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HomeMy WebLinkAbout 16-05 Adopting Updated Purchasing PolicyRESOLUTION NO. JLO 0 A RESOLUTION ADOPTING AN UPDATED PURCHASING POLICY FOR THE TOWN OF FIRESTONE WHEREAS, the Town of Firestone has previously adopted a purchasing policy and procedures for the Town; and WHEREAS, the Board of Trustees finds that such policy and procedures should be amended in order to revise references therein from financial planning and analysis director to director of corporate services, or budget and financial analyst, or delete such reference altogether; lower the purchasing levels for small non -bid purchases and for informal bidding, and clarify provisions regarding verbal quotations, insurance requirements, sole source purchases and ethics in Town contracting, and WHEREAS, the Board of Trustees finds that the adoption of an updated purchasing policy will promote and support the efficient and effective use of Town resources and promote the best interests of the Town; and WHEREAS, there has been presented to the Board of Trustees for adoption an updated purchasing policy, which policy has been developed through the collaborative efforts of the Finance Committee, Town Manager, Director of Corporate Services and other Town Branch heads, supervisors, staff and consultants; and WHEREAS, the Board of Trustees finds that the proposed purchasing policy is solely in support of the Towns fiscal responsibilities, including administration of annually appropriated funds, and solely for the benefit of the Town of Firestone, and confers no rights, duties or entitlements to any bidders or proposers; and WHEREAS, the Board of Trustees by this Resolution to desires to adopt said updated purchasing policy; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: Section 1. The Board of Trustees hereby approves and adopts the updated Town of Firestone Purchasing Policy attached to this Resolution. Section 2. The updated Purchasing Policy approved and adopted by this Resolution shall take effect �'��y� , 2016, and replaces the Purchasing Policy previously adopted by Resolution No. 1543. INTRODUCED, READ, and ADOPTED this "' day of 6 d? j/7 1 , 20166 Town Clerlc TOWN OF FIRESTONE, COLORADO T10 vN`"' t� aul Sorensen °R a or 00 2 Use of Policy This policy and the award of bid and other provisions herein are promulgated solely in support of the proper exercise of the Town's fiscal responsibilities, including administration of annually appropriated funds, and solely for the benefit of the Town of Firestone, and confer no rights, duties or entitlements to any bidders or proposers. Purchasing Levels Amount Required Procedures Petty Cash & Small Non -Bid Purchases Less than $50.00 Complete a "Petty Cash" request form. Petty cash requests require approval from the Department Head. Receipts and excess petty cash must be returned to the Finance Department within three business days of purchase. $50.00 to $4,999.99 Purchases within these amounts must be approved in advance by the Department Head and require the vendor invoice and receiving document when the items are received. Informal Bidding $5,000.00 to $24,999.99 Purchases within these amounts must be approved in advance by the Branch Head or Town Manager. Three quotations, by phone, internet or other source, shall be obtained and documented for the file. $25,000.00 to $49,999.99 Purchases within these amounts must be approved in advance by the Branch Head and Town Manager. Written quotations are required from a minimum of 3 vendors, and such quotations shall be documented for the file. Formal Bidding $50,000.00 and above Purchases of $50,000 and above must be approved in advance by the Board of Trustees. Written quotations are required from a minimum of 3 vendors and the procurement must follow applicable provisions of the "Formal Bidding Requirements." The Board of Trustees may reduce the number of required quotations and waive otherwise applicable formal bidding requirements if the Board of Trustees determines that it is not practical or advantageous to the interests of the Town. Additional Considerations - Note. • A contract shall be used for construction or labor and materials procurements, and a professional services contract shall be used for procurements of professional or consulting services. See Town Clerk's office for Town forms. • In addition to the above, any proposed purchase in the following categories shall require Board of Trustees approval: • Any professional or consulting services contract over $20,000, either in original contract amount or anticipated aggregate expenditures for the fiscal year; • Any proposed purchase related to a project or program that, at the time of the proposed purchase, is over budget by $5,000 or 5% of the approved cost of the project or program, whichever is greater.. • The Board of Trustees or Town Manager may direct the use of a higher level bidding process on the purchase of any product or service without consideration of dollar amount. • In addition to the appropriate approvals, all purchases shall be supported by appropriated funds within the program area. 2 Purchasing A petty cash request, check request or vendor invoice serves to inform the Finance Department of the needs of the departments, correctly identifies a material or service requested for the department's operations, and identifies