02-05-2019 - AGENDA ITEM 11 PURCHASING POLICYAGENDA ITEM NO. 11
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE:
February 5, 2019
TO:
Mayor and City Council
FROM:
Chris Freeland
City Manager
SUBJECT:
PURCHASING POLICY
RECOMMENDATION:
It is recommended that the City Council receive and file this report.
BACKGROUND:
Council Member Castellanos asked for this item to be agendized at the January 15, 2019 City Council
Meeting. The City of West Covina adopted a Purchasing Ordinance (Ordinance No 576) on June 23, 1958,
which was subsequently amended by Ordinance No. 2070 on July 3, 2001, Ordinance No. 2172 on March 4,
2008, and Ordinance No. 2276 on June 16, 2015. The City adopted Ordinance No. 2337 on April 3, 2018.
After adoption of Ordinance No. 2337, a revised Purchasing Policy (Attachment No. 1) implementing the
changes dated April 3, 2018, was disseminated to all staff.
DISCUSSION:
The Purchasing Policy dated April 3, 2018 was a compilation of efforts by City staff and a financial consultant
from Lance, Soll and Lunghard, LLP, to review the City's Municipal Code and Purchasing Policy to facilitate
bringing them into compliance with Federal and State guidelines.
The Purchasing Policy includes five (5) key interrelated components, which were developed following the
Committee of Sponsoring Organizations (COSO) Framework which were recommended by the Federal
Government under Uniform Guidance. Following these five (5) components will further standardize the
processes in order to secure services, materials, supplies and equipment at the lowest possible cost consistent
with satisfactory standards of quality, availability and suitability of the goods or service required.
This is the tone of the organization which sets the foundation of the
system of internal controls. (Page No. 5)
2. RISK ASSESSMENT: This is the process in which you ask, "What can go wrong?". This is a
continuous process for identifying, analyzing, and managing risk, which is performed by Management.
(Page No. 5)
3. CONTROL ACTIVITIES: These are the policies and procedures to help ensure that management
directives are carried out. These are the actions to mitigate risks and are to be performed by all levels
and throughout all locations of the government. (Page No. 6)
4. INFORMATION & COMMUNICATION: This is necessary for the City to carry out
its responsibilities. Communication is both external and internal. External communication includes
quote is not recommended, written documentation as to why it was not
recommended and purchasing should verify there is no conflict of interest
issues. (R2) (R3)
b. If greater than $2,500 but does not exceed $20,000, must be approved by
requesting Department Head and Finance Director. (RI) (R4) (R6)
c. If greater than $20,000 but does not exceed $30,000, must be approved by City
Manager. (RI)
d. If greater than $30,000, must be approved by City Council. (R7)
e. The Purchase Order greater than $30,000 requires the approval of the
requesting Department Head, the Finance Director, and the City Manager. (R1)
f. Staff reports or other forms of proof of appropriation, contract/agreement, and
current expenditure status should be forwarded to the Purchasing Division.
(RI)
Competitive Proposals (Non -Construction $30.001 or morel - Purchases for
supplies, services, and equipment of a value greater than $30,000 shall be made
through an advertised, written bid process outlined in Section 2-333 of the West
Covina Municipal Code. Request for proposals must be publicized and identify all
evaluation factors and their relative importance. Any response to publicized requests
for proposals must be considered to the maximum extent practical. Proposals must be
solicited from an adequate number of qualified sources. A written method for
conducting technical evaluations will be used for proposals received and for selected
recipients. Contracts must be awarded to the responsible firm whose proposal is most
advantageous to the program with price and other factors considered.
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 through A/E firms that are a
potential source to perform the proposed effort.
Formal bids shall be awarded by City Council, and a PO is required to place the order.
A copy of the Council approved staff reports, resolutions, executed
contract/agreements, and current expenditure status shall be forwarded to the
Purchasing Division as backup for the purchase requisition. All agreements shall be
executed by the Mayor or authorized individual as approved by the City Council
and/or defined under the Purchasing Ordinance, or any other related municipal
ordinance or related state code. (R4) (R5) (R6) (R7) (R8) (R9)
Solicitation for goods and services provide for all the following: (as required by 2CFR
215.44 a(3))
1) A clear and accurate description of the technical requirements for the material,
produce or service to be procured. In competitive procurements, such a
description shall not contain features which unduly restrict competition. (R2)
(R3) (R5)
2) Requirements which the bidder/offeror must fulfill and all other factors to be
used in evaluating bids or proposals. (R2) (R5)
3) A description, whenever practicable, of technical requirements in terms of
functions to be performed or performance required, including the range of
acceptable characteristics or minimum acceptable standards. (R2) (R5)
4) The specific features of "brand name or equal' descriptions that bidders are
required to meet when such items are included in the solicitation. (R2) (R5)
5) The acceptance, to the extent practicable and economically feasible, of
products and services dimensioned in the metric system of measurement. (R2)
(R5)
6) Preference, to the extent practicable and economically feasible, for products
and services that conserve natural resources and protect the environment and
are energy efficient. (R5)
Uniform Public Construction Cost Accounting Act
Where applicable and upon approval of Public Works Director and City Manager,
Public Works contracts may follow the alternative bidding procedure known as the
Uniform Public Construction Cost Accounting Act ("the Act') (adopted by City
Council Resolution 2007-83 on December 18, 2007) within the limits (currently
$175,000) specified in the Act. The Act was enacted under Public Contracts Code
Section 22000 through 22045 (PCC 22000-22045). In part, the Act (PCC 22032)
states that public work projects of $45,000 or less may be performed by negotiated
contract or PO, and projects of $175,000 or less may be let to contract by informal bid
procedures. City Council approval is required; however, for awards equal to or greater
than $45,000. Any public works project of more than $175,000 shall be let to contract
by formal bidding procedures. (As defined in the Public Contracts Code, "public
works contract' means an agreement for the erection, construction, alteration, repair or
improvement of any public structure, building, road, or other public improvement of
any kind.) Contracts over $175,000 or other amount established under the Act must
adhere to the bidding requirements set forth in the West Covina Municipal Code.
Except as permitted above, Public Works shall follow the bidding requirements as
defined in the State of California Public Contract Code, or as defined and required by
the Agency that provides the source of funding, whichever is more stringent.
Sealed Bids (Construction Proiects $30.000 or morel — This is the preferred method
for procuring construction with the following conditions:
a. A complete, adequate, and realistic specification or purchase description is
available
b. Two or more responsible bidders are willing and able to compete effectively
for the business
c. The procurement lends itself to a firm fixed price contract and the selection of
the successful bidder can be made principally on the basis of price
The invitation for bids will be publicly advertised and bids must be solicited from an
adequate number of known suppliers, providing them sufficient response time prior to
the date set for opening bids. The invitation for bids, which will include any
specifications and pertinent attachments, must define the items or services in order for
the bidder to properly respond. All bids will be publicly opened at the time and place
prescribed in the invitation for bids. (R2) (R3) (R5)
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 costs, and life cycle costs must be considered in determining which bid
is lowest. Payment discounts will be used to determine the low bid when prior
experience indicates that such discounts are usually taken advantage of and any of all
bids may be rejected if there is a sound documented reason.
• Lowest Quote means the bidder who best responds in price, quality, service,
fitness, or capacity to the particular requirements of the City. Price alone
shall not be the determining factor, but shall be considered along with such
factors as the ability of the bidder to deliver, availability of parts or service,
prior experience with the bidder, and other factors relating to the particular
needs of the City for the supplies, equipment or service to be purchased. (R3)
The company's name, dollar amount quoted, date, and name and phone
number of the individual rendering the quote should be documented and
forwarded to the Purchasing Division as backup to the purchase requisition.
Letters of Proposal, Order Forms, and/or written quotations are also considered
backup, and should be forwarded to the Purchasing Division. Please note the
requisition number on all backup. (R4)
EXCEPTIONS
1) A legal ad is not required for professional services.
2) Under certain circumstances, procurements may take place without competitive
bidding or obtaining three (3) written or verbal quotations. Examples of such
circumstances are as follows:
a. Emergency Purchases (R9)
Emergency Purchases shall be handled as set forth in the Emergency Purchases
section. Proper authorization shall be obtained at the earliest opportunity after
the emergency has been addressed.
b. Sole Source Procurements (R9)
Occasionally, certain supplies, material, equipment, or services are of a
proprietary nature, or are otherwise of such specific design or construction, or
are specifically desired for purposes of maintaining cost effective system
consistency, as to be available from only one source. Sole source procurements
require a written explanation as to the nature of the product, what specific
feature makes it a sole source, why substitution cannot be used and an
explanation of effort expended in trying to find other sources. The written
explanation shall be forwarded to Purchasing as backup.
c. No Response Received to Bids (R9)
After making a good faith effort to obtain bids that results in no bids received,
the order may be placed with a qualified supplier. A list should be forwarded to
the Purchasing Division as backup showing the vendors contacted.
d. Bid Procedure is Dispensed by Majority Vote of the City Council (R9)
The City Council may dispense with competitive bidding procedures upon
finding that it would be impracticable, useless or uneconomical to follow such
procedures and that the public welfare would be promoted by dispensing with
the same. (WCMC, Sec. 2-330, Bidding)
e. Federally funded projects exceeding $100,000 and procurements were awarded
by negotiation, or awarded when only a single bid or offer was received, or
awarded to other than the apparent low bidder, or specifying a "brand name"
product must get prior federal awarding agency approval. (R5)
f. Exceptions Payable on Demand - The following items are exceptions and DO
NOT require a purchase order. (R9)
i.
Conference Expenses
ii.
Credit Cards
iii.
Entertainment
iv.
Luncheons
V.
Mileage Reimbursements
vi.
Training
vii.
Travel Expenses
viii.
Other Debt Service (Bonds, notes)
ix.
Petty Cash/Refunds
X.
Utility Payments
xi.
