HomeMy WebLinkAboutAdmin Policy (4.18.2023)- Purchasing Procedures.pdfCALIFORNIA
Administrative Policy and Procedure
Number: F14 Department: Finance
Effective Date: 4/18/23 ew Date: 4/18/26
Revised Date(s):
City Manager Sig nature___.,,=,..__-r-,,-....,,__ _____ _
Purchasing Procedures
1.Purpose
1 .1 This document is established pursuant to the Diamond Bar Municipal Code
sections 3.24 and 3.25 with the intent to establish clear and efficient
purchasing procedures. These Purchasing Procedures are intended to
supplement, not replace, the Municipal Code. If there is conflict between
the two, the Municipal Code shall prevail. The City's purchasing process is
decentralized, with departments and divisions responsible for
purchasing/contracting to fulfill assigned roles in City operations. At the
core of this responsibility is to ensure that the procurement of goods and
services is completed ethically, achieves the best value for the city, follows
an open, fair, and competitive process, and complies with all applicable
laws.
2. Definitions
2.1 Bid Request -written documents used to solicit competitive proposals,
identifying the goods, services, specifications, and/or terms and conditions
of the purchase. It can take a number of forms, including a simple request
for quotation to a Request for Proposals intended for a more complex
purchase. Template Bid Request forms are available and should be used
for all purchases.
2.2 California Uniform Public Construction Cost Accounting Act (CUPCCAA) - a
voluntary program that allows participating agencies to utilize force
accounts and/or alternative purchasing and bidding procedures for
contracts to complete public works projects. The City has elected to be
subject to the provisions of CUPCCAA.
2.3 Force Account -Work performed on public works projects by City staff or
City-owned or controlled supplies, equipment, materials, etc.
2.4 PlanetBids -the City's online procurement platform.
2.5 Project Manager-the individual responsible for making the purchase.
2.6 Public Works Project -projects involving construction, alteration, demolition,
installation, or non-routine general maintenance. General maintenance
work, like minor repainting, resurfacing of streets at less than one inch, and
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landscape maintenance are not considered public works projects. Refer
CUPCCAA provisions for more information.
2.7 Purchasing Agents -Department Directors have the authority to make
purchases of supplies, services, property, and equipment with a value less
than $10,000. The Public Works Director has purchasing authority up to
$45,000 for Public Works projects (See DBMC 3.24.040(b)(2); DBMC 3.25.020).
2.8 Purchasing Delegates -Division Managers, or other individuals approved by
the City Manager and filed annually with the Finance Director, have the
authority to make purchases of supplies, services, property, and equipment
with a value less than $5,000 (See DBMC 3.24.040 (b)(3)).
2.9 Purchasing Manager-The City Manager is the Purchasing Manager and
has authority to procure goods, services, and professional services with a
value less than $45,000 and Public Works projects with a value less than
$175,000.
3.Purchasing Procedures in Brief
3.1 The purchasing procedure you'll use will depend on what you are buying
and the amount you are spending. Generally, purchases fall into one of
three categories: 1) services, supplies, property, and equipment, 2)
professional services, and 3) public works projects. The table below
provides examples of purchases in each category.
Purchasing Examples
Services, Supplies, Professional Public Works Projects
Property, & Equipment Services
Office supplies, special Attorneys Street beautification work
events decorations
Janitorial & Landscape Engineers Construction of facilities
Maintenance
Contract Class Accountants Curb ramp installations
Instructors
Land and buildings Graphic Park improvements
Designers
Vehicles and heavy Election Painting of buildings
machinery Consultants
3.2 If you're buying things like office supplies, maintenance services, land or
property, or vehicles/heavy machinery, use the table below to
determine which procedure you'll use (See DBMC 3.24.050; Table 3.24A).
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Bidding Requirements - Supplies, Services, Property, and Equipment
Amount Less than $5,000 to less $10,000 to less $45,000
$5,000 than $10,000 than $45,000 or more
Approval Agent or Agent/Dept Manager City
Authority Delegate Head Council
Procedure Quote Informal Informal Formal
PlanetBids Not Not required, Not required, Required
required but but
recommended recommended
Minimum Bids 1 3 3 3
Requisition/PO No Yes Yes Yes
Bid Posting No No Minimum No Minimum 1 O Days
Period Minimum
3.3 If you're buying services from an individual or firm possessing a high degree
of professional skill or expertise, like attorneys, engineers, accountants, or
graphic designers, use the table below to determine which procedure
you'll use (See DBMC 3.24.070; Table 3.24B).
Bidding Requirements -Professional Services
Amount Less than $45,000 $45,000 or More
Approval City Manager City Council
Authority
Procedure Informal Formal
PlanetBids Not required, but Required
recommended
Minimum Bids 3 3
Requisition/PO $5,000 to $45,000 Yes
Bid Posting No Minimum 10 Days
Period
3.4 If you're managing a public works project, like street rehabilitation work or
park enhancements, use the table below to determine the purchasing
procedure you'll use (See DBMC 3.25.020; Table 3.25.03A).
