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CC Resolution 2019-021 Purchasing & Contracting Policy - SupersededRESOLUTION NO. 2019 - 021 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, ADOPTING A PURCHASING AND CONTRACTING POLICY WHEREAS, purchasing and contracting policies provide a guideline to city employees for purchasing and contracting for goods, services and projects to support, enhance and supplement city operations, and WHEREAS, purchasing and contracting policies provide transparency and consistency, and WHEREAS, purchasing and contracting policies enable the Finance department to maintain a system of financial controls for the efficient use and expenditure of public funds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta, California, as follows: SECTION 1. Resolution No. 2018-014 adopted on April 3, 2018 is hereby repealed, and this Resolution supersedes all prior Purchasing and Contracting Policies adopted by Council. SECTION 2. The purchasing and contracting policy attached hereto as Exhibit A and incorporated herein by reference, shall govern the purchase of city supplies, goods, equipment, services and construction projects. SECTION 3. This policy, as applicable, shall constitute the procedures and rules governing the solicitation of bids and award of contracts for public works projects pursuant to Chapter 3.12, and shall constitute the procedures and rules governing the solicitation and selection of firms for services pursuant to Chapter 3.12, of the La Quinta Municipal Code. SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 3 of 26 Exhibit A CITY OF LA QUINTA, CALIFORNIA PURCHASING AND CONTRACTING POLICY I. GENERAL RULES; EXCEPTIONS This Purchasing and Contracting Policy (Policy) shall apply for the solicitation and selection of all purchases and contracts within the City of La Quinta (City). Any exceptions to this Policy must be approved by the City Council (Council). The Council may, by majority vote and in accordance with its fiduciary responsibilities, approve expenditures of any amount, for any length of term, not otherwise inconsistent with any applicable law. A. ADMINISTRATIVE GUIDELINES 1. Vendor Limit. Combined purchases cannot exceed $50,000 per vendor, per fiscal year except with Council approval and in the case of major expenditures, in which a vendor has participated in a public formal bidding process. In addition, multiyear agreements in excess of $50,000 as an aggregate total per vendor will require Council approval. 2. Change Orders or Amendments. A change order or amendment is a change in a contract term, other than as specifically provided for in the contract, that authorizes or necessitates any increase or decrease of the cost of the contract or in the time of completion. Change orders that alter the amount of the contract must be authorized by Directors, City Manager, or Council depending on the amount as referenced in section II Expenditure Categories of this policy. A valid request for a change order or amendment must meet the following criteria: a. the change was not reasonably foreseeable at the time that the contract was signed; b. the change must be relevant to the original contract; and c. the change is authorized by the contract provisions and in the best interest of the City. 3. Conflict of Interest. No employee, officer, Councilmember, or agent shall participate in the selection, award, or administration of a contract if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, Councilmember, agent, or any member of his or her immediate family, his or her partner, or an Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 4 of 26 organization which employs or is about to employ any of the parties indicated, herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. Nothing in this Policy does or is to be construed as limiting the applicability of any other federal, state, or local laws and regulations governing prohibitions against financial conflicts of interest, including but not limited to the Political Reform Act (Government Code Section 81000 et seq.) and implementing regulations from the Fair Political Practices Commission (Title 2, Section 18110 et seq., of the California Code of Regulations), and Government Code Sections 1090-1999 and 1126. All such laws and regulations shall apply to every employee, officer, Councilmember, and agent of the City. 4. Local Vendors. Purchasing goods and services from local vendors which stimulate the local economy is encouraged but not required. 5. Green Purchasing Practices. The City is committed to Green Purchasing practices in obtaining goods and services. The City shall consider environmentally-preferable products when appropriate. Nothing in this policy requires the procurement of products that do not adequately perform their intended use, requires procurement that excludes adequate competition, or requires the procurement of products that are unavailable at a reasonable price or at a reasonable time. An environmentally- preferable product means a product that meets any of the following criteria: a. is durable, repairable, reusable, or recyclable; b. has minimal packaging, toxic content, or chemical-hazard potential; c. is resource or energy efficient in any or all phases of its manufacture, use, or disposal; or d. its use or disposal minimizes or eliminates the City’s potential environmental liability. 6. Payment Terms. The City’s standard payment terms are Net 30, meaning a payment should be issued to the vendor no later than thirty days after the invoice date, unless the City and vendor have agreed to alternate terms. 7. In no instances should purchases be split or divided in such a manner to circumvent policy process and limits. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 5 of 26 8. If any provision of this policy is not followed by departments, a procurement exemption form must be completed and reviewed by the City Manager or their designee. 