Memberships
C2) Council approved, multi -year contracts require a separate purchase order for
each fiscal year of the contract effective July 1 through June 30. Purchase
requisitions should reference the term of the contract and the date of the Council
meeting (e.g., "first year of five-year contract as awarded by City Council on
6/15/2010"). The staff report, adopted resolution, and executed agreement shall
accompany all purchase requisitions and purchase orders. (RI) (R7) (R8)
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C3) Some form of cost or price analysis shall be made and documented in the
procurement files in connection with every procurement action of greater than
$2,500. Price analysis may be accomplished in various ways, including the
comparison of price quotations submitted, market prices, and similar indicia,
together with discounts. Costs analysis is the review and evaluation of each
element of cost to determine reasonableness, allocability and allowability. (as
required 2CFR 215.45) (R3) (R5)
C4) Where appropriate, an analysis is made of lease and purchase alternatives to
determine which would be the most economical for the City of West Covina. (as
required by 2CFR 215.44 a(2) (R3) (R5))
C5) PO Processing Schedule
a. Purchase Orders Issued - Upon receipt of system -approved purchase
requisitions and appropriate backup, purchase orders will be issued. (R9)
b. Emergency purchase orders may be obtained immediately from Purchasing
upon request from a Department Head (or his/her designee). Provide
Purchasing with a completed requisition form along with the emergency
request form (available on citywide drive), description of the emergency,
account number, and a "Not to Exceed" amount. (R9)
c. Confirming Orders - WILL NOT be accepted. Please obtain PO prior to
placing order. (R9)
C6) Bid Splitting - Supplies, services, equipment, or professional services may not
be split or separated into smaller projects or job tasks for the purpose of evading
approval requirements or obtaining City Council approval. (An example of bid
splitting would be placing an order with Office Depot for $2,500 for an office desk
and chair; then entering a second order for a conference table and conference
chairs, and maybe a third order for lateral cabinets. The total amount to this vendor
for office furniture exceeds $2,500. The office furniture should be bid.) (R5)
C7) Advance Payments - Payment made to a vendor before the goods are delivered or
service performed should not occur on procurements over $2,500. If an advance
payment cannot be avoided, a Performance Bond equal to the amount of the
advance payment may be required. "Notwithstanding, advance payments may be
made as a deposit for the purchase of materials/services or, provide for in writing
an agreement properly approved and executed by the City and subject to the limits
specified within this policy."
C8) Encumbrance of Funds - Except for Emergency procurements, all purchases that
exceed $2,500 require Department Head approval and the approval of the Finance
Director who shall determine that there exists an unencumbered appropriation in
the fund account against which said purchase is to be charged. Such determination
shall be made before any commitment to the supplier is made. (RI) (R4)
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C9) Suspension and debarment - All contracts awarded over the small purchase
threshold, and are funded by the federal agency must be checked for exclusion on
the System Award Management (SAM). If a current exclusion of the SAM then
the award will not be awarded. (R5)
INFORMATION & COMMUNICATION: (This is necessary for the City to carry out
their responsibilities and it must be identified captures, and communicated to all City
personnel who hold responsibility for purchasing. Communication is both externally and
internally. External communication includes department heads receiving proper training
and relevant membership/access to grant compliance resources and procurement
requirements. Internal information within the City must be communicated in all directions
to allow employees to carry out day-to-day activities relating to purchasing.)
I&C1) Annually the Purchasing Policy should be reviewed and disbursed to all
department's delegated managers/staff.
I&C2) Annual audit (Single Audits or other agency specific audits) should be
distributed and discussed each year with all departments regarding any
purchasing findings, if applicable.
I&C3) Any discrepancies found during the monitoring process should be
discussed with related department heads and department staff.
MONITORING: (This is an ongoing assessment and separate evaluation which tests
whether the controls are being effective. Internal auditing within the City include
sampling of transactions and testing of compliance.)
MI) Finance Department will review agenda/minutes from Council meetings for
projects/contracts exceeding $30,000 discussed/approved by Council.
M2) Upon Notice of Completion requests, Finance Department will verify all
invoices have been received and recorded by the Account Payable Clerk.
M3) Upon Notice of Completion approval, Purchasing Division will verify
corresponding purchase orders have been closed.
ASSESSING AND REPORTING MONITORING RESULTS INTERNALLY
• Purchase orders not provided to the Finance Department will be documented
and reported to the Department Head responsible for the contract.
• Compliance issues noted will be documented and reported to the Finance
Director, Department Head responsible for the contract, and the City Manager.
• Corrective action should be prepared and documented by the Department Head
responsible for the contract and provided to the Finance Department and the
City Manager.
• Based on deficiency, consider compensating controls that can prevent repeat
findings.
• Each deficiency reported should be ranked as High, Moderate, or Low:
o High Risk — Can result in a material finding and loss of City Funds.
o Moderate Risk — Potential results can accumulate to a material issue
over time.
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o Low Risk — Errors more relate to loss of efficiency than material
amounts.
• Consider corrections based on deficiency risk.
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EMERGENCY PURCHASES
PURPOSE:
The purpose of this policy is to provide regulations for the emergency purchase of needed
materials, repairs and services consistent with the provisions of the West Covina Municipal Code
and City Purchasing Ordinances.
AUTHORITY:
Section 2-154 of the West Covina Municipal Code states, "In case of disaster which threatens the
life or property of the people of the City, the City Manager is hereby empowered to award
contracts and make purchases as may be necessary to meet such emergency, providing he shall
file with the Council at the next meeting a certificate defining the emergency and the necessity for
such action together with a detailed account of all expenditures."
POLICY:
The City of West Covina defines an emergency purchase as materials, repairs and services needed
for the immediate preservation of health, safety and welfare of the people, repair to existing City
equipment which impacts ongoing City operations, or for the protection of property, and that
there is a present, immediate and existing emergency which could not reasonably be foreseen.
PROCEDURES:
A. The emergency procurement of materials, repair and service needs, when identified as an
emergency, shall be processed as follows:
1. In advance of any commitment, a requesting Department Head (or authorized designee)
should contact the Purchasing Division and explain the nature of the emergency and the
account number to which the procurement will be charged. Identify the materials, repair or
service needed along with the recommended vendor and an estimated cost.
2. Based on the identified need, the Purchasing Officer may authorize the advance assignment
of an Emergency Purchase Order Number, subject to later confirmation.
3. Attaining an Emergency Purchase Order Number does not relieve the department
requesting the order of its responsibility of obtaining the proper levels of purchasing
approval. Proper authorization shall be obtained at the earliest opportunity after the
emergency has been addressed.
a. Emergency procurements that exceed $2,500 require an Emergency Purchase
Exceeding $2,500 form signed by the City Manager (form is available on citywide
drive). The form shall clearly describe the nature of the emergency, the amount of
the expenditure, and the account number from which the purchase is being made.
b. The completed form and any applicable supporting documentation should be
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forwarded to the Purchasing Division who will be responsible for obtaining the
signature of approval from the City Manager.
c. Emergency purchases over $30,000 require City Council approval. It is the
responsibility of the requesting department to complete and submit staff reports for
emergency purchases that exceed $30,000. Such approval should be obtained at
the next Council meeting, but after the emergency has been addressed. Staff
reports will define the nature of the emergency, the amount of the expenditure, and
the fiscal impact.
B. Unauthorized Purchases:
1. Except where Department Heads may find it necessary to respond to an emergency
situation at night, or during weekends and holidays, the Purchasing Division will not issue
confirming POs for unauthorized commitments made by City employees.
2. With the above exception, obligating the City to an unauthorized purchase is prohibited.
Any unauthorized purchases may constitute a personal liability to the employee and/or
may give rise to disciplinary action, up to and including termination.
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PROFESSIONAL AND CONSULTING SERVICES
PURPOSE:
To standardize the process to be followed for the retention of professional and consulting services
so as to achieve the benefit and credibility of open competitiveness while recognizing the need to
be able to retain services based on the quality, not solely the cost of the work; and to provide a
structure for the control and reporting of services acquired so as to prevent violation of the
Municipal Code, State law, and this policy.
POLICY:
Professional service procurement exceeding $2,500 requires the submittal of a purchase
requisition with documenting backup to the Purchasing Division and the issuance of a Purchase
Order (PO).
PROCEDURES/CONTROLS:
The following procedures apply to applicable levels of procurement of professional/consultant
services. It should be noted that in all cases, the department shall endeavor to obtain the lowest
responsible cost established through a comparison of firms; retain only reliable and responsible
firms; and shall, where possible and practical, utilize local firms. A signed Statement of Non -
Collusion By Contractor form must be received by the Purchasing Division before a
purchase order is issued.
Cl) Less than $2,500 — For the retention of professional/consulting services less than $2,500,
the retaining department shall document the use of services via a time billing or letter
agreement. (R6) (R8)
C2) Greater than $2,500 but less than $30,000 — Where possible, a minimum of three (3)
written price quotes shall be received and documented as backup. A purchase requisition
shall be entered into the finance system and approved by the requesting department head.
All backup should be forwarded to the Purchasing Division complete with a signed
Statement of Non- Collusion by Contractor form (available on citywide drive). If the
lowest cost proposal is not selected, the reason for the selection must be documented by
memo and submitted to the Purchasing Division as backup before the procurement will be
approved, and a PO issued. (RI) (R3) (R4) (R6)
a. If greater than $2,500, but does not exceed $20,000, must be approved by the
requesting department head. (R6)
b. $20,001 to $30,000 — A minimum of three (3) written quotations based on a written
description of services shall be received. At a minimum, the retention of services shall
be by written letter of retention and may be by formal contract. (See the Professional
Service Agreement, available on the citywide drive that was prepared and approved by
the City Attorney.) If the lowest cost proposal is not selected, the reason for the
selection must be documented by memo and submitted to the Purchasing Division as
backup along with the request for an approved PO. Within this category, the
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department heads receiving proper training and relevant membership/access to grant compliance
resources and procurement requirements. Internal information within the City must be communicated in
all directions to allow employees to carry out day-to-day activities relating to purchasing. (Page No. 12)
5. MONITORING: This is an ongoing assessment and separate evaluation which tests whether the
controls are being effective. Internal auditing within the City includes sampling of transactions and
testing of compliance. (Page No. 12)
The Purchasing Policy states the following limits by position:
PURCHASE ORDER - Unless listed below as payable on demand, a purchase order is required for ANY
procurement that exceeds $2,500. Except for Public Works projects (construction) covered under the
California Uniform Public Construction Cost Accounting policies and procedures, all purchase orders are
subject to the following dollar limits.
• Purchases $2,500 or less — No quotes required.
• Purchases $2,501 — $20,000 - Three (3) written quotes w/PO request approved by Dept. Head & Finance
Director.
• Purchases $20,001— $30,000 - Three (3) written quotes w/PO request approved by Dept. Head, Finance
Director and City Manager.
• Purchases $30,001 or more — Formal bid procedure required w/Council approval prior to PO.
Exceptions to the competitive process (purchases that require three (3) bids) include: sole source procurements,
emergency purchases, and piggy -backing on another agency's bid which include General Services
Administration (GSA) and California Multiple Award Schedule (C-MAS) contracts.
Public Works construction projects are subject to the California Uniform Public Construction Cost Accounting
policies and procedures. As of January 1, 2019, the following limits were updated by the State:
1. < $60,000 to be performed by employees of a public agency by force account, by negotiated contract, or
by purchase order
2. Projects costing up to $200,000 to be contracted by informal bidding procedures: (minimum of 3 bids
required). If less than the three (3) bids are received through the formal or informal procedure, the project
may be performed by the employees of the public agency by force account or negotiated contract
(purchase order) with the only bidder.
3. Projects costing over $200,000 are subject to the formal bidding process.
Purchase Orders — Upon receipt of appropriate backup and the approvals, purchase orders are processed daily.
