City of Mountlake Terrace. Purchasing Policies and Procedures

Transcription

1 City of Mountlake Terrace Purchasing Policies and Procedures supersedes November 2000 versiondecember 1, 2011 version effective December 1, 2011TBD

2 TABLE OF CONTENTS Glossary of Terms 1 Purpose and Statutory Authority 3 Section 1.0 Small Purchase Procedures Less Than $15,00039, General Solicitation 4 Section 2.0 Purchases Exceeding $15,00040,000 Competitive Bidding Procedures General Solicitation of Bids Opening of Bids Evaluation of Bids Rejection of Bids Award of Contract Completion of Competitive Bidding Process Cooperative Purchasing Special Market Conditions Sole Source Procurement Urgent and Emergency Procurement Leases 12 Section 3.0 Sustainability Buy Recycled Energy Saving 13 Section 4.0 Computer and Telecommunication Equipment, Software and Services Competitive Negotiation 13 Section 5.0 Professional Services Contracts General Architect and Engineers Revisions or Amendments to Professional Services Contracts 14 Section 6.0 Public Works and Improvements General Meaning of Public Work Cost of a Public Works Project Breaking a Public Works Project into Segments Public Works or Improvements under $5, Public Works or Improvements of Estimated Cost Less Than $40,000 (single craft) and $65,000 (multiple crafts) Public Works or Improvements of Estimated Cost Greater Than $40,000 (single craft) and $65,000 (multiple crafts) Emergency for the Execution of a Public Work Project 17

3 6.9 Performance Bond Retained Percentage Change Orders on Public Works Projects 18 Section 7.0 Contract Administration and Close Out System Purchase Order Contractor Performance Progress Reports Payments Acceptance of Work Documentation 19 Section 8.0 Procurement Records General Access to Records Contractor Records 20 Section 9.0 Contract Provisions General Basic Contract Requirements Contract Preparation 20 Section 10.0 Purchase Orders General Open Purchase Orders 22 Section 11.0 Request for Payment General Procedure Recurring Accounts Payable Direct Expenditures (Hand Issued Manual Checks) Petty Cash Budget Amendments Expenditure Approval List 23 Section 12.0 Vendor Contact Procedure 24 Section 13.0 Accounting Procedures 25 Section 14.0 Required Approval Review and/or Responsibilities Related to the Procurement Process 25 Section 15.0 Capital Asset Procedures Capital Assets Capitalization Threshold for Tangible Assets Capitalization Threshold for Infrastructure Assets Depreciation Asset Control Asset Verification/Inventory 27

4 Section 16.0 Small and Attractive Assets General Policy 28 Section 17.0 Surplus Property General Procedure Methods of Disposition 29 Attachment A Contract Approval Requirements for Approval of Supplies, Materials or Equipment, as well as Computer and Telecommunications Purchases 30 Attachment B Contract Approval Requirements for Professional Services 31 Attachment C Contract Approval Requirements for Public Work Projects 32 Attachment D Contract Change Order Approval Requirements 33 Exhibit 1 Cost of Project or Purchase at which Competitive Bids are required by Statute 34

5 GLOSSARY OF TERMS The following are definitions for terms as used in this document, unless the context requires otherwise. ADDENDUM. Something added and/or supplemented. For example, an addendum is usually used when a Request for Bid requires clarification to the original published document. AMENDMENT. Correction and/or alteration. For example, an amendment is usually used to extend the term of a contract. BRAND-NAME PRODUCT. Product whose manufacturer is identified on the product or on the package. CHANGE ORDER. A written order authorizing a change in either plans, specifications, or quantities within the scope of the original contract. CITY. The City of Mountlake Terrace, a code city of the State of Washington. CONTRACT. Agreement between two or more competent persons to perform or not to perform a specific act or acts. A purchase order, when accepted by a vendor, becomes a contract. Acceptance may be either in writing or by performance. However, if a purchase order requires acceptance in writing, it must be thus accepted. COMPETITIVE BIDDING. The issuing of invitations to bid which follow the formal process for advertising, bid and bid opening required by State law. CRAFT, SINGLE. The use of only one trade or craft in the completion of a project. EMERGENCY PURCHASE. A purchase made in response to unforeseen circumstances beyond the control of the City when there exists a threat to public health, welfare, or safety, or where the City may suffer a substantial monetary loss by reason of the time required to follow regular purchasing procedures. LEASE. A contract conveying from one person (lessor) to another (lessee) real estate or personal property for a term in return for a specified rent or other compensation. NATURAL DISASTER. A danger beyond the control of or avoidance by human power; any accident produced by a physical cause, which is irresistible, such as an earthquake, flood or lightning, and is in no way connected with negligence. ORDINARY OR ROUTINE MAINTENANCE. A repetitive repair activity of limited extent and limited life to keep a building, infrastructure, machinery, facilities, etc. in a good state of repair, rather than major rehabilitation. Examples may include: replacing a section of carpeting at City Hall; cleaning debris out of a storm drain; regular periodic tree trimming; minor asphalt overlay - small street section; street re-striping; or repairing a section of fencing at a ballfield. RESPONSIVE BIDDER. A person or leagallegal entity who has submitted a bid conforming in all material respects to the terms and conditions, specifications and other requirements in a request for bids. RETAINED SPECIALIST AGREEMENT. A contract, or any amendment or renewal thereto, with an independent contractor for the rendering of personal services to the City. PREVAILING WAGE. The rate of hourly wage, usual benefits and overtime paid in the locality for the majority of workers, laborers, or mechanics, in the same trade or occupation. Major Public Works Maintenance is subject to Prevailing Wage. An example would be the recarpeting of the entire city hall, or sidewalk repair performed over a long period of time, i.e., an annual contract, or project of large scope. 1

