CITY COUNCIL POLICY
FINANCE
POLICY 4.2
Effective
Last Rev. 06-2026
PURCHASING POLICY AND PROCEDURES
PURPOSE: This document defines the policies and procedures for the purchase of supplies, equipment and services for the City of Laguna Beach, and is in conformance with the requirements of Federal and State law, Laguna Beach Municipal Code (“LBMC”) Chapter 2.30.
In the event of any conflict between this Purchasing Policy and the LBMC or Federal and State law, the LBMC and Federal and State law shall govern. The City’s purchasing philosophy is to ensure fiscal stability and efficiency in governance through the procurement of goods, services, and public projects at the best quality and value in an open and competitive market. The City strongly encourages broad participation in the procurement process.
This policy applies to all City departments, officers, and employees involved in any procurement activity, including purchases made using grants or federal/state financial assistance. When federal or state funding agency requirements are more restrictive than this policy, the more restrictive requirement governs.
GENERAL POLICY:
Responsibilities:
The Departments are responsible for following proper policies and procedures as laid out in this Purchasing Policy. The Director of Finance shall be responsible for recommending additions, deletions and amendments to the City of Laguna Beach Purchasing Policy.
Definitions:
a. The following definitions apply throughout this policy. Emergency: A sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.
b. General Services: Furnishing of labor, time, or effort by a contractor for services as the city may, from time to time, find necessary and proper for the functioning of the City.
Examples include, but are not limited to, janitorial, uniform cleaning and other services which do not require any unique skill, special background or training. c. Capital Asset: Equipment, Machinery, and/or Vehicles costing more than $10,000 with a useful life greater than one year which require reporting, tagging and tracking as well as calculating and recording depreciation
d. Commodities: Supplies, materials tools and minor equipment typically consumed within Attachment 1
4 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
one year and minor equipment with a useful life of more than one year including IT items such as computers and cell phones.
e. Maintenance Work or Maintenance Services: As defined in California Public Contract Code section 22002, the furnishing of labor, time or effort by a contractor, including but not limited to:
i. Routine recurring, and usual work for the preservation or protection of a publicly owned, or publicly operated facility for intended purposes. ii. Minor repainting.
iii. Resurfacing streets and highways at less than one inch. iv. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; and
v. Work performed to keep, operate and maintain publicly owned water or waste disposal systems.
f. Materials: Basic ingredients in a relatively raw, unrefined, or unmanufactured state, that may be worked into a more finished form (e.g., sand, wood, asphalt). g. Professional Services: Services provided by a person, company, corporation, or firm engaged in a profession based on a generally recognized special knowledge, skill, license, and/or certification to perform the work including, but not limited to, the professions of accountant, auditor, attorney, architect, landscape architect, financial consultant, management consulting, investigative services, construction manager, engineer, environmental consultant, or land surveyor, and whose services are considered distinct and unique.
h. PublicWorks Projects: A public works construction project as defined inCalifornia Public Contract Code section 22002 – “Public works project” means any of the following:
i. Construction, reconstruction, erection, alteration, renovation, improvement, demolition and repair work involving any publicly owned, leased, or operated facility.
ii. Painting or repainting of any publicly owned, leased or operated facility. i. The definition of “public project” does not include maintenance work or maintenance services as defined in Public Contract Code section 22002(d) above. j. Prevailing Wage Requirement for Public Works Projects (Which Includes Maintenance) as Defined in the California Labor Code: Labor Code 1771 provides: “Except for public works projects of one thousand dollars ($1,000) or less, not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, and not less than the general prevailing rate of per diem 5 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
wages for holiday and overtime work fixed as provided in this chapter, shall be paid to all workers employed on public works. This section is applicable only to work performed under contract and is not applicable to work carried out by a public agency with its own forces. This section is applicable to contracts for maintenance work.
The California Code of Regulations 16000 provides the definition of maintenance:
i. Routine, recurring and usual work for the preservation, protection and keeping of any publicly owned or publicly operated facility (plant, building, structure, ground facility, utility system or any real property) for its intended purposes in a safe and continually usable condition for which it has been designed, improved, constructed, altered or repaired.
ii. Carpentry, electrical, plumbing, glazing, [touchup painting,] and other craft work designed to preserve the publicly owned or publicly operated facility in a safe, efficient and continuously usable condition for which it was intended, including repairs, cleaning and other operations on machinery and other equipment permanently attached to the building or realty as fixtures.
a. Exception 1: Janitorial or custodial services of a routine, recurring or usual nature is excluded.
