District of Sparwood Policy Manual Administration Purchasing Policy

Transcription

1 District of Sparwood Policy Manual Administration Purchasing Policy District of Sparwood Purchasing Policy Page 1

2 Table of Contents 1. Statement of Principles Ethics in Purchasing Conflict of Interest Definitions... 5 A. Best Value:... 5 B. Bid:... 5 C. Budget Authority:... 5 D. Equipment and Vehicle Capital Leases:... 6 E. Invitational Tender:... 6 F. Local Preferences:... 6 G. Professional Trade Work:... 6 H. Public Tender:... 6 I. Purchasing Cooperative Groups:... 6 J. Quotation:... 6 K. Request to Provide Expression of Interest (REOI):... 7 L. Request for Quotation:... 7 M. Request for Proposals:... 7 N. Tender:... 7 O. Tendered vs. Non-Tendered Purchases: New West Partnership Trade Agreement (NWPTA) Agreement on Internal Trade (AIT) Purchasing Guidelines Signing Authority Purchase of from $0 to $4,999 (excluding taxes) Purchases from $5,000 to $24,999 (excluding taxes) Purchases over $25, 000 (excluding taxes) Selection of Consultants and Professional Trade Services Lowest Bid Recurring Expenditures Authorization to Proceed Authority of the Chief Administrative Officer Petty Cash Credit Cards WorkSafeBC Selection of Suppliers Vendor Invoices Tendering and Requests for Proposals (RFP) Guidelines Calls to Tender or RFP Exception to Calls for Tender or RFP s Sole Source or Direct Award Inquiries and Clarification Receiving Tenders Public Opening Evaluation and Award of Tenders Evaluation and Award of RFP s Negotiations of RFP Publicly Tendered Contract and Receipt of a Single Tender Submission Tenders or RFP s that Exceed Budget Approval of District Council Notification of Bid Prices Documentation Gifts and Gratuities District of Sparwood Purchasing Policy Page 2

3 10. Selection of Consultants Issues to Consider in the Selection of Consultants Criteria for Inviting Selected Consultants Requesting Department Responsibilities Evaluation of Submissions Extended Contracts Maintenance Contracts Disposal of District Assets Including Surplus Inventory Banking Services Audit Services Appendix A: List of Exemptions Appendix B: Request for Quotations Appendix C: PMAC Professional Code of Ethics Appendix D: Sale of Assets or Surplus Goods Form District of Sparwood Purchasing Policy Page 3

4 POLICY MANUAL DEPARTMENT: SUBJECT: ADMINISTRATION Purchasing Policy DATE OF RESOLUTION: November 1, 2010 RESOLVED THAT: ALL FORMER POLICIES AND PRACTICES RELATING TO THIS MATTER BE RESCINDED AND THE FOLLOWING POLICY ADOPTED: This document defines the purchasing and tendering policy for the District of Sparwood. District staff involved in the procurement of goods and/or services on behalf of the District must comply with the guidelines set out in this policy. 1. Statement of Principles In the performance of the duties assigned to it under the terms of the Local Government Act and the Community Charter, the District must out of necessity engage in procurement and the expenditure of public funds for the contracting of goods and/or services. In an effort to achieve maximum economy, efficiency and effectiveness in the performance of this function, the District has established procedures and guidelines with respect to acquiring goods and/or services. In general, it is the policy of the District to buy in the open market and to seek the Best Value for its money. This implies that qualified suppliers are given the opportunity, either by direct notification or by some form of public advertisement, to quote or tender on items to be purchased. Maximizing the District s purchasing ability depends on different factors, such as ensuring good quality; taking advantage of economies of scale; properly defining fair project and/or product specifications, maximizing returns on the disposal of District assets; and ensuring consistency in the application of this policy throughout the District. In addition, value for money does not always mean the lowest acquisition cost in appropriate circumstances it may mean lowest life-cycle cost, which combines the acquisition cost and the subsequent costs of ownership or it may mean the most suitable product or solution. The District will also include consideration of environmental, economic and social factors in its purchasing decisions. 2. Ethics in Purchasing District staff involved in contracting with suppliers for goods and/or services must comply with the Values and Norms of Ethical Behaviour and the Rules of Conduct as stated in the Professional Code of Ethics established by the Purchasing Management Association of Canada (PMAC). These sections are intended to emphasize a fair and competitive process for the acquisition of goods and/or services. This information can be found in Appendix C or on their website at District of Sparwood Purchasing Policy Page 4

