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HomeMy WebLinkAboutEPPP- Updated Purchasing Policy.pdfAdministrative Policy and Procedure Number: 203 Department: Finance Effective Date: 4/18/2024 Next Review Date: 9/19/2026 Revised Date: 9/19/2024 City Manager Signature___________________________________ Purchasing Procedures |Administrative Policy 203 Page 1 of 15 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 Annual Recovered Organic Waste Procurement Target - the amount of organic waste in the form of a Recovered Organic Waste Product that the City is required to procure annually under 14 CCR Section 18993.1. This target is calculated by multiplying the City’s residential population by the per capita procurement target of 0.08 tons of organic waste. CalRecycle provides notice of each jurisdiction's target on its website. 2.2 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. 2.3 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. 2.4 Direct Service Provider – a person, company, agency, district, or other entity that provides a service or services to the City pursuant to a contract Purchasing Procedures |Administrative Policy 203 Page 2 of 15 or other written agreement to assist in meeting the Annual Recovered Organic Waste Procurement Target in the form of compliant mulch, compost, renewable gas, and/or electricity procured from biomass conversion. 2.5 Environmentally Preferred - a product or service that has a lesser impact on human health and the environment when compared with competing products. This comparison may consider raw material acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance, and/or product disposal. 2.6 Force Account – work performed on Public Works projects by City staff or City-owned or controlled supplies, equipment, materials, etc. 2.7 Integrated Pest Management – an ecosystem-based strategy that focuses on the long-term prevention of pests or their damage through a combination of techniques such as biological control, habitat manipulation, and the use of resistant varieties. Pesticides are used only after monitoring indicates they are needed, and treatments are made to remove only the target organism. Pest control materials are selected and applied in a manner that minimizes risks to human health, beneficial and non-target organisms, and the environment. 2.8 PlanetBids – the City’s online procurement platform. 2.9 Practicable – satisfactory in performance and available at a fair and reasonably competitive cost. 2.10 Project Manager – the individual responsible for making the purchase. 2.11 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 landscape maintenance, are not considered public works projects. Refer CUPCCAA provisions for more information. 2.12 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). 2.13 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)). 2.14 Purchasing Manager – the City Manager is the Purchasing Manager and has authority to procure goods, services, and professional services with a Purchasing Procedures |Administrative Policy 203 Page 3 of 15 value less than $45,000 and Public Works projects with a value less than $175,000. 2.15 Recovered Organic Waste Products (ROWP) – products made from California, landfill-diverted recovered organic waste processed at a permitted or otherwise authorized operation or facility. Such products consist of mulch, compost, renewable gas, and electricity procured from biomass conversion. 2.16 Recyclability (or Recyclable) - indicates that recycling facilities are available to at least 60% of the consumers or communities where the items are sold or as indicated in 16 CFR 260.12 or determined by existing legislation. 2.17 Recycled-Content – products with a percentage of recovered material, including pre-consumer and post-consumer. 2.16 Senate Bill 1383 (SB 1383) - refers to CalRecycle’s regulation for the Short-Lived Climate Pollutant Reduction Strategy to divert organic waste from the landfill to meet the statewide methane emission reduction target established in 14 CCR, Division 7. 2.18 Senate Bill 1383 Eligible Compost - compost that is a Recovered Organic Waste Product (ROWP) and is suitable for land application as indicated in 14 CCR Section 17852(a)(24.5)(a)1 through 3. 2.19 Senate Bill 1383 Eligible Mulch - mulch that is produced from a facility, as indicated in 14 CCR 18993.1(4)(B) and complies with the maximum metal concentration and pathogen density standards for the land application specified in 14 CCR Section 17852(a)(24.5)(a)1 through 3. 