b. Exception 2: Protection of the sort provided by guards, watchmen, or other security forces is excluded.
c. Exception 3: Landscape maintenance. See Public Contract Code Section 21002.
k. Purchase Order (PO): An authorization for an order of goods or services which includes an agreed upon price and scope. A PO is generally issued for a one-time service or one time equipment purchase. A PO is also used to encumber funds for each Fiscal Year for approved, executed contracts. No vendor should begin work or deliver goods without a City-issued PO number.
l. Contract: A written and legally binding agreement between the City and a Contractor/Supplier for provision of services and/or commodities in which there is an offer and acceptance which includes mutual agreement for price, scope and terms and conditions. A contract includes an agreed-upon Scope/Statement of Work, Pricing/Cost, Payment Terms, Insurance/Bond Requirements and Terms and Conditions addressing obligations and liability. The city has approved standard templates that have been approved by the City Attorney’s Office. These templates should be used. Deviations from the standard contract templates must be approved by the City’s legal team.
m. Contract Requirements by Purchase Type: A written contract is required for all purchases over $10,000, with the following exception:
6 CITY COUNCIL POLICY
FINANCE
POLICY 4.2
Effective
Last Rev. 06-2026
• Goods and Commodities (supplies, materials, tools, minor equipment, off-theshelf, catalog, or stock items) a written contract is required for purchases over $30,000. For goods purchases at or below $30,000, a City-issued Purchase Order with the City's standard terms and conditions serves as the binding agreement.
For all other purchase types, the $10,000 contract threshold applies regardless of dollar amount:
• Services (general and professional) a written contract required at $10,000 and above.
• Software, SaaS, and technology a written contract or City Attorney-reviewed vendor agreement required at $10,000 and above.
• Public works and construction a written contract required at any dollar amount per CUPCCAA and California law.
In all cases, a Purchase Order is required before goods are delivered or services commence for purchases over $10,000. Vendor signature on the contract must be obtained before any City official signs.
n. Contract Term: Contract term/length should be stated in the contract. Generally multiyear contracts should not exceed five years and may be established for a 3-year initial term with two one-year optional renewal years. However, there may be instances when a contract may extend beyond five years.
o. Contract Contingency: Contract contingency is an allowance with required approvals, of a potential need to increase a contract. A Contract contingency may be requested at the same time as the initial contract approval and may range between 10-20% depending on the nature of the services/project. Utilizing an approved contract contingency requires an approved Requisition, a Purchase Change Order and a Contract Amendment to increase the contract not to exceed amount. p. Exceptions to Standard Terms and Conditions: Contractors on occasion may request to negotiate the City’s standard contract terms which would require the review/approval of the City’s legal team, Risk Management and/or City Council. q. Responsible Bidder: A bidder or proposer who has demonstrated capability, required resources, fitness, capacity, and experience to satisfactorily perform services and/or provide commodities that meet the scope of work and/or specifications. Before contract award, Departments will verify contractor’s references, check System of Award (SAM) https://sam.gov, for potential exclusions, and verify required licensing, ownership and business status.
r. Supplies: Goods utilized in the ordinary course of business for regular use or consumption normally within one year (e.g., pencils, light bulbs, street signs). s. Small Dollar Purchase: A small dollar purchase is a low risk, one-time service or 7 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
commodity costing $10,000 or less. This does not include ongoing contractual services or capital projects and/or capital assets.
t. Small Dollar Purchase Procedure: One quote is required for purchases under $10,000.
Small Dollar Purchases may be purchased using Purchase Order (PO) but a PO is not required. P-Cards may be utilized for small dollar purchases which do not exceed the P-Card policy thresholds and meet the Policy criteria.
u. Informal Quote Procedure: The informal quote procedure provides a cost-effective process for canvassing the marketplace to identify contractors capable of providing appropriate goods or services at a reasonable price. Under the informal quote procedure, the requestor solicits written or emailed quotations from a minimum of three contractors. The goods or services are awarded to a vendor offering the lowest price and highest quality. Exceptions to policy require justification in the requisition and required approvals.
v. Formal Solicitation Procedures: The formal solicitation procedure is to be used primarily for large dollar Capital Asset/Equip and Services (over $100,000 and over $220,000 for Construction Projects) and requires the use of competitive solicitation whereby the requestor issues a public notice soliciting formal written bids or proposals. Under this procedure, bids shall be solicited through the issuance of an Invitation for Bid (IFB) or a Request for Proposals (RFP) through the City’s electronic public bidding platform.
