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HomeMy WebLinkAbout1997-11-03 Ordinance 4462ORDINANCE NO. 4462 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING CHAPTER 2.30 AND SECTIONS 2.31.010 and 2.31.090 OF THE PALO ALTO MUNICIPAL CODE RELATING TO PURCHASING PROCEDURES AND DISPOSITION OF SURPLUS PROPERTY The Council of the City of Palo Alto does ORDAIN as follows: SECTIQN 1. Chapter 2.30 of Title 2 (Administrative Code) of the Palo Alto Municipal Code is hereby amended to read as follows: CHAPTER 2.30 CONTRACTS AND PURCHASING PROCEDURES 2.30.01 Validity of contracts and purchase orders. The city shall not be and is not bound by any contract, purchase order or any other document unless the same shall be made in writing by order of the city council and signed by a duly authorized officer in behalf of the city, except as hereinafter provided. 0.020 Unauthorized purchases - Exceptions. It shall be unlawful for any officer or employee to purchase or contract for supplies or services for the city other than through the manager of purchasing and contract administration (hereinafter manager of purchasing), except: (a) Purchases made from petty cash funds pursuant to procedures established by the city manager; (b) Emergency purchases made in conformance with control procedures established by the city manager; or (c) Contracts for legal services as authorized by this Chapter 2.30. Any purchases, contracts or obligations to pay made contrary to the provisions of this chapter shall be null and void. 2.30.030 Definitions. (a) The following words and phrases whenever used in this chapter shall be construed as defined in this section: (1) "Emergency" means an unforeseen situation which threatens life or property. 1 971104 lac 0031847 • (2) "Public works project" means: (A) Construction, alteration, demolition or repair work done for the city under contract with the city and paid for in whole or in part out of public funds; (B) Street, sewer or other improvement work done under the direction and supervision or by the authority of any officer of the city; (C) The laying of carpet in a city building and paid for in whole or in part out of public funds. (3) "Supplies" means and includes all supplies, materials and equipment, except for capital equipment. (4) "Services" means and includes labor, professional services and consulting services and includes public works projects. Services shall not include labor incidental to the purchase of supplies such as set-up, installation, testing, and maintenance of supplies where the primary purpose is to purchase the supplies, provided that continuing maintenance for licensed computer software shall be considered "services." (5) "Recycled product," "post -consumer waste" and "secondary waste" shall have the meanings set forth in Section 12200 of the California Public Contract Code, as it may be amended. (6) "Recyclable" means a product that is able to be -recycled through one of the city of Palo Alto's recycling programs, or another readily available local recycling program having no cost to the city. (7) "Capital equipment" means equipment requiring an outlay of twenty-five thousand dollars or more for acquisition, and which can be depreciated over a five-year period. (8) "Continuing contract" means a contract for the purchase of supplies as needed over a period of time, or for services or a combination of supplies and services to be rendered over a period of time. 2.30.040 Real property contracts - Leases, rentals or purchases of real property. The city manager is authorized to lease or rent city property to third parties for terms not in excess of one year provided, however, that city property at the Cubberley site may be leased or rented by the city manager to third parties for terms not in excess of five years, and to lease, rent, acquire or purchase real property from others knee the lease, rental or purchase price does not exceed sixty-five thousand dollars in one transaction unless otherwise directed by the city council. A written report of all such transactions shall be made annually by the city manager to 2 971104 lac 0031847 • the city council. All other real property transactions or contracts must be approved by the city council and signed by the mayor. 2.30.050 Subdivision and demolition agreements. The city manager is further authorized to negotiate the terms and conditions of and sign on behalf of the city all contracts with subdividers for the installation of improvements and all agreements for the demolition of buildings made pursuant to this code. 2.30.060 Supplies. (a) Purchase. The city manager is authorized to bind the city in written contract, without previous action by the city council for the purchase of any supplies, regardless of the dollar amount thereof, not made in combination with the provision of services, provided that all supply purchases in excess of twenty- five thousand dollars shall comply with the bid procedure specified in Section 2.30.130, unless they are excepted by Section 2.30.140. (b) Rental. The city manager may rent supplies from others for the city for a term not to exceed one year where the total of all rent payable within any twelve-month period for those supplies does not exceed sixty-five thousand dollars, provided that where the term of the rental exceeds one year or the amount of rent for those supplies exceeds twenty-five thousand dollars in any twelve-month period, the competitive bidding process in Section 2.30.130 shall be followed. (c) The authorization to the city manager contained in subsections (a) and (b) does not include installment purchases which involve the payment of interest or leases with an option to purchase, which shall be subject to approval by the city council. 