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, Property, & Equipment Professional Services Public Works Projects Office supplies, special events decorations Attorneys Street beautification work Purchasing Procedures |Administrative Policy 203 Page 4 of 15 Janitorial & Landscape Maintenance Engineers Construction of facilities Contract Class Instructors Accountants Curb ramp installations Land and buildings Graphic Designers Park improvements Vehicles and heavy machinery Election Consultants Painting of buildings 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). Bidding Requirements - Supplies, Services, Property, and Equipment Amount Less than $5,000 $5,000 to less than $10,000 $10,000 to less than $45,000 $45,000 or more Approval Authority Agent or Delegate Agent/Dept Head Manager City Council Procedure Quote Informal Informal Formal PlanetBids Not required Not required, but recommended Not required, but recommended Required Minimum Bids 1 3 3 3 Requisition/PO No Yes Yes Yes Bid Posting Period No Minimum No Minimum No Minimum 10 Days 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 Authority City Manager City Council Procedure Informal Formal PlanetBids Not required, but recommended Required Minimum Bids 3 3 Purchasing Procedures |Administrative Policy 203 Page 5 of 15 Requisition/PO $5,000 to $45,000 Yes Bid Posting Period No Minimum 10 Days 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 $200,000 or More Approval Authority City Manager or Public Works Director City Manager City Council Procedure Quote Informal Formal Notice Inviting Bids Not required Required Required PlanetBids Not required Not required, but recommended Required Bid Posting Period No minimum No minimum 14 Days Requisition/PO No No No Encumbered Contract Yes Yes Yes Notice of Completion City Manager City Manager City Council 4. Environmental Purchasing Considerations Where applicable or practicable, choose environmentally preferred products and services as follows. 4.1 Environmentally Preferred Products and Services 4.1.1 Purchase products with an environmental standard issued by a third party or government agency that promotes resource efficiency, ethical and fair labor practices, and sustainable harvesting of raw materials. Click here for State of California Eco-Label recommendations. 4.1.2 Purchase products that minimize environmental impacts, toxins, pollution, and hazards to workers and the community. Click here for State of California’s Safer Choice program. 4.1.3 Purchase energy-efficient products with Energy Star Certification or, in the absence of certification, consider products in the upper 25% Purchasing Procedures |Administrative Policy 203 Page 6 of 15 energy efficiency designated by the Federal Energy Management Program. Equipment should be purchased with the most up-to-date energy-efficient functions, including, but not limited to, lighting, space heating, and cooling systems. 4.1.4 Purchase recyclable paper products with recycled content that meets or exceeds state mandates. Recyclability of janitorial supplies may be exempt but eligible for a higher recycled content percentage. Click here for current State of California minimum recycled content requirements. 4.1.5 Staff should encourage vendors or manufacturers to take back old products and packaging for recycling. 4.2 Landscaping, Roads and Buildings 4.2.1 New buildings and renovations undertaken by the City should consider Green Building practices for design, construction, and operation, as described in the LEED Rating System. 4.2.2 Hardscapes and landscape structures constructed of recycled content materials are encouraged. The City should limit the amount of impervious surfaces in the landscape. 4.2.3 Landscape renovations, construction, and maintenance by the City, including workers and contractors providing landscaping services for the City, shall employ sustainable landscaping management techniques for design, construction, and maintenance whenever possible, including, but not limited to, integrated pest management, grasscycling, drip irrigation, composting, and procurement and use of mulch and compost. 4.2.4 Plants should be selected to minimize waste by choosing species for purchase that are appropriate to the microclimate, with species that can grow to their natural size in the space allotted to them. Native and drought-tolerant plants that require no or minimal watering once established are preferred. 4.2.5 The City will annually procure for use in landscaping maintenance, renovation, and construction or giveaway a quantity of Recovered Organic Waste Products (ROWP) that meets or exceeds its Annual Recovered Organic Waste Product Procurement Target through the implementation of SB1383 Eligible Mulch, Compost, renewable gas, and/or electricity procured from biomass conversion. SB1383 Eligible Mulch and Compost used for land application must meet or exceed the physical contamination, maximum metal concentrations, and pathogen density standards specified in 14 CCR section 17852 (a) (24.5) (A) (1) through (3). Purchasing Procedures |Administrative Policy 203 Page 7 of 15 5. Purchasing Fundamentals 5.1 Plan Ahead 5.1.1 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. 5.1.2 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. 5.1.3 Make sure there is enough time to publicly solicit bids for the appropriate time period. 5.1.4 Identify and consider any qualified local vendors. 5.1.5 Make sure the Information Systems Department has approved the proposed purchase of any network or internet-capable hardware or software. 5.2 Develop the Bid Request 5.2.1 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. 