 |
Gainesville |
 |
Code of Ordinances |
|
Part II. CODE OF ORDINANCES |
|
Chapter 2. ADMINISTRATION |
|
Article I. IN GENERAL |
§ 2-7. Purchasing policies and procedures.
(a)
Purpose and scope.
(1)
Purpose. The purpose of this section shall be to establish procedures and guidelines for procurement of supplies, materials and services for the city. This section shall establish the internal control procedures for all vendors and city personnel to follow. Internal control is required to assist in prevention of any unauthorized purchases by the city and any evidences of collusion by vendors. Further, this section shall establish guidelines to provide the citizens and taxpayers of the city assurance that the best use of the available resources of the city is being realized.
(2)
Scope. This section is intended to apply to all purchases made by the city and in the event that the policy with respect to credit card purchases is also applicable, both policies are to be applied. In the event of conflict between this policy and the credit card purchasing policy, the stricter provision shall apply.
(b)
Definitions. As used in this section, the following terms and definitions shall apply:
(1)
City shall mean the City of Gainesville or its departments.
(2)
Purchases shall mean the procurement of supplies, materials and services for the city.
(3)
Purchase order shall mean an approved order to purchase supplies, materials, and services from a vendor.
(4)
Vendor shall mean a supplier of materials or services to the city.
(5)
User department shall mean a department or agency of the city.
(6)
Blanket purchase order shall mean an open order to purchase supplies for a specified period of time (usually on an annual basis) at a limited cost per purchase between the city and a vendor.
(7)
Emergency purchase shall mean any purchase or procurement in a case of grave public necessity to meet an unusual and unforeseen condition that could not have been included in the original budget through the use of reasonably diligent thought and attention that is: (1) a procurement made because of a public calamity that requires the immediate appropriation of money to relieve the necessity of the municipality's residents or to preserve the property of the municipality; (2) a procurement necessary to preserve or protect the public health or safety of the municipality's residents; or (3) a procurement necessary because of unforeseen damage to public machinery, equipment or other property.
(8)
Invoice shall mean any billing from a vendor for purchases of supplies, materials or services.
(9)
Encumbrance shall mean any unpaid obligation or agreement to purchase from a vendor by a user department, to be paid upon receipt of the merchandise.
(10)
Personal or professional services shall mean any provided service of a professional nature, including, but not limited to, services for engineers, medical services, legal services, computer systems programmers and investigators.
(c)
Basic procedures.
(1)
Generally. Supplies or materials that are not available at any central warehouse of the city shall be purchased by following the procedures outlined in this section. Further, replenishment of supplies at any central warehouse of the city shall also be purchased by following these procedures.
(2)
Blanket purchase orders.
a.
Blanket purchase orders may be issued to vendors who frequently provide a large quantity of materials or supplies at a unit cost of less than five hundred dollars ($500.00) each. Blanket purchase orders shall be issued only by the finance department. Criteria to be used for the issuance of a blanket purchase order to a vendor shall be the responsibility of the finance department, considering the frequency of purchases made, the amount of purchases made, the location of the vendor, and the number of user departments purchasing from the vendor.
b.
Local vendors with open charge accounts may be assigned blanket purchase orders in order to expedite the purchase of supplies and materials having a unit cost of less than five hundred dollars ($500.00) each.
c.
All blanket purchase orders for amounts in excess of three thousand dollars ($3,000.00) shall be approved by the city manager and the director of finance. No blanket purchase order shall be assigned by a vendor or a user department of the city.
(3)
Authorization to purchase.
a.
Department heads of the user department and the director of finance may approve purchases less than three thousand dollars ($3,000.00).
b.
The director of finance shall approve purchases for amounts less than three thousand dollars ($3,000.00).
c.
The director of finance and the city manager shall approve purchases in excess of three thousand dollars ($3,000.00), but less than fifty thousand dollars ($50,000.00). Available and sufficient funding in the user department's budgetary authority shall be the basis for all purchases. No purchases shall be made without such available funds, except upon written authorization from the city manager, with designation of the available nondepartmental funds to be used for said purchase.
