HomeMy WebLinkAbout3328 Amending Chapter 3.46 of the Port Townsend Municpal Code; Adopting City Purchasing and Procedures Manaual; Providing for Severability; and Establishing an Effective DateOrdinance 3328
Page 1 of 6
ORDINANCE NO.3328
AN ORDINANCE OF THE CITY OF PORT TOWNSEND AMENDING CHAPTER 3.46
OF THE PORT TOWNSEND MUNICIPAL CODE; ADOPTING CITY PURCHASING
AND PROCEDURES MANUAL; PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE
RECITALS
1. The City Council of the City of Port Townsend has the responsibility to ensure that
purchasing and procurement of goods and services as well as all contracting requirements are
consistent with all applicable law and adopted City policies and procedures.
2. On December 4, 2023, the City adopted the 2024 Budget. During the presentation of the
2024 Budget, City of Port Townsend staff submitted an amended Purchasing Matrix — Bid
Limits & Signing Authorization to Council ("amended Purchasing Policies and Procedures
Manual").
3. The amended Purchasing Policies and Procedures Manual necessitate code revisions for
consistent practices and application related to procurement, purchasing, and contracting
authority. This ordinance will create consistency between the Purchasing Policies and
Procedures Manual and City code.
NOW THEREFORE, the City Council of the City of Port Townsend do ordain as follows:
Section 1. Port Townsend Municipal Code Section 3.46.050, Amended. Port Townsend
Municipal Code Section 3.46.050, titled Formal Bidding, is hereby amended as follows:
3.46.050 Formal bidding.
Formal bidding shall be used whenever a public works project
exceeds the sum provided by state law, including
RCW 3 5,23 o 3.5_2, including any amendments; provided, however,
formal bidding shall not be required for alternative contracting
processes as provided for in this section. Bid packets shall be
prepared for all formal bids, and shall include an invitation to bid
notice, instructions to bidders, general conditions, special bid
conditions (if any), terms and conditions, and a bid proposal form
indicating the type of response desired from a bidder.
A. For all public works which require formal public bidding, the
city manager shall follow the requirements set forth in this chapter.
Ordinance 3328
Page 2 of 6
B. All purchases of materials, gogds, or eq.gipgItc t _not included
wtkit_..:�.1, li" . hall —be comen..._with twlNil..
�jpp �e rbl ..law and..... C lc ... aw ttl a l'w� l utlg,.._ N1oiic ies ....aild
Procedgres N /l�aowal.
betw ew,ii- 7;500 a ld
air l ._writt � l � tati rs Olt, bytlw---ttity.
nutty < geu; ' ' here J')O"s 411e". 4Nlfee (1140Mdo l-Is .be..sufficient 'R.t
-price- e- le1i purehasc-- exe.ept:....1;�:��.
ite,nis-wh eli-, 4'ro ri-a
:si'trgle-- s0tll"Ct"- a.id pi�irdlases--shall be wawa dod-- t�) flie" loWest
C. Small Works Roster,
1. The city manager may establish a small works roster, in
accordance with the requirements set forth in RCW 35.22 .-6 �-0 and
adopted administrative policies and procedures, for contracts
within the dollar amounts set forth in RCW �.9,04.1_55 and as
hereafter amended.
2. At least once each year, the city manager shall publish in the
official newspaper a notice of existence of the small works roster,
soliciting the names of contractors for inclusion in the roster. The
published notice shall identify all small works projects approved in
the adopted capital improvement program which are likely to be
scheduled for bid awards off the small works roster during the next
12-month period. The application and opportunity of contractors to
be added to the small works roster shall remain open continuously
without regard to the date the notice is published.
3. The city manager shall adopt administrative procedures for
securing telephone or written quotations from the contractors on
the small works roster, to assure that a competitive price is
established and to award contracts to the lowest responsive,
responsible bidder. The administrative procedures shall require that
wherever possible, at least five contractors shall be invited to
Ordinance 3328
Page 3 of 6
submit bids, and that once a contractor has been afforded an
opportunity to submit a proposal, that contractor shall not be
offered another opportunity until all other appropriate contractors
have been afforded an opportunity to submit a proposal on a
contract.
D. Limited Public Works Process. The city manager may utilize
the limited small works process in accordance with the
requirements set forth in RCW 39o.04 1...: _ .(3) and adopted
administrative policies and procedures, for contracts within the
dollar amounts set forth in RCW 39,04m i ` 5(3) and as hereafter
amended. (Ord. 3106 § 1 (Exh. A), 2014; Ord. 2715 § 2, 2000).
Section 2. Port Townsend Municipal Code Section 3.46.110, Amended. Port Townsend
Municipal Code Section 3.46.110, titled Authorization, is hereby amended as follows:
3.46.110 Authorization.
A. Where the city council has not provided express approval to
enter into and execute all contracts, the city council authorizes the
city manager, or manager's designee, to enter into and execute on
behalf of the city w—it C.ali Ie-1,I.w-- awa(l........t�.�eµ
authorization amounts provided in the Cty.'s.. adopted Purchasing
Volic ies acid.... Procedures Marmal..,
��lmi1u��l�lvlea..e�tautby �mhwcr����aTil, so long as
the contract is consistenn within the approved annual budget for the
city, and the city's liability under the contract does not exceed the
available fund balance:
1. Contracts for purchase of goods, supplies, materials,
postage or equipment involving a cost or fee within the
.. h r ization aiii0 n't ..1>�2\jdcd in.. the __( 6t� s adol tcd
Purchasing Policies„ Ord Procedures Manual ^on
.10 0O.- flit -se ---- -types-...
spe'ei1i-at y illllll lneilt:
000; provided, that such contracts result directly from
the aggregation of approved budgetary programs and
services for the current year.
Ordinance 3328
Page 4 of 6
2 Contr�acts�._lrrr l tti)Irc works l2t,�a�Ja�c , professional services
contracts, including contracts for architectural, engineering,
legal, and consulting services l lsc ......� r cc mcrtts:...11110
tt airi1etlanc_e comracts involving a cost or fee of less within
the_ author ization ......a...... .m.........o......u....nts provided in the Citv's adopted
.lj tswrtlg )olicie„s apd..Prttcew(l res Manual,
lHONIJc ed -t-lae..... cit - -la agLl� ul) --- t
25
,4:lflt.l - H tlIt..
�rrrcl rr�rcrr�cr �l��.I.rrla�rrarra;c�-c��t�trt�c�i�r--irr����rp���r�g �� c;:r��,t c�r� �o�:
a.r! lcs tlraarr� l hl;t�t4,1tt l�etw..�,cm�;,,
" i ,lilbtl, invarpvirrt r .rptll p �..taaelc�s, r ci... 141t)lt irivolvwiag
arrgl tk=rcic l c�vrcici, therta...,rrrrrrrrrger rry orte
cartrtrrra is ...rrlr to t (1t:14:1 rr-rvolving rrrcrltil pa trtrcies ...aild
tt,000--i-lvolvir g it -Shioe 4ratirl. 4'
...11rc cr ratrr ct r tw ,ro
sc-nsitive atid dela rr ...l r irrg it g tl e....rrrrrtt rr.. lrulirre...couila it
c�rrlel ccr�;t �tbu ��iv trr���-t�r�cl �rr�car�c�y.
53. The city manager shall be authorized to approve change
orders in a cumulative total amount not to exceed 4-0
lrcrc nt (sl:..the'. x'n)tqre:t xrwr rcl nola'rrlrrrg t r. , l r'cr 'del th rt
tlrc t:otrl c st rcr rarrrr wrtl wrr tl c..p ua g t audur ivatioti,-.the
C>tvtd�gct.;' srning ...limits for contracts. ...un.less
autho rued by the City„Council through the project budget
contngenc;1111O1provided, that the total cost remains within
the budget authorization for the project or contract.
(�. lwetrsc� r�gwr�crrrc�r-its lcar�.._r7-r�rter°i-��ls, sa.�l�al�lrc�s-a�rrcl�l.rrripr'�rer�t
wl erar tp a ..e. l a n lrtrrr'a . or I-e tl rus rrc t aw o cl... %l00-1 :r,.
,year-- rrrrrnager -rear u
tar 825; 00- r1- thrr :-ti-ract rs _trrr -sa ri %tivc trrrcl dt',Airy 411
l�r�irrgrrr thaw rr�rrrtta�r i��larra.� ca.a�rr�°-il�-would ;a.t t#rc� crt,�.t.irr�a"ar
Grnal....anoiiev:.
l �;r�r^rgererc,� c�a�tr arc: ts;
Ordinance 3328
Page 5 of 6
..g�eu��.��.��� � �°hip,-14 ��w°��...��:�a�t�-l�a�w�l r��°•�� ���1��+-����...��1��;��1��1
a� p�ar:���h'�tl�e� ������r•�������;1 �����1g,�.,.�.,
49. Settlement agreements involving a cost or fee of less
than $754-0,000 and that do not involve claims against an
elected official, and agreements relating to employment and
personnel matters involving a cost or fee of less than
$754-0,000 (unless otherwise provided by statute or
ordinance; for example, salaries and compensation are
subject to city council approval). For example, the city
manager, who has administrative authority over employees,
may enter into disciplinary or severance agreements
involving a cost or fee of less than $754-0,000.
54-0. Contracts which carry out or implement a provision of
the Port Townsend Municipal Code or established city
policy, for example, maintenance or performance bonds for
plat improvements.
611. Contracts creating no financial liability on the part of
the city that are for the sole purpose of becoming eligible to
receive revenues.
712. Contracts that are for the sole purpose of
housekeeping changes or clarifications to an existing
contract where such changes do not alter any material term
or condition.
B. All interlocal agreements shall be presented to the city council
for prior approval except for interlocal agreements that create no
direct liability or expense to the city, for example, interlocal
purchasing agreements. (Ord. 3106 § 1 (Exh. B), 2014; Ord. 2715
§ 2, 2000).
Section 3. Purchasing Policies and Procedures Manual Adoption. The City hereby adopts
the Purchasing Policies and Procedures Manual as set forth in Exhibit A attached hereto by this
reference as if fully set forth herein.
Ordinance 3328
Page 6 of 6
Section 4. Severability. If any provision of this ordinance or its application to any person or
circumstance is held invalid, the remainder of the ordinance, or the application of the provision
to other persons or circumstances is not affected.
Section 5. Effective Date. This ordinance shall take effect and be in force five days after the
date of its publication in the manner provided by law.
ADOPTED by the (''ply Council of the City of Port Townsend, Washington, at a regular
meeting, flic.yi eof, held this w day of January,
9
David l -...__—
Fabe
Mayor
Attest:
......... µ
Alyssa igues
City Clerk
Approved as to Form:
....................................
