Signal Hill Municipal Code Ch. 3.20 Purchasing Ordinance

This purchasing system is hereby adopted in order to establish efficient policies and procedures for the procurement of goods, services, and public projects at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases and procurements, to clearly define authority for the purchasing function, and to comply with all applicable laws in a professional and ethical manner. (Ord. 2021-06-1524 § 2 (part))

A. Pursuant to Section 1100.7 of the California Public Contract Code, the city council declares that the city’s procurements of goods, services, and public projects, or any portion thereof, are expressly exempt from the California Public Contract Code.

B. In the interest of ensuring an expeditious and fair procedure for administering the award of its contracts, the city in its discretion may follow portions of the California Public Contract Code, but absent a judicial finding that a particular aspect of local public contracting is a matter of statewide concern, the city is not required to do so. (Ord. 2021-06-1524 § 2 (part))

For the purposes of this chapter, the following words and terms, shall be construed with the following definitions:

A. “Alternative delivery” means a procurement method for a public project other than traditional delivery, including but not limited to, design-build, progressive design-build, and construction manager at risk.

B. “General services” means the furnishing of labor, time, or effort by a vendor for non-professional services as the city may, from time to time, find necessary and proper for the functioning of the city.

C. “Goods” means any and all supplies, materials, equipment, articles, things, or property, other than real property, furnished to be used by the city.

D. “Maintenance services” means:

1. Routine, recurring, and usual work for the preservation or protection of a publicly owned, or publicly operated facility for intended purposes;

2. Minor repainting;

3. Resurfacing streets and highways at less than one inch;

4. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems;

5. Work performed to keep, operate and maintain publicly owned water or waste disposal systems; and

6. Other similar services that are generally classified as maintenance and are not public projects.

E. “Professional services” means services provided by a person, company, corporation, or firm engaged in a profession based on a generally recognized special knowledge, skill, license, and/or certification to perform the work including, but not limited to, the professions of accountant, attorney, artist, architect, landscape architect, construction manager, engineer, environmental consultant, dentist, physician, training or educational consultant, or land surveyor, and whose services are considered distinct and unique.

F. “Public project” or “public works project,” means:

1. A project for the erection, improvement, painting, or repair of public buildings and works;

2. Work in or about streams, embankments or other works for protection against overflow;

3. Street or sewer work except maintenance or repair; and

4. Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.

G. “Services” means general services, maintenance services, and professional services.

H. “Traditional delivery” means a procurement method for a public project whereby the city prepares, or causes to be prepared, complete plans and specifications prior to constructing, or causing to be constructed, the project. This is commonly referred to as design-bid-build. (Ord. 2021-06-1524 § 2 (part))

The purchasing officer shall be the city manager or his/her designee. The purchasing officer shall direct and supervise the city’s purchasing program. The purchasing officer shall endeavor to obtain as full and open a competition as possible on all purchases. The purchasing officer shall establish methods and procedures for the efficient and economical functioning of the purchasing program.

The purchasing officer shall have authority to do the following:

1. Enter into any contract permitted by law, including, but not limited to, supplies, equipment, service contracts, required by any department of the city in accordance with the purchasing procedures prescribed by this chapter, such administrative regulations as the purchasing officer shall adopt, and such other rules and regulations as shall be prescribed by the city council;

2. Maintain when feasible full and open competition among bidders on all purchases;

3. Prepare, recommend and implement rules governing the purchase of supplies, equipment and services for the city and recommend revisions and amendments where applicable;

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

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

6. 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 department or which become unsuitable for city use; and

7. Maintain a vendor’s list, vendor’s catalog file and records needed for the efficient operation of the purchasing division. (Ord. 2021-06-1524 § 2 (part))

The authority applicable for the purchase of goods, services, and public projects shall be delegated as follows:

A. Award by Public Works Contracts Manager or Deputy Director of Public Works. The deputy director of public works may make purchases or contracts for goods and services in an amount not to exceed three thousand dollars ($3,000). The public works contracts manager or deputy director of public works may award contracts for public projects, or take any other action in response to bids for public projects, if the estimated amount of the contract will not exceed five thousand dollars ($5,000). The public works contracts manager or deputy director of public works may sign purchases or contracts on behalf of the city within his or her purchasing authority.

B. Award by Department Head. A department head may make purchases or contracts for goods and services in an amount not to exceed twenty thousand dollars ($20,000). A department head may award contracts for public projects, or take any other action in response to bids for public projects, if the estimated amount of the contract will not exceed thirty thousand dollars ($30,000). A department head may sign purchases or contracts on behalf of the city within his or her purchasing authority.

