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01 Purchasing Rules TOWN OF TRUCKEE California ORDINANCE 2011 -01 AN ORDINANCE ESTABLISHING PURCHASING RULES The Town Council of the Town of Truckee Does Ordain as Follows: Section 1. Enactment Title 3, Section 3.12 of the Town of Truckee Municipal Code is hereby amended to read as it appears in "Attachment A ": Section 2. This Ordinance will take effect thirty days following its second reading. All ordinances and parts of ordinances in conflict therewith will be repealed. Section 3. Summary Publication and Posting. the Town Clerk shall have the ordinance published as required by law. The foregoing Ordinance was introduced at a regular meeting of the Truckee Town Council held on the 5th day of May 2011, and adopted at a regular meeting of the Truckee Town Council, on the 19 day of May 2011, Council Member Green moved for the adoption, the motion was seconded by Council Member Wallace Dee and was carried by the following vote: AYES: Council Member Green, Council Member Wallace Dee, Council Member Brown, Vice Mayor deRyk Jones, and Mayor Anderson. NOES: None. ABSENT: None. \A 0 Richard S. Anderson, Mayor ATTEST: APPROVED AS TO FORM: k Judy P ice, M , Town Clerk Dennis Crabb, Town Attorney 1 CHAPTER 3.12PURCHASES 3.12.010 Purpose of Purchasing System The purpose of the Purchasing System is to establish efficient procedures for the purchase of services, supplies and equipment at the lowest possible cost commensurate with quality needs, to exercise positive financial control over purchases, to clearly define authority for the purchasing function, and to assure the quality of purchases. 3.12.020 Scope of Chapter The procedures established by this chapter shall apply only to the purchase of supplies, equipment and services, and shall not apply to public projects as defined in Section 20161 of the California Public Contracts Code. 3.12.040 Purchasing Agent The position of Administrative Services Director (ASD) shall have general supervision and final responsibility of the purchasing system. The ASD shall have the authority to: (a) Establish Purchasing Rules and Regulations for the internal management and operation of the purchasing system and such other rules and regulations as shall be prescribed by the Town Manager; (b) Recommend execution of contracts for the purchase of supplies and equipment; (c) Ensure the needed quality in supplies and equipment are purchased at the least expense to the Town; (d) Discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases; (e) Prepare and recommend to the Town Council rules governing the purchase of supplies and equipment for the Town; (t) Prepare and recommend revisions and amendments to the purchasing rules; (g) Keep informed of current developments in the field of purchasing, prices, market conditions and new products; (h) Prescribe and maintain such forms as are reasonably necessary for the operation of this chapter and other rules and regulations; (i) Ensure the proper inspection of all supplies and equipment purchased and that they are in conformance with specifications; (j) Recommend the transfer of surplus or unused supplies and equipment between departments as needed; (k) Maintain a list of vendors and records needed for the efficient operation of the purchasing division. 3.12.050 Purchasing Regulations The ASD shall be responsible for determining that the regulations and procedures in Municipal Code 3.12 are properly enforced. 3.12.055 Purchasing Authority The Town Manager is authorized to execute any such personal, professional or consulting service or other contractual services and to authorize the purchase of any supplies or equipment in the amount less than the amount specified by Town Council resolution for formal bids, within budget authority. All other such contracts shall be approved by the Town Council; giving the Town Manager authority to sign the contract. The Town Manager shall provide authority to Department Heads, as "department purchasing agents" to make purchases through their staff according to this ordinance and the Purchasing Rules and Regulations. See Purchasing Rules and Regulations for other signatory authority. 3.12.060 Department Purchasing The Town Manager may authorize any department to purchase specified supplies and equipment. Such purchases shall be made in conformity with the procedures established by this chapter and shall be in accordance with budget authority. Page 1 of 9 3.12.090 Purchase Orders • Purchases of supplies and equipment shall be made by purchase orders when supplies and equipment cost exceeds the amount specified for purchase orders and is less than the amount requiring Town Council approval as specified in the Town's Purchasing Rules and Regulations. This cost will include shipping, but will not include sales taxes. Except as otherwise provided herein, no purchase order shall be issued to a vendor unless the prior approval of the purchase order has been obtained, see 3.12.285 for requirements of purchase orders. 