• Appropriate Backup includes the following
o Three (3) written quotes (when applicable)
o Requisition screen print showing available funding
o Other Reports /Documents:
■ Memos
■ Staff reports and copy of approved minutes or certification from City Clerk
■ Fully executed agreements, to include Insurance Certificate, Non -Collusion and
Indemnification forms.
Emergency procurements that exceed $2,500 require an Emergency Purchase form along with requisition form
signed by the City Manager. Complete directions are included in the Purchasing Policy located on the Citywide
drive.
The following is a listing of chapters in the Purchasing Policy which provides guidance to Staff.
General Purchasing Regulations
Emergency Purchases
Professional and Consulting Services
requesting Department Head, the Finance Director, and the City Manager shall
approve retention of professional/consulting services.
The approval by the Finance Director and City Manager should be obtained by filling
out a requisition form and forwarding the form to Purchasing along with backup
(including the Statement of Non -Collusion by Contractor form.) The Purchasing
Division shall be responsible for obtaining the Finance Director's and City Manager's
signatures. A PO will be issued once the approval of the City Manager is received by
Purchasing. (RI) (R3) (R4) (R6) (R8)
c. Retention of professional/consultant service exceeding $30,000 shall be by formal
contract, and shall be approved by the City Council through a staff report that
states the reason of retention along with the proposed source of funding. After
obtaining City Council approval, a purchase requisition will be completed and entered
into the finance system, and a copy of the staff report along with a copy of the
contract/agreement shall be forwarded to Purchasing as backup along with the
Statement of Non -Collusion by Contractor form. (RI) (R3) (R4) (R6) (R7) (R8)
d. The Purchase Order greater than $30,000 requires the approval of the requesting
Department Head, the Finance Director, and the City Manager. (R4)
e. Staff reports or other forms of proof of appropriation, contract/agreement, and current
expenditure status should be forwarded to the Purchasing Division. (RI) (R4)
Continuing Professional/Consultant Services — Departments should evaluate the potential use
of professional/consultant services that may be required over the course of the year. Where it is
anticipated that services in excess of the limits prescribed herein, departments should retain
continuing service proposals wherever possible, particularly where services may exceed the levels
requiring a formal contract. (R7)
Execution of Agreements — Pursuant to Section 40602 of the California Government Code
(R7) 40602. The Mayor shall sign:
(a) All warrants drawn on the City Treasurer.
(b) All written contracts and conveyances made or entered into by the City.
(c) All instruments requiring the City seal.
The legislative body may provide by ordinance that the instruments described in (a), (b),
and (c) be signed by an officer other than the Mayor.
Upon the effective date of any such ordinance, contracts and other instruments may be signed as
set forth in the City Council's approval.
Finance Department Review:
The Finance Department shall require documentation to ensure that departments are complying
with this policy beginning with its effective date. This will include letter of agreements and/or
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contracts with the professional service provider(s). Professional service procurement exceeding
$2,500 requires the submittal of a purchase requisition with documenting backup to Purchasing
and the issuance of a purchase order. In addition, the Finance Department shall periodically
review the continuing use of consultants for compliance with the above policy and shall maintain
a list of active contracts for auditor review.
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SPECIFICATIONS
PURPOSE:
A specification is a written description of the specific product(s) or service to be procured. The
purpose of a specification is to serve as a basis for obtaining supplies, service or equipment
adequate and suitable for the City's needs in a cost-effective manner while, to the extent
practicable, taking into account the cost of ownership and operation as well as the initial cost of
acquisition. Specifications are an integral part of every City formal bid (bids for goods or
service that exceed $2,500 or Public Works contracts). Simply speaking, specifications describe
the goods or service that the City wants to purchase.
Ias] 0Ma
Specification must be drafted with the objective of clearly describing the City's requirements. It is
the policy of the City that specifications permit maximum practicable competition consistent with
this purpose. The City procures standard commercial products. In developing specification,
accepted commercial standards shall be used, and to the extent possible, unique requirements
shall be avoided.
PROVISIONS:
It is the responsibility of each department to provide detailed, accurate specifications when
requisitioning supplies, equipment and services. Accurate specifications are essential for effective
bidding.
A. Performance Specifications — To the extent practicable, specifications shall emphasize
functional or performance criteria and limit design or other detailed physical descriptions to
those necessary to meet the needs of the City.
B. Brand Name Specifications — Use of brand names in specifications shall be for the purpose of
describing the standard of quality, performance, and characteristics the City desires and are
not intended to limit or restrict competition. If a brand name is incorporated into a
specification, whenever possible a minimum of two (2) acceptable brands shall be listed and
shall be followed by the words "or equivalent" stating that equivalent products to those
designated may be considered for award. Using specifications provided by a specific
manufacturer should be avoided. However, if used, the name of the manufacturer, model
number, etc. should be indicated. The bid document shall clearly state that the use of the
manufacturer's specifications is for the sole purpose of establishing the level of quality
desired. The City of West Covina reserves the sole right to determine and approve any
product submitted as an "or equal."
C. Vendor Assistance in Writing Specifications — On rare occasion, vendor assistance may be
required to develop a specification. The City may utilize the service of technical, financial and
legal experts in preparing specifications, bid/proposal evaluation, contract preparation and
inspection services. Such specifications shall be written in general terms, and the vendor shall
be informed that the information provided 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
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any preference over other bidders.
D. Specification Preparation - Purchasing shall prepare any bid specification after the requesting
department supplies a complete Scope of Work/Service or description of item(s) to be
purchased. Terms and conditions are a part of every purchasing specification. To best serve
the City of West Covina, Purchasing reserves the right to add boilerplate language to any
specification.
E. Draft Specifications — Before the specifications are let out to bid, final approval of the
specifications shall be obtained from the using department/division and the
department/division responsible for maintaining the item(s).
20
PUBLIC WORKS CHANGE ORDERS
PURPOSE:
Policy and procedures have been standardized for handling change orders for Public Works
contracts ("Public Works PO") that are most appropriate and in the best interest of the City of
West Covina.
DEFINITION:
A Change Order ("CO") is an authorized amendment to a previously approved Public Works PO
AUTHORITY:
Change Orders ("COs") in general are not specifically addressed nor authorized in the West
Covina Municipal Code, other than by reference to the Standard Specifications for Public Works
Construction. With respect to Public Works' contracts, the City of West Covina adopted
Ordinance 2237, which replaced Section 19-1 of the West Covina Municipal Code in its entirety
to read as follows:
"Sec. 19-1 Standard Specifications for Public Works Construction adopted.
Subject to the condition hereinafter set forth in this section, that certain code entitled
"Standard Specifications for Public Works Construction," 2012 Edition, written and
promulgated by the Public Works Standard, Inc., a mutual benefit corporation, consisting
of a published compilation of a uniform set of specifications, updated and embracing the
most modern materials and construction techniques for public works construction, adopted
by the County of Los Angeles, an agency for the State, one full printed copy of which,
printed as a code in book form, was by the City Council ordered filed and which has been
filed in the Office of the City Clerk, and which, as so on file, is hereby referred to and by
this reference expressly incorporated therein and made a part hereof as fully and for all
intents and purposes as though set forth herein at length, shall be and the same is hereby
adopted and established as the specifications, rules, regulations, standards, contracts,
permits and provisions which shall govern and apply to and be observed in the
construction, alternation, installation, repair, removal, and demolition of public works
within the City or by the City as to all matters therein set forth; subject, however, to the
condition that whenever any provision of such standard specifications hereby adopted
conflicts with any other provision or requirement of the Municipal Code and City's
Standard Plans, such other provision or requirement shall apply."
The "Standard Specifications for Public Works Construction," 2012 Edition is also known as the
"Greenbook " which has the following definitions:
• "Agency" is the legal entity for which the Work is being performed. The "Agency" is
therefore the "City of West Covina."
• "Board" is the officer or body constituting the awarding authority of the Agency. The
21
"Board is therefore the "City Council."
• "Engineer" is the Chief Engineer, Director of Public Works, or other person
designated by the Board, acting either directly or through authorized agents. The
"Engineer" is therefore the "Public Works Director or any other individual designated
by the City Council."
Section 2-10 (Authority of the Board and the Engineer) of the Greenbook states (italics added):
"The Board (City Council) has the final authority in all matters affecting the Work. Within
the scope of the Contract, the Engineer (Public Works Director) has the authority to
enforce compliance with the Plans and Specifications, The Contractor shall promptly
comply with instructions from the Engineer.
The decision of the Engineer is final and binding on all questions relating to: quantities;
acceptability of material, equipment, or work; execution, progress or sequence of work;
and interpretation of the Plans, Specifications, or other Contract Documents. This shall be
precedent to any payment under the Contract, unless otherwise ordered by the Board."
Section 3-2.1 (General) of the Greenbook states:
"The Agency may change the plans, specifications, character of the work, or quantity of
work provided the total arithmetic dollar value of all such changes, both additive and
deductive, does not exceed 25% of the Contract Price. Should it become necessary to
exceed this limitation, the change shall be by written Supplemental Agreement between
the Contract and Agency, unless both parties agree to proceed with the change by Change
Order."
Ias] 0(Wa
It is sometimes necessary to change a Public Works PO after it has been executed. All department
heads shall be responsible to properly administer all contracts pertaining to their respective
departments in order to ensure completed work product/purchase and to minimize potential cost
increases. The Public Works Director shall review, document and recommend/approve all
requests for COs, and shall be responsible and held accountable for any unnecessary increases,
proper documentation and/or subsequent approvals. The Public Works Director shall review and
approve any and all requests for increases in COs prior to authorizing the additional work or
purchase to proceed. Under no circumstance will the Public Works Director allow any additional
work or purchase to proceed without obtaining all necessary and required approvals. It shall be
the duty and obligation of all City employees and the respective department head to minimize and
eliminate change orders as much as possible. Unless otherwise authorized by City Council (by
contract, resolution or award of purchase, etc.), Purchasing may issue a formal CO based on the
following limits:
COs are limited to 10% of the total contract amount subject to the limitations set forth
herein. (To prevent a work stoppage or an emergency, the Public Works Director or
authorized department head may recommend that the City Manager approve a CO to a
construction project exceeding 10% of the initial project providing that City Council
22
approval is obtained at the earliest opportunity.) The Public Works Director or authorized
department head shall be responsible to administer all respective and related contracts to
minimize cost increases, shall review, document and then approve all requests for COs,
and shall be responsible and accountable for any unnecessary increases, improper
documentation and/or subsequent approvals.
2. COs in excess of 10% in which the total aggregate amount is over $10,000 and under
$30,000 may be approved by the Finance Director and City Manager and do not require
City Council approval. The Public Works Director is responsible for reviewing,
approving, documenting and justifying any COs.
3. City Council shall approve all increases or COs that exceed 10% of the original Council
approved contract amount (over $30,000). The Public Works Director is responsible for
reviewing, approving, documenting and justifying anyCOs.