5 3. Conflict of Interest An employee cannot participate in a purchasing decision that involves a direct relative, a person married to a direct relative, or a person sharing the same household as the employee. A direct relative is defined as a spouse, common law partner, parent, grandparent, grandchild, brother, sister, son or daughter. 4. Definitions A. Best Value: The District will buy in the open market and will seek the greatest possible value and services for its purchasing dollars. The placement of orders and awards of contracts will be based on Best Value to the District. This is defined as but not limited to the following as may be applicable to the purchase: Adherence to Government Legal Requirements (Trade Agreements) Price Lowest Life Cycle Cost Timely Delivery Adherence to Conditions of Purchase Adherence to Specifications Resale Value Suitability for Intended Use Safety Standards Parts Availability Low Maintenance Service Response Time Quality of Workmanship and Product Dependable Service Warranty Standardization B. Bid: Refers to a competitive bid received from a Request for Quotation, Request for Tender, Two Phase Bid or Request for Proposal. C. Budget Authority: Through the budget process, Council sets operating service levels and capital project priorities together with the related funding sources. To enable departments to operate efficiently and effectively in the performance of those service levels set by Council, Department Managers have the authority to reallocate funds within the Operating Budget for which they are responsible. Along with this flexibility comes the need to manage and ensure that the gross and net expenditures remain within the budget for which Department Managers are responsible. District of Sparwood Purchasing Policy Page 5

6 D. Equipment and Vehicle Capital Leases: Equipment and vehicles acquired by capital lease must comply with the purchasing and tendering guidelines set out in this policy. As with other types of purchases, the concept of life-cycle costs should be used when evaluating capital leasing costs. In other words, lease costs should include all lease payments (exclusive of taxes) over the term of the lease and all relevant renewal periods, and where applicable, should consider any additional costs relating to the operations and maintenance of the leased equipment or vehicle. E. Invitational Tender: Invitational tenders are tenders in which only certain vendors are requested by direct invitation to bid on a given contract. This type of tender will often be used after a prequalification process has been completed to short list qualified vendors. Invitational tenders should be used for smaller projects and/or on projects requiring special skills which limit the number of qualified bidders. Advertising is not required in these instances. F. Local Preferences: Local vendors will be given the opportunity to bid on supplies and services that they are able to supply. Local is defined as any business operating within the Elk Valley and having a valid business license. G. Professional Trade Work: Professional Trade Work may include, but not be limited to building, mechanical, electrical and plumbing. H. Public Tender: Public tenders are tenders that are open to the general public; anyone may submit a bid. A description of the project and/or materials will be advertised in a local and/or regional newspaper and/or on an electronic site as deemed necessary in an effort to obtain at least 3 qualified bids. I. Purchasing Cooperative Groups: The District of Sparwood endorses the principle of Cooperative Purchasing with other Municipalities, Regional Districts, School Districts and the Provincial Government. The District may endeavor to join with these other agencies in respect of its purchases of materials in common demand. In these circumstances, tenders are invited by the District or by other interested agencies, depending on which body requires the largest quantity of material involved, and the most favorable bid determines the prices for all parties involved. Though bids are called on a joint basis, ordering and billing are done individually. J. Quotation: A quotation is a verbal or written bid to provide goods and/or services. The goods and/or services are usually fairly standard amongst vendors; consequently, there is no need for in-depth proposals or tenders outlining detailed specifications and vendor qualifications. District of Sparwood Purchasing Policy Page 6

7 K. Request to Provide Expression of Interest (REOI): A solicitation to prospective suppliers, the response to which is to be analyzed in accordance with selection criteria set forth in the solicitation. The REOI is used to develop a shortlist of prospective suppliers who are eligible to receive a subsequent solicitation such as an RFP. L. Request for Quotation: An invitation for a quotation or bid from an approved or qualified supplier, used for purchases of goods and services where criteria including service, quality, delivery, will be evaluated as well as price. M. Request for Proposals: An RFP is a formal request for sealed Proposals similar to the Tender system which seeks the creative input of the market place. It details the what, the when, and the why but not the how. An RFP seeks the best value through the competition of rival proponents. It describes in detail the project to be undertaken, the intended result of the project and the criteria for choosing the successful Contractor. Due to the confidential nature of some of these proposals details may NOT be revealed in public. N. Tender: A tender is a bid or offer to provide goods and/or services that is submitted in response to an invitation that indicates in very specific terms what the District requires. O. Tendered vs. Non-Tendered Purchases: Goods and/or services costing in excess of the limits (excluding taxes) set in the Purchasing Guidelines (see 7.0) must comply with the procedures established under the District s tendering guidelines. Purchases and/or expenditures less than the set limits, as well as recurring, noncompetitive expenditures may be exempt from formal tendering procedures, but must adhere to the District s purchasing guidelines. There are also other exemptions listed in Appendix A that fall outside of the District s Purchasing Guidelines. 5. New West Partnership Trade Agreement (NWPTA) NWPTA requires that government and public entities remove impediments across all economic sectors. The Agreement is comprehensive, applying to all government measures (e.g., legislation, regulations, standards, policies, procedures, guidelines, etc.) affecting trade, investment and labour mobility. Specifically, NWPTA obligates public entities to ensure there are: 1) No obstacles: government standards and regulations cannot restrict or impair trade, investment or labour mobility between Alberta, British Columbia and Saskatchewan. 2) Non-discrimination: there will be no preferential treatment of a province's people, investments and goods, except for justified actual cost-of-service differences. Special provisions have been established for certain economic sectors covering investment, business subsidies, labour mobility, procurement, energy, and District of Sparwood Purchasing Policy Page 7

