The City of Pomona. Purchasing Policies & Procedures Manual. Revised 8/8/2007 Purchasing Phone:

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1 The City of Pomona Purchasing Policies & Procedures Manual Revised 8/8/2007 Purchasing Phone:

2 GENERAL PURCHASING REGULATIONS Purpose To establish regulations and provide information to personnel for use in procurement situations. General Statement In order to secure services, materials, supplies and equipment at the lowest possible cost consistent with satisfactory standards for quality; rules, regulations and methods have been standardized in a number of areas. Provisions A. Types of Procurement 1. Central Stores Common items, which are generally used throughout the City, shall be stored in the City's warehouse and purchased in quantity, which will assure the lowest possible cost through quantity buying. Items may be obtained from Central Stores by a Material Requisition. Material Requisitions and a catalog of items stocked are available from Central Stores. 2. Open Market Purchases Purchase of supplies, services and equipment, professional services and construction projects of a value in the amount of $30,000 or less, shall be made by the Purchasing Division. When to total amount of the purchase is over $2,500 procurements shall be based on a minimum of three (3) written or verbal quotations or a conscientious effort to obtain same. Awards shall be made to the lowest responsible bidder. The using department shall submit a request to the Purchasing Division on a Purchase Requisition form generated through the automated purchasing system. All procurements over $20,000 but not over $30,000 shall be approved by the City Manager. 3. Formal Bid Purchase Purchase of supplies, services and equipment of a value greater than $30,000, shall be made by the Purchasing Division by an advertised, written bid with Pomona City Council approval prior to award. Public Works procurements over $30,000 shall be the responsibility of the Public Works Department. Purchasing Policies & Procedures (Rev. 8/8/2007) 1

3 4. Procurement of Professional Services All professional service procurements shall be based, whenever possible, on three (3) competitive proposals. Procurements $20,000 or under shall be approved by the director of the requesting department and the Finance Director. Professional service procurements over $20,000 shall additionally be approved by the City Manager. "Sole Source" professional service procurements over $15,000 and all procurements over $30,000 shall be approved by City Council (Sec , City Code). 5. Bid Splitting It is expressly forbidden to split or separate into smaller projects or job tasks any requirements for supplies, services, equipment or professional service procurements for the purpose of evading approval requirements or obtaining City Council approval. B. Exceptions to Competitive Processes Under certain circumstances, procurements may take place without competitive bidding or obtaining three (3) written or verbal quotations. Examples of such circumstances are as follows: 1. Emergency Purchases The Purchasing Manager may authorize emergency purchases not to exceed $20,000 upon any City employee showing that the purchase required is for the immediate preservation of health, safety and welfare of the people, repair to existing City equipment which impacts on-going City operations, or for the protection of property; and that there is a present, immediate and existing emergency which could not be reasonably foreseen. In addition to the aforementioned criteria, emergency purchases over $30,000 may require City Council approval (Sec 2-968, City Code). 2. Sole Source Procurements Sole source procurements shall require a written explanation as to the nature of the product, what specific feature makes it a sole source, why substitution cannot be used and an explanation of effort expended in trying to find other sources. The written explanation shall accompany the Purchase Requisition and be directed to the Purchasing Division. There can be no sole source procurement for capital improvement projects (CIP). (Sec City Code). Purchasing Policies & Procedures (Rev. 8/8/2007) 2

4 3. Personal or Professional Services Which for Some Reason Do Not Lend Themselves to Competitive Bidding A written explanation shall accompany the Purchase Requisition and be directed to the Purchasing Division. Sole Source procurements over $15,000 must be approved by City Council prior to award (Sec , City Code). 4. No Responses Received to Bids. C. Delivery Whenever possible, merchandise ordered by the City shall be delivered to the Receiving Annex, 636 W. Monterey, Pomona, CA 91768, unless other arrangements have been made. The City warehouse staff shall receive, inspect and deliver the material(s) to the ordering department. D. Advance Payment Payment made to a vendor before the goods are delivered or service performed should not occur on procurements over $100. If an advance payment cannot be avoided, a Performance Bond will be required equal to the amount of the advance payment. E. Encumbrance of Funds Except in the case of Emergency procurement, all purchases must be approved by the Finance Director who shall determine that there exists an unencumbered appropriation in the fund account against which said purchase is to be charged. Such determination shall be made before any commitment to a supplier is made. F. Payments Utilizing Demands The following items are payable on demand and do NOT require a purchase order: Insurance Policies Utilities In addition, these items may also be paid on demand, but may NOT EXCEED $10,000 to a single vendor: Subscriptions Membership Dues Registration Fees Conference Expenses Mileage Reimbursements Refunds Gasoline Credit Cards Luncheons Travel Expenses Uniform Allowances Purchasing Policies & Procedures (Rev. 8/8/2007) 3