the expenditure account number to which the purchase is to be charged. Petty Cash: The petty cash fund shall be used to pay for small obligations which do not exceed $50.00. Petty cash requests will be granted under the following circumstances: ® An employee is requesting a cash advance for expenditures relating to Town business (sales receipt and any excess petty cash must be returned to the Finance Department within three business days). ® An employee is requesting a reimbursement for expenditures relating to Town business (receipts must be attached to the requisition). It is the responsibility of the employee using the petty cash fund to obtain and use the Town's tax-exempt identification number. Tax paid will not be reimbursed or otherwise covered by the Town. Bidding Bidding procedures are used to provide vendors the opportunity to bid, to elicit greater vendor response, to meet competitive bid requirements when imposed by state or federal law, and to promote competitive prices from vendors for the purchase of capital equipment and other items of significant monetary value. The Board of Trustees or Town Manager may direct the use of a higher level bidding process on the purchase of any product or service regardless of the amount to be spent. As used herein, "bid" and "bidding" shall include requests for bids, requests for proposals, or requests for qualifications. The responsible Branch Head, in consultation with the Finance Department, shall determine when bidding procedures shall utilize a request for bids, request for proposals or request for qualifications, as appropriate. All purchases of goods or acquisition of services of $50,000 and over and all purchases of cars, trucks, and heavy equipment shall require formal bidding procedures unless otherwise required by statute or the Firestone Municipal Code. All purchases of any water rights or any interest in land require approval by the Board of Trustees. Contracts for the purchase of property, liability and other insurance coverage, and contracts for the purchase or administration of employee health, welfare or insurance benefits shall be subject to formal bidding no less frequently than once every four years; however, the foregoing shall not limit the authority of the Board of Trustees or Town Manager to direct the use of formal bidding for any renewal. 3 big Informal Bids All purchases within the financial parameters of $5,000.00 to $49,999.99 shall require informal bidding procedures. ® For purchases between $5,000.00 and $24,999.99, the requesting department shall obtain and document a minimum of three (3) verbal quotations, and such quotations shall be documented for the file. ® For purchases between $25,000.00 and $50,000.00, the requesting department shall obtain and document a minimum of three (3) written quotations. Steps to complete an informal bid: (unless otherwise stated, responsibility falls on requesting department): 1) Develop specifications. Upon finalization of the specifications, prepare any documents required by the informal bid. 2) Disseminate specifications to identified vendors, including dissemination by e- mail, mail or other method as appropriate. 3) Evaluate the bid results and determine which bid serves the Town's best interests. 4) Prepare a Purchase Requisition and obtain required approval for the level of purchasing. Formal Bids For purchases of $50,000.00 or more, the requesting department shall follow and document the formal bid procedures outlined below, as applicable to the particular procurement. In presenting a formal bid procurement to the Board of Trustees, the requesting department shall obtain and document a minimum of three (3) written bids. The Board of Trustees may reduce the number of required quotations and waive otherwise applicable formal bidding requirements if it is determined that it is not practical or advantageous to the interests of the Town. Requests for formal bids shall be distributed to qualified/identified vendors in the manner determined by the requesting department. In the discretion of the requesting department, or if directed by the Town Manager or Board of Trustees, requests for formal bids may be posted to the Town website and may be published in a newspaper of general circulation in the Town, in other publications of limited circulation, or in trade journals, but such publication is not required by the Policy. If publication of a request for formal bids is required for a particular procurement by federal or state law or by a funding agency, the requesting department shall prepare and arrange for publication of the required notice. Notices, general instructions, conditions, and specifications shall be mailed, posted to the Town website or otherwise made available to qualified/identified vendors. All requests for formal bids shall be reviewed and approved by the Town Manager or designee prior to distribution. Steps to complete a formal bid: (unless otherwise stated, responsibility falls on requesting department) 1) Develop specifications, upon finalization of the specifications, determine any special requirements, such as bid, performance, and payment bonds; insurance; retainage; and any special requirements the requesting department may need. See bonding and insurance requirements listed below. 