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Res 03-395RESOLUTION NO. 03-395 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, AMENDING THE CITY OF FEDERAL WAY PURCHASING POLICIES TO UPDATE THE PURCHASING POLICIES BY INCORPORATING STATE LAWS. WHEREAS, on December 17, 1991, the Federal Way City Council approved staff's recommendation for Purchasing Policies; and WHEREAS, the Purchasing Policies reference the specific dollar amounts that were in effect under State Law in 1991; and WHEREAS, over the years the State Legislature amended the dollar amounts in State Law for various public contracts; and WHEREAS, the City Council of the City of Federal Way find it is in the public's interest to incorporate State Law into the Purchasing Policies to be more efficient and timely with modifications to State Law; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY HEREBY RESOLVES AS FOLLOWS: Section 1. The City Council of the City of Federal Way adopts the attached Purchasing Polices specifically incorporating State Law where applicable. Section 2. Severabilit¥. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity Res. # 03-39,sPage 1 ORIGINAL or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this resolution. Section 3. Ratification. Any act consistent with the authority and prior to the effective date of the resolution is hereby ratified and affirmed. Section 4. Effective Date. This resolution shall be effective immediately upon passage by the Federal Way City Council. RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, this ~th day of fl,-tnh,,,- ,2003. CITY OF FEDERAL WAY ¢ MAY.O5~ 'JEANNE BURBIDGE c.~ Q~TTEST: _ , CITY CLERK, N. CHRISTINE G'~KEEN, CMC APPROVED AS TO FORM: PATRICIA A. RICHARDSON, CITY ATTORNEY FILED WITH THE CITY CLERK: 10101103 PASSED BY THE CITY COUNCIL: 10101103 RESOLUTION NO. 03-395 k:\reso\Update Purchasing Policies 10/7/03 Res. ~03-39~ Page 2 CITY OF FEDERAL WAY PURCHASING POLICIES Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23. Section 24. Section 25. Section 26. Section 27. GENERAL PROVISIONS Purpose. Application. Federal funds. Grants. Professional service contracts. Responsibility for purchasing. Authority to execute. Routine expenses. Recycling procurement policy. COMPETITIVE BIDDING PROCESS Bid limits. Competitive bidding. General standards for determining lowest responsible bidder. Cancellation of requests for bids or requests for proposals. Specifications. City procurement records. Unauthorized purchases. EXCEPTIONS TO COMPETITIVE BIDDING REQUIREMENT Cooperative purchasing. Emergency procurement. Other exemptions. MATERIALS, SUPPLIES AND EQUIPMENT Small purchases. Inspection and testing. Purchases for special events. PUBLIC WORKS OR IMPROVEMENTS Definition of public works. Plans and specifications - Estimates - Publication - Emergencies. Small works roster. Bonds and bid security ~ Noncollusion affidavit -- Insurance. Administrative procedures. GENERAL PROVISIONS Section 1. Purpose. The purpose of this chapter is to protect and advance the public interest by providing for the fair and equitable treatment of all persons involved in the purchasing process, by maximizing the purchasing value of public funds, by providing safeguards for maintaining a purchasing system of quality and integrity, and by following state law. Section 2. Application. This chapter applies to the award of contracts by the City for (1) purchases of materials, supplies, and equipment;(2) public works and improvements; and (3) non-professional services. This chapter does not apply to (1) the reimbursement of business expenses incurred by employees as governed by Ordinance No. 90-25 as now or hereafter amended; (2) purchase and/or lease of real estate; (3) lease agreements for materials, supplies and equipment unless the agreement is in excess of twenty thousand dollars or for more than three (3) years duration; and (4) professional and non-professional service contracts as defined in Section 5. Section 3. Federal Funds. When a purchase involves the expenditure of federal funds, conducted in accordance with any applicable federal law or regulation. purchasing shall be Section 4. Grants. Nothing in this chapter shall prevent the City from complying with the terms and conditions of any grant, gift or bequest which is otherwise consistent with law. Section 5. Professional service contracts. Professional services, including contracts for architectural, engineering, legal and consulting services, are not subject to the requirements of this chapter. Contracts for architectural and engineering services shall be awarded in accordance with Chapter 39.80 RCW. For purposes of this section, "professional services" are those services involving labor, skill, education and special knowledge and where the labor and skill involved is predominately mental or intellectual, rather than physical or manual. Section 6. Responsibility for purchasing. A. General. The director of finance or designee shall be responsible for all city purchasing under this resolution except where otherwise provided. The director or designee shall be head of the purchasing division of the finance department and shall administer the purchasing policies (hereinafter "Purchasing Policies"). B. Duties. In accordance with the Purchasing Policies, the director of finance or designee shall: (1) Purchase or supervise the purchase of all materials, supplies, equipment and nonprofessional services and award of all public works and improvement contracts by the City; (2) Sell, trade or otherwise dispose of surplus personal property belonging to the City. The city manager shall be responsible for the disposal of real property; (3) Establish and maintain programs for specifications development, contract administration and inspection and acceptance, in cooperation with the city departments using the items purchased; (4) Propose operational procedures consistent with the Purchasing Policies relating to the execution of his/her duties. Such procedures shall be followed by all city