5 G. Conflict of Interest Existing Open Purchase Orders Other Government Agency Fees Petty Cash Reimbursements Entertainment, Entertainers & Groups Utility Tax Exemptions Training (Outside City of Pomona) Rentals Non-recurring services ($2,500 or less) No employee of the City of Pomona shall have any financial interest in the transaction of business in connection with the purchase of goods and service for the City. No employee of the City may contract with any person related to any officer or employee of the City by blood or marriage within the third degree unless the purchase be by competitive, advertised bid, and the person so related submits the lowest bid. (Section 2-975, City Code) H. Gratuities Except for items that are clearly promotional in nature, mass-produced, trivial in value and not intended to invoke any form of reciprocation, employees of the City of Pomona may not accept gifts, entertainment, food or anything of value from a current or potential supplier. The offer of any such gratuities shall be cause for declaring such supplier to be an irresponsible bidder and prevent him/her from bidding. (Section 2-974, City Code) I. Unauthorized Purchases (Confirming Orders) 1. The Purchasing Division will not issue confirming Purchase Orders for unauthorized commitments made by City employees except where Department Heads may find it necessary to respond to an emergency situation at night, or during weekends and holidays. 2. With the above exception, any other unauthorized purchases/commitments may constitute a personal liability of the employee. J. Where to Call for Additional Assistance Purchasing Division, Purchasing Policies & Procedures (Rev. 8/8/2007) 4

6 PURCHASING RECYCLED MATERIALS Policy The City of Pomona shall purchase products manufactured from the maximum recycled content practicable, in accordance with current technology and reasonable availability. All City departments are hereby directed to use recycled products whenever practicable. Special emphasis shall be placed on the purchase of products manufactured with post consumer recycled materials. All city departments shall review their specifications on an ongoing basis to determine if the use of recycled materials could be reasonably substituted for use of virgin materials, and modify specifications, as appropriate. Vendors shall be required to provide documentation of recycled content. City departments shall endeavor to keep abreast of emerging recycled product development, and monitor price, performance, and quality of newly introduced recycled products. All City departments shall minimize solid waste disposal by limiting the use of disposable products and encouraging the use of durable, non-disposable products whenever feasible. City departments shall undertake other source reduction efforts, such as double-sided copies and electronic communication. Other environmental factors shall be considered in the evaluation of purchases. For example, City staff should strive to use the least toxic product available, and to use products that can easily be recycled. Whenever feasible, the City will encourage the use of recycled materials and other source reduction efforts by consultants, contractors and vendors doing business with the City. When recycled products are used, reasonable efforts will be made to label the products indicating recycled content. At the close of each fiscal year, the Finance Department will prepare an annual report detailing the implementation of this policy during the prior year. Purchasing Policies & Procedures (Rev. 8/8/2007) 5

7 EMERGENCY PURCHASE ORDERS Purpose To provide regulations for the emergency purchase of needed materials, repairs and services consistent with the provisions of the City Purchasing Ordinance and the City Charter. General statement Emergency Purchase Orders shall be processed in accordance with the spirit and intent of the City Purchasing Ordinance that states in part: "That the purchase required is for the immediate preservation of the health, safety and welfare of the people or for the protection of property and that there is a present, immediate and existing emergency which could not reasonably be foreseen." (Sec , City Code). Provisions A. Material, repair and service needs, when identified as a bonafide emergency, shall be processed as follows: 1. In advance of any commitment, enter a Purchase Requisition through the automated purchasing system identifying the nature of the emergency, the materials/service needed, the recommended vendor and the estimated cost. 2. Next, contact Purchasing. Based on the identified need, the Purchasing Division may assign an Emergency Purchase Order Number, subject to later confirmation. As time permits, the Purchasing Division may request/obtain competitive quotations as may be appropriate. Emergency Orders estimated to be in excess of $20,000 need Finance Department verification of available funds and the City Manager s approval. 3. Obtain/order needed material or service from the selected vendor. Give Emergency Purchase Order Number to the vendor for reference on packing slips invoices and related correspondence. All invoices must be sent directly to the Finance Department and must reference the purchase order number. 4. The Purchasing Division will prepare a purchase order to the selected vendor confirming the verbal order. Receiving copy shall be sent to the requesting department/division. 5. Upon receipt of material or completion of service, sign and date the Receiving Copy and forward to the Purchasing Division. Purchasing Policies & Procedures (Rev. 8/8/2007) 6

8 B. Unauthorized Purchases 1. The Purchasing Division will not issue confirming Purchase Orders for unauthorized commitments made by City employees except where Department Heads may find it necessary to respond to an emergency situation at night, or during weekends and holidays. 2. With the above exception, any other unauthorized purchases/ commitments may constitute a personal liability of the employee. 3. It shall be expressly forbidden to split or separate into smaller projects or job tasks any requirements for goods and services for the purpose of evading the competitive bidding limits as set by the Council. Purchasing Policies & Procedures (Rev. 8/8/2007) 7