6 PROFESSIONAL SERVICE AGREEMENT. An agreement for services where the work provided is mental in nature, as opposed to physical labor. The product produced is generally not tangible, e.g., legal services, or consulting services. PROJECT. A specific plan or task with clearly defined limits. PUBLIC WORK. Work including all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of any municipality, or which is by law a lien or charge on any property therein. PURCHASE ORDER. A contractual document, with controlled numbering, and specific terms and conditions, issued by Finance to a vendor for the procurement of supplies, materials, equipment, or services. QUOTES. A process through which written or electronic quotes are solicited from suppliers and vendors for equipment, supply and material contracts with total estimated costs below the bid limits. RECYCLABLE PRODUCT. A product which is manufactured of materials that can be recycled into a different product, e.g., aluminum, paper, or glass. RECYCLED PRODUCT. A product that is made of materials that have been recycled from a previous use. REQUEST FOR BID (RFB). The solicitation of competitive offers in which specification, price and delivery, (or project completion) will be the predominant award criteria. REQUEST FOR PROPOSAL (RFP). The solicitation of competitive proposals, or offers, to be used as a basis for making an acquisition, or entering into a contract when specification and price will not necessarily be the predominant award criteria. REQUEST FOR QUALIFICATIONS (RFQ). The solicitation or statements of qualifications and performance data from architects, engineers, architectural landscaping, and consulting/professional firms. This process is used in conjunction with firms performing professional services for the City pursuant to Chapter RCW. RESPONSIBLE. The ability, capacity, and skill of the contractor to perform; the character, integrity, experience, and reputation of the contractor; the quality of past performance on similar contracts; whether performance can meet the time specifications; and such other information having a bearing on the decision to award a contract. RESPONSIVE. Conforming in all material respects to the specifications and instructions. SERVICE. Work performed to meet a demand, especially work that is not connected with manufacturing a product or a public work. Services are more fully defined as ordinary maintenance activities, including repair activities of limited extent and limited life necessary to keep a building, infrastructure, or machinery in a state of good repair, not major rehabilitation. Plant services, street sweeping and one-time rather than on-going activities may not be subject to prevailing wage. (or as currently defined in WAC SERVICE CONTRACT. A contract that calls primarily for a contractor s time and effort rather than for an end product. SMALL WORKS ROSTER (SMW) A process through which there is competition following notification to some or all public works contractors listed on the roster. SYSTEM PURCHASE ORDER. A purchase ordered entered into the accounting system by purchasing directly. All General Fund purchases over $1,000 shall be issued using System Purchase Orders. All other funds have the option of using System Purchase Orders for purchases that exceed $5,000 and field purchase orders for under $5,000. 2

7 PURPOSE AND STATUTORY AUTHORITY PURPOSE: These policies and procedures establish the manner in which the City of Mountlake Terrace procures the materials, supplies, services, equipment, and public works and improvements necessary for a fully functioning municipal government. It is the department director and/or division manager s responsibility to determine when and if higher mandates take precedence. Decentralized purchasing at the City of Mountlake Terrace is designed to meet the following goals: 1. To ensure compliance with State and local laws/regulations pertaining to City purchases. 2. To protect and advance the public interest by providing for the fair and equitable treatment of all persons involved in the purchasing process. 3. To provide a uniform and good procurement system for all departments to acquire goods and services. 4. To assist City departments in obtaining timely, efficient, and cost effective procurement of goods and services. To accomplish these goals, City departments, in conjunction with Finance are authorized by the City Manager to buy or make commitments on the City s behalf. It is the Department Director s responsibility to insure that these procedures are being followed for their respective department s purchasing requirements. REAL ESTATE: This policy does not apply to the purchase of real estate. FEDERAL FUNDS: When a purchase involves the expenditure of federal funds, purchasing shall be conducted in accordance with any applicable federal law or regulation. GRANTS: Nothing in this policy shall prevent the City from complying with the terms and conditions of any grant, gift, or bequest, which is otherwise consistent with law. RESPONSIBILITY FOR PURCHASING: The Finance Director in the capacity as the City s Chief Financial Officer shall be responsible for administering this policy except where otherwise provided. The Finance Director may designate a member of his/her staff who shall, administer this policy. The duties and responsibilities designated in this policy to be performed by the Finance Director shall be performed under the direction of the City Manager or his or her designee. In accordance with this policy, the Finance Director shall: 1. Coordinate with departments to purchase all materials, supplies, equipment and nonprofessional services and award of all public works and improvement contracts by the City; 2. Sell, trade, or otherwise dispose of surplus personal property belonging to the City. The City Manager shall be responsible for the disposal of real property; and 3. Establish and maintain programs for specification development, contract administration, and inspection and acceptance, in cooperation with City Departments using the items purchased. 4. Ensure that the contract review process occurs. 3