8 transportation. Although the NWPTA has special provisions that define particular obligations in certain sectors, the breadth of its coverage covers trade, investment and labour mobility in all economic sectors. NWPTA is applied to all government procurement. It requires open and nondiscriminatory procedures in the purchase of: 1) Goods of $75,000 or greater. 2) Services of $75,000 or greater. 3) Construction of $200,000 or greater. There are some exceptions to procurement under the Agreement, including: 1) Procurement of health and social services, and services provided by lawyers and notaries. 2) Purchases from philanthropic institutions, prison labour or persons with disabilities. 3) Purchases from a public body or non-profit organization. 4) Goods purchased for representational or promotional purposes. 5) Goods required in response to an unforeseeable situation of urgency. 6) Goods intended for resale to the public. See for more information. 6. Agreement on Internal Trade (AIT) The Province of British Columbia has been a signatory to the AIT since This trade agreement is designed to establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency. Annex of the AIT extends coverage of the Chapter 5 (Procurement) obligations to municipalities. Under these provisions, there is a requirement for fair and open competition for major procurements, defined as $100,000 for goods and services, and $250,000 for construction. These larger contract opportunities must be advertised inter-provincially. The advertising requirements can be met by posting the opportunity on an electronic site such as BC Bid or MERX. Conduct that is inconsistent with the procurement obligations under the AIT include: 1) The imposition of conditions on the invitation to tender, registration requirements or qualification procedures that are based on the location of a supplier s place of business or the place where the goods are produced or the services are provided or other like criteria; 2) The biasing of technical specifications in favour of, or against, a particular good or service including those goods or services included in constructions contracts, or in favour of, or against, the suppliers of such goods or services for the purpose of avoiding the obligations of Chapter 5; 3) The timing of events in the tender process so as to prevent suppliers from submitting BIDs; 4) The specification of quantities or the diversion of budgetary funds to subsidiary agencies in a manner designed to avoid the obligations of Chapter 5; 5) The use of price discounts or preferential margins in order to favour particular suppliers; District of Sparwood Purchasing Policy Page 8

9 6) And the unjustifiable exclusion of a supplier from tendering All of these points and facts are exerts from the AIT document which can be obtained online at All managers should familiarize themselves with this trade agreement. 7. Purchasing Guidelines 7.1 Signing Authority Before any purchase is made, approval must be obtained as per the following authorization levels (All figures excluding taxes): Council $100,000 - $ over Chief Administrative Officer $75,000 - $100,000 Director of Finance $25,000 - $74,999 Department Managers $ $24,999 Other Staff $0 - $4,999 The division of required quantities in a manner designed to reduce administrative burden or avoid the obligations of this policy is not permitted. 7.2 Purchases from $0 to $4,999 (excluding taxes) a) Quotations are not required, but reasonable effort shall be made to obtain best value. b) An invoice or bill shall be signed by the expending employee and approved by an individual with appropriate signing authority. 7.3 Purchases from $5,000 to $24,999 (excluding taxes) a) Requires Request for Quotation (RFQ) (see Appendix B) b) Reasonable effort shall be made to obtain quotations from at least three suppliers. c) A purchase order or some other form of approval will be issued to the successful bidder. All of the quotations related to the purchase should be kept for reference. d) If the lowest quote is not accepted, justification should be provided and kept for non-acceptance of the low bid. 7.4 Purchases over $25, 000 (excluding taxes) Vendor will be chosen by Tender or Request for Proposal. 7.5 Selection of Consultants and Professional Trade Services Guidelines for the Selection of Consultants are detailed in Section Lowest Bid In general, it is the District s policy to award purchases to the lowest bidder meeting all of the District s specifications. However, when arriving at the best, qualified, acceptable bid, consideration should be given to such matters as qualifications, quality, source of supply, availability, supplier s past performance and others as District of Sparwood Purchasing Policy Page 9