2.30.070 Services or combination of services and supplies. (a) The city manager is authorized to bind the city by written contract for services involving an expenditure not exceeding sixty-five thousand dollars in any one transaction, exclusive of sales or use tax, without city council approval, provided that the procurement of services exceeding twenty-five thousand dollars shall comply with the provisions of section 2.30.130 unless they are excepted pursuant to section 2.30.140. If services are provided in combination with supplies or capital equipment, the value of the supplies or capital equipment shall be included for purposes of calculating the cost of services. (b) Notwithstanding the provisions of subsection (a), the city manager and city attorney.?,cting jointly are authorized to bind the city by written contract for legal services to be provided to the city, involving an expenditure not exceeding sixty-five thousand dollars in any one transaction, without advertising or previous action by the city council, for the payment of such services. The city attorney is authorized to bind the city by 3 9711041= 0031847 • written contract for legal services to be provided to the city, involving* an expenditure of any amount, provided the city council has firs,. approved the use of such services. (c) With the exception of contracts for legal services, as provided in subsection (b), the award of all contracts for services or a combination of services and supplies or capital equipment involving an expenditure exceeding sixty-five thousand dollars, exclusive of sales or use tax, shall be made by the city council and the contract shall be signed by the mayor or, in the mayor's absence, by the vice -mayor. 2.30.075 Contracts for special studies relating to applications for private development projects. The city manager is authorized to bind the city by written contract, without advertising or previous action by the city council, and without following the provisions of Sections 2.30.130 and 2.30.150, for all services involving the preparation of environmental assessments and other studies deemed necessary by the director of planning and community environment for the processing of applications for private development projects. The city manager's authority under this section shall not be limited by the amount of the expenditure authorized by each contract. This section does not authorize the city manager to bind the city to a contract, unless the applicant for the private development project agrees to bear responsibility for the entire cost of such contract, and such contract will not require the expenditure of city funds in any amount. 2.30.080 Approval of city manager or designee; authority of manager of purchasing. (a) .Ail contracts or purchases which the city manager has authority to make shall be approved by the manager in writing or by the manager's designee when the manager has delegated such authority to such individual in writing which is on file in the office of the city clerk. The city manager may delegate any authority granted to the manager pursuant to this chapter. (b) Notwithstanding subsection (a), the manager of purchasing is authorized to approve purchases of supplies, capital equipment, or services for the city manager involving an expenditure not exceeding twenty-five thousand dollars, exclusive of sales or use tax. The manager of purchasing may delegate in writing the authority granted under this subsection (b) for the purchase of supplies or services not exceeding ten thousand dollars. 2.30.090 Emergencies. In emergency situations, the city manager is authorized to expend city funds without limitation by way of amount and without the requirement for either formal bids or informal quotations. The city manager is authorized to conclude that an emergency exists 4 971104 Sac 0031847 • without further declaration by the city council. Expenditures made during an emergency must be reported to the city council at the next regular meeting if such expenditure would otherwise have been made by the city council. 2.30.100 Continuing contracts; cooperative purchases; mutual aid and joint underground installations. (a) Continuing Contracts. The city manager is authorized to enter into continuing contracts, not exceeding a value of sixty- five thousand dollars per year for any contract, for a period of up to three years, provided that funds are budgeted and encumbered for the entire amount due over the term of the contract, or the contract is made subject to appropriation by the city council of amounts to become due in fiscal years subsequent to the contract's execution, said appropriation occurring at a time when said funds are needed for expenditure for the current services or supplies being rendered or purchased; and provided that the initial transaction has been subject to the applicable bidding requirements of section 2.30.130. (b) Continuing software maintenance. Notwithstanding subsection (a) , the city rran•ager is authorized to enter into continuing contracts for