8 INSURANCE REQUIREMENTS: The City s Risk Manager shall determine liability and property damage insurance requirements for any contract entered into by the City under this policy. The Risk Manager shall determine coverage requirements, limits of liability, necessary endorsements, and other matters relating to insurance. UNAUTHORIZED PURCHASES: Except as provided in this policy and except as authorized by operational procedures (i.e., travel, petty cash, etc.), no City employee shall purchase or contract for any material, supplies, or equipment or make any contract outside the purview of this policy. Any purchase or contract made contrary to the provisions hereof shall not be approved by any City officer and the City shall not be bound thereby, except as may be required or provided by law. All employees authorized to purchase goods and services, or request field or system purchase orders must sign an authorization form approved by the Department Director. The Authorization List will be maintained by the Finance Department. AUTHORITY: These procedures are authorized by: State Constitution VIII, Section 7 - Credit not to be loaned RCW Code City less thanover 20,000 population RCW Public Works RCW Registration, licensing of contractors RCW Contractor s Bond RCW Alternative Public Works Contracting Procedures RCW Prevailing Wages on Public Works RCW Emergency Public Works RCW Personal Service Contracts RCW Contracts-Indebtedness Limitations-Competitive Bidding Violations RCW Interlocal Cooperation Act RCW Architect & Engineering Services RCW Code of Ethics for Municipal Officers-Contract Interests RCW Lien for Labor, Materials, Taxes on Public Works 1.0 SMALL PURCHASE PROCEDURES less than $15,00039, GENERAL. Any purchase of materials, supplies, services (except Public Works & Improvements see Section 6.0, and Professional Services see Section 5.0), and equipment that will not exceed $7,50039,999 may be procured using the following procedures. Spreading purchases out over several months or making separate single purchases circumvents the policies set forth below and is not authorized. 1.2 SOLICITATION Purchases of $2,500 or less. Items costing $2,500 or less (including freight, and tax) may be purchased without soliciting multiple quotes. However, it is recommended that staff solicit three quotes as time allows, to ensure efficient use of public funds. Solicitation can be conducted using either phone quotes, fax quotes, written mailed, or quotes. 4

9 1.2.2 Purchases between $2,500 and $7,50014,999. Departments should solicit no less than three businesses to submit written or oral quotes for small purchases between $2,500 and $7,50014,999. The same solicitation methods as described above in also may be used for this expenditure level. The Department Director will determine the award of the purchase order to the vendor that he/she determines to have submitted the lowest, responsive, responsible quote. If the purchase using General Funds exceeds $1,000, the Department Director shall request a purchase order on the accounting system, and forward to Finance for printing. Purchases under $1,000 may be entered into the Department s Field Purchase Order Books. For other funds, purchases under $5,000 may be entered into the Department s Field Purchase Order Books Between $7,50015,000 and $15,00039,999. Departments shall solicit no less than three businesses from the City s Vendor List to submit written quotes in accordance with the Request for Quotation form. Prices quoted are recorded on a purchase order, and copies of quotes received are retained by the departments. (See Section 12.0) Awards to other than business submitting lowest quote. When the award for a small purchase is not given to the vendor submitting the lowest quote, a statement of the reasons for placing the order elsewhere will be prepared by the department responsible for soliciting quotes. The department will then forward the statement to Finance, for inclusion with the copy of the purchase order, filed with accounts payable Rejection of quotes. Should the Finance Director determine it to serve the public interest, he/she may reject all quotes or parts thereof, upon concurrence with the Department Director. The reason for the rejection of such quotes will be included in the records of the transaction. 2.0 PURCHASES EXCEEDING $15,00040,000 - COMPETITIVE BIDDING PROCEDURES 2.1 GENERAL. Any purchase of materials, supplies, services, and equipment where the cost thereof exceeds $15,00040,000, including freight, and tax, may be procured by following the procedures below. A purchase will not be split and/or broken into segments to avoid any provisions herein. ALTERNATIVES. State Contracts, Interlocal Purchasing Agreements, and Cooperative Purchasing Agreements may be used for the purchase of materials, supplies, services, and equipment where the cost exceeds $15,00040,000 without further bidding See section SOLICITATION OF BIDS Request for bids ( RFBs ). The Finance Director in cooperation with Department Directors will ensure that adequate Requests For Bids ( RFBs ) are prepared that clearly define the item, project, or service needed in order for bidders to properly respond to the invitation. Such RFBs shall be on file with the City and open to public inspection. 5

