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02-389 Purchasing Policy RESOLUTION NO. ¿;;J;2 - .5 89 BY: /{e.!'ih ß 1'roL A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF MERIDIAN TO PROVIDE FOR FINDINGS AND TO ESTABLISH A PURCHASING POLICY FOR THE CITY OF MERIDIAN; PROVIDING FOR THE FOLLOWING: PURPOSE, REFERENCES, DEFINITIONS, PURCHASING ETHICS AND VENDOR RELATIONSHIPS, PROCEDURE, INFORMAL BIDDING, FORMAL BIDDING, REQUEST FOR PROPOSAL, DETERMINATION OF NEED TO CONTRACT, LEASES, RISK MANAGEMENT AND INSURANCE REQUIREMENTS, EXCEPTIONS TO COMPETITIVE BIDDING, PAYMENT PROCESSING, AND SURPLUS PROPERTY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Mayor and Council have the authority [pursuant to LC § 50-302] to establish resolutions not inconsistent with the laws of the state ofIdaho as may be expedient, in addition to the special powers therein granted, to maintain the peace, good government and welfare of the corporation and its trade, commerce and industry; and WHEREAS, the Mayor and Council have deemed it expedient and in the best interests ofthe City of Meridian to establish a purchasing policy for the City of Meridian as every city employee has a personal responsibility to conduct government business in an ethical manner to insure the integrity of the city purchasing and procurement process; and WHEREAS, the purchasing policy will follow state statutes in regard to purchasing prohibitions under LC §67-5726 and LC §67-57l7, and the department managers shall be responsible for adherence to City and State purchasing rules and regulations within their respective departments; and WHEREAS, the purchasing policy will provide for an informal bidding process which shall be for purchases more than $5,000 and less than $25,000, and will additionally provide for a formal bidding process which shall be for purchases of $25,000 or greater; and WHEREAS, the purchasing policy will include a request for proposal process for utilizing the acquisition of services or for complex purchases; and WHEREAS, the purchasing policy will include a determination of a need of a contract process, and a process to enter into lease agreements; and WHEREAS, the purchasing policy will provide that the public works department ensure that all insurance requirements are met for their projects; and RESOLUTION FOR PURCHASING POLICY FOR THE CITY OF MERIDIAN WHEREAS, the purchasing policy will include exceptions to competitive bidding and the process which department managers shall follow; and WHEREAS, the purchasing policy will include a payment process designed to bring uniformity to the City's purchasing orders and to give departments their actual budget balance at any given time, and the process to follow; and WHEREAS, the purchasing policy will include a surplus property disposal process for personal property owned by the city where the cost of maintenance, transportation, storage, or other costs exceed the economic or useful life of the property. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF MERIDIAN, IDAHO as follows: SECTION I. Pursuant to Idaho Code §50-301 et seq., the Mayor and City Council hereby adopt the City of Meridian Purchasing Policy, a copy of which is attached hereto along with the Attachment A and by this reference incorporated herein. A copy of this Resolution and the attached City of Meridian Purchasing Policy and Attachment A shall be held on file in the office of the City Clerk. SECTION 2: EFFECTIVE DATE. This Resolution shall be in full force and effect immediately upon its adoption and approval. PASSED BY THE COUNCIL OF THE CITY OF MERIDIAN, IDAHO, this / 71!- day of ~~~J ,2002. APP~ ijY THJ; MAYOR OF THE CITY OF MERIDIAN, IDAHO, this 17 a:day of ~~ , 2002. ~N.~~ ~\ Mayor Robert D. Corrie ATTEST: RESOLUTION FOR PURCHASING POLICY FOR THE CITY OF MERIDIAN 2 CERTIFICATE OF CLERK OF THE CITY OF MERIDIAN I, the undersigned, do hereby certify: 1. That I am the duly appointed and elected Clerk of the City of Meridian, a duly incorporated City operating under the laws of the State ofIdaho, with its principal offIce at 33 East Idaho, Meridian, Idaho. 2. That as the l~lerk of this City, I am the custodian of its records and minutes and do hereby certify that on the - day of J(:¡;k#>1J..t.-.; , 2002, the following action has been taken and authorized. A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF MERIDIAN TO PROVIDE FOR FINDINGS AND TO ESTABLISH A PURCHASING POLICY FOR THE CITY OF MERIDIAN; PROVIDING FOR THE FOLLOWING: PURPOSE, REFERENCES, DEFINITIONS, PURCHASING ETHICS AND VENDOR RELATIONSHIPS, PROCEDURE, INFORMAL BIDDING, FORMAL BIDDING, REQUEST FOR PROPOSAL, DETERMINATION OF NEED TO CONTRACT, LEASES, RISK MANAGEMENT AND INSURANCE REQUIREMENTS, EXCEPTIONS TO COMPETITIVE BIDDING, PAYMENT PROCESSING, AND SURPLUS PROPERTY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Mayor and Council have the authority [pursuant to I.C. § 50-302] to establish resolutions not inconsistent with the laws of the state of Idaho as may be expedient, in addition to the special powers therein granted, to maintain the peace, good govemment and welfare of the corporation and its trade, commerce and industry; and WHEREAS, the Mayor and Council have deemed it expedient and in the best interests of the City of Meridian to establish a purchasing policy for the City of Meridian as every city employee has a personal responsibility to conduct govemment business in an ethical manner to insure the integrity of the city purchasing