1 PURCHASING POLICY
City of Foster City California
Updated: October 18, 2021January 1, 2025
Prior Update: January 4October 18, 2021
TABLE OF CONTENTS
Section 1 – Purpose and Scope.....................................................................................................2 Section 2 – Governing Principles ...................................................................................................2 Section 3 – Authority......................................................................................................................2 Section 4 – Contract Terms ...........................................................................................................3 Section 5 – Dollar Limits ................................................................................................................3 Section 6 – Federally-Funded Contracts and Purchases...............................................................5 Section 7 – Affirmative Action Penalties.........................................................................................5 Section 8 – Surplus Equipment and Supplies ................................................................................5 Section 9 – Procurement of Recycled-Content Paper Products ....................................................6 Section 10 – Procurement of SB 1383 Eligible Compost and/or Mulch .........................................7 Section 11 – Employee Reimbursement of Benefits-Related Expenses........................................8 Section 12 – Procurement (Credit) Cards ......................................................................................8 Section 13 – Exclusion of Alcoholic Beverages .............................................................................8 Section 14 – City Council Expense Reimbursement Policy ...........................................................8 Section 15 – Disaster Procurement Policy.....................................................................................8 2 Section 1 – Purpose and Scope
In accordance with Foster City Municipal Code Section 3.04.030, “The City Manager shall recommend and the City Council shall approve policies and procedures necessary in implementing a purchasing system which will include the necessary assignment of duties in order to carry out those policies and procedures.” Accordingly, the City Manager has hereby created this set of policies that all departments shall use in letting public construction contracts, executing professional services agreements, and purchasing supplies, services and equipment.
Section 2 – Governing Principles
In accordance with Foster City Municipal Code Section 3.04.010, purchasing policies are created so that supplies, services and equipment are purchased or contracted for the City at the lowest cost commensurate with quality, and that apply positive financial controls that meet legal requirements and generally accepted accounting principles.
Section 3 –Authority
A.Purchasing Authority / Duties and Responsibilities. In accordance with Foster City Municipal Code Section 3.04.030, Department Heads or their designees shall be designated by the City Manager as Purchasing Authorities for the City, who are authorized and responsible for legally obligating the City in the purchase of supplies, services and equipment pursuant to Foster City Municipal Code Chapter 3.04, Purchasing System, and this Purchasing Policy. A listing of such designated employees shall be maintained by the City Manager’s office or his/her designee, and shall be updated from time to time as business needs warrant. All such parties who are delegated authority under this Section are bound by the policies herein established.
Failure to follow these policies is grounds for disciplinary action as provided in the City’s Personnel Rules and Regulations.
B.The duties of the Purchasing Authority are as follows:
1.Purchasing or contracting for supplies, services, equipment and public projects required by operating departments;
2.Negotiating and recommending execution of contracts for the purchase of supplies, services, equipment and public projects;
3.Acting to procure for the city the necessary quality in supplies, services, equipment and public projects at the lowest cost to the city;
4.Encouraging competitive bidding as set forth in Foster City Municipal Code Chapter 3.04, Purchasing System, and endeavoring to obtain as full and open competition as possible on all purchases;
5.Supervising the inspection of all supplies and equipment purchased to insure conformance with contract documents;
6.Maintaining a bidders' list of the vendors capable of supplying the various goods and services required by the City;
7.Maintaining adequate records of bids received and awarded for each purchase where a bidding process was used, or records of key decision made in implementing alternative purchasing methods used in accordance with Foster City Municipal Code Section 3.04.110, Authorized Purchasing Alternatives. 3 C.Centralized Duties. The City Manager, at his/her discretion, may centralize or decentralize any or all of the aforementioned duties. However, in order to maintain adequate internal accounting controls over the purchasing function, the City Manager shall designate the Finance Director to oversee the following centralized duties:
1.Prescribing and maintaining such forms as necessary to the operation of Foster City Municipal Code Chapter 3.04 and other rules and regulations, including purchase requisitions, purchase orders, or other transactional forms;
2.Executing the provisions contained in Foster City Municipal Code Chapter 3.04 and providing administrative interpretation and advising on the provisions contained in chapter 3.04.