3.12.091 Blanket Purchase Orders — Cumulative Purchases Where individual purchases to a vendor may or may not require a purchase order, but where cumulative purchases in a fiscal year to a vendor is in excess of the amount specified for purchase order or approval by Town Council resolution, and a contract and /or other authority has not been approved by Town Council: 1. If the estimated cumulative purchases are less than the amount requiring Council approval a blanket purchase order is authorized up to the maximum authorized for purchase orders. 2. If the estimated cumulative purchases are more than the amount requiring Council approval Town Council must approve in advance a "not to exceed" amount. When a "not to exceed" amount has been approved, creation of a blanket purchase order is authorized. 3.12.120 Bidding Purchases of supplies and equipment shall be by bid procedures pursuant to Sections 3.12.125 through 3.12.270. Bidding for Public Projects, as defined, shall be bid according to Section 20161 of the California Public Contracts Code. Bidding may be dispensed with only under conditions stated in Section 3.12.290. 3.12.125 Formal and Informal Bid Amounts 1. Town Council shall specify, by resolution, the amount requiring formal and informal bids. Purchases of supplies and equipment of an estimated value specified by Town Council for formal bids or more shall follow the formal bid procedures stated below at 3.12.140 through 3.12.249. The amount requiring formal bids are specified in the Town's Purchasing Rules and Regulations. Bidding for_public projects is regulated by Section 20161 of the California Public Contracts Code unless otherwise ordered by Town Council. 2. Purchases of supplies and equipment of an estimated value less than the amount specified by Town Council resolution for formal bids may be made on the open market using the informal bidding procedures set forth below in 3.12.255; 3. Provided, however that all bidding may be dispensed with for purchases of supplies and equipment that have a total estimated value of $1,000, or less. Such purchases may be made on an annual or periodic basis. 4. Fuel purchases may be made on an informal basis even if the amount specified by Town Council resolution for formal bids limitation is exceeded. 3.12.130 Repealed (ORD 95 -03 02- 02 -95; ORD 2006 -05 10- 05 -06) 1 Page 2 of 9 3.12.140 Notice Inviting Formal Bids Notices inviting formal bids shall include, but not limited to, the following: 1. A general description of the item(s) or service(s) to be purchased, or the public work to be constructed or improved (see Section 20161 of the California Public Contracts Code); 2. The location where bid blanks and specifications may be secured; 3. The time and place assigned for the opening of sealed bids; 4. The type and character of bidder's security required, if any; and 5. The location and deadline for submission of bids. 6. Any other information that may be helpful in choosing the contractor most suited for the supplies, services or equipment. (ORD 2006 -05 10- 05 -06) 3.12.150 Notice for Formal Bids Notices inviting formal bids shall be published at least ten days prior to the date of opening the bids. Notices shall be published at least once for non - public projects and at least twice, not less than five days apart, for public works projects (see Section 20161 of the California Public Contracts Code) on the Town's website, in a local newspaper and /or other appropriate publications. (ORD 2004 -04, 05- 20 -04) 3.12.160 Bid Vendor List The department purchasing agent shall also solicit formal sealed bids from responsible suppliers, or who have made written request that their names be added thereto. 3.12.170 Bulletin Board Notice Repealed. 3.12.180 Bidder's Security Where deemed necessary by the ASD, formal bids shall be accompanied by security, either cash, cashier's check, certified check or surety bond, in a sum equal to ten percent of the total aggregate of the bid, and shall be designated in the notice inviting bids. Bidders shall be entitled to return of bid security; provided, however, that a successful bidder shall forfeit the bid security upon refusal or failure to execute the contract within ten days after the notice of award of contract has been mailed, unless the Town is solely responsible for the delay in executing the contract. The Town Council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder who is willing to execute the contract, or may reject all bids and re- advertise. 3.12.190 Other Formal Bond Requirements A faithful performance bond and labor and material bond shall be required for all public projects, unless waived by the Town Council, in an amount reasonably necessary to protect the best interests of the Town. In addition, the Town Council shall have authority to require a faithful performance bond or other bonds before entering into a contract other than a public project contract. if bonds are required, the form and amount thereof shall be designated in the notice inviting bids. 1 Page 3 of 9 3.12.200 Formal Bid Opening Procedure Sealed bids shall be submitted to the Town Clerk's office and shall be identified with the published title of the request for proposal on the envelope. The ASD, or department designee, shall publicly open all bids at the time and place stated in the public notices. A tabulation of all bids received shall be available for public inspection in the Town Clerk's office during regular business hours for a period of not less than 30 calendar days after the bid opening. 