1. An IFB is utilized when the service or commodity can be specifically defined and fixed rates/prices are obtained, evaluated and an award is granted to the lowest, responsible bidder.
2. An RFP is utilized when the service or commodity is not as specific yet there is a clear objective/goal allowing proposers to present new technologies, new products and innovative service solutions. RFP Proposals are evaluated by a panel using pre-determined criteria resulting in an award to the most qualified, responsible proposer.
3. Bid Protest. Bidders/Proposers have a right to protest a Bid or RFP. The protest may be related to the bid process or specifications, or it may be related to the bid award. The protester must submit a timely protest in compliance with the bid or RFP protest deadlines. Protests received after the deadline will not be considered. The protest must be in writing and must include the reason for the protest and the details. It should also include the protestors requested resolution. City staff will pause the solicitation, review the protest and respond to the protestor with either a denial or acceptance and an action to resolve. If the protest is deemed valid, it may result in issuance of an addendum or a rebid. For protests that cannot be resolved at a City staff level, Departments should consult City Attorneys for guidance.
w. Order Splitting: The intentional division of a single purchase into smaller increments to avoid competitive bidding requirements or approval thresholds. Order splitting is 8 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
strictly prohibited. The threshold level is based on the total anticipated value over the full contract term.
x. Requisition: A formal internal request in the City's ERP system to initiate the procurement process. Requisitions must include supporting documentation (quotes, scope of work, specifications) and all required approvals before a PO is issued.
Section A: Purchasing Authority
1. Purchase requisitions must have advanced approvals before receiving goods or services. A requisition should be submitted for approvals in advance. Once approved, a requisition is converted to a PO in the ERP system.
2. Capital Asset Purchases (Equip/Vehicles exceeding $10,000)must be approved through the Budget process and assigned a Capital Asset Budget Sequence Number. Assets with an assigned Sequence Number may be procured in accordance with the Purchasing Policy solicitation requirements, not requiring additional City Council approvals.
3. Approval Levels: The approval levels and bid requirements for all purchasing of goods, materials, supplies, equipment, maintenance work, general services and professional services and construction (non-CUPCCAA) are as follows:
Level Amount Competition Contract / PO Required Approval Level 1 Under
$10,000
1 quote.
Document
vendor, date,
price.
PO not required. P-Card
OK.
Department
Director (DD)
Level 2 $10,000 –
$30,000
3 written
quotes.
Contract and PO are
required for all purchases
over $10,000.
Exception.
Goods and Commodities:
PO *acceptable.
Contract required for
Goods, Materials, and
Supplies over $30,000.
Department
Director (DD)
Level 3 $30,001 –
$100,000
3 quotes or
Formal
Solicitation
process
(IFB or RFP).
Contract and PO are
required for ALL
purchases at this level.
DD + City Manager
Exceptions: If entirely
reimbursable by a third
party (e.g. CEQA, Wireless
Application review) City
Manager may Authorize up
to $200,000. Written
9 CITY COUNCIL POLICY
FINANCE
POLICY 4.2
Effective
Last Rev. 06-2026
*The City Manager, City Attorney, or Procurement Officer may require a written contract at any dollar amount when deemed necessary based on the nature of the purchase, risk considerations, legal requirements, or the best interests of the City.
Determining the Correct Threshold: The threshold level is determined by the total anticipated value of the purchase over the full contract term — not the first-year or per-unit cost. Example: a service costing $20,000/year over a 2-year agreement = $40,000 total → Level 3 applies
Contract Amendment – Increases: Commodity contract increases may be approved by Department Director for no more than 20% over the life of the contract without resolicitation. Service contract increases may be approved by the Department Director by nomore than 10%. Contract increases require an approved requisition with justification for the requested increase and an executed contract amendment. Contract increases exceeding 20% (commodity) and 10% (service) over the life of the contract may require re-solicitation and/or re-approvals in accordance with Purchasing Policy threshold requirements.
Contract Amendment – Administrative Change An administrative non-material change may be made to contracts with the approval of the Department Director. Administrative amendments require an approved requisition and an executed contract amendment.
Contract Amendment – Scope of Work Change - A contract amendment which materially impacts the original scope of work may require formal solicitation or informal quotes. Material changes to a contract Scope of Work require an approved requisition, Department Director and City Manager approval as well as an executed contract amendment.