10 identified in the definitions under Best Value. The District reserves the right to accept other than the low bid. 7.7 Recurring Expenditures Non-competitive recurring expenditures such as staff training, professional membership fees, receiver general etc, do not lend themselves to the competitive bid process. Consequently, quotations and tenders are not required, however, these expenditures must be reviewed and approved by Department Managers or by staff authorized to approve such expenditures. Several exemptions are listed in Appendix A 7.8 Authorization to Proceed Staff may proceed with authorizing expenditures based on quotations received (in accordance with the signing authority limits outlined in 7.1) providing the District s purchasing guidelines have been followed and the criteria listed below have been met: a) The funds for the quoted expenditures in question have been budgeted for in the Approved Annual Financial Plan. b) The quotation is within the amount budgeted for the work in question c) The lowest bidder is being awarded the work. 7.9 Authority of the Chief Administrative Officer The Chief Administrative Officer may award contracts to a value not exceeding $100,000 for which purpose the Department Manager shall submit a report to the CAO. Details of all tenders shall be submitted to Council for their information in the General Information Basket. All Tenders over $100,000 must be approved by Council for which the Department Manager shall prepare a report and recommendation for Council s consideration Petty Cash Expenditures up to $100 may be expended from petty cash. Receipts for purchases made from petty cash will be signed by the expending staff member and placed in the petty cash box Credit Cards The Mayor, Councillors, Chief Administrative Officer, and Department Managers and Deputy Managers are entitled to have a District credit card. Only bona fide District expenditures may be incurred on these cards WorkSafeBC a) Vendors supplying services to the District are to provide evidence of WorkSafeBC coverage. If using subcontractors, vendors are to provide evidence that the subcontractor is covered by WorkSafeBC. b) For Vendors who are unable to obtain WorkSafeBC coverage, the cost of the premiums that the District would be required to remit to WorkSafeBC for the labour provided will be added to the cost quoted by the vendor when selecting a supplier. District of Sparwood Purchasing Policy Page 10

11 7.13 Selection of Suppliers The selection of suppliers will be based on the Best Value to the District as defined in this policy. Suppliers of goods and services to the District who operate their businesses in the District must hold a valid business license at the time of supply Vendor Invoices Vendor invoices must be forwarded to the individual with the appropriate signing authority per Section 7.1 for review. The signing authority is responsible for ensuring that the goods have been received in good order before approval for payment. Approved invoices must be forwarded to the Finance Department for processing and payment. 8. Tendering and Requests for Proposals (RFP) Guidelines 8.1 Calls to Tender or RFP a) Purchases estimated to be in excess of $25,000 (excluding taxes) or considered to be of a sensitive nature must be approved by the Department Manager and must be tendered. Whether a Public Tender, Invitational Tender, or RFP is used will be based on Management s judgment as to which process is most cost effective and provides bids from qualified vendors that are competitive and representative of the market place. b) An effort should be made to solicit Tenders or Proposals from at least three suppliers. If an Invitational Tender is used, a prequalification process may be employed whereby contractors are requested to provide expressions of interest (REOI) or qualifications (RQ) which are used to short list qualified suppliers. A prequalification process may also be utilized as a precursor to issuing an RFP if a large number of qualified firms have been identified. If a Public Tender is chosen, Department Managers must use their judgment to determine the extent and type of advertisement, but it must be advertised. 8.2 Exception to Calls for Tender or RFP s a) The Chief Administrative Officer (CAO) shall have authority to bypass normal procedures in the event of a disaster, labour dispute, and emergency or where the cost or delay resulting from a competitive bidding process would create a personal hazard or cause economic hardship to the District. b) In the event of an emergency on weekends or after hours, the employee handling the emergency shall make a reasonable attempt to contact the CAO or his/her designate prior to making the necessary purchases to remedy the situation. If the employee is unable to contact the CAO or his/her designate, he/she is authorized to make the necessary purchases, and all expenditures must be listed and reviewed with the CAO the next working day. Improper planning is not a justification for an emergency purchase. 8.3 Sole Source or Direct Award Requests for any material or service to be supplied by a sole source should be accompanied with a written explanation fully justifying why conditions exist which District of Sparwood Purchasing Policy Page 11

12 require the item(s) to be purchased from only one vendor. Consideration for sole source may be given in the following situations: a) Where only one contractor has the unique qualifications or skills needed; b) Where the project is highly sensitive or confidential; c) Where the time frame for delivery is urgent and cannot be extended to allow the time needed for more competitive methods; d) Where the planned expenditure is small and the savings of competitive bidding would not justify the increased cost involved with more competitive methods; e) Where the project is a follow-on assignment most appropriately done by the original contractor. 8.4 Inquiries and Clarification Inquiries and clarification regarding the District s tendering process may be directed in writing to the attention of the employee in charge of the tender. Any clarification given will be provided to all bidders. 8.5 Receiving Tenders Each tender must be submitted on a formal tender form, developed for that tender, in a distinctly marked and sealed envelope or package addressed to the department designated in the tender document. The use of the tender form is mandatory in every case in which a sealed tender is submitted. The envelopes of all unopened tenders will be date and time stamped upon being received by the designated department. Any tenders received after the specified closing time must be returned to the vendor unopened. All tenders must contain the full name and address of the vendor tendering, and tenders must be signed in the spaces provided. In the case of companies or other corporate bodies, somebody with legal authority must sign the tenders. The vendor must initial each page of the tender form. 8.6 Public Opening All tenders will be opened in accordance with the tender document specifications and this process will be open to the public. During the public opening, the tenders will be tabulated and the resulting list of bidders and total bid prices will be made available to the public. Public opening of tenders will be considered as an official notification of bid prices. 8.7 Evaluation and Award of Tenders In general, it is the District s policy to award tenders to the lowest bid meeting all of the District s specifications. However, when arriving at the best, qualified and acceptable bid, consideration should be given to such matters as qualifications, quality, source of supply, environmental impact, availability and vendors past performance, i.e. best value. Preference may be given to local suppliers of acceptable, equivalent quality and readily available goods or services in the event of an equal bid. All provincial, federal, and national trade agreements must be followed. The District reserves the right to accept other than the low bid. District of Sparwood Purchasing Policy Page 12