9 PROFESSIONAL SERVICES FROM $20,000 TO $30,000 (Non CIP) Purpose To provide regulations for the procurement of Professional Services of an estimated value greater than twenty thousand dollars ($20,000) and not to exceed thirty thousand dollars ($30,000). This policy shall apply to professional services where a minimum of three (3) proposals has been obtained. General Statement Purchase orders greater than twenty thousand dollars ($20,000) and not to exceed thirty thousand dollars ($30,000) shall be processed in accordance with the spirit and intent of the City Purchase Ordinance that states in part: Professional Services of an estimated value greater than twenty thousand dollars shall require approval by the City Manager. Sole Source request for Professional Services over fifteen thousand dollars ($15,000) shall require approval of the City Council. (Sec , City Code). and... the purchasing officer shall not issue any purchase order for supplies, services or equipment unless the finance director has determined there exists an unencumbered appropriation in the fund account against which said purchase is to be charged (Sec , City Code). Provisions Professional Services of an estimated value greater than twenty thousand dollars ($20,000) and not to exceed thirty thousand dollars ($30,000) shall be processed as follows: A. Submit a memo of justification along with a purchase requisition to Purchasing. (Do not submit the memo directly to the City Manager). B. The following components shall be included in the justification memo: 1. The memo shall be to the attention of the City Manager. 2. The memo shall be similar in form as that of a Council report. 3. It shall explain the nature of the expenditure. 4. It shall state the funding source. 5. Any competitive prices received for the requested expense shall be listed. 6. The memo shall have a signature block for review by the Finance Director, and a signature block for approval by the City Manager. (The City Manager s signature block shall be the last block on the right hand side of the memo. C. The memo and purchase requisition shall be prepared, and approval obtained from Purchasing Policies & Procedures (Rev. 8/8/2007) 8

10 the department director, the Finance Director and the City Manager prior to any commitment to a supplier or contractor. (No confirming orders). D. A purchase order will be issued upon receipt of both the City Manager s approved memo and the purchase requisition. E. Please note that sole source requests for professional services over fifteen thousand dollars require City Council approval (Sec , City Code). EXCLUSIONS TO COMPETITIVE BIDDING OF PROFESSIONAL SERVICES (Non CIP Projects) 1. The process of selecting environmental impact report consultants for non City/Agency projects shall be conducted by the Community Development Director due to time restraints and application processing requirements. The final consultant selection and fee shall be reviewed and approved by the City Manager. 2. City Council shall also review and approve each bond issue, in concept, with selection of professional consultants, as needed, to be selected by the Director of Finance and approved by the City Manager. 3. Professional Services to temporarily fill vacant Class A or B City positions: Award of services to a company or individual to temporarily fill a vacant authorized Class A or B position is exempt from the bidding requirements as long as: i) City advertises for a full recruitment for said position within two months of vacancy. The City Manager or his designee shall be authorized to conduct said recruitment using a professional recruitment firm by obtaining 3 informal bids for recruitment services and awarding to the lowest responsible bidder. ii) Services shall conclude upon hiring of the full-time position. iii) Services shall not exceed 1 year. iv) Services are approved by the City Manager. Purchasing Policies & Procedures (Rev. 8/8/2007) 9

11 OPEN PURCHASE ORDERS/AUTHORIZATION TO RECEIVE MATERIAL Purpose To provide administrative policy and procedure guidelines for the creation and use of open Purchase Orders established with various suppliers as an immediate source for the regular and emergency supply needs of City departments. Policy In order to insure a timely and cost effective source of supply and to meet the regular and emergency material needs of City departments; the Purchasing Division may, with appropriate departmental coordination, issue Open Purchase Orders on a quarterly or annual contract basis to selected local suppliers. Such orders shall authorize City departments/individuals to receive various types of material on behalf of the City, on a pickup/delivery basis only, subject to the following administrative criteria depending on the type of Open Order. A. Open Purchase Order - Emergency/Incidental Use 1. Establishment of an emergency/incidental open purchase order shall be based on a demonstrated urgent and continuous need for an established source of supply for emergency, maintenance and incidental materials/service by a City department with a projected volume of three (3) or more purchase transactions per month. Supplier selection shall be based on price, availability, service and location to the maximum extent possible. 2. Use of such Open Orders by City departments shall be limited to designated suppliers for the products/services specified in the order, and may only be used by authorized employees designated by the responsible Department Head. 3. No single purchase (one item or combination of items) may exceed the limit stated on the purchase order. Purchases in excess of this amount shall be made by a separate Purchase Requisition or by emergency purchase as appropriate. 4. The emergency/incidental Open Order shall not be used to purchase stock items which are available in Central Stores. 5. All items purchased shall be for immediate use. Emergency/incidental Open Orders shall not be used to replenish department/division inventory. 6. Emergency/incidental Open Orders shall not be used for the repetitive purchase of the same item(s) where it would be in the best interest of the City to package its requirements for a bulk purchase of such items from wholesalers or Purchasing Policies & Procedures (Rev. 8/8/2007) 10

