HomeMy WebLinkAboutORD-04-91 Revise City's Purchasing SystemORDINANCE NO. 4-
91 AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF ORANGE AMENDING CHAPTER 3.08
OF THE ORANGE MUNICIPAL CODE REVISING
THE CITY'S PURCHASING
SYSTEM.NOW, THEREFORE, BE IT RESOLVED that the City Council of
the City of Orange does hereby ordain as
follows:section
I:sections 3.08.010 through 3.08.210 of Chapter 3.08
are hereby repealed. sections 3.08.010 through 3.08.230 are
hereby amended to read as
follows:
sections:3.08.
010 3.08.
020 3.08.
030 3.08.
040 3.08.
050 3.08.
060 3.08.
070 3.08.
080 3.08.
090 3.08.
100 3.08.
110 3.08.
120 3.08.
130 3.08.
140 3.08.
150 3.08.
160 3.08.
170 3.08.
180 3.08.
190 3.08.
200 3.08.
210 3.08.
220 3.08.
230 CHAPTER 3.
08 PURCHASING
SYSTEM Adoption of purchasing
System General
Policy Scope of
Chapter Centralized Purchasing
Division Purchasing
Agent Purchase
Orders Encumbrance of
Funds Inspection and
Testing
Bidding Purchasing
Regulations Exemptions from Centralized
Purchasing Estimates of
Requirements Requisition Forms and Purchase
Orders Exceptions to Competitive Bidding
Requirement Regulations Regarding Selection of
Contract
Services Formal Bid
Procedures No Formal
Bids Open Market or Informal Bid
Procedure Minimum Number of Informal
Bids Record of Informal
Bids Surplus Supplies and
Equipment Surplus
Supplies--Trade-
3.08.010 Adoption of Purchasinq Svstem. In order to
establish efficient procedures for the purchase of supplies and
equipment at the lowest possible cost commensurate with quality
needs, to exercise positive financial control over purchases, to
clearly define authority for the purchasing function, and to
assure the quality of purchases, a purchasing system is adopted.
3.08.020 General Policv. Purchases shall be in accordance
with allocations approved in the city budget. At the same time,
the City council recognizes that in certain unanticipated cases,
an emergency may dictate that a certain latitude be permitted in
the implementation of this purchasing system.
3.08.030 Scope of Chapter. The procedures established by
this chapter shall apply only to the purchase of supplies,
equipment and services, and shall not apply to public projects as
defined in section 20161 of the California Public Contracts Code.
3.08.040 Centralized purchasinq Division. There is created
a centralized purchasing division in which is vested authority for
the purchase of supplies, equipment and services.
3.08.050 Purchasinq Aqent. There is created the position
of Purchasing Agent, who may also be known as the Purchasing
Officer, The Purchasing Agent shall be the head and have general
supervision of the Purchasing Division. The duties of Purchasing
Agent may be combined with those of any other office or position.
The Purchasing Agent shall have the authority to:
a) Purchase or contract for supplies, equipment and
services required by any using agency in accordance with
purchasing procedures prescribed by this chapter, such
administrative regulations as the purchasing Agent shall adopt for
the internal management and operation of the Purchasing Division
and such other rules and regulations as shall be prescribed by the
City Councilor the city Manager.
b) Negotiate and recommend execution of contracts for the
purchase of supplies, equipment and services.
c) Act to procure for the City the needed quality in
supplies and equipment at least expense to the city.
d) Discourage uniform bidding and endeavor to obtain as
full and open competition as possible on all purchases.
e) Prepare and recommend to the City Council rules
governing the purchase of supplies and equipment for the City.
f) Prepare and recommend revisions and amendments to the
purchasing rules.
g) Keep informed of current developments in the field of
purchasing, prices, market conditions and new products.
Ord. No. 4-91 2-
h) Prescribe and maintain such forms as are reasonably
necessary for the operation of this chapter and other rules and
regulations.
3.08.060 Purchase Orders. Purchases of supplies and
equipment shall be made only by purchase orders. Except as
otherwise provided herein, no purchase order shall be issued
unless the prior approval of the Purchasing Agent or his
designated representative has been obtained.