3.12.210 Rejection of Formal Bids In its discretion, the Town Council may reject any and all bids presented and may cause re- advertising for bids pursuant to the procedure herein prescribed. However, when all bids exceed the authorized budgeted amount, the Town Manager may authorize rejection of all bids and authorize re- bidding based upon the original specifications or as they may be modified, in accordance with procedures prescribed herein. 3.12.220 Award of Formal Bid Contracts Except as otherwise provided herein, formal bid contracts shall be awarded by the Town Council to the lowest responsible bidder. The determination of "lowest responsible bidder" shall be at the discretion of the Town Council pursuant to findings and recommendations presented by the department purchasing agent at the time of award of contract. 3.12.230 Tie Formal Bids If two or more formal bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay of re- advertising for bids, the Town Council may in its discretion accept the one it chooses or accept the lowest bid made by and after negotiation with the tie bidders at the time of the bid opening or award of contract. 3.12.240 No Formal Bids When no formal bids or no responsive bids are received, the department purchasing agent is authorized to negotiate for written proposals, and make recommendation to the Town Manager and the award, if any, shall be made in accordance with applicable provisions prescribed herein. A responsive bid is defined as a bid which conforms in all material respects to the terms and conditions, the specifications and other requirements of the invitation for bid /request for proposal. (ORD 95 -03 02- 02 -95) 3.12.245 Protest Procedure Upon award of a bid under the provisions of this Chapter, only a person or entity who or which submitted a bid in compliance with this Chapter in the same proceeding will have standing to challenge the award of bid or the procedures used in bid evaluation. Any such challenge must be filed within ten days of the award with the Administrative Services Director. The ASD shall review the protest and provide a written determination regarding its validity to the authority awarding the bid. If the challenger wishes to continue to pursue the matter an appeal of the ASD's decision must be filed with the Town Clerk in the form required by the Clerk and accompanied by an appeal fee deposit equal to the estimated costs of processing the appeal. 1 Page 4 of 9 The appellant shall additionally execute an agreement holding harmless, indemnifying, and defending the Town, its officials, agents, and employees from any and all liabilities and costs arising from a granting of the appeal, including but not limited to the Town's reasonable attorney fees and costs in defending litigation seeking to reverse decisions of the Town with regard to the appeal and any increase in project costs which result from the proceeding. The Town may, at its discretion, require security in the form of bonds, letters of credit, or cash from the appellant to insure performance of the agreement. The appellant and awarded bidder shall be provided with written notice of a hearing on the appeal before the awarding authority. The hearing shall be conducted under rules adopted by the awarding authority for that purpose. The awarding authority shall issue a final decision in writing within ten days after the conclusion of the hearing. Failure to file a timely appeal under the conditions specified herein, or otherwise comply with the provisions of this section, shall constitute a waiver of the right to challenge the bid award. (ORD 95 -03 02- 02 -95) 3.12.250 Informal Bid Purchases of supplies and equipment of an estimated value in the amount specified by Town Council resolution for contract awards on the open market, or less, may be made in the open market pursuant to the procedures set forth below. (ORD 95 -03 02- 02 -95; ORD 2006 -05 10- 05 -06) 3.12.255 Informal Bid Procedure 1. Purchases shall, wherever possible, be based on at least three informal bids, and ' 2. Shall include consideration of the Town preference to local businesses, 3.12.295 below, and 3. Shall utilize "Green Recycle /Reuse" as stated in the 3.12.380, Recycled Product Procurement Policy contained in 3.12.380, and 4. Award of bid shall be awarded to the bidder offering the most advantageous bid to the Town after consideration of price, quality, durability, servicing, delivery time, standardization, and other factors as listed in 3.12.285. 5. A purchase order shall be submitted for approval of bid to the ASD as required in the Purchasing Rules and Regulations, unless a contract is executed. 6. Purchases of motor vehicle fuel for use in Town vehicles may be completed using the informal bid procedures and shall not require a purchase order. 3.12.260 Rejection of Informal Bids Informal bids may be rejected by the department purchasing agent which fail to meet the specific purchase requirements in any respect; or all quotations, for any reason whatsoever, and may invite new quotations. 3.12.270 Notice Inviting Informal Bids The department purchasing agent shall solicit informal bids by written requests to prospective vendors, or by telephone, or by public notice posted on the Town website. 