not exceed $30,000. Any change order to a public works construction contract with an original contract amount greater than $30,000, or any change order that, when considered with the aggregate amount of all other changes to that particular contract, exceeds ten percent of the original contract cost, shall be approved by the City Council. For public works construction contracts greater than $30,000, the Purchasing Officer shall notify the City Council of change orders that have been issued for public works construction contracts pursuant to this section at the time the notice of completion is issued.

(d) Any change order or contract amendment to a contract for goods and supplies, equipment, or professional or nonprofessional services where the original contract cost is in the amount of $30,000 or less may be approved by the Purchasing Officer, provided that the aggregate cost resulting from the original contract and all change orders or amendments to such contract, including the change order or amendment under consideration, does not exceed $30,000. If the change order or contract amendment would cause the aggregate cost of the contract to exceed $30,000, it shall be approved by the City Council. All contract amendments shall be approved as to form by the City Attorney.

(e) If a proposed contract amendment, change order, or request for extra work exceeds the limitations imposed upon the Purchasing Officer by this section or by regulation, and if any extended delay in obtaining City Council approval is reasonably determined to subject the City to liability for damages incurred by a contractor, or to jeopardize the public health, welfare, or safety, or to otherwise result in potential detriment to the City, then the Purchasing Officer shall have authority to exceed the dollar amounts or other limitations specified herein. The Purchasing Officer shall file promptly with the City Council a report showing such conditions and the necessity for such action, together with an itemized account of all expenditures.

(Ord. No. 15-01, § 1, 5-13-2015)

(a) Any City department head may declare goods and supplies or equipment (collectively "personal property") held by such department as surplus. Such declaration shall be in written list form and shall be delivered to the City Manager, who shall circulate the list to all City departments for review. If any department has use for such personal property, the City Manager has the authority to reassign the personal property at his or her discretion. If no City department head has use for such personal property, the personal property shall be deemed surplus.

(b) The City Manager shall have the authority to dispose of surplus personal property by auction, sale, donation, or any other method which, in his or her judgment, provides the best return or most benefit to the City. Notwithstanding any provisions herein to the contrary, the City Manager is authorized to dispose of surplus personal property in any manner he or she deems appropriate, including via disposal or donation, where such personal property is determined to be of little to no value or is determined to be damaged, worn-out, or otherwise obsolete without further compliance with this section. Where surplus personal property is disposed of by sale, the City Manager shall utilize one of the following procedures:

(1) Sale on the open market. The City Manager shall cause to be noticed, at least three days before the sale, in any generally accepted manner of public notification, a notice of sale setting forth a general description of the personal property to be sold, and the day, time, and location of the sale.

(2) Sale by sealed bid or auction. As an alternative to the sale on the open market, the City Manager may, when in his or her judgment it is in the best interests of the City, sell surplus personal property by means of sealed bid or public auction. In the case of sale by sealed bid or public auction, the City Manager shall cause to be noticed, at least three days before the sale, in any generally accepted manner of public notification, a notice setting forth a general description of the surplus personal property to be sold, and the day, time, and location of the sale.

(c) All sales, trade-ins, and donations shall be "as-is" with no warranty, guarantee, or representation made of any kind, express or implied, as to the condition, utility, usability, or fitness for a particular use. All transactions shall be paid to the City in cash, or in any manner acceptable to the City Manager.

(d) In conducting an auction, the City Manager 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.

(Ord. No. 15-01, § 1, 5-13-2015)

In determining the best qualified vendor, consideration is to be given to price, quality, and performance of the goods and supplies, equipment, or nonprofessional services to be provided by the vendor. Criteria for determining the best qualified vendor shall include but not be limited to the following:

(1) The cost and quality of the goods and supplies, equipment, or nonprofessional services;

(2) The ability, capacity, and skill of the vendor to perform and to provide the goods and supplies, equipment, or nonprofessional services requested;

(3) The ability of the vendor to provide the goods and supplies, equipment, or nonprofessional services requested promptly or within the time specified, without delay, interference, or service interruption;

(4) The ability of the vendor to demonstrate the attributes of trustworthiness, quality, fitness, capacity, and experience to satisfactorily perform;

(5) The character, integrity, reputation, judgment, references, experience, and efficiency of the vendor;

(6) The quality of the vendor's performance history and record on previous purchases or contracts with the City;

(7) The ability of the vendor to provide future maintenance, repair parts, and services for the use of the goods and supplies, equipment, or materials purchased; and

(8) The ability of the vendor to demonstrate its prior, current, and continued compliance during the contract term with all applicable federal, state, and local laws, statutes, ordinances and all lawful orders, rules, and regulations promulgated thereunder.

(Ord. No. 15-01, § 1, 5-13-2015)

The provisions of this chapter are not applicable to the following procurements, which are to be approved by the City Council: contracts for banking and/or investment services; contracts for legal services; franchise agreements; and, contracts for procuring and maintaining insurance policies for the benefit of the City.

(Ord. No. 15-01, § 1, 5-13-2015)