5.2.2 When developing the bid request, make sure that the purchase reduces waste and results in fewer products to the greatest practicable extent without reducing safety or workplace quality. 5.3 Solicit Bids 5.3.1 Once you have completed the bid request, it’s time to secure bids from qualified vendors. No matter what you are buying, these bid solicitation rules apply: 5.3.1.1 All bids shall be solicited in writing using the appropriate Bid Request Form. 5.3.1.2 All vendor bids/responses must be received in writing to be eligible for award. Purchasing Procedures |Administrative Policy 203 Page 8 of 15 5.3.1.3 Bid results shall be summarized and any purchasing exceptions justified on the Bid Evaluation and Award Form. 5.3.2 Determine if the solicitation of bids must be publicly posted on PlanetBids. If it is required to be publicly posted, make sure it is posted for the minimum time period. If you have the discretion to choose between soliciting bids directly from selected vendors or by publicly posting it on PlanetBids, consider which approach will provide the most responsive bids at the best value to the City. Consult with your Department Director about the preferred approach prior to proceeding. 5.3.3 Soliciting Bids Using Unit Pricing 5.3.3.1 In the event you are purchasing goods in bulk or where flexibility is required (e.g. office supplies, special event logistics, etc.) it is acceptable to solicit bids using unit pricing. Ask the vendors to provide pricing based on the per unit cost of the most common items you’ll need and in representative quantities, and base the award on the lowest, most responsible response. 5.3.3.2 Bids solicited using unit pricing are unlikely to match budgeted or requisition amounts. When submitting the requisition, acknowledge this in the justification section of the Bid Evaluation and Award Form and Munis note section. 5.3.4 Responding to Inquiries from Potential Bidders 5.3.4.1 Occasionally, potential bidders will submit questions before the bidding response period is closed. All vendor questions should be directed to the Project Manager and any information shared in response must be made available to all potential bidders in writing. 5.3.5 Notice Inviting Bids 5.3.5.1 CUPCCAA requires that the city follow specific advertising guidelines for Public Works Projects that require Formal bidding procedures. A Notice Inviting Bids must be published in a newspaper of general circulation a minimum of fourteen (14) calendar days prior to the opening of a Formal Bid. Refer to the Public Noticing Procedures for more information. Purchasing Procedures |Administrative Policy 203 Page 9 of 15 5.3.6 Pre-Bid Conference 5.3.6.1 For some informal and formal purchases, a conference or walkthrough scheduled prior to the bid opening may be necessary to attract qualified bidders. If so, include the date, time, and location in the bid request and stipulate that vendor participation is mandatory to be considered for award. 5.3.7 Public Bid Opening 5.3.7.1 When Formal Bidding is required for a public works project, a public bid opening by the City Clerk is required. The date, time, and location of the public bid opening must be included in the Bid Request/Notice Inviting Bids. The Public Bid Opening requirement can be met virtually using PlanetBids. 5.4 Evaluate Bids 5.4.1 When the bid period has closed, review the bids for conformance with the bid request. Make sure all line items are accounted for, services acknowledged, specifications and technical requirements met, etc. Once you have identified conforming bids, compare the prices proposed by the respondents. If necessary, conduct interviews, contact references and research the vendor’s past performance to ensure it meets the City’s requirements and standards. Remember to consider the local preference credit of 1% of taxable sales before making the award (if applicable) and the impacts of sales or use tax (if purchased from a vendor based outside the state). Complete the Bid Evaluation and Award Form, attaching all written bids that were received. 5.4.2 In general, the bidder that has met all bid requirements at the lowest cost is considered the lowest responsible bidder. With the exception of Professional Services, which may be awarded based on demonstrated professional qualifications and experience where cost is not the sole factor, you are required to select the lowest responsible bidder. 5.5 Award the Purchase 5.5.1 Determine if an exception to the bidding requirements is needed (See Section 6 below & DBMC 3.24.090). Once you have identified the lowest responsible bidder, notify all bidders of the results. 5.5.2 Make the recommendation for award by commencing the purchasing approval process. Use the tables above to determine Purchasing Procedures |Administrative Policy 203 Page 10 of 15 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). 5.5.3 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: 5.5.3.1 Bid Evaluation and Award Form. 5.5.3.2 Bid Request Form. 5.5.3.3 All vendor bid proposals received. 5.5.3.4 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. 