12 distributors under an annual contract. (Refer to Section B) 7. Purchases shall not be charged against the account of another department/division without prior approval of the department concerned. 8. Emergency/incidental Open Orders are provided to meet the immediate supply needs of the City, must be relevant to a departmental need and should not be used to circumvent normal purchasing procedures. Misuse of the Open Order Authorization by individuals may result in loss of purchase privilege and/or appropriate disciplinary action. 9. An open and competitive environment shall be maintained to the maximum extent possible through selective price sampling of items purchased and/or by price reports provided by employees in the field. The Purchasing Division reserves the rights to add, delete, or rotate suppliers as necessary to insure the best value and service available to the City. B. Open Purchase Order - Annual Contracts 1. Establishment of this type of Open Purchase Order shall be based on a regular and continuous need for standardized products/ services where volume is sufficient to package the City's annual requirements for competitive bidding. Contract award shall be based on best price, product availability, and service. 2. Use of Annual Contract Open Purchase Orders shall be limited to the designated products/services specified in the contract. Needed products/services outside the scope of the annual contract shall require a separate Purchase Order. Other terms and conditions of use shall be outlined in the annual agreement and may vary from product to product. 3. Except in cases of dire emergency, the supplier awarded the Annual Open Purchase Order shall be the sole City supplier for the designated products/services. C. Procedure/Authorization To Receive Material 1. Upon receipt of a purchase requisition from requesting departments, via the automated purchasing system, and in accordance with the above policy guidelines; the Purchasing Division may issue an Open Purchase Order delineating the designated supplier, type of material/service to be included, expenditure limitations and authorized employees. 2. Open orders are encumbered funds. Such open orders shall normally be issued on an annual contract basis consistent with supplier performance and competitive pricing. Open orders are not renewed automatically, but require a new purchase requisition every fiscal year. Purchasing Policies & Procedures (Rev. 8/8/2007) 11

13 3. Designated Management/Supervisory employees having a regular need to purchase supplies/materials on Open Purchase Orders may be issued AUTHORIZATION TO RECEIVE MATERIAL" books by Purchasing. 4. Upon identification of a material/supply need, the designated Management/Supervisory employee shall prepare and approve an authorization form for presentation to one of the specified suppliers. Actual receipt of material may be by the Supervisor or one of his employees. Suppliers shall be asked to request the authorization form to verify authority to purchase. The authorization form must be signed by the approving Supervisor and the employee receiving the material. One copy (white) is left with the vendor for his records. 5. The authorizing Supervisor shall forward the second copy (pink) to Finance along with the customer sales slip/ receipt within two (2) working days after the purchase. The total amount column on the Authorization form must be filled in if there is no corresponding customer sales slip/receipt. Any inconsistencies or potential misuse shall be reported to the responsible Department Head for investigation and resolution. Continued problems may result in revocation of authorization privilege. 6. Completed books with the third (yellow) copies intact must be turned in before a new book can be issued. New authorization books must be delivered to and signed for by the designated Supervisor to verify proper receipt. Purchasing Policies & Procedures (Rev. 8/8/2007) 12

14 LEASE/ PURCHASE AGREEMENT Purpose From time to time, the City of Pomona may find it advantageous to enter into a lease, or a lease with option to purchase agreement. General statement It is the intention of this procedure to provide guidelines and minimum requirements to help in determining when it is to the City's advantage to enter into a lease or lease/purchase agreement. Provisions A. Request for lease or lease/purchase based procurements shall meet the following criteria: 1. Items to be considered for lease or lease purchase shall be limited to capital items with a life span of greater than five (5) years. 2. Items must have a value of not less than $10,000 and be combined in a lease package with other items so that the aggregate shall not be less than $100, Items considered for lease or lease/purchase must be delivered within 6 months of the date that the lease purchase is funded. 4. The items leased must be for the exclusive use of the City, and may not be utilized by any other agency or non City function. 5. The item(s) must be covered by the City liability insurance policy. 6. Small equipment, such as copy and fax machines, and maintenance agreements may not be leased purchased. B. The decision whether to enter into a lease purchase shall be based on the following: 1. A Request for Proposal shall be issued by the Purchasing Division to all firms which have expressed interest in providing lease services to the City. The results of the Request for Proposal (RFP) shall be forwarded to the City Treasurer. 2. The City Treasurer shall evaluate the proposals received comparing the interest rates charged by the various leasing agencies to current interest rates received Purchasing Policies & Procedures (Rev. 8/8/2007) 13

15 on City investments. The positive arbitrage must exceed 50 base points in order to proceed with the lease. 3. If the difference between the interest rate quoted for a lease agreement is less by a minimum of 1/2 percent of the interest rate received by the City Treasurer for current investments, then it may be determined that the lease, or lease with option to purchase, is in the over all best interest of the City. Contract documents may be forwarded to the City Attorney and ultimately to the City Council for approval C. For additional assistance, call Purchasing Division at (909) Purchasing Policies & Procedures (Rev. 8/8/2007) 14