le]u irc,
�°n cw id a
City Attorney
Cityof P ort a� 1),, 250 I a�dison Street, "" a to 1 1 pon°t "C"oe risen�d� Ada 98368 � :360. 85.2700 a e�+awxityofpt Lis
Townsen
Jrw
FINANCE
Purchasing Policies
and
Procedures Manual
250 Madison Street
Port Townsend, WA 98368
cityofpt.us
Page1129
PURCHASING MATRIX - BID LIMITS & SIGNING AUTHORIZATION
(Always include applicable sales tax when determining dollar amounts)
Under $500
No requirement
Payment off signed invoice (or use
Department head or
purchase card if within limits)
designee
No contract required
Employee personal
reimbursement if approved by
supervisor
W-9
$500-$7,500
No requirement, but three
Payment off signed invoice (or use
Department head or
estimates recommended
purchase card if within in limits)
designee
May use MRSC Vendor
W-9
Roster, State contract, or
interlocal agreement
Select lowest qualified
vendor
$7,501-$25,000
Obtain three telephone
Purchase order if >$10,000
Department head (if
and/or written quotations
within budget
or use formal bidding
Requisition form & signed invoice
appropriations)
May use MRSC Vendor
W-9
Roster, State contract, or
interlocal agreement
Select lowest qualified
vendor
Must either:
Purchase order
City Manager (if
$25,001
formally bid, use
within budget
$75,000
State contract, or
Requisition form & signed invoice
appropriations)
interlocal agreement
W-9
Select lowest qualified
vendor
Must either:
Purchase order
Council approval'
$75,001 or more
formally bid, use
State contract, or
Requisition form & signed invoice
Contract and/or
interlocal agreement
invoice signed by City
W-9
Manager
Select lowest qualified
vendor
Page1130
$25,000 or less
Required to have three
Small public works contract
Department head or
estimates
designee
Insurance
May use MRSC Small
Works Roster
W-9
Award to lowest qualified
Prevailing wage (Contractor may
contractor
use Combined Intent/Affidavit
Form for projects $2,500 or less)
Alternatively, may use day
labor (City staff)
5% retainage or retainage bond,
unless waived in advertisement by
City Manager, department head,
or designee
Performance and payment bonds,
unless waived in advertisement by
City Manager, department head,
or designee
Less than $$75,000
Obtain estimates from at
Small public works contract
City Manager for less
Limited Small Public
least three contractors on
than $75,000
Works process
MRSC Small Works Roster'
Insurance
W-9
Contracts over these
Award to lowest qualified
limits require Council
contractor
Prevailing wage
approval
Alternatively, may use
5% retainage or retainage bond,
Contract signed by
formal bidding or day
unless waived in advertisement by
City Manager
labor (City staff)
City Manager
Performance and payment bonds,
unless waived in advertisement by
City Manager
Contractor may choose to have
10% retainage held instead of
providing performance and
payment bonds
Purchase order (encumbrance) if
>$10,000, except capital projects
$350,000 or less
Obtain estimates from at
Small public works contract
Council approval (see
Small Public Works Roster
least five contractors on
above)
process
MRSC Small Works Roster
Insurance
Contract signed by
All contractors in
W-9
City Manager
applicable roster category
Page 1 131
must be given opportunity
Prevailing wage
to submit estimate before
any contractor can be
5% retainage or retainage bond,
solicited again
unless waived in advertisement by
City Manager
If project total is between
$250,000-$350,000, all
Performance and payment bonds
contractors in applicable
category must be notified
Contractor may choose to have
that project is being bid
10% retainage held instead of
providing performance and
Recommend bid deposits
payment bonds for projects
for projects >$40,000
$150,000 or less
Alternatively, may use
Purchase order (encumbrance),
formal bidding or may use
except for capital projects
day labor (City staff) for
approved in CIP
single trade projects
$75,500 or less and
multiple trade projects
$116,155 or less
Award to lowest qualified
contractor
Projects over $350,000
Must use publicly
Public works contract
Council approval
advertised formal bid
process
Insurance
Contract signed by
City Manager'
5% bid deposit required
W-9
Prevailing wage 5
5% retainage or retainage bond
Performance & payment bonds
Purchase order [except Capital
Projects approved in CIP]
Under $5,000
No requirement, but three
No contract required
Department head or
estimates recommended
designee
Payment off signed invoice
Check requirements if
using federal funding
W-9
Prevailing wages may be required
for certain services (e.g.,
landscaping)
Page1132
$5,000-$9,999
No requirement, but
Professional services agreement
Department head or
recommend at least three
designee
estimates from firms on
Insurance
the MRSC Consultant
Roster
W-9
Request price quotes,
Purchase order (encumbrance) if
schedule, qualifications
requested
Check requirements if
Prevailing wages may be required
using federal funding
for certain services (e.g.,
landscaping)
Contract with lowest
qualified vendor
$10,000-$19,999
Request proposals or
Professional services agreement
City Manager
estimates from at least
three firms on the MRSC
Insurance
Consultant Roster
W-9
Request price quotes,
schedule, and
Purchase order (encumbrance)
qualifications
Prevailing wages may be required
Check requirements if
for certain services (e.g.,
using federal funding
landscaping)
Contract with lowest
qualified vendor
$20,000 - $75,000
Formal, advertised RFP or
Professional services agreement
City Manager 6
RFC process
recommended
Insurance
Check requirements if
W-9
using federal funding
Purchase order (encumbrance)
Contract with lowest
qualified vendor
Prevailing wages may be required
for certain services (e.g.,
landscaping)
$75,000 or more
Formal, advertised RFP or
Professional services agreement
Council approval 6
RFQ process
recommended
Insurance
Contract signed by
City Manager
Check requirements if
W-9
using federal funding
Purchase order (encumbrance)
Contract with lowest
qualified vendor
Page1133
Prevailing wages may be required
for certain services (e.g.,
landscaping)
i
Any dollar amount
Must publish need for
Professional services agreement
City Manager if less
services in advance
than $75,000
Insurance, including professional
May use MRSC Consultant
liability
$75,001 or more
Roster
requires Council
W-9
approval
Firms submit statement of
qualifications
Purchase Order if > $10,000
Award based on
qualifications, not price
Some A/E contractor
funding agencies may
require their own contract
and/or contract language
placed in eh city contract.
Verify with funding
agency.
r. The City Manager may sign contracts for purchase of goods greater than $75,000 if they specifically implement
the annual budget and result from the aggregation of approved budgetary programs and services for the current
year (PTMC 3.46.110(A)(1)).
' For projects under $50,000, you may use the Limited Small Public Works process, which requires estimates from
at least three contractors on the roster.
':" The City Manager may sign public works contracts up $75,000 for multiple trades if the contract is time -sensitive
and a delay in bringing the matter before Council would cost the City time and money.
Retainage is not required for federally funded transportation projects through the Federal Highway
Administration. Check grant documents for specific requirements. If the local government waives retainage, they
assume liability of contract non -payments but due retain the right of recovery from the contractor.
' Federally funded or assisted public works projects over $2,000 require payment of Davis -Bacon wage rates
determined by the U.S. Department of Labor.
The City Manager may sign professional services contracts, including architectural, engineering, legal, or
consulting services, up to $75,000 if the contract is time -sensitive and delay in bringing the matter before Council
would cost the City time and money.
7 Once a contract has been awarded the City Manager may sign invoices that exceed $75,000 as long as the total
cost of the project does not exceed the approved contract amount or where change orders do not exceed council
authorized limits for City Manager purchase or contract authority.
Page 1 134
Table of Contents
1.0 Introduction
1.1 Purpose of the Manual
1.2 Contact Information
1.3 Code of Ethics (RCW 42.23)
1.4 Conflict of Interest
1.5 Unauthorized Purchases
1.6 Sustainable Purchasing
1.7 What This Manual Covers
1.8 Define the Need
1.9 Determine the Cost
1.10 Determine Contract Value
1.11 Exemptions to the Competitive Bidding Process
1.12 Declared Emergency
2.0 New Procurement
2.1 Initiate a New Procurement
2.2 Purchases of Goods, Supplies, & Equipment
2.2 (a) SMALL Purchases of Goods, Supplies, & Equipment ($7,500 or less)
2.2 (b) INTERMEDIATE Purchases of Goods, Supplies, & Equipment ($7,501-$15,000)
2.2 (c) LARGE Purchases of Goods, Supplies, & Equipment ($15,001 or more)
2.3 Food and Beverage Purchases
2.4 Piggybacking (State Contracts and Interlocal Purcha sing Agreements)
2.5 Public Works
2.6 Limited Small Works
Process (Public Works Projects under $50,000)
2.7 Small Works Roster
Process (Public Works Projects $350,000 or less)
2.8 Formal, Competitive Bid
Process (Required for Public Works Projects over $350,000)
2.9 Equipment Purchases Including Installation
2.10 Unit Priced Contracts
2.11 Services
2.12 Purchases of Architectural & Engineering Services
2.13 RFPs and RFQs
2.14 Bid Opening Process
2.15 No Bids or Non-Responsive/Responsible Bids or Submittals
2.16 Contracting 101
3.0 Other Considerations
3.1 Rule 171- Sales Tax Exemptions
3.2 Prevailing Wages
3.3 Retainage
1
1
1
2
2
3
4
4
5
6
6
7
8
9
9
9
9
10
11
12
14
15
16
16
17
17
18
18
19
20
21
23
24
26
28
29
31
31
31
33
Page1135
4.0 Contract Administration
34
4.1 Risk Management Considerations
34
4.2 Payment Options
34
4.3 Contract Execution & Administration
35
4.4 Contract Monitoring - Performance
36
4.5 Contract Monitoring - Payment
37
4.6 Amendments & Change Orders
38
4.7 Contract Close -Out & Termination
39
5.0 Surplus and Disposition of Assets
41
5.1 General Information
41
5.2 Declaring Surplus
41
5.3 Disposition of Personal Property
42
5.4 Seizure Items (RCW 69.50.505)
43
5.5 Surplus of Real Property (Land)
43
6.0 Purchasing Cards
43
6.1 Purchasing Cards as a Method of Payment
43
6.2 Purchasing Card Administration
44
6.3 Authorized Charges and Uses
45
6.4 Unauthorized Purchases
45
6.5 Returns and Exchanges
46
6.6 Account Maintenance
46
7.0 Definitions and Acronyms
48.
Page1136
1.1 Purpose of the Manual
The Purchasing Policies and Procedures Manual guides and assists City staff
with basic procurement and contracting requirements as set forth in the City
of Port Townsend Municipal Code (PTMC) Chapter 3.46 and Washington
State statutes.
This manual establishes policy guidelines and clarifies the procedures for
purchasing supplies and materials, public works construction, and
contracting for services by the City of Port Townsend. The procedures set
forth in subsequent sections of this manual are designed to assure the
citizens, the City Council, and City administrative staff that the City is
receiving maximum value for each tax and utility dollar expended and to
ensure fiscal responsibility in the procurement process. All employees and
City representatives must follow these policies and procedures.
All references to the Revised Code of Washington (RCW) and City Ordinances
and Resolutions shall be incorporated as part of this manual, including all
future amendments. In cases where these policies conflict with any City
Ordinance or State or Federal Law or Regulations, the terms of that law or
regulation prevail. In all other cases, these policies apply.
1.2 Contact Information
Name
Responsibility
Finance Director/Manager
Fiscal control, policy, & budget
Finance Director/Manager
Grants & capital improvement
Finance — Accountant/Finance Specialist
program
City Attorney/Legal Asst.
Contracts and bidding process
Finance Technician III
Accounts payable & vendors;
ordinary purchases of supplies,
materials, maintenance, and
equipment; surplus & disposition
of assets; purchasing cards
1
Page1137
1.3 Code of Ethics(RCW 42.23).,
This section of the manual should be interpreted in tandem with the City
of Port Townsend Personnel Policy Manual Chapter 2.1 (Code of
Conduct) and PTMC Chapter 2.80. Please also refer to RCW 42.23 (Code
of Ethics for Municipal Officers — Contract Interests). A municipal officer
includes all elected officials, advisory board members, and City
employees.
City employees are expected to represent the City in a professional and
accountable manner that is courteous, helpful, and efficient. Employees
shall conduct their public and private actions and financial dealings in a
manner that shall present no conflict of interest between the public trust
and their private interest.
Actions of City employees, when purchasing supplies and services,
should be fair and impartial and not be used for personal gain or benefit.
Public employment shall not be used for personal gain, and City
employees may neither solicit, accept, nor agree to accept any
compensation, gratuity, or reward for themselves, their families, or
others that results in their personal gain or which may affect their
impartiality in making decisions on the job. Discounts or concessions
realistically available to the general population, items received that do
not result in personal gain, and samples forgeneral City use are examples
of items that are not gratuities. Personal judgment should be used, and
questions regarding particular situations should be referred to the
employee's supervisor or department head.
Personal gifts or gratuities that might influence or give the appearance
of influencing purchases of goods or services must be declined.
Employees may not willfully circumvent purchasing and procurement
policies and procedures to enter into contracts or purchase goods and
services. Any contract made in violation of this policy manual, City code,
or State statutes will be considered null and void, and the employee or
officer may be subject to discipline or dismissal. Willful disregard of these
policies and statutes when purchasing goods and services may also be
subject to discipline and/or dismissal from service. Please see PTMC
2.80.060 (Penalties) for reference.
1.4 Conflict of Interest
No City staff or Council member may undertake consulting, professional
practice, or other assignments that would result in a conflict of interest. Any
2
Page1138
City employee or Council member who recommends or approves a purchase
and has any financial interest in the firm involved in the purchase shall
disclose his or her interest prior to recommending or approving the
purchase.
No city staff or Council member may participate in the selection, award, or
administration of a contract supported by a Federal award if they have a real
or apparent conflict of interest. Such a conflict of interest would arise when
the City employee or Council member, any member of their immediate
family, their partner, or an organization which employs or is about to employ
any of the parties indicated herein, has a financial or other interest in or a
tangible personal benefit from a firm considered for a contract. Any willful
violation will be subject to disciplinary action according to PTMC 2.80.060.
1.5 Unauthorized Purchases
PURCHASES FOR PERSONAL USE ARE NOT ALLOWED. The person
ordering the unauthorized and unjustified purchase is personally liable
for the costs of the purchase or contract and may be subject to
disciplinary action, up to and including termination of employment. If
the purchase was made without proper authorization but is in fact a
justified purchase, then the department head has the option to
approve the purchase after the fact.