3.08.070 Encumbrance of Funds. Except in cases of
emergency, the Purchasing Agent shall not issue any purchase order
for supplies or equipment unless there exists an unencumbered
appropriation in the fund account against which said purchase is
to be charged.
3.08.080 Inspection and Testinq. The Purchasing Agent
shall, in his or her discretion, inspect supplies and equipment
delivered to determine their conformance with the specifications
set forth in the order. The Purchasing Agent shall have authority
to require chemical and physical tests of samples submitted with
bids and samples of deliveries which are necessary to determine
their quality and conformance with specifications.
3.08.090 Biddinq. Purchasing shall be entered into
pursuant to either formal or informal bid procedures as
hereinafter prescribed. All solicitation of bids shall be
unrestricted and competitive except as provided.
a) Formal Purchasinq Procedures. The purchase of
supplies, materials, equipment, and services of estimated value
greater than $30,000 shall be by written contract and shall
require the approval of the City Council following a formal bid
procedure as set forth in section 3.08.160 below. Purchases shall
not be divided into smaller amounts to avoid formal bid
procedures.
b) Informal Purchasinq Procedures. The purchase of
supplies, materials, equipment, and services with an estimated
value of $30,000 or less shall be made pursuant to an informal bid
procedure as set forth in section 3.08.100 below.
c) Supervise the inspection of all supplies and equipment
purchased to insure conformance with specifications.
d) Recommend the transfer of surplus or unused supplies
and equipment between departments as needed.
e) Maintain an approved vendors list, vendors catalog
file and records needed for the efficient operation of the
Purchasing Division.
3.08.100 Purchasinq Requlations. The Purchasing Agent
shall be responsible for determining that the regulations and
procedures in sections 3.08.150 are carried out.
Id 3-Ord. No. 4-
3.08.110 Exemptions from Centralized Purchasinq. The City
Manager may authorize, in writing, any department to purchase
specified supplies and equipment independent of the Purchasing
Agent; provided, however, that the city Manager shall require that
such purchases be made in conformity with the procedures
established by this chapter and shall further require periodic
reports from the department on the purchases made under such
written authorization.
3.08.120 Estimates of Requirements. All using departments
shall file detailed estimates of their requirements in supplies
and equipment in such manner, at such time, and for such future
periods as the Purchasing Agent shall prescribe.
3.08.130 Requisition Forms and Purchase Orders.
Departments shall submit requests for supplies and equipment to
the city Manager or his designee on standard requisition forms or
an alternative form acceptable to the City Manager. Purchases in
excess of $500.00 shall be made by written purchase order.
3.08.140 Exceptions to Competitive Biddinq Requirement.
Notwithstanding any provision of this chapter to the contrary, the
competitive bidding procedures and requirements may be dispensed
with in any of the following instances:
a)
equipment
entity.
Any agreement involving acquisition of supplies,
or service entered into with another governmental
b)
2,000.
When the estimated amount involved is less than
c) The city Manager may authorize the purchase of
materials, supplies, equipment and services where an emergency is
deemed to exist and it is determined that service involving the
public health, safety or welfare would be interrupted if the
normal procedure were followed. All emergency purchases which
would otherwise require formal bidding procedures made pursuant to
this section shall be submitted to the City Council for
ratification at the next regular Council meeting after the
purchase is authorized.
d) Certain professional services. The procurement of
certain professional services such as contracts with attorneys,
plan checkers, inspectors, architects, engineers, information
systems consultants, auditors, financial consultants, or when the
service contracted for deals with election service, public
relations and related activities; negotiation for or acquisition
of land; insurance; bonds; or any other service of similar nature
to those listed may be made without following either formal or
informal bid procedures. Approval of the City Council for
specific professional services shall be required for contracts in
excess of $30,000. The day to day operation of the City's self
insurance or insurance retention programs are exempt from these
requirements, when performed in cooperation with the City's Risk
Manager.