9. Violations of this policy may result in disciplinary action up to and including dismissal, subject to the applicable due process as prescribed in the City’s Personnel Policies and Procedures. II. EXPENDITURE CATEGORIES Purchases, which include those made by purchase order (PO), written agreement, amendment or change order that require city expenditures, are classified into five categories based on the anticipated expenditure amount. Each category establishes an authorization level, procurement method, and maximum term, which shall apply unless specifically exempted in accordance with this Policy. A. Expenditures of $50 or less (petty cash) B. Expenditures of $51 to $5,000 (operational) C. Expenditures of $5,001 to $15,000 (minor) D. Expenditures of $15,001 to $50,000 (intermediate) E. Expenditures over $50,001 (major) A. EXPENDITURES OF $50 OR LESS Authorization: Department Director, who may delegate to a Department designee Procurement: No bids or PO necessary; petty cash advances or reimbursement Term Limit: N/A Note: These transactions take the place of ordinary ongoing purchases and shall be limited in use. A cash disbursement or reimbursement may be obtained from the Finance Department and must not exceed $50 per item or combined purchase. A petty cash request form shall be completed and signed by the Department Director or designee before submittal. The form shall include the date, description of the item to be purchased, and account number. Petty cash amounts will be advanced to accommodate miscellaneous minor expenditure amounts of $50 or less and for which normal payment provisions are not practical. The Finance department will periodically audit petty cash expenditures as to form and regulations and may confirm purchases. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 6 of 26 B. EXPENDITURES OF $51 to $5,000 DURING THE INITIAL TERM1 Authorization: Department Director, who may delegate to a Department designee4 Procurement: No PO necessary; 3 informal bids/proposals2 whenever possible Term Limit: 3 years plus one 3-year extension C. EXPENDITURES OF $5,001 to $15,000 DURING THE INITIAL TERM Authorization: Department Director or delegated by Director with confirmation from City Manager Procurement: PO required plus 3 written informal bids/proposals Term Limit: 3 years plus one 3-year extension D. EXPENDITURES OF $15,001 to $50,000 DURING THE INITIAL TERM Authorization: City Manager Procurement: PO required plus 3 informal bids/proposals plus city contract3 Term Limit: 3 years plus one 3-year extension Purchase Orders between $25,000 and $50,000 are reviewed by City Council on a quarterly basis on the Demand Register Report. E. EXPENDITURES OVER $50,001 Authorization: City Council Procurement: PO required plus formal bids/proposals plus city contract Term Limit: No limit, any term approved by majority vote of the Council For purposes of this Policy, the “Initial Term” shall be either (i) a term under the contract or PO not to exceed one year, or (ii) a term longer than one year but not to exceed the maximum number of years authorized under a “Term Limit” (set forth below) as long as the contract includes a continuing obligation for performance by a contracting party and the City has an obligation for payment only for the services actually performed and accounted for by invoice or other monthly or regular periodic documentation acceptable to the City. Under any contract or PO, either the contracting party or City may terminate the contract or PO prior to the expiration of the Initial Term for the other party’s nonperformance. 2 “Informal” bid/proposal means tangible proof. i.e. written, e-mail, or other casual medium. Departments shall document attempts to receive bids. 3 The city’s templates for contracts, agreements, amendments and change orders shall be used for category D and E purchases. The City Manager may allow for modifications of these templates or use of other contracts, agreements, amendments and change orders, or may require use of city templates for category B and C purchases when the City Manager determines it is prudent due to the level of risk exposure to the city, the need to spell out a complex scope of work, or any other reason s/he believes to be in the best interest of the city. To meet prevailing wage requirements any maintenance or repair project over $15,000 or construction project over $25,000 will require a written contract. 4 Designee is someone who’s given signing authority by Department Director or City Manager to authorize expenditures. Signature authorization form must be on file to authorize designee signing authority. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 7 of 26 III. PROCUREMENT PROCEDURES - MAJOR EXPENDITURES (over $50,001) A. FORMAL BIDS FOR MAJOR PUBLIC WORKS PROJECTS AND MAJOR SUPPLIES AND EQUIPMENT PURCHASES. Major public works projects and supplies and equipment as referenced in Chapter 3.12 of the La Quinta Municipal Code, are defined as purchases and projects having an actual or estimated value of greater than fifty thousand and one dollars ($50,001). The solicitation and selection of bids and award of contracts shall comply with Section 3.12.030 of the La Quinta Municipal Code (public works contracts), and this Policy, and shall be administered through each City Department, according to the following procedures: 1. Invitation for bids. An invitation for bids (the “invitation”) shall be published in a newspaper, electronic bulletin board or online submission source, City website, or other generally-recognized source of local public works contract information, at least ten days prior to the date of the opening of bids, or as required by California Public Contract Code §20164 and §22032. Invitations shall include general descriptions of the work to be performed, the time and place of the opening of bids, the place where bidders may obtain bid documents, the amount of bid security required, and the amount and nature of performance and labor materials security that will be required. 2. Form of bids. Bids conforming to the requirements of the invitation shall be submitted to the Department Director (the “Director”) in sealed packages or by other means which will prevent the divulging of bids prior to the stated time for opening of bids, all as specified in the invitation or the bid documents. Unopened bids should be clearly marked or otherwise identifiable as bids for the project to which they apply. 