Section B: General Purchasing Procedures
1. Purchase Requisition (REQ). Except as otherwise permitted herein, a formal purchase requisition, approved by the requesting Department Head, Finance Manager, Procurement Officer and City Manager (if applicable) is required in advance for all purchases greater than
$10,000, and for regular and recurring goods and services, regardless of the dollar amount reimbursement agreement
must be on file.
Budgeted Public Works
Projects under $75,000 may
be authorized by DD.
Level 4 Over
$100,00
Formal IFB or
RFP via
eProcurement.
Contract and PO are
required for ALL purchase
types at before ordering.
DD + CM + City Council
10 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
when a contractor asks for a purchase order to be issued. Additionally, a requisition is mandatory for Capital Asset/Capital Outlay purchases (equipment over $10,000), vehicle purchases, and software subscription purchases. Quotes or Bids, Scope of Work or Specifications must accompany the request.
2. Purchase Orders (PO). A purchase order is generated after the purchase requisition and contract (if applicable). Approval of a PO and/or Contract is required before ordering supplies and services. POs are issued via electronic workflow and can only be created by the Procurement Officer, Director of Finance or their designees. POs are also created to encumber funds against a Contract. POs (except Capital Improvement Projects (CIP) and Utility Undergrounding projects) are closed out at the end of each fiscal year.
3. Retroactive Purchase (Retro): Ordering goods or services without advance approval of either the Department Director (for purchases under $10,000) or without an approved Purchase Requisition (for purchases over $10,000), is considered a Retroactive Purchase and is a violation of the City’s Purchasing Ordinance and Purchasing Policy. Retroactive Purchases require a Purchase Requisition with a memo explaining the circumstances and the corrective action taken to avoid recurrence. (under $10,000 requires Department Director approval and over $10,000 requires City Manager approval).
4. Petty Cash Purchases. The purpose of a petty cash procedure and policy (Reference Petty Cash Policy) is to support “day-to-day” small immediate demands of departments that cannot be met through other established procedures for obtaining required materials. These demands are generated for items that are within the goals and objectives of the department and are provided for in the department’s operating budget.
Departments with a petty cash fund and should use it for minor purchases of up to $200.00 when buying from uncommon sources or vendors unwilling to establish a credit account with the City. Departments should submit their petty cash expenditures for reimbursement. The Finance
Department periodically audits each Department's petty cash fund. Petty Cash use must be in compliance with the Petty Cash Policy.
Section C: Solicitation Process
The City of Laguna Beach follows a decentralized purchasing system which gives authority to Departments to request quotes, conduct formal solicitations (IFB or RFP) and negotiate best value and pricing for the City. Quotes or solicitation documentation should be included in the Purchasing Requisition. The following is an outline of the solicitation process. Quotes or solicitation award documentation should be included in the Purchasing Requisition (ERP System).
1. Solicitation Documents
a. An Invitation for Bids (IFB) is utilized for procurement of Goods, Materials, Equipment and Services exceeding $100,000 that can be clearly defined in a detailed Scope of 11 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
Work or Specification. Bids are evaluated and awarded to the lowest responsible bidder.
b. A Request for Proposal (RFP) is utilized when the service or commodity exceeding $100,000 is not as specific but instead, there is a clear objective/goal allowing proposers to present new technologies, new products and innovative service solutions. RFP Proposals are evaluated by an evaluation panel (3-5 subject matter experts which may include City staff) using pre-determined criteria and scoring resulting in an award to the most qualified, responsible proposer. c. Departments may achieve efficiency by soliciting for On Call Contracts and/or PreQualified provider contractors to include a variety of services for construction trades and consulting services. These contracts must be established through the required solicitation and approval processes and should not exceed 5 years without resolicitation. The terms, scope, pricing and not to exceed amount must be stated in the contract. Once in place, these can be used for ongoing service needs.
Departments shall obtain 3 quotes from On Call contractors and award to the lowest responsive, responsible proposer who can timely complete the work pursuant to the request for the quote. Departments must ensure compliance with scope and pricing throughout the term and use of the contract.
d. The Department shall prepare a Scope of Work and/or Bid Specifications and submit the Invitation for Bid (IFB) on the City’s electronic bidding platform. The Department must make efforts to notify all prospective bidders of the bid opportunity. e. Bids are received Electronically via the eProcurement platform and are not viewable until the bidding deadline has closed.
f. The person or department initiating the purchase shall keep a record of all such solicitations and the price quotes or proposals submitted in response thereto. g. If the person or department initiating the purchase is unable to obtain three price quotes or proposals from responsible bidders or proposers after making diligent efforts to do so, the purchase may be made without obtaining three price quotes or proposals, provided that the efforts made to obtain three quotes or proposals shall be documented in the contract file for the purchase and/or documented on the Procurement Cover Sheet.
h. Nothing herein shall preclude the City from requiring a Formal Solicitation if deemed to be in the best interest of the City.