10 The requesting department shall prepare a request for bids, specifying at a minimum: 1. Item(s) or services to be purchased. 2. Specifications, if appropriate. 3. Delivery time requirements. 4. Point of delivery for materials or services. 5. Terms of payment, if appropriate. 6. Time period in which the vendor must respond Public notice. The City Clerk in cooperation with the requesting department will ensure adequate public notice is given by publishing a solicitation at least twice - once each week for two consecutive weeks - in a newspaper of general circulation throughout the city and other trade publications as deemed appropriate by the requesting department. It is suggested that RFBs be listed on the City s web page as well. The solicitation will invite bids and state the method by which RFBs may be obtained and/or examined. The public notice will include the date and time of bid opening. In addition, copies of the RFB should be available at the City as the requesting department deems appropriate Bidding time. RFBs shall allow sufficient time to permit prospective bidders to prepare and submit bids, generally thirteen (13) days from the date of first publication to the date of bid submission. If necessary, the requesting department may determine an alternate timeline with concurrence of the Finance Director Amendment of RFB. If, after the issuance of an RFB but before the time set for submitting bids, it is necessary to amend any part of the RFB (including drawings and specifications), such amendments or addenda shall be sent, via fax or any other electronic communication, to each firm to whom an RFB has been furnished and to each public place and other locations maintaining the RFB, in sufficient time to permit all prospective bidders to consider such information in submitting or modifying their bids. In addition, any information given to a prospective bidder concerning an RFB must be furnished promptly to all other prospective bidders, as an amendment or addendum to the RFB, if such information is necessary to bidders in submitting bids or if the lack of information would be prejudicial to uninformed bidders Bid submittal. The RFB will provide that the City must receive bids no later than the exact time and date set forth in the RFB, including any amendments or addenda, in order to be considered responsive to the RFB. Any bids received after the stated bid submittal time will not be considered responsive to the RFB, and will be returned to the bidder, unopened. 6

11 2.2.6 Bid correction or withdrawal; cancellation of awards. The RFB will provide that bids received in the office designated in the RFB may be modified or withdrawn by written notice not later than the exact time set for submitting bids. A bid may be withdrawn prior to the exact time set for bid submittal in person by a bidder or their authorized representative, provided that his/her identity is made known and he/she signs a receipt for the bid. Any modifications of bids received after the stated bid submittal time shall not be considered. All decisions to permit the correction or withdrawal of bids after bid opening or to cancel awards or contracts based on mistakes will be made by the City Manager or his/her designee Bid responsiveness. To be considered for award, a bid must comply in all material respects with the essential requirements of the RFB both as to the method and timeliness of submittal and the substance of the resulting contract. Bids will be completed, signed, and submitted in accordance with the instructions contained in the RFB. To assure uniformity, bidders should use only the bid forms provided by the City Bid solicitation records. For each RFB issued by the City shall retain a record that includes: a copy of the RFB; an affidavit of publication; copies of any addenda to the RFB; the names and addresses of all prospective bidders to whom the RFB was distributed and the date thereof; and any other information prepared or received during the bidding time relevant to the solicitation procedures. This record shall be available for public inspection and should be available for review by staff at the time of subsequent RFBs for the same or similar items. 2.3 OPENING OF BIDS Bid opening. At the place, date, and time set forth in the RFB, including any amendments or addenda, all bids received in accordance with the bid submittal requirements in the RFB will be publicly opened and read aloud by the requesting department or City Clerk to those persons present. Any bids received after the time and date set forth in the RFB will be returned to the bidder, unopened. The original of each bid will be carefully safeguarded until a record of the bids has been made and its accuracy verified by the requesting department Bid record. After the bid opening, the following information will be entered into a record: the contract number and/or title; the bid opening date; a general description of the services requested; names of bidders; prices bid; and any other information relevant to bid submittal and opening. Such record shall be completed as soon as practical after bid opening and shall be verified as accurate by the requesting department. In the event a bid opening is canceled, this fact should also be recorded, together with a statement of the number of firms invited to bid and the number of bids received. The bid record is a formal public record, which along with copies of the RFBs will be filed after the bid opening. 7