(4)
Price quotations from vendors.
a.
In order to obtain the best merchandise at the least possible cost to the city, the procedures outlined below are recommended:
1.
Competitive bidding by vendors shall be encouraged in order to obtain the best merchandise at the least possible cost.
2.
Quantity discounts shall be utilized in order to obtain the least possible cost per unit for the purchases made by the city.
3.
Use of local vendors for purchases of materials and supplies is encouraged, provided prices quoted by local vendors are within acceptable limits (limits to be determined by state statue and the city manager). In order to promote price competition among local and nonlocal vendors, it is recommended that those local vendors with state purchasing contracts provide those contract prices to the city.
b.
User departments shall obtain competitive price quotations from vendors. The guidelines of this section recommend the user department obtain at least three (3) price quotations from vendors for all purchases in excess of one thousand dollars ($1,000.00). Single supplier vendors should be duly noted by the user department.
c.
Purchases for less than three thousand dollars ($3,000.00) may be obtained by verbal price quotations from vendors. Discretion is left to the user department as to whether written price quotations are requested from vendors for purchases less than three thousand dollars ($3,000.00).
d.
Purchases for three thousand dollars ($3,000.00) to fifty thousand dollars ($50,000.00):
1.
Shall be confirmed in writing by the vendor and the user department. Only written quotations will be considered. Documentation via e-mail or fax is permissible for this purpose.
2.
The city shall contact at least two (2) historically under-utilized businesses (HUBs) from Cooke County on a rotating basis before making purchase expenditures.
e.
Purchases in excess of fifty thousand dollars ($50,000.00) shall comply with state law procedures for competitive sealed bids or competitive sealed proposals and be awarded by the city council.
f.
All quoted prices or bids, whether oral or written, received from any vendor by a user department in accordance with subsection (c)(4) above, shall be recorded in writing by the user department on the appropriate forms and maintained in the user department for audit purposes. Purchases made through cooperative purchasing programs are permissible for the bid requirements; however, appropriate documentation shall be maintained.
(5)
Emergency purchases.
a.
Emergency purchases must be paid out of available departmental funds, that may be allocated for such purpose without necessitating other emergency expenditure, or must be both authorized in writing as provided in (c)(3)c above and approved by the city council, with an appropriate budget amendment, in compliance with V.T.C.A., Local Government Code § 102.009(c).
b.
During periods of an emergency, discretion is expressly given to the city manager for authority to purchase supplies or materials, provided appropriate action to amend the budget is taken within a reasonable period of time. Emergency purchases shall not excuse noncompliance with normal purchasing procedures provided in this section, guidelines or state law.
c.
Emergency purchases in excess of fifty thousand dollars ($50,000.00), which comply with the current emergency exemptions contained in V.T.C.A., Local Government Code § 252.022, may be made without advertisement for bids, provided that the appropriate written authorization is obtained from the city manager. The city manager shall provide a written explanation of emergency purchases in excess of fifty thousand dollars ($50,000.00) within thirty (30) days of the expenditure.
(6)
Purchase orders.
a.
Upon acceptance of the best and most responsible bid from a bidder or vendor, a purchase order may be processed by the finance department. Such purchase order shall become the formal contractual agreement, unless another form of agreement is specified in the bid specifications and approved by the city attorney. Amendments and change orders to purchase orders shall be approved using the procedure provided herein for purchase authorization.
b.
Successful vendors shall be notified by the finance department of the purchase award by the processing and distribution of the purchase order.
c.
User departments shall coordinate individual needs in order to allow optimum processing time for all purchase orders. At least three (3) regular business days' processing time should be allowed by the user department in order for the finance department to process the purchase order.
d.
Upon the processing of the purchase order, an encumbrance shall be established for the line item(s) of the budget for the user department. The encumbrance amount shall reduce the available budget balance in the user department's budget. No funds shall be encumbered on any line item where the approved budget amount has been exceeded, without prior approval by the city manager.
(d)
Contracts for services. Contracts for services shall comply with the provisions of this section as provided herein, except where deviations are expressly permitted.
