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CC - Item 5A - Ordinance Amending Chapter 3.24 Purchasing System & Chapter 3.28 Public Works Bidding Procedure, and Resolution No. 2024-67 to Adopt CA Uniform Public Contracting Cost Accounting ActROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: BEN KIM, CITY MANAGER 3 — DATE: DECEMBER 10, 2024 SUBJECT: ORDINANCE AMENDING CHAPTER 3.24 (PURCHASING SYSTEM) AND AMENDING CHAPTER 3.28 (PUBLIC WORKS BIDDING PROCEDURE) TO THE ROSEMEAD MUNICIPAL CODE, AND APPROVE RESOLUTION NO. 2024-67 TO ADOPT CALIFORNIA UNIFORM PUBLIC CONTRACTING COST ACCOUNTING ACT SUMMARY Staff is recommending the City Council to adopt an ordinance amending and restating both Chapter 3.24 (Purchasing System) and Chapter 3.28 (Public Works Bidding Procedure), and adopting other conforming resolutions. The City engaged NIGP Consulting ("Consultant") in January 2023 to conduct a procurement policy and procedure assessment ("Assessment") and to provide revision recommendations. The purpose of the engagement was to conduct a comprehensive assessment of the City's purchasing policies and procedures. The aim was to determine whether the city was adhering to industry best practices and to ascertain whether greater delegated authority for procurement activities was necessary to streamline operations, increase work efficiencies, and mitigate risk. The objective of this workshop is to communicate the Consultant's findings and recommendations, as well as seek further guidance from the Council regarding the potential execution of said recommendations. Staff presented the assessment report and key recommendations to the City Council on December 12, 2023. The key recommendations are as follows: Update procurement dollar thresholds. The recommended dollar threshold updates are detailed in the table below. Averaging the responses of all agencies to the NIGP 2019 Benchmark Survey Report (Survey), the average starting threshold for small procurements was determined to be thirteen thousand dollars. However, this increase from $1,000 to $13,000 may be deemed excessive at this time. An analysis of all agencies that participated in the NIGP 2019 AGENDA ITEM NO. 5.A City Council Meeting December 10, 2024 Page 2 of 5 Benchmarking Survey Report determined the average threshold levels for formal competition for procurements to be $54,033 (for non -IT) and $57,611 (for IT). Current delegation of authority to award contracts dollar thresholds: 3.24.015 Purchasing methods. Value of Purchase Purchase method Method of Approval $5,000.00 or les Direct competitive purchasing Approval by director of procedure, unless subject to an department responsible for the $5,000.01 to $15,000.00 alternative purchasing procedure. project, using avendor or letter of unless subject to an alternative agreement. $5,000.01 to $30,000.00 Informal competitive purchasing Approval by City Manager. $15,000.01 to $50,000.00 procedure, unless subject to an City Manager. alternative purchasing procedure. $30,000.01 or More Formal competitive purchasing Approval by the City Council. $50,000.01 or More procedure, unless subject to an City Council. alternative purchasing procedure. Proposed delegation of authority to award contracts dollar thresholds: Value of Purchase Purchase method Method of Approval $5,000.00 or less No quotations required Credit card holder or Department Director $5,000.01 to $15,000.00 Informal purchasing procedure, Department Director unless subject to an alternative purchasing procedure. $15,000.01 to $50,000.00 Informal purchasing procedure, City Manager. unless subject to an alternative purchasing procedure. $50,000.01 or More Formal competitive purchasing City Council. procedure, unless subject to an alternative purchasing procedure. e Enable the City to make annual updates to the dollar thresholds for procurement based on the Consumer Price Index. This would be based on the all -urban consumers published by the United States Federal Secretary of Labor (Bureau of Labor Statistics) for the Los Angeles Area (CPI -U). The most recent revision to the Purchasing Ordinance approval limits occurred on August 23, 2016, when the threshold for City Council approval on purchases rose from $25,000 to $30,000. Subsequent to that period, the Los Angeles metropolitan area experienced an inflation surge exceeding 30%. City Council Meeting December 10, 2024 Page 3 of 5 Adopt California Uniform Public Contracting Cost Accounting Act ("CUPCCAA"). CUPCCAA provides for the expedited award of Public Works contracts, faster project delivery, and reduced time, effort, and expense associated with bidding projects based on higher thresholds than permitted under the California Public Contract Code 20160 to 20175. Adoption of CUPCCAA would empower City staff to procure lower dollar value construction services using a less onerous procurement method, or even use in-house staff for small projects, if knowledgeable and available, up to a higher threshold than currently exists. The threshold for formal bidding would be higher than that currently used by the City. New language is included in section 3.24.140 to adjust purchase dollar authorization thresholds for CPI. Current delegation of authority to award contracts dollar thresholds: 3.28.050 Delegation of authority to award contracts. Public works contracts five thousand dollars ($5,080.00) or les maybe approved and executed at the director level without formal bidding. Public works contracts between five thousand dollarsand one cents ($5,000.01) and thirty thousand dollars ($30,000.00) maybe approved and executed by the City Manager. A table summarizing the methods of approval and bidding requirement is provided below. Vakie of Public Project Method ofApproval I Bidding Requirement Up to $5,000.00 Approval by director of department responsible for the project, using a vendor or letter of agreement Bidding not required. 5,000.01 to $30,000.01) Approval by the City Manger. Bidding required. $30,000.01 or more. Approval by the City Council- Bidding required. (Ord. No. 999, t 4(lxh. B), 6-25-19) Proposed delegation of authority to award contracts dollar thresholds based on CUPCCAA standards: Value of Public Project Public Works City Manager City Council Director $75,000 or less (negotiated contract or 3 informal X (5$15k) X (5$50k) proposals, or performed by City Employees) $75,000 to $220,000 (requires 3 informal X (>$50k) proposals) >$220,000 (requires formal bidding procedures) I X (>$50k) On September 29, 2024, Assembly Bill (AB) 2192 amended the thresholds of the California Uniform Public Construction Cost Accounting Act (CUPCCAA). The Act alters the financial thresholds established by CUPCCAA, impacting the administration of bidding processes for public projects by governmental entities. The updated criteria will take effect on January 1, 2025. The aforementioned numbers indicate the revised threshold restrictions effective January 1, 2025. City Council Meeting December 10, 2024 Page 4 of 5 To clarify, public projects exceeding a value of two hundred thousand dollars ($220,000) must be awarded through a formal competitive bidding process. Bidding is open to all qualified contractors, and the award is made to the lowest responsible bidder. As mentioned previously, the authority threshold will be in line with non-public projects, so the Council will have to approve any award of contract in excess of $50,000. • Authorize the adoption of revised CUPCCAA thresholds automatically. This would be contingent solely on the State's revision. Adoption of revised thresholds is thereby automated, eliminating the need for Council intervention for each instance. • Per the request of Council Member Low, the City Council shall be furnished with a report detailing all purchase orders surpassing $10,000. Staff recommends that the report be furnished to the City Council no later than 45 days subsequent to the end of each fiscal quarter. Please note that the consultant recommended implementing a Purchasing Card (pCard) program that streamlines procurement by replacing use of credit cards to increase control to manage cardholder transactions by restricting specific types of purchases. Staff will continue to explore this option and may implement the pCard program in the future. The Consultant concluded that although the current policies are firmly established and in accordance with State legislation, however they could be improved to support the City's uninterrupted operations more efficiently and effectively. To view the previous staff report and the full Procurement Policy and Procedure Assessment Report, please see attachment G. At times, a change order may be necessary to adjust the original agreement or contract to accommodate new circumstances or requirements during the purchasing process. New language regarding change orders and 10% for contingency purposes is added with Section 3.24.130 for non-public projects and Section 3.28.060 for public projects, provided that there is an adequate budget. To further this purpose, staff suggests adopting the attached ordinance, which will amend Chapter 3.24 to address authority threshold levels and also amend Chapter 3.28 to address CUPCCAA. Doing so will create a clearer and more streamlined process in the RMC for such purchases or contracts. STAFF RECOMMENDATION That the City Council: (1) Move to waive further reading and Introduce Ordinance No. 1025; and (2) set a date for a second reading and adoption of Ordinance No. 1025; and (3) Approve Resolution No. 2024-67 Adopting California Uniform Public Contracting Cost Accounting Act; and (4) Receive and file Administrative Policy 20-01 Purchasing Policy and Procedures Manual. City Council Meeting December 10, 2024 Page 5 of 5 ENVIRONMENTAL REVIEW This ordinance is not subject to California Environmental Quality Act (CEQA) pursuant to the following sections of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3: (1) Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); (2) Section 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. This ordinance outlines a mechanism for purchasing and its approval will not involve any commitment to any specific project. As such, there is no possibility that this ordinance may have a significant adverse effect on the environment, and the adoption of this ordinance is exempt from CEQA. Prepared by: 4 Bryan Chua Director of Finance Attachments: A. Ordinance No. 1025 B. Exhibit A Text of Chapter 3.24 C. Exhibit B Text of Chapter 3.28 D. Redline of Changes to Existing Chapter 3.24 E. Redline of Changes to Existing Chapter 3.28 F. Resolution No. 2024-67 Adopting CUPCCAA G. Purchasing Policy Workshop — Report and Presentation H. Redline of Changes to Existing Administrative Policy 20-01 Purchasing Policy and Procedures Manual Attachment A Ordinance No. 1025 ORDINANCE NO. 1025 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD, CALIFORNIA, AMENDING ROSEMEAD MUNICIPAL CHAPTER 3.24 (PURCHASING SYSTEM), AMENDING CHAPTER 3.28 (PUBLIC PROJECT BIDDING PROCEDURES) TO PROVIDE INFORMAL BIDDING PROCEDURES UNDER THE UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT (SECTION 22000, ET SEQ. OF THE PUBLIC CONTRACT CODE) AND OTHER RELATED ACTIONS The City Council of the City of Rosemead ordains as follows: SECTION 1. Findings. The City Council of the City of Rosemead finds as follows: A. The City's purchasing regulations are currently codified in Chapter 3.24 and Chapter 3.28 of the Rosemead Municipal Code ("RMC"). B. The City wishes to amend its purchasing procedures. C. The City Council held a duly noticed public meeting on December 10, 2024, at which time all persons interested in the proposed ordinance had the opportunity to address the City Council. SECTION 2. Environmental Findings. The City Council exercises its independent judgment and finds that this Ordinance is not subject to California Environmental Quality Act (CEQA) pursuant to the following sections of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3: (1) Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); (2) Section 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. This ordinance outlines a mechanism for purchasing and its approval will not involve any commitment to any specific project. As such, there is no possibility that this ordinance may have a significant adverse effect on the environment, and the adoption of this ordinance is exempt from CEQA. SECTION 3. Amendment and Restatement of Chapter 3.24 (Purchasing System for Non -Public Works Proiects). Chapter 3.24 of the RMC is amended and restated in its entirety, as set forth in the attached Exhibit A. SECTION 4. Amendment and Restatement of Chapter 3.28 (Public Proiect Bidding Procedures). Chapter 3.28 of the RMC is amended and restated in its entirety, as set forth in the attached Exhibit B. SECTION 5. Severability. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this 1 Ordinance 1025 ordinance. The City Council hereby declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. Publication. The City Clerk is directed to cause this ordinance to be published in the manner required by law. PASSED, APPROVED AND ORDAINED this 10th day of December, 2024. FEN U U DIVA Ito] to] NuA Steven Ly, Mayor ATTEST: Rachel Richman, City Attorney Ericka Hernandez, City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF ROSEMEAD ) I, Ericka Hernandez, City Clerk of the City of Rosemead, County of Los Angeles, State of California, hereby certify that Ordinance No. 1025 was first introduced at the regular meeting of December 10, 2024, by first reading. Said Ordinance was approved and adopted by the City Council of the City of Rosemead at a regular meeting held on the 10th day of December, 2024, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Ericka Hernandez, City Clerk Ordinance 1025 Attachment B Exhibit A Text of Chapter 3.24 Chapter 3.24 PURCHASING SYSTEM FOR NON-PUBLIC WORKS CONTRACTS Chapter 3.24 PURCHASING SYSTEM FOR NON-PUBLIC WORKS CONTRACTS' 3.24.010 Definitions. Unless otherwise indicated, the following definitions shall apply to all provisions of this chapter: "Authorized Contracting Party" means the City official or body provided with authority under this chapter to approve a contract or to make a purchase. "City Manager" means the City Manager or person designated by the City Manager to act on behalf of the City Manager. "Formal Competitive Purchasing Procedure" means a procedure which meets the requirements of state and local law, including this chapter and any policies and procedures approved by the City Manager consistent with this chapter. "Local Area Veteran Vendor" means a veteran vendor, as defined herein, who is a contractor, or consultant that has a valid physical business address located within the boundaries of the City of Rosemead or within any of the cities that directly border the City which include, Alhambra, Montebello, Monterey Park, San Gabriel, Temple City, EI Monte and South EI Monte, at least six months prior to bid or proposal opening date, from which the vendor, contractor, or consultant operates or performs business on a day-to-day basis, and holds a valid business license issued by the City of Rosemead or one of cities listed above, and designates, for sales tax purposes, the City of Rosemead or one of the cities listed above, as the point of sale for retail transactions within the City. Post office boxes are not verifiable and shall not be used for the purpose of establishing such physical address. "Negotiated Contract" means a letter of agreement, vendor agreement, contract, professional services agreement, maintenance services/public works projects agreement or written documentation which details terms and conditions of the purchase. "Professional Services" means all services performed by persons in a professional occupation, including, but not limited to, consulting and performance services for accounting, auditing, computer hardware and software support, engineering, architectural, planning, redevelopment, financial, economic, personnel, social services, animal control, legal, management, environmental, cable television, communication and other similar professional functions which may be necessary for the operation of the City. "Rosemead Vendor" means a local business enterprise whose business address at the point of sale is located within the geographical boundaries of the City and who maintains a valid license or permit to do business in the City. "Solicitation" means the City's process to obtain bids, quotes, or proposals as provided in Chapter 3.24 for the purchase of goods or services. "Veteran Vendor" means a person who served in the active military, naval, or air service and who was discharged or released under conditions other than dishonorable as verified by a Form DD214 or other acceptable proof of service, who owns a business where at least fifty (50) percent of the company is owned by a veteran. (Ord. No. 988, § 3(Exh. A), 6-25-19; Ord. No. 990, § 3 (Exh. A), 12-10-19) 'Editor's note(s)—Ord. No. 988, § 3(Exh. A), adopted June 25, 2019, amended Chapter 3.24 in its entirety to read as herein set out. Former Chapter 3.24, §§ 3.24.010-3.24.130, pertained to similar subject matter, and derived from prior code; Ord. 864 adopted in 2008; Ord. No. 920, adopted October 11, 2011; and Ord. No. 964, adopted September 13, 2016. Page 1 of 8 3.24.015 Purchasing methods. Value of Purchase Purchase method Method of Approval $5,000.00 or less No quotations required Credit card holder or Department Director. $5,000.01 to $15,000.00 Informal purchasing procedure, Department Director. unless subject to an alternative purchasing procedure. $15,000.01 to $50,000.00 Informal purchasing procedure, City Manager. unless subject to an alternative purchasing procedure. $50,000.01 or More Formal competitive purchasing City Council. procedure, unless subject to an alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.020 Purchasing Officer—Position created—Appointment. There is established in the office of the City Manager the role of a Purchasing Officer. The Purchasing Officer shall be the City Manager or his or her designee(s). If the City Manager designates one or more persons to act in this role, the Purchasing Officer(s) shall serve at the pleasure of the City Manager. The duties of the Purchasing Officer may be combined with those of any other officer(s) or position(s). (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.030 Purchasing Officer—Powers and duties. The Purchasing Officer, in accordance with the policies set forth in this chapter and in any written procedures approved by the City Manager that are consistent with this chapter, shall have the power to: A. Purchase or contract for supplies, services and equipment required by the City; B. Negotiate and recommend to the City Council execution of contracts for the purchase of supplies, services and equipment; C. Prepare and implement policies and procedures governing the bidding, contracting, purchasing, storing, distribution and disposal of supplies, services and equipment for the City; D. Prescribe and maintain such forms as may be reasonably necessary to the implementation of this chapter and any other policies and procedures approved by the City Manager consistent with this chapter; E. Review the working details, drawings, plans and specifications for any projects or purchases requiring such review in this chapter; F. Inspect or supervise the inspection of purchased supplies, services and equipment to ensure conformity with any specifications established or required by the City; G. Transfer among departments any supplies, services and equipment not needed by one such department, but which are necessary for the operation of one or more other departments; H. Sell any supplies and equipment not needed for public use or that may become unsuitable for their intended use; Page 2 of 8 Develop and maintain any bidder's list, service provider's list or vendor's catalog file necessary to the operation of this chapter and any other policies and procedures approved by the City Manager consistent with this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.040 Purchasing policies and procedures. A. The City shall secure supplies, services and equipment at the lowest total cost commensurate with the quality and scope needed, and subject to any limitations imposed by state law. Notwithstanding the foregoing, professional services including but not limited to, legal services, architectural, design, engineering services, financial services, IT services, consulting services, or other services of a nature characterized by the necessity for specialized knowledge, expertise, or qualifications, shall be acquired based on proven competency, professional credentials or certificates, and project and scope of work appropriateness. While cost may be a relevant consideration for professional services, it shall not be the primary determinant unless specified by the authorized contracting party. In order to promote the economic health and development of the City, to recognize the amount of sales tax that is returned to the City as a result of the award of a purchase contract for supplies and equipment to a Rosemead vendor, to encourage local participation in the procurement process, and to exercise the prudent use of public funds, the City Council may, by minute action, award a bid to a Rosemead vendor provided the local bid does not exceed the lowest bid by more than five percent or ten thousand dollars ($10,000.00), whichever is less. B. The Purchasing Officer shall develop, for approval by the City Manager, such policies and procedures as are necessary to implement the provisions of this chapter. The policies and procedures shall be written and implemented in such a way to encourage open and competitive bidding, provide equal opportunity based on merit, make each selection process free of invidious discrimination, provide for efficient and timely acquisition of needed supplies, services and equipment, and provide effective fiscal controls. C. In purchasing, supplies, services, and equipment, the City shall make use of competitive bidding, either direct, formal or informal, whenever required by law, this chapter, or any policies and procedures approved by the City Manager consistent with this chapter, while ensuring the quality of supplies, services, and equipment meets the required standards. D. Direct, formal or informal competitive bidding is not required if there is an alternative procedure set forth in this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.050 Purchasing and contracting procedures. A. Five thousand dollars ($5,000.00) or less. Any purchase of five thousand dollars ($5,000.00) or less may be awarded by the director of the department responsible for the project with no quotations required. B. Five thousand dollars and one cent ($5,000.01) to fifteen thousand dollars ($15,000.00). Any purchase of more than five thousand dollars ($5,000.00) and not greater than fifteen thousand dollars ($15,000.00) may be awarded by the Department Director by any informal purchasing procedure as defined herein. C. Fifteen thousand dollars and one cent ($15,000.01) to fifty thousand dollars ($50,000.00). Any purchase of more than fifteen thousand dollars ($15,000.00) and not greater than fifty thousand dollars ($50,000.00) may be awarded by the City Manager by any informal purchasing procedure as defined herein. D. Fifty thousand dollars and one cent ($50,000.01) or more. Any purchase of more than fifty thousand dollars ($50,000.00) shall, except as otherwise provided in this chapter, be awarded by the City Council pursuant to the formal competitive purchasing procedure set forth below. Page 3 of 8 E. Purchasing Officer Approval. The Purchasing Officer, or his or her designee, shall review and approve all contracts of fifteen thousand dollars and one cent ($15,000.01) or more before the contract is effective. Five -Year Term Limitation. No agreement or contract shall extend for a period of more than five years, including any authorized extensions. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.070 Informal purchasing procedure. A. This informal purchasing procedure shall be used for purchases between five thousand dollars and one cent ($5,000.01) and fifty thousand dollars ($50,000.00). B. Service Provider/Vendor List. The department shall maintain a list of qualified service providers or vendors. C. Distribution of Notice Inviting Informal Bids. At least three vendors or service providers shall be asked to submit informal bids, and the City shall endeavor to receive informal bids from at least three vendors or service providers. Notices inviting informal bids shall be sent to the list of qualified service providers, vendors, and/or trade journals not less than ten (30) days before bids are due. D. Contents of Notice Inviting Informal Bids. When soliciting informal bids, staff shall: 1. Describe to the vendor in general terms the project, service or item; 2. Advise vendors how to obtain additional information about the project; 3. State the date, time and manner for the submission of bids; and 4. Include any other information required by state or local law, as determined by the City Attorney. E. Proprietary Projects or Products. If the director of the using department certifies that, to the best of his or her knowledge, the product or service is proprietary in nature and can be obtained only from a limited number of service providers or vendors, and that no equivalent products or services are available, the notice inviting informal bids may be sent exclusively to such vendors) or service provider(s). F. Contents of Remaining Bid and Contract Documents. The contents and form of the remaining bid and contract documents shall be approved by the director of the using department, as well as the City Attorney. G. City's Authority. The City may reject any or all bids received, and may waive any minor irregularities in each bid received. H. Bid Submittal. Service providers or vendors shall submit their bids in writing. I. No Bids Received. If no bids are received, the authorized contracting party may award the contract by any alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.080 Formal competitive purchasing procedure. A. Use of Formal Competitive Purchasing Procedure. This formal purchasing procedure shall be used for purchases greater than fifty thousand dollars ($50,000.00) or whenever formal competitive purchasing is otherwise required by this chapter. B. Required Process. The formal competitive purchasing procedure shall comply with all aspects of state and local law governing formal competitive bidding, including, but not limited to, the Public Contract Code, Government Code, Labor Code, resolutions of the City Council as may be adopted from time to time, and policies and procedures as the City Manager may approve from time to time. Page 4 of 8 C. Distribution of Notice Inviting Formal Bids. The notice inviting formal bids shall substantially comply with procedures set forth in Chapter 3.24.070. D. Contents of Notice Inviting Formal Bids. At a minimum, the notice inviting formal bids shall: 1. Describe the project in general terms; 2. State how to obtain more detailed information about the project; 3. State the date, time and place for the submission of sealed bids; and 4. Include any other information required by state or local law, as determined by the City Attorney. E. Contents of Remaining Bid and Contract Documents. The contents and form of the remaining bid and contract documents shall be approved by the director of the using department, as well as the City Attorney. F. City's Authority. The City may reject any or all bids received, and may waive any minor irregularities in each bid received. G. Bid Submittal. Service providers or vendors shall submit their bids in writing. H. No Bids Received. If no bids are received, the authorized contracting party may award the contract by any alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.090 Using alternative purchasing procedures. For situations provided in this section, an alternative purchasing procedure which results in a negotiated contract, force account, purchase order or any other procedure determined by the authorized contracting party to be in the best interests of the City and in compliance with the City's policies and procedures may be used. A. Emergencies. For situations determined by the City Manager to constitute an emergency, the City may use the emergency procedures set forth in Chapter 3.28.040. B. Professional Services. When purchasing professional services. C. Computers. When purchasing computer software, hardware maintenance services or software maintenance services. D. Competitive Bidding Already Completed. When the authorized contracting party determines that a competitive bid procedure has been conducted by another public agency (e.g. through CMAS or GSA) and the price to the City is equal to or better than the price to that public agency. E. State Purchase. When the purchase is made on behalf of the City by the State Department of General Services. F. No Bids Received. When no bids are received pursuant to either the informal competitive purchasing procedure or the formal competitive purchasing procedure. G. No Competitive Market. When the authorized contracting party determines that a competitive market does not exist, such as, but not limited to, with memberships in certain professional organizations, meetings, conventions, some forms of travel, legal advertising and when the needed supplies, services and equipment are proprietary and can only be provided by one source. H. Best Interests of the City. When the City Council, on recommendation of the City Manager, determines that an alternative procedure will be in the best interests of the City and the policies set forth in this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) (Supp. No. 38, 6-24) Page 5 of 8 Created: 2024-08-02 07:50:39 [EST] 3.24.100 Inspection and testing. The Purchasing Officer shall inspect supplies and equipment delivered, and contractual services performed, to determine their conformance with the specifications set forth in the order or contract. The Purchasing Officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.110 Surplus supplies and equipment. All using agencies shall submit to the Purchasing Officer at such times and in such form as he or she shall prescribe, reports showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The Purchasing Officer shall have authority to sell all supplies and equipment which cannot be used by any agency or which have become unsuitable for City use, or to exchange the same for, or trade in the same on, new supplies and equipment. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.120 Local area veteran vendor. A. Local Area Veteran Vendor Preference in Purchasing Supplies and Equipment. 1. In the solicitation of supplies and equipment, as provided in Chapter 3.24, the City Council or the City Manager or his/her designee may give a preference pursuant to this chapter to local area veteran vendor in making such purchase or awarding such contract. 