12 2.4 EVALUATION OF BIDS Responsive bid. A responsive bid is a bid, which conforms, in all material respects to the RFB. Any bid that fails to conform in all material respects to essential requirements of the RFB, imposes conditions which would modify requirements of the RFB, or would limit a bidder s liability to the city, as determined by the Finance Director with concurrence by the requesting department, shall be considered nonresponsive. The City will accept bids containing irregularities for consideration. Any action concerning the bid(s) containing irregularities shall be at the discretion of the City Manager. The call for bids shall state the reserved right of the City to reject any and all bids and to waive irregularities in any bid, provided that no bidder shall be permitted to gain unfair advantage over other bidders by action of the City Council pertaining to this section Responsible bidder. In addition to price, the following elements will be given consideration by the requesting department and Finance Director in determining whether a bidder is a responsible bidder: 1) the ability, capacity, and skill of the bidder to perform the contract or provide the service required; 2) the character, integrity, reputation, judgment, experience, and efficiency of the bidder; 3) whether the bidder can provide the items or services within the time specified; 4) previous and existing compliance by the bidder with laws relating to the contract or services; 5) tax revenue the City would receive by purchasing locally; and, 6) such other information that a reasonably prudent purchaser would make Reasonable bid price. The requesting department will review the bid prices offered to determine whether they are reasonable. This determination should be made in light of all prevailing circumstances and upon analysis of costs and prices Record of evaluation. The requesting department will ensure that records of bids and bidder evaluation are maintained. If the requesting department determines that a bid price is unreasonable, that a bidder is not responsible, or that a bid is nonresponsive, the originals of such bids and all written findings related thereto will be preserved with the records of such procurement. 2.5 REJECTION OF BIDS Rejection of individual bids. Based on the evaluation of bids, the requesting department may recommend that an individual bid be rejected after obtaining the advice of the City Attorney and Finance Director. After a final decision, the requesting department will inform the bidder in writing of the reasons for such recommendation. 8

13 2.5.2 Rejection of all bids. Based on the evaluation of bids, the requesting department and Finance Director may recommend that all bids be rejected after obtaining the advice of the City Attorney. After a final decision, the requesting department will inform the bidders in writing of the reasons for such recommendation. The City Council also may determine to reject any or all bids when the public interest will be served thereby. If all bids are rejected or the invitation for bids is canceled, the City Council may direct the requesting department to initiate another competitive bidding procurement, without any further call Records of rejections. The Finance Director and City Clerk with the requesting department will ensure that documentation relevant to a recommendation to reject any or all bids is maintained in the record of procurement. 2.6 AWARD OF CONTRACT Award/award recommendation. The City Council makes the determination of the award on all purchases in excess of $40,000 for materials, supplies, and equipment, upon staff recommendation. The requesting department shall present a summary of the bids received, together with recommendation of award to the City Council Award basis. The City Council may award the bid to the lowest responsive, responsible bidder, or may reject all bids at its discretion Award recommendation. The requesting department will present a recommendation for award within the time for acceptance specified in the RFB. Should any situation after bid opening threaten to delay award beyond the time for acceptance, bidders may be requested, in writing, before expiration of their bids, to extend the bid acceptance period (with the consent of the sureties, if necessary) to avoid the need for readvertisement of the RFB Notification of bidders. The requesting department will promptly notify all bidders of the bid opening results, and the recommendation for award. 2.7 COMPLETION OF COMPETITIVE BIDDING PROCESS Approval. Department initiates an appropriate contract for the successful bidding vendor. After approval, the contract document is signed by the City Manager. If the contract will exceed $40,000 approval of City Council is The requesting department forwards a copy of the final contract to the Finance Department for inclusion with vendor records to ensure compliance with contract and audit requirements System purchase order. With Department approval, Finance creates the system purchase order in the Accounting system. The system purchase order is sent to the requesting department. The requesting department is responsible for gathering all documents pertinent to the materials or services prior to issuing a request for a purchase order. The necessary documents can include any documents required in the RFB. Once the requesting department has received all documents, the Purchase Order may be issued to the vendor. 9

