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HomeMy WebLinkAboutORD 05 (2006)ORDINANCE 05(2006) AN ORDINANCE OF THE CITY OF DIAMOND BAR REVISING THE CITY'S PURCHASING SYSTEM AND AMENDING THE DIAMOND BAR MUNICIPAL CODE The City Council of the City of Diamond Bar does ordain as follows: Section 1. Title 3, Chapter 3.24 of the Diamond Bar Municipal Code is amended in its entirety to read as follows: Chapter 3.24 Purchasing Ordinance Sections: 3.24.010 Establishment of Purchasing System 3.24.020 Definitions 3.24.030 Decentralized Purchasing 3.24.040 Contractual Authority 3.24.050 Bid Procedures 3.24.060 Purchases without Bidding 3.24.070 Temporary staffing, Professional and Consultant Services 3.24.080 Requisitions and Purchase Orders 3.24.090 Encumbrance of Funds 3.24.100 Change Orders 3.24.110 City Credit Card Usage 3.24.120 Emergency Purchases 3.24.130 Vendor List Procurement 3.24.140 Sole Source Procurement 3.24.150 Cooperative Purchasing 3.24.160 Local Preference 3.24.170 Use of Recycled Materials 3.24.180 Bidding for Public Works Projects 3.24.190 Surplus Personal Property Section 3.24.010 Establishment: of a Purchasing System — To establish efficient procedures for the purchase of supplies, services, and equipment; to secure for the City supplies, services, and equipment at the lowest cost commensurate with the quality needed and with due consideration to usability; to exercise positive financial control over purchases; to clearly define authority for the purchasing functions; to assure the quality of purchases; and to buy without favor or prejudice, a purchasing system is adopted and shall control the procedures for all purchases except as otherwise provided by law. Section 3.24.020 Definitions — As used in this Ordinance, the following words and terms shall be defined as follows unless the context indicates that a different meaning is intended: (a) City shall mean the City of Diamond Bar. - (b Contract shall mean an agreement, in writing, between two or more persons with the requisite authority, which creates an obligation to do a particular thing. (c) Encumbrance shall mean a contingent liability and reservation of a budget appropriation incurred as a result of the issuance of a purchase order and/or contract. (d) Personal Property shall mean any tangible property not including land or real estate. This includes but is not limited to vehicles, equipment, supplies, furniture and fixtures. (e) Purchases shall mean procurement of supplies, services, equipment and personal property and shall include leases or rentals of such items. (>) Professional Services shall mean the services of architects, attorneys, auditors, consultants, engineers, physicians, or other individuals or organizations possessing a high degree of professional, unique, specialized, technical skill or expertise. (g) Public Works Project as defined in California Public Contract Code Section 20161 is (a) a project for the erection, improvement, painting or repair of public buildings and works. (b) Work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow. (c) Street or sewer work except maintenance or repair. (d) Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers. (h) Responsive Bidder shall mean a bidder who has placed an offer to furnish supplies, materials, equipment, or contractual services in conformity with the specifications, delivery terms, conditions and other requirements included in the request for bids. (i) Services shall mean any and all services, including but not limited to equipment services contracts. (j) Surplus Personal Property shall mean any personal property that is no longer needed or useable by the City. Section 3 24 030 Decentralized Purchasing — The purchase of supplies, services, and equipment is the responsibility of the individual departments requiring said supplies, services, and equipment. It is the responsibility of the Department Director to ensure the adherence to the procedures prescribed in this Chapter. 3 24 040 Contractual Authority — Provided there is adequate unencumbered budget in the account against which the expenditure is to be charged: (a) Purchases of supplies, services and equipment of an estimated value less than five thousand dollars ($5,000) shall be approved by a Department Director or designee. (b) Purchases with an estimated value greater than five thousand dollars ($5,000) and up to ten thousand dollars ($10,000) shall be approved by the Assistant City Manager or designee. (c) Purchases with an estimated value greater than ten thousand dollars ($10,000) and up to twenty five thousand dollars ($25,000) shall be approved by the City Manager or designee. (d) Purchases with an estimated value greater than twenty-five thousand dollars ($25,000) shall be approved by the City Council. . In the case where there does not exist an available unencumbered budget, the contract authorization set forth above shall not exceed five thousand dollars ($5,000). Section 3.24.050 Bid Procedures — Purchases of supplies, services, and equipment with an estimated value of