PURCHASING CHAPTER 3 POLICY 3-11

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1 A. GENERAL The function of the Purchasing Office is to be of service to all City Divisions in the procurement of goods, materials, supplies, equipment, and services at the lowest possible cost consistent with the quality needed for the proper operation of the Divisions of the City. Assistance in specification preparation and Capital Budget price estimating is provided. As the City's Purchasing Officer the Purchasing Administrator is responsible for the efficient purchase of all goods for the City's use. In order for the purchasing system to operate effectively, lt is essential that all employees concerned with purchasing functions have a clear understanding of the policies and procedures to be followed in the procurement of the goods or services they require. In addition, the Purchasing Office serves as a vital link in the chain that constitutes the City s system of internal checks and balances. It is essential that the City maintain a scrupulous impartiality and complete freedom of supplier selection without personal obligation. Purchasing activities come under the scrutiny of City employees, citizens, suppliers and the public news media. In contacts with the business community, it is necessary to exercise a strict rule of personal conduct to ensure that relations of a compromising nature, or even the appearance of such relations, be avoided. A reputation of fairness and integrity in dealing with suppliers and others must be upheld. It is essential to both the City and its suppliers that all decisions and actions regarding procurement are based upon proper business considerations and are not influenced in any way by personal obligations. As used in the (APM), the following definitions shall apply, unless clearly stated otherwise. 1. The "Purchasing Administrator" shall mean the person designated by the Director of Finance and Administrative Services to perform the duties of the purchasing officer. 2. "Goods" shall mean all supplies, materials, commodities and equipment. 3. "Services" shall mean useful labor that does not produce real or tangible goods (i.e. professional services). It also includes the rental or lease of goods or equipment. The term does not include telephone or gas utilities, which are in their nature unique and not subject to competition. 4. "Using Division" shall mean any department, division, section, office, agency, center, commission, board or other entity of the City Government using goods or services. 5. "Contracts" as referred to in this policy are construed to be only those covering specific projects or jobs which are definable as to type and area of work to be accomplished. Revised 2/28/06 Page 1 of 6

2 6. Recycled products mean all materials, goods, and supplies, no less than 50 percent of the total weight of which consists of secondary and postconsumer waste with not less than 10 percent of their total weight consisting of postconsumer waste. 7. Recyclable product means a product which can be recycled in a recycling program established for waste generated in City facilities. 8. Postconsumer waste means a finished product which would normally be disposed of as solid waste, having completed its life as a consumer item, but does not include manufacturing wastes. Postconsumer waste is part of a broader category, recycled material. 9. Secondary waste means fragments of products or finished products of a manufacturing process, which has converted a virgin resource into a commodity of real economic value, and includes post-consumer waste, but does not include excess virgin resources of the manufacturing process. Secondary waste is part of a broader category, recycled material. B. CENTRALIZATION OF FUNCTION One of the essential principles of good purchasing followed by the City of Glendale is that the authority for purchasing goods and services be centralized. Experience has shown this principle to be a valid one because: 1. The Purchasing Office is able to avail itself of quantity price advantages through bulk purchasing, thus reducing overall administrative costs for the City. 2. By combining requests for goods the Purchasing Office simplifies the auditing of expenditures, and makes possible better material control. 3. By experience, research and investigation, the Purchasing Office is able to determine the reliability of vendors and thus request bids from those vendors who have the capability of best meeting the requirements of the City. 4. A greater degree of standardization, with its many inherent advantages, is possible. C. GENERAL PRINCIPLES Supplementing the legal provisions of the Glendale City Charter and the Glendale Municipal Code, the following principles constitute important elements of the City of Glendale's purchasing system: Revised 2/28/06 Page 2 of 6

3 1. The goal of the City in its purchasing operation is to obtain the highest quality goods consistent with operational needs at the best pricing available. 2. The Purchasing Office shall endeavor to secure the widest competition practicable on all purchases. 3. Preference shall be given to local vendors, if all other significant considerations are equal. 4. No employee of the Purchasing Office is to procure or to assist in procuring any goods or services for the personal use of any employee, officer, or official of the City. 5. No employee, officer, or official, by virtue of his or her position, is entitled to any special consideration from merchants in his or her personal affairs, nor is he or she to attempt to procure goods or services for the personal use of any other person. 6. No officer or employee of the City is to become directly or indirectly financially interested in any contract, work, or business, or in the sale of any article, the expense of which is payable from the City Treasury; nor is such person to receive any gratuity or advantage from any contractor or person furnishing labor or material for the City. Any contract of the City in which an officer, official, or employee becomes financially interested may be declared void by the City Council. 7. Employees shall neither solicit nor accept gratuities, favors, or anything of monetary value from vendors. The City may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. 8. No officer or employee is to purchase obsolete or surplus City property offered for sale through public auction or otherwise. D. RESPONSIBILITIES AND AUTHORITY OF THE ADMINISTRATOR In order to perform the purchasing function for the City government efficiently the Purchasing Administrator is authorized to: 1. Purchase or authorize the purchase of all goods and services (except as otherwise described) lawfully requisitioned by the using divisions. 2. Regularly combine various Divisions requisitions for similar goods into one bid for volume purchases and conduct all bidding procedures called for by this policy. Revised 2/28/06 Page 3 of 6