14 2.8 COOPERATIVE PURCHASING RCW General. Department Directors may recommend joining in cooperative purchasing arrangements with other public agencies similarly authorized, when the best interests of the City would be served thereby. Any cooperative purchasing agreement will set forth fully the purposes, powers, rights, objectives, and responsibilities of the contracting parties and shall be governed by the requirements of state law with regard to cooperative bidding when applicable Use of existing contracts or solicitations. Department Directors may use existing contracts or proposed solicitations of other local, state, or federal agencies to procure materials, supplies, and equipment for the City if such method of procurement would foster economy and efficiency and as permitted by law Award. The City Council shall consider and/or approve all such agreements Bidding. Bids are not required when purchases of materials, supplies or equipment are made under State standard contracts or similar contracts executed by and through other local, state, or federal agencies. 2.9 SPECIAL MARKET CONDITIONS RCW If the City has an opportunity to get a good buy on a piece of equipment at an auction, or if supplies or used equipment is offered at a very favorable price and will be sold before the City will have a chance to complete the bidding process, a waiver from the bidding requirements set in place by these procedures will be considered on a case to case basis by the City Manager or Designee SOLE SOURCE PROCUREMENT RCW (9) General. A contract may be awarded for materials, supplies, and equipment without competition when the Finance Director determines, in writing, based on justification provided by requesting department, that there is only one source for the required materials, supplies, and equipment. In a sole source situation, that single product or service is available from only one source, usually the original manufacturer or the regional franchise. Competitive bidding quoting is therefore futile, and sole source purchase is appropriate and in the best interest of the City Conditions for use of sole source procurement. Sole source procurement is not permissible unless the goods are available only from a single supplier able to meet the City s requirements. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one potential bidder or offer for that item. The following are examples of circumstances that could necessitate sole source procurement: a) Spare parts or replacement parts for existing equipment where proprietary items can be acquired only from one manufacturer or from a single distributor; b) Routine expenses such as utilities charges, claims and judgments, witness fees, governmental taxes and governmental fees for licenses and permits may be acquired, ordered or paid in the best interest of the City within budget appropriation or City Council authorization; 10

15 c) Where compatibility of equipment or accessories is the paramount consideration; and d) Where a sole supplier s item is needed for trial and/or testing. The Finance Director will make the determination as to whether a procurement will be made as a sole source. Any request by a Department that a procurement be restricted to one potential contractor shall be noted in the back up documentation for the Accounting System Purchase Order. This explanation should justify why no other supplier will be suitable or acceptable in meeting the need Negotiation in sole source. The requesting department in cooperation with the Finance Director will conduct negotiations, as appropriate, as to price, terms, and delivery time Award of contract. Sole source purchases, except routine expenses, in excess of $40,000 will require City Council authorization URGENT AND EMERGENCY PROCUREMENT RCW General. The City Manager or his/her designee may make or authorize others to make urgent and emergency purchases of materials, supplies, and equipment or public works and improvements in the open market without advertisement at the best obtainable price regardless of the amount of the expenditure, provided that such emergency purchases shall be made with such competition as is practicable under the circumstances; and, provided further, that all emergency purchases exceeding $40,000 will be reported to the City Council Urgent purchase. An urgent purchase are those purchases exceeding $2,499 calling for immediate action that could have been anticipated prior to the need becoming urgent and the procedure requires submittal of a request for a purchase order to Finance. Example: Using department runs out of a special type of form, supply or material. Reason: Did not watch supply on hand. Any employee requesting an urgent purchase order must have prior authorization from their department director. Finance is to be notified before an urgent order is place. If approved, Finance will issue an Urgent Purchase Order number. Employees requesting an Urgent Purchase Order will ensure the vendor places the Urgent Purchase Order number on the invoice at the time of order Emergency purchase. An emergency purchase is defined as a purchase exceeding $2,499 made in response to unforeseen circumstances beyond the control of the City when a threat to public health, welfare, or safety exists, or where the City may suffer a substantial monetary loss by reason of the time required to follow regular purchasing procedures. 11

16 Finance is to be notified before an emergency order is placed. If approved, Finance will issue an Emergency Purchase Order number. Employees requesting an Emergency Purchase Order will ensure the vendor places the Emergency Purchase Order number on the invoice at the time of order. Examples: a) Natural disaster; i.e., earthquake, flood, volcanic eruption. b) City property is damaged in a traffic accident. c) A part required by a maintenance crew that is necessary to accomplish an emergency repair of a piece of equipment that is critical to public safety or continuing to provide an acceptable service level to the public. any employee requesting an emergency purchase order must have prior authorization from their department director. Special Note: If an urgent or emergency situation occurs during a time that Finance staff is not available (i.e., closed hours, evenings, weekends, and holidays) take immediate action necessary to resolve the problem and advise the Finance Department the next business day Authority to make emergency procurement. Any department may make an emergency procurement when a documented emergency condition arises and the need cannot be met through normal procurement methods. The explanation of the nature of the emergency shall be noted in the Department s field purchase order. Approval will be obtained from the City Manager and a full explanation of the circumstances of the emergency, including the contractor s name, the amount and type of the contract and a listing of the item(s) procured under the contract will be filed by the requesting department with the Finance Director within twelve (12) working days after such purchase Emergency Procurement does not relieve the contracted firm from observing applicable legal requirements such as Insurance, Labor and Material, Performance Bonds and Prevailing Wage requirements All declared emergency procurement will be reported to the City Council LEASES General. The department may negotiate lease agreements for materials, supplies, and equipment when he/she determines that outright purchase is not the preferred alternative. All lease agreements shall comply with City financial policies and budget documents, and any applicable state law Documentation. The department will prepare documentation supporting the decision to lease rather than purchase and this decision shall be approved by the Finance Director. 12

