HomeMy WebLinkAbout6.3 Purchasing Ord CITY CLERK
File # 0380-10
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: January 18, 2000
SUBJECT:
Public Hearing: Amendments to City's Purchasing Ordinance -
(Report Prepared by: Fred Marsh, Finance ManageO
EXI-IIBITS ATTACHED: 1.
2.
Chapter 2.36. 9fthe Dublin Municipal Code - Purchasing (Code)
Draft Ordinance
RECOMMENDATIOn// }]
4
Open the public hearing
Receive the StaffReport and public testimony
Close the public hearing and deliberate
Waive the reading and INTRODUCE the Ordinance.
FINANCIAL STATEMENT: This action would reduce the Staff cost associated with the bidding
process and the issuing of contracts, while assuring that competitive prices are received.
DESCRIPTION: The City Council requested that Staff review the City of Dublin purchasing
procedures to update the process for requiring competitive bids from. selected vendors and for purchase of
recycled products. The current'City ordinance establishes a system whereby purchases are typically made
based solely upon the lowest price for comparable items.
It should also be noted that the mounts governing the competitive bidding process and apProval 'of
contracts in the City's ordinance were established in 1983 and have not been adjuste, d since the adoption
oft he orig-inal ordinance.
Bidding and Contract Requirements in Purchasing Ordinance
Sections 2.36.030 through 2.36.060 and 2.36.130 of the current ordinance establishes procedures based
upon the amount of the purchase (Attachment 1). According to the Ordinance, purchases of less than $200
are not subject to a required bid process. Purchases made between $200 and $5,000 are subject to an
informal bid process where every attempt is made to receive at least three price quotations through
telephone or mail inquiry, comparison of prices on files or through other methods.
Purchases over $5,000 must go through a formal bid process and the resulting contract must be approved
by Council, unless the City Council ~ants an exception to the policy as allowed in Section 2.36.050
(Dublin Municipal Code). It should be noted that the local ordinance can only regulate certain purchases.
For example, State law has a requirement that all "Public Projects" over $5,000 (excluding maintenance
work) must be bid based upon a sealed bid process and awarded to the lowest responsible bidder. Under
State Law, "Public Projects" is defmed as follows:
O)
Construction, reconstruction, erection, alteration, renovation, improvement, demolition and repair
work involving any publicly owned, leased or operated facility.
5'"'(2)
Painting or repainting of any publicly owned, leased, or operated facility. (Public Contract Code,
Section 22002(c).)
COPIES TO:
G:kFINANCEkFREDWORD\purchasing ordinance update.doc
ITEM NO.
Staff contacted several cities in the area and responses were received from Danville, Livermore,
Pleasanton, San Ramon, Tracy and Walnut Creek. For purchases not defined as "Public Projects" under
State Law, Pleasanton, Tracy and San Ramon required Council approval for contracts over $25,000, while
Livermore, Walnut Creek and Danville required council approval for contracts over $50,000. In addition,
the cities also ranged in the minimum purchase mount required to obtain three informal bids, from
$1,000 on the low end to $25,000 on the high end. As far as the requirement for formal bids for non
"Public Projects", the minimum purchase amounts varied considerably, ranging fi.om $15,000 in Walnut
Creek to no requirements for formal bids in Pleasanton, San Ramon and Livermore.
Staff recommends for purchases subject to the City's competitive bidding requirements a) increasing the
purchase mount required for three informal bids ~rom the current limit ($200 to $5,000) to a revised limit
($1,000 to $20,000) b) increasing the purchase amount where a formal bid must be issued and approval by
City Council is required to $20,000 and c) adopting the uniform construction cost procedures, which
would allow the City to apply the revision in item b above to "Public Projects".
If the City implements the uniform construction cost procedures, it is required to update its existing
purchasing ordinance to implement these alternate procedures for "Public Projects." The City's existing
ordinance already addresses all of these alternate procedures, including the requirement to maintain a list
on "Public Projects" of qualified contractors according to categories of work. Therefore no additional
revisions would need to be made to the City's existing ordinance.
Local Vendor Purchasine
Based upon direction from Council at a previous Council meeting, Staff is recommending updating
Section 2.36.040 of the Municipal Code to add a clause which directs staffto obtain a bid fi-om at least
one Vendor located within the City of Dublin whenever possible. However, as a~eed upon by Council at
the May 4, 1999 Council meeting, no preference will ~ven to local vendors as part of the award of the
purchase.
