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CC Resolution 2015-045 Purchasing & Contracting PolicyRESOLUTION NO.2015 - 045 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. 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 2. 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 3. Resolution Nos. 2005-095 and 2006-096 are hereby repealed. This Resolution supersedes and replaces Resolution Nos. 2005-095 and 2005-096. 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. SECTION 5. This Resolution shall become effective on the some day Ordinance No. r5291 becomes effective. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 2 PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta City Council held on this 6th day of October 2015 by the following vote: AYES: Council Members Franklin, Osborne, Pena, Radi, Mayor Evans NOES: None ABSENT: None ABSTAIN: None LINDA EVANS, Mayor City of La Quinta, California ATTEST: hL"4J4---- SUSAN MAYSELS, City ClerKj City of La Quinta, California (CITY SEAL) APPROVED AS TO FORM: 01 WILLIAM H. IHRKE, City Attorney City of La Quinta, California Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 3 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. The City 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. II. EXPENDITURE CATEGORIES Purchases, which include those made by purchase order (PO), written agreement, 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 $100 or less (petty cash) B. Expenditures of $101 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 $100 OR LESS Authorization: Department Director, who may delegate to a department manager Procurement: No bids or PO necessary; petty cash advances or reimbursement Term Limit: na Note: These transactions take the place of ordinary ongoing purchases and shall be limited in use. B. EXPENDITURES OF $101 to $5,000 DURING THE INITIAL TERM' Authorization: Department Director, who may delegate to a department manager Procurement: No PO necessary; 3 informal bids/proposals2 whenever possible Term Limit: 3 years plus one 3-year extension ' 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 verbal or written, via telephone, e-mail or other casual medium. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 4 C. EXPENDITURES OF $5,001 to $15,000 DURING THE INITIAL TERM Authorization: Department Director Procurement: PO required plus 3 written informal bids/proposals Term Limit: 3 years plus one 3-year extension D. EXPENDITURES OF $15,000 to $50,000 DURING THE INITIAL TERM Authorization: City Manager Procurement: PO plus 3 written informal bids/proposals pLus city contract3 Term Limit: 3 years plus one 3-year extension E. EXPENDITURES OVER $50,000 Authorization: City Council Procurement: PO required lLus formal bids/proposals plus city contract Term Limit: no limit, any term approved by majority vote of the City Council III. PROCUREMENT PROCEDURES - MAJOR EXPENDITURES (over $50,000) 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 dollars ($50,000). 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, World Wide Web site, or other generally - recognized source of local public works contract information, at least ten days prior to the date of the opening of bids. 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. 3 The city's templates for contracts, agreements 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, 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. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 5 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 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 Public Works Department during regular business hours for a period of not less than thirty (30) calendar days after the bid opening. 5. Review of bids. The Director 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 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. 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. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 6 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. 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 dollars ($50,000). 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. The City Manager shall approve the preparation and release of all Requests for Proposals (RFP) and Requests for Qualifications (RFQ). 2. 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. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 7 3. 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. 4. City staff shall issue the RFP/RFQ to suitable firms, and may also advertise for competitive proposals. 5. 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. 6. 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. 7. City staff, or a city -authorized consultant, shall negotiate with the top -ranked firm to arrive at mutually -acceptable contract terms. 8. 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. 9. The City Council shall award or reject the contract negotiated by City staff. 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 verbally or in writing as dictated by this Policy from the open market and a written record of informal bids shall be kept with the related PO. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 8 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, set forth in Categories A, B, C or D of Section II above, may award and execute contracts 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. • Acquisition of brand name to insure compatibility with other city products and equipment. For example standardization of fleet inventory (select - source). • Change orders - additions to an original scope of work when the original source is the only reasonable one to provide the additional goods, construction work or service needed (select -source). • Only one manufacturer or vendor makes and/or sells the required equipment (sole -source). 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. Emergency purchases made necessary by an immediate threat to life or property or a substantial disruption of a vital public service. - d. 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. e. The City 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. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 9 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 $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 ("Authorized Users") must be City employees. Authorized Users may check credit cards in and out as necessary. All credit cards shall be returned to Finance or the City Manager's Office in a timely manner after use. The Finance Department requires. Authorized Users to sign a User Agreement 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; 2. Purchasing goods and services from vendors where use of a check is not practical, such as the case with many internet purchases in which no actual store front exists; 3. Securing reservations and locations for various City activities, meetings and conference fees, 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, or consultants. 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; 4. Long-term rentals or lease agreements; 5. 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 Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 10 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 conference 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 within five (5) days of return from a business trip to the Finance Department. 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 • 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. 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. Resolution No. 2015-045 Purchasing & Contracting Policy Adopted: October 6, 2015 Page 11 When subsequently received, the supporting documentation will be retroactively reconciled to the payment. I. Lost or Stolen Cards. Authorized Users are responsible for ensuring that the issuing bank and the Finance Department are notified immediately if the 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 City Manager 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.