16 CONTRACTS Purpose The purpose of this procurement policy is to provide for the fair and equitable treatment of all persons or firms involved in procurement of goods and service by the City of Pomona; assure that supplies, equipment, professional services and construction are procured efficiently, effectively, and at the most favorable prices available to the City; promote competition in contracting; provide safeguards for maintaining a procurement system of quality and integrity; and assure that the City's purchasing actions are in full compliance with applicable Federal and State law and local ordinances. General Statement It is the intention of the procedure to provide guidelines for the procurement of supplies, equipment, construction (non-cip), and professional services in excess of $30,000. Provisions A. Application This policy applies to all contracts and purchase orders for the procurement of supplies, professional services over $30,000 entered into by the City of Pomona. It shall apply to all expenditure of fund by the City over the stated limits irrespective of the source of funds. Nothing in this policy, however, shall prevent the City from complying with the terms and conditions of any grant, contract, gift or request that is otherwise consistent with the law. The term "PROCUREMENT", as used herein, includes both purchase orders and contract, modifications or change orders for construction or professional services, as well as purchase of supplies and equipment and the lease purchase thereof. B. Public Access to Procurement Information All bid and proposal documents, including the Request for Bid, Request for Quotation, Request for Proposal, or Request for Qualification, the legal advertisement, all amendments and attachments, and all submittals shall be a matter of public record, and shall be available for inspection during regular business hours for a period of not less than thirty (30) calendar days after the opening. C. Procurement Authority and Administration Unless otherwise directed by City Council, all procurement transactions shall be administered by the Purchasing Manager. The Purchasing Manager shall ensure that: 1. Purchase Orders, contracts and modifications are in writing, clearly specifying Purchasing Policies & Procedures (Rev. 8/8/2007) 15

17 the supplies, service or construction desired. 2. In addition to the applicable Federal and State requirements, i.e. Labor Code, Administrative Code, Contract Code, and Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (UCDBG), and the terms and conditions deemed necessary for the specific procurement, all Bids and Request for Proposals shall include the following: a. Specific description of products to be procured or service to be performed. b. The contractor must provide an estimated time for completion of work to be performed or goods to be delivered. c. For ongoing service contracts, a specific length of term shall be specified with renewal conditions and compensation adjustments, if applicable. d. A Cancellation Clause for cause for on-going service and construction contracts. e. A Cancellation Clause for convenience for on-going service and construction contracts. f. Liquidated Damage Clause for on-going service or construction contracts. g. Affirmative Action Clause and Minority/Women Owned Business Questionnaire (City Council Resolution 90-86). h. Terms of Compensation. i. Insurance requirements for on-going service and construction contracts as approved by the Risk Manager. j. Award evaluation criteria. k. The "Agreement for Indemnification by Contractor/Vendors and Acceptance and Acknowledgment of Procurement Practices of the City of Pomona" form is required if any work is done on City premises. l. Hold Harmless Clause for construction and service contracts. m. "Statement of Non-Collusion by Contractor" form. 3. That the bid documents specify a time and place for opening, and that said opening takes place as specified. Purchasing Policies & Procedures (Rev. 8/8/2007) 16

18 4. Public notice is given on each upcoming procurement for goods and services at least 10 days before the date of the opening of the bids or proposals (Sec , City Code). Public notice for construction contracts shall be published at least twice, not less than five (5) days apart, and not less than ten (10) days before the opening (Sec , City Code). 5. The Finance Director has determined that there exists an unencumbered appropriation in the fund account against which said procurement is to be charged before contract award or modification (Section 2-967, City Code). 6. Any and all exceptions taken to this procedure shall be promptly reported in writing to the City Manager. 7. Bid and Performance Bonds may be requested on supply or service contracts, as the Purchasing Manager deems advisable, to protect the City's interests. Any such bonding requirement shall be set forth in the Notice for Bids or Request for Proposals (2-970 City Code). All construction contracts shall require that a Bid Bond of not less than 10% of the bid amount shall be provided (Sec , City Code). D. Local Vendors It is the intention of the City to place as many City procurements with local Pomona suppliers as practicable. To insure as much participation as possible by Pomona suppliers, the following affirmative steps shall be taken: 1. Maintain and update periodically qualified Pomona businesses on a Bidders List. 2. Assure that Pomona businesses are solicited whenever there are potential sources of suppliers, equipment and professional services. 3. Insure that public notices are published in a newspaper of local circulation. 4. Where time permits, the City shall establish delivery and performance schedules which will encourage participation by local firms with limited capital resources. 5. If subcontracts are to be let, encourage contractors to make a good faith effort to subcontract with businesses located in the City of Pomona. 6. In determining the lowest responsible bidder, the City will take into consideration the sales tax, which will be returned to the City as a result of the award. E. Minority and Women Owned Businesses Purchasing Policies & Procedures (Rev. 8/8/2007) 17