maintenance of licensed computer software, not exceeding sixty-five thousand dollars per year for any contract, for any period of time during which the city maintains licenses for the software, provided that the contracts are made subject to appropriation by the city council of the amounts necessary to fund the contracts. (c) Cooperative Purchases. The manager of purchasing is authorized to participate with other public agencies in purchasing supplies, services, or a combination thereof, including contracting therefor, provided at least one participant therein substantially follows the bid and award requirements in this chapter, and the contract is executed on behalf of the city by the appropriate official. (d) Mutual Aid. The manager of purchasing is authorized t.o participate with other public agencies in an "open stores" mutual aid policy, provided that the disbursement of any city supplies to other agencies shall not affect city services. Supplies may be disbursed to any other agency on a loan basis or sold to the agency at the current replacement cost to the city at the time of replacement. (e) Joint Installation of Underground Facilities System. The city manager is authorized to participate with the local telephone utility and/or any cable television operator in the joint purchase and installation of underground utility and communication facilities pursuant to a master agreement for installation of underground facility systems which has been approved by the city council; provided, that the city's estimated share of such system does not exceed the sum of sixty-five thousand dollars. 5 971104 Iwo 0031847 410 2.30.110 Open market purchases. Except as otherwise directed by the city manager, or by the city attorney solely with respect to legal services, supplies or services, or any combination of supplies and services involving a total expenditure of city funds in an amount of $25,000.00 or less, exclusive of sales or use tax, shall be purchased, when feasible and when in the best interest of the city, in the open market by written quotation or telephone solicitation, without posting at civic center or newspaper advertisement and without observing the procedure prescribed for the award of formal bid purchases. Open market purchases, whenever possible and practicable, shall be based on at least three competitive quotations and shall be awarded by the manager of purchasing to the person, firm or corporation submitting the lowest responsible quotation. In determining the lowest responsible quotation, the city shall do so based on the factors set forth in Section 2.30.150 for determining the lowest responsible bidder use: in formal bid purchases. The manager of purchasing si'aii keep a recora of all open market orders and the quotations submitted in competition thereon. Such records shall be open to public inspection during business hours. Records of such open market orders or purchases may be disposed of by the manager of purchasing in the ;manner provided by law. 2.30.120 Open purchase contracts. An open purchase contract is a written agreement with a vendor that establishes a quoted or maximum price on any quantity" or an "annual requirements" basis for parts, commodities, or services or combinations thereof. Separate open purchase contracts shall be used for the grouping of parts or commodities of a like kind, or annual maintenance, based on predetermined cumulative quantities to be used or consumed by the city within a set period of time. Open purchase contracts for services, supplies or a combination thereof may be entered into for a period of up to thirty-six months, provided the term of the agreement and conditions of renewal or extension, if any, are included in the solicitation document and funds are available for the first fiscal year at the time the open purchase contract is issued. Payment and performance for succeeding fiscal periods (not to exceed twenty-four months) shall be subject to the availability and appropriation of funds by the city council. Open purchase contracts with a value exceeding twenty-five thousand dollars for services, supplies or any combination thereof shall conform to the bidding requirements of Section 2.30.130. Open purchase contracts valued at less than twenty-five thousand dollars for services, supplies or any combination thereof shall conform to the open market purchase requirements of Section 2.30.110. 6 971104 lac 0031847 • 2.30.130 Bid procedure. (a) When Advertising Required. Where the cost of services or supplies exceeds the amounts set forth in Sections 2.30.060, 2.30.070 and 2.30.120 for open market purchases, the manager of purchasing shall call for bids by posting at civic center or by advertising at least once in a daily newspaper of general circulation in the city not less than five days prior to the date set for receiving bids. (b) Bid Bond or Deposit. Unless waived by the city manager, in cases where it is determined that such waiver will not be detrimental to the interests of city, ail bids, exclusive of those for standard commercial products, shall be accompanied either by cash, a certificate of deposit or certified check or draft, or a cashier's check or draft of or on some responsible bark in the United States, in favor of and payable at sight to the city, in an amount not less than five percent of the aggregate amount of the bid. If the bidder to whom the contract is