13 8.8 Evaluation and Award of RFP s Proposals shall be evaluated in accordance with the criteria set out in the RFP and the relative importance or weighting of such criteria as determined before comparative evaluation. The evaluation criteria will be developed to meet the requirements of a particular contract and will vary from contract to contract in both number and substance. Additionally, the assigned weight must be custom developed for each RFP and may be listed in the RFP. 8.9 Negotiations of RFP Negotiations of an RFP will be allowed: a) Prior to completion of the proposal evaluation, provided that they are held with all responding vendors that submitted Qualifying Proposals. Care must be taken to ensure that all responding vendors are treated equally and impartially and negotiation proceedings must be such that the confidentiality of each responding vendor s negotiating position is assured. b) After the proposal evaluation with one vendor, provided that the vendor submitted the only Qualified Proposal. If negotiations are to be entered into, the right to do so and the substantive matters that may be subject to negotiation must be explicitly indicated in the RFP Publicly Tendered Contract and Receipt of a Single Tender Submission If only one Tender submission is received, such submission shall be accepted, but shall remain unopened. The submission in question shall be forwarded to the Chief Administrative Officer who shall evaluate the circumstances of the contract to determine, in consultation with the Department Manager, whether such submission should be opened, or whether the project in question shall be re-tendered, with or without any changes to the Tender specifications or the method of proceeding to Public Tender or RFP Tenders or RFP s that Exceed Budget If all Tenders or RFP s submitted are over the budget designated for the project in the Financial Plan, all submissions must be forwarded to the CAO who will recommend, in consultation with the Department Manager, one of the following courses of action: a) Reject and re-tender the project, with or without any changes to contract specifications or the method of proceeding to Public Tender or RFP; b) Negotiate with all of the Qualifying Vendors to bring the project within budget; c) Direct the Director of Finance to investigate sources of funding for the overage and, if necessary, recommend that Council amend the Financial Plan to allow for the increased expenditure if that is deemed fiscally responsible. If funds are reallocated within a department s operating budget to accommodate a tender or RFP that has exceeded budget, a report outlining the details of the reallocation will be completed by the responsible Department Manager and submitted to Council for information. District of Sparwood Purchasing Policy Page 13

14 8.12 Approval of District Council Council s approval must be obtained, for all contracts that exceed $25,000 (excluding taxes) where: a) A tender other than the lowest bid is being recommended for acceptance; b) There are unusual circumstances Where there is uncertainty amongst staff regarding the need for Council s approval, the Chief Administrative Officer or Director of Finance should be consulted Notification of Bid Prices All bidders will receive written notification of the name of the successful vendor. The public opening will be considered as price notification to all interested parties. In all other cases, bid prices may be available to interested parties upon request and upon approval by the Department Manager in charge of the tender. Other details will be released in accordance with the B.C. Freedom of Information and Protection of Privacy Act, which protects the business interest of vendors and the negotiating techniques of the District. It is the policy of the District not to disclose separate unit prices Documentation All contracts subject to the competitive bid process must be documented and filed according to LGMA records retention policy for a minimum period of six years plus the current year. File documentation should include the following where applicable: a) The original approved Purchase Order, if applicable, describing the item or services being purchased; b) A list of, or the letters to, the vendors submitting proposals; c) A copy of the RFP if applicable; d) The dated and time stamped envelopes that the documents were received in; e) Evidence of having submitted the project to Public Tender, if applicable (i.e. newspaper clippings, web postings, etc.); f) Tender documents from all bidders; g) A list of bidders and a summary of their tenders; h) Reports to Council and evidence of Council approval (where applicable); i) The letter to successful bidder and a signed contract; j) Letters to unsuccessful bidders; k) Progress reports, payment claims, properly authorized certificate of completion copies of the bid bond, performance bond and, labour and materials payment bond as may be applicable. 9. Gifts and Gratuities To preserve the image and integrity of the District and its employees, business gifts other than items of small intrinsic value should not be accepted. Reasonable hospitality is an accepted courtesy of a business relationship. The frequency and nature of gifts or hospitality accepted will not be allowed whereby the recipient might be deemed by others to have been influenced in making a business decision as a consequence of accepting such hospitality or gifts. If business gifts of greater than intrinsic value are District of Sparwood Purchasing Policy Page 14

