City of San Mateo, California

PREV. IV.G.1
ISSUED: 10/2/00 /

CITY OF SAN MATEO, CALIFORNIA

POLICY AND PROCEDURES MANUAL

/ Number
IV.G.1
LAST REV:
AUTH: 03/31/04 / SUBJECT
PURCHASING POLICY AND PROCEDURE / Page 1 of 22

I.  PURPOSE:

To define and implement policies and procedures for procurement of goods and services (in conformance with Section 5.21 of the City Charter and Chapter 3.60 of the San Mateo Municipal Code).

II.  POLICY:

The City Council has established by ordinance conditions and procedures for purchases or contracts required by the City. This ordinance requires that the City obtain goods and services consistent with the quality needed for the proper operation of the various departments through the use of quotes and competitive bids whenever possible. It is the intent of this policy to obtain the best value in procurement utilizing a competitive environment. The City Manager, or officer authorized by the City Manager, shall be responsible to execute such purchases or contracts in the manner established by this procedure (See exhibits 1, 2 and 3).

The policy delegates the responsibility for the purchases of supplies equipment, services and public works projects to various officials of the City in accordance with the provisions of this procedure. The following procedures do not preclude departments from having more limiting procedures.

III.  AWARD AUTHORIZATION AND PROCEDURE:

San Mateo Municipal Code (Chapter 3.60) defines the award procedures for purchases and contracts. Within this code, the City Manager has provided to the Department Heads the delegation of award authority up to $50,000. Each Department Head may delegate to a Division Manager an award authority up to $25,000.

A / B / C
DEPARTMENT AWARD / MANAGER AWARD / COUNCIL AWARD
Open Market Procedure / Open Market Procedure / Formal Bid Procedure
Up to $50,000 / $50,001 - $99,999 / $100,000 and greater

A. DEPARTMENT AWARD PROCEDURE (Up to $50,000)

[Please see attached Exhibits 1 (page 4a) and 2 (page 6a) for specific requirements based on the category of procurement]

·  The Department Head award authority between the range of $25,001 to $50,000 may not be delegated on a permanent basis (except in the temporary absence of the Department Head whereby someone is appointed to serve as the acting Department Head due to vacation, travel, etc.)

·  The Department Head award authority up to $25,000 may be delegated to a responsible Division Manager.

·  Department Head awards over $25,000 that require insurance, bonds, and contracts, shall be monitored and filed in the department.

The Department Award Procedure will be utilized for all purchases and contracts of $50,000 or less, as follows:

1.  Purchase Orders are generally used for all purchases that total $10,000 and greater. All purchase orders begin as an electronic requisition. All requisitions shall include the Competitive Pricing/Exemption from Bid document as an electronic attachment. (Please refer to page 10, section F, ELECTRONIC REQUISITIONS/PURCHASE ORDERS & ATTACHMENTS). If in the event of a technical problem with electronic software system, then non-electronic documents will be issued with approval of the Finance Director.

a.  On purchases of $15,000 or less, at least two verbal quotes should be obtained wherever possible (please see glossary for explanation).

b.  On purchases greater than $15,000 and up to $50,000, at least two written quotes should be obtained wherever possible (please see glossary for explanation).

c.  On purchases from $25,000 - $99,999, the Supplemental Purchasing Information document shall be attached to the completed electronic requisition.

·  The Supplemental Purchasing Information form shall contain all the necessary data including type of contract, date of award, names of vendors/consultants, amount of contract, quotations received, exceptions, procedures used, and pre-qualification questions (see page 2b). This information shall be compiled and reported to City Council by Purchasing on a quarterly basis to meet the requirements in 3.60.090. After the requisition has been approved by the Department Head, the Purchasing Division shall review the requisition for compliance and issue a purchase order.

2.  Authorized Purchasing Alternatives

·  These general guidelines are also applicable for both City Manager Award and City Council Award levels.