5.5.3.5 City Council report/minutes (if the purchasing approval was granted via minute order) 5.5.3.6 W9 (must be provided to Finance to establish a new vendor in the Munis system before a Requisition can be processed) 5.5.3.7 Certification(s) or written documentation of paper products' recyclability and recycled content is required. Examples of such documentation consist of labels, catalogs, invoices, or a manufacturer or vendor website that verifies the recyclability and minimum percentage of recycled content. In the absence of such certification or verifying documentation, the alternative certification form can be found here. 5.5.4 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. 5.5.5 Purchase Orders 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. Purchasing Procedures |Administrative Policy 203 Page 11 of 15 5.5.6 Open Purchase Orders 5.5.6.1 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. 5.5.7 Change Orders to a Requisition/Purchase Order 5.5.7.1 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. 5.5.8 Contingencies/Change Orders to an Encumbered Contract 5.5.8.1 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. 5.5.9 Cumulative Amounts 5.5.9.1 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. 5.5.10 Notice to Proceed 5.5.10.1 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 Purchasing Procedures |Administrative Policy 203 Page 12 of 15 facto Notice to Proceed by providing it to the vendor. For Public Works projects, use the template here. 5.5.11 Rejecting a Bid 5.5.11.1 Bids may be rejected at the City’s discretion. If all bids are to be rejected, notify bidders in writing using the template here. 6. Purchasing Exceptions 6.1 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. 6.2 Request an exception when you receive less than three responsive bids (informal and formal bidding requirements only). 6.3 Request an exception for a Sole Source purchase. A Sole Source purchase occurs when: 6.3.1 Goods and services are available from only one vendor. 6.3.2 Goods and services have design or performance features essential to the requesting Department where no other source satisfies the requirements. 6.3.3 Goods and services are patented or proprietary. 6.4 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. 6.5 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. Purchasing Procedures |Administrative Policy 203 Page 13 of 15 6.6 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. 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. 7. Contracts 7.1 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. 7.2 When procuring Recovered Organic Waste Products through a Direct Service Provider, the contract or purchase order should have enforceable provisions that include definitions and specifications for SB1383 Eligible Mulch and Compost such as the physical contamination, maximum metal concentrations and pathogen density standards specifications in 14 CCR Section 17852(a)(24.5)(A)(1) through (3)and enforceable mechanisms (termination, liquidated damages) in the event the Direct Service Provider is not compliant with the requirements. 7.3 Multi-year Contracts 7.3.1 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. 7.3.2 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. 8. Managing and Processing Payments 8.1 Departments/divisions are responsible for processing payments, maintaining all required purchasing records, vendor relations, and ensuring Purchasing Procedures |Administrative Policy 203 Page 14 of 15 that the vendor meets established terms and conditions over the full life cycle of the purchase/project. 8.2 Upon receipt of the invoice from the vendor, make sure it is: 8.2.1 Clearly labeled “Invoice.” 8.2.2 Is dated. 8.2.3 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. 8.2.4 Contains a verifiable description of the goods/services rendered, including locations of work performed when applicable. 8.2.5 Contains an accurate payment amount for the work/goods provided in that invoice period. 8.2.6 If the invoice does not include certification from the vendor verifying the recyclability and the percentage of recycled content, or if this information was not provided during the requisition process, as referred to in section 5.5.3.7, supporting documentation must be attached with the invoice. 8.3 Submit the invoice for payment in Munis. Click here for a step-by-step guide to processing a payment in Munis. 9. Further Information 9.1 For further information about these procedures, contact the Finance Director. 9.2 Environmental purchasing considerations will be reinforced with applicable training to staff and contractors, such as janitorial or landscaping providers, with supplemental guides and training as necessary. 10. Exhibits 10.1 Purchasing Process – Quick Reference 10.2 Bid Evaluation and Award Form 10.3 Bid Request Form – Cost Proposal 10.4 Bid Request Form – Contract/Professional Services Purchasing Procedures |Administrative Policy 203 Page 15 of 15 10.5 Bid Request Form – Public Works Project 10.6 Notice to Proceed Template 10.7 Notice of Completion Template 10.8 Bid Rejection Letter – Template 10.9 Authorized list of Purchasing Delegates (contact Finance for this document)