2) Prepare bid documents. Prepare all documents required for the request for formal bid. Bid documents shall contain the following information, as applicable to the particular procurement:*: • Where the bidder can obtain bid documents; • Any costs of bid documents; • Bid submittal deadline; • Date, time and location of bid openings; • Any bond and/or insurance requirements; • Any special requirements; • A statement to the effect that the Town reserves the right to reject any and all bids, and to accept the bid deemed to be the lowest reliable and responsible bid; • A statement to the effect that all bids submitted become public information upon bid opening; • General conditions; • Minimum specifications; • Bid proposal form; • Delivery date or completion date; • Period of bid validity; and • A statement to the effect that the bidder must submit with its bid a copy of its current contractor/business license(s) issued by the Town of Firestone, or obtain same prior to any award if bidder is the successful bidder. *(For example: a request for bids for a vehicle purchase typically would not include bond or insurance requirements. A request for proposals for consulting services would typically not include bond requirements or a formal bid opening. ) 3) Determine bond, insurance, contract requirements. If any bonds, insurance, or contracts are required, prepare contract form and confer with Director of Corporate Services and/or Town Attorney as needed to confirm requirements. See bonding and insurance requirements listed below. 4) Distribute requests for bids. Make available a complete set of bid documents to all qualified/identified vendors or request vendors to pick up bid documents. 5) Open bids. Conduct the public bid opening per the identified bid opening date. Any bids received after the specified time will be returned to the bidder unopened. All bids/quotes/proposals should be retained for the minimum period required by the Town's records retention schedule (generally three years after contract is awarded). 6) Evaluate bids. Evaluate the bid results and determine which bid serves the Town's best interests. If the recommended vendor h.as not submitted the low bid, the department must demonstrate how the higher bid serves the best interests of the Town. 5 7) Prepare Board report. Prepare report to Board of Trustees for its review and action on the proposed procurement. 8) Complete draft documents for Board packet. Submit to Branch Head complete set of documents for Town Board meeting packet. Obtain Town Attorney's approval on any proposed changes to Town bond, insurance, or contract forms prior to the Board of Trustees meeting. 9) Notify vendor. Upon Board of Trustees' award of bid, notify successful bidder and notify other bidders of the results as requested. 10) Finalize documents. Obtain signatures on all contracts and any additional required documents from vendor. One original signed contract with all exhibits must be submitted to the Town Clerk for central filing. Bonding Requirements: Bonds shall be executed on forms prescribed or approved by the Town Manager based on review by the Town Attorney as to form and State of Colorado law. Normally, bonds are used only on labor and materials procurement actions, such as projects for completion of public works or public buildings. Bonds generally are not required for purchases of vehicles, equipment, or standard commercial goods and services, particularly when the goods are not altered or customized to unique Town specifications, but may be required if deemed by the procuring department to be in the interests of the Town. Examples of bonds are: • Bid Bonds: This bond is intended to protect the Town against a bidder's failure to honor its bid. The bid bond requirement may be satisfied by receipt of a certified bank check or a bid bond. The bid security is submitted as guarantee that the bid will be maintained in full force and effect for a period of thirty (30) calendar days after the opening of bids or as specified in the solicitation documents. If the bidder fails to provide the bid security with the bid when requirement by the bid documents, the bid shall be deemed non -responsive. The bid bond should be in an amount equal to at least 10% of the vendor's bid price. • Performance Bonds: This bond is intended to secure performance of the vendor's performance of its obligations. A performance bond, satisfactory to the Town, may be required for all capital projects contracts awarded in excess of $50,000. Unless the Town is legally required to accept a bond in lesser amount, the performance bond shall be in amount equal to one hundred percent (100%) of the price specified in the contract. • Payment Bonds: This bond is intended to secure payment of subcontractors and suppliers. A payment bond for the protection of all persons supplying labor and material to the contractor or its subcontractors may be required for all capital projects contracts awarded in excess of $50,000. Unless the Town is legally required to accept a bond in lesser amount, the payment bond shall be in an amount equal to at least one hundred percent (100%) of the price specified in the contract. Insurance Requirements: Contracts for labor, materials and services entered into by the Town will require the selected contractor to carry the types and minimum amounts of insurance coverage as required by the Town. The contracts shall also contain other provisions