·  Compatible and Brand Name Products

A provision contained within 3.60.070, Authorized Purchasing Alternatives, (and identified in Exhibit 1, page 4a and Exhibit 2, page 6a), permits the purchase of certain items that either match existing furnishings and/or equipment, or has been identified to provide the best value through some type of performance testing. Departments must have adequate documentation on file indicating the basis of this decision and demonstrate what comparison was performed for purchases of $15,000 and greater. The steps in Exhibit 1 for purchases of less than $15,000 are optional, however, departments may elect to set a more restrictive dollar limit.

·  Other purchasing alternatives include:

-  Use of other public contracts (piggyback contracts) from the State of California and other cities/agencies.

-  Use of professional service major procedures for the design and major construction of city facilities.

3. Pre-qualification of Bidders

·  This process may be used to determine which potential bidders are deemed capable of fulfilling the requirements of a particular purchase or contract. The pre-qualification process shall require at a minimum that prospective bidders answer questions that are contained in a pre-qualification questionnaire. See section 3.60.060 PRE-QUALIFICATION OF BIDDERS for the specific requirements of the pre-qualification process.

4.  Use of Exceptions to the Purchasing Policy provided herein should not occur

frequently and in any case should be reviewed and approved by a Division Manager, the Department Head, or City Manager depending on the Award Level. A purchase order and supporting written documentation in the form of a memo is required:

·  Where any emergency exists affecting or threatening to affect the public health, safety, or welfare;

·  Where calling for bids is impracticable, unavailing, or impossible and the awarding authority based on the amount of the purchase/contract sets forth findings in writing designating the reasons;

·  To funding provided to community service groups (although not required to go before the City Council under the ordinance, departments may go before the City Council as a matter of choice as determined by the Department Head and City Manager);

·  To contracts with other governmental agencies (the City Manager will evaluate on a case by case basis to determine whether they are placed on the City Council agenda);

·  Other exceptions include agreements for the preparation of documents, studies or reports that are wholly funded by private persons.

5.  Blanket Purchase Orders. This type of purchasing is available whereby vendors

have consistently provided favorable pricing and/or service. Departments can

elect not to encumber funds with this type of purchase order. (Please refer to page 15, section VIII for details).

6.  Petty cash funds may be used for purchase of items costing $500 or less. (See Procedure IV.A.7)

7.  Stores Requisitions can be used to obtain supplies (office, janitorial, electrical,

safety, etc.) maintained in inventory at the Central Warehouse.

8.  A departmental checklist example is attached on page 22. This is an optional document to assist departments in the administration of purchasing and may be modified to meet the particular needs of the department.

B.  MANAGER AWARD PROCEDURE ($50,001 - $99,999)

[Please see attached Exhibit 2, page 6a for specific requirements based on the category of procurement]

1. The Manager Award Procedure will be utilized whenever the expenditure involved is within the range of $50,001 - $99,999. The Supplemental Purchasing Information document shall be attached to the requisition and forwarded to the City Manager for review and approval. An administrative memo obtaining approval from the City Manager is an acceptable alternative. After approval from the City Manager, the Purchasing Division shall review the requisition for compliance and issue a purchase order.

·  This City Manager award authority may not be delegated, except in the City Manager’s absence, whereby that authority may be delegated to the Deputy City Manager.

·  Upon City Manager approval, the City Manager may delegate to the Department Heads the authority to execute all implementing contracts and documentation.

·  City Manager awards requiring insurance, bonds, and contracts, shall be secured by the department and forwarded to the City Clerk’s office for monitoring. (See page 16, item X. Insurance and Bonds)

·  The Supplemental Purchasing Information attachment or alternative memo shall contain all the necessary data including type of contract, date of award, names of vendors/consultants, amount of contract, quotations received, exceptions, procedures used, and pre-qualification questions. This information shall be compiled and reported to City Council on a quarterly basis to meet the requirements in 3.60.090.

2.  Authorized Purchasing Alternatives

·  The purchasing alternatives that are outlined under the Department Head Award, are available for the City Manager Award (see page 3, item 2).

3. Pre-qualification of Bidders

·  The pre-qualification process that is outlined under the Department Head Award, is available for the City Manager Award (see page 3, item 3).