When representing the City through purchasing goods and services,
employees are prohibited from doing the following:
• "Bid Splitting" —A capital (public work) project means a
complete project. The project may not be split into units or
classes of work to avoid the restriction on work that may be
performed by day labor or other bid rules.
• Purchase breakup — Purchases that exceed authorization limits
or exceed the quote requirements should not be split up to
circumvent the purchasing policies and procedures.
• Purchasing alcohol or personal entertainment goods and
services.
• Generating a purchase order. Only the Legal Department or
Finance Department have the authority to generate a purchase
order (encumbrance).
• Purchasing controlled commodities without prior approval
including the following:
o Cell phones, telephone equipment, pagers, etc.
o Computers and related equipment, fax machines,
printers, scanners, copiers, software, or systems
3
Page1139
o Anything that IT staff is requested or required to install,
connect, service, maintain, or support
o Anything purchased using Equipment Rental and
Revolving Funds
o Using a City -issued purchase card for cash advances or
professional services
1.6 Sustainable Purchasing
The City shall acquire its goods and services in a manner that complies
with all federal, State, and City laws and other requirements (e.g., City
resolutions).
Environmental factors to consider in selecting products include:
• Pollutant releases, especially persistent bio-accumulative toxins
(PBTs)
• Waste generation
• Greenhouse gas emissions
• Recycled content [recommend using 30% recycled paper]
• Energy consumption
• Depletion of natural resources
• Potential impact on human health and the environment
Social equity factors that should be considered include but are not
limited to:
• Use of local businesses when allowable under bid rules
• Use of small, minority, and women -owned businesses
• Ergonomic and human health impacts
Fiscal factors to be considered include but are not limited to:
• Lowest total cost
• Leveraging our buying power
• Impact on staff time and labor
• Long-term financial/market changes
• Technological advances in a rapidly changing market
1.7 What This Manual Covers
The process of selecting vendors and managing contracts shall embody
the value of stewardship of public resources by providing the greatest
levels of both quality and value.
The goals are to ensure that the purchase process:
4
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• Practices ethical behavior and conduct: Create purchasing
processes that are fair, open, and at least cost of public funds.
• Obtains value with public funds: Purchase goods and services
that are fiscally responsible, reduce resource consumption and
waste, perform adequately, promote advantages to lessor
advantaged segments of the community, and promote health and
well-being.
• Acts with integrity and ensures open and effective
communication: Be impartial in fact, as well as in appearance.
From Start to Finish...
Before any purchase is made, the following questions should be
answered:
• Define the need — What kind of purchase is this?
• Determine the cost— How much will it cost?
• Process — How do I procure it?
• Protecting the City — How do we properly protect the City from
liability?
• Authority— Who must approve it?
• Contract administration — What are my responsibilities?
1.8 Define the Need
The first question that should be answered is "What type of purchase is
this?" The major categories of purchases include:
Public Works: „.(!K /, w, ,w �„ ).,
Includes all work, construction, alteration, repair, or improvements other
than ordinary maintenance executed at the cost of the City:
Examples: demolition, remodeling, renovation, road construction, building
construction, and utilities construction.
Ordinary maintenance is generally considered to include work not
performed by contract and performed on a regular basis to service, check,
or replace items that are not broken. For purposes of prevailing wage
5
Page1141
requirements, public works includes ordinary maintenance when performed
by contract. See Section 3.2.
Materials, Supplies, and Equipment:
Materials, supplies, and equipment are considered tangible items, which are
manufactured and are moveable at the time of purchase. It is important to
distinguish materials, supplies, and equipment used in public works
contracts from those in non-public works contracts, as different bidding
requirements apply to each.
Examples: office supplies, off -the -shelf software, hardware, trucks, copy
machines, auto parts, gravel, janitorial supplies, food, and beverages.
Services:
Distinguishing between services and public works is important, as services
have different bidding requirements. Services require the labor, time, or
effort of a human being and can include intellectual or physical work.
Examples: accountants, attorneys, elevator maintenance, instructors,
technology consulting, engineers, and land surveyors.
1.9 Determine the Cost
Once the need has been defined, the estimated cost of the goods or services
will generally determine what competitive selection process you follow.
Estimated project costs for competitive bidding purposes must include:
• All construction -related work (except for engineering or
architectural design fees)
• All phases of the project
• Any permitting costs of the project
• All labor and materials required for the project
• All applicable sales and use taxes
The cost estimate should not include donated materials, labor, supplies, etc.
1.10 Determine Contract Value
Contract value refers to the total aggregate value of the contract, including
potential renewal periods. Examples of contract value are as follows:
• Example #1: A three-year contract for $40,000 per year is
considered a $120,000 contract.
• Example #2: A one-year, $8,000 professional services contract is
renewed for an additional year at $8,000. The aggregate value of
I:
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the contract becomes $16,000, which requires City Council
approval.
1.11 Exemptions to the Competitive Bidding Process
Exemptions to this policy must be approved in writing by the City Manager
when within his or her signing authority; otherwise, exemptions shall be
approved by City Council. Exemptions should make good business sense and
be in the best interest of the City. In all cases, it is the City's responsibility to
conduct a good faith review of all available providers.
Exemptions to competitive bidding requirements as provided in IItC�V
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
........................................ ., 80.(J....) and PTMC 3.46.090:
• Licensed or patented goods or services
• Specialized items that are compatible with existing
equipment or systems (i.e. water treatment plant
Sole source
filters)
• Meets City standards (i.e. meters)
• Factory -authorized warranty services
• Meets a specialized need of the City
• Items of special design, shape, or manufacture that
Purchases involving
match or fit existing equipment, inventory, systems,
special facilities or
programs, or services
market conditions
• Items offered at highly favorable price that will be
sold before City can follow bidding process
Auctions, closeout, &
• Only when items can be purchased below market
ban kru ptcy sales
cost
Emergency purchases
• See Section 1.12
or public works
Purchases of insurance
• Competitive bidding is not required for insurance or
or bonds
bond purchases
• The City Manager, upon approval by City Council,
may proceed to acquire real property through
negotiation
• Negotiations must be based upon an independent
Real property
appraisal of the property
• The City will not pay more than market value
• If purchased with federal funds, the acquisition shall
comply with the Uniform Real Property Acquisition
and Relocation Assistance Act of 1970, as amended
• The City may by agreement acquire, sell, or
Surplus property (RCW
exchange surplus property to or from another
39.33.010)
government without the use of bids
7
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Interlocal agreements • See Section 2.4
(Piggybacking)
(RCW 39.34.030)
Exemption Process:
Complete a written request to the City Manager or City Council (depending
on signing authority) explaining why this option is the only option, makes
good business sense, and is in the best interest of the City. Explain what
features, knowledge, or qualifications the vendor can provide that are not
available from other sources. Outline steps taken to verify that this is the
only vendor available, which could include:
(1) internet search
(2) calls to vendors or contractors on MRSC rosters
(3) advertisement in paper with a "Notice of Intent to Contract"
(4) advice from expert consultant in service area
This request should be signed by the requestor. Use the Sole Source
Justification Form if applicable.
1.12 Declared Emergency
For purposes of this section "emergency" means unforeseen circumstances
beyond the control of the City that either: (a) present a real, immediate
threat to the proper performance of essential functions, or (b) will likely
result in material loss or damage to property, bodily injury, or loss of life if
immediate action is not taken. Competitive bidding may be waived subject
to the following process:
1. Staff (usually a department head) identifies an urgent need and
requests that the City Manager declare an emergency.
2. Upon approval from the City Manager, the department authorizes
work and/or equipment procurement required to address the
emergency.
3. Department drafts a memorandum explaining the basis for the
emergency and the selection of the particular vendor. This
memorandum should be included in the contract file.
4. Request that the Legal Department draft a contract.
5. Department schedules the contract award on next City Council
agenda. City Attorney and department head prepare materials
necessary to ratify the emergency declaration finding.
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2.1 Initiate a New Procurement
The City makes many small and large purchases over the course of the year
and must comply with State and local laws for each type of procurement,
based on type of work, dollar limits, and level of risk involved.
See the matrix at the beginning of this manual for a summary of the types
of new procurements typically performed at the City of Port Townsend.
City staff may also initiate new procurements through purchasing card
purchases (see Section 6.0) and by requesting reimbursement for
purchases made with the employee's personal funds. It is recommended
that employees use a purchasing card for small purchases whenever
practicable and allowed by City policy.
2.2 Purchases of Goods, Supplies, & Equipment
2.2 (a) SMALL Purchases of Goods, Supplies, &
Equipment ($7,500 or less)
Small purchases of goods, supplies, materials, and equipment $7,500 or less
can be made using one of the following processes:
Purchasing Card (see
Contact
Business -related
Alcohol, capital
Section 6.0)
Finance if you
purchases of
equipment, cash
need to know
goods and
advances, consulting
It isstrongly recommended
your limits.
services (i.e.,
services, personal
you use a City purchasing
subscriptions,
items, professional
card vs. personal credit card
Sample limits:
seminars, meeting
services, meals while
All receipts must be retained
$500 single
supplies,
traveling
and turned into supervisor
purchase;
maintenance,
for approval.
$1500
repair,
monthly billing
operations, office
cycle limit
supplies,
computer
Exceptions may
peripherals,
be made with
software
the Finance
subscriptions)
Director's
approval
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Page1145
Personal/employee
Up to $1,000
Incidentals such
Reimbursement
as postage, ferry
Personal credit
tolls, parking fees,
card use must
hotel fees, CDL
be approved by
license, etc.
dept. head.
Vendor Invoice
$7,500
Contracted
supplies
All invoices MUST be
addressed and/or shipped
Goods at low risk
to the City of Port
and not otherwise
Townsend and have an
covered under a
invoice number, date of
contract or
purchase, and description
purchase order
of item purchased.
Regular business -
related goods and
services
Capital expenditures
Although there are no bidding requirements for goods purchases between
$500 and $7,500, it is recommended that City staff obtain estimates from
three vendors, preferably off the MRSC Vendor Roster. Staff may also use a
State contract or interlocal agreement ("piggybacking"). The applicable
department head or designee has invoice signing authority.
Purchases of goods under $500 do not require quotes, but staff may solicit
estimates from the M RSC Vendor Roster or use a State contract or interlocal
agreement ("piggybacking"). The applicable department head or designee
has invoice signing authority.
All payments made by a check issued by the Finance Department require a
W-9 from the vendor.
2.2 (b) INTERMEDIATE Purchases of Goods, Supplies, &
Equipment ($7,501-$15,000)
Purchases of goods, supplies, materials, and equipment from $7,501 to
$15,000 should be made using a purchase order if over $10,000 and a vendor
invoice for payment. Purchases in this category could also be made using a
State contract, interlocal agreement, or formal sealed bidding.
Employees may not use a purchase card or personal payment for
reimbursement unless previously approved by their department head and
within card limits.
When making purchases from $7,501 and $15,000, staff should obtain at
least three telephone or written quotations from vendors on the MRSC
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Vendor Roster. The applicable department head has invoice signing
authority.
A purchase order or written agreement may be required. Check with the
Finance Department for additional requirements.
All purchases in this category require a W-9 from the vendor.
2.2 (c) LARGE Purchases of Goods, Supplies, &
Equipment ($15,001 or more)
utC 3": „ 3„35212 ) any purchase of material supplies, and equipment
Per................................................................................................................, ,
with a cost exceeding $15,000 requires formal, competitive bidding or the
use of a State contract or interlocal agreement.
Formal Bidding Process:
1.
Identify grants or federal
Notify Accountant in Finance
funds as applicable
2.
Prepare bid documents
Include:
• Invitation to bid
• Instructions and information for bidders
• Bid proposal template
• Bid bond template
• Bidder's statement of qualifications template
• Sample contract
• Insurance requirements
Contact Legal Dept. to review prior to finalization
of bid package
3.
Prepare product
Considerations: warranties, delivery, liquidated
specifications
damages
4.
Advertise, publish, and
Advertise in official newspaper
notify
Publish bid on Builder's Exchange
Email notification to recommended roster
participants (if any)
5.
Addenda required?
Department to write addenda, notify plan
holders, and post online
6.
Schedule & conduct bid
Department to schedule conference room and
opening
open and read sealed bids
11
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7
Bid Award
Determine the lowest, responsible, responsive
bidder
Prepare Council agenda materials if $30,000 or
more
Prepare purchase contract (or contact Legal
Department if needed)
Obtain vendor signature and forward to Legal
Assistant
Give Legal Assistant or Finance BARS code and
request purchase order/encumbrance.
