City of Manteca
Purchasing Procedures Manual
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Introduction
The Purchasing Policy manual was prepared to translate common practice purchasing procedures, formal procedures adopted in the Municipal Code and the California Public Contract Code (PCC) into a concise, easily understood practices and procedures manual.
The establishment of these guidelines provides a direction for City staff in the purchase of goods and services at competitive prices. The basic purchasing guideline is to obtain quality supplies, services, vehicles, and equipment required for the proper operation of the City of Manteca, in the most cost-effect manner possible.
The information in this manual is primarily for non-public works projects. The requirements for these types of purchases do not contain or repeat State requirements, nor is it intended to conflict with or supersede State requirements. In the event of any conflict between the provision of these guidelines for non-public works projects, State law or City ordinance/resolution, the more stringent requirement should prevail.
Public works projects are covered by the PCC. This PCC encompasses projects that are generally large and involve construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility. Because these projects are significantly different from general purchases, maintenance and repair services, and professional services, bidding and threshold limits are significantly different from non-public works projects.
These guidelines should be recognized as a dynamic document that will likely change as City personnel find more effective and efficient ways to accomplish tasks and achieve goals. Administrative changes to these purchasing guidelines that do not affect purchasing authority or thresholds may be issued by the Finance Director to address operational needs. All other changes must be approved by the City Council.
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City of Manteca
Purchasing Procedures Manual
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Purpose
In order to establish efficient procedures for the purchase of supplies and equipment at the lowest possible cost commensurate with quality and quantity needed, and to clearly define authority and responsibilities for the purchasing function, the following purchasing procedures are adopted as the Purchasing Procedures Manual “Purchasing Policy” pursuant to Manteca Municipal Code Section 3.24.020.
The City Council by ordinance has designated the City Manager to be the Purchasing agent for the City. The City Manager may delegate the duties and responsibilities of the purchasing function, as outlined in this policy, to the Finance Director as deemed necessary for maximum efficiency and control. The City Manager or designee is vested with authority to review and approve purchase requests with regard to quantity, quality, needs, budgetary appropriation and financial condition. No expenditures shall be made without the appropriate reviews and approvals as provided for in this policy. This purchasing system implements sections 54201 through 54205 of the California Government Code.
The City of Manteca is a decentralized purchasing agency. Designated employees, within each department, shall have the authority to procure budgeted supplies and services as outlined in this policy. This allows for the continuous supply of goods and services necessary to support the City’s operation and meet the City’s obligations to the public.
The purpose of this policy is to define purchase and contract types and to set forth the procedural requirements for these various types of contracts. Contracts may include but are not limited to:
Contracts for consultant or professional services;
Contracts for the purchase of commodities, equipment, and general services, including maintenance contracts on same; and
Contracts for public projects as defined by Public Contract Code section 20161.
All purchases and contracts for contracted services, commodities, equipment, and other personal property required by any department shall be made on behalf of the City in accordance with this policy, except as otherwise provided by state law.
A purchase or contract may be initiated only if sufficient funds have been appropriated and for which there is an unexpended and unencumbered remaining balance sufficient to pay for the purchase or contract. For items not identified or approved in the budget, departments are to gain approval to seek bids from the City Manager prior to soliciting bids. Thereafter, the City Council is to make the award to the successful bidder.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - General Purchases
Summary
General purchases include commodities, supplies, materials and equipment. General purchases of over $5,000 but less than $25,000 shall be considered capital outlay and must be included in the purchasing department’s approved operational budget.
Purchases totaling $25,000 or more shall be considered a Capital Improvement Project (CIP) and must be included in the City’s adopted Capital Improvement Plan.
The Department Director or designee shall be responsible for monitoring the project account balance during the course of the project to ensure that overages do not occur.
The tracking number or resolution number (if Council approval was required) shall accompany any and all request for payments to the Finance Department.
Purchasing Thresholds
All purchasing thresholds are inclusive of sales tax, shipping, and all other charges associated with the purchase. Purchases shall not be split or separated into smaller purchases for the purpose of evading the provisions of the “Purchasing Policy.” All purchases over $1,000 require an approved Purchase Order (PO). No purchase in excess of this amount can be made until an authorized PO has been issued.
Prior to proceeding with any purchase, the Department Director or designee shall determine that unencumbered funds are available in the budget.
Purchases of $1,000 or less
For purchases of $1,000 or less, authorized department personnel may exercise personal discretion with regard to vendor choice with preference given to local merchants.
