Purchasing Policy

City of Southlake Purchasing Policy

Policy: Purchasing Policy

Source: City Council

Category:

Finance Administration Effective Date: September 15, 2020 City Council Approval Date: September 15, 2020

Purpose

The purpose of this Purchasing Policy is to ensure accountable, efficient, transparent, and ethical practices are used to acquire products and services This policy is intended to promote the best interest of the citizens of the City and compliance with State purchasing statutes

Applicability

The Purchasing Policy applies to the purchasing activities of the City

Responsibility and Authority

Under the City of Southlake’s Charter 9 41, the Council may, by ordinance, confer upon the City Manager general authority to contract for expenditures without further approval of the Council for all budgeted items not exceeding limits set by the Council All contracts for expenditures involving more than the set limits must be expressly approved in advance by the Council All contracts or purchases involving more than the limits set, shall be let to the bidder whose submittal is among those most responsive to the needs of the City after there has been opportunity for competitive bidding as provided by law or ordinance; provided that the Council, or City Manager in such cases as he/she is authorized to contract for the City, shall have the right to reject any and all bids

With Ordinance No 888, dated June 19, 2005, City Council conferred upon the City Manager general authority to contract for expenditures without further approval of the Council for all budgeted items not exceeding limits as specified in Texas Local Government Code 252.021(a) or its successor statute City Council must approve all other purchases, except when an emergency purchase exists, as defined by state law.

Department Directors shall ensure their department’s adherence to this policy Department Directors shall determine and assign the appropriate approvers within their department Approvers are responsible for ensuring that departmental purchases adhere to this policy and all budgetary requirements

Competitive Sealed Bids

A purchasing method by which a governmental entity will indicate specific requirements and specifications for its purchasing need and then posts a notice inviting potential suppliers to submit bids with their offered price Each bidder gets the chance to submit a bid once without any modifications allowed. The government will typically select the bidder who offers the lowest price or best value to the entity

Competitive Sealed Proposals

A purchasing method by which a governmental entity may request proposals and pricing information based on the scope of work provided, rank the offerors, negotiate a contract, and then award the project to the contractor that offers the best value and most advantageous proposal

Component Purchases

Purchases of the component parts of an item that in normal purchasing practices would be purchased in one purchase

Historically Underutilized Business (HUB)

A corporation, sole proprietorship, partnership or a joint venture formed for the purpose of making a profit in which at least 51 percent ownership of the business is by a woman, minority and/or service-disabled veteran The State of Texas must certify the business as a HUB to qualify

Separate Purchases

Purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase

Sequential Purchases

Purchases made over a period, of items that in normal purchasing practices would be purchased in one purchase

Purchasing is a function of each department The Purchasing Division shall provide guidance and assistance to departmental personnel regarding purchasing The Purchasing Division shall monitor compliance with purchasing laws, City policies and procedures

All purchases shall be in accordance with the laws of the State of Texas, including, but not limited to, Chapters 252 and 271 of the Texas Local Government Code, and the City of Southlake Charter All purchasing shall adhere to sound purchasing procedures to ensure that Southlake taxpayers receive the best value for City purchases

GENERAL

BIDDING PARAMETERS

Purchases Less Than the HUB Requirements

The Texas Local Government Code 252 0215 or its successor statute sets the Historically Underutilized Business (HUB) requirements No quotes are required but are recommended when possible Only departmental level approval as determined by the Department Director is required

Purchases Within the HUB Requirement Range

These purchases require at least three informal written quotes/bids At least two of the contacts solicited for quotations must be from vendors on the State’s current certified HUB list. If the listing fails to identify a HUB in the county in which the City is situated, the City is exempt from this requirement The written quotes and the solicitations must be retained for auditing purposes The Texas Local Government Code 252 0215 or its successor statute sets the Historically Underutilized Business (HUB) requirements Departmental level, purchasing division, and when applicable, City Manager Office approvals are required. Purchases Governed by the Competitive Purchasing Requirements

The Texas Local Government Code 252 or its successor statute sets Competitive Purchasing requirements The City may use either Competitive Sealed Bids or Competitive Sealed Proposals for expenditures or purchases subject to Competitive Purchasing requirements Contracts required to be procured by Competitive Purchasing are awarded or rejected by the City Council

Competitive Sealed Bidding

The City will use the “best value” method to award contracts under the competitive sealed bid method The City will indicate in the bid specifications that the contract may be awarded either to the lowest responsible bidder or to the bidder who provides goods and services at the best value to the City The City will further indicate in the bid specifications that it reserves the right to reject any or all bids and reopen the bidding process if it is in the best interest of the City

In determining the “best value” for the City, the City may consider: • Purchase Price; • Reputation of the bidder and the bidder’s goods and services; • Quality of the bidder’s goods or services; • Extent to which the goods or services meet the City’s needs; • Bidder’s past relationship with the City; • Impact on the ability of the City to comply with laws and rules relating to contracting with historically underutilized businesses and nonprofit organizations employing persons with disabilities; • Total long-term cost to the City to acquire the bidder’s goods or services; and • Any relevant criteria specifically listed in the request for bids.

Competitive Sealed Proposals

Requests for proposals must solicit quotations and must specify the relative importance of price and other evaluation factors Discussions in accordance with the terms of a request for proposals may be conducted with offerors who submit proposals and who are determined to be reasonably qualified for the award of the contract Offerors shall be treated fairly and equally with respect to any opportunity for discussion and revision of proposals. To obtain the best final offers, revisions may be permitted after submissions and before the award of the contract

Exceptions to Competitive Purchasing Requirements

Texas Local Government Code Section 252 022 or its successor statute outlines exemptions from the Competitive Purchasing Requirements, including during emergencies With Ordinance No 888, City Council conferred upon the City Manager authority to authorize emergency expenditures, as defined in State statute, without competitive bids / proposals The City Manager shall present the emergency expenditures to City Council for ratification within 30 days.

Change Orders

With Ordinance No 888, City Council conferred upon the City Manager the authority to approve change orders to a contract for a decrease or increase up to the amount specified in Texas Local Government Code Section 252.048(c). City Council shall approve a decrease or increase greater than the amount specified in Texas Local Government Code Section 252 048(c) The original contract price may not be increased by more than 25 percent The original contract price may not be decreased by more than 25 percent without the consent of the contractor

CRIMINAL PENALTIES

A City officer or employee commits an offense if the officer or employee intentionally or knowingly makes or authorizes separate, sequential, or component purchases to avoid the competitive bidding requirements of Texas Local Government Code Section 252 021 (Competitive Requirements for Purchases) or any other requirement of Chapter 252 of the Code

SURPLUS PROPERTY

The City shall dispose of a surplus property item with an estimated net auction value greater than $500 through a public auction or internet sale to the highest bidder For heavily damaged or items with an estimated net auction value less than $500, the City may donate the item to a nonprofit organization, recycler, or dispose of the item. The cost of storage of these items and personnel time required to manage the auction items, including meeting the highest bidder is significantly more than the net proceeds and therefore, not cost effective.