Purchase of Products with Recycled Materials
The City of Dublin recogrfizes the need to streng~d-ten markets for materials collected in local recycling
collection system. To accomplish this goal and to comply with the State's 50% waste diversion
requirement by the Year 2000, Staff is recommending updating Section 2.36.040 of the Municipal Code
to add a clause which encourages the purchase of products, whenever feasible, containing the highest
amount of postconsumer and recovered materials practicable. In all cases, these products must meet
reasonable performance standards, and be readily available at a competitive price. In addition, all
equ/pment bought, leased or rented shall, wherever feasible, be compatible with the use of recycled
products purchased by the City.
The language proposed for the City's Purchasing Ordinance is similar to that contained in the model
policy of the Alameda County Waste Management Authority (ACWMA) and the policies of other County
jurisdictions. Staff believes that the language contained in this section will encourage recycled product
procurement without being overly restrictive on purchasing decisions. To implement the policy, training
seminars will be conducted with the assistance of ACWMA to educate City staff on the availability of
affordable, high quality recycled content products.
Posting of Notices and Bids on City's Website
Section 2.36.030, Part C of the Purchasing Ordinance indicates that the Purchasing Agent may advertise
the notice inviting competitive bids in applicable publications. Staff has consulted with the City Attorney
and has determined that the City can also advertise these bids on websites readily accessible to the public,
such as the City's and A.BAG's websites. Advertising on websites such as these would provide two
primary benefits to the City: a) it could increase the exposure to the advertising for these bids and b) it
could reduce the City's advertising costs by reducing the need to advertise these bids in publications.
CONCLUSION:
As a result of this study, and to help reduce staff costs associated with the contract and the bidding
process, Staff recommends including the following revisions to the City's purchasing ordinance:
a) Require Council approval of contracts over $20,000 (existing amount - $5,000).
b)
Require that formal bids be obtained fsi' purchases over $20,000 (currently formal bids are
required for purchases over $5,000). As part of this revision, the City would adopt the uniform
construction cost procedures, which would allow the City to extend this revision for Public
Projects between $5,000 and $20,000.
c)
Require that no bids be obtained for purchases under $1,000 (existing amount - $200) and require
three informal bids to be obtained for purchases between $1,000 and $20,000.
d)
Update the competitive bidding section of the purchasing ordinance to include additional steps
required from the adoption of the uniform construction cost procedures.
e)
Update Section 2.36.040 of the Municipal Code to direct Staff to obtain a bid from at least one
vendor located within the City of Dublin whenever possible.
Update Section 2.36.040 of the Municipal Code to add a clause which encourages the purchase of
products, whenever feasible, containing the highest amount of postconsumer' and recovered
materials practicable. These products must meet reasonable performance standards and be readily
available at a competitive price. In addition a clause will be added states that all equipment
bou~ht, leased or rented shall, wherever feasible, be compatible with recycled products purchased
by the City.
Update Section 2.36.030 of the Municipal Code to allow the City to advertise the notice inviting
bids on websites readily accessible to the public."
RECOMMENDATION
Staffrecommends that Council conduct a public hearing, waive the reading and introduce the Ordinance.
2.36.010
Chapter 2.36
Sections:
2.36.010
2.36.020
2.36.030
2.36.040
2.36.050
2.36.060
2.36.070
2.36.080
2.36.090
2.36.100
2.36.110
236.120
2.36.130
PURCHASING
Adoption of a
purchasing system.
Purchasing Agent
designated.
Purchases by City
Council---Competitive
bidding.
Purchasing award--
Factors to be
considered.
Exceptions to
competitive bidding
requirements.
Purchases of less than
five thousand dollars
($5,000)---Procedure.
Purchase orders.
Availability of sufficient
funds.
Inspection and review.
Surplus supplies and
equipment.
Splitting orders
prohibited.
Exceptions---Public
projects.
Exceptions--
Contracting for
emergency cleanup of
hazardous materials.
2.36.010 Adoption of a purchasing
system.
A purchasing system is adopted in order
to establish efficient procedures for the
purchase of supplies, services and equip-
ment to secure for the city supplies, services
and equipment at the lowest possible cost
commensurate with the level of quality
required, to exercise financial consol over
purchases, and to clearly define authority
for the purchasing function. (Ord. 16-83 §
I)
2.36.020 Purchasing Agent
designated.