C. Award by City Manager. The city manager may make purchases or contracts for goods and services in an amount not to exceed fifty thousand dollars ($50,000). The city manager may award contracts for public projects, or take any other action in response to bids for public projects, if the estimated amount of the contract will not exceed sixty thousand dollars ($60,000). The city manager may sign purchases or contracts on behalf of the city within his or her purchasing authority.

D. Award by City Council. The city council shall make purchases or contracts for goods and services that exceed fifty thousand dollars ($50,000) and for public projects that exceed sixty thousand dollars ($60,000). The city manager may sign purchases or contracts on behalf of the city after award by the city council. (Ord. 2021-06-1524 § 2 (part))

A. Procurement Guidelines. The city manager shall implement policies and procedures governing the procurement of goods, services, and public projects for the city consistent with this chapter. Said procedures and policies may be amended as needed to address operational issues as they arise. The city manager, or his or her authorized representative, shall enforce the procurement guidelines.

B. Rejection of Bids and Proposals. At its discretion, the city council may reject any and all bids, proposals, quotations, or prices and take any other action deemed appropriate for the procurement of goods, services, and public projects.

C. Required Restrictive Procedures. More restrictive procurement methods shall be used if required by federal and state law, or where federal or state funds are involved in the contract to be awarded, or when the city council or city manager determines it is in the best interest of the city to do so.

D. Appropriations Requirement. No contract or purchase shall Be made unless the city manager or finance director shall have first confirmed that there is an unencumbered appropriation in the fund against which such expenditure is to be charged sufficient to cover the amount of purchase or contract, unless in cases of emergency.

E. Unauthorized Purchases. No officer or employee of the city shall request a vendor to deliver goods, services, or public projects to the city without prior authorization by the appropriate city official. Such purchases are void and not considered an obligation of the city.

F. Review and Approval of Plans and Specifications. The city engineer, or qualified designees, are authorized to review and approve engineering plans for all public projects. This shall include the working details, drawings, plans and specifications prepared for every public project, including emergency and change order work, which may affect the design or operation of public improvements and which may bring into question the city’s liability for dangerous conditions of public property.

G. Master Agreements. Unless prohibited by law, the city may enter into master agreements under which the city purchases goods, services, or public projects, including but not limited to on-call services, task orders, and job orders. Master agreements shall have a not-to-exceed cost limit. Notwithstanding anything to the contrary in this Chapter 3.20 and unless otherwise prohibited by law, master agreements with a total aggregate not-to-exceed value in excess of $50,000 may be procured using the formal request for proposal process. Master agreements of $50,000 or less may be procured through any alternative means as determined by the city manager or his or her designee.

H. Split Purchases. A split purchase occurs when the quantity or scope of a required good, service, or public project is known prior to the initial purchase, and is divided into multiple purchases in order to avoid procurement requirements. Split purchases are prohibited and are considered fraud, waste, and/or abuse by auditors and in violation of best practices standards. (Ord. 2021-06-1524 § 2 (part))

A. Right to Protest. Prior to making the award, any responsible bidder or proposer in connection with the award of a contract may protest the award. A subcontractor of a bidder or proposer may not submit a protest. Protests shall be limited to matters in which the city does not have discretion to act, or acts outside of its discretion. This section shall apply to all contracts awarded by the city through a competitive process, including but not limited to a formal bid or formal request for proposal process.

B. Timing of Protest. The protest shall be submitted in writing within five (5) days following the bid opening. Untimely protests will not be considered and will be deemed waived.

C. Contents of Protest. The protest shall identify and explain the factual and legal grounds for the protest. Any grounds not raised in the written protest are deemed waived by the protesting bidder or proposer. The protest shall include all relevant, supporting documentation with the protest at the time of filing.

D. City Response. If the protest is timely and complies with all of the above requirements, the city shall review the protest, any response to the protest received from the challenged bidder or proposer, and all relevant information. The city will provide a written response to the protestor, and the city’s action is final.

E. Effect of Failure to Comply with Protest Procedures. The procedures set forth in this article are mandatory and are the sole and exclusive remedy of a bidder or proposer to dispute the award of a contract. A protest that does not comply with these procedures may be summarily rejected.