3.12.280 Record of Informal Bids The Administrative Services Department shall keep a written record of all informal bids, with the purchase order, for a period of two years. This record, while so kept, shall be open to public inspection. Page 5 of 9 3.12.285 Award of Purchase Orders 1. Authorized Amount: If two or more quotations are received for the same total amount or unit price, quality and service being equal, and if, at the discretion of the department purchasing agent, the public interest will not permit the delay of inviting new quotations, then the department purchasing agent may accept the lower quotation obtained through negotiation with the persons submitting the tie quotations; 2. Local Vendors: Sellers, vendors, suppliers and contractors who maintain places of business located within the limit of the town shall be given preference if quality, price, service and all other relevant factors are equal as detailed in 3.12.295; or 3. If no quotations are received subsequent to solicitation of such, the department purchasing agent may make the required purchase without further notice. 3.12.290 Exceptions to Competitive Bidding Requirement Notwithstanding any provision of this chapter to the contrary, the competitive bidding provisions of this code may be dispensed with when: 1. The estimated amount to be expended is less than that required for a purchase order to be used. 2. Contracts for professional services provided however, that a request for proposals process for such services shall be used when there are three or more companies to choose from, where such services can vary by company and there is time for the bidding process prior to the needed services. 3. Contracts which by their nature do not lend themselves to award by competitive bidding such as, but not limited to: a) Repairs and /or maintenance of equipment which requires unique skills, abilities, or training. b) Equipment which must be used in order to be compatible with existing Town equipment. c) Perishable goods. d) Insurance where obtaining broker quotes is impracticable. e) Computer hardware, software, and licenses which are uniformly priced or have a standard governmental price. 0 Supplies, materials or equipment which can be obtained at a favorable price as a result of other governmental purchasing programs. g) An emergency is found to exist and documented by the awarding authority which precludes use of the customary bidding process. h) Such other circumstances as the Town Council may determine and document that will result in cost savings greater than those which would result from the use of the customary bidding process. (ORD 95 -03 02- 02 -95; ORD 2006 -05 10- 05 -06) 3.12.295 Preference to Local Businesses (a) Definitions: Local business shall mean any business which regularly maintains an office or place of business within the corporate limits of the Town. • Preference shall mean the reduction factor applied to the bid and /or estimate for low bid /estimate purposes. • Reduction factor shall mean the amount specified by Town Council resolution by which any bid or estimate submitted by a local business may be reduced in the award of a Town bid, contract and /or estimate. (b) Requirements of Preference in the Award of Town Bids /Contracts: • In evaluating any bid and /or estimate, or in otherwise selecting a contractor for any Town contract for which the Town selects a business on the basis of a comparison of the price of bids or estimates, the Town shall provide any local business with the preference specified by Town Council resolution. ' • Page 6 of 9 • Application of the reduction factor in the award of the contract or bid shall not actually reduce the amount ultimately paid by the Town to the successful bidder and /or selected contractor. (c) Exemptions from local business preference: • Bids /contracts to the extent which application of the provisions of this section would be prohibited by State or Federal law or regulation. • An emergency is found to exist and documented by the awarding authority which precludes use of the customary local business preference policy. • Where, for reasons other than price or the amount of a bid or estimate, the Town determines that a bid is unresponsive and /or, that the person, entity or business seeking the Town award is unqualified and /or is not responsible. • Contracts with any single or sole source supplier for supplies, materials, equipment or other personal property. • Supplies, materials or equipment which can be obtained at a favorable price as a result of other governmental purchasing programs . • Contracts for professional and consultant services. • Fuel Purchases 3.12.297 Local Bidder Preference For any Town public works contract which is subject to public bidding requirements, under local or state law, a qualified local contractor shall receive in the evaluation of bids a local contractor's preference factor by which the bid may be reduced to determine the lowest bidder. See current resolutions and /or guidelines for Local Bidder Preference. 3.12.300 Regulations Regarding Selection of Contract Services 1 Repealed. 