CHAPTER 1 – OVERVIEW
PURCHASING MANUAL
11/1/2005
CHAPTER 1 – OVERVIEW
CHAPTER 1, SECTION 1. Purpose and Policy Statement
1-1.1. Purpose:
The purpose of these policies is to provide the City of Thousand Oaks a means of assuring continuity and uniformity in its purchasing practices, and to define responsibilities of the Purchasing Division and operating departments.
1-1.2. Policy Statement:
1-1.2.1 The policies contained herein are promulgated under the authority of Title 3, Chapter 10 of the Thousand Oaks Municipal Code.
1-1.2.2 The Purchasing Division is charged with the responsibility and authority for coordinating and managing the procurement of the City's supplies and general services, equipment and special equipment/supplies (§3-10.101).
1-1.2.3 Policies outlined herein are to be adhered to by the Purchasing Division and operating departments when procuring supplies, general services, equipment, and special equipment/supplies.
1-1.2.4 The purchase of supplies, general services, equipment, and special equipment/supplies which are included within the specifications of a "Public Works" construction project are subject to the regulations contained in the Public Contract Code Section 22000 et seq., and the Uniform Public Construction Cost Accounting Act (§3-10.301). Public Works/Construction procedures are outlined in Chapter 3 of this manual.
1-1.2.5 The award of Professional General and Consultant Services are subject to regulations in California Government Code Section 4525-4529 and outlined in Chapter 4 of this manual. The policies and administrative procedures governing contracting for such services are outlined in Chapter 3 of this manual and §3-10.401 of the Municipal Code.
CHAPTER 1, SECTION 2. Responsibilities of Purchasing Division
1-2.1 The Purchasing Division is responsible for the procurement of supplies, general services, equipment, and special equipment (which are not included within a construction contract); establishing and administering purchasing policies and procedures; and for the management of surplus City property. To perform these functions efficiently and assist operating departments, the Purchasing Division shall:
1-2.1.1 Recommend the execution of contracts or the purchase of supplies, general services and special equipment and supplies.
1-2.1.2 Keep informed of the current developments concerning purchasing, prices, market conditions and new products and recommend revisions to purchasing procedures when necessary.
1-2.1.3 Prescribe and maintain all forms and records necessary for the efficient operation of the purchasing system.
1-2.1.4 Supervise and coordinate the process with operating departments for the inspection of all supplies, general services and special equipment and services purchased under Section 3.10 of the Municipal Code, to assure conformance with City specifications.
1-2.1.5 Supervise the transfer of surplus and unused supplies and equipment or sale or disposal of such.
1-2.1.6 Maintain an up-to-date bidder list, vendors’ catalogs, files and such other records as needed to perform these duties. Coordinate vendor relations, locate sources of supply, maintain vendor listing, and evaluate and document vendor performance.
1-2.1.7 Assist operating departments with research and recommendations in developing specifications; review specifications for completeness of information and ensure that purchasing specifications are open and non-restrictive to encourage full competition.
1-2.1.8 When in the best interest of the City, maintain or coordinate the maintenance with operating departments of a supply (Central Stores/Warehouse) of commonly used items in quantities sufficient to satisfy the needs of the City.
1-2.1.9 Identify, evaluate and utilize purchasing agreements that best meet the needs of the City (i.e., cooperative purchases, blanket purchase orders, contractual agreements, etc.).
1-2.1.10 Perform such other tasks as may be necessary for the proper conduct of purchasing supplies, general services and equipment (§3-10.201).
1-2.2 The Purchasing Officer (Purchasing Supervisor in the Purchasing Division) is the designated representative of the City Manager (§3-10.102 (h)). When there is reference to the Purchasing Officer, it refers to the Purchasing Supervisor and staff, not the City Manager. When there is reference to the City Manager, it refers to the City Manager, not the Purchasing Officer. The Purchasing Officer shall:
1-2.2.1 Be charged with the responsibility and authority for coordinating and managing the procurement of the City's supplies, general services, equipment, and special equipment according to these policies.
1-2.2.2 Negotiate, purchase and contract for supplies, general services, equipment, and special equipment/services in accordance with the City of Thousand Oaks Municipal Code and the policies prescribed herein.
1-2.2.3 Purchase or contract for the City the needed general services, supplies, equipment, and special equipment/services from the lowest responsive and responsible bidder.