4. A departmental checklist example is attached on page 22. This is an optional document to assist departments in the administration of purchasing and may be modified to meet the particular needs of the department.

5.  Use of Exceptions to the Purchasing Policy provided herein should not occur frequently and in any case should be reviewed and approved by a Division Manager, the Department Head, or City Manager depending on the Award Level. A purchase order and supporting written documentation in the form of a memo is required:

·  Where any emergency exists affecting or threatening to affect the public health, safety, or welfare;

·  Where calling for bids is impracticable, unavailing, or impossible and the awarding authority based on the amount of the purchase/contract sets forth findings in writing designating the reasons;

·  To funding provided to community service groups (although not required to go before the City Council under the ordinance, departments may go before the City Council as a matter of choice as determined by the Department Head and City Manager);

·  To contracts with other governmental agencies (the City Manager will evaluate on a case by case basis to determine whether they are placed on the City Council agenda);

·  Other exceptions include agreements for the preparation of documents, studies or reports that are wholly funded by private persons.

C.  COUNCIL AWARD PROCEDURE ($100,000 and greater)

[Please see attached Exhibit 3, page 9a for specific requirements based on the category of procurement]

1. Authorized Purchasing Alternatives

·  The purchasing alternatives that are outlined under the Department Head Award, are available for the City Council Award (see page 3, item 2).

2. Pre-qualification of Bidders

·  The pre-qualification process that is outlined under the Department Head Award, is available for the City Council Award (see page 3, item 3).

The Council Award Procedure will be utilized for all purchases, contracts or agreements $100,000 and greater as follows:

1.  The initiating department may review and select the appropriate category of procurement from the matrix in Exhibit 3, page 9a and follow the necessary steps for:

a.  Public Legal Notice

b.  Specifications or Description of Needs

c.  Sealed Bids

d.  Administrative Report to City Council

2.  The initiating department will forward to the City Clerk at least 14 days prior to the date and time set for opening the bids, a copy of the approved “Notice Inviting Sealed Proposals”.

3.  The City Clerk will publish the notice at least once in the official newspaper a minimum of five days prior to the date and time set for opening bids.

4.  The initiating department may release the approved notice to reach other interested parties by mail or electronic means and do further advertisement etc. to coincide with the official publication.

5.  All formal bid openings will normally be set at a time and location specified in the notice.

6.  Bids received after the specified opening time will be returned to the bidder unopened provided that bids received prior to the opening of the first bid will be considered timely, and will be opened, read and considered in conjunction with other timely bids.

7.  The City Council has established a policy relative to single bid items. (Procedure IV.G.7) In the event only one bid is obtained, the initiating department will consult with City’s Finance Director and may exercise the option to extend the bid period by up to 30 days without opening the sealed bid submitted, to allow for additional bids. If the determination is made to open the sole original bid, or if no additional bids are received during the bid extension, the Council may choose another procedure, readvertise, order the work done by City employees, award the contract to the sole bidder based on a cost analysis evidencing the relationship of the one bid to expected market price; or negotiate a contract to the best advantage of the City. [See IV.G.7 – Single Bid Items]

8.  The City Manager – or his representative will, at the time and place specified in the “Notice Inviting Sealed Proposals,” publicly open and declare the content of bids received. Bid results will be made available to all interested parties as soon as possible following the reading.

9.  The initiating department will submit an administrative report to the City Manager for presentation to the Council. The report will give the results of the bidding and will recommend appropriate action to be taken by the Council.

10.  The Council as the awarding authority will determine the outcome of the bids and will declare the results at a public session.

·  Upon City Council approval, the City Manager may delegate to the Department Heads the authority to execute all implementing contracts and documentation.

D.  EXCEPTIONS (for Council Award bidding and advertising)

Requirements for formal competitive bid and advertising will not apply, however a purchase order and supporting documentation is required:

1.  where any emergency exists affecting or threatening to affect the public health, safety, or welfare;

2.  where calling for bids is impracticable, unavailing, or impossible and the awarding authority based on the amount of the purchase/contract sets forth findings designating the reasons;

3.  to the placement of insurance coverage;