2. If the vendor that submits the lowest responsive bid or quote is not a local area veteran vendor as defined herein, the lowest responsive bid or quote submitted by a local area veteran vendor (if there is one) that is within five percent or ten thousand dollars ($10,000.00), whichever is less, of the lowest bid or quote may be deemed to be the lowest bidder. However, said local area veteran vendor must elect to reduce its bid or quote to match the bid or quote of the lowest bidder, in writing, within one business day (excluding weekends and holidays) of being notified of their status by the City. 3. If the lowest local area veteran vendor within five percent or ten thousand dollars ($10,000.00) of the lowest bid or quote does not elect to reduce its bid or quote to match the bid or quote of the lowest bidder, then the next lowest local area veteran vendor shall be given the opportunity to match the bid or quote of the lowest bidder as set forth above, providing that this local area vendor or veteran vendor is also within five percent or ten thousand dollars ($10,000.00) whichever is less, of the lowest bid or quote that has been deemed responsive. 4. In order for a local area veteran vendor to be eligible to claim the preference, the local area veteran vendor must request the preference in the response to the solicitation and provide a copy of its current business license issued by a qualifying City and veteran vendor verification. B. Local Area Veteran Vendor Preference in Services. 1. In the solicitation of contracts based on evaluation criteria which best serves the needs of the City and provides the City with the highest quality and cost effectiveness, as provided in this title, the City Council or the City Manager or his or her designee may give a preference pursuant to this chapter to a local area veteran vendor in making such purchase or awarding such contract. (Supp. No. 38, 6-24) Page 6 of 8 Created: 2024-08-02 07:50:39 [EST] 2. The equivalent of a ten percent preference will be added to final evaluated score of each local area veteran vendor. If the ten percent preference causes the local area veteran vendor to have the best overall score, the local area veteran vendor may be deemed the vendor that best serves the needs of the City and provides the City with the highest quality and cost effectiveness. However, said local area veteran vendor must elect to reduce the price portion of its bid, quote, or proposal to match the price portion of current best overall score vendor if lower, in writing, within one business day (excluding weekends and holidays) of being notified of their status by the City. 3. If the local area veteran vendor does not elect to reduce the price portion of its bid, quote, or proposal to match the price portion of the lowest bidder, then the next lowest local area veteran vendor shall be given the opportunity to match the price portion of the lowest bidder as set forth above, provided the ten percent preference causes said local area veteran vendor to have the best overall score, and provided the local area veteran vendor is deemed the vendor that best serves the needs of the City and provides the City with the highest quality and cost effectiveness. 4. In order for a local area veteran vendor to be eligible to claim the preference, the local area veteran vendor must request the preference in the response to the solicitation and provide a copy of its current business license issued by a qualifying City and veteran vendor verification. C. Exceptions to Local Area Veteran Vendor Preference. The local preference set forth in this chapter shall not apply to the following purchases or contracts: 1. Supplies, equipment, and services provided under a cooperative purchasing agreement; 2. Purchases or contracts which are funded in whole or in part by a governmental entity, such as the State or Federal government and the laws, regulations, or policies governing such funding prohibit application of a local preference; 3. Purchases made or contracts let under emergency or noncompetitive situations; 4. Purchases with an estimated cost of five thousand dollars ($5,000.00) or less; or 5. Application of the local area veteran vendor preference to a particular purchase, contract, or category or contracts for which the City Council is the awarding authority may be waived at the City Council's discretion. D. Quality and Fitness. The local preference set forth in this chapter shall in no way be construed to inhibit, limit or restrict the right and obligation of the City Council and the City Manager to compare quality and fitness for use of supplies, equipment, and services proposed for purchase and compare the qualifications, character, responsibility, and fitness of all persons, firms, or corporations submitting bids or proposals. In addition, the preferences set forth in this chapter shall in no way be construed to prohibit the right of the City Council or the City Manager from giving any other preference permitted by law or this title. E. Application. The local area veteran vendor preference provided in this chapter shall apply to new contracts for supplies, equipment, and services first solicited on or after the effective date of the ordinance from which this section is derived. This chapter shall be implemented in a manner consistent with otherwise applicable provisions. F. Verification of Local Area Veteran Vendor Preference Eligibility. Any vendor, contractor, or consultant claiming to be a local area veteran vendor shall so certify in the bid, in writing to the City Manager or his or her designee. The City Manager or his or her designee shall not be required to verify the accuracy or any such certifications, and shall have sole discretion to determine if a vendor, contractor, or consultant meets the definition of "local area veteran vendor". The decision of the City Manager declaring that any person or business is not a local area veteran vendor shall be final. (Ord. No. 990, § 3 (Exh. A), 12-10-19) Page 7 of 8 3.24.130 Contract change orders. A. Change orders shall be for similar kinds of work to that awarded in the original contract and shall only arise in good faith from unforeseen items and/or events since the time of the award. B. Change order authorization limits are established as follows: Contracts less than or equal to $50,000.00: 10% of contract or up to $5,000 whichever is greater Contracts greater than or equal to $50,000.01:10% of contract or up to $50,000 whichever is less C. The limits noted are for change order amounts in the "aggregate". Change orders for amounts more than these limits must be approved by the City Council as a regular agenda item. 3.24.140 Adjustments for Consumer Price Index. The value of authorization thresholds as presented within section 3.24.015 shall be adjusted for inflation on July 1 of every year by the percent change in the Consumer Price Index. "Consumer Price Index" means the average of the percent change in Consumer Price Index for Urban Clerical and Wage Earners, as reported by the Bureau of Labor Statistics or successor agency, from the December of the preceding calendar year over the preceding December, for the Los Angeles -Long Beach -Anaheim, CA area. Increases or decreases shall be rounded off to the nearest dollar. Page 8 of 8 Attachment C Exhibit B Text of Chapter 3.28 Chapter 3.28 PUBLIC PROJECT BIDDING PROCEDURES Chapter 3.28 PUBLIC PROJECT BIDDING PROCEDURES 3.28.010 Purpose. This chapter is enacted for the purpose of implementing procedures for contracts related to certain public projects in accordance with California Uniform Public Construction Cost Accounting Act (California Public Contract Code Section 22000 et seq., the "Act'), including but not limited to notice and publication of the bids and the award of the contract to the lowest responsible bidder. A "public project' is as defined in Public Contract Code Section 20161. 3.28.011 Definitions. For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows: A. "Contractors list' shall mean a list of qualified contractors, identified according to categories of work. The minimum criteria for the development and maintenance of the list shall be determined by the California Uniform Construction Cost Accounting Commission. B. "Public project' is as defined in Section 22002 of the Public Contract Code, and means any of the following, but does not include "maintenance work': a. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility. b. Painting or repainting of any publicly owned, leased, or operated facility. C. "Maintenance work' includes all of the following: a. Routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility. b. Minor repainting. c. Resurfacing of streets and highways at less than one inch. d. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems. e. Work performed to keep, operate, and maintain publicly owned water, power, or waste disposal systems. D. "Facility" is as defined in Section 22002 of the Public Contract Code, and means any plant, building, structure, ground facility, real property, streets and highways, or other public works improvement. 3.28.020 Informal bidding. Informal bidding. Public projects subject to informal bid procedures may be let to contract as follows: a. The Public Works Department shall maintain a list of Qualified contractors, identified according to categories of work. b. All contractors on the list for the category of work being bid or all construction trade journals specified in Section 22036, or both all contractors on the list for the category of work being bid and all construction trade journals specified in Section 22036, shall be mailed a noticed inviting informal bids unless the product or service is proprietary. Page 1 of 4 c. All mailing of notices to contractors and construction trade journals pursuant to subsection (b) of this section shall be completed not less than ten (10) calendar days before bids are due. d. The noticing inviting informal bids shall describe the project in general terms and how to obtain more detailed information about the project, and state the time and place for the submission of bids. e. The award of project shall be made to the lowest responsible bidder provided the contractor has posted the required bonds and insurance. f. If all bids received are in excess of the informal bidding amount as provided by State law, the governing body of the public agency may, by adoption of a resolution by a four-fifths vote, award the contract, at an amount provided by CUPCCAA or less, to the lowest responsible bidder, if it determines the cost estimate of the public agency was reasonable. 3.28.030 Formal bidding. A. Notice Inviting Bids. Notices inviting bids shall adhere to the regulations established by State law. B. Bidder's Security. 1. Application. Unless otherwise provided by the City Manager before the letting of public notice inviting bids, each bid shall be accompanied by bidder's security. 2. Return. Bidders shall be entitled to return of bid security; provided, however, that a successful bidder shall forfeit his or her bid security upon his or her refusal or failure to execute the contract within ten (10) days after the preparation and mailing of the contract, unless in the latter event the City is solely responsible for the delay in executing the contract. On refusal or failure of the successful bidder to execute the contract, the contract may be awarded to the next lowest responsible bidder. In such event, the amount of the lowest bidder's security shall be applied by the City to the contract price differential between the lowest bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. C. Receipt and Opening of Bids. The notice inviting bids shall specify if bids may be submitted in physical form or electronically. Bids submitted in physical form shall be in a sealed envelope, identified as a "bid" on the envelope, and submitted to the City at or before the time specified in the notice. Bids submitted electronically shall be identified as specified in the notice and submitted to the City at or before the time specified in the notice. At the time and place specified in the notice, the bids shall be publicly opened and read. Notwithstanding the foregoing, if the notice inviting bids specified that bids are to be submitted by electronic transmission, the City may open the bids electronically without a public bid opening; provided, that the bid results are available on the internet at, or immediately after, the date and time noticed for the bid opening. If the results are not immediately available on the internet, the City shall provide the bid results upon request of a bidder or the public as soon as reasonably possible. D. Rejection of Bids. At its discretion, the City Council may reject any and all bids presented and readvertise for bids pursuant to the procedure prescribed in this chapter. E. Award of Contracts. Except as otherwise provided herein, contracts shall be awarded to the lowest responsible bidder. F. Tie Bids. If two or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay or readvertising for bids, the City, at its discretion, may accept the one it chooses. G. Payment Bonds. A direct contractor awarded a public works contract above twenty-five thousand dollars ($25,000) must provide a payment bond, approved by the City, prior to commencing work. The City specifies in its bid solicitation that a payment bond is mandatory for any public works contract over twenty-five thousand (Supp. No. 38, 6-24) Page 2 of 4 Created: 2024-08-02 07:50:39 LL511 dollars ($25,000). A payment bond issued and sanctioned under this section will authorize the execution of and offer coverage for work related to a public works contract that supplements the contract for which the bond is provided, contingent upon the public entity waiving the necessity for a new bond. Note that a design professional is not considered a direct contractor and is not obligated to provide a payment bond. This requirement is inapplicable to a public works contract with a "state entity". A payment bond must be at least 100 percent of the entire payable amount under the public works contract. The bond must exist as a bond and not as a deposit in place of a bond. The bond must be executed by a licensed surety insurer. H. Insurance. All contracts for public projects shall require the contractor to furnish evidence, in a form satisfactory to the City, that the contractor has taken out and has in force liability and worker's compensation insurance in such amounts and form as may be required by the City, in addition to any other insurance required by the City's Risk Manager. Contract Retention. No contract for a public project shall provide for, authorize or permit the payment of more than ninety (90) percent of the contract price before the completion of the work done under the contract, and acceptance thereof by the City, and the expiration of the stop notice claim period and the resolution of any such claims filed thereunder. (Ord. No. 988, § 4(Exh. B), 6-25-19) 3.28.015 Public Projects. The City of Rosemead has opted in to the California Uniform Public Construction Cost Accounting Act (California Public Contract Code Section 22000 et seq., the "Act"). Pursuant to the Act, public projects will be procured as follows: 1. The current threshold set forth in California Public Contract Code Section 22032(a) or less may be let by negotiated contract, purchase order or performed by the City's own employees by force account. 2. The current threshold set forth in California Public Contract Code Section 22032(b) or less may be let by informal bidding procedures as set forth in the California Uniform Public Construction Cost Accounting Act (PCC Section 22034 et seq.). 3. The current threshold set forth in California Public Contract Code Section 22032(c)) or more will be let by formal bidding procedures as set forth in the California Uniform Public Construction Cost Accounting Act (PCC Section 22037 et seq.). 4. Pre -Qualified List —A list of contractors may be developed and maintained in accordance with the provisions of Section 22034 of the Public Contract Code and criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission (CUCCAC). 5. In the event that the monetary limits specified in Sections 22032 and 22034 of CUPCCAA are amended by the State Legislature or adjusted by the State Controller, such amendment in monetary limits shall prevail and apply. 3.28.040 Emergencies. The City Manager is delegated the power to declare a public emergency and take any directly related and immediate action required bythe emergency, up to a total of one hundred thousand dollars ($100,000.00), pursuant to Public Contract Code Section 22050. Emergency expenditures of more than one hundred thousand dollars ($100,000.00) must first be approved by the City Council. Work may be performed without the benefit of competitive purchasing, either formal or informal, only so long as necessary under Section 22050. Page 3 of 4 3.28.050 Delegation of authority to award contracts. A table summarizing the methods of approval and bidding requirement is provided below. Value of Public Project Public Works City Manager City Council Director The current threshold set forth in California Public X (:5$15k) X (:5$50k) Contract Code Section 22032(a) or less may be let by negotiated contract. The current threshold set forth in California Public X (>$Sok) Contract Code Section 22032(b) or less may be let by informal bidding procedures. The current threshold set forth in California Public X (>$50k) Contract Code Section 22032(c)) or more will be let by formal bidding procedures. In the event that the monetary limits specified in Sections 22032 and 22034 of CUPCCAA are amended by the State Legislature or adjusted by the State Controller, such amendment in monetary limits shall prevail and apply. 3.28.060 Contract change orders. A change order is the written authorization that changes the awarded contract. The change order shall be for similar kinds of work to that awarded in the original contract and shall only arise in good faith from unforeseen items and/or events since the time of the award. Request for change order authorization to the City's purchasing authority shall be accompanied by a purchase order. Change orders shall comply with limits set forth in Chapter 3.24.130. 3.28.070 Adjustments for Consumer Price Index. The value of authorization thresholds for Public Works Director, City Manager, and City Council as presented within section 3.28.050 shall be adjusted for inflation on July 1 of every year by the percent change in the Consumer Price Index. "Consumer Price Index' means the average of the percent change in Consumer Price Index for Urban Clerical and Wage Earners, as reported by the Bureau of Labor Statistics or successor agency, from the December of the preceding calendar year over the preceding December, for the Los Angeles -Long Beach -Anaheim, CA area. Increases or decreases shall be rounded off to the nearest dollar. (Supp. No. 38, 6-24) Page 4 of 4 Created: 2024-08-02 07:50:39 [EST] Attachment D Redline of Changes to Existing Chapter 3.24 Chapter 3.24 PURCHASING SYSTEM FOR NON-PUBLIC WORKS CONTRACTS Chapter 3.24 PURCHASING SYSTEM FOR NON-PUBLIC WORKS CONTRACTS' 3.24.010 Definitions. Unless otherwise indicated, the following definitions shall apply to all provisions of this chapter: "Authorized Contracting Party" means the City official or body provided with authority under this chapter to approve a contract or to make a purchase. "City Manager" means the City Manager or person designated by the City Manager to act on behalf of the City Manager. "Formal Competitive Purchasing Procedure" means a procedure which meets the requirements of state and local law, including this chapter and any policies and procedures approved by the City Manager consistent with this chapter. "Local Area Veteran Vendor" means a veteran vendor, as defined herein, who is a contractor, or consultant that has a valid physical business address located within the boundaries of the City of Rosemead or within any of the cities that directly border the City which include, Alhambra, Montebello, Monterey Park, San Gabriel, Temple City, EI Monte and South EI Monte, at least six months prior to bid or proposal opening date, from which the vendor, contractor, or consultant operates or performs business on a day-to-day basis, and holds a valid business license issued by the City of Rosemead or one of cities listed above, and designates, for sales tax purposes, the City of Rosemead or one of the cities listed above, as the point of sale for retail transactions within the City. Post office boxes are not verifiable and shall not be used for the purpose of establishing such physical address. "Negotiated Contract" means a letter of agreement, vendor agreement, contract, professional services agreement, maintenance services/public works projects agreement or written documentation which details terms and conditions of the purchase. "Professional Services" means all services performed by persons in a professional occupation, including, but not limited to, consulting and performance services for accounting, auditing, computer hardware and software support, engineering, architectural, planning, redevelopment, financial, economic, personnel, social services, animal control, legal, management, environmental, cable television, communication and other similar professional functions which may be necessary for the operation of the City. "Rosemead Vendor" means a local business enterprise whose business address at the point of sale is located within the geographical boundaries of the City and who maintains a valid license or permit to do business in the City. "Solicitation" means the City's process to obtain bids, quotes, or proposals as provided in Chapter 3.24 for the purchase of goods or services. "Veteran Vendor" means a person who served in the active military, naval, or air service and who was discharged or released under conditions other than dishonorable as verified by a Form DD214 or other acceptable proof of service, who owns a business where at least fifty (50) percent of the company is owned by a veteran. (Ord. No. 988, § 3(Exh. A), 6-25-19; Ord. No. 990, § 3 (Exh. A), 12-10-19) 'Editor's note(s)—Ord. No. 988, § 3(Exh. A), adopted June 25, 2019, amended Chapter 3.24 in its entirety to read as herein set out. Former Chapter 3.24, §§ 3.24.010-3.24.130, pertained to similar subject matter, and derived from prior code; Ord. 864 adopted in 2008; Ord. No. 920, adopted October 11, 2011; and Ord. No. 964, adopted September 13, 2016. Page 1 of 8 3.24.015 Purchasing methods. Value of Purchase Purchase method Method of Approval $5,000.00 or less No quotations reguiredDireet Credit card holder or Departmensempetitive t 2irector-AppmvaHW4Weetef-0 , wsiRg a vendOF OF Inwn. of .^I,_.:^^ ^.^^^d.,.^ .ehaSdnnpnr'vavvr� BceduLd S5.000.01 to 535.000.00 Informal purchasing procedure. Department Director. unless subject to an alternative purchasing procedure. S15.000.01 to S50.000.00$5,&99A1 Informal purchasing Appreval by City Manager. to $30,000:98 procedur 'RfOffnal cempetitive voce a e, unless subject to an alternative purchasing procedure. $50.000.01 or More$30,000.63Or Formal competitive purchasing Apprevalby-the City Council. Mere procedure, unless subject to an alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.020 Purchasing Officer—Position created—Appointment. There is established in the office of the City Manager the role of a Purchasing Officer. The Purchasing Officer shall be the City Manager or his or her designee(s). If the City Manager designates one or more persons to act in this role, the Purchasing Officer(s) shall serve at the pleasure of the City Manager. The duties of the Purchasing Officer may be combined with those of any other officer(s) or position(s). (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.030 Purchasing Officer—Powers and duties. The Purchasing Officer, in accordance with the policies set forth in this chapter and in any written procedures approved by the City Manager that are consistent with this chapter, shall have the power to: A. Purchase or contract for supplies, services and equipment required by the City; B. Negotiate and recommend to the City Council execution of contracts for the purchase of supplies, services and equipment; C. Prepare and implement policies and procedures governing the bidding, contracting, purchasing, storing, distribution and disposal of supplies, services and equipment for the City; D. Prescribe and maintain such forms as may be reasonably necessary to the implementation of this chapter and any other policies and procedures approved by the City Manager consistent with this chapter; E. Review the working details, drawings, plans and specifications for any projects or purchases requiring such review in this chapter; F. Inspect or supervise the inspection of purchased supplies, services and equipment to ensure conformity with any specifications established or required by the City; Page 2 of 8 G. Transfer among departments any supplies, services and equipment not needed by one such department, but which are necessary for the operation of one or more other departments; H. Sell any supplies and equipment not needed for public use or that may become unsuitable for their intended use; Develop and maintain any bidder's list, service provider's list or vendor's catalog file necessary to the operation of this chapter and any other policies and procedures approved by the City Manager consistent with this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.040 Purchasing policies and procedures. A. The City shall secure supplies, services and equipment at the lowest total cost commensurate with the quality and scope needed, and subject to any limitations imposed by state law. Notwithstanding the foregoing, professional services including but not limited to�.Js�e.e:�h�-.as legal serviceseeyosel, architectural, design engineering eeasu#inaservices financial services aad4ky ar soeeiaked—IT servicessuseerf consulting services or other services of a nature characterized by the necessity for specialized knowledge. expertise or qualifications shall be acauired based on Proven competency, professional credentials or certificates and Project and scope of work appropriateness While cost may be a relevant consideration for professional services it shall not be the primary determinant unless specified by the authorized contracting party In order to promote the economic health and development of the City, to recognize the amount of sales tax that is returned to the City as a result of the award of a purchase contract for supplies and equipment to a Rosemead vendor, to encourage local participation in the procurement process, and to exercise the prudent use of public funds, the City Council may, by minute action, award a bid to a Rosemead vendor provided the local bid does not exceed the lowest bid by more than five percent or ten thousand dollars ($10,000.00), whichever is less. B. The Purchasing Officer shall develop, for approval by the City Manager, such policies and procedures as are necessary to implement the provisions of this chapter. The policies and procedures shall be written and implemented in such a way to encourage open and competitive bidding, provide equal opportunity based on merit, make each selection process free of invidious discrimination, provide for efficient and timely acquisition of needed supplies, services and equipment, and provide effective fiscal controls. C. In purchasing, supplies, services, and equipment, the City shall make use of competitive bidding, either direct, formal or informal, whenever required by law, this chapter, or any policies and procedures approved by the City Manager consistent with this chapter, while ensuring the quality of supplies services and equipment meets the required standards. D. Direct, formal or informal competitive bidding is not required if there is an alternative procedure set forth in this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.050 8id&A ,Purchasing and contracting procedures. A. Five thousand dollars ($5,000.00) or kessless. Any purchase of five thousand dollars ($5,000.00) or less may be awarded by the director of the department responsible for the project with no quotations required. Page 3 of 8 B. Five thousand dollars and one cent ($5,000.01) to *wV -fifteen thousand dollars ($3815 000.00). Any purchase of more than five thousand dollars ($5,000.00) and not greater than thirty -fifteen thousand dollars ($3815 000.00) may be awarded by the '''aaagerDeoartment Director by any informalCeffilaet tive purchasing procedure as defined herein. C. -Fifteen thousand dollars and one cent ($15,000.01) to fifty thousand dollars ($50,000.00). Any purchase of more than fifteen thousand dollars ($15,000.00) and not greater than fifty thousand dollars ($50.000.00) may be awarded by the City Manager by any informal purchasing procedure as defined herein ED. T4WPf-E±1Lthousand dollars and one cent ($3050 000.01) or more. Any purchase of more than thirty -fifty thousand dollars ($3850 000.00) shall, except as otherwise provided in this chapter, be awarded by the City Council pursuant to the formal competitive purchasing procedure set forth below. DE. Purchasing Officer Approval. The Purchasing Officer, or his or her designee, shall review and approve all contracts of f4e-fifteen thousand dollars and one cent ($15,000.01) or more before the contract is effective. IF. Five -Year Term Limitation. No agreement or contract shall extend for a period of more than five years, including any authorized extensions. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.070 Informal eempetit+ve purchasing procedure. A.. This informal purchasing procedure shall be used for purchases between five thousand dollars and one cent ($5,000.01) and fiftythir-ty thousand dollars ($3050,000.00). B. Service Provider/Vendor List. The department shall maintain a list of qualified service providers or vendors. C. Distribution of Notice Inviting Informal Bids. At least three vendors or service providers shall be asked to submit informal bids, and the City shall endeavor to receive informal bids from at least three vendors or service providers. Notices inviting informal bids shall be mailed sent to the list of qualified service providers, vendors, and/or trade journals not less than ten (30) days before bids are due. D. Contents of Notice Inviting Informal Bids. When soliciting informal bids, staff shall: 1. Describe to the vendor in general terms the project, service or item; 2. Advise vendors how to obtain additional information about the project; 3. State the date, time and ire -manner for the submission of bids; and 4. Include any other information required by state or local law, as determined by the City Attorney. E. Proprietary Projects or Products. If the director of the using department certifies that, to the best of his or her knowledge, the product or service is proprietary in nature and can be obtained only from a limited number of service providers or vendors, and that no equivalent products or services are available, the notice inviting informal bids may be sent exclusively to such vendor(s) or service provider(s). Page 4 of 8 F. Contents of Remaining Bid and Contract Documents. The contents and form of the remaining bid and contract documents shall be approved by the director of the using department, as well as the City Attorney. G. City's Authority. The City may reject any or all bids received, and may waive any minor irregularities in each bid received. H. Pregesal-Bid Submittal. Service providers or vendors shall submit their prepesa6-bids in writing. I. No Bids Received. If no bids are received, the authorized contracting party may award the contract by any alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.080 Formal competitive purchasing procedure. A. Use of Formal Competitive Purchasing Procedure. This formal purchasing procedure shall be used for purchases greater than #4n-1if�thousand dollars ($3950 000.00) or whenever formal competitive purchasing is otherwise required by this chapter. B. Required Process. The formal competitive purchasing procedure shall comply with all aspects of state and local law governing formal competitive bidding, including, but not limited to, the Public Contract Code, Government Code, Labor Code, resolutions of the City Council as may be adopted from time to time, and policies and procedures as the City Manager may approve from time to time. C. Distribution of Notice Inviting Formal Bids. The notice inviting formal bids shall substantially comply with procedures set forth in Chapter 3.2824.070. D. Contents of Notice Inviting Formal Bids. At a minimum, the notice inviting formal bids shall: 1. Describe the project in general terms; 2. State how to obtain more detailed information about the project; 3. State the date, time and place for the submission of sealed bids; and 4. Include any other information required by state or local law, as determined by the City Attorney. E. Contents of Remaining Bid and Contract Documents. The contents and form of the remaining bid and contract documents shall be approved by the director of the using department, as well as the City Attorney. F. City's Authority. The City may reject any or all bids received, and may waive any minor irregularities in each bid received. G. Prepesa4-Bid Submittal. Service providers or vendors shall submit their prepesals-bids in writing. H. No Bids Received. If no bids are received, the authorized contracting party may award the contract by any alternative purchasing procedure. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.090 Using alternative purchasing procedures. For situations provided in this section, an alternative purchasing procedure which results in a negotiated contract, force account, purchase order or any other procedure determined by the authorized contracting party to be in the best interests of the City and in compliance with the City's policies and procedures may be used. A. Emergencies. For situations determined by the City Manager to constitute an emergency, the City may use the emergency procedures set forth in Chapter 3.28.040. B. Professional Services. when purchasing professional services. Page 5 of 8 C. Computers. When purchasing computer software, hardware maintenance services or software maintenance services. D. Competitive Bidding Already Completed. When the authorized contracting party determines that a competitive bid procedure has been conducted by another public agency (e.g. through CMAS or GSA) and the price to the City is equal to or better than the price to that public agency. E. State Purchase. When the purchase is made on behalf of the City by the State Department of General Services. F. No Bids Received. When no bids are received pursuant to either the informal competitive purchasing procedure or the formal competitive purchasing procedure. G. No Competitive Market. When the authorized contracting party determines that a competitive market does not exist, such as, but not limited to, with memberships in certain professional organizations, meetings, conventions, some forms of travel, legal advertising and when the needed supplies, services and equipment are proprietary and can only be provided by one source. H. Best Interests of the City. When the City Council, on recommendation of the City Manager, determines that an alternative procedure will be in the best interests of the City and the policies set forth in this chapter. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.100 Inspection and testing. The Purchasing Officer shall inspect supplies and equipment delivered, and contractual services performed, to determine their conformance with the specifications set forth in the order or contract. The Purchasing Officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.110 Surplus supplies and equipment. All using agencies shall submit to the Purchasing Officer at such times and in such form as he or she shall prescribe, reports showing all supplies and equipment which are no longer used or which have become obsolete or worn out. The Purchasing Officer shall have authority to sell all supplies and equipment which cannot be used by any agency or which have become unsuitable for City use, or to exchange the same for, or trade in the same on, new supplies and equipment. (Ord. No. 988, § 3(Exh. A), 6-25-19) 3.24.120 Local area veteran vendor. A. Local Area Veteran Vendor Preference in Purchasing Supplies and Equipment. 1. In the solicitation of supplies and equipment, as provided in Chapter 3.24, the City Council or the City Manager or his/her designee may give a preference pursuant to this chapter to local area veteran vendor in making such purchase or awarding such contract. 2. If the vendor that submits the lowest responsive bid or quote is not a local area veteran vendor as defined herein, the lowest responsive bid or quote submitted by a local area veteran vendor (if there is one) that is within five percent or ten thousand dollars ($10,000.00), whichever is less, of the lowest bid or quote may be deemed to be the lowest bidder. However, said local area veteran vendor must (Supp. No. 38, 6-24) Page 6 of 8 Created: 2024-08-02 07:50:39 LE5TJ elect to reduce its bid or quote to match the bid or quote of the lowest bidder, in writing, within one business day (excluding weekends and holidays) of being notified of their status by the City. 3. If the lowest local area veteran vendor within five percent or ten thousand dollars ($10,000.00) of the lowest bid or quote does not elect to reduce its bid or quote to match the bid or quote of the lowest bidder, then the next lowest local area veteran vendor shall be given the opportunity to match the bid or quote of the lowest bidder as set forth above, providing that this local area vendor or veteran vendor is also within five percent or ten thousand dollars ($10,000.00) whichever is less, of the lowest bid or quote that has been deemed responsive. 4. In order for a local area veteran vendor to be eligible to claim the preference, the local area veteran vendor must request the preference in the response to the solicitation and provide a copy of its current business license issued by a qualifying City and veteran vendor verification. B. Local Area Veteran Vendor Preference in Services. 1. In the solicitation of contracts based on evaluation criteria which best serves the needs of the City and provides the City with the highest quality and cost effectiveness, as provided in this title, the City Council or the City Manager or his or her designee may give a preference pursuant to this chapter to a local area veteran vendor in making such purchase or awarding such contract. 2. The equivalent of a ten percent preference will be added to final evaluated score of each local area veteran vendor. If the ten percent preference causes the local area veteran vendor to have the best overall score, the local area veteran vendor may be deemed the vendor that best serves the needs of the City and provides the City with the highest quality and cost effectiveness. However, said local area veteran vendor must elect to reduce the price portion of its bid, quote, or proposal to match the price portion of current best overall score vendor if lower, in writing, within one business day (excluding weekends and holidays) of being notified of their status by the City. 3. If the local area veteran vendor does not elect to reduce the price portion of its bid, quote, or proposal to match the price portion of the lowest bidder, then the next lowest local area veteran vendor shall be given the opportunity to match the price portion of the lowest bidder as set forth above, provided the ten percent preference causes said local area veteran vendor to have the best overall score, and provided the local area veteran vendor is deemed the vendor that best serves the needs of the City and provides the City with the highest quality and cost effectiveness. 4. In order for a local area veteran vendor to be eligible to claim the preference, the local area veteran vendor must request the preference in the response to the solicitation and provide a copy of its current business license issued by a qualifying City and veteran vendor verification. C. Exceptions to Local Area Veteran Vendor Preference. The local preference set forth in this chapter shall not apply to the following purchases or contracts: 1. Supplies, equipment, and services provided under a cooperative purchasing agreement; 2. Purchases or contracts which are funded in whole or in part by a governmental entity, such as the State or Federal government and the laws, regulations, or policies governing such funding prohibit application of a local preference; 3. Purchases made or contracts let under emergency or noncompetitive situations; 4. Purchases with an estimated cost of five thousand dollars ($5,000.00) or less; or 5. Application of the local area veteran vendor preference to a particular purchase, contract, or category or contracts for which the City Council is the awarding authority may be waived at the City Council's discretion. D. Quality and Fitness. The local preference set forth in this chapter shall in no way be construed to inhibit, limit or restrict the right and obligation of the City Council and the City Manager to compare quality and fitness for Page 7 of 8 use of supplies, equipment, and services proposed for purchase and compare the qualifications, character, responsibility, and fitness of all persons, firms, or corporations submitting bids or proposals. In addition, the preferences set forth in this chapter shall in no way be construed to prohibit the right of the City Council or the City Manager from giving any other preference permitted by law or this title. E. Application. The local area veteran vendor preference provided in this chapter shall apply to new contracts for supplies, equipment, and services first solicited on or after the effective date of the ordinance from which this section is derived. This chapter shall be implemented in a manner consistent with otherwise applicable provisions. Verification of Local Area Veteran Vendor Preference Eligibility. Any vendor, contractor, or consultant claiming to be a local area veteran vendor shall so certify in the bid, in writing to the City Manager or his or her designee. The City Manager or his or her designee shall not be required to verify the accuracy or any such certifications, and shall have sole discretion to determine if a vendor, contractor, or consultant meets the definition of "local area veteran vendor". The decision of the City Manager declaring that any person or business is not a local area veteran vendor shall be final. (Ord. No. 990, 4 3 (Exh. A), 12-10-19) 3.24.130 Contract change orders. A Change orders shall be for similar kinds of work to that awarded in the original contract and shall only arise in good faith from unforeseen items and/or events since the time of the award. B Change order authorization limits are established as follows: Contracts less than or equal to<= S50.000-00: 10% of contract or up to $5,000 whichever is greater Contracts- Rreater than or equal to $50,000.01: 30% of contract or up to $50.000 whichever is less C The limits noted are for change order amounts in the "aggregate" Change orders for amounts more than these limits must be approved by the City Council as a regular agenda item. 3 24140 Adiustments for Consumer Price Index. The value of authorization thresholds as presented within section 3.24.015 shall be adjusted for inflation on July 1 of every year by the percent change in the Consumer Price Index. "Consumer Price Index" means the average of the percent change in Consumer Price Index for Urban Clerical and Wage Earners. as reported by the Bureau of Labor Statisticsorsuccessoragency from the December of the preceding calendarvearovertheoreceding December, for the Los Angeles -Long Beach -Anaheim CA area Increases or decreases shall be rounded off to the nearest dollar. Page 8 of 8 Attachment E Redline of Changes to Existing Chapter 3.28 Chapter 3.28 PUBLIC PROJECT BIDDING PROCEDURES Chapter 3.28 PUBLIC PROJECT BIDDING PROCEDURES 3.28.010 Purpose. This chapter is enacted for the purpose of implementing procedures for contracts related to certain public projects in accordance with California Uniform Public Construction Cost Accounting Act (California Public Contract Code Section 22000 et se . the "Act" ., including but not limited to notice and publication of the bids and the award of the contract to the lowest responsible bidder. A "public project" is as defined in Public Contract Code Section 20161. 3.28.011 Definitions. For the Purposes of this chapter unless otherwise apparent from the context, certain words and Phrases used in this chapter are defined as follows: A "Contractors list" shall mean a list of Pualified contractors identified according to categories of work. The minimum criteria for the development and maintenance of the list shall be determined by the California Uniform Construction Cost Accounting Commission. B "Public Project" is as defined in Section 22002 of the Public Contract Code, and means any of the following, but does not include "maintenance work": a Construction reconstruction erection alteration renovation improvement demolition, and repair work involving any publicly owned leased, or operated facility. b Painting or repainting of any Publicly owned, leased, or operated facility. C "Maintenance work" includes all of the following: a Routine recurring and usual work for the oreservation or protection of any publicly owned or publicly operated facility. b. Minor repainting. c Resurfacing of streets and highways at less than one inch. d Landscape maintenance including mowing watering trimming pruning planting replacement of plants and servicing of irrigation and sorinkler systems. e Work performed to keen operate and maintain publicly owned water, Dower or waste disposal systems. D "Facility" is as defined in Section 22002 of the Public Contract Code and means any plant, building, structure ground facility, real property, streets and highways or other Public works improvement. 3.28.020 Informal bidding. Informal bidding Public Proiects subject to informal bid Procedures may be let to contract as follows: a The Public Works Department shall maintain a list of Qualified contractors identified according to categories of work. b All contractors on the list for the category of work being bid or all construction trade iournals specified in Section 22036 or both all contractors on the list for the category of work being bid and all construction Page 1 of 5 trade journals specified in Section 22036 shall be mailed a noticed inviting informal bids unless the product or service is proprietary. c All mailing of notices to contractors and construction trade journals pursuant to subsection (b) of this section shall be completed not less than ten (10) calendar days before bids are due. d The noticing inviting informal bids shall describe the project in general terms and how to obtain more detailed information about the project and state the time and place for the submission of bids. e The award of project shall be made to the lowest responsible bidder Provided the contractor has posted the reciuired bonds and insurance - f. If all bids received are in excess of the informal bidding amount as provided by State law, the governing body of the public agency may, by adoption of a resolution by a four-fifths vote, award the contract, at an amount provided by CUPCCAA or less to the lowest responsible bidder, if it determines the cost estimate of the public agency was reasonable. 3.28.030 Formal 8biddinRe. A. Notice Inviting Bids. Notices inviting bids shall adhere to the regulations established by State Iaw.Netiees & Rviting bids shall be advenised by the Gity GIeFk, and shall Include a geneFal desffiPti8R of the WOFI(tS be done, state wheFe laid feFFRS aAd specifleations may be serWFed, and the time aAd plaee feF epeniAg bids. 1. published Net*re. The Gity Giek Shall EaUse neVres inyoting laids te be published twice OR a newspapeF ef geneFal &GUIaties at least ten (Ig) days befffe the date of epening of the bids, OF pasted fGF five days thFee publie places iR the Gty designated by the Gity GOURCil, iA aGGGFdanee with Publie GantFaet Code X16+: B. Bidder's Security. 1. Application. Unless otherwise provided by the City Manager before the letting of public notice inviting bids, each bid shall be accompanied by bidder's security. 2. Return. Bidders shall be entitled to return of bid security; provided, however, that a successful bidder shall forfeit his or her bid security upon his or her refusal or failure to execute the contract within ten (10) days after the preparation and mailing of the contract, unless in the latter event the City is solely responsible for the delay in executing the contract. On refusal or failure of the successful bidder to execute the contract, the contract may be awarded to the next lowest responsible bidder. In such event, the amount of the lowest bidder's security shall be applied by the City to the contract price differential between the lowest bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder. C. Receipt and Opening of Bids The notice inviting bids shall specify if bids may be submitted in physical form or electronically. Bids submitted in physical form shall be in a sealed envelope identified as a "bid" on the envelope and submitted to the City at or before the time specified in the notice. Bids submitted electronically shall be identified as specified in the notice and submitted to the City at or before the time specified in the notice At the time and place specified in the notice the bids shall be publicly opened and read. Notwithstanding the foregoing if the notice inviting bids specified that bids are to be submitted by electronic transmission the City may open the bids electronically without a public bid opening provided, that the bid results are available on the internet at or immediately after, the date and time noticed for the bid opening. If the results are not immediately available on the internet the City shall provide the bid results upon request of a bidder or the public as soon as reasonably possible. 'a0 PFeeeduFe. Sealed bids shall be 5kilamitted Created: 2026-08-02 07:50:39 [EST] (Supp. No. 38, 6-24) Page 2 of 5 FegulaF business h8UFS feF a peFi9d ef not less than thiFty (30) eaieRdaF days afteF the bid epeRiRg. GRee the time ef bid epeniRg shall net be kelat by the Gity, and eRee deemed ReR Fespensive, shall be FetUFRed to D. Rejection of Bids. At its discretion, the City Council may reject any and all bids presented and readvertise for bids pursuant to the procedure prescribed in this chapter. E. Award of Contracts. Except as otherwise provided herein, contracts shall be awarded to the lowest responsible bidder. F. Tie Bids. If two or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay or readvertising for bids, the City, at its discretion, may accept the one it chooses. G. P ee-Payment Bonds. A direct contractor awarded a public works contract above twenty-five thousand dollars ($25,0001 must provide a payment bond approved by the Ciri prior to commencing work. The City specifies in its bid solicitation that a payment bond is mandatory for any public works contract over twenty-five thousand dollars (S25,000). A payment bond issued and sanctioned under this section will authorize the execution of and offer coverage for work related to a public works contract that supplements the contract for which the bond is provided contingent upon the public entity waiving the necessity for a new bond Note that a design professional is not considered a direct contractor and is not oblieated to orovide a Pavment bond This requirement is inapplicable to a public works contract with a "state entity". A payment bond must be at least 100 percent of the entire payable amount under the public works contract. The bond must exist as a bond and not as a deposit in place of a bond The bond must be executed by a licensed surety Fials and lalaff band insurer. sha" be .J d the ..inviting bids bends, H. Insurance. All contracts for public projects shall require the contractor to furnish evidence, in a form satisfactory to the City, that the contractor has taken out and has in force liability and worker's compensation insurance in such amounts and form as may be required by the City, in addition to any other insurance required by the City's Risk Manager. I. Contract Retention. No contract for a public project shall provide for, authorize or permit the payment of more than ninety (90) percent of the contract price before the completion of the work done under the contract, and acceptance thereof by the City, and the expiration of the stop notice claim period and the resolution of any such claims filed thereunder. (Ord. No. 988, § 4(Exh. B), 6-25-19) 3.28.015 Public Projects. The City of Rosemead has opted in to the California Uniform Public Construction Cost Accounting Act (California Public Contract Code Section 22000 et sea the "Act") Pursuant to the Act, public projects will be Procured as follows: 1 The current threshold set forth in California Public Contract Code Section 22032(a) or less may be let by neeotiated contract Purchase order or Performed by the City's own employees by force account. 2 The current threshold set forth in California Public Contract Code Section 22032(b) or less may be let by informal bidding Procedures as set forth in the California Uniform Public Construction Cost Accounting Act (PCC Section 22034 et seg.). Page 3 of 5 3 The current threshold set forth in California Public Contract Code Section 22032(c)) or more will be let by formal bidding procedures as set forth in the California Uniform Public Construction Cost Accountine Act (PCC Section 22037 et sea.). 4 Pre -Qualified List—A list of contractors may be developed and maintained in accordance with the provisions of Section 22034 of the Public Contract Code and criteria promulgated from time to time by the California Uniform Construction Cost Accounting Commission (CUCCAC). 5 In the event that the monetary limits specified in Sections 22032 and 22034 of CUPCCAA are amended by the State Legislature or adjusted by the State Controller, such amendment in monetary limits shall prevail and apply. 3.28.040 Emergencies. The City Manager is delegated the power to declare a public emergency and take any directly related and immediate action required bythe emergency, up to a total of one hundred thousand dollars ($100,000.00), pursuant to Public Contract Code Section 22050. Emergency expenditures of more than one hundred thousand dollars ($100,000.00) must first be approved by the City Council. Work may be performed without the benefit of competitive purchasing, either formal or informal, only so long as necessary under Section 22050. 3.28.050 Delegation of authority to award contracts. A table summarizing the methods of approval and bidding requirement is provided below. Value of Public Project Public Works City Mana¢er City Council Director The current threshold set forth in California Public X 5 15k X (g$50k) Contract Code Section 22032(a) or less may be let by negotiated contract. The current threshold set forth in California Public X > 50k Contract Code Section 22032(b) or less may be let by informal bidding procedures. The current threshold set forth in California Public X > 50k Contract Code Section 22032(c)) or more will be let by formal bidding procedures. In the event that the monetary limits specified in Sections 22032 and 22034 of CUPCCAA are amended by the State Legislature or adjusted by the State Controller such amendment in monetary limits shall prevail and apply. Page 4 of 5 3.28.060 Contract change orders. A change order is the written authorization that changes the awarded contract. The change order shall be for similar kinds of work to that awarded in the orieinal contract and shall only arise in eood faith from unforeseen items and/or events since the time of the award Reauest for change order authorization to the Cit)/s purchasing authority shall be accompanied by a purchase order. Change orders shall comply with limits set forth in Chapter 3.24.130. 3.28.070 Adjustments for Consumer Price index. Thevalue of authorization thresholds for Public Works Director City Manager. and City Council as presented within section 3 28 050 shall be adjusted for inflation on July 1 of every year by the oercent change in the Consumer Price Index "Consumer Price Index" means the average of the percent chanee in Consumer Price Index for Urban Clerical and Waee Earners as reported by the Bureau of Labor Statistics or successor agency. from the December of the Preceding calendar year over the preceding December, for the Los Angeles -Lone Beach -Anaheim. CA area. Increases or decreases shall be rounded off to the nearest dollar. (Supp. No. 38, 6-24) Page 5 of 5 Created: 2024-08-02 07:50:39 [EST] Attachment F Resolution No. 2024-67 RESOLUTION NO. 2024-67 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD ADOPTING UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT PROCEDURES WHEREAS, prior to the passage of Assembly Bill No. 1666, Chapter 1054, Statutes of 1983, which added Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the Public Contract Code, existing law did not provide a uniform cost accounting standard for construction work performed or contracted by local public agencies; and WHEREAS, Public Contract Code section 22000 et seq., the Uniform Public Construction Cost Accounting Act, establishes such a uniform cost accounting standard; and WHEREAS, the Commission established under the Act has developed uniform public construction cost accounting procedures for implementation by local public agencies in the performance of or in the contracting for construction of public projects; and WHEREAS, the City desires to elect and become subject to Uniform Public Construction Cost Accounting Procedures for the purpose of awarding public project contracts set forth in the Public Contract Code section 22000 et seq.; and WHEREAS, the City finds that utilizing the procedures outlined in the Uniform Public Construction Cost Accounting Act may save administrative time and expense and will be in the best interest of the City. NOW, THE CITY COUNCIL OF THE CITY OF ROSEMEAD, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: That the City Council of the City of Rosemead hereby elects under Public Contract Code section 22030 to become subject to the Uniform Public Construction Cost Accounting procedures set forth in the Act and to the Commission's policies and procedures manual and cost accounting review procedures, as they may each from time to time be amended, and directs City staff to notify the State Controller of this election. PASSED, APPROVED, AND ADOPTED, this 10`h day of December, 2024. Steven Ly, Mayor APPROVED AS TO FORM: ATTEST: Rachel Richman, City Attorney Ericka Hernandez, City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) § CITY OF ROSEMEAD ) I, Ericka Hernandez, City Clerk of the City Council of the City of Rosemead, California, do hereby certify that the foregoing City Council Resolution No. 2024-67, was duly adopted by the City Council of the City of Rosemead, California, at a special meeting thereof held on the 10" day of December, 2024, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Ericka Hernandez, City Clerk Attachment G Purchasing Policy Workshop Report and Presentation ROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: BEN KIM, CITY MANAGER DATE: DECEMBER 12, 2023 SUBJECT: PURCHASING POLICY WORKSHOP — REVIEW OF THE PROPOSED PURCHASING POLICY UPDATE RECOMMENDATIONS The City engaged NIGP Consulting ("Consultant") in January 2023 to conduct a procurement policy and procedure assessment ("Assessment") and to provide revision recommendations. The purpose of the engagement was to conduct a comprehensive assessment of the City's purchasing policies and procedures. The aim was to determine whether the city was adhering to industry best practices and to ascertain whether greater delegated authority for procurement activities was necessary to streamline operations, increase work efficiencies, and mitigate risk. The objective of this workshop is to communicate the Consultant's findings and recommendations, as well as seek further guidance from the Council regarding the potential execution of said recommendations. The findings and recommendations of the evaluation are detailed in the attached report. Several key recommendations include: Update procurement dollar thresholds. The recommended dollar threshold updates are detailed in the table below. Averaging the responses of all agencies to the NIGP 2019 Benchmark Survey Report (Survey), the average starting threshold for small procurements was determined to be thirteen thousand dollars. However, this increase from $1,000 to $13,000 maybe deemed excessive at this time. An analysis of all agencies that participated in the NIGP 2019 Benchmarking Survey Report determined the average threshold levels for formal competition for procurements to be $54,033 (for non -IT) and $57,611 (for IT). Current delegation of authority to award contracts dollar thresholds: 4.7.1= rurdudtq anar hods. value of purchase purchase method Method of Appiroval $5,000110 or lam Direct competitive purchasing Approval by director of procedure, unlemsubject tow department responsible for the alternative purchasilgprocedure. pr*,t using a vendor or letter of agreement $5,000.01 to $90,000.00 informal co npettive purchasing Approval by City Manager. procedure, unlemsubject to an alternative purchmingprocedure. $30,000.01 or More formal compettive purchasing Approval by the City council procedure, unless subject to an alternative purchasing procedure. AGENDA ITEM LA City Council Meeting—Purchasing Policy Workshop December 12, 2023 Page 2 of 4 Current and Consultant proposed delegation of authority to award contracts dollar thresholds: Up to SLO0 Method of Approval Up to $5,000 pCard or Direct Purchase; no pCard Holder or Upto$5,000.00 qumatbns required Department Director >SL000.01- >$SAOD.M- Written Quotes(mlNmum 2) Department Director 55.000 $15A00 unless sub)ect to akernadve pr -educe >S15A00A1 >$15AOOA1 Written Quotes (ndnlmum 3) Cay Manager -$30AW -$50l unless sub)ect to aaerurbw Procedure >$30,00)iM >$50.0MM formal Competitive Process. Cay Couch unba sublect to aaemsdve prooedure Enable the City to make annual updates to the dollar thresholds for procurement based on the Consumer Price Index. This would be based on the all -urban consumers published by the United States Federal Secretary of Labor (Bureau of Labor Statistics) for the Los Angeles Area (CPI -U). The most recent revision to the Purchasing Ordinance approval limits occurred on August 23, 2016, when the threshold for City Council approval on purchases rose from $25,000 to $30,000. Subsequent to that period, the Los Angeles metropolitan area experienced an inflation surge exceeding 30%. Adopt California Uniform Public Contracting Cost Accounting Act ("CUPCCAA"). CUPCCAA provides for the expedited award of Public Works contracts, faster project delivery, and reduced time, effort, and expense associated with bidding projects based on higher thresholds than permitted under the California Public Contract Code 20160 to 20175. Adoption of CUPCCAA would empower City staff to procure lower dollar value construction services using a less onerous procurement method, or even use in-house staff for small projects, if knowledgeable and available, up to a higher threshold than currently exists. The threshold for formal bidding would be significantly higher than that currently used by the City. Current delegation of authority to award contracts dollar thresholds: 3.28.050 Delegation of authority to award contracts. Public workscontracts foe thousand dolters($5,000.00) or leamav be approved and executed at the director leve I without formal bidding. Public works contracts between five thousand dollars and one cents ($5,000.01) and thirty thousand dollars ($30,000.00) may be approved and executed by the Cay Manager. A table summarizing the methods of approval and bidding requirement Is provided below- Value of Public Project Method of Approval 5 *me Requirement Upto$5,000.00 Approval by director of department responsible for the pro)ect. using a vendor or letter of Weennent. Bidding not required. 