2. Bid or Proposal Evaluation
a. The City may reject any or all bids or proposals in response to a city solicitation in its sole discretion. Justification of rejection should be recorded and communicated to the proposer as a professional courtesy and to maintain good vendor relationships
12 CITY COUNCIL POLICY
FINANCE
POLICY 4.2
Effective
Last Rev. 06-2026
b. If no bids or proposals are received, the city may make the purchase by any lawful reasonable and available means, notwithstanding the other requirements of this chapter.
c. If two or more bids or proposals received are for the same total amount or unit price, quality and service being equal, the contract may be awarded to either bidder or proposer.
3. Awarding Contracts
a. Invitation for Bids (IFBs) shall be awarded to the responsible proposer submitting the lowest responsive bid
b. Request for Proposals (RFPs) shall be awarded based on demonstrated competence and the professional qualifications necessary for the satisfactory performance of the service, offered at a fair and reasonable price. c. Contract Templates approved by the City Attorney’s Office must be used.
Exceptions to standard City Terms and Conditions must be approved by the City Attorney’s office.
d. Upon final approval of a contract, the following contract signature authorities apply:
i. Vendor signatures shall be obtained first. Departments must confirm the authorized signatures depending on the company’s organization. ii. Under $30,000 Department Head may sign/execute on behalf of City. iii. Over $30,000 CityManager will sign and if applicable (City Attorney reviewed/approved exceptions to terms), the City Attorney will also sign. iv. Contracts that have City Attorney approved exceptions to standard terms or insurance and Contracts that require City Council approvals, will be signed by the City Manager, City Attorney and City Clerk.
v. All executed contracts must be filed with the City Clerk’s Office to create a record and assign a contact/agreement number. Final executed contracts should be provided to the Purchasing Officer to enter into the ERP System.
4. Purchasing Approval Involving Personal Relationships No City employee shall approve, recommend, authorize, or otherwise participate in the selection, award, negotiation, or administration of any contract, purchase order, or agreement in which they have a personal relationship with any counterparty. For purposes of this prohibition, “personal relationship” means a person related by blood, adoption, current or former marriage, domestic partnership or cohabitation. Cohabitation means living with another person while in a romantic relationship without being married or in a domestic partnership 13 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
If such a relationship exists, the City employee acting as the approving authority shall immediately disclose the relationship in writing and recuse themselves from all related discussions, decisions, and approvals and elevate the approval to the next level of approval authority.
Section D: Public Projects – Public Works Projects or “Construction Services” California Uniform Public Construction Cost Accounting Act. The City has adopted the Uniform Public Construction Cost Accounting Act (Pub. Cont. Code section 22000 et seq., as may be amended) (the “Act”) and all expenditures for Public Projects, as defined by Public Contract Code section 22002, by the City shall be made in accordance with the Act.
1. Solicitation Procedures. The Department initiating the purchase shall make a reasonable and good faith estimate of the anticipated cost of the project and utilize the appropriate solicitation procedure below. Purchases shall not be split or separated into smaller orders for the purpose of circumventing policy requirements. a. No Competitive Solicitation Required. Public Projects with an estimated cost of $75,000 or less (or as such limit may be amended from time to time) may be performed by City employees by force account or else may be awarded by negotiated contract or by purchase order without competitive bidding. b. Informal Bid Required. Public Projects over $75,000 but not more than $220,000, require either the informal bid procedures set forth herein or the formal solicitation procedures set forth herein.
c. Formal Bidding Required. Public Projects exceeding $220,000 require formal solicitation procedures set forth herein.
d. Informal Bid Procedures. A notice inviting bids shall be prepared, which describes the project in general terms, explains how to obtain more detailed information about the project, and states the time and place for the submission of bids. The notice shall be sent to all contractors for the category of work to be bid, as shown on the list developed in accordance with this section, and to all construction trade journals as specified by the California Uniform Public Construction Cost Accounting Commission ("Commission"), in accordance with Public Contract Code Section 22036, including any amendment thereto. Note: Informal Bidding Procedures do not require publication.
Notices sent to contractors on the contractors list shall be sent not less than ten (10) calendar days before bids are due and may be sent by mail, fax, or email.