F. Conflicts. The protest procedure contained in this section shall not apply if a particular procurement solicitation contains a different protest procedure. (Ord. 2021-06-1524 § 2 (part))

The total estimated cost of goods, services or public projects determines the bidding procedures and procurement methods that must be followed, as described below:

A. Goods.

• 1. No competition required: $3,000.00 or less
• 2. Informal quote process: $3,000.01 - $50,000.00
• 3. Formal bid process: over $50,000.00

The city council may dispense with the formal bid process for goods over $50,000 if the city council finds that a formal request for proposal process would be more beneficial to the city or if the city council finds that the need to compare different products and/or negotiate the best value would be better achieved through a formal request for proposal process.

B. Services.

• 1. No competition required: $3,000.00 or less
• 2. Informal quote process: $3,000.01 - $50,000.00
• 3. Formal request for proposal (RFP)/request for qualifications (RFQ) process: over $50,000.00

• C. Public Works Projects via Traditional Delivery.

• 1. No competition required: $5,000.00 or less
• 2. Informal quote process: $5,000.01 - $60,000.00
• 3. Formal bid process: over $60,000.00

The formal bid process may be preceded by a formal request for qualifications process to prequalify prospective bidders.

D. Public Works Projects via Alternative Delivery

1. Alternative delivery may not be used for public works projects of less than $60,000.

2. Formal request for proposal (RFP)/request for qualifications (RFQ) process: over $60,000.00

(Ord. 2021-06-1524 § 2 (part))

A. Soliciting Quotes or Proposals. City staff shall solicit via posted notice, telephone request, mail, email, fax or any other reasonable solicitation method, price quotes or proposals documented in writing. If unable to obtain a minimum of three (3) price quotes, staff shall document that reasonable efforts were made to obtain price quotes or proposals including, that a notice was posted for not less than seven (7) business days; that there were no other vendors to solicit price quotes or proposals from; or that they solicited to other vendors and two or more declined to provide a quote or proposal. In lieu of soliciting three (3) price quotes or proposals, staff may elect to procure by formal procedures.

B. Award of Purchase. Award shall be made to the best qualified vendor presenting a quote or proposal that is in the city’s best interests. Contracts for the purchase of professional services shall be awarded to the best qualified consultant on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services at fair and reasonable prices. (Ord. 2021-06-1524 § 2 (part))

A. Issue RFQs or RFPs. At a minimum, the solicitation for a RFQ or RFP shall: (1) describe the project; (2) state how to obtain more detailed information about the project; (3) state the date, time and place for the submission of statements of qualifications or proposals; (4) describe general parameters for evaluation and selection; and (5) include any other information required by state or local law.

B. Published Notice. City staff shall solicit RFQs or RFPs via published notice in a newspaper of general circulation and/or on the city’s website at least ten (10) calendar days before the date for receiving statements of qualifications or proposals, unless exigent circumstances call for a shorter time.

C. Review of Statements of Qualifications or Proposals. Proposals and statements of qualifications shall be evaluated based on the evaluation and selection criteria established by the city in the RFP or RFQ.

D. Award. Award for professional services contracts shall be on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services at fair and reasonable prices. Award for other contracts shall be to the vendor offering the best value to the city, in the city’s sole and absolute discretion.

E. Rejection of Statements of Qualifications or Proposals. The city council may, in its sole and absolute discretion, reject any one or more items of a statement of qualifications or proposal; reject any and all statements of qualifications or proposals; or waive any irregularities or informalities in the statements of qualifications, proposals, or procurement process if deemed to best serve the interests of the city. After all statements of qualifications or proposals are rejected, the city council may abandon the procurement, re-advertise, or have the procurement done in any manner that the city council may direct without further complying with this chapter. (Ord. 2021-06-1524 § 2 (part))

A. Notice Inviting Formal Bids. Notice inviting formal bids shall be provided. At a minimum, the notice inviting formal bids shall: (1) distinctly describe the project; (2) state how to obtain more detailed information about the project; (3) state the date, time and place for the submission of sealed bids; (4) state the date, time and place for the opening of sealed bids; and (5) include any other information required by state or local law.

B. Published Notice. The notice shall be published at least ten (10) calendar days before the date of opening the bids in a newspaper of general circulation and/or on the city’s website.

C. Bidder’s Security. At the city manager’s discretion, the city may require bids to be accompanied by one of the following forms of bidder’s security: (a) cash; (b) cashier’s check made payable to the city; or (c) a bidder’s bond executed by an admitted surety insurer made payable to the city. Such security shall be in an amount determined acceptable by the city manager. If bidder’s security is required, no bid shall be considered unless security in the form set forth above is enclosed with the bid.