departments. These operational procedures are subject to prior approval of the city manager. The city manager may amend the procedures as he or she deems appropriate; and (5) Determine liability and property damage insurance requirements, including but not limited to coverage requirements, limits of liability, necessary endorsements and other matters relating to insurance, for any contract entered into by the City under this chapter. Section 7. Authority to execute. Every contract under thc Purchasing Policies where the annual cost to the City or the annual revenue to be received by the City for such contracts is: A. Twenty thousand dollars or less, the city manager or his/her designee is authorized to sign such contracts on behalf of the City; B. More than twenty thousand dollars, approval of the city council is required for such contracts. Section 8. Routine expenses. Routine expenses such as utilities charges, claims and judgments, witness fees, governmental taxes and governmental fees for licenses and permits may be acquired, ordered or paid in the best interests of the City within budget appropriations or other council authorization therefor. Section 9. Recycling procurement policy. A. Intent. In accordance with RCW 35A.40.210, 35.22.620(10) and 39.30.40 including all future amendments, additions and deletion, the City of Federal Way finds it desirable to adopt a procurement policy promoting the use of recycled products and recyclable products by the City of Federal Way departments, thereby stimulating the demand for these products and helping to develop markets for materials that have been diverted from the solid waste stream. B. Use of recycled Materials. All City of Federal Way departments shall use recycled products and recyclable products whenever practicable and reasonable. C. Duty of the Director of Finance or Designee. The director of finance or designee shall establish and maintain a list of recycled and recyclable products that are available to be purchased by departments whenever practicable. 2 COMPETITIVE BIDDING PROCESS Section 10. Bid Limits. The competitive bidding process outlined in Section 11 is required whenever the estimated cost of a purchase of materials, supplies and equipment, or a contract for public work or improvement (including the cost of materials, supplies, equipment and labor), will exceed the sums as set forth in RCW 35A.40.210 and 35.22.620(3) including all future amendments, additions and deletions. Whenever the estimated cost of the materials, supplies and equipment is less than the bid limit as stated above, purchases shall be made in a manner authorized by Section 24 (small purchases). Whenever the estimated cost of the public work or improvement is less than the bid limit as stated above a contract for the public work or improvement may be awarded in the manner authorized by Section 21 (small works roster). The public work or improvement may be performed by city employees within the limits and to the extent authorized by state law. Section 11. Competitive bidding. A. General. Any purchase of material, supplies, and equipment, or any contract for public works or improvements where the cost thereof exceeds thc bid limit in Section 10 shall be by competitive bidding in accordance with RCW 35A.40.210 and 35.22.620(6) including all future amendments, additions and deletions, except for purchases and contracts made pursuant to Sections 17 (cooperative purchasing), 18 (emergency) and 19 (sole source). B. Request for Bids. A request for bids shall be issued which shall include the specifications and the contractual terms and conditions applicable to the procurement. C. Public Notice. Public notice of the request for bids shall be given not less than fourteen (14) calendar days prior to the date set forth therein for the opening of bids unless another timeline is deemed necessary by the director of finance or designee. Such notice shall be published, at least once each week for two (2) consecutive weeks in a newspaper of general circulation. The public notice shall state the date and time of bid opening. Bids not received by the date and time stated for bid opening will not be accepted or considered. D. Bid Opening. Bids shall be submitted sealed to the office of the director of finance or as otherwise specified at any time within regular business hours and shall be identified as bids on the envelope. Bids shall be opened in public by the director of finance or designee at the time and place stated in the request for bids. The amount of each bid, and such other relevant information as the director of finance or designee deems appropriate, together with the name of each bidder, shall be announced and recorded. The record and each bid shall be open to public inspection. The director of finance or designee shall tabulate the bids and submit them to the concerned department, which will make appropriate recommendations to the city manager. E. Bid Evaluation. Bids shall be evaluated based on the specifications and other relevant evaluation criteria set forth in the bid specifications. The evaluation criteria shall be objectively measurable whenever possible, and may include such factors as discounts, transportation costs, 3 and total or life cycle costs, inspection or testing which has been done of the product bid, quality, workmanship, delivery time, and suitability for a particular purpose. F. Bid irregularities. Except where otherwise provided in these Purchasing Policies, bids containing irregularities will be accepted by the City for consideration. Any action conceming the bid(s) containing irregularities shall be at the discretion of the city manager and/or city council in accordance with the provisions of law. The call for bids for all bids shall state the reserved right of the City to reject any and all bids and to waive irregularities in any provided that no bidder shall be permitted to gain unfair advantage over other bidders by action of the city council pertaining to this section. G. Correction or withdrawal of