and procurement process; and WHEREAS, the purchasing policy will follow state statutes in regard to purchasing prohibitions under I.C. §67-5726 and I.C §67-5717, and the department managers shall be responsible for adherence to City and State purchasing rules and regulations within their respective departments; and WHEREAS, the purchasing policy will provide for an infonnal bidding process which shall be for purchases more than $5,000 and less than $25,000, and will additionally provide for a formal bidding process which shall be for purchases of $25,000 or greater; and WHEREAS, the purchasing policy will include a request for proposal process for utilizing the acquisition of services or for complex purchases; and WHEREAS, the purchasing policy will include a detennination of a need of a contract process, and a process to enter into lease agreements; and WHEREAS, the purchasing policy will provide that the public works department ensure that all insurance requirements are met for their projects; and CERTIFICATE OF CLERK - PURCHASING POLICY PAGE I OF 2 WHEREAS, the purchasing policy will include exceptions to competitive bidding and the process which department managers shall follow; and WHEREAS, the purchasing policy will include a payment process designed to bring unifonnity to the City's purchasing orders and to give departments their actual budget balance at any given time, and the process to follow; and WHEREAS, the purchasing policy will include a surplus property disposal process for personal property owned by the city where the cost of maintenance, transportation, storage, or other costs exceed the economic or useful life of the property. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF MERIDIAN, IDAHO as follows: SECTION 1. Pursuant to Idaho Code §50-301 et seq., the Mayor and City Council hereby adopt the City of Meridian Purchasing Policy, a copy of which is attached hereto along with the Attachment A and by this reference incorporated herein. A copy of this Resolution and the attached City of Meridian Purchasing Policy and Attachment A shall be held on file in the office ofthe City Clerk. SECTION 2: EFFECTIVE DATE. immediately upon its adoption and approval. ~ SEAL - STATE OF IDAHO, ~ 'Fe... ,f t : ss: \."'ð Q~r 151." .p ¡ County of Ada. ) ""1,,"" a 'f)'t' "".f' '" °fJNT'(, ", On th~~ ~~~~hM, ~ ~~;;~e~~~i~e~ppeared WILL~:/~I1~~;~:':R., known or identified to me, respectively, to be the City Clerk ofthe City of Meridian, Idaho, that executed the said instrument, and acknowledged to me that he executed the same on behalf of the City of Meridian. (SEAL) ...ONS... ..~ .--- :'¡;'. .~,{Ó'f~«<~.. .",/,ç. ;¡"\? : I \ : . I I . . . J . ~ \ : . '-- À-1C~' . . d')j-~_v.tß,~... .. ...,!?'iiõ"i19. ... ."'... ~b4u Notary Public for Idaho Residence: Adø-..û>UfiiÍ.u..} r .Þdc;.Jw Commission Expires: 1-7g'-nc; Z:IWorklMIMeridianlMeridian 15360MIResolutions City Ha]]\2002ICERTofCLKPurchasingPolicy.doc CERTIFICATE OF CLERK - PURCHASING POLICY PAGE 2 OF 2 PURCHASE POLICY CITY OF MERIDIAN Resolution # 02- .3 ø '1 Adopted by the City Council 9-17-02- PURPOSE Commodities and services purchased in the public sector represent a direct cost to the taxpayer. Every purchase that city employees make is subject to public scrutiny. Competition is the central principal of public procurement. The rules and regulations in this procedure were developed to encourage competitive solicitation for sound value, guard against favoritism and profiteering and promote the interest of local economies by providing equal opportunities to compete for government business. REFERENCES Procedure detail can be found in specific purchasing and expenditure processing field memorandum. See Attachment A. DEFINITIONS Public Purchasing: The purchasing or procurement of an item or a service that meets the need of the city, at the best price, from the most responsive and responsible vendor. Idaho Code: This policy refers to several Idaho Statutes. See attachment A for a list of all statutes that impact public purchasing. The city follows Title 50 Municipal Corporations Chapter 3 Powers and follows code written for state purchasing whenever practical. PURCHASING ETHICS AND VENDOR RELATIONSHIPS Every city employee has a personal responsibility to conduct government business in an ethical manner and assure the integrity of the city purchasing and procurement processes. Department managers are responsible for adherence to City and State purchasing rules and regulations. I. PROHIBITIONS Page10f17 The City has adopted the following state statutes in regard to purchasing prohibitions: . Idaho Code §67-5726 - Conflict of interest regarding the holding of contracts or selling to the City property or supplies by City employees. . Idaho Code §67-5726 - Prohibition regarding the influencing or conspiring to influence public purchasing decisions and contract awards. Attempts at influence may include kickbacks and bribes, peddling or payment of a fee, back door selling, hard-sell tactics, fraternization, or offering gifts to avoid following published procedures or gain advantages. . Idaho Code §67 -5726 and Idaho Code §67 -5717 - Circumventing Purchasing Authorization - Prohibits efforts by employees to obtain products or services by avoiding the competitive process by splitting purchases, creating false emergency situations and non-use of City-wide contracts. 