Additional contractors and/or construction trade journals may be notified at the discretion of the department soliciting bids, provided, however:
i. If there is no list of qualified contractors maintained by the City for the particular category of work to be performed, the notice inviting bids shall 14 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
be sent only to the construction trade journals specified by the Commission.
ii. If the product or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors. e. Formal Bid Procedures. A notice inviting bids shall be prepared, which describes the project in general terms, explains how to obtain more detailed information about the project, and states the time and place for the submission of bids. The notice shall be published at least fourteen (14) calendar days before the date of opening the bids in a newspaper of general circulation, printed and published in the City; or, if there is no newspaper printed and published in the City, in a newspaper of general circulation which is circulated within the City; or, if there is no newspaper which is circulated within the City, publication shall be by posting the notice in at least three places within the City as have been designated by ordinance or regulation of the City as places for the posting of its notices.
The notice inviting formal bids shall also be sent electronically, if available, by either fax or email and mailed to all construction trade journals specified by the Commission pursuant to Public Contract Code Section 22036. The notice shall be sent at least fifteen
(15) calendar days before the date of opening the bids. In addition to notice required by this section, the City may give such other notice as it deems proper.
2. Contractors List. The City shall develop and maintain a list of contractors in accordance with the provisions of Public Contract Code Section 22034 and criteria promulgated from time to time by the Commission.
3. Bidder’s Security. All hard copy or electronic bids shall be presented under sealed cover accompanied by one of the following forms of bidder’s security: (a) cash; (b) cashier’s check made payable to the City; or (c) a bidder’s bond executed by an admitted surety insurer made payable to the City. Such security shall be an amount equal to at least ten percent (10%) of the bid amount. No bid shall be considered unless security in the form above set forth is enclosed with the bid.
4. Award of Contract. If a contract is awarded, it shall be awarded to the responsible bidder submitting the lowest responsive bid. If two or more bids are the same and the lowest, the contract may be awarded to either bidder.
a. If the project was bid using informal bidding procedures, and all bids received exceed two hundred twenty thousand dollars ($220,000), as such limit may be amended from time to time, the City Council may, by adoption of a resolution by a four-fifths vote, award the contract to the lowest responsive and responsible bidder if the amount of the contract does not exceed two hundred thirty five hundred dollars ($235,000), as such limit may be amended from time to time, and it determines the 15 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
City’s cost estimate for the project was reasonable. Otherwise, the project shall be re-bid following the formal bidding procedures.
b. In its discretion, the City may reject any or all bids, and may do any of the following:
i. Abandon the project.
ii. Re-advertise for bids in the manner described herein. iii. By a four-fifths vote, the City Council may declare by resolution that the project can be performed more economically by City employees and may have the project done by force account without further complying with this chapter. Prior to rejecting all bids and declaring that the project can be more economically performed by City employees, the City shall furnish a written notice to an apparent low bidder, informing the bidder of the City's intention to reject the bid. Such written notice shall be mailed at least two (2) business days prior to the hearing at which the City intends to reject the bid.
5. If no bids are received through the formal or informal bidding procedure, the projectmay be performed by City employees by force account or by a negotiated contract without further complying with this Policy.
6. Contractor Name/Ownership Change: In the event of a contractor name and/or ownership change, a contract amendment will be required. Assignments (ownership change) must be reviewed by the City Attorney, and the new contractor/owner must be vetted by the City Department and verified to be in good standing and qualified to perform the contract services.
7. Public Works Projects or “Construction Services” approval levels that meet the definition of California Uniform Public Construction Cost Accounting Act (CUPCCAA) have the following approval levels:
Change Order and Amendments: Approval authority limits shall be based on the total contract amount inclusive of any change orders or amendments. If a contract increase Level Amount Competition Contract / PO Required
Level 1 –
CUPCCA
Under $75,000 No competitive bid
required. 1 quote +
contract required (always
required for public works).
Dept Director
Level 2 –
CUPCCA
$75,001 –
$220,000
Informal bid (3 quotes,
10-day notice) or formal
solicitation + contract
required.
Dept Director + City
Manager
Level 3 –
CUPCCA
Over $220,000 Formal solicitation (IFB or
RFP) + contract required.
Dept Director + CM + City
Council
16 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
results in an aggregate contract amount which exceeds the authority level of the initial contract approval, the change order or amendment must be approved by the appropriate authority in accordance with the levels above.