(e)
Bid specification procedures. Purchases in excess of fifty thousand dollars ($50,000.00) shall comply with state law procedures for competitive bids or competitive sealed proposals and awarded by the city council. When the competitive sealed proposal procedure is authorized under state law, the city manager, or his designee, shall be authorized to conduct discussions, in accordance with the terms of a request for proposal, with bidding entities who submit proposals and who are determined to be reasonably qualified for the award of a contract. The city manager, or his designee, is directed to treat such bidders fairly and equally with respect to any opportunity for discussion and revision of proposals, to obtain the best final offers before award of the contract by the city council.
(f)
Inspection of merchandise.
(1)
Inspection of merchandise received shall be the responsibility of the user department. Merchandise damaged during shipment shall be returned to the vendor by the user department immediately, along with any description of the damages. The city shall not be responsible for payment of any damaged or defective merchandise.
(g)
Employee personal purchases prohibited. Purchases of merchandise by employees of the city for personal use through any vendor of the city shall be prohibited. Use of a city vendor to purchase personal merchandise in order to avoid payment of sales taxes, or in order to receive a favorable price quotation or for any other reason, may be grounds for employee disciplinary action, including dismissal.
(h)
City employees as vendors. Use of city employees as vendors shall be authorized only after approval by the city manager and only when such employee is the only available source for the merchandise.
(i)
Bid lists. Official bid lists or vendor lists are not maintained by the city. Each user department shall be responsible for maintaining vendor lists for supplies purchased on a routine basis.
(j)
Gifts, gratuities and trial merchandise provided by vendors.
(1)
Gifts, gratuities, promotional items or vendor-provided meals provided to city employee, except for gifts, etc., of nominal value, shall be prohibited under this section. Acceptance of such gifts shall not bind the city in any way to purchase any merchandise from the vendor or company supplying the gift.
(2)
Merchandise provided by a vendor on a trial basis shall not bind the city to any type of purchase agreement or contract. Such merchandise may subsequently either be returned to the vendor or accepted by a user department of the city.
(k)
Relationships among user departments and finance department.
(1)
The finance department shall be responsible for processing all documents related to purchasing and payment of accounts. No user department shall be authorized to enter into any contract or agreement which is in violation of this section or to make any payment to a vendor for purchases of supplies or materials. All funds and accounts shall be established by the finance department, and no user department shall maintain any fund or account separate from those funds and accounts established by the finance department without prior approval from the city manager.
(2)
User departments shall coordinate purchases through the finance department. Required forms shall be approved by the appropriate officials and forwarded to the finance department on a timely basis. User departments shall coordinate vendor inquiries and complaints regarding orders through the finance department. User departments may be consulted by the finance department in order to obtain clarification regarding vendor inquiries.
(3)
User departments shall endeavor to assure a timely flow of purchasing documents in order to reduce emergency situations that otherwise could have been foreseen and prevented. Departments shall continually review the existing supplies on hand and request replenishment of those supplies in a timely manner.
(l)
Payment process.
(1)
Payment shall be made to vendors only after approval from the appropriate officials and in compliance with this section. User departments shall approve all payments to be made to the vendor, subsequent to the approval of all purchase requests. The finance department shall process payments to vendors.
(2)
Payments shall be made in accordance with the prices and rates specified in the bid or purchase order. No payment shall be made which exceeds the approved amount, without prior authorization being received in advance from the city manager or, when required, the city council. For bids or purchases not requiring city council approval, the city manager or his designee shall approve all exceptions or additions to amounts previously authorized. For bids or purchases requiring city council approval, the city council shall approve all exceptions or additions to amounts previously authorized. When final payment has been processed by the finance department for a purchase order, the purchase order will be closed, and the encumbrance obligation removed from the user department's budget appropriations. No subsequent purchases shall be made after final payment has been processed for a closed purchase order.
(3)
Payments from blanket purchase orders shall also be made in accordance with this section. All payments from blanket purchase orders shall be approved by the department head of the user department prior to payment processing to the vendor.