Ord. No. 4-91 4-
e) Sole source. The procurement of certain supplies,
services, and equipment may be made without following either
formal or informal bid procedures, if a commodity or service is
offered by only one vendor, or when only one vendor is able to
supply a commodity within the time frame and/or under the terms
and conditions which reasonably meet the needs of the using City
department. Any purchases of $100,000 or less in value under this
section shall be made only on written recommendation of the
Purchasing Agent and approval of the City Manager. All other
purchases shall be approved by the city Council.
3.08.150 Requlations Reqardinq Selection of Contract
Services. The City Council shall, by resolution, prescribe
procedures, rules and regulations governing the solicitation,
selection and award of proposals or bids for the furnishing of
personal services or professional or consulting services or for
other contractual services, the contracts for which may be awarded
without observing the bidding procedures provided for in this
chapter. Such procedures, rules and regulations shall have as one
purpose the obtaining of contractual services of the highest
quality together with cost-
effectiveness.3.08.160 Formal Bid Procedures. Purchases in excess
of 30,000 shall be by written contract or approved purchase
order from the lowest responsible bidder pursuant to the
procedure hereinafter
prescribed.a) Notice inviting bids, Notices inviting bids
shall include a description and specifications of the articles
or services to be purchased, delivery, conditions and
discounts,where bid documents and specifications may be secured, the cost
of documents and specifications, and the time and place for
filing and of opening of
bids.1. Public Notice. Notices inviting
bids shall be published by the City Clerk in a newspaper of
general circulation in the City at least ten (10) days before the date
of opening of the bids. As an alternative, when there is
no adjudicated newspaper for the city, notices may be posted in
at least four public places in the city that have been designated
by council action as the places for posting public
notices.2. Other Notice. The City Manager or
City Clerk shall also advertise pending purchases by notices in
such publications or trade journals or in such other manner as
deemed appropriate so as to insure that competitive bids are secured
by the
City.b) Bidder's Security. When deemed necessary by
the Purchasing Officer, bidders shall submit bond security of
ten percent of the amount of bid when bids are submitted.
Bidders shall be entitled to return of bond security, provided,
however,that a successful bidder shall forfeit his bond security upon
his refusal or failure to execute the contract within the time
period specified in the bid documents after the notice of award
of Id 5-Ord. No.
contract has been mailed, unless in the latter event the city is
solely responsible for the delay in executing the contract. The
City Council may, on refusal of the successful bidder to execute
the contract, award it to the next lowest responsible bidder. If
the City Council awards the contract to the next lowest bidder,
the amount of the lowest bidder's security shall be applied by the
City to the contract price differential between the lowest bid and
the second lowest bid and the surplus, if any, shall be returned
to the lowest bidder.
c) Bid Opening Procedure. Sealed bids shall be submitted
to the General Services Department, Purchasing Division, and shall
be marked with the word "BID" on the envelope and a description of
the project or item. Bids shall be opened in public at the time
and place stated in the public notices or as soon thereafter as
possible. The date and time bids are received shall be marked on
each envelope. Bids received after the deadline established in
the notices inviting bids shall be returned to the bidder
unopened. A tabulation of all bids received shall be open for
public inspection during regular business hours for a period of
not less than thirty calendar days after the bid opening.
d) Rejection of Bids. For stated reasons, the city
council may reject any or all bids presented and may re-
advertise for bids pursuant to the procedure hereinabove
prescribed.e) Award of Contracts or Approval of Purchase
Orders.Except as otherwise provided herein, contracts shall be awarded
by the City council to the lowest responsible bidder. The award
of contract shall be confirmed by purchase order. Local bidders
are granted a 1% differential in lieu of sales tax loss.