awarded, for fifteen days after the posting of such contract, or within any other time frame specified in the notice inviting bids, fails or neglects to enter into the contract and to file the required bonds, the director of administrative services shall draw the money due on such certificate of deposit or check or draft and pay the same or any cash deposited into the treasury, and under no circumstances shall it be returned to the defaulting bidder. In lieu of the foregoing, any bid may be accompanied by a surety bond in said amount furnished by a surety authorized to do surety business in the state of California, guaranteeing that said bidder will enter into the contract and file the required bonds within said period or said amount shall be forfeited. With the approval of the city manager, prospective bidders may file annual or continuous surety bonds covering all bids to be made during the period that the surety bond is in effect. Upon failure of the bidder to whom the contract is awarded to execute the contract and file the required bonds, the city council or the city manager as the case may be, may, in its discretion, award the contract to the next lowest responsible bidder, or upon failure of such bidder to execute the contract and return the appropriate bonds within the designated time, to the third lowest responsible bidder, if any there be. (c) Opening of Bids and Awards. All bids shall be sealed, identified as bids on the envelope and shall be submitted to the manager of purchasing at the place and time specified in the public notice inviting bids. Bids shall be opened by the manager of purchasing or his designee, in public, at the time and place designated in the notice inviting bids. Bids received after the specified time shall not be accepted and shall be returned to the bidder unopened. The contract shall be let to the lowest responsible bidder, as defined in this chapter, either by the city council, if the payment is for services in excess of sixty-five thousand dollars, or a combination of services and supplies or capital equipment in excess of sixty-five thousand dollars, exclusive of sales or use tax, or in any other cases by the city manager. The contract shall be let by the city council or the city 7 971104 lac 0031847 manager on the basis described in the notice inviting sealed bids to the lowest responsible bidder, as defined in this chapter or in the city charter for those contracts governed by the city charter. At the time of award, the city council may authorize the city manager, or in contracts awarded by the city manager, the city manager may authorize a designee to negotiate and execute one or more amendments or change orders to the contract, the scope of which amendment or change order shall be within or incidental to the scope of the contract awarded, and the value of which shall be within the amount appropriated for the contract. The city council or the city manager, as the case may be, may reject any and all bids and waive any informalities or minor irregularities in the bids. (d) Disposition of Bid Bond or Deposit. All deposits and bonds shall be returned after execution of the contract by the successful bidder and deposit of the necessary bonds. (e) Approval of Faithful Performance and Labor and Materials Bonds Waiver. Faithful performance or labor and material bonds required by city specifications or contract shall be approved as to form by the city attorney. The city manager may waive the furnishing of a faithful performance bond when the manager determines that such waiver will not be detrimental to the city. (f) No Bids. If no bids are received or if no bids meeting the specifications are received, the city manager may proceed to have the services perfoiuied or the supplies purchased without further competitive bidding. (g) The city manager shall make a quarterly report to the city council of all contracts awarded for services, or supplies and capital equipment in combination with services, the value of which exceed twenty-five thousand dollars, and of all contracts for supplies or capital equipment which exceed sixty-five thousand dollars. 2.30.140 Exceptions to competitive bidding. (a) The restrictions and provisions of Section 2.30.130 requiring competitive bidding shall not apply to the following contracts, purchases or transactions: (1) To contracts involving the obtaining of or specialized services such as, but not limited rendered by architects, attorneys, accountants engineers, information technology consultants, specialized or professional consultants; (2) Where calling for bids on a competitive basis is, the opinion of the city manager, impracticable, unavailing impossible; professional to, services , auditors, and other in or (3) Where the city's requirements can be met solely by a single patented article or process; W1104 1847 (4) Placement of insurance coverage; (5) When the public work is performed by the city with its own employees; (6) Purchase of utility commodities for resale. 