3. Bid security for public works projects. Bids for public works projects shall be accompanied by cash, cashier’s check, certified check, surety bond, or other form of security stated in the invitation or bid documents, in a sum equal to at least ten percent (10%) of the amount of the bid. 4. Opening of bids. At the time and place stated in the invitation, the bids shall be publicly opened and announced. The bid amounts shall be tabulated, and the tabulation shall be available for public inspection at the City Department during regular business hours for a period of not less than thirty (30) calendar days after the bid opening. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 8 of 26 5. Review of bids. The Director or designee shall review all bids received for completeness, accuracy, responsiveness to the invitation and the bid documents, and the City’s experience with or knowledge of the qualification and reliability of each bidder and shall prepare a recommendation to the City Council. Written amounts shall take precedence over associated numeric amounts. Mathematical errors, if found, shall be corrected and shall not disqualify a bid. The corrected total shall be the bid amount considered in determining the lowest responsible bidder and shall be the contract amount awarded if the bid is selected. 6. Award of contract. Contracts shall be awarded by the City Council to the lowest responsible bidder. Determination of the lowest responsible bidder shall be at the sole discretion of the City Council pursuant to findings and recommendations presented by the Director or designee at the time of the award of contract. 7. Equal bids. If two or more equal low bids are received, the City Council may award the contract to any one of the equal low bidders by the following: a. Select one bid; or b. Reject all bids and re-solicit for bids; or c. Reject all bids and authorize negotiated agreement if consistent with federal and state laws; or d. Select one bid, which is the most responsible bidder; or e. Take any other action that the City Council deems to serve the best interest of the City. 8. No bids. When no bids are received from responsible firms, the City Council may accomplish the project in any manner it sees fit. 9. Rejection of bids. The City Council may reject any or all bids presented and may then direct that the project be re-advertised, may authorize negotiation of a contract with one or more responsible firms, or may resolve that the project can be performed more economically by City forces, day labor, time and materials contract, or other method. 10. Execution of contract. The successful bidder shall execute the contract and furnish required performance security and labor and materials security when required pursuant to the bid document. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 9 of 26 11. Forfeiture of bid security for public works projects. If the successful bidder fails to execute the contract and furnish security within the stated time, and said failure is not primarily due to actions or omissions of the City or to acts of god, the bidder shall forfeit the bid security provided. The City Council may then consider the bid of the next lowest responsible bidder. 12. Release of bid security for public works projects. Bidders are entitled to the return of their bid security unless forfeited as provided herein. The City shall retain all bid security until a contract has been executed or until the City Council rejects all bids at which time all bid security not forfeited shall be returned to the appropriate bidders. 13. Disposition of forfeited bid security for public works projects. The City shall retain forfeited bid security until a contract is awarded to another firm or the project is cancelled. The City shall retain an amount equal to the difference between the forfeiting firm’s bid and the new contract amount, if any, and an additional amount equal to administrative and other costs incurred as a result of the failure of the forfeiting bidder to enter into a contract and provide required security, and shall return any remaining amount of the bid security to the forfeiting bidder. 14. Performance security and labor and materials security for public works projects. The bidder to whom the contract is awarded (the “successful bidder”) shall furnish performance security and labor and materials security in amounts specified in the Invitation or Bid Documents. B. FORMAL PROPOSALS FOR MAJOR PROFESSIONAL AND TECHNICAL SERVICES. Major professional and technical services are defined as services having an actual or estimated value of greater than fifty thousand and one dollars ($50,001). The solicitation and selection of proposals and award of contracts shall comply with Section 3.12.020 of the La Quinta Municipal Code (service contracts), and this Policy, and shall be administered through each City Department, according to the following procedures: 1. Maintenance and Repair Services. Services intended to preserve and/or restore a public work to a clean, safe, efficient, and/or continually usable condition. Maintenance and repair services include, but are not limited to: carpentry, electrical, painting, plumbing, glazing, and other craftwork to preserve a facility in the condition for which it was intended; repairs, cleaning and other operations on machinery and other equipment permanently attached to a facility as fixtures; the mowing, pruning, and trimming of lawns, grass, trees, shrubs, bushes and hedges; and the Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 10 of 26 regular removal or relocation of by-products or waste products accumulated at City facilities as the result of ongoing environmental processes. 2. The City Manager shall approve the preparation and release of all Requests for Proposals (RFP) and Requests for Qualifications (RFQ). 3. City staff shall determine, based on professional judgment, whether an RFP or an RFQ process best suits its needs and City staff, or a city- authorized consultant, shall prepare the RFP/RFQ document. 4. City staff, or a city-authorized consultant, or both shall prepare a list of suitable firms from known registries, professional organizations, and/or any other source. 