regarding insurance as the Town shall require. The following are the types and minimum amounts of insurance that should be required: a. Workers' Compensation in statutory limits (if applicable). b. Employer's Liability Insurance: $100,000/ each accident, $500,000) disease - policy limit, and $100,000/ disease - each employee. c. Comprehensive General Liability Insurance: $1,000,000/Occurrence d. Automobile Liability or Hired & Non -Owned Vehicle Liability Insurance: $1,000,000/each accident (if applicable). e. Professional Liability Insurance: $1,000,000/Occurrence (if applicable). Certain types of insurance may not be applicable to a particular contract. For example, professional liability insurance would not be applicable to a contract for installation of playground equipment. Whether a particular type of insurance is applicable, or whether amounts of coverage should be changed, shall be determined by the Director of Corporate Services, in consultation with the Town Attorney. Depending on the type of contract or services to be provided, higher insurance coverages may be required. Bid documents should state the Town's anticipated insurance and bond requirements for the contract to be awarded. Bidders should be advised that the successful bidder shall be required to meet the Town's insurance and bonding requirements and provide certificates of insurance with the Town named as additional insured on required liability insurance coverages, and that the contractor shall not commence work until it has obtained all insurance required by the contract documents and such insurance has been approved by Town. Bidders List: A bidder's list may be establish and maintained by individual Branches in an effort to promote competitive bidding from qualified vendors and to establish a source of suppliers. Additional bidder pre -qualification may also be utilized for specific procurements. Evaluation of Bids: In addition to the bid amount, additional factors will be considered as an integral part %J the bid evaluation process, including, but not limited to: • The bidder's ability, capacity and skill to perform within the specified time limits; • The bidder's experience, reputation, efficiency, judgment, and integrity; • The quality, availability, and adaptability of the supplies or materials bid; • Bidder's past performance; • Sufficiency of bidder's financial resources to fulfill the contract; • Bidder's ability to provide future maintenance and/or service; • Other applicable factors as the Town determines necessary or appropriate (such as compatibility with existing facilities, equipment or hardware); and • If a bid other than the lowest bid is recommended, the requesting department must demonstrate how the higher bid serves the best interests of the Town. 7 Contracts for Engineering Design and Construction Management Services The following bidding requirements shall apply to engineering design and construction management services for capital improvement projects: ® Under $30,000: Engineering design and construction management services under $30,000 may be approved by the Branch Head and Town Manager as non -bid procurements. No bids are required. ® Between $30,000 and $60,000: For engineering design and construction management services between $30,000 and $60,000, informal bidding procedures shall apply, except that all purchases for engineering design and construction management services over $50,000 must be approved by the Board of Trustees. ® $60,000 and above: For engineering design and construction management services $60,000 and above, formal bidding procedures shall apply. In addition to the appropriate approvals, all purchases shall be supported by appropriated funds for the specific capital improvement project. State Bids are quotations or bids solicited by the through the State of Colorado (Bid Information and Distribution System). Use of State Bids is permitted for any equipment or vehicle purchases on items priced from $20,000 to $150,000, Use of State Bids must be in accordance with applicable procedures and only current State Bids may be used. Use of State Bids would override the formal bidding process and procedures listed above, except in situations where use of competitive bidding is required in conjunction or as a condition of receipt of federal or state funding for the project. The determination of whether to use State Bids shall be made by the Branch Head. Cooperative Purchasing -- National Joint Powers Alliance C.R.S. § 24-110-201 gives the Town the authority to participate in cooperative procurement endeavors, such as cooperative purchasing. Cooperative purchasing is permitted on items priced up to $150,000 through the use of National Joint Powers Alliance's ("NJPA") national cooperative contract solutions. Use of NJPA would be an alternative to use of the Town formal bidding procedures listed above; however, NJPA may not be used in situations where use of competitive bidding is required in conjunction or as a condition of receipt of federal or state funding. The determination of whether to use NJPA shall be made by the Branch Head. Use of other cooperative purchasing units as an alternative to use of Town formal bidding procedures is allowed only if use of such cooperative purchasing unit has been approved in advance in writing by the Town Manager. Colorado law requires that