D.Contracting Authority. Department Heads are hereby authorized to execute various agreements in the normal course of business that may legally bind the City with a vendor or outside agency, except for those agreements which require approval by the City Manager or City Council per ordinance or Council resolution.
E.Delegation of Contracting Authority. Department Heads, upon consultation with the City Manager, may delegate authority to their managers or supervisors to execute certain types of agreements such as recurring agreements or agreements where the amounts are considered de minimus (e.g., contracts with instructors for recreation classes). A delegate must be a full-time, permanent employee of the City of Foster City.
Section 4 – Contract Terms
When contracting for perpetual, on-going services (e.g. regular maintenance work, regular janitorial services, etc.), the Purchasing Authority shall endeavor to contract for initial terms of at least three (3) years. Reasonable extensions to contract terms may be exercised if included within the original agreement along with process and timing for exercising those extensions.
Section 5 – Dollar Limits
The following dollar limits and approval authorities are established for procuring public contracts; supplies, services and equipment; and professional services. Subsequent changes to the dollar limits and/or approving authority are subject to City Council approval by resolution.
The following tables indicate the proper procurement method for contracts, purchases, and procurement of services under the requirements of the California Public Contract Code and Foster City Municipal Code Chapter 3.04, Purchasing System.
When contracting for an item or one-time/temporary service, the value of the contract for purposes of identifying the proper procurement method shall be the total compensation paid to the vendor/contractor/service provider. When contracting for perpetual, on-going services (e.g. regular maintenance work, regular janitorial services, etc.), the value of an on-going service contract – regardless of its term – shall be the cost of procuring the service for three (3) years.
For example, a maintenance service contract which will compensate the contractor in an amount not-to- exceed $20,000 annually shall be considered a $60,000 contract for the purpose of establishing the proper procurement method based on dollar limits.1 1 Example: A maintenance service contract which will compensate the contractor in an amount not-to- exceed $20,000 annually shall be considered a $60,000 contract for the purpose of establishing the proper 4 Federally-funded contracts and purchases must adhere to the federal guidelines, as outlined in Section 6 of this Policy.
A.Public Contract Code (no federal funds used)
Purchasing Method Approving
Authority
Dollar Limit
Level 1 – Force account (City employees) or
No bid requirements (Section 3.04.180)
City Manager
or Designee
< $60,000 <75,000 or up to the
Informal Bid Limit Pursuant to
Public Contract Code Section
22032
Level 2 – Informal bid procedures (Sect
3.04.190) (Note: If all bids received are in
excess of the Informal Bid limit set forth in
Public Contract Code section 22032, the
governing body of the public agency may, by
adoption of a resolution by a four-fifths vote,
award the contract, up to $235,000 or the limit
set forth in Public Contract Code section
22034(d), if it determines the cost estimate of
the public agency was reasonable.If all bids
received exceed the Informal Bid Limit, City
Council may by 4/5th vote award contract, at
$212,500 or less, to lowest responsible bidder,
if it determines the cost estimate of the public
agency was reasonable)
City Council > $60,00075,000 and <
$200,000220,000
or Informal Bid Limit Pursuant
to Public Contract Code
Section 220322 Eexcept where
alternative procurement
processes are allowed by state
law (e.g., CA Government
Code Section 4217)
Level 3 – Formal bid procedures (Sect.
3.04.200, et seq), Council approval required
City Council > $2200,000 or Informal
Formal Bid Limit Pursuant to
Public Contract Code Section
220322 Eexcept where
alternative procurement
processes are allowed by
state law (e.g., CA
Government Code Section
4217)
B.Purchases of Supplies, Equipment, and Services (excluding Professional Services) (no federal funds used)
Purchasing Method Approving
Authority
Dollar Limit
Level A – No bid requirements (open
market) (Section 3.04.060)
City Manager or
Designee
< $10,000
Level B – Informal bid procedures (Sect
3.04.070)
City Manager > $10,000 and < $50,000
Level C – Formal bid procedures (Sect.
3.04.080), Council approval required
City Council > 50,000*
procurement method based on dollar limits.
2 Except where alternative procurement processes are allowed by state law (e.g., CA Government Code Section 4217)
5 C.Purchases of Professional Services
Purchasing Method Approving
Authority
Dollar Limit
Level D – City Manager approval of RFP and
award of Contract (Sect.