15 provided by the vendor, these gifts will be allocated by the Chief Administrative Officer to employee functions such as the Social Club for Prizes or Gifts to be drawn for. The Values and Norms of Ethical Behaviour and the Rules of Conduct as stated in the Professional Code of Ethics established by the Purchasing Management Association of Canada (PMAC) in Appendix C shall be followed. 10. Selection of Consultants 10.1 Issues to Consider in the Selection of Consultants In the selection of consultants, the following issues should be taken into consideration prior to the calling for written proposals or issuing an invitation to selected consultants: a) The method of selecting the successful consultant; b) The information which should be provided to the consultant; c) The criteria used to evaluate the consultant's proposal; Upon deciding on the above issues, either a Public Tender or Invitational Tender for consultants shall be issued where the anticipated cost of engaging the consultant is $10,000 or more Criteria for Inviting Selected Consultants Where the Department Manager, in consultation with the Chief Administrative Officer, is of the opinion that an Invitational Tender from selected Consultants would be more appropriate than a Public Tender, the following shall be taken into consideration when choosing the invitees: a) Consultant s relevant experience; b) Past performance of the Consultant (as indicated by references or reputation); c) Familiarity, if any, with the practices and procedures of the District; d) Potential for conflict of interest or perceived conflict of interest Requesting Department Responsibilities In the case of a Public Tender or an Invitational Tender from selected Consultants, the requesting department shall: a) Provide specific details of the project, together with all the necessary elements, criteria or specifications; b) Disclose the purpose for the works or services to be provided; c) Define the overall objectives and goals to be accomplished; d) Outline the evaluation methods on which a Consultant selection will be made Evaluation of Submissions When submissions to either a Public Tender or an Invitational Tender from selected Consultants have been received, they shall be evaluated giving due consideration to the following: a) Consultant's and the project team's relevant experience (if applicable); b) Compliance with the submission requirements specified; c) Consultant's statement of understanding of the project; District of Sparwood Purchasing Policy Page 15

16 d) Information obtained through the references provided in the Consultant's submission; e) The project schedule; f) Cost effectiveness of the Consultant's proposal to the overall project; g) Fees to be charged by the Consultant; h) Results of an interview with the Consultant Extended Contracts Where deemed appropriate given the nature of the work to be performed, a contract term not to exceed five years may be entered into with the Consultant chosen. If an extended contract term is to be considered, this possibility must be detailed in the tender documents and/or the advertising. 11. Maintenance Contracts Maintenance contracts may be used for acquiring ongoing maintenance on specific groups of items that can be easily identified and competitively bid. Maintenance contracts could include such items as building, electrical or plumbing maintenance. Maintenance contracts will be issued for a maximum term, including renewals, of five years. 12. Disposal of District Assets Including Surplus Inventory Managers will seek to obtain the best return possible on the disposal of District Assets which are deemed no longer useful to the operation. This can be done through trade-in, public auction or any other cost-effective options available. No District Asset is to be disposed of without first notifying the Chief Administrative Officer (CAO) or the Director of Finance (DOF). a) On the authority of the CAO or the DOF, un-needed goods valued at $500 or less may be donated to Community Groups or non-profit organizations operating in the District of Sparwood on a draw basis. b) Surplus goods over $500 shall not be donated or gifted to anyone without express permission of Council at an open meeting. c) When major equipment comes up for replacement, the Department Head will recommend whether it should be traded in or disposed of in another manner and the disposal method(s) will be approved during the budget process or by Council. d) Other surplus items will be disposed of as follows: 1) Department Heads will prepare a memo advising of upcoming items to be disposed of, their estimated value and the recommended disposal method. The Department Head will then circulate this information to other Departments as well as a copy to Council. This provides the other Departments the opportunity to obtain needed items at no cost. 2) If other Departments do not want the items, Department Heads have the option of employing the following disposal procedure: i. Determine and document the terms of sale on a Sale of Assets or Surplus Goods Form (see Appendix D). The description should include things like the make, model, year of purchase, its value at the time of purchase, the condition it is in now, and other details that may be of concern to potential District of Sparwood Purchasing Policy Page 16