4. The Public Works Department shall include in the award of contract/purchase for any
public improvement or construction projects, a reasonable contingency not to exceed 10%
or any other reasonable percentage justified by the department head and approved by the
City Council. As many public improvement projects are significant in costs, any CO's
over the contingency shall require City Council approval for the increase and fund
appropriation. The Public Works Department shall not increase or add projects for unused
fund appropriations to circumvent the purchasing and bidding policies of the City.
a. Any COs that do not exceed the contingency amount included at the time the
contract was awarded and approved by the City Council do not require City
Council approval. The Public Works Director is responsible for reviewing,
approving, documenting and justifying any COs.
b. Contingency amounts approved by City Council for any projects are not to be
included in the Purchase Order and shall be approved by completing a CO.
PROVISIONS:
A. An authorized CO shall be obtained prior to committing the City to any or additional
financial obligations. The finance system (Eden) establishes a clear audit trail by allowing
a CO to be issued against an existing Public Works PO using the original purchase order
number. Requesting departments initiate a CO by filling out a Change Order
Authorization form (see attached form) and having it signed by the requesting department
head. Please note the nature of the requested CO on the form, and forward the completed
form to Purchasing.
B. It is the aggregate of the original Public Works PO plus the amount of the CO that
determines the level of approval.
1. When the sum of the CO and original Public Works PO does not exceed $20,000
Only the approval of the department head is required. Forward a Change Order
Authorization form to Purchasing complete with the Public Works Director's signature.
Purchasing will enter the CO into Eden.
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CO + PO < $20,000 = Public Works Director Approval only
2. When the sum of the CO and Public Works PO is greater than $20,000 — The Finance
Director and City Manager must approve any CO that brings the aggregate Public Works
PO to an amount that exceeds $20,000. Forward a completed Change Order Authorization
form to Purchasing, approved by the Public Works Director, and Purchasing will obtain
the signatures of the Finance Director and City Manager. Once the CO is approved,
Purchasing will enter the CO into Eden.
CO + PO > $20,001 = requires Public Works Director, Finance Director and City
Manager approval
3. When the CO is less than 10% of the Public Works PO and does not exceed $30,000
The City Manager may approve COs up to $30,000 as long as the CO does not exceed
10% of the original order, except in an emergency. The aggregate of the CO and the
Public Works PO may not exceed $30,000. The Public Works Director shall complete and
approve the Change Order Authorization form, which shall be forwarded to Purchasing
who will obtain the signatures of the Finance Director and City Manager. Once the CO is
approved, Purchasing will enter the CO into Eden. The Public Works Director must
provide all proper documentation as to the justification for the CO. The CO is not
considered to be approved and work authorized until signed off by the Public Works
Director, Finance Director, and CityManager.
CO (<— 10% of Public Works PO) + Public Works PO > $30,000 = requires Public Works
Director, Finance Director, and City Manager approval
4. When the CO is more than 10% of the Public Works PO and less than $30,000 — A
CO in excess of 10% of initial contract amount requires a written Supplemental
Agreement between the Contractor and Agency, unless both parties agree to proceed with
the change by CO. The Public Works Director is responsible for reviewing, approving,
documenting, and justifying any COs.
CO (> 10% of Public Works PO) + Public Works PO < $30,000 = requires Public Works
Director, Finance Director, and City Manager approval
5. When the amount of the CO and Public Works PO exceeds $30,000 - Except for when
otherwise authorized by City Council, the City Council must approve any CO that would
increase the total contract price to be equal to or exceed $30,000. It is the requesting
department's responsibility to administer any contract or agreement, to further minimize
any need for a CO, and to obtain Council approval of a CO. Purchasing will enter the CO
into Eden once it receives the Change Order Authorization form with a copy of the staff
report and resolution approved by the City Council.
CO + Public Works PO > $30,000 = City Council approval
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6. When the Public Works PO exceeds $30,000 and is awarded by the City Council with
or without a Contingency — The Public Works Director may include a contingency of
10% to the original contract amount with appropriate necessary funding to cover any such
contingency on any contract to be awarded by the City Council. Any increase in cost that
exceeds the total amount originally approved by City Council (including contingencies)
requires the approval of the City Council.
CO + Public Works PO > Public Works PO + Contingency approved by City Council =
City Council approval
CO (reduction in price, purchase and/or scope of work) plus Public Works PO < original
contract amount awarded by City Council = requires Public Works Director, Finance
Director and City Manager approval. *
*City Council approval shall be required if the scope of work is changed which
alters the overall clear intent and/or direction of the City Council.
25
AMENDMENTS TO PURCHASE ORDERS
POLICY:
It is sometimes necessary to change a PO after it has been executed. All department heads shall be
responsible to properly administer all contracts pertaining to their respective departments in order
to ensure completed work product/purchase and to minimize potential cost increases. The
department head shall review, document and recommend/approve all requests for amendments,
and shall be responsible and held accountable for any unnecessary increases, proper
documentation and/or subsequent approvals. Department heads shall review and approve any and
all requests for increases in POs prior to authorizing the additional work or purchase to proceed.
Under no circumstance will the department head allow any additional work or purchase to
proceed without obtaining all necessary and required approvals. It shall be the duty and obligation
of all City employees and the respective department head to minimize and eliminate change
orders as much as possible. Unless otherwise authorized by City Council (by contract, resolution
or award of purchase, etc.), Purchasing may issue a formal amendment based on the following
limits:
Amendments are limited to 25% of the total contract amount subject to the limitations set
forth herein. (To prevent a work stoppage or an emergency, the Public Works Director or
authorized Department Head may approve an amendment to a project exceeding 10% of the
initial project providing that City Council approval is obtained at the earliest opportunity.)
The authorized Department Head shall be responsible to administer all respective and related
contracts to minimize cost increases, shall review, document and then approve all requests
for amendments, and shall be responsible and accountable for any unnecessary increases,
improper documentation and/or subsequent approvals.
2. Amendments in excess of 25% of the original contract/PO amount, must be approved by the
City Council if the aggregate of the amendment and the PO would be more than $30,000.
The appropriate Director shall be responsible for reviewing, approving and documenting any
amendments.
3. Formal amendments will not be required for small dollar amounts (not to exceed 25% of the
original order), such as sales tax, shipping or professional service reimbursable. Upon timely
receipt, Accounts Payable will pay such invoices once they are approved by an authorized
signature and coded with a correct account number.
PROVISIONS:
A. An authorized amendment shall be obtained prior to committing the City to any or additional
financial obligations. The finance system (Eden) establishes a clear audit trail by allowing an
amendment to be issued against an existing order using the original purchase order number.
Requesting departments initiate an amendment by filling out a Purchase Order Amendment
Authorization form (see Citywide drive) and having it signed by the requesting department
head. Please note the nature of the requested amendment on the form, and forward the
completed form to Purchasing.
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Specifications
Public Works Change Orders
Amendments to Purchase Orders
Credit Card Purchases
Fuel Card Program
Local Vendors
Invoice Payments
Surplus City Property
Contract Documents
Environmentally Preferable Purchasing
Cooperative Contracts
Procurement/Contracting using Federal Funds
The Purchasing Policy shall be amended from time to time with the approval of the City Manager for
additional clarification, as local, state and federal rules are updated.
Prepared by: Mark Baxter, Purchasing Manager
Additional Approval: Marcie Medina, Finance Director
Fiscal Impact
FISCAL IMPACT:
There is no fiscal impact associated with this report.
Attachments
Purchasing Policy
Ordinance No. 2337
B. It is the aggregate of the original PO plus the amount of the amendment that determines the
level of approval.
1. When the sum of the amendment request and original PO does not exceed $20,000
Only the approval of the department head is required. Forward a Purchase Order
Amendment Authorization form to Purchasing complete with the Department Head's
signature. Purchasing will enter the revision to the PO into Eden.
PO + Amendment < $20,000 = Department Head approval only
2. When the sum of the amendment and PO is greater than $20,000 — The Finance
Director and City Manager must approve any amendment that brings the aggregate PO to
an amount that exceeds $20,000. Forward a completed Purchase Order Amendment
Authorization form to Purchasing approved by the requesting Department Head, and
Purchasing will obtain the signatures of the Finance Director and City Manager. Once the
amendment is approved, Purchasing will enter the revision to the PO into Eden.
PO + Amendment > $20,001 = requires Department Head, Finance Director, and City
Manager approval.
3. When the amendment is less than 25% of the PO and the total does not exceed
$30,000 - The City Manager may approve amendments as long as the amendment does
not exceed 25% of the original order and the aggregate of the amendment and the PO may
not exceed $30,000. A Department Head approving the Purchase Order Amendment
Authorization form shall forward to Purchasing who will obtain the signatures of the
Finance Director and City Manager. Once the amendment is approved, Purchasing will
enter the revision to the PO into Eden. The Department Head must provide all proper
documentation as to the justification for the amendment. The amendment is not
considered to be approved and work authorized until signed off by the Department Head,
Finance Director, and City Manager.
Amendment (< 25% of PO) + PO < $30,000 = requires Department Head, Finance
Director, and City Manager approval
4. When the CO is more than 25% of the PO and less than $30,000 — A CO in excess of
25% of initial contract amount requires a written Supplemental Agreement between the
Contractor and Agency, unless both parties agree to proceed with the change by CO.
CO (> 25% of PO) + PO < $30,000 = requires Department Head, Finance Director, and
City Manager approval
5. When the amount of the amendment and PO exceeds $30,000 - Except for when
otherwise authorized by City Council, the City Council must approve any amendment that
is equal to or exceeds $30,000. It is the requesting department's responsibility to
administer any contract or agreement, to further minimize any need for an amendment,
and to obtain Council approval of an amendment. Purchasing will enter the amendment
into Eden once it receives the Purchase Order Amendment Authorization form with a
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copy of the staff report and resolution approved by the City Council.
Amendment + PO > $30,000 = City Council approval
6. When the PO exceeds $30,000 and is awarded by the City Council with or without a
Contingency — The Department Head may include a contingency of 10% to the original
contract amount with appropriate necessary funding to cover any such contingency on any
contract to be awarded by the City Council. Any increase in cost that exceeds the total
amount originally approved by City Council (including contingencies) requires the
approval of the City Council.
Amendment + PO > Total authorized by City Council = City Council approval
Amendment (reduction in price, purchase and/or scope of work) plus PO < original
contract amount awarded by City Council = requires Department Head, Finance Director
and City Manager approval. *
*City Council approval shall be required if the scope of work is changed which alters the
overall clear intent and/or direction of the City Council.
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CREDIT CARD PURCHASES
PURPOSE AND GOALS
The Purchase Card (P-Card) Program for the City of West Covina (City) employees provides an
efficient, cost effective method of purchasing and paying for small -dollar transactions. The Program
is designed to reduce numerous processes, such as petty cash, low -dollar checks, and small -dollar
purchase orders. These procedures provide the guidelines for use.
a) The P-Card is similar to a standard charge card, except payment is made by the
City.
b) The P-Card is only allowed to be used by the employee it's assigned to.
c) The P-Card allows you to purchase goods and services directly from vendors when the
transaction does not exceed $2,500. Travel expenses (conference registration, airline
tickets, hotel, and car rental) are exempt from the $2,500 transaction limit. It is against
this policy to split the cost of the purchase in order to bypass the purchase limit.
d) Each card is the property of the City and is to be used ONLY for City purchases as
defined in this policy.
e) All P-Card holders must have a completed Signature Authorization Form on file with the
Finance Department.