19 The City of Pomona shall actively solicit minority and women owned businesses that demonstrate a willingness to meet the requirements of the City's specifications. In order to promote the use of minority and women owned businesses the City shall take the following actions: 1. Maintain and update periodically qualified minority and women owned businesses on a Bidders List. 2. Disseminate information regarding City bidding procedure and practices to the minority business community. 3. Require that the City's Minority Business Questionnaire be included with all City bids and Request for Proposals. 4. If subcontracts are to be let, encourage contractors to make a good faith effort to subcontract with minority and women owned businesses. 5. Provide access to the Ethnic/Women Business and Professional Directory to area businesses and contractors upon request. F. Award of Contract All procurements in excess of $30,000 for supplies and services, professional services shall be submitted and approved by the Pomona City Council prior to award (Section 2-970, City Code). 1. All changes in excess of 15% of the cost for supplies and services, professional services (Minute Order dated 4/19/82), and all construction changes in excess of 15%, not to exceed $100,000 (Section , City Code) shall be approved by the City Council prior to authorization of the change. 2. The City may utilize the service of technical, financial and legal experts in specification preparation, bid/proposal evaluation, contract preparation and inspection services. The technical expert/firm shall be subject to the ethical standards as detailed in Section I of this procedure, and is specifically forbidden from submitting a bid or proposal on any project in which he has participated in preparation of the procurement. G. Procurement Methods For the procurement of goods and services, general professional services over $30,000, one of the following procurement methods shall be chosen based on the nature of the procurement: 1. Sealed Bids Purchasing Policies & Procedures (Rev. 8/8/2007) 18

20 Contracts shall be awarded based on competitive sealed bids for all construction contracts and for goods and services if the following conditions are present: a. A concise, adequate and realistic purchasing specification is available. b. Two (2) or more responsible bidders are willing and able to compete effectively for the contract. c. The procurement can be based on fixed price contract. d. The award can be made principally on the basis of price. 2. Competitive Proposals Competitive proposals may be used if there is an adequate method of evaluation, and where the City's Purchasing Manager determines that conditions are not appropriate for the use of sealed bids. a. Evaluation The Request for Proposal (RFP) shall clearly identify the relative importance of price and other evaluation factors, including the weight given to each technical factor. A mechanism for fairly and thoroughly evaluating the technical and price proposals shall be established before the proposal is issued. Proposals shall be handled in such a manner as to prevent disclosure of names of offerors before the time set for opening. The proposals shall be evaluated only on the criteria stated in the Request for Proposals. b. Negotiations If there is a need for negotiations, negotiations shall be conducted with offerors who submit proposals that are determined to have a reasonable chance of being selected for award based on evaluation against the technical and price factors as specified in the RFP. Such offerors shall be accorded fair and equal treatment with respect to any opportunity for negotiation and revision of proposals. The purpose of negotiations shall be to seek clarification with regard to, and advise offerors of, the deficiencies in both the technical and price aspects of their proposals so as to assure full understanding of and conformance to the solicitation requirements. No offeror shall be provided information about any other offeror's proposal. Offerors shall not be advised to reduce their proposed prices to a specific amount in order to be considered for award. A common deadline shall be established for receipt of proposal revisions based on negotiations. 3. Non Competitive Proposals Purchasing Policies & Procedures (Rev. 8/8/2007) 19

21 All procurements shall be conducted competitively to the maximum extent possible. Procurements by non competitive proposals may be used only when the award of contract is not feasible using sealed bids or competitive proposals due to one of the following (Sec , City Code):. The item or service is available only from a single source.. The purchase is for highly perishable materials or medical supplies.. Prices are established by law.. Procurements from other government agencies.. When the products or service is required to be compatible or interchangeable with existing products/service.. Emergency procurement, as defined by Sec & of the City Code.. After solicitation from a number of sources, a minimum number of bids are not received. a. Justification Each procurement based on non-competitive proposals shall be supported by written justification for using such procedures. Justification shall be approved in writing by the Purchasing Manager and shall become a part of the Public Record. b. Prices H. Contracts The reasonableness of the price for all procurements based on noncompetitive proposals shall be determined by performing a cost analysis, which shall be approved by the Finance Director. The analysis shall become a part of the public record. Subject to the City's Charter and Ordinances, the City shall issue purchase orders and formal contracts as best meet its needs. 1. Purchase Orders The use of purchase orders shall be utilized for all procurements as well as maintenance contracts and rental agreements, and other contracts as deemed appropriate. 2. Formal Contracts Formal written contracts may be issued for all completed consulting/ professional service agreements and construction contracts, and approved as to form by the Purchasing Policies & Procedures (Rev. 8/8/2007) 20