greater than $2,500 shall be by bid procedures pursuant to this section, except as otherwise provided in this Chapter. (a) Minimum number of bids. Purchases shall be based on at least three bids, and shall be awarded to the lowest responsive and responsible bidder. (b) Solicitation of Bids. The City staff may solicit quotations by telephone or written requests to prospective bidders. Written solicitation of bids may be by mailed solicitation, posting, or by publication in a newspaper of general circulation or in trade journals. (c) Response to Solicitation. If purchase cost is estimated to be five thousand ($5,000) or less, oral bids may be accepted. If the purchase cost is estimated to be in excess of five thousand dollars, ($5,000) written bids shall be obtained. (d) Rejection of bids. The City may reject any and all bids for any reason and may waive any irregularity in any bid that does not create an undue or unfair advantage to the bidder. (e) Cost of bid preparation. The cost of bid preparation shall be borne entirely by bidders and shall in no circumstance be a charge against the City. (f) Record of bids. The records of bid shall be kept in accordance with the approved record retention policy. (g) Performance bond. The City may in its discretion require a performance bond of the successful bidder in the full amount of the contract price. Section 3.24.060 Purchases without Bidding - Bidding shall not be required when one of the following conditions pertains: (a) The amount of the purchase has a total estimated value of less than two thousand five hundred dollars ($2,500). (b) Sole source purchases such as legal advertising, utilities, conferences, transit passes and Sheriffs department services (c) An essential or critical need requires that an order be placed with the best available source of supply due to time constraints. (d) Purchases from vendors on the City Council Approved Vendor's List. (e) If, at the discretion of the City Manager, and upon a finding supported with written documentation, it is in the City's best interest in regard to product uniformity, total cost of acquisition, and/or similar considerations. These purchases must be approved by the City Manager or his/her designee. (f) Purchases made through a Cooperative Purchasing Program utilizing purchasing agreements maintained by the State, County, or other public agencies. Section 3.24.070. Temporary Staffing Professional and Consultant Services. Proposals for all temporary staffing, professional and consultant services may be obtained pursuant to procedures determined by the City Manager. Selection shall be on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required. It is not mandatory that a contract for temporary staffing, professional and consultant services be awarded to the lowest bidder when it is believed that the quality of service or technical expertise provided by a higher bidder warrants their selection. Reasons for the selection of any bidder other than the lowest bidders shall be in writing and shall be retained with the record of bids. Section 3 24 080 Requisitions and Purchase Orders — Except as provided in Sections 3.24.110 and 3.24.120, below, purchase of supplies, services and equipment where the cost exceeds $2,500 shall require a requisition and purchase order. Requisitions shall be approved by the issuing Department Director, Assistant City Manager or City Manager as prescribed in Section 3.24.040. After other approvals are received all requisitions will be reviewed by the Finance Director or designee for budgetary and purchasing policy compliance. Upon final approval, the requisition will be converted to a Purchase Order and the funds will be encumbered. A requisition and purchase order may be issued for items costing less than $2,500 if required by the vendor or if the department wishes to use the purchase order as a mechanism to encumber funds. Section 3.24.090 Encumbrance of Funds — Except in cases of emergency, the issuing Department Director shall not issue any purchase order for supplies, services, or equipment unless there exists an unencumbered appropriation in the account against which said purchase is to be charged. If when the purchase order is posted the account appears to be over budget, the Department Director shall create a budget transfer to cover said overage immediately. Section 3.24.100 — Change Orders — Purchase Orders represent a contract between the City and the Vendor. Any substantial change to a Purchase Order shall be documented as a change order. Change orders shall be reviewed by the Finance Director and shall be approved by the City Manager. A purchase order may not be increased by more than 10% or $2,500 whichever is less, without a change order. If the contract is awarded by the City Council, the City Council may approve a contingency in addition to the contract award. The City Manager may approve change orders on City Council approved contracts up to the contingency amount. If the change order exceeds the contingency it must be taken to the City Council