5,000.01 to $30,00000 APPrCn1l by the City Manager. Bidding required. $30,OOOA7 or more. Approvalby the City Council. Bidding required. City Council Meeting — Purchasing Policy Workshop December 12, 2023 Page 3 of 4 Current and Consultant proposed delegation of authority to award contracts dollar thresholds based on CUPCCAA standards: To clarify, public projects exceeding a value of two hundred thousand dollars ($200,000) must be awarded through a formal competitive bidding process. Bidding is open to all qualified contractors, and the award is made to the lowest responsible bidder. • Authorize the adoption of revised CUPCCAA thresholds automatically. This would be contingent solely on the State's revision. Adoption of revised thresholds is thereby automated, eliminating the need for Council intervention for each instance. Establish a Purchasing Card Program (pCard). The use of pCards will replace blanket purchase orders and petty cash, reducing the administrative workload and challenges associated with both methods. In contrast to traditional credit cards, which have a single credit limit, significant control mechanisms are available to manage cardholder transaction limits and restrictions for specific types of purchases. Although not all administrative tasks are eliminated, the pCard application simplifies monitoring, access adjustments, and financial system uploads to reduce data entry errors. Implementing a pCard program is frequently perceived as empowering employees and improving morale, in addition to immediately paying suppliers. Many pCard programs also provide a "rebate" based on the total spend on the entity's cards. Create separate manuals for policy and for procedures. The detailed procedures for procurement activities would best be consolidated into a separate Procurement Procedures Manual with flowcharts and training for employees that procure on behalf of the City. These procurement procedures should be relocated from the Policy, resulting in a policy -only manual, although these two manuals are companion documents and must align. This will provide a clear delineation between policy and procedures. Consider consolidating procurement functions to one professional procurement position. The Consultant was mindful of the City's structure/organization and staff limitations. While the City manages some relatively large expenditures, the staff with delegated authority are responsible for multiple functions of which procurement is outside of their "core functions." Consolidating the procurement functions within one professional procurement position would alleviate Department staff City Council Meeting — Purchasing Policy Workshop December 12, 2023 Page 4 of 4 of these non-core functions, provide trained procurement advisory services, enhance transparency, and provide one primary point of contact to enhance consistency and efficiencies throughout the procurement processes and contracting functions. • Per the request of Council Member Low, the City Council shall be furnished with a report detailing all purchase orders surpassing $10,000. Staff recommends that the report be furnished to the City Council no later than 45 days subsequent to the end of each fiscal quarter. The Consultant concluded that although the current policies are firmly established and in accordance with State legislation, however they could be improved to support the City's uninterrupted operations more efficiently and effectively. To view the full Procurement Policy and Procedure Assessment Report, please see attachment A. STAFF RECOMMENDATION 1. Receive and file "Procurement Policy and Procedure Assessment" report. 2. Discuss the report recommendations, including the updates to procurement dollar thresholds, and provide direction to staff. 3. Authorize the City Manager to submit for City Council consideration an amendment to the Purchasing Ordinance that would increase dollar thresholds for procurement, including future CPI adjustments, with respect to RMC Title 3, Chapter 3.24.015 Purchasing Methods. 4. Authorize the City Manager to submit for City Council consideration a resolution to become subject to the California Uniform Public Contracting Cost Accounting Act and to file a copy of the approved resolution with the State Controller's Office. 5. Authorize the City Manager to bring forward to the City Council for consideration an agreement with NIGP Consulting to incorporate and implement the report recommendations, which includes creating a separate procurement policy and procedure manual in line with industry best practice. FISCAL IMPACT None — This is informational only. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: 1219 U l� Bryan Chua Finance Director Attachment A: Procurement Policy and Procedure Assessment Report NIGPConsulting powered by periscope PROCUREMENT POLICY AND PROCEDURE ASSESSMENT Submitted by: Lynda Allair, NIGP-CPP, CPPD, Con Procurement Professionals Delivering Results FINAL REPORT for NIGPIConsulting powered by periscope PROCUREMENT POLICY AND PROCEDURE ASSESSMENT TABLE OF CONTENTS EXECUTIVE SUMMARY ......................................................Error! Bookmark not defined. INTRODUCTION..................................................................... Error! Bookmark not defined. PROJECTSCOPE................................................................................................................... 10 I. Ordinances, Statutes, Municipal Codes, Procurement Policies to Ensure Consistency with Current Practices and Industry Best Practices in the Public Procurement Profession .... 11 State Legislation and Regulatory Constraints that Impact the City ................................ 15 III. Existing City Policy and Procedure that may Impede Efficiency, Create or Increase Risk, Weaken Controls, Limit Flexibility, Limit Transparency or Weaken Accountability in the ProcurementFunction................................................................................................. 17 IV. Existing City Policy and Procedures and all Related Documents Addressing Procurement Practices and Procedures............................................................................................ 23 V. Analysis Against ABA Model Procurement Code and Industry Best Practices ................ 24 CONCLUSION....................................................................................................................... 28 APPENDICES..... APPENDIX A: SUMMARY OF RECOMMENDATIONS ............................ APPENDIX B: RESOURCES REVIEWED ................................................ APPENDIX C: VIRTUAL INTERVIEWS .................................................. APPENDIX D: ABA MODEL PROCUREMENT CODE COMPARISON ........ N IC PConsulting P�y w 29 EXECUTIVE SUMMARY The Executive Summary provides a brief overview of the engagement methodology and recommendations. In January 2023, the City of Rosemead, CA ("City') contracted with NIGP Consulting to perform a Procurement Policy and Procedure Assessment ("Assessment"), and to provide recommendations for revisions. The results of the Assessment are presented in this Final Report ("Report"). The Project Scope included the following areas to be considered: Ordinances, statutes, municipal codes, procurement policies to ensure consistency with current practices and industry best practices in the public procurement profession. II. State legislation and regulatory constraints that impact the City. III. Existing City policy and procedure that may impede efficiency, create, or increase risk, weaken controls, limit flexibility, limit transparency or weaken accountability in the procurement function. IV. Existing City polity and procedures and all related documents addressing procurement practices and procedures. V. The American Bar Association Model for Procurement Code ("MPC") and industry best practices. The NIGP Consultant ("Consultant") gathered, studied, and reviewed numerous source and data documents. The Consultant also conducted individual interviews with identified stakeholders to assess the current state of the procurement environment, particularly in regard to the application of procurement policy and procedure, i.e., alignment between current policy and procedures versus actual practice, and to identify inefficiencies and areas of concern. The Consultant additionally interviewed the City's Legal Counsel to identify potential legal concerns and/or compliance issues. The Consultant's recommendations are summarized and presented in Appendix A: Summary of Recommendations. NIC PConsulting Page 3 Overview General operational themes that emerged during the Assessment include the following: • Policy— 20-01 Purchasing Policies and Procedure Manual ("Policy"), 45 pages in length, amalgamates both procurement policy and procedures and contributes to confusion amongst staff. • Threshold levels related to procurement categories and methodologies are considered low relative to today's supply market. The procurement contracting process entails several steps from the time identification of the need occurs through to the end of the contract. Numerous City staff including the City Manager, Assistant City Manager, Director of Finance, City Clerk and various accounts payable staff could potentially interact with the contracting process to varying degrees depending on the type of requirement and cost thereof. The separation of duties for authorizations and procure -to -pay functions are managed through the City's Munis system, with system security protocols controlling read/write/approve access. The City should be mindful of maintaining these protocols as organizational adjustments are made. • There is a lack of definitive evidence that procurement process training is provided to all staff with procurement authority, although this could be due to the scope of this engagement. It is suggested that training directly related to authority level in either a totally decentralized or hybrid structure, procurement policy and procedures, as well as documentation requirements related to both contract formation and contract administration would be highly beneficial. • The City is making good efforts to automate and reduce some of the manual work associated with the procure -to -pay processes by implementing a variety of technological solutions. Overall, the City's policies and procedures are detailed and sound, and they will benefit from the following high-level enhancements: • Incorporate public procurement best practices to guide policy recommendations. In the years since the City's current policies became effective (i.e., early 2008 with only minor revisions in mid -2019), there have been many new Global Best Practices developed and published by NIGP The Institute for Public Procurement("NIGP"). The City is to be commended for performing a comprehensive assessment to ensure that the City's Procurement policies and procedures are valid and current. N1 C PConsufting Page 4 p�apWbc" Consider increasing the delegated authority for procurement activities to streamline activities while mitigating risk. The City does have delegated authority within its Municipal Code and policies; however, there are some inconsistencies and conflicts within the current policy and procedures relative to authority areas versus operational areas, perhaps generated by the 2019 revisions. The purpose of the policy is to make appropriate and efficient delegations to the City Manager, Assistant City Manager, Department Directors, Senior Department Managers and line staff, and to facilitate prudent and expedient operations of the City. The recommendations will preserve the City Council's Oversight Authority, and City Manager's designation as the Chief Procurement Officer (CPO), and with continued delegation of authority as the CPO sees fit. Create separate manuals for policy and for procedures: The detailed procedures for procurement activities would best be consolidated into a separate Procurement Procedures Manual with flowcharts and training for employees that procure on behalf of the City. These procurement procedures should be relocated from the Policy, resulting in a policy -only manual, although these two manuals are companion documents and must align. This will provide a clear delineation between policy and procedures and should relieve some of the staff confusion associated with the currently combined document. Consider consolidating procurement functions to one professional procurement position: The Consultant was mindful of the City's structure/organization and staff limitations. While the City manages some relatively large expenditures, the staff with delegated authority are responsible for multiple functions of which procurement is outside of their "core functions." Consolidating the procurement functions within one professional procurement position would alleviate Department staff of these non- core functions, provide trained procurement advisory services, enhance transparency, and provide one primary point of contact to enhance consistency and efficiencies throughout the procurement processes and contracting functions. Conclusion The Consultant determined that the existing policies, while well-established and aligned with State legislation, would benefit from updates that will more efficiently and effectively support uninterrupted operations for the City. The City has prudently acted to undertake this Assessment to update its Procurement policies and procedures to meet its current challenges and better prepare for the future. NIGP Consulting sincerely appreciates the opportunity to perform this Assessment. The City's leaders and staff were professional, knowledgeable, and insightful during our frequent NIC PConsulting Page 5 meetings and discussions. The Consultant is encouraged the project sponsors and senior management recognize the need to review, assess, and implement changes to further align City procurement policies and procedures to best practices. This willingness to change is essential for the City to transform the procurement operation to be flexible and agile to realize the City's Vision and fulfill its Mission as identified in the 2030 Strategic Plan. NIC PConsulting Pa,e 6 IINTRODUCTION The Assessment was conducted by one of our NIGP Consulting Senior Consultants ("Consultant") who brings the breadth and depth of procurement expertise necessary to perform the Assessment and provide prudent recommendations. Lynda Allair, NIGP-CPP, CPPO has over 40 years of experience as a public procurement leader within the provincial, municipal and health care sectors. She has extensive expertise in procurement legislation (both nationally and internationally), policy development, cross -functional °. planning, project implementation, procurement performance, sustainability program development and implementation, and business ' analysis. She is an active leader in local and international public procurement associations. Lynda develops educational content and instructs public procurement classes for NIGP; the University of Guelph, Ontario; and others upon request. Lynda has been part of the NIGP Consulting Program since 2010, assisting public entities to transform their procurement operations to become high -performing and strategic in nature. NIC PConsulting Page 7 �'Wby ,. IMETHODOLOGY AND APPROACH The Assessment was conducted using NIGP Consulting's four -phased methodology. In use since 1995, this proven methodology provides consistency and thoroughness for each unique project. Each of the four project phases are critical to fully assessing an entity and preparing a final report with appropriate recommendations specific to the entity. In Phase 1— Preparation: As part of the preparation phase of the engagement, the Consultant requested documentation in each of the designated areas of the Project Scope. The Consultant was informed through State of California codes, statutes, and regulations. The Consultant worked closely with City staff to compile the stakeholder list for the interviews and to review the interview questions in advance. Please see Appendix B: Resources Reviewed for the full list of resources that were analyzed. In Phase 2— Data Collection: Virtual interviews were conducted with seven (7) stakeholders beginning with the kick-off meeting on January 30, 2023, followed by individually scheduled interviews on February 22 and March 2, 6, and 14, 2023. Those interviewed included: • City Manager • Assistant City Manager • Finance Director • Public Works Director • Parks & Recreation Director • City Clerk • City Attorney (contracted) Follow-up communication was conducted both via email with the Project Manager during the interview period as well as after the interviews were completed to obtain clarifications. Stakeholders were identified in collaboration with Michael Bruckner, Assistant City Manager, and Bryan Chua, Finance Director, and were representative of the primary internal customers who have procurement responsibilities within the City and/or who interact with the procurement function. An interview was also conducted with the City Attorney. Interviews N I C P Consulting inform the Consultant of stakeholder needs, what is working well, and where there are challenges which provide opportunities for improvement. Please see Appendix C: Virtual Interviews for those who the Consultant interviewed. In Phase 3—Analysis: The Consultant reviewed and analyzed all data, to include requesting input and/or clarifications from City staff where needed. This Report provides recommendations reflective of Global Best Practices of Public Procurement. These recommendations support strategic objectives for managing an effective procurement operation, focused on simplifying and streamlining processes and increasing the levels of open competition and transparency. In Phase 4— Deliverables: The deliverables included a draft Report of Findings and Recommendations (provided to the City for review and input) followed by this final Report. The purpose of the Report is to recognize where the City is performing well as well as to provide opportunities for increasing the efficiency and effectiveness of the procurement function within the City. Project deliverables also provided the option for a live/virtual presentation and discussion with the City about the final Report by the Consultant. The Recommendations within this Report are based on Global Best Practices of Public Procurement and industry course content. They also reflect the Values and Guiding Principles of Public Procurement. They are summarized and presented in Appendix A: Summary of Recommendations. For insight on recommendations about delegation and increases of authority for procurement, the Consultant cited the most current NIGP Public Procurement Benchmark 2019 Survey Report. All references serve as industry benchmarks of high -performing procurement departments. The Recommendations also reflect the Consultant's vast experience and expertise in public procurement. Supporting documentation is attached as follows: • Appendix A Summary of Recommendations • Appendix B • Appendix C • Appendix D NIC PConsulting p ,e w wmre Resources Reviewed Virtual Interviews ABA Model Procurement Code Comparison Page 9 iPROJECT SCOPE The Project Scope included the review and consideration of the following: I. Ordinances, statutes, municipal codes, procurement policies to ensure consistency with current practices and industry best practices in the public procurement profession. II. State legislation and regulatory constraints that impact the City. III. Existing City policy and procedure that may impede efficiency, create, or increase risk, weaken controls, limit flexibility, limit transparency or weaken accountability in the procurement function. IV. Existing City policy and procedures and all related documents addressing procurement practices and procedures. V. The American Bar Association Model for Procurement Code (MPC) and industry best practices. For each above Project Scope area, the Consultant offers the following: • Approach which identifies the benchmark for the analysis. • Findings which identify the current state of the procurement function. • Recommendations which will bring the entity in closer alignment with Global Best Practices and industry standards. NI C I♦ Consulting Page 10 I I. ORDINANCES, STATUTES, MUNICIPAL CODES, PROCUREMENT POLICIES TO ENSURE CONSISTENCY WITH CURRENT PRACTICES AND INDUSTRY BEST PRACTICES IN THE PUBLIC PROCUREMENT PROFESSION A. APPROACH The City is a "general law City" under Cal Gov Code § 34102, which requires the City to operate under the general laws of the State of California. Keeping this in mind, the Consultant reviewed the following documents: • California Public Contracts Code, Division 2, General Provisions, Part 1, Sections 1100-9203; Part 3, Sections 20100-22178; Part 4, Sections 22200-22201; Part 5, section 22300 • United States Code Title 41. Public Contracts, Subtitle 1, Division B, Chapter 19, Section 1908, Pages 59-60 URL: htti)s://www.law.cornell.edu/uscode/text/41/1908 (inflation adjustment) • California Uniform Public Contracting Cost Accounting Act ("CUPCCAA") • California Uniform Construction Cost Accounting ("CUCCA") Manual — 2021 Edition • CUCCA Conflict of Interest Code • Uniform Commercial Code ("UCC") • City Municipal Code, Chapter 3.24: Purchasing System for Non -Public Works Contracts • City Municipal Code, Chapter 3.28: Public Project Bidding Procedures • Policy -20-01 Purchasing Policies and Procedures Manual ("Policy") The Consultant also compared the City's Municipal Code, Chapter 3.24: Purchasing System for Non -Public Works Contracts; Chapter 3.28: Public Project Bidding Procedures; and Policy to the American Bar Association 2000 Model Procurement Code (MPC) in order to determine whether or not the Policy encompassed all prudent provisions of the MPC. While the MPC is not a policy document, it does contain sample language that may be used in a policy document. The MPC is a comprehensive and thorough outline of the necessary components of the legal structure for public procurement, and it serves public agencies very well. B. FINDINGS The Consultant offers the following observations: 1. The City Council has the authority to establish or modify policies for the City based on State Statutes and California Public Contracts Code. Limitations are attributable to the City being classed a "general law City' under Cal Gov Code § 34102. N IC PConsufting P�a Page 11 2. The City Council has delegations of authority. Delegations of authority are provided in both Chapter 3.24 Purchasing System for Non -Public Work Contracts and Chapter 3.28 Public Project Bidding Procedures. 3. There is alignment of City Municipal Code and Procurement Policies and Procedures with California Legal Requirements: The City's Municipal Code and Policy align with State statutes, although there is an opportunity to leverage the CUPCCAA which, to date, has been considered but not implemented. It is commendable that the City has considered this and has deferred a final decision until completion of this Review. 4. Price analysis procedures in Policy do not align with industry best practices: The City's Policy and procedure for the determination of value (analyzing the out-of-pocket expense for procurement) is inconsistent with global best practices in procurement. The City clearly differentiates between the "raw" price of supplies and equipment, i.e., associated additional expenses such as taxes not included, versus the "total price", i.e., other expenses necessary to place the item in service or to perform under a contract. City procedures indicate that the "raw" price will be used to determine the appropriate procurement method based on specific dollar thresholds. This practice is inconsistent with procurement best practices. This inconsistency generates the risk of the City utilizing an inappropriate procurement method, particularly if the City adopts CUPCCAA, as the CUCCA Policies and Procedures Manual, 2021 Edition, Page 59, specifically states: Costing Materials and Supplies Direct Purchase: The total material and supplies costs are the invoiced amount. This amount should be posted to the project tracking system for direct purchases on a timely basis. This recorded amount should include the cost of the materials and supplies, freight, sales tax, use tax and any other appropriate costs. S. There appears to be deficiencies in Post -Contract Execution Procedures, i.e., Contract Administration: The City s Policy does not address contract administration functions, resulting in lack of direction and confusion for Department staff. The Policy currently does not provide guidance on how to monitor and correct supplier performance issues, how to identify impacts and options related to delays, and how to determine contract termination options (such as for breach, convenience or mutual agreement terminations). 6. The City's Procurement function is decentralized. Decentralization does not provide a consistent and easy way for Departments to access Procurement staff. Procurement is generally not a core function of Executive leadership or Senior Management. Centralization of authority and oversight of policy, as well as the centralization of procurement advisory services and training, enhances the ability to ensure consistency in procedures and accountability. While a totally centralized procurement function is not realistic for the City, the implementation of a hybrid approach would be more in N IC PConsulting - .an7 o-, p3�.ropa Page 12 alignment with industry best practices. The Consultant was mindful of the City's structure/organization and staff number limitations. C. RECOMMENDATIONS The Consultant recommends the following based on the review of the relevant jurisprudence: 1. Ensure Price Analysis Procedures are consistent and uniform. Expenses such as shipping, insurance, storage, demurrage, etc., beyond the "raw" price of a good or service, can contribute significant value to the total price paid by an entity. Failure to include such expenses can arbitrarily skew a contract award, particularly if expenses over the long term are not considered as may be the case when calculating total cost of ownership. 2. Develop comprehensive contract administration procedures. The absence of clearly written contract administration procedures can result in the inability to adequately monitor, report, and correct a supplier's poor performance, resulting in unrealized benefit to the City and the inability to terminate a contract. 3. Consider creating a new supply chain position, perhaps titled "Contract Specialist." Providing a single -point -of -contact for procurement functions is the most practical way for the City to implement a hybrid procurement structure. This will provide a central support, oversight and control mechanism to provide consistency, transparency and accountability in procurement functions enterprise wide for the City. Based on the current Organization Chart, some vacancies exist which might be repurposed to create a new supply chain position, for example, Contract Specialist. This new position could provide the day-to-day management of and support for the following procurement functions: • Assist Departments in assessing needs and developing budget estimates. • Provide advisory services for the best procurement and contracting methods. • Provide advice regarding procurement best practices and trends. • Develop and maintain solicitation document templates. • Manage complex procurement solicitations, evaluations, and award processes. • Issue purchase orders within the Munis system. • Oversee contract administration functions, i.e., ensure documentation is maintained in contract files. • Maintain centralized contract repository. • Oversee City's Purchasing Card program. • Research cooperative agreements, market trends, and supply chain issues. • Operational management of assets disposal to maximize residual financial recovery. NIC P Page 13 7 Consulting Pm bype� oar • Assist in negotiation process planning and implementation. • Provide procurement specific training to new staff (on -boarding process) as well as current staff. • Provide support in project management processes. • Provide single -point -of contact to better manage supplier relationships. Implementing such a position would relieve Senior Executive, Management and Department staff of many day-to-day procurement functions that distract them from their core functions, vest routine procurement operational duties with one individual, provide consistency in processes and legal compliance, and enhance records management. Additionally, if this position reports to the Assistant City Manager, procurement functions now completed by Finance staff (issuing purchase orders) and the City Clerk (posting solicitations on the eProcurement platform) creates a definitive separation of duties, particularly between procurement and financial (payment) functions. This is often an issue identified in audit findings. NIC PConsulting Page 14 II. STATE LEGISLATION AND REGULATORY CONSTRAINTS THAT IMPACT THE CITY A. APPROACH The Consultant conducted a review of relevant legislation and regulatory constraints that impact the City and the City's options for adjustments. The primary focus of Section II relates to the California Uniform Public Contracting Cost Accounting Act (CUPCCAA) which has dollar thresholds higher than the City's current thresholds. Thresholds for non-public works will be addressed in Section III. B. FINDINGS The Consultant offers the following observations related to CUPCCAA: CUPCCAA is currently not adopted by the City. CUPCCAA provides for the expedited award of Public Works contracts, faster project delivery, and reduced time, effort, and expense associated with bidding projects based on higher thresholds than permitted under the California Public Contract Code 20160 to 20175. Adoption of CUPCCAA would empower City staff to procure lower dollar value construction services using a less onerous procurement method, or even use in-house staff for small projects, if knowledgeable and available, up to a higher threshold than currently exists. The threshold for formal bidding would be significantly higher than that currently used by the City. CUPCCAA thresholds for 2023 are as follows: N 1 C PConsulting Oy A potential drawback to CUPCCAA is that the City would be limited to the current CUPCCAA thresholds. Under current processes, Council would need to approve any new thresholds when the State revises them. However, the Council does have the authority to update City policy in such a way that CUPCCAA threshold values could be automatically adopted as they are revised. This streamlines the adoption process for threshold revisions. 