errors; Cancellation of Awards. Correction or withdrawal of inadvertent errors in bids before or after bid opening, or cancellation of awards or contracts based on such bid mistakes, may be permitted by the City to the extent allowed by law. Mistakes discovered before bid opening may be modified or the bid may be withdrawn by written or telegraphic notice received in the office designated in the request for bids prior to the time set for opening. After bid opening, corrections in or withdrawal of bids shall be permitted only to the extent that the bidder can show by clear and convincing evidence that a mistake was made, the nature of the mistake, and the bid price actually intended. All decisions to permit the correction or withdrawal of bids after bid opening, or to cancel awards or contracts based on bid mistakes, will be made by the city manager. H. Award or reiection of bids. The recommended bids over twenty thousand dollars shall be submitted to the city council by the city manager. The city council may award the bid to the lowest responsive, responsible bidder in accordance with Section 12, or may reject all bids in its sole discretion. The contract shall be considered and/or awarded to the lowest responsible bidder whose bid meets the specifications and evaluation criteria set forth in the request for bids. I. Recalling for bids. The city council may reject any or all bids and/or call for further bids. If no responsive, responsible bid is received on the first call, the City may readvertise and make a second call, or may enter into a contract without any further call. Section 12. General standards for determining lowest responsible bidder. In accordance with RCW 43.19.1911 including all future amendments, additions and deletions to determine the lowest responsive, responsible bidder, in addition to price, the following may be considered: A. The ability, capacity and skill of the bidder to perform the contract; B. Whether the bidder can perform the contract promptly, or within the time specified, without delay or interference; C. The reputation, experience and efficiency of the bidder; D. The quality of performance of previous contracts by the bidder; E. The previous and existing compliance by the bidder with laws and ordinances relating to contracts or services; F. The sufficiency of the financial resources and ability of the bidder to perform the contract; G. The ability of the bidder to provide future maintenance and service for the use of the subject of the contract; H. The number and scope of conditions attached to the bid. Section 13. Cancellation of requests for bids or requests for proposals. In accordance with RCW 43.19.1911 including all future amendments, additions and deletions a request for bids may be canceled in the discretion of the director of finance or designee. The reasons therefor shall be made part of thc contract file. Each request for bids issued by the City shall state that the request may be canceled. Notice of cancellation shall be sent to all parties that have been provided with a copy of the request. The notice shall identify the request for bids and state briefly the reasons for cancellation. Section 14. Specifications. A. Maximum Practicable Competition. All specifications shall be drafted so as to promote overall economy for the purposes intended and encourage maximum free and open competition in satisfying the City's needs. The policy enunciated in this section applies to all specifications including but not limited to those prepared for the City by architects, engineers, designers, and drafters. B. "Brand Name or Equivalent" Specification. Brand name or equivalent specifications may be used when the director of finance or designee determines that use of a brand name or equivalent specification is in the City's best interest. C. Brand Name Specification. Because use of a brand name specification is often restrictive of competition, it may be used only when the director of finance or designee makes a written determination that only the identified brand name item or items will satisfy the City's needs. D. Experience Clause Restrictions. Experience clauses requiring prospective bidders to have a record of satisfactory operation or performance may only be used if such requirements have been adequately justified in writing and approved by the director of finance or designee. Section 15. City procurement records. A. Contract File. All determinations and other written records pertaining to thc request to bid, award, or performance of a contract shall be maintained for thc City in a contract file by the director of finance or designee and/or city clerk. B. Retention of Procurement Records. All procurement records shall be retained and disposed of by the City in accordance with state law and city ordinances, regulations and guidelines. If a contract is being funded in whole or in part by assistance from a federal agency, then all procurement records pertaining to that contract shall be maintained in accordance with any applicable requirements of federal law. Section 16. Unauthorized purchases. Except as provided in these Purchasing Policies and except as authorized by operational procedures adopted by thc finance director or designee, no city employee shall make any purchase or contract within the purview of these Purchasing Policies other than through the director of finance or designee. Any purchase or contract made contrary to the provisions hereof shall not be approved by any city officer and the City shall not be bound thereby, except as may be required or provided by law. EXEMPTIONS TO COMPETITIVE BIDDING REQUIREMENTS Section 17. Cooperative purchasing. The director of finance or designee is authorized to recommend to the city council that it join in cooperative purchasing arrangements with other public agencies similarly authorized. Any cooperative purchasing agreement shall comply with RCW 39.34.030(3)including all future amendments, addition and deletions and set forth fully the purposes, powers, rights, objectives