Obtain W-9 for Accounts Payable
Do not notify non -selected bidders about award
until contract is fully signed
The City Manager has signing authority for purchases less than $30,000. All
purchases totaling $30,000 or more require City Council approval. Consider
the entire cost of the purchase for all years (for example, maintenance costs)
involved when determining the approval level. Contact the Finance or Legal
Department with questions on total contract value.
All purchases in this category require a W-9 from the vendor.
2.3 Food and Beverage Purchases
Generally, consuming food and beverages at public expense will be
discouraged. The consumption of nourishment is ordinarily regarded as
private and personal and not a public activity. (This includes light snacks.) In
the occasion where food and beverages are approved for purchase, in all
circumstances the department head and/or the City Manager must pre -
approve the purchase(s) and the department must have adopted budget
appropriations.
The following outlines circumstances when the City will provide for the
consumption of food and beverages:
1. Meal reimbursements while in travel status. Please refer to the City of
Port Townsend Personnel Policy Manual, Section 5.7 for meal per diem
policies.
2. Light refreshments and/or meals maybe purchased by the City when:
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Page1148
• Employees or officials attend a special meeting, training, or similar
circumstance where the purpose of the event is to discuss City
business, AND
• It provides benefit to the City, AND
• The refreshments are an integral (necessary) part of the meeting or
training session for the employee or official to receive the full
benefit of the meeting and/or training. (e.g., a working breakfast,
lunch, or dinner), AND
• The meeting or training session takes place away from the
employee or official's regular workplace, AND
• Receipts for actual costs of the refreshments/meals are kept with
documentation of who was in attendance and the purpose of the
meeting or training session.
3. In emergency situations when a department head determines that
employees or intergovernmental employees performing critical City
functions must remain at their workplaces, providing
refreshments/meals will be allowed if the department head pre -
approves the purchase.
4. Meals and/or refreshments for employee, official, volunteer, wellness,
public, or occasional appreciation events when:
• The City Manager and/or department head has approved the
purchase(s) in advance and documentation of such is evident, AND
• Receipts for actual costs are kept with documentation of who was
in attendance and the purpose of the event, AND
• The meal/refreshment purchases forthe event is approved through
budgeted appropriations.
Prohibited purchases of refreshments include the following circumstances
and will not be reimbursed by the City:
1. Meals and/or refreshments that were not pre -approved by the
department head and/or the City Manager.
2. Meals and/or refreshments that were not approved in budgeted
appropriations.
3. Purchase of alcoholic beverages.
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2.4 Piggybacking (State Contracts and Interlocal
Purchasing Agreements)
State Contract Piggybacking Process
The City has signed a master contract with the Washington State
Department of Enterprise Services (DES) to use the State's contracts for
goods and services. When using a State contract, we are "piggybacking" off
their competitive process, eliminating the need to perform our own. The City
encourages the use of these contracts whenever possible.
1.
Review State contract
Contact Finance Department with process
website for piggybacking
questions
requirements
2.
Contact vendor to verify
Obtain details regarding all aspects of purchase,
they will honor State
including invoicing, availability, delivery, etc.
contract pricing
3.
Contact Finance Dept.
Finance or Legal Asst. will develop a purchase
order for the good/service if contract value >
$10,000 or otherwise required by the vendor
3.
Contact buyer to place
Place order and process invoice for payment.
order
Provide Finance Department with BARS and
It is highly recommended
State contract number for purchase order
that all agreements to
use the .State pricing are
documented in writing
State contracts include standard terms and conditions. When piggybacking
off a State contract, all State contract terms and conditions apply. Contact
the Legal Department if any contract terms do not suit the City's needs. Only
certain particulars can be changed, such as quantity and delivery terms.
Interlocal Purchasing Agreements
The process described above for State contracts can also be used to
purchase goods and services through other agencies' contracts. However,
the following additional steps must be taken by City staff:
1. Read the other agency's contract carefully to confirm that it allows
other agencies to use it.
2. Document that the purchase was made according to the other
agency's bidding requirements and our bidding requirements.
Contact the Legal Department for assistance. This is best done by
14
Page1150
requesting and retaining copies of all bid documents from the other
agency.
3. Confirm that the City has a current interlocal purchasing agreement
with the agency before making the purchase.
4. If we do not have an agreement, contact the purchasing coordinator
at the other agency to request one. Contact the Legal Department
for assistance in processing the agreement.
Note: Be particularly careful about documentation when piggybacking off a
contract from an out-of-state agency or a different type of agency (for
example, a school district or port district). The authorization limits shown on
the matrix at the beginning of this manual apply to purchases through State
contracts and Interlocal Agreements.
2.5 Public Works
Bid Limit:
According to uZC"W ,35".23".3"52 a second-class city, such as Port Townsend,
may construct a public work by contract or by day labor (City staff) without
calling forbids when the estimated cost of the work will not exceed $116,155
if more than one trade is involved or $75,500 if a single trade is involved.
When the cost of a public work exceeds these figures, the project should be
done by contract through formal sealed bidding, except that the City may
use the small works roster process for projects up to $350,000.
Determining the Cost of a Public Work:
The total construction cost of each project must be estimated in order to
correctly apply bid limit dollar amounts to determine if public works project
must be competitively bid. This estimate may be prepared by an outside
third party; however, the final cost estimate must be validated by the City.
The total construction cost (estimated as if the project were to be bid) should
include materials, supplies, equipment, and labor for that project AND
applicable sales and use taxes. However, the value of volunteer labor,
donated materials, or donated equipment need not be included in the cost
estimate for a public works project, as these are not a cost to the City.
For projects completed by any means other than a contract or small works
roster process (for example, using City workers) having an estimated cost
exceeding $25,000, the City must publish a description of the project and its
estimated cost in the official newspaper at least fifteen days before
beginning work, as required by,utC..W32 0..402 .
,,,,,,,,,, ,,,,,
15
Page 1 151
Bid Splitting:
RCW 351,23„352(°.) prohibits the division of a project into units of work or
classes of work to avoid the restriction on work that may be performed by
day labor on a single project.
Small Works Roster:
When the estimated cost of a public works project is $350,000 or less, the
City may follow the small works roster process for construction of a public
work or improvement as an alternative to the general competitive bidding
requirements, in accordance with ut ....... ",0"4.:1„55 The City of Port
Townsend has contracted with the u..uu u„�p„u ut„I„ uyu,„r
of Wa, dun t n (u „ut ) for use of its statewide electronic database for small
public works contractors, vendors, and consultants.
Publication:
At least once a year, on behalf of the City, MRSC publishes notice in local
newspapers of the existence of the rosters and solicits the names of
contractors for the rosters. Responsible contractors can be added to the
appropriate MRSC roster(s) at any time that they submit a written request
and necessary records. The City may require contracts to be signed when
project awards are made using a small works roster.
2.6 Limited Small Works Process (Public Works Projects
under $50,000)
If a public work, construction, alteration, repair, or improvement project is
estimated to cost less than fifty thousand dollars ($50,000), the City may
use the limited public works process instead of formal, competitive bidding,
as provided in RCW 39.04.155(3).
Process:
1. Develop a scope of work describing the nature of the work to be
performed and materials and equipment to be furnished. Detailed plans
and specifications need not be included in the invitation.
2. Solicit at leastthree contractorson the MRSC Small Works Rosterforthe
applicable category or categories. Requests for estimates should include
the date, time, and location to return the estimate. Notify contractors
that:
a. they must pay prevailing wage;
b. the City must equitably distribute opportunities among
contractors in the geographic area;
c. the City will require a performance bond and a payment bond,
each for the total cost of the project; and
16
Page1152
d. the City will hold 5% retainage until releases are received from
the State (RCW 60.28.011), unless waived by staff member with
contract signing authority.
Note: The City staff member with contract signing authority
may waive the bond and retainage requirements, however,
contractors must be notified about this waiver in the request for
estimates and/or advertisement for the project.
Note: If payment and performance bonds are required, the
contractor may choose to have 10% retainage held instead of
obtaining bonds.
3. Determine the lowest responsive, responsible bid.
4. Send the Legal Assistant copies of all estimates or a list of all contractors
contacted and their bid amounts. (We are required by law to maintain a
list of contractors contacted under the limited public works process.)
5. The Legal Assistant will make sure the contractor meets all bidder criteria
and will draft a contract.
6. If project total is over staff signing authority, contact the City Clerk to
schedule contract approval on an upcoming City Council agenda.
7. After Council approval, send the draft contract to the contractor along
with a request for items identified by the Legal Assistant (for example,
W-9 and proof of insurance).
Note: All projects require a W-9 from the contractor.
Alternative to Process:
Local governments may waive retainage but must assume liability of
contractors for non-payment. The local government has the right of
recovery from the contractor.
2.7 Small Works Roster Process (Public Works Projects
$350,000 or less)
If a work, construction, alteration, repair, or improvement project is
estimated to cost $350,000 or less, the small public works process may be
used instead of formal, competitive bidding, as allowed by ut
.................................................................
Process:
1. Develop a scope of work describing the nature of the work to be
performed and materials and equipment to be furnished. Detailed plans
need not be included be included in the invitation.
17
Page1153
Note: For projects totaling $250,000-$350,000, all contractors in the
applicable category must be notified that the project is being bid, even if
they are not invited to bid.
2. Contact at least five contractors on the MRSC Small Works Roster for
the applicable category or categories. Requests for estimates should
include the date, time, and location to return the estimate. Notify
contractors that:
a. they must pay prevailing wage;
b. the City will require a payment bond and a performance bond,
each for the total cost of the project; and
c. the City will hold 5% retainage until releases are received from
the State (RCW 60.28.011).
Note: The City staff member with contract signing authority
may waive retainage requirements, however, contractors must be
notified about this waiver in the request for estimates and/or
advertisement for the project.
Note: For projects totaling $150,000 or less, the contractor
may choose to have 10% retainage held instead of obtaining bonds.
Note: The city will retain the right of recovery from the
contractor if retainage is waived.
3. Determine the lowest responsive, responsible bid.
4. Send the Legal Assistant or Engineering staff (for capital projects) the
estimate for the lowest bid and expected project dates. (The City's
"Small Works less than $350,000 Documentation Form" may be used.)
5. The Legal Assistant or Engineering staff will make sure that the
contractor meets all bidder criteria and will draft a contract.
6. Contact the City Clerk to schedule the contract approval for an upcoming
City Council meeting.
7. Draft agenda bill and resolution, if applicable, and send to City Attorney
for review.
8. After Council approval, send the draft contract to the contractor along
with a request for items identified by the Legal Assistant or Engineering
staff, such as proof of insurance and a W-9.
2.8 Formal, Competitive Bid Process (Required for Public
Works Projects over $350,000)
Formal, competitive bidding must be used for all public works projects over
$350,000; however, it may also be used for any projects below this
threshold. Competitive bidding is designed to prevent favoritism in
awarding public work contracts and to enable local governments to obtain
18
Page1154
the best work or supplies at the most reasonable prices. It is also designed
to provide a fair forum for bidders and to protect the public interest.
Bidding process:
1. Coordinate with Accountant in Finance if using grantor federal
funds.
2. Draft or work with consultant to draft bid package and send to City
Attorney for review.
3. Draft a notice to bid, stating the nature of the work.
4. Notify bidders that bids must be sealed, and a 5% bid deposit is
required, in the form of a cashier's check, postal money order, or
surety bond.
5. Have the notice to bid published in the City's official newspaper
(currently The Leader) at least 13 days prior to the date bids are
due. Staff may choose to publish notice in additional newspapers,
such as the Daily Journal of Commerce.
6. Post the bid on Builder's Exchange.
7. City Administration receives and date and time stamps sealed bids.
8. Hold a public bid opening after the bid deadline closes.
9. Identify the lowest responsive, responsible bidder.
Note: If the contract is not awarded to the lowest bidder, a full and
complete statement of the reasons for selecting another bidder
must be prepared, approved by the City Manager, and retained in
the file. See RCW 35.23.352(2) or Section 2.15.
10. Notify the City Clerk to add approval of the project contract to an
upcoming City Council agenda.
11. Draft an agenda bill and resolution, if applicable. Ask the City
Attorney to review.
12. Following Council approval, ask the Engineering Dept. (capital
projects) or Legal Assistant (other projects) to draft a contract.
13. Send draft contract to contractor with request for additional items
identified by Engineering staff or the Legal Assistant.
14. After the contract has been fully signed, send a copy to the
contractor and return all bid bonds, except for the one submitted
by the successful bidder.