4 3. Sign and issue all purchase orders for goods and services upon approval of the Council or City Manager and certification by the Director of Administrative Services. 4. Negotiate prices and agreements with vendors, when he has determined it to be in the best interests of the City, with the concurrence of the Director of Administrative Services. (Negotiation shall only be authorized when it has been determined that there is insufficient competition to engage in the normal competitive processes and/or due to circumstances that have occurred beyond the control of Purchasing). 5. Sign purchase orders for the construction, improvement, repair, or maintenance of public works involving the expenditure of no more than $100, Maintain a bidder's list consisting of the names and addresses of responsible vendors who may be qualified to furnish the City the goods or services requested. 7. Prescribe and maintain all forms and records as he shall find reasonably necessary for the efficient operation of the Purchasing Office. 8. Maintain vendor's catalog's, brochures and other literature containing current descriptions of goods used by the City. 9. Obtain all Federal, State and Local tax exemptions to which the City is entitled. 10. Declare vendors who default on their quotations irresponsible bidders and disqualify them from receiving any business from the City or for a stated period of time. 11. Sell the City's surplus or obsolete goods and recovered, unclaimed personal property by auction or bids. 12. Keep informed of current developments in the field of purchasing and recommend revisions of purchasing regulations and procedures when necessary. 13. Enter into cooperative purchases with other government entities, or their contractors, for supplies, material or labor. 14. Review all vehicle specifications as requisitioned by the various divisions and revise the specifications, if necessary, for standardization, color, more competition, or updating of specifications, assist in the preparation and review of other specifications when necessary, and to review the changes made with the requesting divisions. 15. Represent the City Manager at the opening of formal bids in the Council Chamber. Revised 2/28/06 Page 4 of 6

5 16. Authorize a subordinate from the Purchasing Office to act for the Administrator when the Administrator is unable to act. E. RESPONSIBILITIES OF DIVISIONS Although the Purchasing Office bears the primary responsibility for procurement of goods for the City government, every division also has certain responsibilities to fulfill in the purchasing process, a few of the most important of which are the following: 1. To be knowledgeable of the fact that Purchasing has only delegated purchasing authority in the amount of $1,000 to Divisions and Sections. The City is not liable for payment for any purchase of goods and/or services in excess of $1,000. The individual may be held personally financially responsible; 2. To consult with Purchasing regarding a purchase prior to contacting any vendor(s). Purchasing will then advise the best method to procure the required goods and or services; 3. To anticipate requirements sufficiently in advance to permit the Purchasing Office to obtain the requisitioned items in accordance with the best purchasing practices; 3. To prepare requisitions carefully and properly in accordance with the instructions in Policy 3-12, Paragraph H -1. Proper description of the items requested will permit the Purchasing Office to obtain the correct goods needed and eliminate repeating the work already done by the requesting division; 4. To review and approve requisitions that have been entered into PeopleSoft; 6. To review requisitions entered into PeopleSoft to verify that they have an APPROVED status, and that they have a VALID budget check designation; 7. To assist the Purchasing Office in writing specifications when requested to do so; 8. To advise the Purchasing Office of estimated annual requirements of frequently used items in order to facilitate placing of annual orders; 9. To advise the Purchasing Office when any abnormal requirement for goods becomes apparent; 10. To be familiar with and follow all purchasing policies and procedures. Revised 2/28/06 Page 5 of 6

6 11. To insure that funds are budgeted and adequate to meet requirements for procurement and payment prior to the acquisition of goods and/or services either directly or indirectly. F. RELATIONS WITH VENDORS It is to the advantage of the City to maintain and promote good relations with its suppliers. For purposes of control, it is necessary that the Purchasing Office coordinate transactions between the City and vendors. The Purchasing Office will normally serve as an intermediary between divisions and vendors, interviewing vendors, arranging interviews with divisions, and obtaining prices, catalogs, samples and general information on commodities. Purchasing may also seek to negotiate settlements between the vendor and using divisions in compliance with the purchase order. When it is to the advantage of the City and the division concerned for direct contact to be made with a vendor, such as for the purpose of obtaining technical information and cost estimates for planning purposes, direct contact may be made without consulting the Purchasing Office. All vendors are to receive prompt and courteous attention. G. STANDARDIZATION Standardization of the specifications for items common to several divisions facilitates quantity buying, since common specifications enable the Purchasing Office to place larger orders, which generally make price reductions possible. The Purchasing Administrator and Executives are to cooperate in the establishment of standard specifications for articles in common use. Item specifications should not be formally adopted until the item has been tested and proven satisfactory on the job. Specifications should not be so detailed that they preclude wide competition among vendors. When brand names are specified, the word "or equal" should be added unless compelling reasons make only a single brand acceptable. Revised 2/28/06 Page 6 of 6