Purchases of more than $1,000 but less than $10,000
Authorized department personnel shall acquire at least three (3) verbal, written, or internet vendor quotes. Each vendor must be given the exact information provided to all other vendors. Responses, including non-responsive vendors, shall be included on the Purchase Order Quote Form.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - General Purchases (continued)
The use of this form ensures that the department has on file the following information:
Date of request for quote
Department
G/L Account and Project number (if required)
Exact items/quantity requested for quote
Vendor information (contact information including vendor number) Vendor’s response to request for quote
Justification for selection of vendor
A PO will be initiated at the department level. The Purchase Order Quote Form along with all related documentation will be submitted to the Finance Department for review, final approval, and formal issuance of a PO.
Purchases of more than $10,000 but less than $50,000
Authorized department personnel shall acquire written quotes from at least three (3) vendors. Each vendor must be given the exact information provided to all other vendors. Responses, including non-responsive vendors, shall be included on the Purchase Order Quote Form. The use of this form ensures that the department has on file, the following information:
Date of request for quote
Department
G/L Account and Project number (if required)
Exact items/quantity requested for quote
Vendor information (contact information including vendor number) Vendor’s response to request for quoted
Justification for selection of vendor
A PO will be initiated at the department level. The Purchase Order Quote Form along with all related documentation will be submitted to the Finance Department for review, final approval, and formal issuance of a PO.
Purchases of $50,000 or more
A formal bid is required if the estimated dollar amount of the purchase, including tax, shipping and other related costs, is $50,000 or more, or if the accumulated amount of multiple purchases of the same item is expected to exceed $50,000 in any one fiscal year. In all cases, price shall be the determining factor of bid selection.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - General Purchases (continued)
The Department Director or designee shall prepare a bid package to solicit bids from qualified vendors. The bid package shall consist of the following elements:
Notice Inviting Bids
Information to Vendors
Product Specifications
Proposal Format
City of Manteca Insurance Requirements (if applicable) The City Clerk or designee shall follow bid procedures regarding posting of notices, receiving bids, and opening and processing bids. The Department Director or designee shall prepare an agenda report recommending the City Council award the purchase to the lowest responsible bidder.
Upon award of the purchase by the City Council, the Department Director or authorized department personnel shall submit a Purchase Order request with award recommendation and documentation including contract, if applicable, to the Finance Department for final approval and issuance of a PO.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - General Services Agreements
Summary
General Services Agreements (GSA) are not strictly professional in nature, but arise where operations, repair and maintenance services, or other services of a nonprofessional nature, are provided to the City. GSA that typically fall into this category include:
maintenance or nonstructural repair of city buildings, structures or improvements which does not require engineering plans, specifications or design including but not limited to, fire extinguisher maintenance, minor roof repairs, plumbing, electrical, HVAC, elevator maintenance, custodial services, and pest control; maintenance of landscaping and public grounds
maintenance and repairs of office machines and city equipment lease or rental of office equipment
laboratory services including the cleaning, analysis, and testing of city supplies, equipment, and waste products
providing temporary personnel services
providing other services to facilitate city operations such as telecommunications and utilities
Both qualifications and pricing shall be considered when awarding General Services Agreements. While cost efficiency should be held in the highest regard, other considerations may be taken into account. These factors include, but are not limited to, ability of the vendor to deliver, ability to service, prior experience, quality, compatibility with existing City equipment and other particular needs of the City.
All agreement thresholds are inclusive of sales tax, shipping, and all other charges associated with the provision of the service. Services shall not be split or separated into smaller purchases for the purpose of evading the provisions of the “Purchasing Policy.” Prior to proceeding with any agreement, the Department Director, or designee, shall determine whether unencumbered funds are available in the budget. The Department Director, or designee, shall be responsible for monitoring the project account balance during the course of the project to ensure that overages do not occur. The tracking number or resolution number (if Council approval was required) and Contract Tracking Sheet (see Appendix) shall accompany any and all request for payments to the Finance Department.
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City of Manteca
Purchasing Procedures Manual
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Purchasing- General Services Agreements (continued)
Agreement Execution
Prior to final GSA execution, the following approvals must be received and actions taken.
1. City Attorney – review and approve maintenance agreement. A vendor’s own maintenance agreement can be utilized, provided that the City Attorney has reviewed and approved what is considered to be a non-standard agreement.
2. City Clerk –assign agreement number for tracking and review GSA for required signatures and documentation.
3. Risk Management – review and approve required insurance documentation.
Generally, if there is a risk of personal injury or property damage from the City’s procurement of services, insurance may be required as a condition of contract approval.
4. Finance – review and approve that services requested have been budgeted and that sufficient unencumbered funds are available.