5. City staff shall issue the RFP/RFQ to suitable firms and may also advertise for competitive proposals. The RFP/RFQ should be included in the requisition. 6. City staff shall form a selection committee, which may include private consultants, to review the RFPs/RFQs received, and the selection committee may conduct interviews and/or hold discussions with proposing firms. 7. The selection committee shall rank the proposing firms according to the criteria specified in LQMC Section 3.12.020 (service contracts) and City staff shall notify firms of their position in the ranking. For design-build projects, the selection committee may also take into account the criteria for selection of public works contacts specified in LQMC Section 3.12.030. 8. City staff, or a City-authorized consultant, shall negotiate with the top- ranked firm to arrive at mutually-acceptable contract terms. 9. City staff, or its authorized consultant shall terminate negotiations and begin negotiations with the next-ranked firm if an agreement cannot be reached and continue this process until negotiations are successfully concluded or until the list of qualified firms submitting proposals is exhausted and an agreement cannot be reached. 10. The Council shall award or reject the contract negotiated by City staff. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 11 of 26 IV. PROCUREMENT PROCEDURES – NON-MAJOR EXPENDITURES ($50,000 & under) INFORMAL BIDS OR PROPOSALS - Intermediate, Minor, and Operational Expenditure category projects, including minor public works projects, supplies, goods, equipment and minor services as referenced in Chapter 3.12 of the La Quinta Municipal Code, are defined as projects having an actual or estimated value of fifty thousand dollars ($50,000) or less. The solicitation and selection of bids and award of contracts shall comply with Section 3.12.030 of the La Quinta Municipal Code (public works projects), Section 3.12.020 of the La Quinta Municipal Code (service contracts), and this Policy, and shall be administered through each City Department, according to the following procedures: 1. Informal bids shall be obtained as dictated by this Policy from the open market and a written record of informal bids shall be kept with the related PO. If applicable, the RFP/RFQ should be included in the requisition. 2. Bid security. Security and labor and material security shall conform to the requirements for major public works projects but may be modified or waived by the City staff person authorized to make the purchase if warranted and in the best interest of the City. 3. Execution and Award of Contracts. The City Council may award contracts, or the City Manager, or designated City Director, or staff personnel may award and execute contracts, set forth in Categories A, B, C or D of Section II above, and may waive competitive bidding requirements if in the best interest of the City, provided there are unencumbered appropriations in the fund accounts against which the expenses are to be charged. V. EXEMPTION TO ANY PROCUREMENT METHOD Justification for exemption to any required procurement method may be submitted to the City Manager or in the case of a major expenditure, to the City Council under the following circumstances: a. Sole-source or select-source purchase. When determining if a purchase is sole or select source, rationale and/or proof must be provided in the purchase requisition as follows:  Demonstrate the need for a brand name product, such as to ensure compatibility with other city products and equipment. For example, standardization of fleet inventory (select-source). Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 12 of 26  Detail the need to add to an original scope of work (Change Order) because the original source is the only reasonable one to provide the additional goods, construction work or service needed (select- source).  Demonstrate that only one manufacturer or vendor makes and/or sells the required equipment (sole-source).  Select source form must be completed and attached to requisition. b. State, County, or other public agency cooperative purchasing program or contracts utilizing funding or other participation from agencies which require conformance with state, federal or other contracting regulations. c. The City does not require a contract for equipment purchases such as a specific type or brand of supply or part necessary for acceptable operation of a machine or device, or as required by warranty or contract on the machine or device; written documentation supporting a purchase must be provided. d. Emergency purchases made necessary by an immediate threat to life or property or a substantial disruption of a vital public service.  In advance of any local emergency, the City seeks to retain a list of available local businesses willing to provide necessary supplies, materials, equipment, services, food, care or shelter to the City through the Office of Emergency Management. Once the Emergency Operations Center (EOC) is activated, these memorandums will be activated.  In the event of an emergency, the City Manager or designee may make immediate purchases of goods and services. Emergency purchases include any purchase required to prevent imminent danger or to prevent or mitigate the loss or impairment of life, health, property, or essential public services. Every effort shall be made to obtain advance approvals or to obtain approvals as soon as possible following the purchase.  The City is not required to engage in either formal or informal competitive bidding in an emergency. The City Council delegates to the City Manager and his/her designee the authority to waive any procedures in the Policy that are not statutorily mandated when making emergency purchase of supplies, equipment, materials or services.  The Council shall ratify emergency suspension of procedures at the next properly noticed Council meeting following the emergency procurement and consider whether further suspension of procedures is required to abate the impacts of the emergency. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 13 of 26 e. The awarding officer(s) may waive irregularities in formal or informal bids received provided that it is in the best interest of the City to do so, and it does not result in unfair advantage to any bidder. f. The Council may authorize the award and execution of contracts without competitive bidding provided that such award is in the best interest of the City, or of the public health, safety and welfare. g. The following disbursements are exempt from purchase order requirements: i) Utility services ii) Disbursements to public agencies for which the City collects fees on behalf of that agency iii) Intergovernmental Memorandums of Understanding VI. CITY CREDIT CARD USE A. Authorization and Acknowledgement. Approval to use, issue and revoke a City credit card is at the discretion of the City Manager. Unless otherwise authorized by the City Manager, City credit cards shall have a credit limit of up to $5,000. The City Manager shall have the authority to set credit limits on a case by case basis up to $25,000. City credit cards shall be kept by the Finance Department and/or City Manager’s Office for safekeeping and prudence. Users authorized by the City Manager or designee (“Authorized Users”) must be City employees. Authorized Users may check credit cards in and out but are encouraged to limit usage only when necessary. All credit cards shall be returned to the Finance Department or the City Manager’s Office in a timely manner after use. Use of City credit cards shall follow all other purchasing guidelines in this policy. The Finance Department requires Authorized Users to sign a Signature Authorization Form acknowledging his/her understanding of the policies and procedures for the use of the City credit card and acknowledging the receipt of the credit card. B. Appropriate City Credit Card Use. City credit cards may be used for the following: 1. Traveling on City business; Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 14 of 26 2. Purchasing goods and services from vendors where use of another payment method is not practical, such as the case with many internet purchases in which no actual storefront exists; 3. Securing reservations and locations for City activities, meetings and conferences, community events, honoree luncheons, marketing promotions, and sales missions; 4. Paying for meals in conjunction with official City business such as meetings with City Council, developers, consultants, or interview panels. C. Inappropriate City Credit Card Use. The credit card shall not be used for the following: 1. Cash advances, money orders, wire transfers, etc.; 2. Routine gasoline purchases; 3. Alcoholic beverages, tobacco products, prescription drugs and cannabis 4. Political or religious organizations; 5. Firearms or ammunition; 6. Personal gifts including gift cards, flowers, etc.; 7. Long-term rentals or lease agreements; 8. Heavy-duty machinery that requires a maintenance agreement; 5. Use of the City credit card is not intended to replace effective procurement planning which enables volume discounts or to circumvent established competitive purchasing procedures. This means no purchases for goods or services should be made that would otherwise require competitive bidding; 6. Employees shall not use City credit cards for personal expenses. Charging personal items, services, entertainment or expenses of any kind on City cards is a misuse of City funds and a serious breach of City’s ethics policy. Doing so will result in disciplinary action, up to and including termination. Employees should use care in selecting between using their business and personal credit cards. D. Travel, Meetings, & Conferences. The uses of the City credit card for travel, local meetings, and conferences shall at all times comply with the standards and practices set forth within the City travel and meeting policy. All credit card charges must be supported by detailed charge receipts and submitted on an expense report to the Finance Department upon return from a business trip. E. Obtaining Goods and Services. Authorized purchases may be made in person, via approved internet site, or by telephone. Authorized Users must require vendors to itemize the receipt/invoice. An itemized receipt/invoice consists of the following information:  Date of purchase  Detailed description of goods or services purchased Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 15 of 26  Price per item  Amount of sales tax and total amount  Shipping charges, if any Upon completing the credit card transaction, the employee shall submit the itemized receipt with appropriate account numbers to the Finance Department. F. Monthly Statement. At the end of a billing cycle, the Finance Department will provide to Authorized Users a statement showing all transactions made during the billing cycle for which receipts/invoices have not already been turned into the Finance Department. Authorized Users are responsible to review and reconcile monthly credit card statements. Once reconciled, the Authorized User will attach the supporting detailed charge receipts and related invoices to the monthly credit card statement and turn it into the Finance Department within two (2) working days of receipt. Falsification of receipts will subject the employee to disciplinary action, up to and including termination of employment. The Finance Director reserves the right to review each credit card statement and determine if the expenses were purchased in accordance with the City policy. G. Disputed Charges. Authorized Users are responsible for ensuring that the vendor, the issuing bank, and the Finance Director are notified immediately of any disputed charges. Authorized Users will be responsible for resolving the disputed charge directly with the credit card company. H. Returned Items. If items purchased with the credit card are found defective or the repair or services faulty, the cardholder has the responsibility to return the item to the merchant for replacement or credit to the card. Cash refunds or store credit will not be permitted. I. Timely Payment. Based on the statement cycle date, the Finance Department will ensure timely payments. Credit card charges will be paid