Prices,fitness, quality, delivery and service being equal,
preference will be given to the local bidder. For purposes of this
section,local bidder" shall mean a business having its principal place
of operation within the jurisdictional boundaries of the city
of
Orange.f). Tie Bids. If two or more bids received are for
the same total amount or unit price, quality and service being
equal,and if the public interest will not permit the delay
of re-advertising for bids, the City council may at
its discretion accept the one it chooses or accept the lowest bid made
by and after negotiation with the bidders that are tied at the
time of the
bid opening.3.08.170 No Formal Bids. When no formal bids
or no responsive bids are received, the Purchasing Officer
is authorized to negotiate for written proposals, and his or
her recommendation shall be presented to the City Manager and the award,
if any,shall be made in accordance with applicable
provisions
prescribed herein.3,
08.180 of
supplies and 30,000
or less Open Market or Informal
Bid Procedure.equipment of an estimated value
in the may be made by the Purchasing
Agent
in Purchases
amount of
the open Ord. No. 4-
market pursuant to the procedure prescribed in sections 3.08.180
through 3.08.200 and without observing the procedure prescribed in
sections 3.08.160 through 3.08.170; provided, however, all bidding
may be dispensed with for purchase of supplies and equipment
having a total estimated value of less than $2,000.
3.08.190 Minimum Number of Informal Bids. Open market
purchases shall, wherever possible, be based on at least three
informal bids, and shall be awarded to the bidder offering the
most advantageous bid to the City after consideration of price,
quality, durability, servicing, delivery time, standardization,
and other factors.
3.08.200 Record of Informal Bids. The Purchasing Agent
shall keep a written record of all open market purchases and
informal bids for a period of two years. This record, while so
kept, shall be open to public inspection.
3.08.210 Surplus Supplies and Eauipment. All using
departments shall submit to the Purchasing Agent, at such times
and in such forms as he shall prescribe, reports showing all
supplies and equipment which are no longer used or which have
become obsolete and worn out.
3.08.220 Surplus Supplies--Trade Ins. The Purchasing
Agent shall have authority to exchange for or trade in on new
supplies and equipment all supplies and equipment which cannot be used
by any department or which have become unsuitable for City
use.3.08.230 Surplus Supplies--Sale. The
Purchasing Agent shall have authority, subject to approval of the city
Manager, to dispose of surplus supplies or equipment by auction or by
sale or otherwise after receiving bids or proposals which, in his
or her judgment, provide the maximum return to
the City.
Section II:A summary of this Ordinance shall be pUblished
and a certified copy of the full text of this Ordinance shallbepostedintheOfficeoftheCityClerkatleastfive (5) days
prior to the City Council meeting at which this Ordinance is
to be adopted. A summary of this Ordinance shall also be
published once within fifteen (15) days after this Ordinance's passage
in the Orange City News, a newspaper of general
circulation, published and circulated in the City of Orange. The City ClerkshallpostintheOfficeoftheCityClerkacertifiedcopyofthe
full text of such adopted Ordinance along with the names of
those City ld 7-Ord.
council members voting for and against the Ordinance in accordance
with Government Code section 36933. This Ordinance shall take
effect thirty (30) days from and after the date of its final
passage.
ADOPTED this 26th day of February 1991.
ATTEST:
MARILYN J. JENSEN. C.M.C.
city C1erk'of the city 'of Orange
By:4.A..u~ (]:t~/'Ad
CA SANDRA CATHCART, C.M.C.
DEPUTY CITY CLERK ",
STATE OF CALIFORNIA)
COUNTY OF ORANGE )
CITY OF ORANGE )
I, MARILYN J. JENSEN, city Clerk of the City of Orange,
California, do hereby certify that the foregoing Ordinance was
introduced at the regular meeting of the City Council held on
the 19th day of February ,1991, and thereafter at a regular
meeting of said City Council duly held on the 26th day
of Februarv ,1991, was duly passed and adopted by
the following vote, to wit:
AYES: COUNCIL MEMBERS: STEINER, BARRERA, MAYOR BEYER, COONTZ, SPURGEON
NOES: COUNCIL MEMBERS: NONE
ABSENT: COUNCIL MEMBERS: NONE
MARILYN J. JENSEN, C.M.C.
city Clerk of the City of Orange
By:2/,.t 0~_,'ML
SANDRA CATHCART, C.M.C.
DEPUTY CITY CLERK
Ord. No. 4-91 8-