5. Signatures – GSA should be signed by the other party except in the instance of a public entity or railroad in which instance it may be signed by first by the authorized city representative.
6. Final Execution – the City Clerk will process the final execution of the agreement. One original copy of the agreement shall be retained by the City Clerk’s Office as the official record. One original copy of the agreement will be forwarded to the initiating department to be forwarded to the vendor.
Agreement Authority
City Council approval is required for each General Service Agreement as defined above unless otherwise granted to another city representative.
The City Council delegates authority to enter into General Services Agreements as follows:
1. Department Directors - Department Directors are authorized to award and sign General Services Agreements in an amount not to exceed $10,000 provided that the funds were approved by the City Council as part of the annual Department budget. This authorization cannot be delegated and contracts cannot exceed one-year in length.
2. City Manager – The City Manager is authorized to award and sign General Services Agreements in an amount not to exceed $75,000 provided that the funds were approved by the City Council as part of the annual Department budget. This authorization cannot be delegated and contracts cannot exceed three-years in length.
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City of Manteca
Purchasing Procedures Manual
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Purchasing- General Services Agreements (continued)
Authorization to Amend Agreements
If circumstances arise that were not reasonably foreseeable by the parties at the time of executing the Agreement which make extra work necessary for the proper completion of the service originally contracted for, a contract amendment and corresponding increase in total contract amount may be necessary. For purposes of this policy, “total agreement amount” shall be defined as the total consideration paid over the term of the agreement, including any previous amendments to the contract. “Original agreement amount” shall be defined as the amount of compensation agreed upon when the agreement was first execute. Amendment authority may not exceed 10% of the original agreement amount.
1. Department Directors - Department Directors overseeing the agreement may sign agreement amendments if the amendment will not cause the total agreement amount to exceed $11,000.
2. City Manager – For all agreements entered into within the City Manager’s authority, the City Manager may sign agreement amendments if the amendment will not cause the total agreement amount to exceed $82,500.
For all amendments to agreements entered into with City Council approval, unless otherwise authorized by Resolution, City Council approval will be required.
Agreement Award Process
General Services Agreements of $1,000 or less
Contracts are not required for services of $1,000 or less. Authorized department personnel may exercise discretion with regard to vendor choice with preference given to local merchants.
General Services Agreements of more than $1,000 but less than $50,000 Services of greater than $1,000 but less than $50,000 require a maintenance agreement. Authorized department personnel shall acquire written quotes from at least three (3) vendors. However, this requirement may be waived by the City Manager depending upon the nature of the service to be provided. Each vendor must be given the exact information provided to all other vendors. Responses, including nonresponsive vendors, shall be taken into consideration when awarding a maintenance/service agreement.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - General Services Agreements (continued)
General Services Agreements of $50,000 or more
Services of $50,000 or more require a formal Request for Proposal (RFP) process. As a rule, proposals from a minimum of three prospective vendors shall be solicited. The RFP is a competitive formal bid process in which the City solicits proposals from potential vendors. Proposals are evaluated against both stated requirements and predefined evaluation criteria in which price is not the only factor. As a rule, proposals from a minimum of three prospective vendors shall be solicited. However, this requirement may be waived by the City Manager depending upon the nature of the service to be provided.
Each vendor must be given the exact information provided to all other vendors.
Responses, including non-responsive vendors, shall be taken into consideration when awarding a maintenance/service agreement. The RFP document describes the City’s requirements and desired outcomes within a written specification, solicits vendors for their proposed solutions, describes key criteria to be used in the evaluation of proposal and outlines the terms and condition under which the vendor will operate or provide services.
The formal RFP process shall include:
1. Request for proposals: The RFP shall include a general description of the services to be procured, a proposed services agreement, insurance requirements, criteria for evaluation of proposals, and the time and place for submission of proposals. Proposers shall submit sealed proposals.
2. Evaluation of proposals: All responsive proposals shall be reviewed and evaluated by the City in order to determine which proposer best meets the City’s needs by demonstrating the competence and qualifications necessary for the satisfactory performance of the required services. Cost efficiency should be held in the highest regard; however, other considerations may be taken into account.
The City reserves the right to reject any and all proposals or waive any irregularities in any proposal or the proposal process.
3. Award of agreement: The City Manager will award agreements for services with a value of $50,000 or greater but less than or equal to $75,000. The City Council shall award all agreements with a value of greater than $75,000 or for a time period in excess of three years.
4. Exception: The formal RFP process may be waived when processed through a cooperative purchase agreement with another public agency as outlined in Additional Purchasing Options - Cooperative Purchasing Program on page 24.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Professional Services Contracts
Summary
Professional services are provided by independent contractors and may include but are not limited to architectural, engineering, testing, land surveying, appraising, environmental, planning, financial, legal, development processing, governmental operations, special studies, construction project management and other related services. These services may include unique services or other specialized abilities.