17 buyers. Ensure that potential buyers are informed that applicable taxes will be added to their bid. ii. Determine and document a minimum acceptable bid price. iii. At least 4 weeks should be allowed from the time the information is submitted to the closing date. iv. Usually it will be best to limit the time available for viewing the product(s). Dates and times that staff will be available to show the items to potential buyers should be specified on the sale of surplus goods form. v. Alternative sales mechanisms should be specified on the form. These sales methods can be employed in the event that no bids are received or if the minimum price is not met. Less valuable materials can go to the re-use centre at the landfill, but another alternative has to be specified for more valuable products. vi. The sale information should be provided to the District of Sparwood website manager for posting to the website. Information may also be included in the weekly full page newspaper ad, and in the Community Newsletter put out through the Recreation Department, the Council Facts, and other media that the Department Head feels would be appropriate. vii. Bids will be directed to the Department Head with the item(s) for sale. Bidders will be directed to submit their offers in a sealed envelope to the District Office or the applicable Department, and they will be opened after the closing date and time. 13. Banking Services Converting from one bank to another bank entails significant overhead expense and should not be done frivolously. To ensure an efficient banking system that offers the latest in technology along with competitive rates the District will institute the following practice: a) The Director of Finance will prepare a report to Council whenever the current banking contract is set to expire. The report will include a recommendation whether to tender banking services; b) Tenders will be invited only from local financial institutions; c) Where service costs and interest rate formulas are equal, standard of past service will be the determining factor when assessing tenders; d) Contracts may be terminated prior to expiry date for cause such as, but not limited to, poor service. If deemed necessary, the Director of Finance will make such recommendation to Council who will then authorize cancellation of the contract by resolution. 14. Audit Services Under Subsection 169(1) of the Community Charter, a Council is required to appoint an Auditor for the District. The District of Sparwood will therefore institute the following practice: a) The Director of Finance will prepare a report to Council whenever the current Auditing Contract is set to expire. The report will include a recommendation on whether to tender Auditing Services. District of Sparwood Purchasing Policy Page 17

18 b) Requests for Proposals will be invited only from local Accounting Firms that meet the required qualifications. c) The RFP process will follow the guidelines within this policy. District of Sparwood Purchasing Policy Page 18

19 Appendix A: List of Exemptions Exemption Item Examples Rationale Petty Cash Items Training and Education Refundable Employee & Other Expenses Employer General Expenses Professional and Special Services Miscellaneous District Administration Expenses Small Office Supplies Lunch Items for Meetings Toiletry Supplies Cleaning Supplies Other Small Value Items Less Than $100 Conferences, Conventions or Tradeshows Seminars, Workshops or Courses Memberships and Subscriptions Professional Fees Meal Allowances, Travel Expenses Hotel Accommodations, Approved Entertainment, Course Reimbursement Miscellaneous Non-Travel Expenses District of Sparwood Payroll, Advances Payroll Deduction Remittances Employee Benefit Expenses, Tax Remittances Petty Cash Replenishment Councilors Discretionary Funds Licenses and Insurance (Vehicles) Encroachment Licenses Real Property Including Land, Building, Leasehold Interests, Easements Grants to Agencies Debenture Payments, Sinking Fund Payments Honoraria, Arbitrator Awards, Legal Settlements, Legal Services, Insurance, Insurance Deductibles, Permits Printing and Copying under $5,000 Custom Invoices, Stationery Supplies, Catering, Groceries, Postage, Print, Media Advertising, Utilities, Couriers or Shipping These items are typically valued at less than $100 and are needed on short notice. These items are covered under separate policies These items are covered under separate policies These items are covered under separate policies These items are covered under separate policies These items are typically routine and under $5,000 District of Sparwood Purchasing Policy Page 19

20 Appendix B: Request for Quotations Procedures 1. Required for purchases from $ $24, Reasonable effort shall be made to obtain written quotations from at least three suppliers. 3. Is used when the services are fairly standard so there is no need for in depth proposals or tenders outlining detailed specifications and vendor qualifications. 4. The RFQ ensures competition on the price and can be started and finished in a relatively short period of time. 5. The RFQ can be solicited by fax, , or letters to likely vendors or by way of newspaper or electronic advertisements. 6. Each written quotation must be submitted on a formal quotation form in a distinctly marked envelope addressed to the designated department. 7. The envelope of all unopened quotations will be date and time stamped upon receipt by the designated department. Receipt of Quotations 1. Only bids that have been received up to the time designated in the RFQ will be eligible for consideration. 2. A revision to a quotation must be submitted in writing prior to the time designated for receipt of quotes. 3. Telephone revisions to a written quoted price are not acceptable. District of Sparwood Purchasing Policy Page 20