Usine the P-Card:
We strongly recommend that at least one person in each department have a P-Card and all
departments are encouraged to use their P-Cards for all orders under $2,500. The P-Card eliminates
the need to submit requisitions, subsequently reducing repetitive tasks and paperwork. All P-Card
holders must comply with these guidelines and holders will be personally responsible for charges
not in compliance with these guidelines.
The card can be used for conference registrations, travel expenses (flights, vehicle rentals, hotels,
and meals), seminars, subscriptions, dues, publications, supplies and services.
Restrictions:
The card may not be used for items on City contracts, or any products or services considered an
inappropriate use of City funds. If an item being purchased is in question as to it being allowed,
contact the Purchasing Manager for guidance prior to making such purchase.
The following items are prohibited but should not be considered a complete list:
• alcoholic beverages
• tobacco products
• greeting cards
• cash advances
• charitable contributions
29
• firearms
• furniture (any kind)
• hazardous chemicals
• political contributions
• prescription drugs
• renovation/construction services
• security systems
• donations
Gift cards and awards are allowed under the Use of Public Funds Policy. These items are only to be
purchased by Finance after approval by the City Manager.
Billing Reconciliation and Verification:
Individual card holders are responsible for completing the monthly P-Card Reconciliation Form
(available on citywide drive). The monthly cardholder statement received from the Card issuer will
detail charges made during the previous billing cycle. The statement and receipts are to be attached
to the completed P-Card Reconciliation Form and routed for approval.
A. Reconciliation Process:
The cardholder is required to reconcile each charge on the statement to the corresponding
original itemized receipt, each month within seven days of receipt of the s t a t e m e n t.
• The monthly statement and all original itemized receipts corresponding to transactions
listed thereon are to be attached to the P-Card Reconciliation Form.
• The business purpose of each expense should be noted in the space provided on the P-
Card Reconciliation Form.
• If the recipient of the goods and/or services is different than the cardholder, then the
recipient should sign the receipt, packing slip, or other documentation.
• The cardholder and supervisor must sign and date the P-Card Reconciliation Form
and then route it to Purchasing for review.
• The P-Card Reconciliation Form requires the approval of the immediate supervisor
and Department Head or designee for all employees. In the case of a Department
Head's expenses, the approval of the City Manager is required and in the case of the
City Manager, the approval of the Mayor is required.
• Finance will review the P-Card Reconciliation Form. Once all charges have been
verified, the expenditures will be posted to accounts in Eden via the monthly wire
register.
B. Disputing a Charge:
Disputed billing can result from failure to receive goods or services, fraud, incorrect amounts,
duplicate charges, etc. The cardholder should contact the supplier first to resolve any outstanding
issues. Contact the credit card issuer in case of any unresolved dispute.
30
Note that, by law, suppliers are not allowed to bill your card for purchases until the items have
been shipped.
C. Returning Item(s):
It is essential that the supplier be contacted for a return authorization. Items should be returned
directly to the supplier by whichever means the supplier requires. Retain supporting documentation
on file. The cardholder is responsible for ensuring that proper credit is posted for any returned
item(s).
D. Termination/Cancellationofthe Purchasing Card:
Purchasing cards may be cancelled if a department or individual does not comply with policies and
procedures stated in this document.
E. Lost/Stolen Card:
Immediately notify the credit card issuer and the Purchasing Manager if the card is lost or
stolen.
F. Payment to Card Issuer:
The Card issuer will do an automatic draft from the City's main checking account. This draft will
correspond to the charges that were made during the last cycle. This draft will be completed the day
after the invoice is created in order for the City to maximize the offered rebate.
G. New Card Implementation:
To request a Card, a New Purchase Card Request Form (available on citywide drive) needs to be
completed and transaction levels approved. In addition, a Cardholder Agreement Form (available on
citywide drive) needs to be completed and approved.
H. Request for Single Transaction Limit Increase:
By design, the single transaction limits are capped at $2,500. From time to time it may be necessary
to increase on a temporary basis. If the need arises, complete the Temporary Increase Request Form
(available on citywide drive) and route for approval.
Once the final approval has been received, Finance will contact the card issuer and increase the
single transaction limit for a temporary set time frame. This limit increase needs to be for a specific
defined purchase that is clearly explained on the form.
31
FUEL CARD PROGRAM
PURPOSE:
To promote operational efficiency, purchases of unleaded and diesel fuel may be made using the credit
card. The following policy and procedure are established to insure internal control and timely payment
of charges.
POLICY:
The City provides a universal fuel card system that allows authorized employees to fuel City vehicles at
most major retail gas stations, other than Arco and small independent stations, located in West Covina
and throughout California. The use of the fuel card is restricted to official City business and may not
be used for personal purchases. Use of the card is restricted to the purchase of fuel only. Any
misuse of the card will result in disciplinary action, up to and including termination. The basic
purchasing policy of the City of West Covina is to obtain quality supplies, services, and equipment
needed for the proper operation of its various departments at the lowest possible cost. In keeping with
this policy, every effort should be made to purchase fuel at West Covina stations whenever possible at
the lowest possible price. Except for motorcycles that use a higher -octane gasoline, the purchase of
unleaded gasoline will be limited to regular, 87 octane.
PROVISIONS:
1. Card Limits - Use of the City's card is limited to fuel purchases only specifically related to City
business for a maximum purchase not to exceed $150/purchase. Using the City credit card for
personal purchases is not permitted. Based on a sample of past bills for fuel usage, each card is
restricted by a daily transaction limit and a monthly spending limit. In most cases, cards are
limited to three (3) transactions per day and a monthly limit of $1200.
a) If necessary, the card system will allow a driver up to one additional transaction per day
beyond the limit shown and one additional fueling beyond the monthly spending limit. The
card will block usage beyond this "soft" limit.
b) If fuel consumption or cost patterns indicate that the limits are too low, adjustments to the
card limits can be made by a Department Head (his/her designee) sending a request in
writing to Fleet Operations or the Purchasing Division.
2. Card assignment - fuel cards will be assigned to all City vehicles, and individual cards will be kept
in each vehicle.
a) Any authorized employee may use the card assigned to a City vehicle. A list of employees
authorized to drive/fuel City vehicles is maintained in Finance and Fleet Operations.
b) The card shall only be used to fuel the vehicle to which it is assigned. Employees shall not
use the card to fuel any other vehicle except the one to which it is assigned, and employees
shall not fuel multiple vehicles at the same time using one card.
32
c) A sign out/in log must be used every time a department issued fuel card is checked out. That
log must be made available to fleet operations upon demand.
d) Department Heads may request the addition/deletion of authorized employees by contacting
Purchasing, ext. 8443 or Fleet, ext. 8789.
e) Inappropriate use of the fleet card may result in disciplinary action, including termination of
employment and criminal action.
3. Card Instructions — The following directions are provided to aid employees with step-by-step
instructions for using the fuel card.
a) If the gas station has a card reader located at the pump, swipe your card once. (DO NOT
swipe your card multiple times as this will cause the card to lock out any additional
transaction.)
b) If the pump terminal prompts you to choose either "Credit" or "Debit," press the "Credit"
key.
c) The terminal should then request your "DRIVER ID" number or "PIN" number. Your
DRIVER ID and PIN are the same 6-digit numbers. The numbers consist of your 2-digit
department number plus your Employee number. (Use 0 between department and employee
number so that the PIN number totals six digits.)
Example: John Doe is employee #343. He works for Police, department 31. His DRIVER
ID/PIN # is therefore 31 (Department) + 0 (extra digit) + 343 (employee #) = 310343
d) Finally, the terminal will ask you to enter the ODOMETER reading. Enter your odometer as
a whole number. DO NOT enter tenths of miles.
e) Because all terminals are different, you may be required to enter the information in a
different order. Simply follow the instructions on the terminal to process your transaction.
f) If there are no pump card readers, or if the card reader will not accept the card, see the
attendant inside to process your fuel transaction. If the station attendant cannot process the
transaction electronically, then a manual receipt should be issued.
g) If the sale must be processed manually, write your DRIVER ID/PIN #, the UNIT # and
ODOMETER reading on the receipt. If your card cannot be read at any location, the
magnetic strip may be damaged. Request a replacement card from your fleet manager:
Fleet - (626) 939-8789 or Purchasing — (626) 939-8443.
h) If the station attendant has questions, he/she may call the Customer Service number on the
back of the card.
33
Before leaving the vehicle, verify that the card has been returned to its correct place within
the vehicle.
Lost or Stolen Cards — A lost or stolen card must be reported to the Fleet Manager
immediately. Contact Fleet Operations at (626) 939-8458 or Purchasing Division at (626)
939-8443. The Fleet Manager will notify Fleet Systems.
34
LOCAL VENDORS
PURPOSE:
It is to the City's advantage to promote and maintain good relations with all vendors and to utilize local
West Covina suppliers whenever feasible to do so. The purpose of this policy is to assure that West
Covina businesses are solicited whenever there are potential sources of supplies, equipment and
professional services; and to encourage all departments to consider West Covina businesses whenever
purchasing goods.
POLICY:
The primary goal of the purchasing process is to get the very best value for the City considering a
combination of factors including price, quality, and terms. Departments will make a reasonable effort to
give West Covina businesses an opportunity to participate in all procurements for goods and services.
A. It is the intention of the City to place as many City procurements with local West Covina
suppliers as practicable.
B. In determining the lowest responsible bidder, the City will take into consideration the sales tax
that will be returned to the City as a result of the award. The West Covina municipal Code,
Article VII, Division 2, Section 2-330 (d) states, "With respect to those bids relating to the
purchase of items subject to state sales tax, the term "lowest responsible bidder" shall be
deemed to include a one (1) percent discount with a maximum of $1000 for local vendors in the
computation of bids in order to reflect the advantages that accrue to the City by the award of bid
to a local vendor."
C. Local vendors shall be given preference in the event of a tie bid. The West Covina Municipal
Code, Article VIE[, Division 2, section 2-333 (g) states, "If two (2) or more bids received are for
the same total amount or unit price, quality and service being equal, and if the public interest
would not be promoted by re -advertising for bids, the City Council may accept the one it
chooses or accept the lowest bid made by negotiation with the tie bidders at the time of bid
opening. In case of a tie, preference shall be given to local bidders."
D. In those cases where bids are not required (discretionary purchases), the advantages local
vendors offer by their close proximity and the corresponding positive impact to the local
economy should be considered as part of the purchasing decision.