3.04.140)
City Manager < $50,000
Level E – City Council approval of RFP
and award of Contract (Sect 3.04.140)
City Council > $50,000
6 Section 6 – Procurement Requirements for Federally-Funded Contracts and Purchases
Federally-funded contracts/purchases must adhere to criteria specified under Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Section 2 - CFR § 200.317-200.326, to comply with the Uniform Guidance (UG) procurement requirements. These requirements differ from those under the California Public Contract Code and the City’s procurement guidelines. Any contract or purchase using federal funds must comply with the methods specified in the following tables.
A.Federally-Funded Public Works Contracts
Purchasing Method Approving
Authority
Dollar Limit
Level 1 – Force account (City employees) or
No bid requirements
(Section 3.04.180)
City Manager or
Designee
< $3,500
Level 2 – Informal bid procedures (Sect
3.04.190) (Note: If all bids received exceed
the Informal Bid Limit, City Council may by
4/5 vote award contract to
lowest responsible bidder for up to an
additional 10% of that Limit
City Council > $3,500 and < $150,000 or
Informal Bid Limit Pursuant to 2
C.F.R. § 200.320
Level 3 – Formal bid procedures (Sect.
3.04.200, et seq), Council approval required
City Council > $150,000 or Informal Bid Limit
Pursuant to
2 C.F.R. § 200.320
B.Federally-Funded Purchases of Supplies, Equipment, and Services (excluding Professional Services)
Purchasing Method Approving
Authority
Dollar Limit
Level A – No bid requirements (open
market) (Section 3.04.060)
City Manager or
Designee
< $3,500
Level B – Informal bid procedures (Sect
3.04.070)
City Manager > $3,500 and < $50,000
Level C – Formal bid procedures (Sect.
3.04.080), Council approval required
City Council > 50,000
Section 7 - Affirmative Action Penalties
Contractors in violation of Fair Employment Practices Act or other similar federal law; per person, per day, for each day the person was discriminated against: $100 per person, per day (updated 2007, Ordinance 563 § 2 (part))
Section 8 – Surplus Equipment and Supplies
On occasion, the City may desire to sell used or surplus equipment and/or supplies. The concept is that the City will receive funds from the sale of said surplus assets to be recognized as revenues and deposited into reserves.
7 A.Sale of Surplus Assets. Departments must obtain prior written authorization from the City Manager (or his/her designee) to sell surplus assets in accordance with Foster City Municipal Code Chapter 3.04, Purchasing System, and this policy.
Surplus assets may be used as “trade-in” value with a vendor from whom replacement assets are purchased without the need for public sale of said assets. Otherwise, state and local law prohibit gifting of public funds to any individual or entity. Accordingly, the City shall use open methods in selling off surplus assets. Departments are authorized to use the following means of selling surplus assets in an open forum:
•Auctions – including City-run auctions, auction houses, online auctions (e.g., eBay)
•Sealed bids – sealed bids received and opened at a pre-specified time and place •Sales offers – under limited circumstances, the City may entertain offers from sole buyers (including City employees) to purchase surplus assets only after other open methods of disposing said assets are exhausted.
Departments must ensure that sale of any such assets are publicly noticed. Public notice of online auctions can be achieved through publicizing City-authorized online auctions on the City’s web site in an easily found location that links users to the online auction web site.
All funds received from sale of surplus assets must be recognized as revenue to the City (not as an offset to an expenditure).
B.Donating Surplus Assets. Subject to City Council approval, surplus equipment and/or supplies may be donated to local organizations, including but not limited to: school districts, public or private schools, service organizations, and non-profit organizations.
Unless expressly authorized by Council resolution, such assets shall have been determined to have little or no market value using open methods of public sale prior to being donated to local organizations. Organizations that provide services directly in or to Foster City residents or businesses shall have first priority.
Section 9 –Procurement of Recycled-Content Paper Products A.In accordance with Foster City Municipal Code Section 3.04.095, if fitness and quality of Rrecycled-Ccontent Ppaper pProducts and rRecycled-Ccontent Pprinting and Wwriting Ppaper are equal to that of non-recycled items, Purchasing Authorities shall purchase Rrecycled-cContent pPaper pProducts and Rrecycled-cContent Pprinting and wWriting pPaper that consists of at least thirty percent (30%), by fiber weight, postconsumer fiber, whenever available at the same or a lesser total cost than non- recycled items, consistent with the requirements of the Public Contracts Code, Sections 22150 through 22154 and Sections 12200 and 12209, as amended.