(4)
Vendor invoices and statements shall be mailed directly to the finance department. The finance department shall be responsible for identifying all individual payment authorizations and verifying those authorizations with the vendor invoice and statement. User departments shall promptly forward all necessary payment authorizations to the finance department in order to avoid any unnecessary delays in processing payment to vendors.
(5)
V.T.C.A., Government Code § 2251.021, provides that payments, with certain exceptions, to vendors shall be made within thirty (30) days, or interest shall become due and payable to the vendor. All user departments shall endeavor to process all necessary payment authorizations in order to prevent any unnecessary accrual of interest pursuant to this provision. Any interest charges accruing to a user department as a result of this provision shall be charged against the appropriate departmental budget. If the head of the user department believes that a bona fide dispute exists with a vendor, contractor, subcontractor, or supplier about the goods delivered or the services performed that may result in a late payment, the department head shall bring the dispute to the attention of the city manager so that appropriate action may be taken.
(6)
The city is exempt from all applicable local and state sales and use taxes, as provided by V.T.C.A., Property Tax Code § 151.309, and certain federal taxes, except for taxes specifically designated by state and federal statutes or regulations. The city may provide any vendor with a tax exemption certificate.
(m)
Local government cooperative purchasing. When it is determined to be advantageous to the city, cooperative purchasing with other governmental entities may be used. Such cooperative agreements shall be approved by all governing bodies participating in any cooperative purchasing agreement. Agreements shall clearly define the liabilities and responsibilities of each entity as to the items to be purchased and the quantity discounts to be realized through such cooperating efforts and payment terms and conditions.
(n)
Designation of purchasing officer, responsibility. The city manager or his designee shall be designated as the purchasing officer of the city and shall be responsible for approval of purchasing transactions and activities. The purchasing officer shall develop and maintain written administrative policies and procedures for the activities of the purchasing and procurement functions. Commitment of financial and staffing resources in order to regulate the purchasing and procurement functions shall be the responsibility of the city council.
(o)
Inventories and surplus property. Each user department shall be responsible for maintaining departmental inventories of fixed assets. On an annual basis or as requested by the city manager, the user department shall submit a detailed inventory of all departmental inventories to the city manager or his designee for verification.
(p)
Disposition of surplus and salvage property.
(1)
Definitions.
a.
Salvage property means personal property, other than items routinely discarded as waste, that because of use, time, accident, or any other cause is so worn, damaged, or obsolete that it has no value for the purpose for which it was originally intended.
b.
Surplus property means personal property that:
1.
Is not salvage property or items routinely discarded as waste;
2.
Is not currently needed by its owner;
3.
Is not required for the owner's foreseeable needs; and
4.
Possesses some usefulness for the purpose for which it was intended.
(2)
Disposition. The city council may:
a.
Periodically sell the city's surplus or salvage property by competitive bid or auction;
b.
Offer the property as a trade-in for new property of the same general type if the city council considers that action to be in the best interests of the city; or
c.
Order any of the property to be destroyed or otherwise disposed of as worthless or dispose of any of such property by donating the property to a civic or charitable organization located in the city, if the city council undertakes to sell that property under the prior subsection and is unable to do so because no bids are made; and
d.
May reject any offer or bid made, if deemed by the city council or its designee to be in the best interest of the city.
(3)
Notice. Notice of a sale of surplus or salvage property shall:
a.
Be published by the city in the official newspaper of the city; and
b.
Be published on or after the 30th day but before the tenth day before the date of the sale.
(4)
Records. A record of each item sold and its sale price and of each item destroyed or donated shall be maintained in accordance with the city's record retention policy. User departments shall be responsible for reporting to the finance department any property determined to be surplus as needed each calendar year. Coordination of surplus items shall be done by the user department and the finance department.
(Ord. No. 434-2-90, § 1, 2-6-90; Ord. No. 595-5-94, §§ 2—4, 5-3-94; Ord. No. 811-4-99, § 2, 4-20-99; Ord. No. 919-11-2001, § 2, 11-6-01; Ord. No. 1264-12-2010, § 2, 12-21-10; Ord. No. 1431-06-2018, §§ 1—7, 6-5-18)