PROCEDURE:
To insure as much participation as possible by West Covina suppliers, the following affirmative steps
shall be taken:
1. Locate local vendors — When procuring goods, City departments shall seek out qualified, local
vendors to participate in the procurement process. At a minimum, this effort shall include:
a) A review of the current telephone yellow pages
35
b) Current bid lists
c) Any internal directory of local vendors that may be available
d) An internet search, if available
2. Maintain and periodically update qualified West Covina businesses on a Bidders list.
3. Insure that public notices for formal bids are published in a newspaper of local circulation, and that
such notices are listed on the City's web site.
4. If subcontractors are to be used, encourage contractors to make a good faith effort to subcontract
with businesses located in the City of West Covina.
5. West Covina employees shall conduct their dealings with vendors in a professional manner and
shall promote equal opportunity by demonstrating fairness, integrity, and courtesy in all vendor
relations.
36
City of West Covina
Purchasing Policy
April 3, 2018
INVOICE PAYMENTS
PURPOSE:
The purpose of this policy is to establish written procedures for all authorized payments either by
demand or purchase order. The Finance Department shall then issue checks to pay various vendors in a
timely manner.
POLICY:
All invoices shall be mailed directly to Accounts Payable (A/P). All requests for payments from A/P
shall be by either an authorized demand or purchase order. To ensure that vendors receive payment
within the City's prescribed net 30-day term, invoices must be received by A/P in a timely manner,
coded, and approved. (An A/P Demand Schedule is posted and available upon request.) It is the
responsibility of the department to ensure that invoices are properly coded and approved by the
Department Head or his/her designee.
PROVISIONS:
1. Purchase Order Payments
The invoice shall be signed by the Department Head (or his/her designee), and it must be coded
with the proper account number(s) and PO if applicable. The Department Head's signature denotes
that the item(s)/service was received and that the invoice may be paid.
2. Demand Payments
After being approved by the Department Head and coded for payment, the original invoice and any
supporting documentation should be forwarded to Accounts Payable.
37
SURPLUS CITY PROPERTY
PURPOSE:
The purpose of this policy is to establish uniform procedures for the disposition of City property that is
most appropriate and in the best interest of the City of West Covina.
DEFINITION:
"Surplus property" is used to describe any City supplies or equipment that has become obsolete or
worn out, or is no longer needed or useable by the holding department. Surplus Property does not
include `real property."
POLICY:
A Department Head may declare any city -owned property as surplus by submitting a Surplus Property
form to purchasing (available on citywide drive). The Purchasing Officer shall dispose of said
equipment in the most appropriate manner that is in the best interest of the City of West Covina after
notifying all departments of the supplies/equipment that may be of use in another department.
PROVISIONS:
1. A Surplus Property form shall be completed and submitted to the Purchasing Officer for any
supplies/equipment that is/are deemed to be obsolete or worn out, or is/are no longer needed or
useable by the department. The report shall contain the quantity, description, serial number, City
I.D. number, location and condition of the equipment or supplies.
2. Any item with an estimated value of $250 or more requires City Council approval prior to sale. The
Purchasing Officer shall inform the City Council of the nature of the property proposed for
disposition and the recommended disposition thereof.
3. The Purchasing Officer shall post a list of serviceable surplus items so that all departments may
review the list and determine if something on the list may be useful to another department.
4. The Purchasing Officer or designee shall approve one of the following methods of disposition that
is most appropriate and in the best interest of the City.
a) Transfer — Surplus property may be transferred between City departments. After physically
inspecting any item that is posted on the list of surplus equipment, a department may request
that the item(s) be transferred into that department by submitting a written request to the
Purchasing Officer.
b) 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 Manager. If surplus property is to be applied to a purchase order, the trade-in
value shall be itemized on the P.O.
38
c) Public Auction — Surplus property may be sold at public auction. The City may contract with a
professional auctioneer including professional auction services. City employees may not bid or
purchase surplus equipment (WCMC, Sec. 2-317, Sale of Surplus Supplies and Equipment).
d) Disposal — Surplus property may be offered for sale by the Purchasing Officer by posting a
legal ad in a newspaper of general circulation. All surplus property is for sale "AS IS" with no
warranty, guarantee, or representation of any kind, express or implied, as to the condition,
utility or usability or the property offered for sale.
e) 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.
f) 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 awhole.
g) 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.
h) Disposal as Junk — If the Purchasing Officer determines that any such obsolete, unserviceable,
or surplus property has no salvage value or is unsafe, it may be disposed of in any acceptable
manner.
i) Donation/Gifts — Surplus property may be given to any fraternal, benevolent, patriotic,
charitable or religious organization not organized for profit, or to any other public agency. Any
such gift requires City Council approval.
j) Surplus items with an estimated value of less than $250 may be sold to employees.
5. The proceeds from sale of any surplus City Property, less direct costs from any sale, shall be
returned to the general fund revenue account "Proceeds from Auction" unless otherwise stipulated
or federally funded property. Federally funded property need to adhere to surplus property
requirements set forth in the grant management policy
39
CONTRACT DOCUMENTS
PURPOSE:
The purpose of this policy is to establish uniform procedures for the preparation, presentation and
execution of city and contract documents.
POLICY:
All ordinances, resolutions and contract documents (agreements) shall be examined and approved
by the City prior to presentation to the City Council. Pursuant to Section 2-22 of the West Covina
Municipal Code, adopted by Ordinance No. 1835:
"All ordinances, resolutions and contract documents shall, before presentation to the
Council, have been approved as to form and legality by the City Attorney, or his or her
authorized representative and shall have been examined and approved for administration
by the City Manager or his or her authorized representative, where there are substantive
matters of administration involved."
The Department Head shall be responsible to ensure that the documents properly reflect the
purpose and intent of the contract document.
The City Attorney shall review and sign all documents (resolutions, ordinances, contracts and
agreements) for proper legal content and form (approve as to form).
The Mayor shall execute all applicable contracts and agreements, unless otherwise provided for
by ordinance, pursuant to Section 40602 of the California Government Code. In the absence of the
Mayor, the Mayor Pro Tem shall fulfill the Mayor's duties pursuant to Section 40601 of the
California Government Code.
PROCEDURE:
1. The department head shall prepare all necessary documents and/or seek assistance from the
City Attorney to prepare such documents. The Department Head is responsible to ensure that
the documents properly and clearly state the scope of work, timeframe work or product is to
be delivered, and compensation.
2. The department head shall submit all resolutions, ordinances and/or documents (including
contracts and agreements) to the City Attorney for review and approval as to form, prior to
presentation to the City Council.
3. The Department Head shall submit a complete draft staff report that includes all attachments,
including but not limited to resolutions, ordinances and contracts/agreements for review and
approval, prior to presentation to the City Council.
4. The Department Head shall obtain at least the execution of one original document indicating
that contracting parting has agreed to the terms and conditions of the proposed
40
contract/agreement, prior to presentation to the City Council.
5. Upon approval, the Department Head shall submit three (3) executed agreements to the City
Clerk to obtain City signatures.
6. Upon execution, the City Clerk shall retain one (1) copy and send the remaining two (2)
copies to the Department Head. The Department Head is to retain one copy for the
department's file and send one copy to the contracting company/individual.
7. The Department Head shall authorize the commencement of work/purchase upon receiving a
copy of executed contract/agreement by issuance of a Purchase Order and all necessary
bonding and insurance from contractor.
41
ENVIRONMENTALLY PREFERABLE PURCHASING
PURPOSE:
To establish purchasing practices that, to the maximum extent practical, will assure the
procurement of environmentally preferable products to comply with the State of California Public
Contract Code.
POLICY:
Section 12400 of the Public Contract Code states, "environmentally preferable purchasing"
means the procurement of goods and services that have a lesser or reduced effect on human
health and the environment when compared with competing goods or services that serve the
same purpose. This comparison shall take into consideration to the extent feasible, raw
material acquisition, production, manufacturing, packaging, distribution, reuse, operation,
maintenance, disposal, energy efficiency, product performance, durability, safety, the needs of
the purchaser, and cost.
It is the intention of the City to practice environmentally preferable purchasing whenever
practicable when procuring goods and services. Purchasing preference shall be given to
environmentally preferable products/service when the following criteria applies.
The product/service meets applicable standards and can be substituted for a
comparable non -environmentally preferable product/service.
The product/service can be competitively bid.
The product/service costs no more than a comparable non -environmentally preferable
product/service. An exception can be made if the benefits (cost savings) of an
environmentally preferable product justify a reasonably higher cost.
IU110160If111.70
Procurement of all products with a total value exceeding $2,500 requires departments obtaining
the lowest responsible bid from a minimum of three (3) companies. To insure a much
participation as possible to supplies of environmentally preferable products, the following
affirmative steps shall be taken:
A. Maintain and periodically update qualified suppliers of environmentally preferable
products on a Bidders List.
B. Departments will make a reasonable effort to obtain pricing for environmentally preferable
products by specifying product compliance with existing, nationally recognized,
environmentally friendly standards such as Energy Star, Green Seal, and ISO 14000.
42
COOPERATIVE CONTRACTS / PIGGYBACKING
PURPOSE:
The use of cooperative procurement contracts is to leverage the benefits of volume purchases,
delivery and supply chain advantages, best practices and the reduction of administrative time and
expenses.
Examples of cooperative procurement contracts are: NJPA, NIPA, HGACBUY, US Commodities,
WSCA-NASPO.
POLICY:
Piggybacking is a form of intergovernmental cooperative purchasing in which an agency will be
extended the same pricing and terms of a contract entered into by another agency. Generally, the
originating agency will competitively award a contract that will include language allowing for
other agencies to utilize the contract which may be to their advantage in terms of pricing.
PROCEDURE:
Cooperative Contracts / Piggybacking purchases can be used if the following factors have been
met.
1. The goods / services must be specifically with the scope of the contract and the contract
must be active. A purchase cannot be made against a contract that has expired.
2. A proof of award and a copy of the contract must be obtained and information whether
the award was competitive or sole source must be supplied.
3. The use of cooperative contracts / piggybacking on other agencies agreements requires the
requesting Department to comply with all City requirements in regard to purchasing limits
and required documents.
43
PROCUREMENT / CONTRACTING USING FEDERAL FUNDS
PURPOSE:
The purpose of this policy is to outline the contract provision requirements for using Federal
funds to purchase materials, products, or services. These requirements governing the purchasing
process are designed to ensure that City staff:
• Follow a free and open competitive process in securing those products or services;
• Properly document purchasing activities anddecisions;
• Observe the special rules for particular kinds of purchases (small purchases, competitive
sealed bids, competitive proposals, and sole source procurements);
• Properly bond and insure work involving large construction contracts and/or subcontracts;
and
• Use local businesses and contract with small, minority and/or women -owned businesses to
the maximum extent feasible.