1. The City is limited to two construction methods. The City is only permitted to use the traditional Design -Bid -Build and Design -Build methods for obtaining construction services. The City mostly uses the traditional method and has very limited exposure to utilizing Design -Build. (Job Order Contracting could potentially be beneficial to the City, particularly for small renovation projects; however, this method is not permitted under California statutes. Construction Manager at Risk (CMAR), an enhanced method which is somewhat of a combination of the traditional method and Design -Build, is also prohibited by California statutes.) C. RECOMMENDATIONS The Consultant offers the following Recommendations: 4. Adopt the CUPCCAA. This provides City staff with a less onerous procurement process for low dollar value construction services at a higher threshold and the formal bidding process would be based on a significantly higher threshold than currently used by the City. 5. Permit automatic adoption of revised CUPCCAA thresholds based solely on the State's revision(s). This automates adoption of revised thresholds without Council intervention for each occurrence. NIC PConsulting Page 16 po-nweti of oo-.rcpe III. EXISTING CITY POLICY AND PROCEDURE THAT MAY IMPEDE EFFICIENCY, CREATE OR INCREASE RISK, WEAKEN CONTROLS, LIMIT FLEXIBILITY, LIMIT TRANSPARENCY OR WEAKEN ACCOUNTABILITY IN THE PROCUREMENT FUNCTION A. APPROACH Best practices in public procurement advances guided the Consultant's policy review and recommendations. There have been many new Global Best Practices developed and published by NIGP since the update of the City's Policy. The Best Practices studied for updating the City's policies included: • Achieving an Optimal Procurement Card (PCard) Program • Audits • Contract Administration • Contract Closeout • Debriefs • Developing A Procurement Manual • Ethical Procurement • Market Research Process: Research, Analysis, and Intelligence • Place Of Procurement Within the Entity • Risk Management • Strategic Procurement Planning • Transparency in Public Procurement • Using Cooperative Contracts All of these Global Best Practices are available at https://nigp.orp/global-best-practices . The Consultant reviewed the California Public Contract Code, Division 2, General Provisions, Part 1, Sections 1100-9203; Part 3, Sections 20100-22178; Part 4, Sections 22200-22201; Part 5, section 22300 and others pertaining to the City and procurement, as well as United States Code Title 41. Public Contracts, Subtitle 1, Division B, Chapter 19, Section 1908, Pages 59-60, pertaining to indexing dollar threshold amounts. The Consultant compared the City Procurement Policy dollar thresholds with the thresholds reported in the most recent (2019) NIGP Public Procurement Benchmarking Survey Report. The benchmarking report includes data from all types of public procurement entities. The Consultant also considered the readability and user-friendliness of the current City Policy and associated documents. Complex documents can contribute to confusion, misunderstanding, and incorrect interpretations. N I C PConsulting Page 17 To reduce regulatory constraints that may impede efficiency in the procurement function, the Consultant considered a number of options. These options included the following: Additional delegation of authority. Implementation of a Purchasing Card Program to replace the use of blanket purchase orders, traditional corporate credit cards and petty cash, reducing administrative workload. Consolidation of procurement functions in a new position, i.e., Contract Specialist, to free up Department staff time, provide consistency in processes, and provide contract administration support. Delegating authority is vital for thriving entities as it enables leaders to focus on progressively higher priority level activities for the entity. Further, for those that accept delegated authority, it encourages a greater sense of responsibility and an opportunity to grow and implement prudent initiatives. Based on staff interviews, the Consultant also looked at the Policy in relation to the working relationships and workflow between and among staff who perform procurement functions, implementing the Policy. The NIGP Procurement Guide For Elected and Senior Officials was consulted by the Consultant as it further defines the procurement information that the City Council, Executive and Directors need to know. B. FINDINGS The Consultant offers the following observations: 1. The current Policy is difficult to read. The document is lengthy (45 pages) and combines policies with procedures, resulting in readers being unsure as to what content is policy versus procedure. This type of combined document is more difficult to maintain because all changes have to be approved by the governing body, impeding the ability to be agile and responsive to changing procedural requirements. Separate documents provide clarity to readers. Many public entities have unbundled their policy and procedure manuals for these very reasons. 2. The current Policy uses dated terminology which maybe distracting or misleading for readers. For example, the public procurement profession has moved to using "supplier" rather than "vendor' and there are inconsistencies of use for other terms throughout the document. Some of these deficiencies may be addressed by updating definitions to align with the MPC and the NIGP Dictionary of Terms. N I C P Consulting Page 18 3. The City dollar threshold limits are, in some cases, below the industry in general. These thresholds are reviewed and adjusted periodically by most entities to reduce the amount of work to obtain competitive responses to bids and proposal requests, while managing risks associated with informal solicitations. 4. The City currently utilizes Blanket Purchase Orders to encumber funds in the financial system, petty cash for micro -purchases, and corporate credit cards for select staff. The use of blanket purchase orders and petty cash require manual processes that impact workloads and create administrative challenges. These methods do not provide a real-time window to expenditures, or automated controls. Corporate credit cards, although providing a method to manage emergency procurements, do not provide threshold oversight in real-time, nor do they provide restrictions on particular types of purchases. S. Contract administration and contract close-out processes are not addressed in documents reviewed. The absence of comprehensive contract administration and contract close-out procedures in City documents is a gap in process controls and accountability. Inadequate contract administration and close-out create significant risk to the City which could result in the City's inability to identify contractor deficiencies in a timely manner, and the inability to exercise liquidated damages or terminate an under- performing supplier for breach of contract. 6. Distribution of the City's procurement functions over several staff and multiple departments can contribute to confusion regarding who does what specific functions. Consolidating the procurement functions and advisory support services in one position would minimize this confusion, free up Department staff time to focus on their core functions, provide a resource for strategic procurement planning, promote consistency in processes, provide contract administration support, and contribute to more robust contract files to support defense when challenged. This new "Contract Specialist" position has previously been addressed in this Report in Section I, C. Recommendations, #3. 7. Higher level approval is required for non-compliant procurements. Non-compliant procurements should require approvals two levels higher (2 up) from the individual who was not compliant with Policy. This practice is one method to ensure that upper-level managers are aware of non-compliance issues and take corrective action(s) before situations deteriorate. Such a policy would be a pro -active action and provide a method to respond if such a procurement were to occur. 8. There maybe potential delays in the procurement process due to the requirement for City Council to approve procurements exceeding $30,000. Currently, City Council NICPConsulting w...ewrkwa Page 19 approval is required for all procurements exceeding thirty thousand dollars ($30,000). Although the approval process is managed by using the "Consent Agenda" methodology, the risk does exist that the time delay from award recommendation preparation to the next Council Meeting for approval could negatively impact timely contract execution. It is highly likely that this risk would escalate under either of the following potential conditions: 1) disruption in the supply chain when goods or services may be in high demand and/or short supply, or 2) during disruptive events such as severe weather or supply disruptions caused by strikes or transportation route closures. Under either of these conditions, a rapid decision regarding the procurement award could be critical in meeting City requirements. One method to manage such risks is to increase threshold levels as outlined in Recommendation #9 below to provide a less formal competitive process for lower value procurements. C. RECOMMENDATIONS 6. Create separate documents for policy and procedures. If separated, policies and policy amendments could be approved by the City Council, and procedural changes would be approved at the Executive Management level. 7. Procedures Manual should be a training tool. Detailed procedures for procurement activities would best be consolidated into a procurement procedures manual with flowcharts and training for employees that procure on behalf of the City. The procurement procedures should be relocated from the City Procurement Policy documentation. 8. Update Polity terminology to align with MPC and NIGP Dictionary of Terms. Using current terminology consistently would provide clarity, particularly for newer staff. 9. Designate the City Manager as the Chief Procurement Officer (CPO), and with continued delegation of authority as the CPO sees fit. The City Manager should be provided with a broader delegation of authority for supply chain activities through the procure -to -pay continuum. 10. Implement a Purchasing Card Program (pCard). The pCards will replace the use of blanket purchase orders and petty cash reducing the administrative workload and challenges associated with both of these methods. Unlike traditional credit cards which have only one credit limit, significant control mechanisms are available to manage pCard holder transaction limits and restrictions for specific types of purchases. Not all administration workload disappears but the pCard application facilitates monitoring, access adjustments and financial system uploads to reduce data entry errors. Implementation of a pCard program is often perceived as empowering staff and N I C P Consulting Page 20 improving morale, in addition to paying suppliers immediately. Many pCard programs also offer a "rebate" based as a percentage of total spend on the entity's cards. The NIGP 2019 Benchmark Survey ( htto://bitly.ws/GkoB ) also indicates that 81% of public entities have a pCard program. 11. Update Procurement Dollar Thresholds. The dollar threshold recommended updates are shown in the following table. The NIGP 2019 Benchmark Survey Report (Survey) designated a $13,000 threshold as the average level for the starting threshold for small procurements after an analysis of all agencies responding to the Survey. The NIGP 2019 Benchmark Survey Report identified $54,033 (non -IT) and $57,611 (for IT) thresholds as the average threshold level for formal competition for procurements after an analysis of all agencies responding to the Survey. However, based on the much lower thresholds currently utilized by the City, the following threshold increases are recommended at this time. The City should periodically review and adjust threshold levels based on updated benchmark data and market conditions. Threshold Level Procurement Required Proposed MethodCurrent Approval Up to $1,000 Up to $5,000 pCard or Direct Purchase; no pCard Holder or quotations required Department Director >$1,000.01- >$5,000.01- Written Quotes (minimum 2) Department Director $5,000 $15,000 unless subject to alternative procedure >$15,000.01 >$15,000.01 Written Quotes (minimum 3) City Manager -$30,000 -$50,000 unless subject to alternative procedure >$30,000.01 >$50,000.01 Formal Competitive Process, City Council unless subject to alternative procedure 12. Enable the City to make annual updates to the dollar thresholds for procurement based on the Consumer Price Index for all urban consumers published by the United States Federal Secretary of Labor (Bureau of Labor Statistics) for the Los Angeles Area (CPI -U). Further information on the Consumer Price Index for all urban consumers for the Los Angeles Area can be found at https://data.bis.gov/cei-bin/surveymost?cu. 13. Develop and implement comprehensive contract administration and contract close- out procedures. Further information on this can be found in the Contract Management NIC PConsulting Page 21 Standard available from the National Contract Management Association at https://www ncmaho org/Web/Web/Standards---Practices/Contract-Management- Standard-Publication.aspx?hkev=5fifdc7a-f748-437d-a5a1-3e9af7cdb83c. 14. Develop and implement a non-compliant procurement policy and associated procedures that require approvals two levels higher, or the City Manager, to enhance the degree of accountability and enhance policy enforcement. NIC PConsul ing p�by Page 22 IV. EXISTING CITY POLICY AND PROCEDURES AND ALL RELATED DOCUMENTS ADDRESSING PROCUREMENT PRACTICES AND PROCEDURES A. APPROACH The Consultant conducted a comprehensive review of all documents and data provided by the City or researched through the State website. B. FINDING C. The Consultant offers the following observations based on the review of existing City policy and procedures and all related documents pertaining to Procurement: 1. Documents are currently aligned to the MPC with minor exceptions. Gaps identified when City Procurement documents are compared to the ABA Model Procurement Code are detailed in Section V. 15. Conduct a review of all existing procurement templates to ensure alignment with changes. General and Special Contract Terms and Conditions, solicitation/report templates, and all other forms currently employed in the procurement process should be reviewed to ensure alignment with Policy updates. 16. Conduct a review of companion financial and Council reporting documents to ensure alignment with updated Policy changes. N1G PConsufting Page 23 Pd byp•bWw V. ANALYSIS AGAINST ABA MODEL PROCUREMENT CODE AND INDUSTRY BEST A. APPROACH The Consultant conducted a comprehensive review of the City's Policy and other relevant legislation against the ABA Model Procurement Code (MPC), the results of which are summarized in Appendix A: ABA Model Procurement Code Comparison. B. FINDINGS 1. The MPC comparison indicates adequate levels of polity control and procedural accountability per each MPC Article as follows: a. Article 1 General Provisions: Each component is either addressed or is not applicable for this engagement. b. Article 2 Procurement Organization: Each component is either addressed in the City's Policy or is not applicable to this engagement. c. Article 3 Source Selection and Contract Formation: Most components are met although some are noted only on a limited basis. There are a few components that are not addressed, and which are relatively simple to correct. d. Article 4 Specifications: This is adequately covered although a couple of gaps are noted. e. Article 5 Procurement of Infrastructure Facilities and Services: Most components are addressed by referencing California Statutes rather than providing detailed information in the Manual. Incorporating by reference is one way to pull the details into a document; however, it is time consuming for the reader to access the source document, often resulting in frustration and lack of adequate information. f. Article 6 Modification and Termination of Contracts for Supplies and Services: Similar to the finding above, these are addressed by referencing California Statutes and may benefit from providing detailed information in the Manual. g. Article 7 Cost Principles: These, too, are addressed by referencing California Statutes rather than providing detailed information in the Manual. h. Article 8 Supply Management: This is addressed with minor gaps. NICPConsulting rawwa Page 24 Article 9 Legal and Contractual Remedies: Basically, this is not covered except as may be provided under California law or any grantor's requirements, details of which were not provided. j. Article 10 Intergovernmental Relations: Procurement policy speaks minimally to cooperative purchasing. Other components are not specified in the Policy although they might be incorporated under another policy outside of procurement. k. Article 11 Assistance to Small and Disadvantaged Businesses: Most of the specific requirements and procedures are identified under Federal Requirements and captured by reference. I. Article 12 Ethics in Public Procurement: Some components are covered under the California Administrative Code and referenced in the City Municipal Code while a few are partially addressed in the City's Purchasing Policy and Procedures Manual. Others are assumed to be provided for in California law although the Consultant is unable to site a specific Section. C. RECOMMENDATIONS 17. Consider adding these MPC provisions for inclusion in the Policy: • Severability. If any provision of this Policy or any application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or application of this Policy which can be given effect without the invalid provision or application, and to this end the provisions of this Policy are declared to be severable. • Supplementary General Principles of Law Applicable. Unless displaced by the particular provisions of this Policy, the principles of law and equity, including the Uniform Commercial Code of this State, the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or bankruptcy shall supplement the provisions of this Policy. Requirement of Good Faith. This Policy requires all parties involved in the negotiation, performance, or administration of contracts to act in good faith. • Reporting on Anticompetitive Practices. When for any reason collusion or other anti-competitive practices are suspected among any bidders, offerors, or City staff, notice of the relevant facts shall be transmitted to the Attorney General. 18. Develop Suspension and Debarment procedures to enable the City to have a reasonable time to investigate the issues that would lead to debarment of a firm. N I C P Consulting Page 25 These two actions are excellent tools that encourage contract compliance and enable meaningful actions, should a supplier behave inappropriately. The City should consider leveraging Los Angeles County's Internal Services Division procedures and registers to facilitate this. 19. Develop a formal debriefing policy and procedures for the City. A debrief meeting is used to provide constructive feedback to a proposer on their proposal. Proposers may consider this feedback when preparing subsequent proposals. Entities may benefit equally from the information learned during a debrief, which they can utilize when preparing subsequent solicitations. Debriefs may also serve to develop relationships and build trust with proposers. Debriefings of unsuccessful suppliers are permitted, although not required under the MPC, and many public entities require debrief meetings by policy. U.S. FAR 15.506 requires the purchasing entity to provide a debrief to a proposer for procurements conducted under FAR Part 15 if the proposer requests a debrief in writing within three calendar days after the entity's award notice. 20. Provide Authority to the City Manager to appoint/approve members of the Evaluation Team for large or complex Procurements. This ensures that individuals with subject matter expertise, who do not have a conflict of interest, are appointed/approved as evaluators. 21. Ensure the provision for pre-solicitation/pre-specification conferences that would provide potential suppliers with a level playing field when specific sites are viewed and/or specifications are reviewed, prior to posting. This is part of "Other Requirements of the Procurement Process" and also includes meetings with suppliers such as pre-bid, pre -proposal conferences, and site visits. The pre -specification meeting is becoming more prevalent. This enables staff to achieve input on draft specifications in a transparent manner. 22. Update bond requirements to manage risk more effectively. The form of security is best updated to not permit cash and/or letter of credit. Handling cash is an avoidable risk in this case. A letter of credit, even if marked "irrevocable," is not a best practice. The other forms of security are easily accessible and present less risk in processing. 23. Reject Bids for non-compliance with bid security requirements. This is recommended so that no authority is granted the ability to waive non-compliance as a minor irregularity. Bid security requirements affect a respondent's price. This will be an economic advantage and, therefore, renders a bid or proposal non-responsive. Authors of specifications should use caution if considering a bid security requirement (bond) for any good or service outside of the construction sector, in which providing a bond is a normal practice. NIC PConsulting p�a Page 26 24. Develop a comprehensive stand-alone Code of Conduct or Ethics Policy. This policy should encompass anti-trust situations, as well as the various types of conflict of interest, gratuities, gifts, reporting requirements, etc. General Comment: Use the ABA Model Procurement Code Comparison chart to pinpoint and develop policies and procedures appropriate to manage City risk going forward. Although the City is fairly well aligned and compliant with the MPC Articles, some deficiencies do exist Updates to these Articles should be relatively simple and straightforward although the City should consider incorporating at least minimal direction for staff to restrict the need to routinely access source documents, such as State statutes. MPC Article 9 is the biggest gap, but State law may provide structure for components. NIC PConsulting -��wn� CONCLUSION The Consultant conducted a comprehensive review of the City of Rosemead's Purchasing Policy to determine alignment with State statutes, ordinances and Municipal Code to provide recommendations for revisions. The Consultant also conducted individual interviews with identified stakeholders to assess the current state of the procurement environment, particularly in regard to the application of procurement policy and procedure, i.e., alignment between current policy and procedures versus actual practice, identify inefficiencies and areas of concern. The Consultant also interviewed the City's Legal Counsel to identify potential legal concerns and/or compliance issues. Based on the interviews and document review, the decentralized nature of the City's procurement function is deemed to be the root cause of issues identified. Gaps in Policy and procedures do exacerbate this, however, moving to a hybrid procurement model will be beneficial. The implementation of a Contract Specialist as the single -point -of -contact for procurement advice and support will be instrumental in supporting a hybrid procurement operation, i.e., delegated authority with centralized oversight. Based on the City's proactive approach by initiating this Assessment, the interest and cooperation provided by City staff, and the quality and comprehensive nature of the City's existing Purchasing Policy and Procedures Manual, the Consultant is confident of the City's success in continuing the transformation to a high -performing entity Thank you for the opportunity to share industry best practices and professional recommendations for your consideration. NIGP Consulting and the Consultant stand ready to support the efforts of the City in any future improvements and transformation. We further are available to assist the City as a continued resource for learning, to assist in any additional support service needs, and certainly to continue to advocate for the City s procurement function's continued growth and development. For information regarding developing strategic tools and methods for procurement operations, please contact Marcheta Gillespie, NIGP Consulting by email at: meillesoieCf nigp.com. NIGP Consulting stands ready to offer our continued support and further engagement if and as needed. Ni PConsulting Page 28 IAPPENDICES Supporting documentation is attached as follows: • Appendix A Summary of Recommendations • Appendix B Appendix C • Appendix D N 1 C PConsulting Resources Reviewed Virtual Interviews ABA Model Procurement Code Comparison APPENDIX A: SUMMARY OF RECOMMENDATIONS SUMMARY OF RECOMMENDATIONS: 1 Ensure Price Analysis procedures are consistent and uniform. Develop comprehensive Contract Administration procedures. Consider creating a new supply chain position, perhaps titled "Contract Specialist." 2 3 4 Adopt the CUPCCAA. 5 Permit automatic adoption of revised CUPCCAA thresholds based solely on the State's revision(s). 6 Create separate Policy and Procedure documents. 7 Procedure document should be a training tool (including flowcharts, forms, etc.). 8 Update Policy terminology to align with MPC and NIGP Dictionary of Terms. 9 Designate the City Manager as the Chief Procurement Officer, and with continued delegation of authority as she/he sees fit. 10 Implement a Purchasing Card Program. 11 Update Procurement Dollar Thresholds. Update annually the Procurement Dollar Thresholds, based on the Consumer Price Index. r12 13 Develop and implement comprehensive Contract Administration and Contract Close -Out procedures. 14 Develop and implement a Non -Compliant Procurement Policy and associated Procedures. 15 Conduct a review of all existing procurement templates to ensure alignment with changes. 16 Conduct a review of companion financial and Council reporting documents to ensure alignment with changes. NIC PConsulting Page 30 17 Consider adding these MPC provisions for inclusion in the City Procurement Policy: • Severability • Supplementary General Principles of Law Applicable • Requirement of Good Faith • Reporting on Anticompetitive Practices 18 Develop Suspension and Debarment procedures to enable the City to have a reasonable time to investigate the issues that would lead to debarment of a firm. Develop a formal debriefing policy and procedures for the City. 19 20 Provide authority to the City Manager to appoint/approve members of the Evaluation Team. 21 Ensure the provision for pre-solicitation/pre-specification conferences. 22 Update bond requirements to manage risk more effectively. 23 Reject Bids for Non-compliance with Bid Security Requirements. 