Contracts for professional services must be based on demonstrated competence, professional qualifications for the services required, availability, and fair and reasonable cost. Cost cannot be the sole basis for awarding a professional contract.
All professional consulting services must be conducted by way of a contract for professional services. The following are general guidelines as contracts for consultant services may vary on a case-by-case basis.
Prior to proceeding with any agreement, the Department Director or his/her designee shall determine whether unencumbered funds are available in the budget. The Department Director, or designee, shall be responsible for monitoring the project account balance during the course of the project to ensure that overages do not occur.
The tracking number or resolution number (if Council approval was required) and Contract Tracking Sheet (see Appendix) shall accompany any and all request for payments to the Finance Department.
Contract Execution
Prior to final contract execution, the following approvals must be received and actions taken.
1. City Attorney – review and approve contract or Professional Services Agreement (PSA). A vendor’s own agreement can be utilized, provided that the City Attorney has reviewed and approved what is considered to be a nonstandard agreement.
2. City Clerk –assign agreement number for tracking and review contract or PSA for required signatures and documentation.
3. Risk Management – review and approve required insurance documentation.
Generally, if there is a risk of personal injury or property damage from the City’s procurement of services, insurance may be required as a condition of contract approval.
4. Finance – review and approve that services requested have been budgeted and that sufficient unencumbered funds are available.
5. Signatures – Contract or PSA should be signed by the other party except in the instance of a public entity or railroad in which instance it may be signed by first by the authorized city representative.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Professional Services Contracts (continued)
6. Final Execution – the City Clerk will process the final execution of the contract or PSA. One original copy of the agreement shall be retained by the City Clerk’s Office as the official record. One original copy of the agreement will be forwarded to the initiating department to be forwarded to the vendor.
Contract/Agreement Authority
City Council approval is required for each contract or Professional Services Agreement as defined above unless otherwise granted to another city representative.
The City Council delegates authority to enter into Professional Services Agreements as follows:
1. Department Directors: Department Directors are authorized to award and sign Professional Services Agreements in an amount not to exceed $10,000 provided that the funds were approved by the City Council as part of the annual Department budget. This authorization cannot be delegated and contracts cannot exceed oneyear in length.
2. City Manager: The City Manager is authorized to award and sign Professional Services Agreements in an amount not to exceed $75,000 provided that the funds were approved by the City Council as part of the annual Department budget. This authorization cannot be delegated and contracts cannot exceed three-years in length.
Authorization to Amend Agreements
If circumstances arise that were not reasonable foreseeable by the parties at the time of executing the Agreement which make extra work necessary for the proper completion of the service originally contracted for, a contract amendment and corresponding increase in total contract amount may be necessary. For purposes of this policy, “total agreement amount” shall be defined as the total consideration paid over the term of the agreement, including any previous amendments to the contract. “Original agreement amount” shall be defined as the amount of compensation agreed upon when the agreement was first execute. Amendment authority may not exceed 10% of the original agreement amount.
1. Department Directors - Department Directors overseeing the agreement may sign agreement amendments if the amendment will not cause the total agreement amount to exceed $11,000.
2. City Manager – For all agreements entered into within the City Manager’s authority, the City Manager may sign agreement amendments if the amendment will not cause the total agreement amount to exceed $82,500.
For all amendments to agreements entered into with City Council approval, unless otherwise authorized by Resolution, City Council approval will be required.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Professional Services Contracts (continued) Contract/Agreement Award Process
Professional Services Contracts of $1,000 or less
Contracts are not required for services of $1,000 or less. Authorized department personnel may exercise his/her own discretion with regard to vendor choice with preference given to local merchants
Professional Services Contracts of more than $1,000 but less than $75,000 Services of greater than $1,000 but less than $75,000 require a Professional Service Agreement (PSA). Authorized department personnel shall acquire written quotes from at least three (3) vendors. However, this requirement may be waived by the City Manager depending upon the nature of the service to be provided. Each vendor must be given the exact information provided to all other vendors. Responses, including nonresponsive vendors, shall be taken into consideration when awarding a PSA.
Professional Services Contracts of more than $75,000
Services of greater than $75,000 require a Formal Request for Proposal (RFP) process.
The RFP is a competitive formal bid process in which the City solicits proposals from potential vendors. Proposal are evaluated against both stated requirements and predefined evaluation criteria in which price is not the only factor. As a rule, proposals from a minimum of three prospective vendors shall be solicited. However, this requirement may be waived by the City Manager depending upon the nature of the service to be provided.