cooperative purchasing groups meet specific requirements if they are to be used by local governments. Town Attorney review shall be obtained as needed to confirm whether the proposed use of a cooperative purchasing unit meets statutory cooperative purchasing requirements. E:3 Integrated Project Delivery Contracting Process The Board of Trustees may award an integrated project delivery ("IPD," sometimes referred to as "design -build") contract for a Town capital improvements project, or other public project as defined in C.R.S. § 31-25A303, upon a determination by the Board of Trustees that IPD represents a timely or cost-effective alternative for the public project. Prior to awarding an IPD contract, the requesting Branch Head, in consultation with the Town Manager, shall solicit proposals for the project by issuing a request for proposals or request for qualifications to individuals or firms that have indicated an interest in participating in the proposed project or that have displayed evidence of expertise in the proposed project. Notice of the initial solicitation for an IPD procurement shall be published in a newspaper of general circulation within the Town. The Town may also publish notice of the solicitation in a trade journal or post notice on the Town's website. After reviewing the proposals, the Board of Trustees may accept the proposal that, in its estimation, represents the best value to the Town. In the procurement and administration of an IPD contract, the Town may utilize, without limitation, the provisions and procedures set forth in C.R.S. § 31-25-1301 et seg. [+�7C�+311TiC«ta71_TiC«7iTit`_l • •-1hl�T[•7i• Sole Source Purchases: It is the policy of the Town of Firestone to recognize and solicit quotes and bids. Sole source purchases may be made if it has been determined that the goods or services can only be obtained from a single supplier capable of meeting all specifications and purchase requirements, or when it is in the Town's best interests. The following procedures shall apply: Sole Source Purchase in the amount of $5,000.00 to $24,999.99 The requesting department shall provide written justification for the sole source purchase and attach to the purchase requisition. The Branch Head will review the justification for the sole source purchase. If the sole source justification is accepted by the Branch Head, approval will be granted. If the purchase is unwarranted, two (2) more telephone quotations are required. Sole Source Purchase in the amount of $25,000.00 to $49,999.99 The requesting department shall prepare a memorandum to the Branch Head justifying the sole source purchase. The Town Manager and Branch Head will review the justification for the sole source purchase. If the sole source justification is accepted by the Town Manager and Branch Head, approval will be granted. If the sole source purchase is not approved, the department shall obtain additional written bids or quotes in compliance with this Policy. Sole Source Purchase of $50,000.00 or above The requesting Branch Head and Town Manager shall include within the materials presented to the Board of Trustees a memorandum justifying the sole source purchase. E Bidding procedures may be waived by the Board of Trustees when it has been demonstrated that the requested goods or services are a sole source purchase. If the sole source purchase is not approved, the department shall obtain additional bids or quotes in compliance with this Policy. Local Vendor Preference To encourage purchasing from businesses located within the Town of Firestone, it is the policy of the Town to recognize and solicit quotes from local vendors. Whenever such local sources exist and are competitive, purchases may be made from local vendors; however the bidding requirements, procedures and criteria of this Policy shall still apply. Unless a violation of law or prohibited as a condition of a grant, bids for purchases of goods of $5,000 or less may be awarded, as deemed appropriate solely within the discretion of the Town, to local vendors providing their proposal or quote is within 2% of the lowest bid. This provision applies only to purchases of goods of $5,000 or less and does not apply to procurement of services. For purposes of this provision, a "local vendor" is defined as any person or entity who has been a bona fide resident of Firestone who has held a valid Town business license for at least six weeks immediately prior to submitting a bid. Purchases during Emergencies In the event of local disaster or emergency conditions declared by the Town, the Town shall comply with this Purchasing Policy to the extent practicable. Forms required herein for the purpose of authorizing and acquiring goods or services necessary for the immediate preservation of life, health, safety, welfare or property may be ratified after acquisition when a delay in acquiring the goods or services will cause immediate risk to life, health, safety welfare or property, based upon the determination of the Town Manager. Goods and services necessary for the immediate preservation of life, health, safety, welfare or property during a local disaster or emergency conditions shall not require compliance with bidding requirements set forth in this Policy, and may be awarded on a sole -source basis. Receiving Procedures and Check Requests Receiving Procedures: 1) It shall be the responsibility of the receiving department to ensure that goods and services are received as ordered and in good condition. Immediately upon receipt of merchandise, check quantity, quality, and any specifications such as model number, etc. to ensure that the goods have been received as indicated on the packing slip. 2) If the goods are faulty or damaged, notify the vendor and Branch Head designee immediately. If damage is concealed or not noticed at time of delivery, upon discovery of damage, leave all boxes and packing lists intact and notify vendor immediately. 