22 City Attorney. All formal contracts shall be approved by City Council and signed by the Mayor unless City Council authorizes otherwise. For each and every individual procurement, approval of a Federal, State Contract or Grant does not remove the requirement for a purchase order. 3. Options Options for additional quantities or performance periods may be included in the contract providing that: a. The option is contained in the solicitation b. The option is a unilateral right of the City. c. The contract states a limit on the additional quantity and overall performance period of the contract. d. The options are evaluated as part of the initial selection process. e. The option may be exercised only if it is determined to be more advantageous to the City than conducting a new procurement. 4. Contract Administrator A contract administrative system designed to insure that contractors perform in accordance with the agreements shall be maintained. Each department shall appoint a responsible individual to administer all the contracts that fall under its jurisdiction. Each department shall submit to the City Manager, on a quarterly basis, a listing of all contracts over $50,000 that are currently open and contracts awarded in the proceeding 12 months that cumulatively total over $50,000 to individual contractors showing the following: a. Name of contract b. Purpose of contract c. Term d. Percent completion I. Ethics in City Contracting The City of Pomona shall adhere to the following code of conduct consistent with applicable State and City ordinances. 1. No member of the Council, or other officer, department head or employee of the City shall have any financial interest in any contract, sale or transaction to which the City is a party if having such interest constitutes a violation of the State law Purchasing Policies & Procedures (Rev. 8/8/2007) 21

23 pertaining to interest in contract. Any contract, sale or transaction in which there shall be any such prohibited interest shall become void at the election of the City when so declared by resolution of the Council. 2. No officer or employee of the City of Pomona shall have any financial interest in the transaction of any business in connection with the purchase of goods and service for the City. No officer or employee of the City of Pomona may contract with any person related to any officer or employee of the City by blood or marriage within the third degree (Sec , City Code). 3. The practice of splitting or separating a purchase into smaller procurements for the purpose of evading bidding procedures shall be expressly forbidden (Sec , City Code). Purchasing Policies & Procedures (Rev. 8/8/2007) 22

24 PURCHASING FOR CAPITAL IMPROVEMENT (CIP) PROJECTS 1. Construction projects up to $20,000 may be informally bid and awarded by the Public Works Director on a Purchase Requisition. 2. Construction contracts $20,001 to $30,000 may be informally bid and awarded by the City Manager via the City Manager s memo. The City Manager will approve the award and the contract- signing in one memo. At the bottom of the memo, state: and authorize the Public Works Director to sign any contracts or documents related to this award. 3. Construction contracts between $30,001 to $125,000 (including the contingency of a 15% change order) shall be bid using a list of qualified contractors obtained from information gained from the Contractor s State License Board, construction trade associations, business license records, and by an annual publishing in construction trade journals calling for qualified bidders, or any other written request to be included on the City s list. 4. The Public Works Director will mail notices inviting informal bids to all those on the list, the project may be described in general terms with provisions to obtain more detailed information. The City Manager will approve the award and the contract- signing in one memo. At the bottom of the memo, state: and authorize the Public Works Director to sign any contracts or documents related to this award. CHANGE ORDERS The total cost of the project is critical in deciding which method of bidding to utilize, therefore all projects should be estimated with the possibility of a 15% change order. If the 15% change order pushes the project into the Qualified Contractor s List requirement or the Formal Bid requirement, bid the project using the higher level requirement. The 15% change order rule applies to any construction project as outlined in the signed contract regardless of dollar amount. If the project results in greater than 15% in change orders, a City Council Report must be prepared to authorize the additional funds. 5. Construction contracts $125,001 or greater require formal, advertised bidding and City Council approval. 6. The continued prohibition of bid splitting for the purpose of evading other purchasing provisions. Purchasing Policies & Procedures (Rev. 8/8/2007) 23

25 CONTRACTS FOR PROFESSIONAL SERVICES Capital Improvement Professional services projects are described as those services provided by an individual, firm, partnership, or corporation and are of a technical and/or unique nature which require persons who are exceptionally qualified by education or experience to perform administrative, technical or advisory services which do not involve the delivery of a specific end product other than reports, plans, documents or specifications. 1. Capital Improvement Public professional services projects up to $20,000 may be informally bid and awarded by the Public Works Director on a Purchase Requisition. (a) Minimum number of quotations. Purchase shall, wherever possible, be based on at least three quotations from bidders on the existing qualified consultant list, and shall be awarded to the lowest qualified bidder. (b) Solicitation of quotations. Quotations may be obtained by written, fax, or telephone request. (c) Record of quotations. All quotations shall be kept for a period of one year after the placing of the order. This record, while so kept, shall be open to public inspection. 2. Capital Improvement Professional services projects $20,001 to $30,000 may be informally bid and awarded by the City Manager via the City Manager s memo. At the bottom of the memo, state: and authorize the Public Works Director to sign any contracts or documents related to this award. 3. Capital Improvement Professional services projects, specifically architectural, landscape architectural, engineering, environmental, geotechnical, land surveying, and construction management of $30,001 to $125,000 may be awarded through informal administrative procedures by creation of a qualified list of firms. A) A newly created Selection Committee shall rank the firms annually according to the firm s relative satisfaction of the criteria. This will result in short list of qualified firms for specific project types. The Selection Committee will be comprised of at least 5 representatives of various departments, but shall have no more that 2 representatives from any one department. The City Manager may designate the Public Works Director to approve all appointments to the Selection Committee. B) The Public Works Director will mail requests for proposals to all Purchasing Policies & Procedures (Rev. 8/8/2007) 24