2.9 Equipment Purchases Including Installation
R "5,, 3,,,352(°!,,), prohibits the division of a public works project into units
of work or classes of work to avoid the restriction on work that may be
performed by day labor on a single project.
Occasionally projects include the direct purchase of equipment separate
from the installation. For example, the City purchases equipment for
19
Page1155
$50,000 off a State contract, and the installation is estimated to cost
$25,000.
How do we bid this project?
Because we cannot split public works into units to avoid the bidding process,
we must combine the cost of the two purchases and treat them as one to
establish the "project cost." In this example, the cost of the entire project is
$75,000 (equipment @ $50,000 + installation @ $25,000), which exceeds
the City's limited public works bid threshold of $50,000. Therefore, the
public work installation must be awarded using the small works process or
formally bid (see Sections 2.7 and 2.8 above). The purchase of the
equipment can be made using the State contract (see Section 2.4 above).
What kind of contract do we use?
For this project, because the public works installation is under $350,000, we
would use a small public works contract. Usual contract requirements that
apply to small public works projects apply to this project. Because the total
project cost is $75,000, this contract would have to go to City Council for
approval.
There are so manyvariables to this type of purchase that it would be difficult
to highlight every possible scenario. Please contact the Finance Department
or Legal Department for assistance.
Approval Process:
Refer to the Public Works section of the matrix at the beginning of this manual.
2.10 Unit Priced Contracts
RCW 35.23.352 allows the City to use unit priced (or on -call) contracting for
public work projects that are expected to happen on a recurring basis, such as
tree trimming, road resurfacing, or public facility maintenance. Unit priced
contracts means a competitively bid contract in which public works are
anticipated on a recurring basis to meet the business or operational needs of the
city or town, under which the contractor agrees to a fixed period indefinite
quantity delivery of work, at a defined unit price for each category of work.
Whenever possible, the city must invite at least one proposal from a cerrified
minority or women contractor who otherwise qualifies.
Unit priced contracts must be executed for an initial contract term not to exceed
three years, with the city or town having the option of extending or renewing the
unit priced contract for one additional year.
Invitations to bid for these contracts shall include, for purposes of the bid
evaluation, estimated quantities for the anticipated types ofwork and specify how
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the City will issue or release work assignments, work orders, or task
authorizations based on the hourly rates or unit prices bid by the contractor.
Contracts must be awarded to the lowest responsive, responsible bidder.
Unit priced contractors shall pay prevailing wages and update rates annually.
Intents and affidavits for prevailing wages paid must be submitted annually for
all work completed within the previous twelve-month period of the unit -based
contract.
Note: The City is also allowed (by BCV 39.10.420� to obtain pu0c works services by job
order contracts; bowever, these contracts are for a broader scope than uni[priced contracting and
require [bat 90% of [be work be performed by subcontractors. Please consult wi[b [be City
Attorney for more information.
2.11 Services
There are three types of services that the City may need to obtain:
1. Professional services (also called personal services) are provided by
independent contractors with specialized knowledge, advanced
education, professional licensing, or certifications; the primary service
provided is mental or intellectual, involving the consistent exercise of
judgment and discretion.
2. General services (also known as purchased services) include all service -
related work not considered a public work or professional service. Most
often these are routine in nature (i.e. yearly, monthly, weekly, etc.).
Examples include courier services, weeding, and vehicle inspection
services. State law does not require a competitive process for the
selection of general services, with the exception of the City newspaper.
3. Architectural, engineering, land surveying, and landscape architecture
services (A&E) are addressed in Section 2.12 below. Section 2.11 does
not apply to A&E services.
The City uses MRSC's Consultant Roster, which distinguishes architectural
and engineering services as defined in RCW 39.80.020 from other consulting
services. Consultants can be added to the appropriate roster when they
submit a written request and necessary records to MRSC. The City reserves
the right to publish an announcement on each occasion when professional
or other services are required.
To ensure a more competitive process, the City has adopted tighter
standards for selection of service providers than required by State law.
Unless the City Manager approves in writing an exemption based on the best
interests of the City, staff shall follow these guidelines for selection of
professional or general services:
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• Under $5,000— No competitive process required. It is still incumbent on
the department to ensure that the price is reasonable, and the provider
is qualified. It is recommended to request prices, schedules, and
qualifications from three consultants on the MRSC Consultant Roster.
• $5,000 to $9,999 — It is highly recommended to request prices,
schedules, and qualifications from at least three consultants on the
MRSC Consultant Roster.
• $10,000 to $19,999 — Request proposals from at least three consultants
on the MRSC Consultant Roster (with one having a MWDBE classification
when possible) or use an RFP/RFQ process.
• $20,000 or more — Formal advertised RFP or RFQ process
recommended.
Note: Some general services, such as landscaping work, require payment
of prevailing wages. Contact the Legal Department with questions.
Contract Award Process:
1. Develop scope of work.
2. Determine budget amount for work.
3. If grant funds are involved, check the grant agreement requirements.
4. Obtain proposals or conduct formal bidding as required above.
5. Evaluate the proposals and negotiate a contract with the lowest
qualified, responsible bidder.
6. If Council approval is required, contact City Clerk for meeting date. Draft
agenda bill and resolution, if applicable, and send to City Attorney for
review.
7. After Council approval (if required), contact the Legal Assistant with a
copy of the estimate and other relevant information, such as project
start and end dates.
8. Legal Assistant will prepare a draft Professional Services Agreement.
9. Send contract to service provider for review and signature, along with
request for documents identified by Legal Assistant, such as W-9.
10. Forward signed contract and additional documents to Legal Assistant for
processing.
11. Forward fully signed contract to contractor and arrange for project
sta rt.
Approval Limits:
For the approval limits, refer to the Services section of the Purchasing Matrix
at the beginning of this manual.
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2.12 Purchases c f Architectural & Engineering Services
Architectural, engineering, land surveying, and landscape architecture
services (frequently referred to as "A&E") are to be acquired under the
authority and procedures outlined in chapter RCW 39.80.
RCW 39.80.030 requires that the City publish advance notice of its need for
A&E services. The City may comply with this section by (1) publishing an
announcement on each occasion when professional consultant services are
required or (2) announcing generally to the public its projected requirements
for any category or type of professional service.
A&E consultants are initially selected based upon their qualifications, rather
than price (see RCW 39.80.050). The City will negotiate a contract with the
most qualified firm at a price that the City determines is fair and reasonable.
In making its determination, the City shall consider the estimated value of
the services to be rendered, as well as the scope, complexity, and
professional nature of the project. If the City is unable to negotiate a
satisfactory contract with the selected firm for a price the City determines to
be fair and reasonable, negotiations shall be terminated, and the City shall
begin negotiations with the next highest qualified firm. There are two ways
to select an A&E firm based upon their qualifications:
1. Roster statement of qualifications (SOQ) review — Select three or
more consultants from the MRSC Consultant Roster in the relevant
service category and evaluate their qualifications. Documentation of
the three reviews is required. Minority -owned, women -owned, and
veteran -owned firms must be given the maximum practicable
opportunity to compete for these contracts.
2. Project -specific request for proposals (RFP) — Use the MRSC
Consultant Roster to send out an RFP and request for qualifications
(RFQ) to consultants in the relevant service category. Minority -
owned, women -owned, and veteran -owned firms must be given the
maximum practicable opportunity to compete for these contracts.
Contract Award Process:
1. Develop scope of work
2. Determine budget amount for work
3. If grant funds are involved, check the grant agreement requirements
4. Public advance notice of need for services, if not already done
5. Obtain proposals or conduct formal solicitation, as described above
6. Evaluate proposals and/or statements of qualifications and select the
most highly qualified firm
7. Negotiate final project scope and fees with selected firm
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8. If project total is over City Manager signing authority, contact City Clerk
to add contract approval to upcoming City Council agenda
9. After Council approval (if applicable), request that Legal Assistant draft
professional services agreement
10. Obtain consultant's signature on agreement, along with proof of
insurance, professional certification (if applicable), and W-9
11. Send documents to Legal Assistant for City signatures and processing
Approval Limits:
Refer to the matrix at the beginning of this manual.
2.13 RFPs and RFQs
Reauest for Proposals:
A Request for Proposals (RFP) is a method of soliciting competitive proposals
for a defined scope of work. The proposals would normally include factors
to measure qualifications, delivery, and service reputation, as well as price.
An RFP is a formal invitation from the City to a company to submit an offer
to provide a solution (or proposal) to a problem or need that the City has
identified. The supplier's experience, qualifications, and solution may take
precedence over the cost proposal to the City.
Elements of an RFP:
1. Purpose of RFP (brief description of project)
2. Project background
3. Scope of work or statement of need
4. Goals and objectives
5. Minimum qualifications
6. Technical requirements (if any)
7. Schedule
8. Estimated project budget & request for cost proposal
9. Submittal requirements, including deadline
10. Evaluation process and criteria
11. Insurance requirements
12. Funding sources (if applicable)
Evaluation criteria for the submitted proposals should relate to the project's
scope of work and stated objectives and should be clearly communicated
with the proposers.
Request for Qualifications:
A Request for Qualifications (RFQ) is a method of soliciting competitive
proposals that considers and evaluates companies on the basis of
demonstrated competency and qualification rather than price. This process
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is typically used for architectural and engineering services where price is not
a consideration. An RFQ will generally result in negotiations.
Elements of an RFQ:
1. Project background and scope of services
2. Project budget and source of funding
3. Schedule
4. Minimum qualifications
5. Submittal requirements, including deadline
6. Selection process/evaluation criteria.
Information request of the respondents may include list of principals,
previous projects, number of employees, and licenses or certifications.
Depending upon the complexity of the project, a typical RFP or RFQ takes
around 6-8 weeks to complete.
Process for RFPs or RFQs:
1.
Identify need
Develop scope of services
2.
Determine the estimated cost
Confirm sufficient budget exists and
identify funding source(s)
3.
Identify grants or federal funds
Notify Finance Dept. (Accountant)
4.
Develop draft RFP/RFQ
Considerations:
• Schedule
• Scope of services
• Qualifications
• Selection process & evaluation criteria
• Submittal requirements & deadline
• Proposal validity period
• Term of contract
5.
Finalize RFP/RFQ
Contact City Attorney for review, then
finalize RFP/RFQ
6.
Identify appropriate roster
Identify roster category and companies
category
7.
Advertise, publish, and notify
• Advertise
• Publish RFP on City's website
• Email notification to recommended
roster participants
8.
Evaluate proposals
Department to identify selection
committee
9.
Conduct interviews
Department to schedule
10.
Identify "apparently successful
Seek management approval to negotiate
proposer"
with "apparently successful proposer"
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11. Negotiate contract Goal: reach a mutually advantageous
position on issues of concern while
fulfilling requirements of contract
12. Award contract Prepare council agenda materials, if
applicable, and contact Engineering or
Legal Assistant for draft contract when
2.14 Bid Opening Process
Bid Due Dates
Time is of the essence. It is important to make the bid submittal deadline
clear in the bid documents. For example: "The bid form will be received up
to 3:00 p.m. on April 27, 2020. Bids received after that date and hour, based
on the time on our atomic clock, will not receive consideration." For
example, if a bid is due at 2:00 P.M., a bid received at:
• 1:59 p.m. is on time
• 2:00 p.m. is on time
• 2:00:01 p.m. is late
If a bidder insists on submitting a bid after the deadline and leaves it, do not
open it. Make a photocopy of the bid envelope with the time stamp and
immediately return the bid by certified mail, return receipt requested.
Equal Treatment of Bidders
Avoid giving bidders an advantage to include: permitting bidders use of
private offices and conference space for finalizing bid prices, providing
envelopes for bidders to use in sealing the bid, or permitting bidders to use
the agency's telephone, computer, fax, or photocopier. Avoid disclosing the
names of bidders or the total number of bidders until the bid opening.
Receiving Bids Checklist
• Is the bid in writing? Do not accept bids by fax, email, telephone or
orally unless the bid solicitation allows for it (generally not allowed
for formal, competitive bidding).
• Did the bidder attend the mandatory pre -bid meeting, if applicable?
• Is the bid envelope sealed? Offer tape if not sealed.
• Is the correct information on the envelope?
• Is the time stamp clear?
• Is the time stamp prior to deadline?
• All received bids should be kept in a secure and centralized location
not accessible to other bidders.
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Withdrawal & Modification of Bids
• A request to withdraw or modify the bid in advance of the deadline
may be received verbally or in writing. If unfamiliar with the bidder,
ask for identification.
• Make a photocopy of the face of the bid envelope, ensuring the bid
receipt time shows up on the copy.