The City Manager is designated as Pur-
chasing Agent. The City Manager may
delegate all or a portion of the purchasing
duties to any city staff member. The Pur-
chasing Agent shall have the authority to:
A. Purchase or contract for supplies,
services and equipment required by the city,
in accordance with purchasing procedures
outlined in this chapter;,
B. Negotiate and recommend execution
of contracts for the purchase of supplies,
services and equipment;
C. Act to procure for the city the neces~
sary quality in supplies, services, and equip-
ment at the lowest cost to the c/ty;
D. Prepare and recommend to the City
Council revisions and amendments to the
purchasing roles;
E. Establish and maintain such forms as
reasonably necessary to the operation of
purchasing guidelines;
F. Supervise the inspection of all sup-
plies, services, and equipment purchased to
insure conformance with specifications;
G. Recommend the sale or disposal of all
supplies and equipment which cannot be .
used by the city, or which have become
unsuitable for city use;
H. Maintain a bidder's list and other
records necessary for the efficient acquisi-.
tion of goods and services. (Ord. 16-83 § 2)
35
(Dublin 8-92)
ATTACHMENT 1
2.36.030
2.36.030 Purchases by City
Council--Competitive
bidding.
When the amount or value involved is at
least five thousand dollars ($5,000), the
purchase or disposal shall be made by the
City Council through competitive bid as
outlined below:
A. Notice inviting bids shall include a
general description of the services and/or
articles to be purchased or sold, where bid
bl~mk.~ and specifications may be obtained,
the time and place for bid openings, and
whether bid deposit_ or bond and faithful
performance bond will be required.
B. Notice inviting bids shall be posted in
at least three (3) public places in the city
that have been designated by ordinance as
the place for posting public notices, at least
ten (10) days before the date of opening the
bids.
C. The Purchasing Agent shall also solic-
it sealed bids from all responsible prospec-
tive suppliers whose names are on the
bidder's list and may advertise the notice
inviting bids in applicable publications.
D. When deemed necessary by the Pur-
chasing Agent or City Council, any bidder
may be required to submit a bid deposit or
bond in an amount ~letermined by the Pur-
chasing Agent or City Council. A successful
bidder (and his surety, if a bond is fur-
nished) shall be liable for any damages
upon the bidder's failure to enter into a
conu:act with the city or upon the bidder's
failure to perform in accordance with the
tenor of his bid.
E. When deemed necessary by the Pur-
chasing Agent or City Council, any person
or entity entering into a contract with the
city may be required to furnish a faithful
performance deposit or bond in an amount
determined by the Purchasing Agent or
Council.
F. Bids shall be opened in public at the
time and place stated in the public notices.
A tabulation of all bids received shall be
open for public inspection during regular
business hours for a period of not less than
thirty (30) calendar days after the bid open-
ing.
G. At its discretion, the City Council
may reject all bids presented and readverrise
for bids.
H. Contracts shall be awarded by the
City Council to the lowest responsible bid-
der, except as otherwise provided herein.
I. If two or more bids received from
responsible bidders are for the same total
amount or unit price, quality and service
being equal, preference shall be ~ven to the
local vendor, or the City Council may ac-
cept the lowest bid made by negotiation
with the tie bidders and the Purchasing
Agent at the time of the bid opening. (Ord.
16-83 § 3)
2.36.040 Purchasing awardN
Factors to be considered.
Purchases shall be awarded after consid-
eration of the following factors: A. The amount of bid price;
B. The ability, capacity and skill of the
bidder to perform the contract or provide
the service required;
C. The ability of the bidder to perform
the contract or provide the service promptly,
or within the time specified, without delay
or interference;
cmbn~ ~-~2) 36
D. The reputation and experience of the
bidder;,
E. The previous experience of the city
with the bidder;,
F. The previous and existing compliance
by the bidder with the laws and ordinances;
G. The sufficiency of the financial re-
sources and ability of the bidder to perform
the contract or provide the service;
H. The quality, availability, and adapt-
ability of the supplies or contractual servic-
es to the particular use required;
I. The ability of the bidder to provide
future maintenance and service for the use
of the subject of the contract;
J. The number and scope of conditions
attached to the bid. (Ord. 16-83 § 4)
2.36.050 Exceptions to competitive
bidding requirements.
A. The provisions of this chapter requir-
ing competitive bidding shall not apply to
the following:
1. Contracts involving the acquisition of ·
professional or specialized services, such as,
but not limited to, services rendered by
architects, attorneys, engineers, and other
specialized consultants;
2. where the city' s requirements can be
met solely by a single patented article or
process;
3. To situations where no bids have
been received following bid announcements
under other provisions of this chapter;
4. When the mount involved is less
than two hundred dollars ($200);
5. When an emergency requires that an
order be placed with the nearest source of
supply; .
6. When a purchase involves goods of
a technical nature, where it would be diffi-
cult for a vendor to bid on a standard set of
2.36.040
specifications, the Purchasing Agent shall
undertake a thorough review of known
products and a comparison of features
which would most closely meet the city's
needs at the least cost;
7. For janitorial services for city build-
ings and facilities;
8. For maintenance and repair of build-
ings and facilities;
9. For maintenance and repair of public
streets, including street sweeping.