26 those on the short list for the specific type of project. C) Upon reviewing the responding scope and cost proposals, the Executive Selection Committee (Public Works Director, Finance Director, Deputy City Manager or his designee, and the using department s Director) shall rank the firms based on the best and most complete response. The Executive Selection Committee shall open negotiations with the top ranked firm. If negotiations are not successful, negotiations may include the next firm in sequence as ranked during proposal review. Negotiations shall continue in this manner until a mutually satisfactory contract results. 4. Professional services over $125,000 do not require review by the Executive Committee. City Council report is sufficient. 5. Continued prohibition of bid splitting for the purposes of evading other purchasing provisions. Purchasing Policies & Procedures (Rev. 8/8/2007) 25

27 SALE OF SURPLUS REAL PROPERTY The City Manager shall be authorized to execute an agreement for the sale and transfer of surplus real property if said property meets the following criteria: (a) The property is less than 5,000 square feet in area and as such is exempt from legal notice of sale requirements (b) The property must be sold to an owner of contiguous property. (c) The fair market value is calculated by using the real estate appraisal formulas. (d) The vacant, unused lot is to be used for improvement purposes. Purchasing Policies & Procedures (Rev. 8/8/2007) 26

28 ACKNOWLEDGMENT OF PROCUREMENT PRACTICES Policy All City suppliers who perform work on City property shall sign and return to the City of Pomona Purchasing Division before the commencement of any work the form entitled "AGREEMENT FOR INDEMNIFICATION BY CONTRACTOR/VENDORS AND ACCEPTANCE AND ACKNOWLEDGMENT OF PROCUREMENT PRACTICES OF THE CITY OF POMONA". Updates The form may be updated or changed from time-to-time as directed by the City Attorney and Risk Manager. Purchasing Policies & Procedures (Rev. 8/8/2007) 27

29 AGREEMENT FOR INDEMNIFICATION BY CONTRACTOR/VENDOR AND ACCEPTANCE AND ACKNOWLEDGMENT OF PROCUREMENT PRACTICES OF THE CITY OF POMONA The City of Pomona requires contractors and suppliers of services to the City to agree to indemnify and hold the City of Pomona harmless for claims or losses arising from or connection with the contracting party s work for the City of Pomona before a Purchase Order is issued. To reduce the possibility of misunderstanding between contracting parties and the City in ease of a claim or lawsuit, the City of Pomona is requiring that contacting parties who perform services for the City sign this letter. This letter will act as and become a part of each Contract/Purchase Order between the City of Pomona and the contracting parties signing the letter for the period of to. In consideration of the opportunity of doing work for the City of Pomona and benefits to be received thereby, the contracting party to this agreement agrees as follows: 1. That where a contract, purchase order or confirming order is issued by the City of Pomona awarding a contract, this Letter Agreement is to be considered part of that contract. 2. Contractor agrees to indemnify the City of Pomona, and any officer, employee or agent, and hold the City of Pomona, and any officer, employee or agent, there of harmless from any and all claims, liabilities, obligations and causes of action of whatsoever kind or nature for injury to, or death of, any person (including officer, employees and agents of the City of Pomona), and for injury or damage to or destruction of property (including property of the City of Pomona), resulting from any and all actions or omissions of contractor or contractor s employees, agents or invitees, or any subcontractor of contractor or any of such subcontractor s employees, agents or invitees. 3. That the contracting party specifically waives the benefits and protection of Labor Code Section 3864 which provides: If an action as provided in this chapter is prosecuted by the employee, the employer, or both jointly against the third person results in judgment against such third person or settlement by such third person the employer shall have no liability to reimburse or hold such third person harmless on such judgment or settlement in the absence of a written agreement so to be executed prior to the injury. This waiver will occur as to any contracts awarded by the City of Pomona to the contracting party to this letter while this Agreement is in force. 4. That this Agreement has been signed by an authorized representative of the contracting party, and such representative has the authority to bid the contractor/vendor to all terms and conditions of this Agreement. 5. That this Agreement shall be binding upon the successors and assignees of the contracting party to any contract with the City of Pomona. As a condition precedent to acceptance, any contacts from the City of Pomona and contracting party agree to advise its successors or assignees of this agreement and to obtain their consent to its writing before the work of the representative successor or assignees begin, such assignment shall not be effective without the written consent of the City of Pomona. 6. To promptly notify the City of Pomona of any change in ownership of the contracting party while this Agreement is in force. 7. In the event that this Agreement, contract or purchase order is entered into with the Pomona Community Redevelopment Agency, wherever the term City of Pomona is indicated it shall also be applicable to the Pomona Community Redevelopment Agency. This letter Agreement cannot be modified or changed without the express written consent of the City of Attorney of the City of Pomona. On behalf of (Name of Contractor or Vendor) (Address) I agree to the terms of this Letter Agreement Name Title (Manager, Owner, or Officer of Company) This Agreement is to be returned to: City of Pomona Purchasing Department P. O. Box 660, Pomona, CA Purchasing Policies & Procedures (Rev. 8/8/2007) 28