• Have the bidder sign the photocopy with the following "Received by
(signature, printed name, date, time)."
• Keep the original signed photocopy.
• Remove the bid receipt stamp or cross it out on the face of the bid
envelope.
• Return the bid to the bidder, notifying the bidder that if they choose
to resubmit the bid, it must be received prior to the bid submittal
deadline and stamped in again with a new time and date stamp prior
to the deadline.
Modifying Bids from a Distance
The bidder may submit additional information modifying a previously
submitted bid if the modification is:
• Received in writing.
• Signed by an authorized representative of the bidder.
• Received prior to the bid receipt deadline.
• In a sealed envelope.
• Clear in stating what prices are being changed.
Subcontractor's List
Due either with the bid or within one hour of the bid submittal deadline
(RCW 39.30.060).
Opening the Bids
Bids should be opened in a public meeting. Read each bid before opening
the next one. Consider using one person to open the bids and a second
person to read. The project manager staff should record the prices on a bid
tabulation form. The bid reader should state publicly all the information
noted in looking at the bid, without passing judgment whether it is
responsive or non -responsive, to include:
• Name of bidder
• Is bid form signed?
• Bid amount
• Is bid guaranty included?
• Are addenda acknowledged?
• Is subcontractor's list included?
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The bids will be evaluated for responsiveness after the bid opening. If a
contractor wishes to review the bids after the bid opening, allow only one
contractor at a time to review the bids in a monitored environment.
2.15 No Bids or Non-Responsive/Responsible Bids or
Submittals
No Bids or Submittals Received:
As provided in RCW 35.23.352(1), in the event the City does not receive any
bids or submittals on the first call, the City has three options: (1) re -advertise
and make a second call, (2) enter into a contract with any qualified
contractor, or (3) purchase the supplies, materials, or equipment and
perform such work and improvement by day labor (City staff).
Before determining which option would best fit, the department should
conduct a survey of the registered bidders or proposers or any other known
interested parties to determine: 1) why they didn't they submit, 2) whether
the City's document too restrictive or too complex, 3) if there ample time to
submit, and 4) if there too many open questions before the due date. The
City Attorney may be consulted for additional assistance in determining the
best option.
Determining Lowest Responsible Bidder:
The City should award the contract for a public works project to the lowest
responsible bidder, unless the lowest bid is above the budget for the project.
In that case, all bids may be rejected, and the City may call for new bids.
A responsible bidder shall be a registered and/or licensed contractor who
meets the mandatory bidder responsibility criteria established by RCW
39.04.350 and who meets any supplementary criteria established by the
City.
According to RCW 35.23.352(2), the City may award a contract to the second
lowest bidder if: (1) the bid is within five percent of the lowest bid, (2) the
second lowest bidder meets the same criteria as the lowest bidder, AND (3)
the City has issued a written finding to the lowest bidder within the last three
years that the lowest bidder was late, over budget, or did not meet
specifications, and the City has not found in writing that the lowest bidder
has shown how they would improve performance.
Non -Responsive and/or Not -Responsible:
The City shall draft bidder responsibility criteria that are based upon clear
business reasons, and the criteria must not be overly restrictive of the
bidding pool. Note that in Washington State, a bidder who objects to the
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supplemental bidder responsibility criteria may request that the City modify
the criteria before the bid submittal deadline.
Bids may be rejected as non -responsive for a multiple of material factors,
including lack of subcontractor's list when required (for contracts in excess
of $1M or contracts of three or more trades), insufficient bid guarantees,
bids submitted after the deadline, qualified bids, and/or lack of
acknowledgement of addenda. In general, a material irregularity is required
before the bid may be deemed non -responsive (defined as anyvariance
which provides "a bidder substantial advantage or benefit not enjoyed by
others"). In the event the City receives a bid or submittal on the first call
that is deemed non -responsive or non -responsible, the department shall
consult with the City Attorney to determine whether it is a material or
immaterial irregularity. Each project will be evaluated on a case -by -case
basis.
Bid Protest:
The City follows the bid protest guidelines established in RCW 39.04.105.
2.16 Contracting 101
A contract is a written agreement between two or more people or entities
to accomplish a specific outcome. In a public purchasing context, a contract
is an agreement by a vendor or contractor to provide goods or services to
the City in return for receiving payment from the City. The following is an
overview of the contract process:
Invitation:
• A solicitation (ITB, ITQ, or RFP) is an invitation to a contractorto make
an offer.
• These are most often directed at multiple parties and outline the
needs of the City.
Offer:
• The contractor's returned quote/bid/proposal is their offer to the
City to perform the work, outlining what and how much.
• The offer shows that the contractor is willing to agree to specific
terms.
• The offer is given to a particular party.
• The contractor has made an offer to do what the City requested for
a specific price.
Acceptance:
• The City must now accept one of the offers.
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• The acceptance is a communication showing agreement to the exact
terms of the offer or a contract.
• Contracts must show that the offer made by the contractor has been
accepted, usually by attaching the contractor's estimate or scope of
work and fee schedule.
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3.1 Rule 171 — Sales Tax Exemptions
Normally sales tax applies to every sale of tangible personal property (and
some services) to all persons, including cities. Thus, for bid limit purposes,
the tax must be included when determining the cost of a public work or
when calculating the cost of materials, supplies, and equipment purchases
separately from a public work.
However, there are some sales and use tax exemptions for certain public
work projects. The exemptions include:
1. Labor and services rendered for the building, repairing, or improving
of any street, place, road, highway, easement, right-of-way, mass
public transportation terminal or parking facility, bridge, tunnel, or
trestle owned bya city ortown which is used primarilyfor pedestrian
or vehicle traffic ( RCW 82.04.050(10). See also WAC 458-20-171,
nicknamed "Rule 171.") Materials used in constructing these
projects are not exempt from the sales and use tax.
2. Labor and services for the processing and handling of sand, gravel,
and rock taken from City pits and quarries when the material is for
publicly -owned road projects ( RCW 82.08.0275 and WAC 458-20-
171).
3.2 Prevailing Wages
What are prevailing wages? The Department of Labor and Industries (L&I)
requires that workers be paid prevailing wages when employed on all public
works, public building service maintenance, and contracted maintenance,
based upon the classification of labor performed.
Prevailing wages are defined as the hourly wage, usual benefits, and
overtime paid in the largest city in each county, to the majority of workers,
laborers, and mechanics. Prevailing wages are established by the
Department of Labor and Industries for each trade and occupation
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employed in the performance of public work. They are established
separately for each county and are reflective of local wage conditions.
What are the responsibilities of the City when contracting for public works?
The City, in awarding a contract, must make the determination of whether
that contract involves "public work" and communicate it to contractors in
the bid specifications and contracts.
What provisions must be made for prevailing wage? Awarding agencies
must stipulate in bid specifications and contracts for public work that
workers shall receive the prevailing rate of wage. Those documents must
either contain a list of the applicable prevailing wage rates or a link to the
rates on L&I's website. If including a link, print the current rates and keep
with the project file.
What are the public building service maintenance contract requirements?
Public building service maintenance (janitorial) contracts of more than one-
year duration must include wage language recognizing the potential for
future variance in applicable prevailing wages each year after the first year
of the contract.
What are awarding agency requirements when disbursing public funds?
Agencies may not make any payments where contractors have not
submitted an Intent to Pay Prevailing Wage form that has been approved by
L&I. Agencies may not release final payment until all contractors have
submitted an Affidavit of Wages Paid form that has been certified by L&I.
The requirement to submit these forms should also be stated in the contract.
What are the contractor's filing requirements? Public work contracts
require that each and every contractor and subcontractor on the project file
the "Statement of Intent to Pay Prevailing Wages" and "Affidavit of Wage
Paid" forms.
Is there a minimum contract amount for a contractor to file? There is no
minimum dollar contract amount. Intent and Affidavit forms are required
for every public works contract regardless of the size of the contract.
When does the contractor file an Intent? The Intent form is filed
immediately after the contract is awarded and before work begins, if that is
possible.
When does the contractor file an Affidavit? The Affidavit form is not filed
until after all the work is complete.
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3.3 Retainage
What is the purpose of retainage? The City retains a portion of the contract
amount for public works contracts as a trust fund to pay any claims
associated with the contract and/or for payment of amounts due by the
contractor to the Department of Labor and Industries, the Employment
Security Department, and the Department of Revenue (RCW 60.28.011).
What level of retainage is required? The City generally retains 5% of the
contract amount. However, for contracts awarded by the small works roster
process and totaling less than $150,000, contractors may opt to have 10%
retained in lieu of a obtaining a performance bond. The City may
alternatively choose to waive retainage requirements for any small works
roster contracts. Retainage is not held for projects funded by federal
transportation funds.
What are the retainage options? The City retains the funds in a City fund,
unless otherwise requested by the contractor. A contractor may choose to
have the funds deposited by the City into an interest -bearing account or
placed by the City in escrow with a bank or trust company. If the escrow
option is selected, contact the City Attorney for an escrow agreement.
When can retainage be released? Retained funds will be released afterfinal
acceptance of the project and after the City has received all releases from
the Department of Revenue, the Department of Labor and Industries, and
the Employment Security Department. Upon receipt of all releases, the
project manager should notify the Legal Assistant to release the funds. For
projects under $35,000, the retained funds will be released when the
Department of Labor and Industries has approved the contractor's Affidavit
of Wages Paid.
Is the City liable for payment of project costs to subcontractors if waiving
retainage? Local governments may waive retainage but must assume
liability of the contractor's non-payment. The Local government does retain
the right to recovery from the contractor.
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4.1 Risk Management Considerations
The City enters into numerous contracts throughout the year. These
contracts involve risk. City property can be damaged. Employees of the City,
contractors, subcontractors, and suppliers can be injured. Members of the
public can be harmed. These and other accidental losses can arise during
and as a result of the activities during the contract fulfillment process. The
City seeks to transfer responsibility to such events to those with whom it
contracts.
The City's approach to contracting is designed and managed to avoid undue
exposure to risk with exceptions where it makes good business sense.
Certificates of insurance and endorsements naming the City as an additional
insured are required from all contractors and consultants who contract with
the City. Verification of appropriate insurance requirements shall be
completed prior to signing of the contract by the City. Any waiver of
insurance requirements requires the approval of the person with signing
authority for the contract (generally the City Manager). Contact the City
Attorney with questions about insurance requirements or for advice on the
risk of a requested waiver.
4.2 Payment Options
Prior to contract award, payment terms should be identified to determine
the most effective compensation method. The most common include:
Hourly/Time and Materials:
The City pays a fixed hourly rate and pays for the cost of certain specific
services and/or materials. For certain professions, such as consultants, this
is the standard option. Time and materials contracts should have a ceiling
amount or a not to exceed amount included. This type of payment term may
be used if the City is unable to clearly define the level of effort required to
accomplish the objectives. A time and materials contract places most of the
risk on the City and little on the contractor and provides no positive profit
incentive to the contractor for cost control or labor efficiency. Frequent
contract monitoring is required to ensure that the number of hours is kept
to a reasonable level.
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Fixed or Lump Sum:
The contractor receives a fixed amount or lump sum payment based on
terms established in the contract. Typically, payment is tied to a completion
of agreed upon performance achievements. Other alternatives are possible,
such as progress payments made to compensate for activities conducted
over the specific period of the contract. This type of contract should
generally establish a minimum allowable level of compensation. With this
method of compensation, the City may not be required to pay if specific
terms in the contract are not met and thus the risk is placed on the
contractor.
Cost Reimbursement:
A cost reimbursement method of compensation has a higher risk for the City
because it reimburses the contractor for all costs incurred under the terms
of the contract. To prevent overpayment, allowable cost provisions should
be clearly identified. Contract managers should consider including a contract
provision for a maximum allowable compensation level for the contract
period and budget. Cost reimbursement contracts generally require more
fiscal pre -planning and monitoring than other methods.
Performance Based:
These contracts are based on attainment of a specific outcome. The rate of
compensation is generally negotiated based on cost information provided
by the contractor. Generally, performance -based contracts identify the
maximum allowable compensation. This allows the Cityto define the quality
of services in terms of performance standard and pay accordingly.
Performance based contracts differ from time and materials or fixed price
contracts in that if the quantifiable qualityof service is low, the payment may
be reduced or withheld. This requires a higher level of reporting from the
contractor to the City. The contractor primarily assumes the risk because the
City does not pay if performance levels are not met.
4.3 Contract Execution & Administration
Contract Execution:
The contract is fully executed when all authorized parties have signed it.
Upon execution, signed copies of the contract should be provided to all
interested parties including, at a minimum, the contractor and Legal
Assistant.