21 Appendix C: PMAC Professional Code of Ethics INTRODUCTION It is a condition of membership in the Purchasing Management Association of Canada and its affiliated Institutes and Corporation that members shall abide by the Constitution and the Rules and By-Laws of the Institute or Corporation in which they are members. This Professional Code of Ethics is binding upon all members. DEFINITIONS Purchasing Management Association of Canada Means the national body of the association. Institute means the Institute of a province affiliated with the Purchasing Management Association of Canada. Corporation means the Corporation des approvisionneurs du Quebec, affiliated with the Purchasing Management Association of Canada. VALUES AND NORMS OF ETHICAL BEHAVIOUR Members will operate and conduct their decisions and actions based on the following values: Honesty/Integrity Maintaining an unimpeachable Standard of integrity in all their business relationships both inside and outside the organizations in which they are employed; Professionalism Fostering the highest standards of professional competence amongst those for whom they are responsible; Responsible Management Optimizing the use of resources for which they are responsible so as to provide the maximum benefit to their employers; Serving the Public Interest Not using their authority of office for personal benefit, rejecting and denouncing any business practice that is improper; Conformity to the Laws In Terms of: A. The laws of the country in which they practice; B. The Institute's or Corporation's Rules and Regulations; C. Contractual obligations. 1. To consider first, the interest of one's organization in all transactions and to carry out and believe in its established policies. 2. To be receptive to competent counsel from one's colleagues and be guided by such counsel without impairing the responsibility of one's office. 3. To buy without prejudice, seeking to obtain the maximum value for each dollar of expenditure. 4. To strive for increased knowledge of the materials and processes of manufacture, and to establish practical procedures for the performance of one's responsibilities. 5. To participate in professional development programs so that one's purchasing knowledge and performance are enhanced. 6. To subscribe to and work for honesty in buying and selling and to denounce all forms of improper business practice. 7. To accord a prompt and courteous reception to all who call on a legitimate business mission. 8. To abide by and to encourage others to practice the Professional Code of Ethics of the Purchasing Management Association of Canada and its affiliated Institutes and Corporation. 9. To counsel and assist fellow purchasers in the performance of their duties. 10. To cooperate with all organizations and individuals engaged in activities which enhance the development and standing of purchasing and materials management. District of Sparwood Purchasing Policy Page 21

22 RULES OF CONDUCT In applying these rules of conduct, members should follow guidance set out below: A. Declaration of Interest Any personal interest which may impinge or might reasonably be deemed by others to impinge on a member's impartiality in any matter relevant to his or her duties should be immediately declared to his or her employer. B. Confidentiality and Accuracy of Information The confidentiality of information received in the course of duty must be respected and should not be used for personal gain; information given in the course of duty should be true and fair and not designed to mislead. C. Competition While considering the advantages to the member's employer of maintaining a continuing relationship with a supplier, any arrangement which might prevent the effective operation of fair competition should be avoided. D. Business Gifts and Hospitality To preserve the image and integrity of the member, employer and the profession, business gifts other than items of small intrinsic value should not be accepted. Reasonable hospitality is an accepted courtesy of a business relationship. The frequency and nature of gifts or hospitality accepted should not be allowed whereby the recipient might be or might be deemed by others to have been influenced in making a business decision as a consequence of accepting such hospitality or gifts. E. Discrimination and Harassment No member shall knowingly participate in acts of discrimination or harassment towards any person that he or she has business relations with. F. Environmental Issues Members shall recognize their responsibility to environmental issues consistent with their corporate goals or missions. G. Interpretation When in doubt on the interpretation of these rules of conduct, members should refer to the Ethics Committee of their Institute or Corporation. ENFORCEMENT PROCEDURES The following procedures shall apply unless otherwise governed by provincial legislation. Cases of members reported to have breached the Ethical Code shall be referred to the Institute or Corporation for review by their Ethics Committee. A. Complaint Process Allegations of a breach to the Professional Code of Ethics shall be made in writing by the witness to the Institute or Corporation. 1. Upon receipt of the complaint, the Institute or Corporation will send an acknowledgment of receipt to the witness and will advise the accused in writing that he or she is under investigation, and the nature of the complaint. B. Investigation 1. The Ethics Committee will conduct an investigation, which will include the opportunity for the accused to present his or her own version of the facts. 2. The Ethics Committee will, within a reasonable period of time, present its report to the President of the Institute or Corporation. The report will include the nature of the complaint and the decision as to the dismissal of the complaint, or the sanction to be applied. 3. The President will then send the decision to the accused, who has 30 days to appeal. 4. If the accused decides to make a request of appeal, then the request must be in writing to the President. 5. The President will convene an Appeal Committee meeting with the witnesses, the accused and all other persons who could have new information about the case. 6. The Appeal Committee will make its decision within 30 days of the receipt of the request of appeal. The decision of the Appeal Committee is final and without appeal. C. Sanctions 1. Where a case is proven, a member may, depending on the circumstances and the gravity of the charge, be reprimanded, suspended from membership or expelled and removed from the list of members. Details of cases in which members are found in breach of the Code may be published in such a manner as the Institute or Corporation shall deem appropriate. 2. Enforcement shall be in accordance with the requirements of the member's Institute or Corporation. District of Sparwood Purchasing Policy Page 22

23 Appendix D: Sale of Assets or Surplus Goods Form DISTRICT OF SPARWOOD SALE OF ASSETS OR SURPLUS GOODS FORM ITEM FOR SALE: DESCRIPTION OF GOODS: Details Date to start advertising: Auction closing date and time: Location, dates and times goods can be viewed: Name and phone number of the contact person: Advertising District of Sparwood full page advertisement in Free Press (Y/N): List editions to advertise in (note that ads have to be submitted by the close of business the Wednesday prior to the edition): District of Sparwood web page(y/n): Other advertising (Y/N): First date of listing: Last date of listing: List other media and dates: Procedure for dealing with unsold goods: Additional information District of Sparwood Purchasing Policy Page 23