and responsibilities of the contracting parties. Any cooperative purchasing agreement shall be governed by the requirements of state law in regard to competitive bidding when applicable. In addition, the director of finance or designee may utilize existing contracts or proposed solicitations of other local, state, or federal agencies to procure materials, supplies, and equipment for the City consistent with legal requirements if such methods of procurement would foster economy and efficiency. Section 18. Emergency procurement. Notwithstanding any other provisions of the Purchasing Polices, the city manager or his/her designated agent may, in accordance with RCW 35A.40.210, 35.22.620(6), and 39.04.280 including all future amendments, additions and deletions, make or authorize others to make emergency procurement of materials, supplies, equipment, or construct public works projects without complying with the competitive requirements of these Purchasing Policies when there exists a threat to public health, welfare, or safety or where the City may suffer a substantial monetary loss by reason of the time required to follow regular purchasing procedures; provided, that such emergency procurement shall be made with such competition as is practicable under the circumstances. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file. As soon as practicable, a record of each emergency procurement shall be made and shall set forth the contractor's name, the amount and type of the contract, and a listing of the item(s) procured under the contract, which shall be reported to the city council. Section 19. Other exemptions. A. The finance director or designee is authorized to make open market purchases without obtaining competitive bids or quotations therefor in accordance with RCW 35A.40.210, 35.22.620(6) and 39.04.280 including all future amendments, additions and deletions under the following conditions: Items of Special Design. When an item required is of special design, shape or manufacture to match or fit in with an existing installation and competitive bidding is impracticable; Surplus or Distress Sales. When it is possible to procure obvious bargains in surplus or distress material, supplies or equipment. Items for quick Delivery. When the obtaining of competitive bids or quotations will cause delay resulting in an appreciable loss to the City; B. Small Items Not Stocked, Blanket Purchase Orders. The director of finance or designee is authorized to establish blanket purchase orders with local vendors for the purchase of items which are not stocked by the departments of the City and are available at usual market prices. Such local vendors shall be selected on the basis of best overall price policies, breadth and depth of stocks and delivery_ service. C. Sole source procurement. A contract for the purchase of materials, supplies or equipment may be awarded without complying with the bidding requirements of this chapter when the purchasing manager determines in writing, after conducting a good faith review of available sources, that there is only one source for the required materials, supplies or equipment. The director of finance or designee shall conduct negotiations, as appropriate, as to price, terms, and delivery time. A record of sole source procurement shall be maintained that lists each contractor's name, the amount and type of each contract, and a listing of the items(s) procured under each contract. MATERIALS, SUPPLIES AND EQUIPMENT Section 20. Small purchases. A. General. Any purchase of materials, supplies or equipment not exceeding the bid limit specified in Section 10 shall be considered a "small purchase" and shall be made in accordance with RCW 39.04.190 including all future amendments, additions or deletions. The finance director or designee shall adopt purchase procedures whereby the requirements of Section 11 shall not apply. Insofar as it is practical, three businesses shall be solicited to submit quotations. The finance director or designee shall keep a record of all small purchases and quotations submitted in competition thereon and such records shall be open for public inspection during regular office hours. The finance director or designee shall consider and/or award the purchase order on small purchases to such vendor as the finance director or designee determines to have submitted the lowest responsive, responsible quotation, in accordance with the provisions of this chapter. B. Filing of statements on awards to other than vendor submitting lowest quotation. When the award for a small purchase is not given to the vendor submitting the lowest quotation, a statement of the reasons for placing the order elsewhere shall be prepared and filed with the other papers relating to the transaction. C. Rejection of quotations. The finance director or desginee shall have the authority to reject all quotations or parts thereof, with regard to a small purchase of any materials, supplies, or equipment when he/she determines the public interest will be served thereby, and upon concurrence with department directors and upon rejection of such quotations shall include the reason therefor in the records of the transaction. 