24 Develop a comprehensive stand-alone Code of Conduct or Ethics Policy. NICP Page 31 7 Consulting P « byp m� APPENDIX B: RESOURCES REVIEWED RESOURCES• DOCUMENTS California Public Contracts Code, Division 2, General Provisions, Part 1, Sections 1100-9203; Part 3, Sections 20100-22178; Part 4, Sections 22200-22201; Part 5, section 22300 United States Code Title 41. Public Contracts, Subtitle 1, Division B, Chapter 19, Section 1908, Pages 59-60 URL: https://www.law.cornell.edu/uscode/text/41/1908 (inflation adjustment) City Municipal Code, Chapter 3.24: Purchasing System for Non -Public Works Contracts City Municipal Code, Chapter 3.28: Public Project Bidding Procedures Policy -20-01 Purchasing Policies and Procedures Manual Organizational Chart —City of Rosemead 09/01/2022 Sample Bid Package: Garvey Park Tennis Courts Resurfacing, 11-16-22 Sample RFP Package: RFP No. 2022-06 — Building Services 2022 Proposed CUPCCAA Ordinance to Replace Chapter 3.28 — In process but on hold Proposed CUPCCAA Staff Report California Uniform Public Contract Cost Accounting Act (CUPCCAA) California CUCCAC Manual — 2021 Edition California CUCCAC Conflict of Interest Code Uniform Commercial Code Purchase Order List FY 2022 2030 Strategic Plan NIGP Procurement Guide for Elected And Senior Officials URL: https://n igp.oriz/resource/research-papers/N I G P%20 P rocu reme nt%20Guide%20-%20n iap- procurement-guide-for-elected-and-senior-officials.pdf?dl=true GLOBALORDER Achieving and Optimal Procurement Card (PCard) Program Audits Contract Administration Contract Closeout Debriefs Developing A Procurement Manual Ethical Procurement Market Research Process: Research, Analysis, and Intelligence Place Of Procurement Within the Entity Transparency in Public Procurement Risk Management Strategic Procurement Planning Using Cooperative Contracts APPENDIX C: VIRTUAL INTERVIEWS N I C PConsulting Page 32 I VIRTUAL INTERVIEWS Ben Kim, City Manager 2 Michael Bruckner, Assistant City Manager 3 Bryan Chua, Finance Director 4 Michael Chung, Public Works Director 5 Tom Boecking, Parks & Recreation Director 6 Ericka Hernandez, City Clerk 7 Rachel Richman, City Attorney N1 C PConsulting v,: w ,_o' APPENDIX D: ABA MODEL PROCUREMENT CODE COMPARISON Purpose, Rules of Construction Yes Supplementary General Principles of s See Note at the end of this Table Law Applicable Three specific provisions; See also Note at the Requirements of Good Faith Yes * end of this Table Application of this Code N/A Not Applicable for this engagement Severability * See Note at the end of this Table Effective Date Yes Prominently displayed Determinations Yes Specific authority for determinations Some definitions are not MPC, they are pertinent Definitions Yes to City only or flow through from the California Public Contracts Code or other Regulations Specific provisions and applications for solicitation opportunities/documents, but not Public Access to Procurement Partial definitive on Public Records Requests limitations Information or process, i.e., "after bid openings, bids will be available for review at the City Clerk's office..." Authorization for the Use of Electronic Transmissions N/A Not Applicable for this engagement NIC PConsulting N I C P Consulting Page 35 Procurement Organization Article 2 Creation of the Office of Chief CPO Authority is vested in the City Manager for Procurement Officer (CPO) (1) the procurement of general supplies, equipment, and routine services, (2) administration of the purchasing policy, and (3) Yes management of surplus City property but is silent on Construction (Public Works); various City staff performs the administration functions based on delegated authority Appointment and Qualifications No These are not part of the Procurement Policy Tenure, Removal and Compensation No These are not part of the Procurement Policy Authority/Duties of the CPO Yes Delegation of Authority Yes Based on dollar thresholds Centralization of Procurement However, there are some exemptions and there Authority Yes is delegation of authority provisions Authority to Contract for Legal Services Yes Under "Professional Services" definition Exemptions Yes The specific procurements are clearly stated Procurement Regulations Yes Several cited in the Policy Procurement Advisory Council and Yes City Council Other Groups Article 3 Source Selection and Contract Formation Some definitions are not ABA Code, they are Definitions Yes pertinent to City or State of California Methods of Source Selection Yes Competitive Sealed Bidding Yes Conditions for Use Yes Public Notice Yes N I C P Consulting Page 35 Bid Opening Yes Bid Acceptance and Evaluation Yes Correction or Withdrawal of Bids; Cancellation of Bids Yes Award Yes Multi -Step Sealed Bidding No Competitive Sealed Proposals Yes Conditions for Use Yes Basically "Professional Services" Public Notice Yes Receipt of Proposals Yes Evaluation Factors No No Procedures outlined Discussion with Responsible Offerors No Negotiation is mentioned but no procedures outlined Award Yes Award Notice is addressed but limited notice procedures Debriefings No Small Purchases Yes Sole Source Procurements Yes Emergency Procurements Yes Differentiates between "emergency" and "urgent' Cancellation of ITBs & RFPs Yes For Bids, but RFPs not addressed Responsibility of Bidders and Offerors Yes Under "qualified vendor characteristics" Prequalification of Suppliers Limited Related to Public Works Types of Contracts Limited N IC PConsulting Pc^'>�eo M periscope NICPConsulting P�by Page 37 Limited Defined maximum contract term is 5 years Multi -Year Contracts including extensions Right to Inspect Plant No Right to Audit Records No Finality of Determinations No Reporting of Anti -Competitive Practices See Note at the end of this Table Retentions of Procurement Records No Not unless addressed in a separate Records Retention Policy Reporting/documentation requirements are not Record of Procurement Actions Taken No 4 Specifications specified in the City Purchasing Policy Article of Terms Yes Some definitions are not MPC they are pertinent to City or State Regulations for Specification Other than identifying requesting department as Preparation No responsible Duties of the CPO Yes Duties of the City Manager Relationship with Using Agencies No Maximum Practicable Competition Limited Defines minimum number of quotations required for informal procurements Specifications Prepared by other than Although permits suppliers to respond to [City] Personnel opportunities for which they prepared the Yes specifications which is an Organizational Conflict of Interest Facilities and Services Article 5 Procurement of Infrastructure Definitions Yes Some definitions are not MPC, they are pertinent to City or State Project Delivery Methods Authorized Yes Referenced California Statutes NICPConsulting P�by Page 37 Source Selection Methods Assigned to Yes Referenced California Statutes Project Delivery Methods Scope Yes Referenced California Statutes Design Bid Build Yes Referenced California Statutes Operations and Maintenance Yes Referenced California Statutes Design Build Yes Referenced California Statutes Design Build Operate Maintain No Referenced California Statutes Design Build Finance Operate No Referenced California Statutes Maintain Choice of Project Delivery Methods Yes Referenced California Statutes A & E Services Defined under "Professional Services; Referenced Yes California Statutes & Municipal Code Bid Security Yes Referenced California Statutes & Municipal Code Contract Performance and Payment Yes Referenced California Statutes & Municipal Code Bonds Bond Forms and Copies Yes Referenced California Statutes & Municipal Code Errors and Omissions Insurance Yes Referenced California Statutes & Municipal Code of Contracts. . . Services Article 6 Modification. Terminations Contract Clauses and their partial Also referenced California Statutes administration Article 7 Cost .- Cost Principles Regulations Required Yes Referenced in California Statutes NIC PConsulting Page 38 Definitions of Terms Limited Based on City requirements for asset management Supply Management Regulations Limited Limited to asset disposal but does not address Required inventory holdings or management of same Allocation of Proceeds from Sale or Yes Disposal of Surplus Supplies Authority To Resolve Protested Solicitations and Awards Right to Protest Authority to Resolve Protests Authority to Debar or Suspend Authority to Resolve Contract & Breach of Contract Controversies Remedies Time Limitations on Actions Protest of Solicitations or Awards Suspension or Debarment Proceedings Contract and Breach of Contract Controversies Appeal and Review of Procurement Appeals Board Decisions N IC PConsulting F��..-, ,'," im m m Except as may be provided under California law No but not addressed in current policies and procedures No N No No No Page 39 Cooperative Purchasing Authorized Yes By policy but limited details in Procedures Joint Use of Facilities (e.g., sharing For City this is not specified in the Procurement office space and equipment with No Policy another entity) Supply of Personnel, Information and Technical Services (e.g., sharing For City this is not specified in the Procurement personnel and various services with No Policy another entity) to Small and Businesses DisadvantagedArticle 11 Assistance Statement of Policy and Its Limited Majority of specific requirements and procedures Implementation are identified under current Federal Requirements related to procurement of Definitions Yes property or services stemming from Federal aid and compliance with 23 CFR Part 172, 2 CFR Part Chief Procurement Officer Duties 200, and other Federal regulations Ethics in Public Procurement Article 12 General Standards of Ethical Conduct Yes California Administrative Code Section 18730 referenced in City Municipal Code General Ethical Standards for California Administrative Code Section 18730 Employees Yes referenced in City Municipal Code General Ethical Standards for Non- partial Particularly to lobbying and "cone of silence" Employees provisions Criminal Sanctions No Except as provided for in California law NIC PConsulting 7..1101-1x. -12 Page 40 Employee Conflict of Interest Description and examples are anti-competitive practice related versus personal and/or organizational conflict of interest (CA Administrative Code Section 18730 referenced in Partial City Municipal Code). Gifts and gratuities are mentioned under Federal Requirements section, but "intrinsic value' is not defined, and no reporting processes are detailed. Employee Disclosure Yes California Administrative Code Section 18730 referenced in City Municipal Code Gratuities and Kickbacks California Administrative Code Section 18730 No referenced in City Municipal Code Prohibition Against Contingent Fees No California Administrative Code Section 18730 referenced in City Municipal Code Restrictions on Employment of Present No Except as may be provided in California law and Former Employees Use of Confidential Information No Except as may be provided in California law In the Procurement Policy Civil and Administrative Remedies Against Employees Who Breach Ethical No Except as may be provided in California law Standards Civil and Administrative Remedies California Administrative Code Section 18730 Against Non -Employees Who Breach No referenced in City Municipal Code Ethical Standards *Note: The Consultant recommends that the City consider these MPC provisions for inclusion in the Policy: • Severability. If any provision of this Policy or any application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or application of this Policy which can be given effect without the invalid provision or application, and to this end the provisions of this Policy are declared to be severable. NICPConsulting Page 41 by Supplementary General Principles of Law Applicable. Unless displaced by the particular provisions of this Policy, the principles of law and equity, including the Uniform Commercial Code of this State, the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or bankruptcy shall supplement the provisions of this Policy. • Requirement of Good Faith. This Policy requires all parties involved in the negotiation, performance, or administration of City contracts to act in good faith. • Reporting on Anticompetitive Practices. When for any reason collusion or other anti- competitive practices are suspected among any bidders, offerors, or City staff, notice of the relevant facts shall be transmitted to the Attorney General. END OF REPORT AND APPENDICIES NICPConsulting Page 42 ,� ..ems.- ml Aj CLZ w a I Ln ii. a Ln c v E v L v crL L N c O _O + J c� O Ln N 4-J M v 4? N E :3 > L > N N > Q c u (3) ■� '3 pU O }' p ++ L c E L _ U ON > �•- U — pc z C O u aci pC _ – O U Q� O J c N L L 4p 4. c w + � U C C,6E a) AA N O v to D Y O ate+ N u O . Y U N >- 0 .� �_ ■ ■ ■ 6 ■ L c m a LL a V£ Z N L U (II i O V) L O C � v o N E N O N L ; 3 crt�v O U L � � ' o W Lnv a- + a"! U U W L6 ••• V£ Z p9r II c c ._ W6 Q) 0 U^ N C E cu > N L W v 0 = U s U V1 U U L —p 0 fB d d E N N U 0 CO v G m G � � Um O C7 JO Q 0 Z • • • • m tom-. S N C 0 I c� NCY) N v -- C O 4-J Q •� �i OU O N c6 J a -C 'tN O � uLn V) C: > L CL L� L O / Q f0 c :3 Z) N L _ • L (n 0 Q ++ :3C Vi QC1 J F' O C ti N c +� cn ` O O 3 4-J-0 Ln O N O 'aM E i in � v Q -cc) O L U C m v E a 2 c � v 3 " C N L m O CO F.� � L a co t O U C VI _ m a L Qj i U v> > -0 _^ bp v zf0 CL 0 iU U O m U U aO+ Q Q O U U Q-0 O O N? s CL L dw� in a" w o N m a U Fn .0 :a m c • • • (� • • Z w m tom-. S N C 0 I v .L v v a+U U O U ri � }, c ,U Q a- L L O C 0= `- N w N O v OLn Q �� d i + (p •L U _0 O te a' E (0 O 0 � (B a -d Q +� t Q O 0 -0�t U a—+ N C _0 Q Q N 0 O '� U L o " � = -C W LJ � `- CO "a p LO L E O 0 cu vu u U v v 0 -° C: U Q 'o o v Ln Q Q o v �Naa_ 4 � �uC a, o 0 0 :D ca r W Q U U w U Z` ul c O O T 1W A On. V Z� N C u U 'O bA C to N > Q E N E iJ O cL C N J .O 4J N O U 3 > +� a u N +- Q1 O N L Q N > c�6 4J ( N E O 4� Q v m U �i C) L O L • • • • U a • A On. V Z� L O C L N v > '°1 u o C -0 Q L C a) aJ pU @ fl- V a1 U N E-+=- +, 3 C +.+ LO U U 0 v N N CL N CL .Q O _ o Q C ? 7 O Q fl w L v U 4, O w a p N O U°° m c v i v co ° N C2. w p (AEc + c E U Qj ° c to °u ° tz v } L L L N a -J O U E C .� .0 LJ , n C r9 Q O C ry CL } O rLp `~ a1 " U 'C 2 c O +� U N Q p -p p "EO Q cLo '� N Ln W l.L 4, N a) N N W u C v w p +, u c40o `L° o C > u U v 4-1 CO a� H OO v o o a N v f0 o W C O CL U= w E N Q QJ 4-v U O E CL 0 �m .= O 2 4J U aiw 4-J U 2 .N N C U N 0 Q m C 7 y C 0 0 4-J v U ro Q :t N ro O N76 4J to 4J C Cf- v ❑.ro 2 .N N C U N 0 Q m C 7 y C 0 'Awk 0 Attachment H Redline of Changes to Existing Administrative Policy 20-01 Purchasing Policy and Procedures Manual E H E po CITY OF ROSEMEAD Administrative Policy Manual Policy Number: 20-01 Date Established: Feb. 12, 2008 Date Revised: Dec. 10, 2024 City Manager Approval: CITY OF ROSEMEAD PURCHASING POLICIES AND PROCEDURE MANUAL SECTION 1: -PURPOSE The purpose of this policy is to provide the City of Rosemead a means of assuring continuity and uniformity in its purchasing operation, and to define the responsibilities for purchasing supplies, services, and equipment. These guidelines are not intended to address every issue, exception, or contingency that may arise in the course of purchasing activities. The basic standard that should always prevail is to exercise good judgment in the use and stewardship of City Resources, including keeping within the budget authorized by the City Council and encouraging open competition. SECTION 2 =- POLICY STATEMENT A. The policy contained herein was developed under the authority of Chapter 3.24 of the City of Rosemead Municipal Code (RMC). The City Manager is designated as the Purchasing Officer for the City and may delegate the administration of the program. The Purchasing Officer is charged with the responsibility and authority for coordinating and managing the procurement of the City's supplies, equipment or routine services, according to the RMC and this policy and procedures manual. The policy outlined herein is to be adhered to by the Purchasing Officer and all City Departments when procuring supplies, equipment and routine services. This policy strives to define decision making with prudent review and internal control procedures and to maintain departmental responsibility and flexibility in evaluating, selecting, and purchasing supplies, equipment, and routine services. describedCalifornia Uniform Public Construction Cost Accounting Act is in Chapter 3.28 of - 1720 17-43. Also a - re iterns defined as a "Public Project" under the State ef Califernma 0180 20175 Public Project is defined as (PCC 20161): (a) A project for the erection, improvement, painting, or repair of public buildings and works. (b) Work in or about streams, bays, waterfronts, embarkments, or other works for protection of overflow. (c) Street or sewer work, except maintenance or repair. (d) Furnishing supplies or materials for any such project, including maintenance or repairs of streets or sewers. Page 1 of 32 Generally any construction, alteration, repair, demolition, renovation, or maintenance of a public project or a public works project paid for in whole or in part out of public funds, which has an estimated value greater than &xty seventy-five thousand dollars ($675,000), shall be contracted for and let to the lowest responsible bidder by procedures established in the State of California Public Contract Code section 22036 and Chapter 3.28 of the RMC. It should also be noted that the City recognizes the requirements of the state Labor Code and Public Contract Code that require the payment of Prevailing Wages for public works projects in excess of one thousand dollars ($1,000). The City's Decentralized Purchasing System may only be dispensed with or modified when other State, Federal, or Intergovernmental statutes, regulations, or procedures prescribe that a specific separate purchasing process be followed or when approved by the City Council. For example, Public Works projects or a public project are governed by State Law and in some cases Federal Law. Another example may be provisions for expending grant funds which may be covered by separate Federal, State, and or Intergovernmental requirements which specify that as a condition of contract award or funding that a specific purchasing process other than the City's is to be followed. This includes but is not limited to transportation projects or services funded by the Federal Transit Administration (FTA). The FTA requirements are outlined in the "Required Third - Party Contract Clauses" procurement document (http://www.fta. dot.gov/laws/circulars/leg req 4063.html), and specific contract language and detailed information regarding each requirement is included in the "Best Practices Procurement Manual" (http://www.fta.dot.qov/funding/thirdpartyprocurement/grants financing 6037.html). Modifications or deviations must be pre -approved by the City Manager and shall be determined on a case by case basis. Please refer to additional Federal requirements specified in Section 12. Waiver of all purchasing system processes may only be granted by approval of the City Council. A basis for requesting the waiver should be a unique cost savings opportunity to the City. C. Determination of Value - For purposes of determining the value of a proposed purchase so that it may be categorized for processing through the City's Centralized Purchasing System, the value of all proposed purchases or acquisitions shall be predicated upon a separate "cost - price" basis. In determining which of the procurement procedures listed in RMC Section 3.24 apply to any given purchase of supplies, equipment or routine services, the total cost of the supplies or equipment shall not be used. Instead the price of the supplies or equipment alone shall be the determining factor. The price of an item may often be different from the final or total cost to the City. The cost to be borne by the City through the financial transaction is in reality the entire City expenditure needed to acquire supplies, equipment, or routine services. This may include sales tax or other costs. Page 2 of 32 Price shall be the direct cost of the good or service alone and the direct related expenses. The price of an item should be considered as the dollar amount necessary to place the item in service or to perform under a contract. There may be instances where there are additional incidental expenses directly related to the acquisition of a good or service, examples may include installation or set up costs, disposal fees, warranties or other such items. These incidental costs shall be factored into the purchase and as such shall be a determining factor in the acquisition price. Explu.de.d from the urine of an item shall be the expeRses Felated te shippiRg fees, postage, GF sales taxes. These may be GGRsidered as 61R'll bird .+I to as nr n d etes aR theFei^r^ do not r^A^n4 n petii'v^ di#eronoe6 66iGh as Vii_. _atinnc 'n the quete nr bird n _ _ _s ffGF iRstallat'n 9F waFFantie6. From time to time, the City may consider leasing or renting equipment as a basis for savings. In that instance, the total value of the good, not the estimated lease payment, shall determine which procurement procedure applies. With regard to Professional/Special Services under RMC Section 3.24.070-3.24.090, the value of the services for purposes of determining which procurement procedure applies shall be determined by adding the price of the services to be provided with the cost of any equipment or supplies that will be provided to the City by the Professional/Special service provider, postage, GOMMURiGatieRs, er eth^rassiated- wsts ,^I For complete details on the Purchasing Procedures and requirements for specific dollar amounts please consult Section 7 of this Manual. D. Conflict of Interest -Any employee or elected official of the City or any department thereof who shall aid or assist a bidder or vendor in securing a contract to furnish supplies, materials, equipment, or contractual services at a higher price than that proposed by any other bidder/vendor, or who shall favor one bidder/vendor over another by giving or withholding information, or who shall willfully mislead any bidder/vendor in regard to the character of the materials or supplies called for, or who shall knowingly accept commodities of a quality inferior to those called for by the contract, or who shall knowingly certify to a greater amount of labor performed than has actually been performed, or to the receipt of a greater amount or different kind of materials or supplies than have actually been received, shall be deemed guilty of malfeasance and the Purchasing Officer shall have the authority pursuant to the City of Rosemead's Personnel System Rules and Regulations to take appropriate disciplinary action. Such actions may also result in criminal prosecution. If at any time it shall be found that the person to whom a contract has been awarded has in presenting any bid(s) or quote(s), colluded with any other party or parties for the purpose of preventing any other bid or quote being made, then the contract so awarded shall be null and void. It is the intent that this purchasing policy, all procedures and processes discussed herein, and each transaction entered into pursuant to Section 3.24 of the RMC shall be made in accordance with the City's Conflict of Interest Code and all other Federal, State, and local laws. Page 3 of 32 SECTION 3 - UNAUTHORIZED PURCHASES Except for urgencies or other authorized exemptions stated in these guidelines, no purchase of supplies, services, or equipment shall be made without authorization as described within the manual or in Section 3.24.015 of the RMC. Under no circumstances shall a purchase be considered approved or final until approved by the City Council or Purchasing Officer as required by the appropriate purchasing classification. No representative of the City shall enter into a verbal agreement or make any arrangements, for any purchase of more than One five thousand dollars ($45,000), until the final approval is granted. In the event that an unauthorized purchase is made the following may apply: A. Such purchases are void and not considered an obligation of the City. B. Invoices without an authorization may be returned to the vendor unpaid. C. The person ordering the unauthorized purchase may be held personally liable for the costs of the purchase or contract. Important: Purchase orders shall be issued prior to ordering supplies, equipment and routine services and not "after the fact' for work already done or materials or equipment already ordered. SECTION 4 - RESPONSIBILITIES OF THE PURCHASING OFFICER As described in the RMC Section 3.24.030, the Purchasing Officer is the City Manager, who is authorized to delegate the duties of the Purchasing Officer to any officer or employee of the City as long as the delegee provides a quarterly report of purchasing activity to the City Manager. Although the duties can be delegated, the City Manager remains responsible for the activities of the Purchasing Officer. The Purchasing Officer is responsible for: 1) the procurement of general supplies, equipment and routine services; 2) the administration of the purchasing policy; and 3) the management of surplus City property. SECTION 5 - RESPONSIBILITIES OF CITY DEPARTMENTS City Departments are charged with the following responsibilities in the purchasing process: A. To provide the Purchasing Officer at the beginning of each fiscal year, an updated authorized signature list designating those individuals who are delegated the authority to make purchases per the policies and procedures as described herein. B. To anticipate requirements sufficiently in advance to allow adequate time to obtain goods in accordance with the best purchasing practices. Page 4 of 32 C. To communicate and coordinate purchases with the Purchasing Officer, as necessary. D. To provide detailed, accurate specifications to ensure goods obtained are consistent with requirements and expectations. E. To prepare requisitions in accordance with instructions to minimize the processing effort. F. To inform the Purchasing Officer of any vendor relations problems, shipping problems (i.e., damaged goods, late delivery, wrong items delivered, incorrect quantity delivered, etc.) and any situations which could affect the purchasing function. G. To minimize urgent and sole source purchases and to provide written documentation when such purchases may be necessary. H. To review all bids received for compliance with specifications and provide the Purchasing Officer with written documentation regarding their findings. I. To notify bidders or vendors of purchase award when authorized by Purchasing Officer or City Council depending on the appropriate Purchasing System Classification for approval. J. To refrain from "splitting" orders for the purpose of circumventing procurement requirements. K. To ensure that the proper account numbers are noted on the purchase order form. L. To ensure that there is sufficient unencumbered funds in the account numbers to be charged. M. To include a completed budget amendment form when necessary. SECTION 6 -VENDOR RELATIONS It is to the City's advantage to promote and maintain good relations with vendors. The Purchasing Officer and City staff shall conduct their dealings with vendors in a professional manner and shall promote equal opportunity and demonstrate fairness, integrity, and courtesy in all vendor relations. When feasible to do so, vendors within the City of Rosemead should be utilized for supplies, services, and equipment. However, good vendor relations must also be balanced with fair and equitable selection, the lack of which may lead to possible conflicts of interest or the appearance as such. Page 5 of 32 SECTION 7 - PURCHASING PROCEDURES As previously mentioned, purchasing and the process by which a good or service is acquired is based upon its price. Purchasing dollar limits are "per order". Purchasing Ordinance prohibits "splitting" an order to circumvent the specified dollar limits. Departments shall contact the Purchasing Officer to coordinate volume bids of repetitive requirements (i.e., the frequent purchase of items such as chemical, paper goods, etc., which annually exceed the specified limits). All personnel utilizing Homeland Security Grant funds must review the Federal Excluded Parties List System to ensure compliance with the Federal procurement program policies and requirements. Prior to authorizing a requisition for equipment purchases for Homeland Security Grants, the Federal debarment listing must be reviewed to ensure vendor(s) are not listed. The debarment listing is available online at httD://www.eDIs.ciov/er)ls/search.do. A. Purchases of No More than $5,000 - Department Director Approval Purchases of no more than five thousand dollars ($5,000)_ is subjeGt tG the �..Dire r CFetit;ve-PRrohgsflor.eedu;�- tli,edRMQ eesto;z :24 050 z24 -060d o not require any quotations. A. Purchases of more than $5,000.01 but less than or equal to $15,000 - Department Director Approval. Purchases of more than five thousand dollars ($5,000) is subject to the Informal Purchasing Procedure outlined in RMC Section 3.24.070. 3.23.050.A — Five thousand dollars ($5,000) or Less. Any purchase of five thousand dollars ($5,000) or less may be awarded by the director of the department responsible procedure as deAeed hepio with no quotations required. 3.24.040050.D -B — Direct competitive purchasing procedure. Direct purchasing procedure shall be used for purchases between en five thousand dollars and one cent ($45,000_01) and fifteenve thousand dollars ($15,000), which includes contracting at least three vendors from a predetermined vendor list for informal quotes. The City is responsible for updating and maintaining a list of predetermined vendors. Once the quotes are obtained and a pricing sheet is completed, the City may use a vendor agreement or letter of agreement to complete the purchase. Every effort to utilize a local vendor shall be exercised or to utilize the most cost efficient vendor shall be exercised. For purchases up to fifteenve thousand dollars ($15,000), the authority to award a purchase order, vendor agreement, or letter agreement, is the Department Head. Per Section 3.24.060070.0-C of RMC, three informal quotes are required for purchases between one five thousand dollars and one cent ($45,000) and fifteenve thousand dollars ($15,000). Pricing quotes are not required for purchases under $45,000. Prudent judgment shall be used at all times. Page 6 of 32 B Purchases between $15,000.01 and $3050,000 - City Manager Approval Except as otherwise exempted in the RMC, supplies, equipment and routine services, with an estimated value of f+ve-fifteen thousand dollars and one cent ($15,000.01) to th4ty-fid thousand ($3050,000) shall be purchased following the Informal Competitive Purchasing Procedure set forth in RMC Section 3.24.070, including but not limited to: 3.24.070.0 — Distribution of Notice Inviting Informal Bids. At least three vendors or service providers shall be asked to submit informal bids, and the City shall endeavor to receive informal bids from at least three vendors or service providers. Notices inviting informal bids shall be mailed sent to the list of qualified service providers, vendors, and/or trade journals not less than ten (10) days before bids are due. 3.24.070.H — Proposal Submittal. Service providers or vendors shall submit their proposals in writing. For purchases in the amount of $15,000.01 - $3050,000 the authority to award belongs to the City Manager. Department staff shall not award purchase orders for $15,000.01 or more without the approval of the City Manager. The Requesting Department shall obtain three written competitive quotations whenever possible for purchases. Getting more quotations is encouraged. In the event that three quotes cannot be obtained, documentation of the process should indicate why less than three were obtained and be attached with the purchase order request. The Requesting Department shall submit a requisition, which includes the recommended vendor, with all supporting documentation to the Purchasing Officer. Supporting documentation shall include informal competitive price quotes obtained, names of vendors contacted, description of the items required, and certificates of insurance as applicable. The Purchasing Officer shall review the recommendation and supporting documentation. The purchase may be awarded to the lowest responsive and responsible vendor whose quote fulfills the intended purpose, quality, and delivery needs of the solicitation provided that an unencumbered appropriation for that item exists. The Purchasing Officer may reject quotes or request that the Department negotiate further to obtain terms more acceptable to the City. The Purchasing Officer may also determine that the interest of the City is best served to require the Formal SeatraeTBidding Procedures for purchases within this range. Upon approval of the purchase, the Requesting Department shall request that the Finance Department issue a purchase order to the Department. C. Purchases of $3050,000.01 or More - City Council Approval Unless otherwise provided, purchases of $3050,000.01 or more must follow the Formal Competitive Purchasing Procedure set forth in RMC Section 3.24.080. D. Additional Bid Procedures 1. Bid numbers will be given to each project and should be obtained from the City Clerk's Office (i.e., NIB 2008-01). The bid number should be included as part of the request for proposal/quotation. �r'eaa:rrmrrrr.:rrrrrTr�rnrrrr*rr:+�rstsr�aer�zr..