17 3.0 SUSTAINABILITY 3.1 BUY RECYCLED. Every effort will be made to utilize products made from recycled materials if such products are reasonable, available, are of acceptable quality and are generally priced the same as similar products not made from recycled materials. See the City s Sustainability Policies for additional information. 3.2 ENERGY SAVING. Equipment Purchases of equipment should have Energy Saving Criteria if applicable. Refer to the City s Sustainability Policies for more information. 4.0 COMPUTER AND TELECOMMUNICATIONS EQUIPMENT, SOFTWARE AND SERVICES RCW COMPETITIVE NEGOTIATION. Per RCW due to the unique aspects of electronic data processing and telecommunications systems and the importance of these systems for effective administration warrant separate acquisition so purchase of same can be done through competitive negotiation rather than through competitive bidding. A request for proposal shall be prepared and submitted to an adequate number of qualified sources. Notice of the request must be published in a paper of general circulation at least 13 days before the last date upon which the proposals will be received. The award shall be made to the qualified bidder whose proposal is most advantageous to the City. 5.0 PROFESSIONAL SERVICE CONTRACTS 5.1 GENERAL. Definition means professional consultant or services rendered by any person or firm other than as an employee of the agency, contracting to perform activities with no direction from the City. Professional Service Contract is an agreement, or any amendment or renewal thereto, with an independent contractor for the rendering of professional services to the City. Departments may solicit qualifications using a Request for Qualifications form or have the option of negotiating a fee for consulting services. The requesting department shall initiate Professional Service Contracts. Once the approved contract has been signed, the initiating department requests a System Purchase Order from Finance. The requesting department will also forward a copy of the final contract to Finance for inclusion with vendor records to ensure compliance with contract and audit requirements. As work is performed, accepted, and invoiced, the contracting department s staff will approve each invoice for payment against the system purchase order. Note: The City Manager or his/her designee has to sign these types of service contracts except those under $5, ARCHITECTS AND ENGINEERS. Washington State Law (RCW 39.80) requires the City to publicly announce its requirements for architectural and engineering services and to negotiate contracts on the basis of demonstrated competence and qualification for the type of services required and at fair and reasonable prices. This State law is applicable only for Architectural and Engineering Services. 13

18 5.2.1 The Public Works, Engineering and Community and Economic Development Departments, in cooperation with the Finance Department will establish an Architects and Engineers roster of pre-qualified firms, or contract out with a Shared Professional Services Roster maintained by a coordinating agency Notification to consultants shall be accomplished by publishing Requests for Qualifications (RFQual) (annually in trade publications as deemed appropriate by the requesting department) or coordinated by the Shared Professional Services Roster maintained by a coordinating agency Department staff interested in architectural or engineering services shall review the shared roster, and contact one or more firms from the list to negotiate for services with the most qualified firm. Responsiveness; ability and history of successfully completing contracts of this type of work; meeting projected deadlines; experience in similar work; and performance data, references, and key personnel shall be reviewed before fees are negotiated The contracting department shall initiate Architectural and Engineering Service. Once the approved contract has been signed, Finance will initiate a system purchase order. The requesting department will also forward a copy of the final contract to the City Clerk s Office and Finance for inclusion with vendor records to ensure compliance with contract and audit requirements. As work is performed, accepted, and invoiced, the contracting department s staff will approve each invoice for payment against the system purchase order. Note: The City Manager has to sign these types of service contracts except those under $5, REVISIONS OR AMENDMENTS TO PROFESSIONAL SERVICES CONTRACTS The initial agreement/contract should permit changes in the scope of services requested by the City\consultant, to either add, modify, or delete duties in accomplishment of the assigned body of work and within the scope of the original body of work. For example: The consultant agrees to perform those services which are described hereafter. Unless modified in writing and agreed to by both parties, the duties of the consultant shall not be construed to exceed those services. The City and the consultant agree that if additional duties are to be performed by the consultant in the prosecution of this work, the consultant shall submit an additional or supplemental work program and be compensated on the same terms as this contract has previously stated, or in a manner mutually agreed upon by both parties. Or the City, may, from time to time, require changes or modifications in the Scope of Work to be performed hereunder. Such changes, including any decrease or increase in the amount of compensation therefore, which are mutually agreed upon by the City and the consultant shall be incorporated in written amendments to this contract. Any revisions/amendments reflecting an increase that exceeds a total of $40,000 in the original contract shall be reviewed and approved by the City Council. 14