2.30.150 Lowest responsible bidder. (a) In addition to price, in determining the lowest responsible bidder, consideration will be given to quality and performance of the supplies to be purchased or services provided by the seller. Criteria for determining low bid shall include, but not be limited to the following: (1) The ability, capacity and skill of the bidder, to perform the contract or provide the supplies or services required; (2) The ability of the bidder to provide the supplies or services promptly, or within the time specified, without delay or interference; e e (3) The character, integrity, reputation, judgment, nce and efficiency of the bidder; (4) purchases o The quality of bidder's performance on previous ontracts with the city; (5) The ability of the bidder to provide future maintenance, repair parts and services for the use of the supplies purchase; (6) Current compliance by the bidder with federal acts and executive orders and state of California statutes governing the subject of nondiscrimination in employment, provided that the city .manager shall recognize as proof of noncomp3iance only the final decisions and orders of those federal and state agencies empowered under the law to make such findings; (7) Certification by the successful bidder that the bidder will pursue an affirmative course of action as required by affirmative action guidelines provided hereinafter reasonably pertaining to the work of the contract and to the nature and size of the bidder's work force, to ensure that applicants are sought and employed, and that employees are treated during employment, without regard to their race, color, national origin or ancestry, or religion; (8) Compliance by the bidder with the city's policy for purchasing recycled products as specified below: (A) In determining the lowest responsible bidder, a five percent price preference shall be given to recycled products, and to reusable products offered as alternatives to disposable (nonreusable) products. If no recycled product is available, a five 9 971104 lac 0031847 percent price preference shall be given to recyclable products when they are offered as alternatives to nonrecyclable products. The price preference shall be determined based upon the lowest responsible bid or price quoted by suppliers offering nonrecycled products. The maximum amount of price preference shall not exceed ten thousand dollars per purchase. (B) Persons bidding to provide products or services to the city shall be notified of the city's preference for the use of recycled products, including price preference. Bidders shall be asked to provide information on recycled products that would be used on the project. (C) No price preference shall be given for bids which include subcontractors, but the use of recycled products shall be considered when determining the lowest responsible bidder, if all other factors, including price, are equal. (D) Persons bidding to provide a recycled product shall certify in writing to the city the percentage and contents of post -consumer and secondary recycled material in the product. (b) Under this section, specific guidelines will be adopted by council resolution from, time to time, identifying the nature and scope of "affirmative action's desired by the city. (c) Such guidelines shall be made available to all persons desiring to bid on city business. (d) Such certification shall be provided only by that bidder who is determined to be the successful bidder pursuant to all other criteria. The provisions of this subsection must be met and the information provided shall be evaluated prior to a final determination that such bidder is in fact the lowest responsible bidder for purposes of an award of the contract. 2.30.160 Certificate of nondiscrimination. The bidder to whom the contract is to be awarded shall provide a certificate stating: (a) whether the bidder is currently in compliance with all federal and state of California laws covering nondiscrimination in employment, and that the bidder will pursue an affirmative course of action as required by affirmative action guidelines as set forth in Section 2.30.150 and resolutions adopted pursuant thereto; (b) that if awarded the contract, the bidder will not discriminate in the employment of any person under the contract because of race, color, national origin or ancestry, or religion, of such person; and 10 9711041st 0031847 1 (c) that the bidder will participate, if requested, in pre -award review of his qualifications under the provisions of this section. The requirement of this section shall apply only to contracts in excess of $!',000.00. Notwithstanding the fact that an award is to be made by the city council or the city manager, a failure to meet the requirements of this section shall disqualify the bidder from further consideration. 2.30.170 Penalties for discr4miv.ation in employment. Any contractor who is found in violation of the nondiscrimination provisions of the State of California Fair Employment Practices Act or similar provisions of federal law or executive order in the performance of any contract with the city, thereby shall be found in material breach of such contract and thereupon the city shall have the power to cancel or suspend the contract, in whole or in part, or to deduct from the amount payable to such contractor the sum of $25.0© dollars for each person for each calendar day during which such person was discriminated against, as damages for said breach of contract, or both. Only a finding of the State of California Fair Employment Practices Commission or the equivalent federal agency or officer shall constitute evidence of a violation cf contract under this section. 