D. Forfeiture of Security. If the successful bidder fails to execute the contract, the bidder’s security shall be forfeited to the city. The city council may on refusal or failure of the successful bidder to execute such contract award the contract to the next lowest responsible bidder. If the city council awards the contract to the second 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 low bid. The surplus, if any, shall be utilized to offset any and all costs of preparation and printing of plans, specifications, estimates of cost, publication of notices, and any surplus remaining shall be returned to the lowest bidder who fails to execute the contract.

E. Bid Opening. Bid opening shall be conducted in one of the following ways:

1. Sealed bids shall be submitted to the city clerk and shall be clearly identified with the bid number on the envelope. Upon receipt, the city clerk shall date and time stamp the envelope. Bids shall be opened in public at the time and place stated in the public notice.

2. Sealed bids shall be submitted on the city’s electronic bid management system. Bids shall be opened automatically on the electronic bid management system at the time stated in the public notice.

F. Review of Bids. The city shall review all bids received for completeness, accuracy, responsiveness to the invitation and bid documents, and the city’s experience with or knowledge of the qualification and reliability of each bidder and prepare a recommendation for the city council. The city council may waive any irregularities or discrepancies in each bid received.

G. No Bids. If no bids are received, the city council may abandon the procurement, re-advertise for bids, or have the procurement done in any manner that the city council may direct without further complying with this chapter.

H. Award of Contract. If awarded, the contract shall be awarded to the lowest responsible and responsive bidder. If two or more bids received are the same amount, the city council may decide which bid to accept and award.

I. Rejection of Bids. The city council may, in its sole and absolute discretion, reject any one or more items of a bid, reject any and all bids, or waive any irregularities or informalities in the bids or bidding process if deemed to best serve the interests of the city. After all bids are rejected, the city council may abandon the procurement, re-advertise for bids, or have the procurement done in any manner that the city council may direct without further complying with this chapter. (Ord. 2021-06-1524 § 2 (part))

There shall be no informal quote process, formal RFP or RFQ process, or formal bid process required for the purchases of goods, services, or public projects under the any of the following circumstances:

A. Minimum Procurement Levels. When procuring goods or services up to $3,000, or when procuring public projects up to $5,000.

B. Disaster Relief. When in the case of a disaster, as further explained in Chapter 2.76 of the city’s Municipal Code.

C. Emergency. When in case of emergency.

1. “Emergency” means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.

2. In the case of an emergency which requires the immediate procurement of goods, services, or public projects up to $100,000, the city manager may procure these items without regard to the provisions of this chapter. The action shall only be to repair or replace a public facility, take any directly related and immediate action required by that emergency, or procure the necessary goods, services, and public projects for those purposes. In making such a contract or purchase, at least three (3) vendors should, if practicable, be solicited to submit price quotations by use of sealed bidding methods, facsimile, or email. Award shall be made to the vendor offering the lowest acceptable quotation that best meets the needs of the city. The city manager shall terminate the emergency action at the earliest possible date that conditions warrant. If a contract or purchase is made pursuant to this authority, the city manager shall provide to the city council for review a written public record showing the nature of the emergency and the city manager’s authorization to proceed.

3. In the case of an emergency which requires the immediate procurement of goods, services, or public projects in excess of $100,000 dollars, the city council may procure these items without regard to the provisions of this chapter. The action shall only be to repair or replace a public facility, take any directly related and immediate action required by that emergency, or procure the necessary goods, services, and public projects for those purposes. In making such a contract or purchase, at least three (3) vendors should, if practicable, be solicited to submit price quotations by use of sealed bidding methods, facsimile, or email. Award shall be made to the vendor offering the lowest acceptable quotation that best meets the needs of the city. The city council shall terminate the emergency action at the earliest possible date that conditions warrant.

D. No Competitive Market. When the city council determines that a competitive market does not exist or that the city will not gain a competitive advantage by using the formal bidding procedure, the city may use any other procurement method.

E. Competitive Bidding Already Completed. When the city manager or city council determines that: (1) a competitive bid procedure has been conducted by another public agency, including, but not limited to, another local agency, the state through the California Multiple Award Schedule (CMAS), the federal government through the general services administration (GSA), or a joint powers agency, authority or alliance that procures competitive contracts; and (2) the price to the city is equal to or better than the price to that public agency.