19 6.0 PUBLIC WORKS AND IMPROVEMENTS 6.1 GENERAL. Any purchase of public works and improvements may be procured by applicable law and the procedures set forth in this section. 6.2 MEANING OF PUBLIC WORK. RCW defines the term public work as follows: The term public work shall include all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein. The Public Works Act requires that employees of government contractors be paid prevailing wages for all public work (RCW 39.12). The prevailing rate of wage is defined as the hourly wage, fringe benefits, and overtime. Contractors, therefore, must pay a wage-and-fringe benefits package to workers that meet or exceed the prevailing wage and prevailing fringe benefit amounts added together. Contractors also must observe the overtime and holiday provisions that are also incorporated as part of the prevailing rate of wage. Public Works maintenance is subject to Prevailing Wage. An example would be the recarpeting of the entire City Hall, or sidewalk repair performed over a long period of time, i.e., on an annual contract, or of a large scope. Ordinary or routine maintenance is more fully defined as repetitive repair or service activities, including repair activities of limited extent and limited life necessary to keep a building, infrastructure, or machinery in a state of good repair, not major rehabilitation. Other examples are plant services or street sweeping may not be subject to prevailing wage. For procedures on purchasing ordinary maintenance or services 6.3 COST OF A PUBLIC WORKS PROJECT. When estimating the total cost of such public works project in determining the applicability of the bidding requirements, RCW provides that the cost of a separate public works project includes all cost of materials, supplies, equipment and labor (including sales tax and freight) on the construction of that one continuous or interrelated project where work is to be performed simultaneously or in close sequence. 6.4 BREAKING A PUBLIC WORKS PROJECT INTO SEGMENTS. A public works project will not be split into phases in order to avoid compliance with bidding statutes (RCW ). A public work project means a complete project. The restrictions in this subsection do not permit the division of the project into units of work or classes of work to avoid the restriction on work that may be performed by day labor on a single project. The breaking down of any public work or improvement by phases for the purpose of avoiding the minimum dollar amount prescribed in the RCW is contrary to public policy and is prohibited. 6.5 PUBLIC WORKS OR IMPROVEMENTS UNDER $5,000. Public works or improvements with a total cost of less than $5,000 per project may be procured on a contract purchase order, rather than through a formal contract. All forms, certificates, retainage, and prevailing wage requirements must still be met by the contractor, with the general terms and conditions preprinted on the reverse of the purchase order, and specific terms and conditions included on the face of the purchase order, governing the contract purchase order. A request is turned in to the Finance Department to issue the system purchase order for totals of $5,000 or more. 15

20 6.6 PUBLIC WORKS OR IMPROVEMENTS OF ESTIMATED COST LESS THAN $40,000 1 (SINGLE CRAFT) AND $65,000 1 (MULTIPLE CRAFTS). All public works or improvements, the estimated cost of which is less than $40,000 1 (single craft) and $65,000 1 (multiple crafts) will be provided using the procedures set forth in Section 1.0, Small Purchase Procedures except as indicated below: Force accounts. Force accounts. The City of Mountlake Terrace is a code city, under 20,000 population which does not limit 10% of the construction budget limit on the total work that can be done by city workers as there is for larger cities. The following limitations apply to the above section: a) A code city under 20,000 population can have public employees perform a public work project in excess of sixty-five thousand ($65,000 1 ) dollars if more than a single craft or trade is involved with the public work project; or b) A code city can have public employees perform a public work project in excess of forty thousand ($40,000 1 ) dollars if only a single craft or trade is involved with the public work project; or if the public work project is for street signalization or street lighting. 6.7 PUBLIC WORKS OR IMPROVEMENTS OF ESTIMATED COST GREATER THAN $40,000 1 (SINGLE CRAFT) AND $65,000 1 (MULTIPLE CRAFTS). All public works or improvements, the estimated cost of which is greater than $40,000 1 (single craft) and $65,000 1 (multiple crafts) will be provided using the procedures set forth in Section 2.0, Competitive Bidding Procedures except as indicated below: Small works roster The Public Works Department will establish a small works roster as an alternative to general competitive bidding requirements for contracts less than $300,000 2 or may contract out with a Shared Small Works Roster maintained by a coordinating agency. This roster is comprised of all contractors who have requested to be on the roster and are, where required by law, properly licensed or registered to perform such work in this state Roster list. The roster will include contractors who have requested placement on the roster and are, where required by law properly licensed or registered to perform such work in the State of Washington Invitation to bid. A minimum of five (5) firms from the roster will be requested to submit written bids. The invitation will include an estimate of the scope and nature of the work to be performed, and the materials and equipment to be furnished. Once a bidder has been offered an opportunity to bid, that bidder is not to be offered another opportunity to bid until all other appropriate contractors on the roster have been offered such an opportunity. The City shall award the contract to the contractor submitting the lowest responsible bid Award of contract. The City Council shall make the determination of award on all small works roster contracts in excess of $40, Limitations on work performed by public employees. Per RCW (2) Public work projects performed by public employees is limited to 10% of the public works construction budget. Projects valued in excess of the 10% limit require competitive bidding. 16