B.Recycled-cContent pPaper pProducts include, but are not limited to:
• Office Supplies: file folders, hanging file folders, white wove envelopes, manila envelopes, index cards, cartons, wrapping, packaging, corrugated boxes • Writing and Printing Papers: copy, xerographic, watermark, cotton fiber, offset, note pads, computer printout paper, writing tablets, other uncoated writing papers
• Printed Materials: calendars, brochures, reports, magazines, publications, posters, newsprint, book paper, forms
8 • Paper Janitorial Supplies: toilet paper, toweling, facial tissue, toilet seat covers C.All Ppaper pProducts and pPrinting and wWriting pPaper must be eligible to be labeled with an unqualified recyclable label as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).
D.Upon purchase of regulated paper products, Purchasing Authorities shall maintain records of all Paper Products and Printing and Writing Paper purchases (both recycled-content and non-recycled content, if any is purchased) made by any division or department or employee in such a manner that they may be provided upon request.
Records shall include a copy of the invoice or other documentation of purchase, written certifications for recycled-content purchases, vendor name, purchaser name, quantity purchased, date purchased, and recycled content (including products that contain none), and if non-Recycled-Content Paper Products and/or non-Recycled-Content Printing and Writing Paper are provided, include a description of why Recycled-Content Paper Products and/or Recycled- Content Printing and Writing Paper were not provided.
E.Purchasing Authorities will be responsible for obtaining records pertaining to Procurement of Recovered Organic Waste Products and Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper.
F.Purchasing Authorities will do the following to track Procurement of Recovered Organic Waste Products, Recycled-Content Paper Products, and Recycled- Content Printing and Writing Paper:
1.Collect and collate copies of invoices or receipts (paper or electronic) or other proof of purchase that describe the procurement of Printing and Writing Paper and Paper Products, including the volume and type of all paper purchases; and, copies of certifications and other required verifications from all divisions procuring Paper Products and Printing and Writing Paper (whether or not they contain recycled content) and/or from the vendors providing Printing and Writing Paper and Paper Products. These records must be kept as part of City’s documentation of its compliance with 14 CCR Section 18993.3.
2.Collect and collate copies of invoices or receipts or documentation evidencing procurement from all divisions procuring Recovered Organic Waste Products and invoices or similar records from vendors/ contractors/ others procuring Recovered Organic Waste Products on behalf of the City to develop evidence of City meeting its Annual Recovered Organic Waste Product Procurement Target. These records must be kept as part of the City’s documentation of its compliance with 14 CCR Section 18993.1.
3.Collect, collate, and maintain documentation submitted by City’s Direct Service Providers, and/or vendors.
4.Compile an annual report on direct procurement, and vendor/other procurement on behalf of the City, of Recovered Organic Waste Products, Recycled-Content Paper Products, and Recycled-Content Printing and Writing Paper, consistent with the recordkeeping requirements contained in 14 CCR Section 18993.2 for the Annual Recovered Organic Waste Product Procurement Target and 14 CCR Section 18993.4 for Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper procurement. This report shall be made available to the City’s responsible 9 G.D.entity for compiling the annual report to be submitted to CalRecycle (which will include a description of compliance on many other SB 1383 regulatory requirements) pursuant to 14 CCR Division 7, Chapter 12, Article 13. The procurement report shall also be shared with the City Council annually as evidence of implementing this Policy.will be responsible for obtaining records pertaining to procurement of recovered organic waste products and recycled-content paper products and recycled-content printing and writing paper, and shall input all data and digital copies of invoices, receipts, or other proofs of purchase that describe the procurement of printing and writing paper and paper products into the City’s SB 1383 Implementation Record to document its compliance with 14 CCR Section 18993.3. Records shall include a copy of the invoice or other documentation of purchase, written certifications for recycled-content purchases, vendor name, purchaser name, quantity purchased, date purchased, and recycled content, and if non-recycled-content paper products and/or non-recycled-content printing and writing paper are procured, include a description of why recycled-content paper products and/or recycled- content printing and writing paper were not provided.