7 Section 21. Inspection and testing. The director of finance or designee shall inspect or supervise the inspection of all deliveries materials, supplies, or equipment to determine their conformance with the specifications set forth in the request to bid. Inspection by Using Department. The director of finance or designee may authorize a using department having the staff and facilities for adequate inspection to inspect all deliveries made to such using departments, under operational procedures. Tests. The director of finance or designee may require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with the specifications. In the performance of such tests, he/she shall have the authority to make use of laboratory facilities of any outside laboratory. Section 22. Purchases for special events. The city manager may promulgate procedures to govern the purchase of supplies, such as food, beverages, decorations and awards, for public events and employee activities, including employee of the year recognition, volunteer recognition and ceremonial openings of public facilities. PUBLIC WORKS OR IMPROVEMENTS Section 23. Definition of public works. RCW 39.04.010 including all future amendments, additions and deletions is incorporated by reference. Section 24. Plans and specifications - Estimates -Publication - Emergencies. Plans and/or specifications, and an estimate of the cost of such work must be filed with the director of finance or designee when a public work or improvement is necessary. The plans, specifications and estimates of cost shall be approved by the director of finance or designee and the original draft or a certified copy filed with the director of finance or designee before further action is taken. If it is determined that it is necessary or advisable to execute such public work or improvement by any means, e.g., force account, or method other than by contract, and it appears · that the estimated probable cost of executing the work will exceed the amount as set forth in RCW 39.04.020 including all future amendments, additions and deletions, then, at least fifteen days before the work is begun, the director of finance or designee shall cause such estimate, together with a description of the work, to be published at least once in a newspaper of general circulation within the City; except that when any emergency requires the immediate execution of such public work or improvement, upon finding of the existence of an emergency by the authority having power to direct such public work or improvement to be done, duly entered of record, publication of description and estimate may be made within seven days after the commencement of the work. 8 Section 25. Small works roster. A small works roster in accordance with RCW 39.04.155 including all future amendments, additions and deletions may be used for construction of a public work or improvement, as an alternative to general competitive bidding requirements set out in Section 11. The finance director or designee shall maintain a list of contractors who have requested placement on the roster and who are properly licensed or registered to perform work in the State of Washington. Insofar as it is practical, five businesses shall be solicited to submit bids. Once a bidder has been offered an opportunity to bid, that bidder will not be offered another opportunity to bid until all other appropriate contractors on the roster have been offered such an opportunity. Section 26. Bonds and bid security - Noncollusion affidavit -Insurance. Bid Security. Requirement for Bid Security. Bid security shall be required for all competitive bidding for public work or improvement contracts in accordance with RCW 39.08.010 and 39.08.030 including all future amendments, additions and deletions. Bid security shall be of a type and in a form established by the director of finance or designee and approved by the city attorney or designee, which may include a bond provided by a surety company authorized to do business in this state, or the equivalent in cash, cashier's or certified check and shall be included in the bid package. Bid security shall be required on bids for materials, supplies and equipment only if determined necessary by the director of finance or designee. Amount of Bid Security. Bid security shall be in an amount equal to at least five percent of the amount of the bid or in another amount as determined by the purchasing manager. Rejection of Bids for Noncompliance with Bid Security Requirements. When the request for bid requires submittal of bid security, noncompliance will result in rejection of the bid. Withdrawal of Bids. If a bidder is permitted to withdraw its bid before award as provided in Section 1 I(G), the bidder's bid security shall be returned. Contract Performance and Payment Bonds. When required -- Amounts. When a public works or improvement contract is awarded as a result of a call for bids under Section 11 (H) of these Purchasing Policies, the following bonds or security shall be delivered to the City and shall become binding on the parties upon the execution of this contract: A performance bond satisfactory to the city attorney or designee, executed by a surety company authorized to do business in this state or otherwise secured in manner satisfactory to the City for an amount equal to one hundred percent of the price specified in the contract. A payment bond satisfactory to the city attorney or designee, executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the City for the protection of all persons supplying labor and material to the contractor or its subcontractors for the performance of the work provided for in the contract. The bond shall be in an amount equal to one hundred percent of the price specified in the contract. Authority to Require Additional Bonds. Nothing in this section shall be construed to limit the authority of the City to require a performance bond or other security in addition to the bonds specified herein. Noncollusion Affidavit. As part of any bid submitted, the bidder shall be required to warrant that the bid is a genuine bid and that he or she has not entered into collusion with any other bidder or any other person by submitting with his or her bid an executed and notarized noncollusion affidavit on a form approved by the city attorney. Insurance. Contracts for public works and improvements shall contain such requirements for the provision of insurance by the contractor as are determined by the director of finance or designee. Section 27. Administrative procedures. The city manager may promulgate procedures for the purpose of administering public works improvement contracts. Such procedures may define the levels of authority pertaining to review and approval of contract change orders. The director of finance or designee is to report change orders to the city council on a quarterly basis. l0