1-2.2.4 Ensure full and open competition on all purchases; if sole source, ensure proper documentation is on file signed by the requesting Department Director.
1-2.2.5 Ensure that there exists an unencumbered appropriation in the fund account against which any purchase is to be charged, except in cases of urgency as described in Municipal Code Section 3-10.209.
1-2.2.6 Makes purchase award recommendations to the appropriate authority.
CHAPTER 1, SECTION 3. Responsibilities Of Operating Departments
Operating departments are charged with the following responsibilities in the purchasing process:
1-3.1 Provide at the beginning of each fiscal year, an updated authorized signature list to the Finance Director designating those individuals who are delegated the authority to make purchases pursuant to the policies and procedures as described herein. The authorized signature list shall be included in the City of Thousand Oaks Approval Guide that is updated and distributed periodically.
1-3.2 Departments may purchase a contract for specified and limited supplies, equipment, special equipment/supplies and services independently of the Purchasing Officer of a value less than Five Thousand and no/100ths ($5,000.00) dollars, provided such department keeps a record of such purchases and exercises reasonable prudence in seeking price quotes and purchasing such items. All such purchases shall be made with funds in an unencumbered appropriation.
1-3.3 Communicate and coordinate all purchases ($5000 and over) with the Purchasing Division.
1-3.4 Anticipate requirements sufficiently in advance to allow the Purchasing Division adequate time to obtain goods in accordance with the best purchasing practices.
1-3.5 Ensure that there exists an unencumbered appropriation in the fund accounts against which any purchase is to be charged.
1-3.6 Inspect all supplies, general services and special equipment and services purchased to assure conformance with City specifications.
1-3.7 Provide detailed, accurate specifications to ensure goods obtained are consistent with requirements and expectations.
1-3.8 Submit to the Purchasing Officer a requisition on the Purchasing Officer’s approved form prior to initiating any procurement (§3-10.202). Prepare requisition in accordance with instructions to minimize the processing effort.
1-3.9 Inform Purchasing of any vendor relations problem, shipping problems (i.e., damaged goods, late delivery, wrong items delivered, incorrect quantity delivered, etc.) and any situations which should be brought to the attention of Purchasing.
1-3.10 Minimize urgent and sole source purchases and provide written documentation signed by the Department Head when such purchases may be necessary.
1-3.11 Follow the bidding limits and guidelines as established by the Municipal Code.
1-3.12 Assist Purchasing with the review of all bids received for compliance with specifications, and provide Purchasing with written documentation regarding findings. After Purchasing’s review, prepare a recommendation to City Council for award of the bid.
1-3.13 Notify vendors of purchase award when authorized by Purchasing Officer.
CHAPTER 1, SECTION 4. Unauthorized Purchases
A purchase order is required for all purchases of $5,000 and over. An exception to this would be for urgencies as defined in the Municipal Code (§3-10.209).
1-4.1 Unauthorized purchases are void and not considered an obligation of the City.
1-4.2 Invoices without an authorized purchase order may be returned to the vendor unpaid.
1-4.3 The person ordering the unauthorized purchase may be held personally liable for the costs of the purchase or contract.
1-4.4 Purchase orders shall be issued to a vendor when ordering supplies and services and not "after the fact" for work already done or materials already ordered.
1-4.5 The Purchase of special equipment may be made by a separate written contract approved by the City Attorney and the Purchasing Officer (§3-10.203).
CHAPTER 1, SECTION 5. Vendor Relations
1-5.1 It is to the City's advantage to maintain and promote good relations with suppliers of goods and services. Purchasing and operating department staff shall conduct their dealings with vendors in a professional manner and shall promote equal opportunity and demonstrate fairness, integrity, and courtesy in all vendor relations.
1-5.2 The Purchasing Office maintains a lists of registered vendors for purchases of goods and services. A list of registered vendors can be obtained by commodity and sub-commodity code from the Purchasing Office.
1-5.3 Operating departments may make direct contact with vendors for such purposes as obtaining price quotes (less than $30,000), developing service contracts, utilizing RFP/Q’s, obtaining technical information, obtaining cost estimates for budgeting or purchasing purposes, for preparing purchase requisitions and for placing orders for authorized purchases. The Purchasing Division will be the main contact in bid situations. The Purchasing Division will normally serve as an intermediary between operating departments and vendors when requested by the operating department and in conflict resolution situations.