F. State Purchase. When the purchase is made on behalf of the city by the state department of general services.

G. Mandated Expenditures. When expenditures are mandated by law or regulation, such as county booking fees, utilities, postage, waste disposal fees or other non-negotiable permit, use or application fees.

H. Shared Services. When the city council or city manager authorizes the award and execution of contracts for services, subject to the dollar limits consistent with this chapter, that are provided by another government entity, public entity, joint powers authority, quasi-governmental entity, special district or non-profit entity that will maximize efficiency, increase cost effectiveness, increase range of services, minimize duplication, provide training or education, encourage collaboration, standardize efforts, or leverage government resources.

I. Best Interest of City. Except where otherwise prohibited by law, when the city council or city manager authorizes the award and execution of contracts for goods, services, and public projects subject to the dollar limits consistent with this chapter, without following the required procurement methods, provided that the city council or city manager finds that such award is in the best interest of the city, or of the public health, safety, and welfare.

J. Sole Source. When the city council or city manager determines that there is only one source that provides the needed goods or services, or to ensure compatibility with other city products and equipment, the city shall work to procure these items in the best interest of the city.

K. Purchase of Recurring Charges. The city may create an open vendor list for the purposes of providing goods or services for the fiscal year for ongoing cleanup, maintenance and different routine items that are of a continuing nature. Prices from each vendor shall be obtained in a manner to ensure competitive pricing, in the best interest of the city, the threshold for each vendor may be determined by the city council, at the recommendation of the city manager. A vendor list may be approved by the city council as often as necessary but not less than once every twenty four (24) months.

L. Task or Job Orders. Unless prohibited by law, on-call services, task orders, or job orders that the city purchases through a duly approved master agreement shall not be subject to further procurement requirements.

M. Otherwise Authorized. When otherwise authorized by this chapter, the city’s Charter, or applicable law. (Ord. 2021-06-1524 § 2 (part))

Purchases of supplies, services and equipment shall be made by purchase orders duly issued in accordance with the established rules and regulations provided in the purchasing manual. (Ord. 2021-06-1524 § 2 (part))

The authority applicable to issue a change order for the purchasing or contracting of goods, services, and public projects shall be delegated as follows:

A. Change by Department Head. A department head may issue a change order for purchases or contracts when the value of the awarded price, all previous change orders, and the current change order (the “cumulative value”) does not exceed $20,000.

B. Change by City Manager. The city manager may issue a change order for purchases or contracts when the cumulative value does not exceed $50,000.

C. Change by City Council. The city council may issue a change order for purchases or contracts whenever the city council determines it to be in the best interest of the city. (Ord. 2021-06-1524 § 2 (part))

A. Submitting Reports. All departments shall submit to the city manager, when requested, reports showing all materials, supplies and equipment which are no longer used or which have become obsolete or worn out.

B. Disposing of Surplus. The city manager shall have authority to sell as surplus all materials, supplies, and equipment which cannot be used by any department or which have become unsuitable for city use, or to exchange the same for, or trade in the same on, new materials, supplies, and equipment. The sale of surplus materials, supplies, and equipment shall be made pursuant to rules prescribed by the city manager and only after authorization from the city council as to any items of an estimated value of $50,000 or more.

C. City Officials and Staff. City officials and employees and their immediate families, shall not be eligible to purchase such surplus materials, supplies, and equipment. (Ord. 2021-06-1524 § 2 (part))

A. The city manager, or his or her designee, shall specify insurance requirements for the city and its vendors. (Ord. 2021-06-1524 § 2 (part))

A. In accordance with Civil Code section 9550(a), payment bonds are required on all public works contracts involving an expenditure in excess of twenty-five thousand dollars ($25,000). For purposes of this section, “public works contract” means an agreement for the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. In all other circumstances, the city manager, or his or her designee, shall have authority to require a payment bond before entering a contract in such an amount necessary to protect the best interests of the city.

B. The city manager, or his or her designee, shall have authority to require a performance bond before entering a contract in such an amount necessary to protect the best interests of the city.

C. The city shall, to the greatest extent practicable, use bond forms supplied by the city attorney. (Ord. 2021-06-1524 § 2 (part))

A. A vendor shall not assign, transfer, convey, sublet, or otherwise dispose of a city contract or any part thereof including any claims, without prior written consent of city. Any assignment without the written consent of city shall be void. (Ord. 2021-06-1524 § 2 (part))