Bidding Requirements -Public Works Projects
Amount Less than $60,000 $60,000 to $200,000 or
$200,000 More
Approval City Manager or City Manager City Council
Authority Public Works Director
Procedure Quote Informal Formal
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Notice Inviting Not required
Bids
Planet Bids Not required
Bid Posting No minimum
Period
Requisition/PO No
Encumbered Yes
Contract
Notice of City Manager
Completion
4.Purchasing Fundamentals
4.1 Plan Ahead
Required Required
Not required, Required
but
recommended
No minimum 14 Days
No No
Yes Yes
City Manager City Council
4.1.1 Make sure funding has been appropriated in the correct budget. Do
not proceed with a purchase unless funding is available in the line
item budget.
4.1.2 If the purchase is for a public works project, make sure the plans and
specifications have been approved by the Public Works Director or
City Council.
4.1.3 Make sure there is enough time to publicly solicit bids for the
appropriate time period.
4. 1 .4 Identify and consider any qualified local vendors.
4.1.5 Make sure the Information Systems Department has approved the
proposed purchase of any network or internet-capable hardware or
software.
4. 1 .6 Make sure recycled materials are considered as part of the
purchase (if applicable and financially feasible).
4.2 Develop the Bid Request
4.2.1 Using the appropriate Bid Request Form, supply potential vendors
with the information necessary to provide the most responsive bids.
When drafting the request, be as exact as possible when conveying
the specific products and/or services desired, the scope of work and
timelines expected, or the plans and specifications of the project.
Remember, the bid request will be the primary basis for choosing the
lowest responsible bidder. Keep in mind, answers to posted
questions do not impact the ability to select vendor. Utilize the
requirement section for essential components for acceptable bids.
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4.5 Award the Purchase
4.5. 1 Determine if an exception to the bidding requirements is needed
(See Section 5 below & DBMC 3.24.090). Once you have identified
the lowest responsible bidder, notify all bidders of the results.
4.5.2 Make the recommendation for award by commencing the
purchasing approval process. Use the tables above to determine
the approval requirements. Nearly all purchases of $5,000 or more
will require a Requisition/Purchase Order to encumber the funds in
MUNIS. Contracts should only be used to encumber funds in Munis
when the vendor's contract requires withholding retention (almost
exclusively Capital Improvement Projects).
4.5.3 Then, enter the requisition or contract encumbrance request into the
Munis approval workflow to be reviewed for budgetary
appropriation and compliance with purchasing procedures. Make
sure the request includes the following backup information:
4.5.3.1 Bid Evaluation and Award Form.
4.5.3.2 Bid Request Form.
4.5.3.3 All vendor bid proposals received.
4.5.3.4 Executed contracts and/or amendments (if applicable). You
do not need to attach insurance forms and Contract
Routing Forms to a fully-executed contract in MUNIS.
4.5.3.5 City Council report/minutes (if the purchasing approval was
granted via minute order)
4.5.3.6 W9 (must be provided to Finance to establish a new vendor
in the Munis system before a Requisition can be processed)
4.5.4 Upon approval in the Munis workflow, the requisition or contract will
cause the encumbrance of funds and you may proceed with the
purchase. Click here for a step-by-step guide to requesting a
requisition in Munis. Click here for a step-by-step guide to
encumbering a contract in Munis.
4.5.5 POs are to be annual in nature and not amended via a change
order to be continued to the next Fiscal Year. A PO change order is
to be used for the current Fiscal Year only. A new PO should be
entered for the next Fiscal Year.
4.5.6 Open Purchase Orders
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4.5.6.1 An open purchase order is used to purchase supplies from a
specific vendor on an as-needed basis when the quantity
and/or variety of goods have not yet been determined.
4.5.7 Change Orders to a Requisition/Purchase Order
4.5.7.1 Modifications to the approved Purchase Order or contract
encumbrance amount, project scope, and/or funding
source require approval prior to purchase. To request a
modification, complete the change order request in Munis.
Once submitted, the Change Order request will re-enter the
approval workflow. Upon approval by the appropriate
authority, the Purchase Order or contract encumbrance will
be revised and re-released by the Finance Department and
the purchase may commence. Click here for a step-by-step
guide to processing a change order in Munis.
4.5.8 Contingencies/Change Orders to an Encumbered Contract
4.5.8.1 Approved contingency amounts shall be processed when
needed via change order in Munis. If a change order that
requires the use of the approved contingency amount is
necessary, route the contract change order for approval
and execution. Once executed by the City Manager, give
the contractor notice to proceed with the change order.
Then, process the change order to the encumbered
contract in Munis, attaching the executed contract change
order or amendment. Click here for a step-by-step guide to
processing a change order to an encumbered contract in
Munis.
4.5.9 Cumulative Amounts
4.5.9.1 When submitting a requisition request, it is important to
check your department's purchasing history with the vendor.
The cumulative amount of all departmental purchases
during the fiscal year with that vendor will determine
purchasing authority/dollar threshold requirements.