2.30.180 Penalties for violation of affirmative action provisions. Any contractor who is found by the city manager to be in violation of the agreement to pursue an affirmative course of action or in violation of any provision of the affirmative action guidelines pertaining to his contract shall be found in material breach of such contract and thereupon the city shall have the power to cancel or suspend the contract, in whole or in part, or to deduct from the amount payable to such contractor the sum of $250.00 for each calendar day during which the contractor is found to have been in noncompliance, as damages for said breach of contract, or both. 2.30.190 Control procedures. The type of written contracts to be used for all purchases shall be in conformance with control procedures established by the city manager, city attorney, and finance director, provided that all contracts for services or a combination of services and supplies or capital equipment when the total cost exceeds twenty- five thousand dollars, exclusive of sales or use tax, shall be prepared or approved by the city attorney. The city attorney shall approve the form of all contracts and agreements. 2.30.200 Avoidance of losses or liability. Any contract, purchase order or other document covering the procurement or use of services, supplies, capital equipment, or 11 971104 lac 0031847 property for the city or the providing of such services, supplies, capital equipment, or property for the city shall remove or transfer from the city insofar as practicable, all risk of loss, liability and cost of defense. The city may purchase, at contractor's expense, insurance covering the course of construction of public works where superior coverage, lower premium, consent of tie contractor, or other factors justify such purchase. 2.30.210 Inspection and testing. The city department receiving or utilizing services or supplies shall inspect supplies delivered and services performed to determine their conformity with the specifications applicable thereto or set forth in the contract and shall report any deficiencies to the manager of purchasing. The city may require chemical and physical tests of supply samples submitted with bids and samples of supply deliveries which are necessary to determine their quality and conformance with specifications. 2.30.220 Contract splitting prohibited. It is unlawful to spit or separate into smaller portions, work orders, projects, purchases, contracts or any public work project for the purpose of evading the provisions of this chapter, including the splitting of work or services between or among departments or divisions or other organizational units of the city. 2.30230 Purchasing manual. The manager of purchasing shall prepare a purchasing manual which will clearly define and describe the aims and purposes of this chapter. The purchasing manual shall describe and explain in detail the procedures that the using departments must follow in the procurement of supplies and services, and shall include, among other things, control procedures established under authority of this chapter. SECTION 2. Section 2.31.010 of Chapter 2.31 (Property Control) of Title 2 of the Palo Alto Municipal Code is hereby amended to read as follows: 2.31.010 Surplus property and equipment Disposal or destruction. (a) Authority of director of administrative services. All using departments shall submit to the director of administrative services, at such times and in such form as the director shall prescribe, reports showing all property which is no longer used or which has been obsolete or worn out. The director of administrative services shall have authority to sell all property which cannot be used by any department or which has become unsuitable for city use, by negotiated sales, through the acceptance of sealed bids, by public auction, or by exchange or trade-in for new property and equipment. The director of administrative services may in writing delegate any authority 12 971104 lac 0031847 granted to the director pursuant to this chapter with respect to property valued at less than five thousand dollars. (b) Authority of city manager. The city manager may authorize the abandonment, destruction or donation to public bodies, charitable, civic or nonprofit organizations, of city property which has no commercial value or of which the estimated cost of continued care, handling, maintenance or storage would exceed the estimated proceeds of sale. Such determination shall be made in writing and countersigned by the director of administrative services. The city manager may delegate any authority granted to the manager pursuant to this chapter. SECTION 3. Section 2.31.090 of Chapter 2.31 of Title 2 of the Palo Alto Municipal Code is hereby amended to read as follows: 2.31.090 Sale to vest title. On payment of the price bid for the property sold, delivery of the property sold with a bill of sale signed by the manager of purchasing and contract administration shall vest title in the purchaser. SECTION 4. The Council finds that this is not a project pursuant to the California Environmental Quality Act ("CEQA") and that no environmental assessment is necessary. SECTION 5. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: OCTOBER 20 , 1997 PASSED: NOVEMBER 3, 1997 AYES: ANDERSEN, EAKINS, FAZZINO, HUBER, KNISS, ROSENBAUM, SCHNEIDER, WHEELER NOES: ABSENT: MCCOWN ABSTENTIONS: ATTES erk APPROVED AS TO en /Asst . City Attorney Acting Director of Administrative Services 13 971104 lac 0031847