once reconciled by the Authorized Users and approved by the Finance Department. To avoid late fees and finance charges, the Finance Department reserves the option to pay all credit card charges, even if supporting documentation is not yet received. When subsequently received, the supporting documentation will be retroactively reconciled to the payment. J. Lost or Stolen Cards. Authorized Users are responsible for ensuring that the issuing bank and the Finance Department are notified immediately if the Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 16 of 26 card is lost or stolen. Failure to do so may result in holding the Authorized User responsible for any fraudulent use of the card. K. Disciplinary Action. The Human Resources Department is responsible for all disciplinary action surrounding misuse of cards, including cancellation of card privileges. L. Surrender upon Request or Separation. The credit card will be immediately surrendered upon separation from City employment, retirement, termination or upon request of the City Manager. Use of the credit card for any purpose after its surrender is prohibited. FEDERALLY FUNDED PROCUREMENTS This section pertains to federal-funded projects and purchases. VII. GENERAL PROCUREMENT STANDARDS A. Code of Conduct. As representatives of the City, all employees are expected to conduct themselves in a professional and ethical manner, maintaining high standards of integrity and the use of good judgement. Employees are expected to be principled in their business interactions and act in good faith with individuals both inside and outside the City. The following Code of Conduct shall govern the performance, behavior and actions of the City, including employees, directors, appointed or elected officials, volunteers, or agents who are engaged in any aspect of procurement, including, but not limited to, purchasing goods and services, awarding contracts and grants, and the administration and supervision of contracts: 1. No employee, director, appointed or elected official, volunteer, or agent of the City shall participate in the selection, award, or administration of contracts supported by a federal award if a conflict of interest is real or apparent to a reasonable person. 2. Conflicts of interest may arise when any employee, officer, or agent of the City, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a real or apparent financial or other interest in or a tangible personal benefit form a firm considered for the contract. 3. No employee, director, appointed or elected official, volunteer, or agent of the City shall do business with, award contracts to, or show favoritism toward a member of his or her immediate family, spouse’s family, or to any company, vendor, contractor, or parties to subcontractors who either Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 17 of 26 employ or has any relationship to a family member; or award a contract or bid which violates the spirit or intent of federal, state and local procurement laws and policies established to maximize free and open competition among qualified vendors. 4. The City’s employees, directors, appointed or elected officials, volunteers, or agents shall neither solicit nor accept gratuities, favors, gifts, consulting fees, trips, or anything having a monetary value in excess of twenty-five dollars ($25.00) from a vendor, potential vendor, family or employees of a vendor, contractor or parties to subcontractors. 5. Disciplinary measures for violations of the Code of Conduct by employees, directors, appointed or elected officials, volunteers, or agents who are engaged in any aspect of procurement, including, but not limited to, purchasing goods and services, awarding contracts and grants, and the administration and supervision of contracts could result in disciplinary action, up to and including Dismissal, subject to the applicable due process as prescribed in the City’s Personnel Policies and Procedures. B. Solicitation Procedures 1. Acquisition of unnecessary or duplicative items must be avoided. Consideration should be given to consolidating or dividing procurements to obtain a more economical purchase. When appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. 2. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services, the City shall enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. 3. Procuring federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs shall be utilized. 4. Value engineering clauses may be used in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 18 of 26 5. Contracts shall only be awarded to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. 6. Records will be maintained sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The City Clerk will be the repository for said records and shall be maintained for period of no less than seven (7) years. 7. Time and material type contracts (open-ended) may be used only after a determination that no other contract is suitable. Time and material type contract means a contract where the cost to the City is the sum of the actual cost of materials and direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expense, and profit. Each time and material contract will set a ceiling price that the contractor exceeds at its own risk. A higher degree of oversight is required in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. 6. The City alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the City of any contractual responsibilities under its contracts. The federal awarding agency will not substitute its judgment for that of the City unless the matter is primarily a federal concern. Violations of law will be referred to the local, state, or federal authority having proper jurisdiction. C. Competition 1. All procurement transactions must be conducted in a manner providing full and open competition. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals will be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include, but are not limited to: Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 19 of 26 a. Placing unreasonable requirements on firms in order for them to qualify to do business; b. Requiring unnecessary experience and excessive bonding; c. Noncompetitive pricing practices between firms or between affiliated companies; d. Noncompetitive contracts to consultants that are on retainer contracts; e. Organizational conflicts of interest; f. Specifying only a brand name product instead of allowing an equal product to be offered and describing the performance or other relevant requirements of the procurement; and g. Any arbitrary action in the procurement process. 2. Procurements shall be conducted in a manner that prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. 3. All solicitations will incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standard to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a brand name or equivalent description may be used as a means to define the performance or other relevant requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated. 4. Bids and proposals shall identify all the requirements which the offerors must fulfill and all other factors to be used in evaluation bids or proposals D. Methods of Procurement. In addition to the City’s purchasing policy approval limits, one of the following methods should be used: Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 20 of 26 1. Micro-purchase: Purchases where the aggregate dollar amount does not exceed $3,000, or the current limitation set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1, where this threshold is periodically adjusted for inflation. 2. Small purchase: Purchases up to the Simplified Acquisition threshold, which is currently $150,000. Informal purchasing procedures are acceptable, but price or rate quotes must be obtained from an adequate number of sources. 3. Sealed bid: Purchases over the Simplified Acquisition threshold, which is currently $150,000. Under this purchase method, formal solicitation is required, and the fixed price (lump sum or unit price) is awarded to the responsible bidder who conformed to all material terms and is the lowest in price. This method is the preferred procurement method for construction contracts, if the following conditions apply: a. A complete, adequate, and realistic specification or purchase description is available; b. Two or more responsible bidders are willing and able to compete effectively for the business, and, c. The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally based on price. If this method is used, the following requirements shall apply: d. The invitation for bids will be publicly advertised and bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date for opening the bids; e. The invitation for bids, which will include any specifications and pertinent attachments, must define the terms or services in order for the bidder to properly respond; f. All bids will be publicly opened at the time and place prescribed in the invitation for bids; g. A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts will only be used in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and h. Any or all bids may be rejected if there is a sound documented reason. Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 21 of 26 4. Competitive proposals: Purchases over the Simplified Acquisition threshold, which is currently $150,000. This procurement method requires formal solicitation, fixed-price or cost-reimbursement contracts, and is used when sealed bids are not appropriate. The contract should be awarded to the responsible firm whose proposal is most advantageous to the program, with price being one of the various factors. If this method is used, the following requirements apply: a. Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical; b. Proposals must be solicited from an adequate number of qualified sources; c. The methods for conducting technical evaluations of the proposals received and for selecting recipients may include, but not limited to: oral interviews, references, past performance, availability to perform work, and certifications as determined by project scope. d. Any response that takes exception to any mandatory items in this proposal process may be rejected and not considered; e. Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and, f. Competitive proposal procedures may be used for qualifications- based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated, and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services, though A/E firms are a potential source to perform the proposed effort. 5. Noncompetitive proposals: Also known as sole-source procurement, this may be appropriate only when one or more of the following criteria are met: a. The item is available only from a single source; Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 22 of 26 b. The public emergency for the requirement will not permit a delay resulting from competitive solicitation; c. The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-federal entity; or d. After solicitation of a number of sources, competition is determined inadequate. E. Contract Cost and Price. A cost or price analysis shall be performed in connection with every procurement action in excess of the Simplified Acquisition threshold ($150,000) including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, independent estimates shall be made prior to receiving bids and proposals. 1. Profit shall be negotiated as a separate element of the price for each contract in which there is a no price competition and, in all cases, where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor’s investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. 2. Costs or prices based on estimated costs for contracts under the federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for the City under Subpart E- Cost Principles of Part 200- Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 3. The cost plus a percentage of cost and percentage of construction cost methods of contracting shall be used. F. Federal Awarding Agency or Pass-Through Entity Review. 1. The City shall make available, upon request of the federal awarding agency or pass-through entity, technical specifications on proposed procurements where the federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 23 of 26 City desires to have the review accomplished after a solicitation has been developed, the Federal awarding agency or pass-through entity may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. 