4.5.10 Notice to Proceed
4.5. 10. 1 To inform the vendor that the purchase has been approved
and is ready to commence, issue a Notice to Proceed. For
purchases of supplies, services, property, equipment, and
professional services, use the approved requisition as a de
facto Notice to Proceed by providing it to the vendor. For
Public Works projects, use the template here.
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4.5. 11 Rejecting a Bid
4.5.11.1 Bids may be rejected at the City's discretion. If all bids are to
be rejected, notify bidders in writing using the template
here.
5. Purchasing Exceptions
5. 1 In the course of purchasing, there may be situations in which the standard
bidding procedures do not apply or cannot be implemented (See DBMC
3.24.090). If one of the following occurs, identify and briefly justify the
exception on the Bid Evaluation and Award Form. Consult with your
Department Director and City Manager prior to approving or awarding any
bid that requires an exception. This information will be approved by the
purchasing authority prior to entering into Munis as the requisition request
proceeds through the approval workflow.
5.2 Request an exception when you receive less than three responsive bids
(informal and formal bidding requirements only).
5.3 Request an exception for a Sole Source purchase. A Sole Source purchase
occurs when:
5.3. 1 Goods and services are available from only one vendor.
5.3.2 Goods and services have design or performance features essential
to the requesting Department where no other source satisfies the
requirements.
5.3.3 Goods and services are patented or proprietary.
5.4 Request an exception when using a cooperative purchasing program. The
Municipal Code requires that the City Council approve all cooperative
purchasing agreements by resolution. Cooperative purchasing is eligible
only when the baseline contract is still in effect by the cooperative agency.
Unless specifically allowed by State or Federal law and approved by the
City Attorney, Public Works projects or materials for use in a Public Works
project may not be procured using cooperative purchasing programs.
5.5 Request an exception in an emergency situation that poses an immediate
threat to public health, or safety including, but not limited to a public
disaster or breakdown of machinery or an essential service. While standard
bidding requirements are waived in an emergency situation, purchases
must be subsequently ratified by the approving authority based on the
applicable purchasing authority threshold.
5.6 Purchasing cards/CAL Cards are purchasing cards issued by the Finance
Department for the purchase of small dollar, low value purchases that
would otherwise be inefficient using standard purchasing procedures.
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Examples include, but are not limited to: small supplies, online orders, travel
expenses, etc. CAL Card purchases may not exceed individual purchasing
limits or requisition/purchase order thresholds. Refer to Administrative Policy
F2 for more information.
6.Contracts
6.1 When making a purchase, the Project Manager is responsible for
negotiating and preparing contract terms and collecting any required
contract documentation (proof of insurance/additional insured
endorsement, performance and/or payment bonds, etc.). In most cases,
the use of standard form agreements (with modifications for the specifics of
your purchase) will suffice. Do not hesitate to contact the City Attorney's
office with questions prior to routing for approval and execution. Once the
contract is fully executed, you are responsible for providing a copy to the
vendor. Click here to access the Staff Guide to Preparing Contracts.
6.2 Multi-year Contracts
6.2.1 For multi-year contracts, requisition approval thresholds are
determined by the total not-to-exceed amount for the term of the
contract, along with the requesting department's authorized
budget. When determining the appropriate approval threshold for
your purchase, do not factor in optional extension periods not
included in the original not-to-exceed amount until they are formally
exercised.
6.2.2 If an existing and approved contract is amended, you do not need
to attach all previously approved bid documents to the request in
MUNIS. Simply attach the executed contract and amendment.
7.Managing and Processing Payments
7.1 Departments/divisions are responsible for processing payments,
maintaining all required purchasing records, vendor relations, and ensuring
that the vendor meets established terms and conditions over the full life
cycle of the purchase/project.
7.2 Upon receipt of the invoice from the vendor, make sure it is:
7.2.1 Clearly labeled "Invoice".
7.2.2 Is dated.
7.2.3 Contains a unique Invoice Number and any related PO or Contract
number. Separate invoices shall be submitted for each PO or
Contract. Departments are to confer with the Finance Department
when this is not feasible and will be advised on how to "break up"
an invoice prior to entering it into Munis.
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7.2.4 Contains a verifiable description of the goods/services rendered,
including locations of work performed when applicable.
7.2.5 Contains an accurate payment amount for the work/goods
provided in that invoice period.
7.3 Submit the invoice for payment in•Munis. Click here for a step-by-step
guide to processing a payment in Munis.
8.Further Information
8. l For further information about these procedures, contact the Finance
Director.
9.Exhibits
9. l Purchasing Process - Quick Reference
9.2 Bid Evaluation and Award Form
9 .3 Bid Request Form - Cost Proposal
9 .4 Bid Request Form - Contract/Professional Services
9.5 Bid Request Form - Public Works Project
9.6 Notice to Proceed Template
9 .7 Notice of Completion Template
9 .8 Bid Rejection Letter - Template
9.9 Authorized list of Purchasing Delegates (contact Finance for this document)
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