CHAPTER 1, SECTION 6. Purchasing Methods
The following policies are established to provide methods for purchasing supplies, general services, equipment and special equipment/supplies. As defined in Section 3-10.102(g) of the City's Purchasing Ordinance, "purchase" shall include renting, leasing, purchasing, licensing, or a trade of equipment or supplies.
1-6.1 Purchase Order
1-6.1.1 Purchases of supplies, general services, special equipment/supplies, general equipment and construction contract or public work specification of $5,000 and over shall be made by purchase orders issued by the Purchasing Officer, appropriate documentation on scope of work and contracts are required as part of the purchase order.
1-6.1.2 The purchase of special equipment may be made by a separate written contract approved by the City Attorney and Purchasing Officer (§3-10.203).
1-6.1.3 Exemptions from purchase order include:
Utility Payments
Grants
Payments to Other Governmental Units
Law Suit Settlement payments
1-6.1.4 Except in cases of urgency, the Purchasing Officer shall not issue any purchase order, authorize the execution of any contract, or enter into any contract for purchasing of supplies, services or equipment, unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged (§3-10.204).
1-6.1.4.1 Operating Departments shall verify the existence of an unencumbered appropriation prior to submitting Purchase Requisitions to Purchasing.
1-6.1.5 Operating Departments shall supply support documentation to the Purchasing Division when requesting a purchase order indicating bidding process they followed and a copy of the contract for professional, consulting and general services.
1-6.2 Purchase Order Changes
A purchase order is a contract between the City and a vendor. Any substantial change to a purchase order shall be documented on a change order form initiated by the operating department. Change orders shall be reviewed by the Purchasing Division and shall be approved by the Purchasing Officer.
1-6.2.1 Equipment/Supplies – Allowable Changes
Three quotes or bids are normally obtained prior to purchasing equipment or supplies of $5,000 and over; therefore, change orders involving price changes or additional cost should be rare. The last payment against a purchase order that does not increase the purchase order total by more than $1,000 can be processed without obtaining a change order.
A change order can be obtained for the following reasons:
1. Adding any item or aggregate of items as long as the total change order is more than $1,000.
2. Complete cancellation of an order, providing cancellation is approved in advance by Purchasing.
a. Cancellation of certain items on the purchase order, usually due to their unavailability or because of unacceptable back orders.
b. Changing delivery point or delivery date.
c. Correcting errors in the original purchase order.
d. Changing size, color quantity, etc. when unit price is not affected.
e. Changing vendor information (name, address, etc.)
Taxes, shipping and handling charges that do not increase the purchase order total by more than $1,000 do not require a change order form; every effort should be made to include such items on the purchase order.
1-6.2.2 General Services – Allowable Changes
Change orders are allowed; however, accumulative change orders plus original purchase order cannot exceed the authorization level for which the original purchase order was issued without Council authorization. (For example, a $1,000 change order/orders to an original purchase order of $29,000 brings the total cost of services to the $30,000 threshold and City Council approval is needed. Further, City Council approval of a contract amendment is required if change order exceeds the contract “not-to-exceed” amount. Refer to Chapter 3, Section 6 for further detail.)
1-6.2.3 Consultant Services – Allowable Changes
1-6.2.3.1 Change orders are appropriate only if within the original scope of contracted services. If a major change in scope of work occurs for services less than $30,000, a new contract and purchase order is required based on appropriate approval. For major changes in scope of work with a cost of $30,000 or over, a new RFP/Q process or waiver from City Council is required.
Prequalified vendors for individual projects less than $30,000. At the beginning of the fiscal year, if a department plans to do similar work throughout the City, the department can go out for an RFP/Q to prequalify different consultants for the subject work. Once the RFP/Q has been conducted, ongoing work can be awarded to the same consultant for various projects or a list can be established of qualified consultants and can be given to any consultant on the list. A new purchase order, a new contract or contract amendment and appropriate approval will need to be obtained for each project. A change order in this case would not be appropriate.
1-6.2.3.2 The original purchase order plus accumulative change orders cannot exceed the authorization level, solicitation requirements or planned budget for which the original scope of work and consultant selection process were undertaken without benefit of an appropriate consultant selection process and Council authorization. Anticipation of overall and complete scope of work for consultant services is necessary to ensure the correct selection process.
1-6.2.3.3 Budget must be in place to cover change orders.
1-6.2.3.4 A change order to a purchase order obtained without an RFP/Q process may not be processed if accumulative amount of work equals $30,000 or more.