3.12.310 Surplus Supplies and Equipment All departments with fixed asset inventories shall review their inventory list and submit to the Administrative Services Department, at such times and in such forms as prescribed, reports showing all supplies and equipment which are no longer used or which have become obsolete and worn out. 3.12.320 Surplus Supplies -- Trade - ins The ASD shall have authority to exchange for or trade in on new supplies and equipment all supplies and equipment which cannot be used by any department or which have become unsuitable. 3.12.330 Surplus Supplies -- Sale. The ASD shall have authority, subject to approval of the Town Manager, to dispose of surplus supplies or equipment by auction or by sale or otherwise after receiving bids or proposals which provide the maximum return to the Town. Town employees or officers may participate in the purchase of surplus supplies and /or equipment on the same basis as other members of the general public; provided, however, there is no direct bid involvement or conflict of any kind. (URGENCY ORD 93 -15 06- 03 -93; ORD 93 -19 07- 01 -93; ORD 95 -03 02- 02 -95) Page 7 of 9 3.12.340 Conveying Surplus Personal Property to Charitable, Nonprofit Organizations Notwithstanding the other provisions of this article, the Town Council may convey to charitable, nonprofit organizations surplus property as it is determined by the Town Council that the use to which the personal property will be for the benefit of the general welfare of the community in matters such as recreation, education, aid to the destitute, town beautification, or any other activity in which the Town government may legitimately participate. The Town Council authorizes the Town Manager to convey to charitable, nonprofit organizations surplus property where the value of an individual item is $1,000 or less and which meets the aforementioned criteria relative to community benefit. The organization accepting such personal property shall sign a statement that accepts such property on the condition that it will be used for the purpose designated by the Town; that it shall not be used for any other purpose without the permission of the Town; and that if such property is ever diverted to other than a charitable use, the Town may reclaim such property. (ORD 95 -03 02- 02 -95; 2005 -06 05- 05 -05) 3.12.350 Cooperative Purchasing Programs. Repealed. (ORD 95 -03 02- 02 -95; ORD 2006 -05 10- 05 -06) 3.12360 Credit Card Purchases Purchases with credit cards shall be for gasoline, travel expenses, training seminars and for supplies or services that will not be billed by a vendor. These purchases shall be made by personnel authorized to use the credit card to make purchases within the department approved budget. The operational policy, as established in the Purchasing Rules and Regulations, for the use of all credit cards shall be utilized. (ORD 95 -03 02- 02 -95) (URGENCY ORD 93 -15 06- 03 -93; ORD 93 -19 07- 01 -93) 1 Page 8 of 9 3.12.370 Rule for Non procurement, suspension and debarment from Federal Contracts Prior to contracting for services on projects utilizing Federal Funds the non procurement, suspension and debarment list provided by the Federal Government according to 31 U.S.C. 6101, note, E.O. 12549, E.O. 12689, 48 CFR 9.404, Rule for Non procurement suspension and debarment shall be reviewed to verify the contractor is not included in the list. 3.12.371 Requirements by Other Governmental Agencies and Granting Authorities Prior to contracting for services or purchasing equipment and material which is to be funded by grant or other governmental authority the rules required under the funding agreement will be reviewed and followed to ensure proper compliance with requirements such as prevailing wage. 3.12.380 Recycled Product Procurement Policy 1. It is the intent of the Town Council, based on the adoption of the Green Procurement and Sustainable Practices Policy adopted January 13, 2009, that the Town of Truckee take a leadership role not only in recycling its waste products but also in the purchase of recycled products for use in the delivery of town services. It is the purpose of this section to provide direction in the procurement and use of recycled products unless such products do not perform satisfactorily and /or are unreasonably expensive and /or conflicts with an existing Town policy. For the purpose of this section, recycled materials are defined as any materials (e.g., glass, paper, plastic, etc.) that are separated by type, reprocessed by industrial methods, and used as raw materials for the manufacture of new products. 2. It is the policy of the Town of Truckee to purchase and use recycled products whenever possible to the extent that such use does not negatively impact health, safety, or operational efficiency and to encourage the purchase of products which can be recycled or reused. The priority for purchasing recycled content products shall be as follows: a. The highest percentage of recycled content of post- consumer recovered material available in the marketplace; and b. The highest percentage of "pre- consumer recovered material," available in the marketplace. • 3. The town will purchase and use environmentally preferable product categories as designated in the Green Procurement and Sustainable Practices Policy IV A. Procurement Practices. Page 9 of 9