�rrmm�:namm 9peRed at 11 00 2. The City emolovs the PlanetBids platform to effectively oversee its biddina procedures. Suppliers and contractors wishing to do business with the City must initially register on the platform, supplying the requisite firm information. Upon registration, clients can explore existing bidding opportunities, formulate their offers, and submit them electronically, guaranteeing prompt and comprehensive submission. After the submission deadline, the City assesses the bids according to oredetermined criteria, including pricing, qualifications, and adherence to standards. and then informs the chosen bidder." 37. Bids are not awarded until they are placed on a City Council meeting agenda and approved by the City Council. Upon award of the contract, the unsuccessful bidders will be notified by letter of non-acceptance and their bidder's security returned. E. County Lobbying Certification Form All contractors shall submit a County Lobbying Certification Form to the City when a contract is awarded using Community Development Block Grant (CDBG) funds (Attachment A). SECTION 8 - DETERMINATION OF CONTRACT OR PURCHASE AWARD Generally, an award shall be made to the lowest responsive and qualified bidder or vendor. This shall be the case for the Direct Cempetltive Purchasing Procedure, Informal Qempetit Purchasing Procedure, and the Formal Competitive Purchasing Procedure. In determining the lowest "responsive" bid or quote, the following elements shall be considered in addition to price; Page 8 of 32 - .- AJ .. . . . . 2. The City emolovs the PlanetBids platform to effectively oversee its biddina procedures. Suppliers and contractors wishing to do business with the City must initially register on the platform, supplying the requisite firm information. Upon registration, clients can explore existing bidding opportunities, formulate their offers, and submit them electronically, guaranteeing prompt and comprehensive submission. After the submission deadline, the City assesses the bids according to oredetermined criteria, including pricing, qualifications, and adherence to standards. and then informs the chosen bidder." 37. Bids are not awarded until they are placed on a City Council meeting agenda and approved by the City Council. Upon award of the contract, the unsuccessful bidders will be notified by letter of non-acceptance and their bidder's security returned. E. County Lobbying Certification Form All contractors shall submit a County Lobbying Certification Form to the City when a contract is awarded using Community Development Block Grant (CDBG) funds (Attachment A). SECTION 8 - DETERMINATION OF CONTRACT OR PURCHASE AWARD Generally, an award shall be made to the lowest responsive and qualified bidder or vendor. This shall be the case for the Direct Cempetltive Purchasing Procedure, Informal Qempetit Purchasing Procedure, and the Formal Competitive Purchasing Procedure. In determining the lowest "responsive" bid or quote, the following elements shall be considered in addition to price; Page 8 of 32 (1) A responsive bid or quote is one which is in substantial conformance with the requirements of the invitation to bid or quote, including specifications and the City's contractual terms and conditions; (2) Vendors/bidders who substitute terms and conditions or who qualify their bids or quotes in such a manner as to nullify or limit their liability shall be considered non- responsive vendors/bidders; (3) Conformance with the requirements of the invitation to bid or supply a quote may also include providing proof of insurance, completing all forms, including references, and all other information as requested in the bid or solicitation document; and, (4) The successful vendor/bidder must demonstrate the ability to successfully fulfill a contract, including rendering of subsequent and continuing service. Staff may request proof of a prospective vendor/bidder's reliability. Prospective vendors/bidders may be requested to furnish proof of financial resources, a list of current or previous customers, and other pertinent data. Such action may also be taken after receipt of bids or price quotes. A vendor/bidder may be determined to be non-responsive if a prospective bidder fails to furnish proof of qualifications when required. In determining the lowest "qualified" vendor/bidder, the following elements shall be considered: (1) That the products offered provide the quality, fitness, and capacity for the required usage; (2) That the vendor/bidder has the ability, capacity and skill to perform the contract satisfactorily and within the time required; and, (3) That the vendor/bidder's experience(s) regarding past purchases by the City or other public agencies demonstrates the reliability of the vendor/bidder to perform the contract. When a purchase award bid is recommended to be awarded to other than the lowest vendor/bidder, written justification is required. The written statement, signed by the appropriate department head, shall be attached to the purchase requisition. Resection of Bids or Quotes The Purchasing Officer or the Requesting Department may recommend rejection of any or all bids or quotes to the City Council if it is determined to be in the best interests of the City. The City Council may also recommend rejecting any or all bids or quotes at their discretion. Reasons for rejection may include, but are not limited to, the following: a bid or quote is determined to be non-responsive, the number of bids or quotes received is inadequate, bids or quotes received are not reasonably uniform in price, or the lowest bid or quote received is deemed to be too high. The Purchasing Officer and/or City Council may, in any given case, reject all bids or quotes with or without cause and submit the supplies, equipment or Page 9 of 32 service involved to a new bidding or price quotes solicitation process. If all bids or quotes are rejected, the Purchasing Officer may be authorized to re- solicit bids, negotiate a contract for the purchase, or abandon the purchase. Tie Bids or Quotes If two or more bids or quotes are received which are in all respects equal in price and meeting all specifications, the Requesting Department may accept the one deemed to be in the best interests of the City by the City Council. Page 10 of 32 Change Orders A. After the effective date of any contract executed on behalf of the City for the purchase of equipment or supplies or retention of professional or other services, or construction work on a public works project, the City Manager shall have authority to approve in writing any modification involving an addition to, deletion from, or revision in any item in such contract, including, without limitation, plans, specifications and extra work, and change orders relating to the nature or quantity of services, equipment, supplies or work, in accordance with the Standard Specifications for Public Works Construction ("Greenbook") 2006 edition or latest edition: The dollar amount of all such modifications or change orders relating to any one contract shall not exceed ten percent (10%) of the original contract price. Any modifications or change orders above this amount shall require City Council approval. Contract change orders shall also be in compliance with RMC 3.24.130 which states the following: Change order authorization limits are established as follows: • Contracts <_ $50,000.00: 10% of contract or up to $5,000 whichever is greater • Contracts >_ $50,000.01: 10% of contract or up to $50,000 whichever is less ,4- The limits noted are for change order amounts in the "aggregate". Change orders for amounts more than these limits must be approved by the City Council as a regular agenda item. B. The authority herein conferred upon the City Manager may, in the sound discretion of the City Manager, be delegated in whole or in part to a Department Manager or other designated employee or agent of the City. C. An appropriate contract change order form shall be used for approval of change orders. The form shall detail the reasons for the proposed change, description of the change, change in contract cost, extension in contract time (if warranted), and new contract total cost including all prior change orders. The contract change orders shall be signed by the project manager, contractor, Department Director and City Manager. D. In connection with any specific contract where the circumstances so warrant, the City Council may, by resolution, authorize the City Manager to exceed the specific dollar amounts or percentage limitations set forth in subsection 8.A of this section. E. If a proposed contract modification, change order or request for extra work exceeds the limitations imposed upon the City Manager by this section or by resolution, and any extended delay in obtaining City Council approval is reasonably determined to subject the City to liability for damages incurred by a contractor, or jeopardize the public health, welfare or safety, or to otherwise result in potential detriment to the City, then the City Manager shall have authority to exceed the dollar amounts or percentage limitations specified herein. .. .. .. .. _:r_�:nrs�:nerrr_�r.�ra.r.�:.znrrrrse,_r.■ Page 11 of 32 SECTION 9 - PROCUREMENT METHODS Except as described below, the purchases of supplies, routine services and of equipment should be purchased using a contract or a purchase order. Please refer to Attachment B, Purchasing Checklist for purchases made using a purchase order. Blanket Purchase Orders A Blanket Purchase Order is an agreement whereby the City contracts with a vendor to provide equipment or supplies on an as -needed or ongoing Department Director basis. These items would typically be less than $45,000 per order and therefore would be exempt from Centralized Purchasing. Blanket Purchase Orders provide a mechanism whereby items that are uneconomical to stock may be purchased in a manner that allows timely access to necessary materials. The Purchasing Officer shall review Blanket Purchase Orders annually, before the beginning of the fiscal year. Requests for Blanket Purchase Orders may also be submitted to the Purchasing Officer by a Requesting Department on an as -needed basis. The Purchasing Officer shall review Blanket Purchase Order requests based upon the following criteria: Average dollar value and type of items to be purchased. 2. Frequency of need. All Blanket Purchase Orders shall include the following information: a. A general description of the equipment or supplies that may be charged. b. The period of time the order will remain open, but not beyond the end of each fiscal year. C. The maximum total amount that may be charged on the purchase order. d. The maximum amount which may be charged each time the employee implementing a purchase enters the vendor's place of business. e. Items excluded from the purchase, if applicable. Page 12 of 32 f. The phone number of the Purchasing Officer or Designee for questions or approval of charges that exceed the limit. g. Identification of the department(s) and employee(s) who may charge against the order. h. Requirement that the employee shows City identification. i. Requirement that employees print and sign their names when picking up goods. j. Account number(s) to be charged. Once a Blanket Purchase Order is issued to a vendor, any authorized City employee may contact the vendor directly to place orders per the terms and conditions specified in the Blanket Purchase Order. City Departments are encouraged to develop a list of eligible employees that may purchase through the Blanket Purchase Order and keep it on file with the vendor or business. Contract Purchase Orders Contract Purchase Orders are the preferred method of acquiring goods or services which may be common to several City Departments. Entering into a contract purchase order is generally done to acquire goods or services which may be used repetitively and would ordinarily fall into the Centralized Purchasing - Open Market Procedure category. In some instances, based on the value of the items, the contract purchase order may be applicable to items solicited under the Formal Contract Procedure. Establishing Contract Purchase Orders provides a means of obtaining volume pricing based upon the combined needs of all City Departments. They reduce the administrative costs associated with seeking redundant competitive quotes or bids and processing a Purchase Order each time an order is placed, and they allow City Departments to order as needed, reducing the requirement to maintain large inventories of stock. When soliciting quotes or bids and with the intent of entering into a Contract Purchase Order the specifications in the Open Market quote or Formal Contract Bid shall specify that the City is seeking to enter into a contract purchase order. The Requesting Department should seek to involve local bidders or vendors as much as possible and the local business preference may apply. The Requesting Department should also seek to avoid "splitting" an order for the purposes of following a less stringent Centralized Purchasing Process - most likely attempting to avoid going to bid under the Formal Contract Procedure. For example, if a Requesting Department has specified in an approved budget that they need ten items costing one thousand two hundred dollars each there may be options in when and how they are solicited. If all ten are needed at one time the dollar amount would require that a Formal Contract Procedure be followed to obtain bids. If however there is an expectation that not all will be purchased or they will only be purchased as needed then the Open Market Procedure would apply and the Requesting Department may enter into a Contract Purchase Order to obtain the items when needed. If a Contract Purchase order exists, departments shall order all of their requirements from the successful vendor. No other source shall be used without prior approval of the Purchasing Officer. Departments shall submit, in writing to the Purchasing Officer, any performance problem encountered immediately following the occurrence so that corrective action may be taken. Page 13 of 32 Contract Purchase Orders are annual and may include option for renewal for specific products, product types, or services at agreed upon prices or pricing structure and for a specified period of time. No contract shall exceed five (5) years in duration. Departments must prepare purchase orders for the full amount of the contracts. Contracts for - $3050,000 or less may be signed by the City Manager and approved as to form by the City Attorney. Contracts greater than - $3050,000 must always be approved by City Council. Cooperative Purchases The City may participate in purchases and contracts established by other political jurisdictions, provided the cooperative agreement is established following a competitive bid process like the City's Formal Contract Procedure. The Purchasing Officer or Designee may authorize the award of cooperative purchase agreements up to $3050,000. City Council approval is required for the award of any cooperative purchase of $0050,000.01 or more. Sole Source Purchases Commodities and services that can be obtained from only one vendor are exempt from competitive bidding. Sole source purchases may include proprietary items sold directly from the manufacturer, items that have only one distributor authorized to sell in this area or a certain product is proven to be acceptable. All sole source purchases shall be supported by written documentation signed by the appropriate department head and forwarded to the Purchasing Officer. Final determination of whether an item is a valid sole source purchase will be made by the Purchasing Officer or Designee. Urgency Purchases Urgency purchases may be made without competitive bidding when time is of the essence, and shall be made only for the following reasons: To preserve or protect life, health or property; or Upon natural disaster; or To forestall a shutdown of essential public services. Since urgency purchases do not normally provide the City an opportunity to obtain competitive quotes or properly encumber funds committed. Sound judgment shall be used in keeping such orders to an absolute minimum. In addition, the following requirements shall apply: The Finance Department shall be contacted as soon as possible for an advance purchase order number, which may be given verbally, to cover the urgent transaction. If unable to contact the Finance Department, place the order and contact the Finance Department the next workday. A completed purchase requisition shall be submitted to the Purchasing Officer within two working days, or as soon as the information is available. All purchase requisitions for urgent purchases shall be signed by the appropriate department head. Page 14 of 32 3. Documentation explaining the circumstances and nature of the urgency purchase shall be submitted by the appropriate department head as follows: a) Purchases equal to or less than $5,000: Use standard purchasing procedures. b) Purchases in the amount of $5,000.01 - $�3,E350,000: Report to the Purchasing Officer by processing a requisition within one week. Finance will issue a PO. C) Purchases of $3-050,000.01 or more: 1) Requires City Manager approval prior to purchase, and (2) Report to City Council within two working days. If the urgency purchase causes any budget line item to exceed the approved budget, it shall be the responsibility of the department requesting the purchase to obtain advance City Council approval for an additional appropriation or to make a transfer to cover the purchase. Purchase Order Exemptions Certain purchases are not readily adaptable to the open market and formal bidding process. These purchases are generally for items where the competitive bid process or obtaining quotes is not applicable or where a check is required to accompany the order. Following is a list of allowable exemptions: Advertising and Notices Medical Payments (Physicians, Lab) Courier/Delivery/Messenger Membership Dues Department Purchases (under $500) Payments to other Governmental Units Emergency Fuel Purchases Petty Cash Replacement Insurance Claim Payments Property Rentals Utility Payments Trade Circulars or Books Real-property/easement Acquisition Travel expense/Advances Subscriptions Carnival Rides & Games for City events Class Instructors Excursions An encumbrance is recorded in the financial system when a Purchase Order (PO) is generated. An encumbrance is a reservation of budgeted funds in order to ensure that the money is allocated to the payment of goods or services after they have been delivered and invoiced. This assists in the management of the budget by incorporating future expenses. If a payment is required to accompany the order, a Purchase Order would not be required because a reduction of the available budget takes place when payment is made, however the appropriate authorizations are still required to process payment. Exemptions are limited to those items listed above. Departments may submit written requests for additional exemptions to the Purchasing Officer. If warranted, additional exemptions will be added to this list. If a vendor requires a Purchase Order to process an order, the department shall submit a purchase order requisition to the Purchasing Officer to initiate a purchase order. Page 15 of 32 In an instance where a vendor does not accept Purchase Orders and payment is required before a good or service is rendered a request may be made for a check to be issued. The preferred method of issuing a check shall be through the warrants process. However, in some instances a "pre -issue check" may be prepared and issued by the Finance Department. A check or pre -issued check shall only be prepared if Department Head approval accompanies the request and there are sufficient funds available in the designated account to make the purchase. Page 16 of 32 Petty Cash Procedures Each department shall assign a petty cash fund Custodian. Cash is to be kept in a locked metal box or drawer which is always to remain locked, except when cash is being disbursed. The only person with access to the key is the Custodian or his/her designated backup person. Cash advances can only be disbursed to City employees or officials or for refunds' in an amount less than $10. The two types of uses of petty cash are discussed below: Cash Advance Requirements 1. Written approval of the purchase by the Department Supervisor. 2. The advance may only be used for the pre -approved purpose. 3. Pre -approval will be outstanding for no more than two (2) working days. 4. Purchaser must sign "Advance for Purchase" voucher. 5. Purchaser must update voucher information and return unspent cash. 6. Purchaser must attach original receipt to voucher. 7. Account number must be written on updated voucher. 8. The maximum amount for each advance is fifty dollars ($50). Reimbursement after Purchase: It shall be acceptable, with Department Supervisor approval, for a City employee or official to make a purchase using his or her own funds by way of cash, check, credit or debit card to acquire goods or services on behalf of the City for which the individual will be reimbursed. The following is a list of requirements for petty cash reimbursements: 1. Original receipt is attached to a petty cash voucher with account number. 2. Obtain Department Supervisor's written authorization for the purchase. 3. Must be an appropriate petty cash purchase. 4. Purchaser and Department Supervisor must sign petty cash receipt. 5. The maximum per transaction amount that can be reimbursed is fifty dollars ($50). Departments shall determine when it is appropriate for a City Employee to purchase an item on behalf of the City. This process should not be used as a common practice and in general, Department Supervisor approval should be granted prior to the Employee or Official initiating the purchase on behalf of the City. Personal checks shall not be cashed using petty cash. Petty cash funds should be replenished by submitting a "Demand for Payment" form, signed by the Department Head, with original receipts attached in time to be included with the regular check processing cycle. Requesting "pre -issue" checks is discouraged but will be honored under urgency circumstances, with Finance Director approval. The balance of cash, receipts and outstanding advance forms must always total the amount allotted to each specific petty cash box. From time to time, for internal control purposes, Finance Department staff will audit the contents of the petty cash boxes and document their findings for City auditor review. Page 17 of 32 Vendor Assistance in Writing Specifications There may be occasions when vendor assistance is required to develop a specification. Such specifications shall be written in general terms and the vendor shall be informed that the information they provide may be used to develop specifications for a competitive bid process. The vendor shall be allowed to submit a bid but will not be given any preference over the other bids. Credit Card Usage Under certain circumstances, the use of a City issued credit card may be the most appropriate method for certain purchases. The use of a City bank credit card should not be used as a shortcut of the Accounts Payable cycle. In other words, their use should be the last resort. SECTION 10 - PROFESSIONAL SERVICES - CONSULTANT SELECTION Selection of Consultants or Vendors for Professional Services (General) The following criteria shall be used to determine approval authority for Professional Consultant Service Contracts: a. Qualifications: In contracting for professional/special services, such contracts should only be awarded to firms or persons who have demonstrated adequate levels of experience, competence, resources/equipment, staffing and other professional qualifications necessary for more than a satisfactory performance of the services required in the time period needed. b. Cost: Once the department or agency requesting the professional/special service has determined that a firm has an adequate level of competence, the cost of the service may be considered, however, price may not be the sole factor in determining to whom a contract shall be awarded. The City's best interests may be served by awarding the contract to a higher priced contractor based on the scope of services available, unique skills, staffing levels, timing, prior experience, past working relationship, and other factors required by the department or proposed by the contractor. G. Request for Proposal/Qualifications: The acquiring of professional/special services shall be procured through a negotiated contract and should include requests for proposals/qualifications (RFP/Q). Soliciting bids for professional/special services is decentralized and shall be the responsibility of the department director requesting the service. The purchasing officer may be contacted to assist in the formal request for proposal/qualification (RFP/Q) process. d. Contracts forFiftvThirty Thousand Dollars ($3950,000) orLess: 1. In non -emergency situations, the requesting department should contact a minimum of three (3) consultants/firms. Page 18 of 32 2. Unless the city council authorized the entering into or the award of a specific contract for professional/special services, the purchasing officer shall approve in writing the award of all such contracts, taking into consideration the recommendation of the department director requesting the professional/special services at issue. 3. The purchasing officer or his/her duly authorized designee is authorized to approve professional/special service contracts with an estimated cost of Thirty Fifty Thousand Dollars ($3050,000.00) or less. e. Contracts Over Fiftyy Thousand Dollars ($3050,000) (including change order % in calculation of the cost); In non -emergency situations, departments should utilize the following sealed request for proposal process: 1. RFP/Q Solicitation Process: A formal sealed request for proposal qualification (herein "RFP/Q") document should be developed for solicitation of professional services contracts over Fifty -T Thousand Dollars ($0050,000.00). 2. Advertisement: The department should advertise in appropriate publications and/or use the professional services listings, as available, during the solicitation process. 3. Fourteen (14) To Twenty -One (21) Day Notice: Notice inviting RFP/Q's should be posted at City Hall and on the City's website at least fourteen (14) calendar days before the due date of submission of the RFP/Q. 4. Notice Contents: The notice shall at least describe the general type of service needed, how the RFP/Q minimum scope of work can be obtained, the requirement of a written sealed proposal, state the closing date, place, and time for submission of the RFP/Q. 5. Solicitation Procedure: Sealed request for proposals/qualifications should be submitted directly to the City Clerk's Office. Departments shall analyze proposals for compliance with RFP/Q requirements, value of the total scope of services and make a recommendation to city council for selection, or for follow up interviews of those submitting proposals. 6. Award: Contracts for professional/special services in excess of Fift Thirty Thousand Dollars ($0050,000.00) require the approval of the city council and the signature of the mayor, or in his/her absence, the mayor pro tempore, pursuant to the provisions of Government Code sections 40601 and 40602. f. Standard Form: Contracts for professional/special services should be on the City's standard form and shall be reviewed and approved as to form by the City Attorney. Page 19 of 32 Selection of Consultants or Vendors for Professional Services for Capital Improvement Projects In general Capital Improvement Projects are most likely to fall within the category of a Public Project or Public Works as defined specification of and are subject to the regulations contained in the State of California Labor Code Section 1720 - 1743, or California Public Contract Code Section 20160 - 20175. These are excluded from the Purchasing System of the City. The exception is any project that is to be implemented following the "design - build," process through the selection of a qualified consultant, pursuant to the State of California Government Code Section 5956 through 5959.10. Under the "design - build" process, a public works project or public project may be exempt from bidding requirements and other requirements provided that the selected consultant was chosen based on competence and professional qualifications and that the work to be completed is to be paid through fee producing infrastructure. To this end the following procedures shall be followed when selecting a consultant to perform "design - build" Capital Improvement Projects: 1. After the City Council adopts the next year's Capital Improvement Program (CIP), the Public Works Director/City Engineer shall develop a list of projects recommended for staff to determine the selection of consultants or vendors. 2. Consultant or vendor selection shall be from a list of qualified professionals prepared by the appropriate City Department Head responsible for the project. 3. If the project is to be reviewed by a formal presentation and interview process will be arranged by the appropriate City Department Head who reports the particular Committee or Commission. The Purchasing Officer may also assign staff as appropriate in this process. If the project is to be reviewed by City staff the Purchasing Officer will determine the RFP review process and who should be involved. Selection of Professional/Special Services for Continuing Service Providers The following shall apply to the selection of Professional/Special services which are needed on a continuous or project -by -project basis. Professional firms and persons providing attorney, architect, engineer, land surveyor, construction manager, appraiser, expert, accounting firm, consultant or those services such as computer services, security services and other services which require in addition to the use of special or specific equipment, special performance criteria, specific experience, training, personal judgment, quality of work or factors other than simply obtaining service at the lowest cost to the City or other professional/special services may be retained on a continuing basis to provide professional services. At the beginning of each fiscal year, the Finance Department shall make a written request to each City Department Head to submit to the Finance Department a list of consultants currently providing professional/special services under contract to their department. The list shall set forth the name of the person(s) or firm(s) providing services and shall state the type of services provided and shall state the contract cost, contract length, contract commencement date and the number of years the consultant has been retained by the City. Page 20 of 32 Exclusions: 1. The process of selecting environmental impact report consultants for non -City projects shall be conducted by the Planning Services Manager/or Assistant City Manager due to time restraints and application processing requirements. The final consultant selection and fee shall be reviewed and approved by the Purchasing Officer. 