for additional authorization. Section 3.24.110 City Credit Card Usage — Under certain circumstances, the use of a City credit card may be the most appropriate method of payment for purchases in lieu of . The following policies and procedures are established to insure internal control and timely payment of charges. City credit cards shall be available to the City Council and staff for the conduct of official City business, including but not limited to the following purposes: (a) To charge the cost of meals when required in the conduct of official business, except when an employee has received a travel advance. (b) Authorized travel expenses and hotel charges. (c) Gasoline purchases. (d) Other circumstances where the use of a credit card best meets the needs as determined by the Department Director. The Citywide credit cards will be safeguarded by the Finance Department. These credit cards must be checked out through the Finance Department staff. A signed Credit Card Usage Authorization form will be required prior to the release of the credit cards. All receipts shall be turned in to the Finance Department staff when the credit card is returned. Purchase made with credit cards shall follow normal budgetary guidelines and purchasing regulations. Section 3.24.120 Emergency Purchases — The City Manager may authorize emergency purchases free of all provisions of this Chapter upon showing by any Department Director that the purchase required is for the immediate preservation of health, safety and welfare, repair to existing City equipment which impacts ongoing City operations, or for the protection of property. There must be a present, immediate and existing emergency that could not reasonably be foreseen. A confirming Purchase Order must be completed after the emergency. Section 3.24.130 Vendor List Procurement - In January each year, City Staff will establish an "Approved Vendor List" and present it to the City Council for approval. This list will be comprised of vendors who have consistently provided excellent service to the City. This will be based on City standards for quality and price of services meaning that they have traditionally been the lowest bidder, they can deliver goods or services on time, or they consistently meet or exceed product/service specifications. Vendors on the Approved Vendor List shall be evaluated regularly by City staff for quality and price. Vendor: not meeting City Standards may be removed by the City Manager or designee at any time. Once removed, a vendor may be reconsidered for placement on the Approved Vendor List the following January. Section 3.24.140 Sole Source Procurement - Situations in which a procurement of any product is obtainable only from a single vendor or sole source, and is not adaptable to competitive bidding. The Department Director upon approval of the City Manager shall negotiate with the vendor so that the City receives a fair and equitable price for the desired supplies, service, equipment or product. Section 3 24 150 Cooperative Purchasing Programs — Purchases may be made under a cooperative purchasing program, utilizing purchasing agreements maintained by the State, County, or other public agencies are exempted from the requirements of this Chapter. California Public Contract Code Section 10324 authorizes the Department of General Services to make purchases of supplies, equipment or materials on behalf of cities in those instances when the purchases can be made by the Department of General Services at a purchase price lower than the City can obtain through its normal purchasing procedures. In those instances where it is determined that purchasing through the State, the County or other governmental agency will result in savings to the City, the City is authorized to make such purchases. Section 3.24.160 Local Preference — In order to promote the economic health of the City and to encourage local participation in the procurement process, the City in determining the lowest responsible bidder may take in to consideration the sales tax (one percent) which would be returned to the City as prescribed in this Section. (a) Definition. Whenever used in this section, the phrase "local bidder/vendor" shall mean a business, firm, or enterprise with fixed offices or locally taxable distribution points within the City, which holds a valid business registration issued by the City, and bearing a street address within the City. (b) Local Preference. In awarding purchase orders and contracts for supplies and equipment, the City may grant a preference of one percent to local bidder/vendors. The bids of all local bidder/vendors shall be reduced by one percent prior to determining the lowest bidder. The preference shall not exceed five thousand dollars ($5,000.00) for any single purchase order or contract. (c) Identical Bids. If after applying the preference provided for in subsection (b) of this section, identical bids are submitted by a local bidder/vender and a bidder who is not local, the contract shall be awarded to the local bidder/vendor. Identical