10. When another public agency has
administered a competitive bidding process
within the past two years for the same or
substantially similar supplies,~ services or
equipment;
11. When the City Council specifically
waives the competitive bid process and
authorizes staff to negotiate the purchase of
vehicles by a four-fifths vote.
B. When the procurement falls into any
of the categories listed above, the Purchas-
ing Agent may authorize contracts made by
negotiation; provided, that the amount does
not exceed five thousand dollars ($5,000).
When the amount exceeds five thousand
dollars ($5,000), the action must be autho-
rized by the City Council.
C. Any request for an exception under
this section shall include the nature of the
contract, amount of the contract, and the
reasons why competitive bidding is not
feasible. (Ord. 21-97 § 1; Ord. 5-91 § 1:
Ord. 16-83 § 5)
2.36.060 Purchases of less than five
thousand dollars
($5,000)--Procedure.
Where the amount or value involved is
more than two hundred dollars ($200), but
less than five thousand dollars ($5,000), the
purchase or disposal may be made by the
2.36.060
Purchasing Agent, without written bid, and
by informal price checking through tele-
phone or mail inquiry, comparison of prices
on file or otherwise. Every attempt shall be
made to receive at least three (3) price quo-
rations. At the discretion of the Purchasing
Agent, the acquisition of goods and services
where the value is at least two hundred
dollars ($200) but less than five thousand
dollars ($5,000), the formal competitive bid
process may be used. (Ord. 16-83 § 6)
2.36.070 Purchase orders.
All purchases shall be documented by a
purchase order prepared by the Purchasing
Agent. The original copy shall be directed
to the vendor and one (1) copy shall be
retained for the purchase order file. The
final copy shall be directed to the depart-
ment for whose benefit the purchase is be-
ing made to be used as a receiving report.
(Ord. 16-83 § 7)
2.36.080 Availability of sufficient
funds.
No purchase order shall be issued until
it has been ascertained that there is to the
credit of the department of the city for
whose benefit such purchase is to be made,
a sufficient unappropriated balance in ex-
cess of all unpaid obligations to defray the
amount of such order. (Ord. 1 6-83 § 8)
2.36.090 Inspection ahd review.
The Purchasing Agent shall require the
inspection of supplies and equipment deliv-
ered, and contractual services performed, to
determine their conformance with the speci-
fications and requirements set forth in the
order or contract. (Ord. 16-83 § 9)
2.36.100 Surplus supplies and
equipment.
At such times as determined by the Pur-
chasing Agent, reports shall be prepared
showing all supplies and equipment which
are no longer used or which have become
obsolete or worn out. The Purchasing Agent
shall have the authority to sell, trade or
exchange ali said supplies and equipment.
Such sales will be made pursuant to Section
2.36.030 or Section 2.36.060 of this chapter,
whichever is applicable. (Ord. 16-83 § 10)
2.36.110 Splitting orders
prohibited.
It is unlawful to split or separate into
smaller orders the purchase of supplies,
materials, equipment or services for the
purpose of evading the competitive bidding
provisions of this chapter. (Ord. 16-83 § 1 I)
2.36.120 Exceptions--Public
projects.
This chapter is expressly made inapplica-
ble to bids for public projects as defined by
Public Contracts Code Section 20161 and
where the eXPenditure required for the pub-
lic project exceeds the limit set by Public
Contracts Code Section 20162. The provi-
sions contained in Public Contracts Code
Section 20161 et seq., establish contract
procedures the city shall follow regarding
public projects. (Ord. 5-91 § 2: Ord. 16-83
§ 12)
2.36.130 Exceptions---Contracting
for emergency cleanup of
hazardous materials.