The RFP process for Public Works contracts funded in part or in whole by Federal or State funds may have additional requirements. The most current Local Assistance Procedures Manual (LAPM) should be reviewed prior to the issuance of an RFP.
The RFP document describes the City’s requirements and desired outcomes within a written specification, solicits vendors for their proposed solutions, describes key criteria to be used in the evaluation of proposal and outlines the terms and condition under which the vendor will operate or provide services.
The general selection criteria for RFP evaluation includes:
1. Qualifications
2. The firm’s experience with similar projects
3. Schedule of completion of the project; and
4. Price (unless precluded by State or Federal law)
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Professional Services Contracts (continued) Based on the results of the initial screening process, the top firm(s) may be invited to present their qualifications. Based upon the qualifications and the presentations, the City shall rank order the firms. The City may negotiate the price, terms, and conditions of the project with the top firm. The City also reserves the right to negotiate with another top-ranked firm if an agreement cannot be reach with the Number 1-ranked firm.
The final award is made by the City Council to the vendor that is determined to best meet the overall needs of the City. Prior to final RFP presentations to City Council, the vendor shall provide signed copies the PSA and required documentation of insurance.
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Capital Improvement and Public Works Projects Summary
The award of contracts for public works projects of the City shall be governed by the California Public Contract Code (PCC). Capital improvements are generally defined as new construction or fixed assets and improvements to previously constructed fixed assets and shall follow the same guidelines as public works projects. PCC Section 20161 defines a “public project” as: (1) a project for the erection, improvement, painting or repair of public buildings and works; (2) work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow; (3) street or sewer work except maintenance or repair; and (4) furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.
The Department Director, or his/her designee, shall be responsible for monitoring the project account balance during the course of the project to ensure that overages do not occur. The tracking number or resolution number (if Council approval was required) and contract tracking sheet (see Appendix) shall accompany any and all request for payments to the Finance Department.
Capital Improvement/ Public Works projects of $5,000 or less Public works projects below $5,000 shall follow the written quotation procedure outlined in the General Purchases Section page 4. Per PCC Section 20163 it shall be unlawful to split or separate into smaller work order or projects any public work project for the purpose of evading the provisions of the PCC requiring public work to be done by contract after competitive bidding.
Capital Improvement/ Public Works projects of more than $5,000 - formal bidding procedures
Contracts for public works projects above the minimum formal bid limit as set by the PCC (currently $5,000), shall be awarded pursuant to formal bidding procedures as set forth herein.
In emergency situations, the necessity for going to bid prior to expenditure may be avoided per PCC section 20168. The Special Provisions – Emergency Purchases section of the “Purchasing Policy” further defines the process for emergency purchases.
City Council approval is required for all plans and specifications for public works and capital projects. Prior to being presented to City Council, plans and specifications shall be reviewed by:
Director of Public Works
Building Safety and/or City Engineer
Affected utilities for conflicts and/or relocations
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City of Manteca
Purchasing Procedures Manual
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Purchasing - Capital Improvement and Public Works Projects (continued)
The sealed bids as required by the PCC shall be received by the City Clerk who shall be responsible for publicly opening and reading said bids at the stipulated time and place.
Once bids have been opened, the Department Director or his/her designee shall recommend to Council the award of contract to the lowest responsible bidder. The agenda packet should include all required signatures and back up documentation for the contract.
Upon City Council approval, the contract package will be signed by the Mayor. The City Clerk shall prepare a resolution noting the Council’s approval of the contract, the project name and number, project cost(s) and budget account number(s). The City Clerk shall retain the original contract.
Change Orders
During the course of capital improvement projects, modifications to the scope of work or additional work may be required that could not have been anticipated in advance.
Change Order (CO) approval will be set at the following limits for the City Manager and Department Director:
Contract Amount Department
CO Limit
City Manager
CO Limit
< $75,000 10% 20%
$75,001 - $1,000,000 5% 10%
$1,000,001 -
$5,000,000 3% 7.5%
$5,000,001+ 2% 5%
Prior to approving change orders, the City Manager will confirm with the Finance Department that sufficient funds exist.
Any change orders exceeding the approved budget or contract amount require City Council approval and an appropriation of funds (if necessary).
In the case of an emergency, the City Manager may approve work that exceeds the designated approval level before submitting the change order to the City Council for its formal approval.
An emergency is defined as work, which if not performed, may jeopardize the life, health or convenience of local citizens; may substantially delay the completion of the project; or which may substantially increase the costs of the project as further progress is made.
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