2. The City will make available upon request, for the Federal awarding agency or pass-through entity pre-procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, when: a. Procurement procedures or operations fails to comply with the procurement standards in this part; b. The procurement is expected to exceed the Simplified Acquisition Threshold ($150,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation; c. The procurement, which is expected to exceed the Simplified Acquisition Threshold, specifies a “brand name” product; d. The proposed contract is more than the Simplified Acquisition Threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or e. A proposed contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold. 3. The City is exempt from the pre-procurement review in paragraph 2 of this section if the federal awarding agency or pass-through entity determines that its procurement systems comply with the standards of this part. 4. The City may request that its procurement system be reviewed by the federal awarding agency or pass-through entity to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high-dollar funding, and third-party contracts are awarded on a regular basis; 5. The City may self-certify its procurement system. Such self-certification must not limit the federal awarding agency's right to survey the system. Under a self-certification procedure, the federal awarding agency may rely on written assurances from the City that it is complying with these standards. The City must cite specific policies, procedures, regulations, or standards as being in compliance with these requirements and have its system available for review. G. Bonding Requirements. For construction or facility improvement contracts or subcontracts exceeding the Simplified Acquisition Threshold Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 24 of 26 ($150,000), the federal awarding or pass-through entity may accept the bonding policy and requirements of the City provided that the federal awarding agency or pass-through entity has made a determination that the federal interest is adequately protected. If such a determination has not been made, the minimum requirements must be as follows: 1. A bid guarantee from each bidder equivalent to five percent (5%) of the bid price. The bid guarantee must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified; 2. A performance bond on the part of the contractor for 100 percent (100%) of the contract price. A performance bond is one executed in connection with a contract to secure fulfillment of all the contractor’s obligations under such contract; and, 3. A payment bond on the part of the contractor for 100 percent (100%) of the contract price. A payment bond is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. H. Contract Provisions. All federal funding source compliance provisions shall include the following: 1. Equal Employment Opportunity- All contracts, when funded in whole or partly by monies derived from the federal government (either directly or indirectly), shall contain a provision requiring compliance with Equal Employment Opportunity. 2. Davis-Bacon Act- Applies to construction contracts in excess of $2,000. It requires contracts to pay laborers and mechanics wages not less than the prevailing wage as determined by the Secretary of Labor and must be required to pay wages not less than once a week. Each bid solicitation published by the City must contain the current prevailing wage determination. Any award of the contract must be conditioned on contractor’s acceptance of that wage determination and suspected or reported violations of this act shall be immediately reported to the Federal awarding agency. 3. Copeland “Anti-Kickback” Act- Applies to construction contracts in excess of $2,000. It prohibits kickbacks in construction contracts funded with Federal monies. Contractors and subcontractors or subrecipients shall be prohibited from inducing any person employed in the construction, completion, or repair Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 25 of 26 of public work, to give up any part of the compensation to which he or she is otherwise entitled and suspected or reported violations shall be immediately reported to the Federal awarding agency. 4. Clean Air Act & Federal Water Pollution Control Act- Applies to contracts and sub grants in excess of $150,000. Contractor shall be required to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act and the Federal Water Pollution Control Act. Suspected or reported violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA). 5. Debarment and Suspension- Contracts funded with federal grant monies may not be awarded to contractors that have been debarred or suspended from receiving federal monies pursuant to the System for Award Management (SAM). 6. Byrd Anti-Lobbying Amendment- Contractors that apply or bid for an award of $100,000 must certify that they will not and have not used federal funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award. I. Contracting with small and minority business, women’s business enterprises, and labor surplus area firms. All necessary affirmative steps will be taken to assure that minority business, women’s business enterprises, and labor surplus area firms are used when possible. Affirmative steps include: 1. Placing qualified small and minority businesses and women’s business enterprises on solicitation lists; 2. Assuring that small and minority businesses and women’s business enterprises are solicited whenever they are potential sources; 3. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses and women’s business enterprises; 4. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses and women’s business enterprises; Resolution No. 2019-021 Purchasing and Contracting Policy Adopted: June 18, 2019 Page 26 of 26 5. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and, 6. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (1) through (5) of this section.