POLICY:
This means that the City should seek to buy with Federal funds only what is necessary under the
terms of its Agreement, and no more. The City is required to ensure the integrity of its purchasing
decisions; to document the history, results, and decisions behind its purchases; to follow the rules
for certain kinds of transactions; and to offer opportunities to local and disadvantaged firms to
respond to your purchasing needs. By following these requirements, the City is helping to
guarantee the fairness and the vitality of our free market system, and to ensure that taxpayer
resources are not being wasted.
The City has existing rules for purchasing services and products as defined in the Purchasing
Policy dated October 4, 2014 and City Ordinance No, 2276, along with its Municipal Code
Chapter2: Article VII. By observing these basic rules, the purchasing decisions can be more
efficient and follow the requirements for fair, competitive purchasing.
In addition, when the City uses Federal funds to purchase materials or services, it is not sufficient
simply to state that the City received the lowest possible price and followed the rules. You have to
be able to prove it. Therefore, to avoid disallowed costs and/or recapture of payments, it is necessary that
you document the background, need, and the details of every purchasing decision, whether it involves
renting an office or buying two-by-fours.
PROCEDURE:
CONTRACT PROVISIONS REQUIRED
All contracts, awarded by a recipient including small purchases, shall contain the following
provisions as applicable:
44
1. Equal Employment Opportunity —All contracts are required to comply with E.O. 11246,
"Equal Employment Opportunity" (30 FR 12319, 12935, 3 CFR, 1964-1965 Comp., p. 339),
as amended by E.O. 11375, "Amending Executive Order 11246 Relating to Equal
Employment Opportunity," and as supplemented by regulations at 41 CFR part 60, "Office
of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of
Labor."
2. Copeland "Anti -Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c)—All contracts and sub
grants in excess of $2000 for construction or repair awarded by recipients and subrecipients
shall include a provision for compliance with the Copeland "Anti -Kickback" Act (18 U.S.C.
874), as supplemented by Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or
Grants from the United States"). The Act provides that each contractor or subrecipient shall
be prohibited from inducing, by any means, any person employed in the construction,
completion, or repair of public work, to give up any part of the compensation to which he is
otherwise entitled. The recipient shall report all suspected or reported violations to the Federal
awarding agency.
3. Davis -Bacon Act, as amended (40 U.S.C. 276a to a-7)—When required by Federal program
legislation, all construction contracts awarded by the recipients and subrecipients of more
than $2000 shall include a provision for compliance with the Davis -Bacon Act (40 U.S.C.
276a to a-7) and as supplemented by Department of Labor regulations (29 CFR part 5,
"Labor Standards Provisions Applicable to Contracts Governing Federally Financed and
Assisted Construction"). Under this Act, contractors shall be required to pay wages to
laborers and mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors shall be required to pay
wages not less than once a week. The recipient shall place a copy of the current prevailing
wage determination issued by the Department of Labor in each solicitation and the award of a
contract shall be conditioned upon the acceptance of the wage determination. The recipient
shall report all suspected or reported violations to the Federal awarding agency.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333)—Where applicable, all
contracts awarded by recipients in excess of $2000 for construction contracts and in excess
of $2500 for other contracts that involve the employment of mechanics or laborers shall
include a provision for compliance with sections 102 and 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor
regulations (29 CFR part 5). Under section 102 of the Act, each contractor shall be required to
compute the wages of every mechanic and laborer on the basis of a standard work week of 40
hours. Work in excess of the standard work week is permissible provided that the worker is
compensated at a rate of not less than 112 times the basic rate of pay for all hours worked in
excess of 40 hours in the work week. Section 107 of the Act is applicable to construction work
and provides that no laborer or mechanic shall be required to work in surroundings or under
working conditions which are unsanitary, hazardous or dangerous. These requirements do not
apply to the purchases of supplies or materials or articles ordinarily available on the open
market, or contracts for transportation or transmission of intelligence.
45
5. Rights to Inventions Made Under a Contract or Agreement —Contracts or agreements for the
performance of experimental, developmental, or research work shall provide for the rights of
the Federal Government and the recipient in any resulting invention in accordance with 37
CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business
Firms Under Government Grants, Contracts and Cooperative Agreements," and any
implementing regulations issued by the awarding agency.
6. Clean Air Act (42 U.S.C. 7401-7671q.) and the Federal Water Pollution Control Act
(33 U.S.C. 1251-1387), as amended —Contracts and sub grants of amounts in excess of
$150,000 must contain a provision that requires the non -Federal award to agree to comply
with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42
U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C.
1251-1387). Violations must be reported to the Federal awarding agency and the Regional
Office of the Environmental Protection Agency (EPA).
7. Mandatory standards and policies relating to energy efficiency which are contained in the state
energy conservation plan issued in compliance with the Energy Policy and Conservation Act
(42 U.S.C. 6201).
8. Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2
CFR 180.220) must not be made to parties listed on the government wide Excluded Parties
List System in the System for Award Management (SAM), in accordance with the OMB
guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR Part 1986 Comp., p.
189) and 12689 (3 CFR Part 1989 Comp., p. 235), "Debarment and Suspension." The
Excluded Parties List System in SAM contains the names of parties debarred, suspended, or
otherwise excluded by agencies, as well as parties declared ineligible under statutory or
regulatory authority other than Executive Order 12549.
9. Byrd Anti -Lobbying Amendment (31 U.S.C. 1352)—Contractors that apply or bid for an
award of $100,000 or more must file the required certification. Each tier certifies to the tier
above that it will not and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or employee of any agency,
a member of Congress, officer or employee of Congress, or an employee of a member of
Congress in connection with obtaining any Federal contract, grant or any other award covered
by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non -Federal funds that
takes place in connection with obtaining any Federal award. Such disclosures are forwarded
from tier to tier up to the non -Federal award.
Bonding
The requirements for bonding in procurement are as follows:
1. For construction or facility improvement (sub) contracts exceeding $100,000, the following
minimum Federal requirements (2 CFR section 200.325) for bid guarantees, performance
bonds, and payment bonds must be met. These include:
46
TABLE OF CONTENTS
INTRODUCTION............................................................................................................... 3
GENERAL PURCHASING REGULATIONS................................................................... 5
EMERGENCY PURCHASES..........................................................................................14
PROFESSIONAL AND CONSULTING SERVICES.....................................................16
SPECIFICATIONS...........................................................................................................19
PUBLIC WORKS CHANGE ORDERS...........................................................................21
AMENDMENTS TO PURCHASE ORDERS..................................................................26
CREDIT CARD PURCHASES........................................................................................ 29
FUELCARD PROGRAM................................................................................................ 32
LOCALVENDORS..........................................................................................................35
INVOICEPAYMENTS.................................................................................................... 37
SURPLUS CITY PROPERTY.......................................................................................... 38
CONTRACT DOCUMENTS........................................................................................... 40
ENVIRONMENTALLY PREFERABLE PURCHASING .............................................. 42
COOPERATIVE CONTRACTS......................................................................................43
PROCUREMENT/CONTRACTING USING FEDERAL FUNDS ................................. 44
a) A bid guarantee from each bidder equivalent to 5 percent of the bid price. The "bid
guarantee" must be a firm commitment in the form of a bid bond, certified check, or
other negotiable instrument as assurance that the bidder is prepared to execute a
contract within the time specified for the bid amount.
b) A performance bond from the (sub) contractor for 100 percent of the contract price to
secure the (sub) contractor's fulfillment of all obligations under the contract.
c) A payment bond from the (sub) contractor for 100 percent of the contract price to
assure payment of all persons supplying labor and material under the contract.
2. For non-profit City, 24 CFR 84.48(c) states that for contracts or subcontracts awarded for
construction or facility improvement equal to or less than $100,000, a City must follow its own
policies for bid guarantees, performance bonds, and payment bonds.
For both non-profit City and governmental City, however, the City Agreement may mandate
compliance with the grantee's bid guarantee, bonding, and insurance requirements in
instances of contracts or subcontracts for construction or facility improvements with a value
equal to or less than $100,000.
Use of Local Businesses; Contracting with Small, Minority, and/or Women -Owned
Businesses
Federal regulations, both CDBG and non-CDBG, make it very clear that City should make every
effort to use local business firms and contract with small, minority -owned and/or women -owned
businesses in the procurement process. Specifically,
1. A City must take affirmative steps to use small firms, minority -owned firms, women- owned
firms, or labor surplus area firms in its CDBG-financed activities (24 CFR 85.36(e)). The
efforts which a City should make include:
a) Incorporating such businesses in solicitation lists whenever they are potential sources.
b) Ensuring that such businesses are solicited when identified as potential sources.
c) Dividing procurement requirements, when economically feasible, to permit maximum
participation of such businesses.
d) Requiring prime contractors, when subcontracts are let, to take affirmative steps to
select such firms.
2. In conformance with the requirements of Section 3 of the Housing and Community
Development Act of 1968, to the greatest extent feasible, City must award contracts for work
to be performed to eligible business concerns located in or owned by residents of the target
area to ensure that the employment and other economic opportunities generated by Federal
financial assistance for housing and community development programs shall, to the greatest
extent feasible, be directed toward low- and very low-income persons, particularly those who
are recipients of governmental assistance for housing (see 24 CFR570.607(b)).
City should note, however, that the desire to award contracts to local firms is not a legitimate
excuse for avoiding an open and competitive procurement process.
47
ORDINANCE NO. 2337
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, TO AMEND CHAPTER 2, ARTICLE VII OF
THE WEST COVINA MUNICIPAL CODE RELATING TO
PURCHASES AND SALES
WHEREAS, it is deemed to be in the City's best interest to purchase goods, services and
equipment more effectively.
NOW, THEREFORE, be it ordained by the City Council of the City of West Covina as
follows:
SECTION 1. That Section 2-316 (Surplus supplies and equipment) of Article VII
(Purchases and Sales) of the West Covina Municipal Code, is hereby amended to read as
follows:
See. 2-316. — Surplus supplies and equipment.
All using agencies shall submit to the purchasing officer, at such times and in such
form as he 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 dispose of surplus supplies and equipment in accordance with the City of West Covina's
Purchasing Policy after receiving authorization from the city council as to any item of an
estimated value of two hundred fifty dollars ($250.00) or more.
SECTION 2. That Section 2-317 (Sale of surplus supplies and equipment) of Article VII
(Purchases and Sales) of the West Covina Municipal Code, is hereby amended to read as
follows:
See. 2-317. — Sale of surplus supplies and equipment.
Surplus supplies and equipment may be sold to the public in accordance with the City of
West Covina's Purchasing Policy. City employees, however, are ineligible to bid on and to
purchase such surplus items except as authorized by the City of West Covina Purchasing
Policy.
SECTION 3. That Section 2-318 (Surplus supplies and equipment acquired with federal
funds) of Article VII (Purchases and Sales) of the West Covina Municipal Code, is hereby
amended to read as follows:
Secs. 2-318 — Surplus supplies and equipment acquired with federal funds.