bids by two or more local bidder/vendors shall be determined by the toss of a coin. (d) Exceptions. Notwithstanding the foregoing, the provisions of this section shall not apply under any of the following circumstances: When application of the provisions of this section is prohibited by state or federal law or the requirements of a state or federal grant; 2. When a contract with the City to purchase supplies and equipment will be funded in whole or in part by donations or gifts to the City, to the extent that the provisions of this section would conflict with any conditions attached by the donor of the donation, provided that the donation and any conditions attached to it have been accepted and approved by the City Council; 3. When the City Manager determines that a contract with the City to purchase supplies and equipment results from exigent circumstances, and also determines either that any delay in the execution or performance of the contract would jeopardize the public health, safety, or welfare of the citizens of the City, or that the operational effectiveness of a significant municipal function would be seriously threatened if the contract were not entered into expeditiously. (e) Good Faith Effort to Contact Local Merchants. The City shall make a good faith effort when soliciting bids for supplies or equipment to solicit bids or proposals from local merchants. (f) City Manager Authorization. The City Manager, or his or her designee, may promulgate rules and regulations to implement the provisions of this section. (g) Enforcement and Penalties. In the event that the City Manager, or his or her designee, makes a finding that a bidder for a contract has made an intentional misstatement in order to obtain a local merchant preference under regulations adopted pursuant to this section, the bidder may be subject to any remedy available to the City at law or equity. 1. A finding by the City Manager, or his or her designee, that a bidder for a contract has made an intentional misstatement in order to obtain a local merchant preference shall be regarded by the City Council as a basis for determining whether the bidder is a responsible bidder for the present contract or for future contracts. 2. A bidder who has been disqualified as a responsible bidder by a determination of the City Council, based on a finding by the City Manager, or his or her designee, that the bidder made an intentional misstatement in order to obtain a local merchant preference, shall be disqualified from bidding on all contracts with the city for a period of not less than one year from the date of the disqualification, as determined by the City Council. Section 3.24.170 Use of Recycled Materials_7 All departments shall purchase and use recycled products and recycled materials when available unless determined by the City Manager to be financially infeasible. The City may at its option require its contractors and consultants to use recycled products in fulfilling contractual obligations Section 3.24.180 Biddinq for Public Works Projects — Public works projects shall be bid, advertised and awarded in accordance with applicable sections of the California Public Contract Code. Section 3 24 190 Surplus Personal Property — Each department shall periodically review its equipment and inventory and complete a surplus property list for items deemed surplus or have become obsolete or worn out. The completed list shall be submitted to the City Manager's office. (a) Trade in. The City Manager or designee shall have the authority to exchange for or trade in on new equipment surplus personal property. (b) Sale. The City Manager shall have the authority to dispose of surplus personal property by auction, sealed bids, for scrap or negotiated sale, whichever in the City Manager's judgment will provide the maximum return to the City. (c) Disposed as trash. When the cost of locating a buyer exceeds the estimated sale price of surplus personal property or the item is obsolete or worn out or of minimal value, the City Manager may recycle, destroy or dispose of the item as trash. (d) Disposed as gifts. The City Manager subject to the approval of the City Council may give surplus personal property to another public agency or special district such as a school district or library. Section 2. The City Clerk shall certify to the adoption of this ordinance and shall cause the same to be published as required by law. ADOPTED AND APPROVED this 1St day of A„g„tet , 2006. Mayor I, TOMMYE CRIBBINS, City Clerk of the City of Diamond Bar, California do hereby certify that the foregoing Ordinance was introduced at a Regular meeting of the City Council of the City of Diamond Bar held on the 18th day of Ju3v and was finally passed at a Regular meeting of the City Council of the City of Diamond Bar held on the 1st_ day of A„g ,sem 2006, by the following vote: AYES: COUNCIL MEMBERS: Chang, Tanaka, Tye, MPT/Zirbes, M/Herrera NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAINED: COUNCIL MEMBERS: None Tommye Cribbins, City Clerk City of Diamond Bar