When, in the discretion of the Public
Works Director/City Eng/neer or his or her
design~, it is determined that a hazardous
spill has occurred and that immediate clean-
up is required to prevent the spill from
entering the city storm drain system or any
(Dublin 12-97)
2.36.130
watercourse, the City Manager, or his or her
designee, may contract for the clean up of
the spill. Any such contract in the amount
of five thousand dollars ($5,000) or under
may be entered into on behalf of the city by
the City Manager, or his or her designee,
without prior City Council approval; how-
ever, no such contract exceeding five thou-
sand dollars ($5,000) in amount shall be
executed without prior approval of the City
Council. (Ord. 9-92 § 3)
38a o:~b~n 12-97)
ORDINANCE NO. - 00
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DUBLIN
AMENDING DUBLIN MUNICIPAL CODE CHAPTER 2.36 TO UPDATE THE PURCHASING
PROCESS FOR THE ISSUANCE AND AW.4~RD OF BIDS, APPROVAL OF CONTRACTS, AND
PURCHASE OF PRODUCTS WITH RECYCLED CONTENT
The City Council of the City of Dublin does ordaih as follows:
SECTION 1 Section 2.36.030 "Purchases bv City Council - Competitive Bidding"
Amend Section 2.36.030 of the Dublin Municipal Code with the following:
a. Revise the frrst paragraph to read as follows:
"When the amount or value involved is at least twenty thousand dollars ($20,000), the purchase or
disposal shall be made by the City Council through competitive bid as outlined below. Items that
are classified as "Public Projects" under State Law shall be subject to the uniform conslruction
cost accounting procedures as outlined in the Public Contract Code, Section 22000 et seq. Section
22030. Bids should be obtained from at least one vendor located within the City of Dublin
whenever possible."
Revise subparagraph C to read as follows:
"The Purchasing Agent shall also solicit sealed bids from all responsible prospective suppliers
whose names are on the bidder's list and may advertise the notice inviting bids in websites readily
accessible to the public"
Add a new subparagraph J to read as foilOws:
"Under the Uniform Public Construction Cost Accounting Act, a public project consists of the
following:
(1)
Construction, reconstruction, erection, alteration, renovation, improvement, demolition and
repair work involving any publicly owned, leased, or operated facility.
(2)
Painting or repainting of any publicly owned, leased, or operated facility (Public Contract
Code, Section 22002 (c).)
SECTION 2 Section 2.36.040 "Purchasing Award - Factors to be Considered"
Amend Section 2.36.040 of the Dublin Municipal Code by adding a new subparagraph K containing the
following provision in regards to the use of products with recycled content:
ATTACHMENT 2
"The purchase of products, whenever feasible, containing the highest mount ofpostconsumer and
recovered materials practicable. In all cases, these products must meet reasonable performance
standards, and be readily available at a competitive price. In addition, all equipment bought,
leased or rented shall, wherever feasible, be compatible with the use of recycled products
purchased by the City."
SECTION 3 Section 2.36.050 "Exceptions to Competitive Bidding Requirements"
Amend Section 2.36.050 of the Dublin Municipal ~ode with the following:
a. Revise subparagraph A4 to read as follows:
"When the amount involved is less than one thousand dollars ($1,000);"
b. Revise subparagraph B to read as follows:
"For purchases not defined as "Public Works Projects" under State Law, when the procurement
falls into any of the categories listed above, the Purchasing Agent may authorize contracts made
by negotiation; provided, that the amount does not exceed twenty thousand dollars ($20,000).
When the amount exceeds exceed twenty thousand dollars ($20,000), the action must be
authorized by the City Council."
SECTION 4 Section 2.36.060 "Purchases of less than five thousand dollars ($5,000) - Procedure"
Amend Section 2.36.060 of the Dublin Municipal Code with the following:
a. Change the title to read "Purchases of less than twenty thousand dollars ($20,000) - Procedure"
b. Revise the paragraph to read as follows:
"Where the amount or value involved is more than one thousand dollars ($1,000), but less than
twenty thousand dollars ($20,000), the purchase or disposal may be made by the Purchasing
Agent, without written bid, and by informal price checking through telephone or mail inquiry,
comparison of prices on file or otherwise. Every attempt shall be made to receive at least three (3)
price quotations. At the discretion of the Purchasing Agent, the acquisition of goods and services
where the value is at least one thousand dollars ($1,000) but less than twenty thousand dollars
($20,000), the formal competitive bid process may be used."
SECTION 5 Section 2.36.130 "Exceptions - Contracting for emergency cleanup of hazardous.
materials"
Amend Section 2.36.130 of the Dublin Municipal Code with the following:
c. Revise the last sentence of the paragraph to read as follows:
"Any such contract in the amount of twenty thousand dollars ($20,000) or under may be entered
into on behalf of the City by the City Manager, or his or her designee, without prior City Council
approval; however, no such contract exceeding twenty thousand dollars ($20,000) in amount shall
be executed without prior approval of the City Council.
SECTION 6
Posting and Effective Date
This Ordinance shall take effect and be in force thirty (30) days from and after the date of its passage.
The City Clerk of the City of Dublin shall cause this ordinance to be posted in at least three (3) public
places in the City of Dublin in accordance with Section 36933 of the Government Code of-the State of
California.
PASSED, APPROVED AND ADOPTED this day of . . ' 2000.
AYES:
NOES:
ABSENT:
.a23 STAExT:
ATTEST:
Mayor
City Clerk