Contract Administration:
Contract administration means any activity related to contracting, including
the decision to contract, contractor screening, contractor selection, contract
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preparation, contract monitoring, auditing and post contract follow up.
Typical responsibilities of the project manager include:
• Understanding the contract, including the specific contract obligations
and performance indicators by which performance will be monitored.
• Assessing the risks related to the project before soliciting proposals and
contracting to determine the extent of the monitoring required.
• Ensuring the contractor has a clear understanding of how the contract
will be managed and monitored.
• Providing the contractor with guidance and technical assistance, as
needed, to promote effective contract performance.
• Identifying the extent and source of funding for services provided.
• Monitoring the contractor's activities to ensure quality service delivery.
Ensuring funding is used only for authorized purposes.
• Reviewing invoices and verifying that delivery of services is rendered.
• Resolving issues or problems that arise during the contract.
• Measuring and tracking satisfaction with contractor performance.
• Complying with State and City rules and regulations.
• Documenting the contract to validate that effective contract
management has occurred.
Project managers need to be mindful not to do the following:
• Instructing the contractor to begin work before the contract is executed
and approved.
• Changing the description, scope, period of performance, or cost of the
contract without processing a written amendment.
• Directing the contractor to do work that is not specifically described in
the contract.
• Signing a contractor's contract form (some exceptions apply)
• Authorizing payment to the contractor for any work not performed
satisfactorily.
• Paying for the same or similar services more than once.
4.4 Contract Monitoring - Performance
Monitoring Contract Performance:
Monitoring means any planned, ongoing, or periodic activity that measures
and ensures contractor compliance with the terms, conditions, and
requirements of a contract. The level of monitoring should be based on a risk
assessment of the contractor's role in delivering the services and the
contractor's ability to deliver under the terms of the contract.
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The purpose of monitoring is to ensure the contractor is:
• Complying with the terms and conditions of the contract and applicable
laws and regulations.
• In compliance with the contract through identifying and resolving
potential problems and providing constructive, timely feedback.
• Adhering to the project schedule and making appropriate progress
toward the expected results and outcomes.
• Providing the quality of service expected.
Monitoring Activities May Include:
• Periodic contractor reporting — Require the contractor to submit
progress reports or other appropriate data or reports, based on pre-
defined criteria, and review the contractor's reports for verification of
services provided and adherence to the contract. Substandard
performance should be identified and addressed timely and
appropriately.
• Invoice review — Compare billings with the terms agreed upon in the
contract. Ensure the costs being charged are within the contract
parameters.
• Other periodic contact with contractor — On -site visits to maintain
contact with the contractor to review progress on a regular basis. Good
contract monitoring includes a continuous dialogue with the contractor.
4.5 Contract Monitoring - Payment
Reviewing Invoices for Pavment:
Contract payment is the process by which the contractor submits invoices
for reimbursement for services and receives payments. The contract
manager must carefully review the contractor's request for payment to
verify the accuracy of all charges.
Considerations:
• Are the hours/costs commensurate with the services or deliverables
received?
• Is the service period identified on the invoice and were the services
rendered prior to contract expiration?
• Do the rates invoiced match the rates stated in the contract?
• Has the necessary documentation been included to verify charges
accurately? Is there enough money remaining on the contract?
• Reimbursable expenses. Below are the recommended reimbursable
expenses:
o Travel
o Mileage
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o Food
o Miscellaneous expenses
If charges are acceptable, the contract manager submits a claim approval
form for payment. Payment terms are 30 days from date of invoice.
4.6 Amendments & Change Orders
Amendments:
Amendments are changes to service contracts.
Changes to contracts may be processed as amendments, rather than new
contracts, but only if the changes are within the general scope of the original
contract.
Change Orders:
A change order is the formal document that alters some condition of the
contract documents. The change order may alter the contract price,
schedule of payments, completion date, terms and conditions, or the plans
and specifications. Change orders are changes to public works contracts and
reflect unforeseen conditions that must be addressed to meet the contract
requirements and without which the work requested in the original contract
could not be completed. Minor modifications that do not materially affect
the scope or cost of the contract, such as address changes or staff changes,
do not require a formal change order but should be documented in writing.
These situations should be distinguished from extra work that could stand
on its own and is outside and independent of the contract, in which case a
new competitive bid process is required. Appropriate uses of change orders
include:
Scope — Scope changes may include adding, modifying, or deleting tasks,
services, or deliverables or revising specifications. Changes to scope should
be well documented and include any additional costs associated with these
changes.
Changes that are outside the general scope of the contract or bid request
are not appropriate to award through contract change orders. Such changes
would have the effect of making the work performed substantially different
from the work defined at the time the original contract was awarded.
Terms and Conditions —Changed conditions could include price variations in
commodities.
Cost — If the cost of the contract is increased or decreased, document
reasons for change (e.g.: scope changes, changes to unit price items).
Period of Performance — An extension to the contract end date is the most
common change to the period of performance. Minor modifications that do
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not materially affect the scope or cost of the contract, such as address
changes or staff changes do not require a formal change order but should be
documented in writing.
Amendment and Change Order Approval:
• Amendments and change orders that do not change the total value of
the agreement contract (i.e.: a new expiration date) may be signed by
L
y Manager or designee.
ulated cost changes up o 10% o the original agreement or
ct amount ma d y he ity Manager or designee, if
u get capacity and available re en e.
• Accumulated cost changes greater t n 10% o the original agreement
or contract amount must be approved ' Council. Such approval
establishes a new agreement or contract amount against which the
above percentages apply for subsequent amendments or change orders.
• The City Council may pass a resolution on an indivi u roject giving the
City Manager the authority to sign all amendm is and hange orders
within the allotted project budget, superseding t 10% 1 it.
To protect the City's interests, all amendments or change orders shall be
executed in writing prior to the end of the contract period of performance
and before the contractor begins work as authorized by the amendment.
4.7 Contract Close -Out & Termination
Contract Termination:
Contracts may be terminated prior to the completion date of the contract
either for convenience of the parties or for cause. Contact the CityAttorney's
Office for guidance when considering a contract termination.
Contract termination should be done in writing and follow the process
described in the contract or as advised by the City Attorney.
Contract Close -Out Process:
Once the contract is complete, it is critical that the project manager
complete the close-out process in a timely manner and stay on a schedule.
1) Notice of Completion of Public Works Contract. Required for
projects totaling $35,000 or more. The project manager should
complete and file a "Notice of Completion of a Public Works
Contract" form with the Department of Revenue, Department of
Labor and Industries, and Employment Security Department. This
form is available on L&I's website.
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2) Receive release letters from Employment Security Department,
Department of Revenue, and Department of Labor & Industries.
These letters will be sent either by mail or through that department's
web portal.
3) Release retainage. Once the above -mentioned letters are received,
the project manager should request that the Finance Department
release retainage by a memo or coversheet along with a copy of the
letters received.
a) Release retainage bond. If the contractor provided a bond
instead of having the City hold retainage, the project manager
should contact the bond issuer to release the bond.
b) Escrow release. If the contractor requested that the City hold
retainage in an escrow account, the project manager should
provide a written release to the bank.
Liens
Whenever a valid lien has been filed against the retainage, the City may
only release that amount of the retainage in excess of the total amount of
the valid lien claims and an amount sufficient to defray the costs and
attorney's fees of the claimants in foreclosing the liens.
Invoices Submitted after Close -Out Process
Invoices that are submitted after contract expiration may still be paid if the
following conditions apply:
• Invoice or pay estimate clearly shows that services were preformed prior
to contract expiration.
• Sufficient funds existed prior to close-out.
Every effort should be made to process invoices in a timely manner to
eliminate delays and extra steps in payment processing.
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5.1 General Information
It is the policy of the City of Port Townsend to provide the best possible
stewardship and management of municipal assets in the best interests of the
residents of Port Townsend.
PTMC Chapter 3.44 sets forth the City's processes for disposition of surplus
property and long-term leases. The information in this policy manual is
intended summarize the code requirements.
5.2 Declaring Surplus
A department head or operations manager may recommend that personal
or real property under his or her control is deemed no longer to have any
value and may desire to surplus that property.
• If the property has an estimated value under $10,000, the City
Manager may declare that it is surplus.
• All personal property with an estimated value greater than $10,000,
and any real property must be declared surplus by the City Council.
• All personal property acquired with utility funds may be transferred
to and used by a non -utility department if the property is of de
minimis monetary value. Disposition of utility assets must have an
administrative hearing by the City Manager.
Criteria for declaring surplus is based on one or more of the following:
• The City has or soon will have no practical, efficient, or appropriate
use for the property, nor will it have such a use for the property in
the near future.
• The purpose served by the property can be accomplished by use of
a better, less costly, or more efficient alternative;
• The purpose served by the property no longer exists as determined
by a change of policy evidenced by an ordinance or resolution of the
City Council;
• The property is damaged, worn out, or otherwise inoperable and the
cost of repairing the same is unwise or impractical.
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5.3 Disposition of Personal Property
Departments that determine they have surplus property should first make
these items or equipment available to other City departments when
reasonable. If the item is no longer of value to the City, staff may do the
following:
• Sell or transfer the item(s) to another government agency, subject to the
public notice and hearing requirements of RCW 39.33.020 for items with
a value in excess of $50,000.
• Auction the item(s). The originating department will be responsible for
all costs associated with this option. Finance will coordinate the auction
with the department representative.
• Sell the item through a sealed bid process.
• Trade the item(s) in for new replacement equipment.
• Send the item(s) to the State surplus program.
• Donate the item(s) to a non-profit that serves or benefits low-income
persons or persons with disabilities. (Be sure to obtain a receipt for
record retainage.)
• Dispose of the item(s) in the most cost effective, efficient manner.
A department head or designee that is responsible for the disposition of
property or assets. They should sign the "Declaring Surplus Memo" to the
City Manager. The memo should be a detailed statement of the item(s),
where the asset is located, the estimated value and the recommended
disposition procedure. Send the memo to the Finance Department to
coordinate obtaining the City Manager's or Council's approval.
Once approval has been granted to dispose of the property, the receiving
individual or organization must sign an "As-Is/Where-Is" Statement and/or
Liability Waiver. The signed form must be forwarded to the Finance
Department for record retainage.
Within 24 hours of receipt, proceeds from any sale and sales tax collected
will be forwarded to the Finance Department to be deposited. Sales tax will
be remitted to the Department of Revenue on the next reporting cycle.
Prior to sale, remove all City logos or other markings identifying the item(s)
as City property from any vehicles and or equipment prior to sale.
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5.4 Seizure Items (ROW 69.50.505)
The Port Townsend Police Department follows their Asset Forfeiture Policy
(Policy 601) in regards to the authority and procedures for the seizure,
forfeiture and liquidation of property associated with designated offenses.
5.5 Surplus of Real Property (Land)
The City Council shall make all decisions that relate to surplusage of real
property in accordance with Chapters 35.94 and 39.33 RCW and whether
property should be designated to meet affordable housing needs and
surplused or retained for that purpose. Because real property should
perform a valuable public function, the City Council should consider both
current use and any foreseeable future use when surplusing real property.
Pursuant to PTMC 3.44, affordable housing needs will be considered before
surplusing public lands.
The City Council shall hold a duly -noticed public hearing prior to disposing of
real property or designating that the property may meet affordable housing
needs and be surplused or retained for that purpose. All procedural
guidelines shall be followed in accordance with the code.
6.1 Purchasing Cards as a Method of Payment
In accordance with RCW 43.09.2855, local governments are authorized to
use credit cards or procurement cards for official government purchases and
acquisitions.
The City of Port Townsend's purchasing card program has been established
to provide a convenient, efficient means to purchase commodities and
services from vendors and reduce the costs associated with a purchasing
process. The City has obtained purchasing card participation in the
statewide contract with US Bank as administered by the Washington State
Department of Enterprise Services (DES). A benefit of using the contract is
that it allows the City to earn a quarterly rebate based on the volume spent
and timely payment.
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The program is designed to empower employees to purchase items needed
for operational City business. It is a method used to pay for purchases and
is not meant to circumvent the purchasing policies or bidding procedures.
6.2 Purchasing Card Administration
Purchasing cards (p-cards) are administered by the Finance Department.
The purchasing card program administrator maintains the accounts and is
authorized to make necessary changes and updates, corresponds with the
bank to resolve issues, orders p-cards, reconciles purchases made during the
billing cycle to the bank statement, verifies accuracy of supporting
documents and signatures, maintains records, and assures timely payment.