3) It shall be the responsibility of the receiving department to inform the Branch Head of the delivery and acceptance of an order by submitting the receiving documents with the check request for payment. 4) It shall be the responsibility of the receiving department to inform the Branch Head and Finance Department when full or partial payments are authorized. 5) All invoices shall be mailed by the vendor directly to the accounts payable department. 6) The receiving department shall be responsible for notifying the vendor of any goods received that are not in compliance with the terms of the order and any damaged goods. Check Requests: Check request forms are used to request payment for materials or services. Check requests will be granted on the following circumstances: ® Checks will be cut in accordance with the Finance Department schedule; ® Original invoice must be attached; ® All requests must be signed by the requestor, Branch Head, Director of Corporate Services and, for purchases over $25,000, the Town Manager; ® All check requests must be properly coded; ® Receiving documents must be attached; and ® Checks over $50,000.00 will require at least one manual signature of any authorized account signer. Ethics in Town Contracting As provided in C.R.S. § 24-18-201 et seq., elected and appointed Town officials and Town employees shall not have a financial or other interest in any contract made by them as Town employees or officials, or by any Town body or board of which they are members or employees, except in the circumstances described in such statute. Such circumstances generally include contracts awarded via competitive bidding procedures, contracts with respect to which the official or employee has complied with the disclosure and recusal requirements of state law, and other limited situations. Elected and appointed Town officials and Town employees involved in the procurement process shall comply with all ethics laws governing such process. Additional information regarding ethics rules for Town contracting can be provided by the office of the Town Manager. DEFINITIONS: Capital Asset: Tangible or intangible property, including durable goods, equipment, software, buildings, installations, easements, and land valued at $5,000 or more. Capital Improvement Projects (CIP) — Any projects to build, alter, repair or maintain public buildings, streets and alleys, public parks and facilities, municipal utilities, sidewalks, highways, parks or public grounds. Capital Outlay —Expenditures which result in the acquisition of or addition to capital assets ($5,000 or more). Capital Projects — A project that is budgeted in capital accounts. Branch Head —Chief of Police, Director of Corporate Services, Director of Community Development, and Town Clerk, as applicable. 11 Emergency conditions - A situation in which any department's operations may be severely hampered or a situation in which the preservation of life, health, safety, welfare or property of employees or the public are endangered. This includes those instances when immediate repair to Town property, equipment, or vehicles is necessary under the aforementioned circumstances. Expenditures —Decreases in net financial resources. Expenditures include current operating expenses which require the current or future use of net current assets, debt service, and capital outlays. Integrated project delivery ("IPD") — A project delivery method in which there is a contractual agreement between the Town and single participating entity for the design, construction, alteration, operation, repair, improvement, demolition, maintenance, or financing, or any combination of these services, for a public project. IPD contract - A contract using an integrated project delivery method. Professional Services —Those services within the scope of the practice of architecture, auditing, engineering, professional land surveying, industrial hygiene, legal counsel, financial advisers, land development planners, building inspection services, information technology services, and banking services. Retainage - A portion or percentage of payments due for work completed on a contract that is held back until the entire job is completed satisfactorily. Services —The furnishing of labor, time, or effort by a contractor not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. The term does not include professional services or integrated project delivery as previously defined. Sole Source Purchase - A procurement of goods or services which can only be obtained from a single supplier capable of meeting all speccations and purchase requirements or when it is in the Town 's best interests. Surplus Property -Materials and equipment which are no longer necessary to Town operations, obsolete, and/or excessively expensive to maintain. 12