Notwithstanding Sections 2-316 and 2-317, any surplus supplies or equipment purchased
with federal fiords shall be disposed of in accordance with the federal requirements for the
disposal of that particular supply or equipment. Additionally, the proceeds from the sale or
trade-in of surplus supplies or equipment purchased with federal funds shall be used to offset the
cost of replacing said supplies or equipment.
SECTION 4. That Section 2-330 (Bidding) of Article V1I (Purchases and Sales) of the West
Covina Municipal Code, is hereby amended to read as follows:
Sec. 2-330. — Bidding
(a) Purchases of supplies, services, equipment, and the sale of personal property shall be
pursuant to the bid procedures set forth in sections 2-333 and 2-334 and the City of West
Covina Purchasing Policy.
(b) Bidding may be dispensed with when an emergency requires that an order be placed with
the nearest available source of supply, when the amount involved is less than two thousand
five -hundred dollars ($2,500.00) or when the commodity can be obtained from only one (1)
vendor. The city council, by majority vote of its entire membership, may dispense with such
bidding and other procedures required by this division in any individual instance upon finding
that it would be impracticable, useless or uneconomical in such instance to follow such
procedures and that the public welfare would be promoted by dispensing with the same.
(c) With respect to those bids relating to the purchase of items subject to state sales tax, the
term "lowest responsible bidder" shall be deemed to include a one (1) percent discount for
local vendors in the computation of bids in order to reflect the advantages that accrue to the
city by the award of bid to a local vendor.
SECTION 5. That Section 2-331 (Purchase orders) of Article VII (Purchases and Sales) of the
West Covina Municipal Code, is hereby amended to read as follows:
See. 2-331. — Purchase orders
Purchases of supplies, services and equipment of a value greater than two thousand five
hundred dollars ($2,500.00) shall be made only by purchase order according to the City of
West Covina Purchasing Policy.
SECTION 6. The City Clerk shall certify to the passage and adoption of this ordinance, causing
it to be posted as required by law, and it shall be effective thirty (30) days after its adoption.
PASSED, APPROVED AND ADOPTE on day of April, 2018.
Mike Spence
Mayor
APPROVED AS TO FORM: T
ES
T
,
Ki berly I la Barlow iCkol. S. I.e� 's
City Attorney City Clerk
1, NICKOLAS S. LEWIS, City Clerk of the City of West Covina, California, do hereby certify that
the foregoing Ordinance No. 2337 was regularly introduced and placed upon its first reading at a
regular meeting of the City Council on the 20'' day of March, 2018. That thereafter said Ordinance
was duly adopted and passed at a regular meeting of the City Council on the P day of April, 2018
by the following vote of the City Council:
AYES: Johnson, Toma, Warshaw, Wu
NOES: Spence
ABSENT: None
ABSTAIN: None
ickolas S. Liv,
City Clerk
INTRODUCTION
This document defines the policies and procedures for the procurement of supplies, services and
equipment, for the City of West Covina. Its purpose is to establish standardized regulations to
City personnel for use in all procurement situations. The policy and procedures were developed
under the authority of the City of West Covina Municipal Code (Article VIL Purchases and
Sales), and are in conformance with the requirements of Federal and State codes and regulations.
The procedures serve as a guide for maintaining the City's reputation for fairness and integrity as
well as to ensure proper checks and balances. All purchasing functions will be conducted using
the highest ethical standards as derived from the Principles and Standards of Ethical Supply
Management Conduct advocated by the Institute for Supply Management (ISM) formerly
National Association of Purchasing Managers (NAPM) and the California Association of Public
Purchasing Officers (CAPPO). In addition, the Finance Department will remain constantly aware
of its responsibilities in spending public funds. This Purchasing Policy is not intended to
supersede the West Covina Municipal Code, City Ordinances or any State or Federal law.
The Purchasing Policy of the City of West Covina is to obtain quality supplies, services, and
equipment needed for the proper operation of its various departments at the lowest possible
cost while ensuring that the proper procedures are followed and necessary approvals
obtained. This manual strives to define decision making with prudent review and internal control
procedures to maintain departmental responsibility and flexibility in evaluating, selecting and
purchasing supplies, services, and equipment. To this end, each section of the manual will begin
with a "Purpose" or stated goal, and will be followed by "Provisions" or procedures that spell out,
in clear terms, how to purchase supplies, services and equipment. Every employee of the City is
responsible for adhering to the policies and procedures established by the City. When procuring
supplies, services, and equipment, all departments shall follow the policy and procedures that are
defined in this Purchasing Policy and Procedures manual.
These procedures were developed following the Committee of Sponsoring Organizations (COSO)
Framework which were recommended by the Federal Government under the Uniform Guidance.
In a joint initiative, The Committee of Sponsoring Organizations of the Treadway Commission
(COSO) and the American Accounting Association (AAA) developed the "COSO Framework".
The COSO Framework incorporates five (5) interrelated components: Control Environment, Risk
Assessment, Control Activities, Information and Communication, and Monitoring Activities.
These five components were utilized in developing the City of West Covina's Purchasing Policy.
The Procurement Policy of the City of West Covina is to accomplish three (3) objectives.
1) Operations of the City of West Covina are operating effectively and efficiently which
includes operational and financial performance goals and safeguarding of resources.
2) Reporting of the City of West Covina are reliable for proper financial reporting internally
and its preparation of the published financial statements.
3) Compliance of the City of West Covina are adhering to the laws and regulations which the
City of West Covina is subject to.
The Purchasing Division exists as a service agency for other departments and divisions of the
City. Our customers are the employees of the City of West Covina. Purchasing personnel must
function as an essential tool for all departments. Cooperation is essential for the successful
operation of the purchasing function. An effective purchasing program requires that all personnel
involved be part of a team. This procurement team must include not only the representative of the
ordering department and Purchasing, but also, the individuals responsible for the repair and
maintenance of the equipment to be purchased. By carefully following good purchasing practices
and procedures, the City's purchasing division can become essential in promoting efficiency and
economy in government operation.
By complying with adopted policy and procedure, we assure that our day-to-day operations run
effectively and efficiently, that we achieve our performance and financial objectives, and that we
safeguard our resources. As employees, defined policies and procedures let us know what is
expected of us and help us to define our job and understand our responsibilities.
The City of West Covina adopted a Purchasing Ordinance (Ordinance 576) on June 23, 1958
which has been subsequently amended by Ordinance 2070 (July 3, 2001), Ordinance 2172
(March 4, 2008), Ordinance 2276 (June 16, 2015), and Ordinance 2237 (April 3, 2018), which
this Purchasing Policy does not replace, but further provides administrative policies and
procedures to implement. This Policy shall be amended from time to time for additional
clarification.
GENERAL PURCHASING REGULATIONS
PURPOSE:
Policy and procedures have been standardized in order to secure services, materials, supplies and
equipment at the lowest possible cost consistent with satisfactory standards for quality,
availability and suitability of the goods or service required. In addition, these procurement
procedures shall provide for the City to avoid purchasing unnecessary items. (as required 2CFR
215.44 a(1)
CONTROL ENVIRONMENT: (This is the tone of the organization which sets the foundation
of the system of internal controls.)
City Manager and Department Heads (Management) will set the "Tone at the Top" for all City
employees relating to proper procurement of the City of West Covina. Management
communicates the ethical and integrity importance of the City. Management will communicate
the importance of the City of West Covina's Fraud, Waste, and Abuse Policy to employees in
which they have oversight. In addition, an annual review of the Conflict of Interest and Ethics
Policy will be distributed to all employees of the City.
CEl) Annually the following policies will be distributed to all employees with a returned
acknowledgement form:
a) Fraud, Waste, and Abuse Policy
b) Ethical Standards Policy (Conflict of Interest)
POLICY:
All purchases and payments will be made by either purchase order or by demand payment as
outlined below pursuant to the West Covina Municipal Code. This includes contracts and
maintenance agreements.
GENERAL PROVISIONS OF POLICY:
RISK ASSESSMENT: (This is the process in which you ask, "What can go wrong?".
This is a continuous process for identifying, analyzing, and management risk which is
performed by Management.)
RI) Purchases made by the City can exceed the approved budget.
R2) Purchases not made independent/fair and can be made to friends or relatives.
R3) Purchases can be made without the proper research for best prices resulting in
improper use of public funds.
R4) Purchases can be reported in the wrong accounts resulting in improper
financial reporting.
R5) Federally funded purchases can be made without meeting the proper compliance
requirements.
R6) Payment can be made on invoices unknown by department heads.
R7) Agreements/contracts may be entered without Council approval.
R8) Agreements/contracts can be signed without proper funds available.
R9) Lack of efficiency resulting in waste of City funds.
CONTROL ACTIVITIES: (This is the policies and procedures to help ensure that
management directives are carried out. These are the actions to mitigate risks and are to
be per by all levels and throughout all locations of the government.)
C1) Unless listed in Exceptions 2f (page 10) as "Payable on Demand," pursuant to
Section 2-331 of the West Covina Municipal Code, a purchase order (PO) is required
for ANY procurement that exceeds $2,500 according to the rules prescribed by the
City Manager and the West Covina Municipal Code. An authorized purchase order
shall be issued PRIOR to procuring supplies, services or equipment and committing the
City to any financial obligation. (RI)
A. Purchase Renuisitions - Departments request purchase orders by entering purchase
requisitions into the finance system and by completing a purchase requisition form.
Backup (staff reports, contracts/agreement, adjustment/appropriation memo, Eden
expenditure status) shall accompany all requisition requests submitted to the
Purchasing Division. Department Heads may establish a list of users (individuals
authorized to enter requisitions into the financial system) by submitting names to the
Purchasing Manager. Please note that requisitions are entered under one queue only,
and account numbers are assigned to specific queues.
Purchasing staff can enter POs directly for orders that are funded from accounts
assigned to different/multiple queues provided that the backup (i.e. invoice, staff
report, etc.) so specifies. (For example: Graffiti Abatement is charged to several
departments; all with different queues. The requesting department shall forward to
Purchasing a completed requisition form including backup consisting of the supporting
staff report that shows City Council approval and fund distribution. Purchasing will
enter the PO direct and send the requesting department a copy of the PO.)
B. METHODS OF PROCUREMENT T
Micro purchases ($2.500 or less) - The purchase of supplies, services and equipment
of an aggregate value that does not exceed $2,500 is not subject to competitive
bidding. However, wherever possible, a conscientious effort shall be made to obtain
products/services from West Covina vendors. Invoices shall be forwarded to Accounts
Payable after completing the following:
• Coding the invoice with the proper account number (R4)
• Obtaining an authorized signature approving payment of the invoice (R6)
Small purchases ($2.501 that do not exceed $30.000) - The purchase of supplies,
services and equipment of an aggregate value greater than $2,501 that does not exceed
$30,000 (including sales tax, shipping, etc.) requires a PO awarded to the lowest
responsible bidder after obtaining a minimum of three (3) written rate quotes.
a. The written rate quotes as support with the purchase requisition. If lowest