Contract Contingency: Department Director may request City Council approval of a contract contingency at the time of contract approval. Contingency requests may range from 10-20%based on the type of service and/or project. Use of contingency amounts will require a Purchase Requisition and a Contract Change Order/Amendment but will not require reapproval from Council.
Section E: Exceptions to Competitive Purchasing Requirements The exceptions to competitive solicitation requirements are pursuant to ordinance 2.30.050, but approvals levels still apply. All exceptions require documented written justification in the requisition.
1. No Competitive Advantage. When the City Manager or City Council determine that no price advantage would be gained from a competitive solicitation process.
2. Commodities. On an annual basis, the City Council will approve a list of commodities that are not readily adaptable to the open-market bid, Request for Proposals, or competitive bid processes and should therefore be exempt from the competitive bidding requirements of these Guidelines. Examples may include, but are not limited to, fuel, sand, rocks, lumber, mulch, and trees. Any approved commodities will be eligible for purchase after procuring three (3) quotes upon the review and approval of the Procurement Officer, so long as purchases fall within the approved budgets in the Fiscal Year Operating Budget.
3. Miscellaneous expenditures. Specific services are excluded from the requirements in this policy, such as employee benefit payments, insurance policy premiums, the purchase or lease of real property, unilateral services such as postage, required licenses, utilities and/or required government fees and payments to other government agencies.
4. Pass -Through Agency. When the City receives Federal, State, or County grantmonies as a pass-through agency. This includes situations where the City is a fiscal agent, receiving funds on behalf of a separate entity.
5. Payments to Contract Instructors. When the City provides payment to a contract instructor for a recreation class where the payment is based on participant registration.
6. Sole Source. Sole Source purchases over $10,000 require City Manager or City Council approvals. This is appropriate when the Department Director determines that there is only one source that provides the needed services, supplies, or equipment or to ensure compatibility with other city products and equipment. The Department must provide 17 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
justification and shall procure these items in the best interest of the city. The Purchase Requisition should provide justification for the Sole Source request. Instances when sole source procurement may be necessary:
a. The goods or service is available from only one vendor. b. To match existing products in use to ensure compatibility. c. In order that a field test or experiment may be made to determine a product’s suitability for future use.
d. Competition is deemed inadequate after soliciting a number of sources. e. Vendor holds a unique set of skills or expertise that makes it impossible/unlikely anyone else can do the work or the same quality of work.
f. Product or service is Proprietary, and vendors can provide Proprietary Affidavit.
Note: Cost, convenience, and vendor preference are NOT valid sole-source justifications.
7. Cooperative Contracting: Departments may save time and money by utilizing (piggybacking) on contracts that have been solicited by other Public Agencies or Procurement Cooperative Partners (Omnia, NASPO, Sourcewell, etc.) if the solicitation methods meet the City’s solicitation requirements. Department Directors, City Procurement Officer and the City Legal Counsel will review Cooperative Agreements to verify pricing is competitive, purchasing policy requirements have been met and terms and conditions are agreeable. Cooperative Contracts require approvals in accordance with dollar thresholds listed in this Policy. Cooperative Agreements much adhere to the following requirements:
a. The competitive bidding source contract must still be in effect. b. The source contract must not preclude the City fromusing it as an agreement for cooperative purchasing.
c. The awarding jurisdiction for the source contract must be either the federal government, a State within the United States of America, or a county or city within the United States of America. ▪ Examples of nationally recognized purchasing cooperatives include, but are not limited to, California Multiple Award Schedule (CMAS); National Association of State Procurement Officers (NASPO) ValuePoint; the Department of General Services (DGS); OMNIA Partners (formerly U.S.
Communities Cooperative Purchasing); Sourcewell (formerly National Joint Powers Alliance); and federal General Services Agency (GSA) procurements. d. The prospective vendor making a proposal to the City must be the same vendor 18 CITY COUNCIL POLICY
FINANCE
POLICY 4.2
Effective
Last Rev. 06-2026
that was awarded the source contract. It is insufficient for the prospective vendor to be a partner supplier or authorized re-seller under the source contract vendor. e. The scope of work and/or goods delivered in the source contract must be the same as (or substantially similar to) the scope of work and/or goods requested by the City.
f. The prospective vendor must extend to the City the same terms and conditions as (or terms more favorable to the City than) those in the initial contract. g. City Attorney must approve agreements related to the Cooperative purchase.