Section 10 – Procurement of SB 1383 Eligible Compost and/or Mulch A.Any department or individual procuring compost for or on behalf of the City shall procure compost that meets the definition in 14 CCR Section 17896.2(a)(4), which stated, as of the effective date of this policy, that “Compost” means the product resulting from the controlled biological decomposition of organic Solid Wastes that are Source Separated from the municipal Solid Waste stream, or which are separated at a centralized facility. Compost eligible for meeting the City’s Annual Recovered Organic Waste Product Procurement Target must be produced at a compostable material handling operation or facility permitted or authorized under 14 CCR Chapter 3.1 of Division 7 or produced at a large volume in-vessel digestion facility that Composts on-site as defined and permitted under 14 CCR Chapter 3.2 of Division 7. Compost shall meet the State’s composting operations regulatory requirements.
B.Any department or individual procuring mulch for or on behalf of the City shall procure mulch pursuant to 14 CCR Chapter 12 of Division 7 that meets the conditions for the duration of the applicable procurement compliance year, as specified by 14 CCR Section 18993.1(f)(4).
•Produced at either aA compostable material handling operation or facility as defined in 14 CCR Section 17852(a)(12), that is permitted or authorized under 14 CCR Division 7, other than a chipping and grinding operation or facility as defined in 14 CCR Section 17852(a)(10), OR a transfer/processing facility or transfer/processing operation as defined in 14 CCR Sections 17402(a)(30) and (31), respectively, that is permitted or authorized under 14 CCR Division 7; OR, a solid waste landfill as defined in Public Resources Code Section 40195.1 that is permitted under 27 CCR Division 2.
•Meets or exceeds the physical contamination, maximum metal concentration, and pathogen density standards for land application specified in 14 CCR Sections 17852(a)(24.5)(A)1 through 3.
10 Section 11 – Employee Reimbursement of Benefits-Related Expenses Employees are eligible for reimbursements of a variety of employment-related benefits, including but not limited to: vision, professional development expenses, uniform reimbursements, job-related footwear, and other benefits which may be part of negotiated benefits packages in Memoranda of Understanding (MOU) with bargaining groups or compensation and benefits plans (C&B Plan) for unrepresented employees.
Employees shall submit requests for reimbursement of approved reimbursable expenses after those expenses are incurred by the employee. The request shall first be approved by the Department Head or his/her designee, then be approved by the Human Resources Department to ensure compliance with the provisions of the applicable MOU or C&B Plan.
Expenditures shall be accounted for as fringe benefits in the appropriate department budget.
Section 12 – Procurement (Credit) Cards
The City has created a Procurement (Credit) Card Program to assist departments in purchasing from vendors that either do not accept purchase orders, or otherwise to improve the efficiency of processing small dollar item purchases. A Credit Card Program policy has been issued and is attached hereto and incorporated herein by reference.
Section 13 – Exclusion of Alcoholic Beverages
In general, City funds shall not be used to purchase alcoholic beverages and such expenditures are explicitly prohibited unless specifically approved in advance by a Department Head or the City Manager for rare special City events where serving alcoholic beverages would be appropriate, such as grand openings or citizen volunteer appreciation events.
Section 14 – City Council Expense Reimbursement Policy
In accordance with California Government Code § 53232.1-.4, the City Council has adopted a City Council Expense Reimbursement Policy as of January 3, 2006. This Policy establishes guidelines regarding reimbursable expenses for City Councilmembers, and is required by law effective January 1, 2006.
The Policy is incorporated by reference herein. This Policy applies to the City Council as City Councilmembers and Estero Municipal Improvement District Directors.
Section 15 – Disaster Procurement Policy
The City Manager shall develop and implement a separate Disaster Procurement Policy to supplement the City’s normal purchasing practices to assure that, in both emergency and exigent circumstances caused by a proclaimed disaster or emergency, the City is able to acquire the goods and services required to address an immediate threat to life safety, public health, or to eliminate or reduce an immediate threat of significant damage to improved public and private property through cost-effective measures while still maintaining an effective purchasing process that meets applicable California and federal purchasing laws for cost recovery and reimbursement.