All purchasing cards will have the "City of Port Townsend" embossed on the
card with the cardholder's name. It is not permitted to allow anyone other
than the cardholder to use a card to make purchases.
Approval to participate in the purchasing card program will be determined
by the applicable department head. It is recommended that employees
complete their initial probationary period before being eligible to have a
purchasing card issued to them. (Exceptions to this may be made with
authorization from the Finance Director or Finance Manager). Prior to
releasing the purchasing card to the employee, the cardholder will:
1. Attend training to cover the City's purchasing policies and
procedures.
2. Attend training to cover p-card procedures for US Bank Online
purchasing card transaction management.
3. Acknowledge they have received, read and understood the City's
Purchasing Policy and Procedures Manual by signing a Cardholder's
Agreement Form.
Department heads or their designees will ensure employees approve their
charges and submit the proper supporting documentation, assign correct
fund and account numbers (BARS Codes) and descriptive information for
each charge, approve the charges online, print activity statements, and
submit paperwork to the program administrator in Finance within five days
of the billing cycle close date. Failure to comply with these policies and
procedures may result in suspension of an employee's privilege of using a
City issued purchasing card. Improper use of the p-card may result in
disciplinary action up to and including termination of employment.
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6.3 Authorized Charges and Uses
As authorized, employees will use their p-cards at time of purchase for
operational materials, supplies, small equipment, postage, subscription
services, professional memberships, ordinary maintenance, services, CDL
physicals, and authorized business travel expenditures. (Please seethe City's
Guidelines for Employee Travel for detail on authorized travel expenditures).
Purchasing cards may be used at any vendor that accepts VISA credit.
When making a purchase:
• The cardholder must obtain a vendor's register receipt or invoice
(Proof of Purchase). Packing slips and statements are not substitutes
for receipts or invoices.
• Register receipts and invoices should include transaction detail such
as date of purchase, a description of each item, tax, shipping, and
total. If the vendor does not issue a detailed receipt, it is the
employee's responsibility to write a description of the purchase(s)
on the receipt.
• If a receipt is lost or the cardholder is unable to obtain a receipt, a
"Declaration of Lost Invoice" Form must accompany the reconciled
statement in place of the receipt. Employees who routinely do not
submit actual invoices/receipt may have their purchasing card
benefits suspended.
• Follow the purchasing requirements outlined in the Purchasing
Policies and Procedures Manual.
6.4 Unauthorized Purchases
Cardholders must comply with the State bidding and purchasing laws and
the City's Purchasing Policies when using a purchasing card.
Examples of unauthorized uses and purchasing include:
• Personal purchases of any kind
• Cash advances through ATMs or banks
• Cash refunds for returned items
• Items restricted by City policy or State law, such as alcohol, tobacco,
and entertainment
• Any items from vendors restricted by the Finance Department, a
department head, or the City Manager
Examples of inappropriate uses:
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• Any purchase in which the purchasing card is used to circumvent City
or State polices, bid limits, or a cardholders personal purchasing
limit.
• Any purchase made on a cardholder's account by someone other
than the cardholder.
6.5 Returns and Exchanges
Cardholders are responsible for contacting the vendor when supplies,
equipment, and services purchased with the p-card are not acceptable
(incorrect, damaged, defective, not received) and for arranging a return for
credit or exchange.
• If items are returned for credit, the cardholder is responsible for
obtaining a credit receipt from the vendor to include in the monthly
purchasing card reconciliation.
• If items need to be exchanged, the cardholder is responsible for
returning the items to the vendor and obtaining a replacement as
soon as possible.
• If items are disputed, the cardholder is responsible for resolving any
disputes directly with the vendor. If resolution is not possible,
contact the Program Administrator.
6.6 Account Maintenance
Online account maintenance:
US Bank Online account maintenance is the responsibility of the cardholder.
If an employee is locked out of their account, they should contact US Bank
directly. The customer support number is listed on the back of the
purchasing card. Please see the US bank Purchasing Card Instruction
Guidelines for online account maintenance or call the purchasing card
administrator in the Finance Department.
Name changes:
Changes to a cardholder's name should be reported to the program
administrator. A new card will be issued in the employee's name. The
cardholder should surrender the old p-card to his or her department head or
to the program administrator.
Lost or stolen card or fraud detection:
Cardholders are responsible for their own card security. In the event the
cardholder loses their card, suspects fraudulent activity on the card, or the
card is stolen, they should contact US Bank immediately. In addition, the
cardholder should contact the program administrator.
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Termination of employment or revocation of purchasing card privilege:
Cardholders must turn in their purchasing card to their department head,
Human Resources, or the program administrator in the event theyterminate
their employment with the City, or they have had their purchasing card
privileges revoked.
Spending Limits:
Spending limits will be requested by the applicable department head and
approved bythe Finance Department. In general, authorized spending limits
will be established as follows (single transaction limit/monthly cycle limit):
• $5,000/$5,000 — department heads and purchasing card program
administrator
• $2,500/$5,000 — department managers, supervisors, department
purchasing designees
• $1,000/$2,500 — maintenance and operator staff
• $500/$1,500 — others as assigned.
Exceptions to these general guidelines will be reviewed at the request of the
applicable department head.
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AM: Architectural and engineering services; includes land surveyors and landscape architects.
Appropriation: City Council authorization to expend funds for a specific purpose.
Bid: A written proposal submitted by a vendor or contractor to furnish supplies, materials, equipment, or
services in conformity with the City's specifications included in a request for bids by the City.
Bidding: Procedure used to solicit quotations on price from various prospective providers of supplies,
materials, equipment, or services.
Bid Evaluation: A review of bids/proposals received as a result of a competitive process to determine
bidders' responsibility, responsiveness to requirements, and to determine the successful bidder(s).
Bid Opening: The official process in which sealed bids are opened, usually in the presence of one or more
witnesses, at the time and place specified in the invitation for bid. Each bid is logged, and bids are made
available for public inspection only after award of the contract. The bid opening must be open to the public.
Bid Deposit (also called a bid bond): A deposit in the form of a cashier's check, postal money order, or
surety bond equal to 5% of the amount of the bid. Required for all formally bid public works projects.
Bid Splitting: Breaking a public work project or purchase into segments. The City may not split a project or
purchase to avoid compliance with bidding statutes (RCW 35.23.352(1)).
Capital Equipment: Equipment of the City having an initial value of one thousand ($1,000) or more and an
estimated useful life of three or more years.
Change Order: An amendment to a public works contract, signed by both parties and outlining the mutually
agreed upon changes to contract time, payment amount, or scope of work, as applicable.
Contract: A legally binding and enforceable written agreement between two or more parties stating the
terms and conditions for an exchange of something of value (usually money, goods, or services) between
parties. The Legal Department should be contacted if there is uncertainty as to the need for a written
contract and how to go about it.
Contractor: Individual, company, corporation, firm, or combination, with whom the City develops a
contract for the procurement of goods and services.
Cooperative Purchasing (also called piggybacking): The action taken when two or more entities combine
their requirements to obtain advantages of volume purchases including administrative savings and other
benefits.
DES: Washington State Department of Enterprise Services.
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Delivery Terms: Conditions in a contract relating to freight charges, place of delivery, time of delivery, or
method of transportation.
Effective Date of Contract: The date on which the contract starts.
Emergency: Unforeseen circumstances beyond the control of the agency that present a real, immediate,
and extreme threat to the proper performance of essential functions or which may reasonably be expected
to result in excessive loss or damage to property, bodily injury, or loss of life.
Emergency Purchase: A purchase in which the normal competitive purchasing procedures have been
waived by a declaration of emergency issued by the City Council or City Manager.
Encumbrance: Interchangeable with "purchase order."
Equitably distribute opportunities: Means that the local government may not favor certain contractors on
the appropriate small works roster over other contractors on the same roster who perform similar services.
Formal Competitive Bid: The process of advertising and receiving sealed written bids from prospective
vendors or contractors. The selection of the vendor or contractor is primarily based on the lowest cost
from a responsible vendor.
General Services: Interchangeable with "purchased services."
Goods and Services: Material, supplies, services, and equipment offered for purchase by a vendor or
contractor and required by an agency to accomplish continuing and necessary functions.
Informal Solicitations: Price quotes from vendors that are obtained using a variety of mediums such as
phone, fax, email, or writing. Results must be documented and submitted to the Finance Department to
obtain a purchase order (encumbrance). The selection of the vendor is based on lowest cost from a
responsible vendor.
Interlocal Agreements: The exercise of governmental powers in a joint or cooperative undertaking with
another public agency.
L&I: Washington State Department of Labor and Industries.
MRSC: Municipal Resources and Services Center. A Washington -based non-profit that provides
information and educational servicesto local government agencies. The Cityof Port Townsend uses MRSC's
vendor, consultant, and small public works rosters.
Ordinary Maintenance: Defined by WAC 296-127-010 as: " work not performed by contract and that is
performed on a regularly scheduled basis (e.g., daily, weekly, monthly, seasonally, semiannually, but not
less frequently than once per year), to service, check, or replace items that are not broken; or work not
performed by contract that is not regularly scheduled but is required to maintain the asset so that repair
does not become necessary."
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Personal Services: Interchangeable with "professional services."
Prevailing Wage Rate: The rate of hourly wage, usual benefits, and overtime paid in the locality to the
majority of workers, laborers, or mechanics in the same trade or occupation; required to be paid on all
public works and public building service maintenance contracts. These rates are set by L&I.
Professional Services: Services that involve technical expertise provided by a consultant to accomplish a
specific study, project, task, or other work. These activities and products are mostly intellectual in nature
and do not include architectural and engineering (A&E) services. Examples of personal services include
accounting, legal, comprehensive planning, and real estate services.
Proposal: An offer to perform a contract to supply goods or services in response to a request for proposal
(RFP).
Purchase: The buying, leasing, renting or lease -purchasing of goods or services.
Purchase Order (also called encumbrance): A form issued by the Finance Department or Legal Assistant,
which reserves the purchase amount in the applicable fund and can sometimes serve as a written request
to a vendor to provide the item being purchased.
Purchased Services (also called general services): Services that are generally routine, repetitive, or
mechanical in nature and support the City's day-to-day operations. Purchased services include janitorial,
debt collections, equipment service agreements, machine repair, or delivery services.
Public Work: A project including all work, construction, alteration, repair, or improvement other than
ordinary maintenance executed at the cost of the City. Public work projects include the related materials,
supplies, and equipment to complete the project.
Purchase Order (Encumbrance): Official document used in authorizing the encumbrance of City funds
toward a purchase.
Quotation: An offer, including price, to perform a contract to supply goods and/or services in response to
a request for quotation.
Request for Proposals (RFP): A process that requests interested firms to submit a statement of their
proposal for completing a project. Proposals are evaluated based on suitability, practicality, quality of the
proposal, experience, and cost.
Request for Qualifications (RFQ): a request for only a firm's general capabilities, including a list of principals,
previous projects, number of employees, and licenses. An RFQ doesn't not including pricing information.
Requisition Form: A standard form providing detail information as to quantity, description, estimated
price, vendor, fund account, signature, and other information necessary to make a purchasing decision.
Responsible Bidder: Contractor, supplier, or vendor who is determined to be qualified to provide services
or goods to the City based on the criteria in RCW 39.04.350.
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Responsive Bidder: An entity whose bids conforms in all material respects to the terms and conditions, the
specifications, and other requirements of a solicitation.
Sealed Bid (Formal Bid): An advertised solicitation for a requirement in which the cost exceeds the bid limit.
The bids are opened during a public opening.
Sole Source (also called a single source purchase): An exception to competitive bidding. A purchase of
goods or services that is clearly and legitimately limited to a single source of supply in which the purchase
price may be best established by direct negotiation.
Solicitation: Notification to prospective bidders about a future project or purchase, with a request for
competitive bids, quotes, or proposals.
Splitting: The separation of continuing/repetitive requirements for the same good or service into several
purchases to avoid dollar limitations or competition.
Small Works Roster: List of contractors by work category who have registered with MRSC and requested
to be notified by the City about upcoming projects or purchases and bid opportunities.
Specification: A clear, complete, and accurate statement of the technical requirements descriptive of a
material, item, or service.
State Contract: Contracts for goods or services administered by the Department of Enterprise Services on
behalf of agencies. The contract document will identify the conditions under which usage by agencies is
allowed.
Subcontractor: A person or business that is, or will be, providing or performing an essential aspect of a
contract under the direction and responsibility of the primary contractor.
Supplier: A vendor of purchased goods and services.
Surplus Property: Personal property belonging to the City for which the City has no further use.
Vendor: A provider of materials, supplies, goods, or equipment.
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