8. Emergency. Where an emergency situation exists, or where a disaster has been declared by the City Council, State or Federal government, such that the life, health or safety of employees or the general public is at risk, or when significant harm may occur to city property or operating systems and goods and/or services must be procured immediately to prevent loss or substantial disruption of city services or functions; provided that competitive bidding is not required by a state or federal reimbursing agency and is otherwise consistent with State law.
9. Mandated Expenditures. When expenditures are mandated by law or regulation, such as county booking fees, utilities, postage, waste disposal fees or other non-negotiable permit, use or application fees.
10. Non-Traditional Procurements. Certain goods and services are acquired in a specific manner (through methods and/or from sources) that may meet the “best quality and value” standards outside of the open, competitive market. Examples of such nontraditional procurements include goods purchased through public auction, closeout sale, bankruptcy sale, or other similar sale, where the purchase at any such auction or sale is made at a cost below the market cost.; goods obtained as part of an exchange that is not a sale or auction. goods produced by the California Prison Industry (CALPIA).
11. Best Interest of City. When the City Manager determines that bidding would be impractical, inefficient, or otherwise not in the best interest of the city, provided that contract file contains sufficient documentation to justify bid impracticality.
Section F: General Purchasing Guidelines
1. Record Keeping. The Finance Department is responsible for maintenance of purchasing records.
2. Receiving Goods/Equipment
a. Inspection and Testing. All goods procured by the City shall be subject to inspection and/or testing upon receipt or completion by the Department receiving the product to ensure conformance with the specifications set forth in the order. If 19 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
a product fails to meet specifications, it shall be identified as "on hold pending rejection," and a notification shall be forwarded to the Finance Department. If a product is determined to be unusable, it shall be rejected and returned to the vendor as the vendor directs, and at their expense, for credit or replacement. Items found not to specifications, but of limited usability, may be conditionally accepted but only after renegotiation of the original contract.
b. Acceptance. When goods have been received or a project has been completed to the satisfaction of the ordering Department and the specifications, the packing slip and/or other completion documentation shall be signed off by the receiver/inspector. Information to be noted in the documents must include, as a minimum, the acceptor’s signature and a legible rendering of their name and the date of receipt/completion. Any deviation from the exact ordering specifications must be noted on the receiving/acceptance documents.
3. Contractor Performance Departments are responsible for monitoring contractor performance and immediately address deficiencies or deviations from the Scope of Work or Pricing. If after formal notice, deficiencies are not resolved, Departments should involve the Procurement Officer to determine if a formal Notice to Cure is necessary. If a Notice to Cure is unsuccessful in resolving deficiencies, the Procurement Officer and Legal Team will review and determine if a breach of contract exists and if termination of the contract is necessary. All performance efficiencies should be documented by the Department.
Section G: State or Federally Funded Projects and Procurements. State or federally funded purchase requests must follow the funding agencies Purchasing Policy and in certain cases, specific Contract Terms must be added to the contract. Due diligence must be followed to ensure the funding agency purchasing policy is applied. For purchases funded in whole or in part by federal grants, the following additional requirements apply under 2 CFR Part 200 (Uniform Guidance):
• Full and open competition is required. The micro-purchase threshold is $10,000; simplified acquisition threshold is $250,000 (subject to annual OMB adjustment). • For sole-source or single-bid situations under federal grants, a written cost or price analysis is required in the procurement file.
• Departments must verify the vendor is not on the SAM.gov exclusion list before awarding any federally funded contract.
• Buy American and Davis-Bacon Act requirements apply to federally funded construction projects.
Section H: Exemptions from Purchasing Policy.
The following expenditure types are exempt from the competitive bidding, Purchase Order, and contract requirements of this policy and may be processed directly for payment upon receipt of a 20 CITY COUNCIL POLICY
FINANCE
Effective
Last Rev. 06-2026
POLICY 4.2
proper invoice with Department Director approval, provided funds are available in the approved departmental budget:
• Memberships and professional dues (e.g., League of California Cities, MMASC, and other professional or governmental associations)
• Legal fees and outside counsel authorized by the City Attorney • Employee benefit payments (health, dental, vision, life insurance, and retirement contributions) • Utilities (electric, gas, water, sewer, telecommunications) • City insurance premiums and risk pool contributions
• Postage and postal meter replenishment
• Required permits, licenses, and fees mandated by law or regulation at a set, non-negotiable rate payable to a governmental or regulatory agency
Exemption from purchasing procedures does not exempt these expenditures from the City's standard invoice approval and accounts payable processes. When in doubt whether an expenditure qualifies for this exemption, departments should contact the Procurement Officer prior to processing payment.
21