2. City Council shall also review and approve each bond issue in concept with approval for the selection of certain professional consultants, as needed, to be selected by the Chief Financial Officer as approved by the Purchasing Officer. SECTION 11 - SURPLUS PERSONAL PROPERTY The Purchasing Officer is responsible for the transfer and disposition of surplus City property. "Surplus property" is used generically to describe any City personal property that is no longer needed or useable by a Using or Holding Department of the City. The Purchasing Officer or Designee shall request City Council approval to declare item(s) surplus. (RMC 3.24.130) Methods of Disposition The Purchasing Officer or Designee shall determine or approve one of the following methods of disposition that is most appropriate and in the best interests of the City. 1. Transfer to another Department: Surplus property may be transferred between City Departments. Departments wishing to transfer surplus property to or from another department shall complete the Surplus Property Form and submit it to the Finance Department for review. All transfers of items with an estimated value of $1,000 or more require approval of the Department Heads from each department affected by the transfer. 2. Trade -In: Property declared as surplus may be offered as a trade-in for credit toward the acquisition of new property. All trade-in offers will be submitted for the review and approval of the Purchasing Officer. If surplus property is to be applied to a purchase order, the trade-in value shall be itemized on the Purchase Order. The amount charged against the expenditure account will be the value of the purchase before application of the trade-in credit. 3. Disposal: Surplus property may be offered for sale by the Purchasing Officer. All surplus property is for sale "as is" and "where is", with no warranty, guarantee, or representation of any kind, expressed or implied, as to the condition, utility or usability or the property offered for sale. Appropriate methods of sale are as follows: (a) Public Auction - Surplus property may be sold at public auction. Public Auctions may be conducted by City staff, or the City may contract with a professional auctioneer including professional auction services. Page 21 of 32 (b) Sealed Bids - Sealed bids may be solicited for the sale of surplus property. Surplus property disposed of in this manner shall be sold to the highest responsible bidder. (c) Selling for Scrap - Surplus property may be sold as scrap if the Purchasing Officer deems that the value of the raw material exceeds the value of the property as a whole. ' (d) Negotiated Sale - Surplus property may be sold outright if the Purchasing Officer determines that only one known buyer is available or interested in acquiring the property. (e) No Value Item - Where the Purchasing Officer determines that specific supplies or equipment are surplus and of minimal value to the City due to spoilage, obsolescence or other cause or where the Purchasing Officer determines that the cost of disposal of such supplies or equipment would exceed the recovery value, the Purchasing Officer shall dispose of the same in such a manner as he or she deems appropriate and in the best interest of the City. Proceeds Proceeds from the sale or trade-in of surplus property shall be returned to the appropriate fund unless otherwise approved by the City Council. SECTION 12 -FEDERAL REQUIREMENTS The Purchasing Officer is responsible for adhering to Federal requirements for the procurement of property or services stemming from federal aid. A. This section shall apply to the awarding of sub -grants and contracts by the City stemming from federal grants to the City. This section shall have the same application on the awarding of sub -grants and contracts by the City stemming from state, county or other non-federal government entity grants originating as federal grants. 8B. The City will comply with 23 CFR Part 172 for federally funded contracts for engineering and design related services for projects subject to the provisions of 23 U.S.C. 112(a) related to federal aid highway program construction projects. C. Procurement Standards. 1. The City shall maintain a contract administration system which ensures contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders. Page 22 of 32 2. The City shall maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer or agent of the City shall participate in selection, or in the award or administration of a contract supported by federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when: a. The employee, officer or agent; b. Any member of his or her immediate family; c. His or her partner; or d. An organization which employs, or is about to employ, any of the above, has a financial or other interest in or a tangible personal benefit from a firm considered for award. 3. The City's officers, employees or agents will neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to sub -agreements. Such a conflict will not arise where the financial interest is not substantial, or the gift is an unsolicited item of nominal intrinsic value. The City's standards of conduct provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the City. 4. The City shall not enter into a contract with a non -Federal entity has a parent, affiliate, or subsidiary organization that is not a state, local government or Indian tribe, unless the non -Federal entity maintains written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest mean due to relationships with a parent company, affiliate, or subsidiary organization, the non -Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization. 5. The City shall avoid acquisition of unnecessary or duplicative items. Consideration will be given to consolidating or breaking out procurements to obtain a more economic purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. 6. The City shall consider entering into state and local intergovernmental agreements or inter -entity agreements where appropriate for procurement or use of common or shared goods and services. 7. The City shall consider using Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. 8. The City shall consider using value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure its essential function is provided at the overall lower cost. 9. The City shall make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor Page 23 of 32 integrity, compliance with public policy, record of past performance and financial and technical resources. 10. The City shall maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection and the basis for the contract price. 11. The City shall use time and material type contracts only: a. After a determination is made that no other contract is suitable; and b. If the contract includes a ceiling price the contractor exceeds at their own risk. 12. The City alone shall be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes and claims. These standards do not relieve the City of any contractual responsibilities under its contracts. D. Competition. 1. The City will conduct procurement transactions in a manner providing full and open competition. To ensure objective contractor performance and eliminate unfair competitive advantage, contractors developing or drafting specifications, requirements, statements of work, or invitations for bids or requests for proposals shall be excluded from competing for such procurements. 2. The City shall conduct procurements in a manner prohibiting the use of statutorily or administratively imposed in-state or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. 3. The City shall have written procedures for procurement transactions. These procedures will ensure that all solicitations: a. Incorporate a clear and accurate description of the technical requirements for the material, product or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a brand name or equal description may be used to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offerors shall be clearly stated; and Page 24 of 32 b. Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. 4. The City shall ensure prequalified lists of persons, firms or products that are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. The City shall not preclude potential bidders from qualifying during the solicitation period. E. Methods of Procurement to be Followed. The City shall use one of the following methods of procurement: 1. Procurement by Micro -Purchases. Procurement by micro -purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro -purchase threshold as set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and adjusted periodically for inflation. As of the date of this ordinance, the micro -purchase threshold is $010,500000. 2 -.-Procurement by Small Purchase Procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies or other property that do not cost more than the simplified acquisition threshold as set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908 and periodically adjusted for inflation. If small purchase procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources. As of the date of this ordinance, the simplified acquisition threshold is 2_$350250,000. For purchases exceeding fifty thousand ($50,000), City Council approval is required. 3. Procurement by Sealed Bids (Formal Advertising). Bids are publicly solicited and a firm -fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the invitation for bids, is the lowest in price. a. For sealed bidding to be feasible, the following conditions should be present: (1) A complete, adequate, and realistic specification or purchase description is available; (2) Two or more responsible bidders are willing and able to compete effectively for the business; and (3) The procurement lends itself to a firm -fixed-price contract and the selection of the successful bidder can be made principally based on price. b. If sealed bids are used, the following requirements apply: (1) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids; (2) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items or services for the bidder to properly respond; Page 25 of 32 (3) All bids will be publicly opened at the time and place prescribed in the invitation for bids; (4) A firm -fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (5) If there is a sound documented reason, any or all bids may be rejected. 4. Procurement by Competitive Proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed-price or cost -reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply: a. Requests for proposals shall be publicized and identify all evaluation factors including relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical; b. Proposals will be solicited from an adequate number of qualified sources; c. The City shall conduct technical evaluations of the proposal received and for selecting awardees; d. Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and e. The City may use competitive proposal procedures for qualifications -based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated, and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort. 5. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances applies: a. The item is available only from a single source; b. The public exigency or emergency for the requirement will not permit delay resulting from competitive solicitation; c. The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in a written request from the City; or d. After solicitation of multiple sources, competition is determined inadequate. 6. Contracting with Small and Minority Businesses, Women's Business Enterprises and Labor Surplus Area Firms. Page 26 of 32 a. The City shall take all necessary affirmative steps to assure that minority businesses, women's business enterprises and labor surplus area firms are used when possible. b. Affirmative steps include: (1) Placing qualified small and minority businesses and women's business enterprises on solicitation lists; (2) Assuring that small and minority businesses and women's business enterprises are solicited whenever they are potential sources; (3) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses and women's business enterprises; (4) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses and women's business enterprises; (5) Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and (6) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in subsections 6.b.(1) through (6) of this section. 7. Contracts Cost and Price. a. The City shall perform a cost or price analysis in every procurement action exceeding the simplified acquisition threshold including contract modifications. The method and degree of analysis will be dependent on the facts surrounding each procurement situation. As a starting point, the City shall make independent estimates before receiving bids or proposals. b. The City must negotiate profit as a separate element of the price for each contract in which there is no price competition and, in all cases, where cost analysis is performed. To establish a fair and reasonable profit, consideration must be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work. c. Costs or prices based on estimated costs for contracts under the Federal award will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for the City under Subpart E - Cost Principles of Title 2, Subtitle A, Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards). d. The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used. Page 27 of 32 8. Federal Awarding Agency or Pass -Through Entity Review. a. The City shall make available, upon request of the Federal awarding agency or pass-through entity, technical specifications on proposed procurements where the Federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for purchase. b. The City shall make available upon request, for the Federal awarding agency or pass-through entity pre -procurement review, procurement documents, such as requests for proposal or invitations for bids, or independent cost estimates when: (1) The City's procurement procedures or operation fails to comply with the procurement standards of Title 2, Subtitle A, Part 200, Subsection 200.324; (2) The procurement is expected to exceed the simplified acquisition threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation; (3) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a "brand name" product; (4) The proposed contract is more than the simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or (5) A proposed' modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold. c. The City may be exempted from the pre -procurement review in subsection 8.b. above if the Federal awarding agency or pass-through entity determines that its procurement systems comply with the standards set forth in Title 2, Subtitle A, Part 200, or the City self -certifies compliance with such standards if self -certification is permitted by the Federal awarding agency or pass- through entity. 9. Bonding Requirements. For public projects, the City shall require bid guarantees, performance bonds, and payment bonds consistent with Title 2, Part 200, Section 200.325 of the Code of Federal Regulations. 10. Contract Provisions. The City's contracts shall contain the prov1slons in Appendix II to Title 2, Subtitle A, Part 200 - Contract Provisions for non -Federal Entity Contracts Under Federal Awards, as applicable. SECTION 13 -QUARTERLY REPORT —PURCHASES OVER $10,000 A quarterly report shall be submitted to the City Council no later than 45 days following the end of each quarter. This report shall include all purchase orders issued during the reporting period with a value exceeding $10,000. Note that this section can only be altered with approval of the City Council. This section may only be modified with the City Council's approval. Page 28 of 32 SECTION 13-14 —GLOSSARY OF PURCHASING TERMS AGREEMENT An understanding or arrangement between two or more parties. Also see "Contract" and 'Purchase Order". APPROPRIATION City Council authorization to expend public funds for a specific purpose AS IS A term indicating that goods offered for sale in existing condition are without Warranty or Guarantee. AWARD The acceptance of a Bid, Quote, or Proposal. BID The executed document submitted by a Bidder in response to Notice Inviting Bids (NIB), a Proposal, or a Requests for Quotations. BIDDER A person or legal entity who submits a bid in response to a solicitation. See Bid or Proposal. BLANKET PURCHASE ORDER An Agreement of no more than one year between the City and a Vendor allowing authorized City employees to charge repetitive Purchases of supplies, equipment or services at pre -arranged prices, dollar limits and/or other terms and conditions. BRAND NAME A trade name which serves to identify a product or particular manufacturer. CHANGE ORDER Written modification or addition to a Purchase Order or Contract/Agreement authorized by the appropriate authority. CITY City shall mean the City of Rosemead, and other such districts, authorities, or agencies as may be governed by the members of the City of Rosemead City Council. CITY ATTORNEY Shall mean and include the City Attorney of the City of Rosemead and/or the Rosemead Community Development Commission. CITY COUNCIL Shall mean and include the City Council of the City of Rosemead, the Commissioners of the Rosemead Community Development Commission and the Commissioners of the Rosemead Housing Development Commission. It shall also mean the governing boards of such other districts, authorities, or agencies as may be governed by the City Council of the City of Rosemead. Page 29 of 32 COLLUSION WITH BIDDER OR VENDOR Any secret agreement to purposefully be fraudulent or deceitful for purposes of influencing the outcome of a bid process. Collusion may occur between an agency, employee, or representative of the City with a prospective bidder or vendor in some cases one or more bidders or vendors may collide to manipulate a purchase award. COMPETITIVE BIDDING The submission of prices by individuals or firms competing for a Contract, privilege, or right to supply merchandise or services. CONFLICT OF INTEREST The City's Conflict of Interest Code applies to each and every transaction entered into pursuant to the provisions of the Purchasing System and this manual. The Conflict of Interest Code adopted by the City of Rosemead has adopted the State of California Administrative Code Section 18730 which contains a standard model and is adopted by reference by the City. CONTRACT A verbal or written, legally binding mutual promise between two parties, e.g., an accepted Purchase Order. CONTRACT PURCHASE ORDER A Purchase Order (usually issued for one year) outlines unit prices to be charged by the Vendor for the term of the Purchase Order. This type of Purchase Order is generally used for such things as electrical, plumbing and other goods and services which are anticipated to be needed periodically throughout the year. The Bids are usually expressed at hourly rates plus parts expressed at a specific Discount below list price. Zil IX -10 ORDER A Purchase Order (usually issued for one year) outlines unit prices to be charged by the Vendor for the term of the Purchase Order. This type of Purchase Order is generally used for such things as electrical, plumbing and other goods and services which are anticipated to be needed periodically throughout the year. The Bids are usually expressed at hourly rates plus parts expressed at a specific Discount below list price. DESIGNEE A duly authorized and appointed representative of an employee that holds a superior position to the person appointed to represent him or her. DISCOUNT An allowance or deduction from a normal or list price extended by a seller to a buyer to make the unit price more competitive. Page 30 of 32 DISPOSE OF EMERGENCY PURCHASE To transfer or part with, to sell; to get rid of; to throw out. See Urgency Purchase. ENCUMBRANCE Committing budgeted funds prior to receiving supplies, equipment or services; funds are shown as an encumbrance until supplies, equipment or services are received, at which time funds are actually expended. EQUIPMENT Personal property necessary to conduct the City's business, including, but not limited to furnishings, machinery, vehicles, rolling stock, and other property used to conduct the City's business. FORMAL BID A Bid which must be submitted in a sealed envelope and in conformance with a prescribed format, to be opened and announced at a specified time at a public opening. GENERAL SERVICES Services such as janitorial, uniform cleaning, maintenance, and other services for which the performance of such activities do not require any unique skill, special background or training. GAURANTEE A pledge or assurance that something is as represented and will be replaced or repaired if it fails to meet the stated Specifications. INFORMAL BID Written or verbal Quotations for supplies, equipment and services which pursuant to this policy are not required to meet the formal bidding requirements. Informal Bids include unsealed written quotes, verbal quotes and quotes received via fax. LOWEST (RESPONSIVE) BIDDER LOWEST BIDDER/ VENDOR RMC The Bidder submitting the lowest price and capable of performing the proposed Contract. See also "Responsive Bidder". Any individual, partnership, or corporation which regularly maintains a place of business within the incorporated City Limits of the City of Rosemead and has obtained a business license issued by the City of Rosemead. Rosemead Municipal Code MALFEASANCE An act which is, in itself, unlawful or unauthorized; acting in a manner wholly beyond one's jurisdiction. MISFEASANCE Performance of a lawful action (an action in one's jurisdiction) in an illegal or improper manner. Page 31 of 32 NON FEASANCE Failure to act when one has the affirmative duty or authority to do so. NON LOCAL BIDDERIVENDOR Any individual, partnership, or corporation which does not have a place of business within the incorporated City Limits of the City of Rosemead. NON-RESPONSIVE BIDDER A Bid that does not conform to the essential requirements of the Notice Inviting Bids. Non -Conforming Bid. Unresponsive Bid. NOTICE INVITING BIDS (NIB) A formal notice published in the newspaper or elsewhere or sent directly to potential Bidders, notifying them that the City is accepting bids for a specific purpose. PROFESSIONAL SERVICE Any work performed by an auditor, attorney, doctor, architect, engineer, land surveyor, construction project manager, appraiser, expert, or consultant, for example. PROPOSAL The executed document submitted by an offer or in response to a Request for Proposals (and the basis for subsequent negotiation). PUBLIC CONTRACT CODE Shall mean Public Contract Code of the State of California PUBLIC PROJECT (DEFINITION IS FROM STATE OF CALIFORNIA PUBLIC CONTRACT CODE) a) A project for the erection, improvement, painting, or repair of public buildings and works. b) Work in or about streams, bays, waterfronts, embankments or other work for protection against overflow. c) Street or sewer work except maintenance or repair. d) Furnishing supplies or materials for any such project, including maintenance or repair of streets, sewers, or water systems. PUBLICLY OWNED, LEASED or OPERATED FACILITY Any plant, building, structure, ground facility, utility system, real property, streets and highways or other capital improvement for which the project will be undertaken by the City. Page 32 of 32 PURCHASE Renting, leasing, licensing, trading or in any other way acquiring Equipment, Supplies, or Services is determined to be a purchase on behalf of the City of Rosemead. Page 33 of 32 PURCHASING OFFICER The City Manager officer or his/her designated representative. PURCHASE ORDER A document that authorizes the delivery of specified merchandise or the rendering of certain services and the making of a charge for them. QUALIFIED BIDDER OR VENDOR CHARACTERISTICS A "qualified" bidder, is a bidder that demonstrates the following: (1) can provide product quality, fitness, and capacity for the required usage. (2) has the ability, capacity, and skill to perform the contract or provide the service required. (3) has demonstrated character, integrity, reputation, judgment, experience, and efficiency, particularly with reference to past purchases by the city or other public agencies. (4) has the ability to perform within the time required. (5) has shown quality of performance and/or of products provided in previous contracts or services with the city or other public agencies. (6) Note: Previous documented incidents of unsatisfactory performance and/or unsatisfactory delivery, materials, or services may also result in a determination of unqualified. QUOTATION A statement of price, terms of sale, and description of goods or services offered by a prospective seller to a prospective Purchaser, usually for Purchases below the amount requiring Formal Bidding. REQUEST FOR QUOTATION (RFQ) The document generally used for seeking competition on small Purchases or on any Purchase that does not require competitive Sealed Bidding. Can be used for obtaining price and delivery information for Sole Source and emergencies. Also, see Quotation. RESPONSIBLE BIDDERIVENDOR A person who has the capability in all respects to perform in full the Contract requirements, and the integrity and reliability which will assure good faith performance. RESPONSIVE BIDDER (1) A person who has submitted a Bid which confirms in all material respects to the Notice Inviting Bids (NIB) or (2) One who's Bid conforms in all material respects to the terms and conditions, Specifications and other requirements of the NIB. SEALED BID A Bid which has been submitted in a sealed envelope to prevent its contents from being revealed or known before the deadline for the Page 34 of 32 submission of all Bids; required on Formal Bids. Page 35 of 32 SOLE SOURCE An Award for a commodity or service to the only reasonably known capable supplier due to the unique nature of the requirement, the supplier, or market conditions. SPECIFICATIONS A description of what the Purchaser seeks to buy or accomplish, and consequently, what a Bidder must be responsive to in order to be considered for Award of a Contract. A Specification may be a description of the physical or functional characteristics, or the nature of a supply or service. It may include a description of any requirements for inspecting, testing, or preparing a supply or service item for delivery. SPLIT To divide a Purchase into two or more parts in order to avoid the requirements of the Purchasing Policy. This action is prohibited by the Policy. Example of Split: If a department knows it will use $30,000 of a particular supply in one fiscal year and they place two orders six months apart to keep each order below the $30,000 limit, the action is considered Splitting and is not allowed under the policy. Not a Split: If a department hires ABC Engineering to prepare a fee study for $10,000 and also hires the same company to oversee a capital improvement project for $15,000, the action is not considered splitting. SURPLUS PROPERTY SUPPLIES Any City personal property that is no longer needed or usable by the holding department. Office Supplies, janitorial Supplies, materials, goods, or other, tools, or other commodities used in the general conduct of the City's business, excepting Supplies or materials for a Public Work which is regulated under the Public Contract Code section 20160, et seq. ,11:Ze34:Iwo PURCHASE A purchase which may done without competitive bidding or obtaining quotes when time is of the essence and is made only for the following reasons: (1) To preserve or protect life, health or property; or (2) Upon natural disaster; or (3) To forestall a shutdown of essential public services. USING or REQUESTING DEPARTMENT An established department or division of the City of which shall utilize the goods, equipment, or other purchases which are to be obtained using the Purchasing System as established by the City of RMC, Section 3.24. Page 36 of 32 VENDOR A supplier of goods or services. WARRANTY The representation that something is true. Not to be confused with "Guarantee". A representation of utility, condition, and durability made by a Bidder or Vendor of a product offered. REQUEST FOR PROPOSAL (RFP) All documents, whether attached or incorporated by reference, utilized for soliciting competitive Proposals. The RFP procedure permits negotiation of Proposals and prices as distinguished from Competitive Bidding and a Notice Inviting Bids. The procedure allows changes to be made after Proposals are opened and contemplates that the nature of the Proposals and/or prices offered will be negotiated prior to Award. Attachments A - Lobbying Certification for Contracts, Grants, Loans & Cooperative Agreements B - Purchasing Checklist Page 37 of 32 Purchasing Policy - Attachment A LOBBYING CERTIFICATION FOR CONTRACTS, GRANTS, LOANS & COOPERATIVE AGREEMENTS The undersigned certifies, to the best of his or her knowledge and belief, that: 1. No federally appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. 2. If any funds other than federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete Standard Form -LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3. The undersigned shall require that the language of this CERTIFICATION be included in the award documents for all sub -awards at all tiers (including subcontracts, sub -grants, and contracts under grants, loans, and cooperative agreements) and that all sub -recipients shall certify and disclose accordingly. This CERTIFICATION is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this CERTIFICATION is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required CERTIFICATION shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Signature Name of Company Date Purchasing Policy -Attachment B Purchasing Checklist DOCUMENTATION < $5,000 $5,000.01- $3050,000 $3050,000.0 1 Price Quote * X Vendor or Letter Agreement X Professional Services Agreement X X Formal Bid Procedures X Insurance Certificate - If City will be risking liability X X Verify Filing of Business License X X X Purchase Order X Department Request/Authorization X X X PAYMENT Demand X X Purchase Order- Blanket X X Purchase Order - Regular X APPROVAL LEVEL Department Head City Manager City Council