11. CODE OF ETHICS All City of Meridian employees responsible for procuring goods and / or services will: A. Follow the ordinances, rules and regulations of the City of Meridian and the laws of the State of Idaho. B. Avoid activities that would compromise or give the perception of compromising the best interests of the City of Meridian. C. Reduce the potential for any charges of preferential treatment by actively promoting the concept of competition. D. Act as good custodians of public money by obtaining maximum benefit for funds spent. E. Never solicit or accept money, loans, credits or prejudicial discounts, gifts or entertainment material in nature (generally exceeding $100) favors or services from your present or potential suppliers, which might influence or appear to influence purchasing decisions. 111. VENDOR RELATIONSHIPS Developing and maintaining good relationships with our suppliers is important. Maintain and practice, to the highest degree possible, business ethics, professional courtesy, and competence in all transactions. Adhere to and protect the supplier's business and legal rights to confidentiality for trade Page 2 of 17 secrets, and other proprietary information. PROCEDURES Acquisition cost includes unit price plus delivery and installation. I. PURCHASING AUTHORITY Each Department Director or designee within the city will have the authority to acquire goods or service in accordance with the following guidelines. A. PURCHASES UP TO $1,000 Each Department Director or designee can make purchases up to $1.000 at their discretion without purchase orders or competitive bidding as long as the expenditure is within their appropriated budget. B. PURCHASES FROM $1,000 TO $5,000 Such purchases can be made with the approval of the Department Director but must be accompanied by a purchase order. The approval should take place when the purchase order is issued, before any obligation has been incurred. If the item is already on contract or an open purchase order a purchase order is not required but the initial contract purchase order should be referenced on the invoice. C. PURCHASES MORE THAN $5,000 AND LESS THAN $25,000 These purchases require informal, written bids and issuance of a purchase order. See informal bid procedures below. Each Department's City Council Liaison must sign all purchase orders in this range. D. PURCHASES $25,000 OR.GREATER Expenditures at this level must go through a formal bid process in compliance with Idaho Code §50-341. See formal bid procedures below. II. INFORMAL BIDDING A. At least three bids must be obtained if possible and at least three of those must be from vendors with a significant Idaho presence (if possible). There is no maximum number of bids. Idaho Code §50-341 defines significant Idaho presence as follows: "For the purposes of this section, any bidder domiciled outside the boundaries of the state of Idaho may be considered as an Idaho domiciled Page 3 of 17 bidder, provided that there exists for a period of one (1) year preceding the date of the bid a significant Idaho economic presence as defined herein. Significant Idaho presence shall consist of the following: 1. That the bidder maintain in Idaho fully staffed offices, or fully staffed sales offices or divisions, or fully staffed sales outlets, or manufacturing facilities, or warehouse or other necessary related property; and 2. If a corporation be registered and licensed to do business in the state of Idaho with the office of the secretary of state." B. The request for quotation may be written or oral. Both must be documented with date, name or person providing quote and signed by the City employee obtaining the quote. C. Splitting of Requirements: Acquisition requirements shall not be divided to avoid bid statutes, rules, or policies. D. The award shall be made to the bidder offering the lowest acceptable quotation. If a bid is not acceptable retain written explanation of the reason, This is to provide support documentation in the event of challenge by an unsuccessful vendor. 1, AWARDING BIDS - Awards may be made in any of the following ways. (Documentation demonstrating the informal bid process was followed needs to be forwarded to accounting with the request for payment) a. Lowest Cost - Generally, awards are made to the lowest cost responsible bidder. Responsible bidder is defined as the vendor whose bid conforms in all material respects to the request for quotation and reflects the lowest acquisition price. Comparisons of costs should include all costs, including such items as delivery costs, setup charges, removal charges, labor charges, any additional materials required, and other elements described in the quotation. b. Best Value or Weighted Cost- To determine best value a weighted analysis may be used. In a weighted analysis, cost is only one factor in determining the award. Other factors may include evaluation of specifications, comparative performance examinations, vendor references, product usability, flexibility, maintenance, company resources, previous experience, etc. To assure a fair determination of award, identified factors are weighted according to importance in the overall purchasing decision. Relative Page 4 of 17 scores are assigned to each factor, including price, to determine the lowest acquisition cost. c. Life - Cycle Costing - Awards may also be made to bidders offering the lowest life cycle cost Life cycle costing means the total cost of an item for its entire life span. It includes initial purchase price, operating supplies, maintenance, repairs, salvage value, and disposal costs, III. FORMAL BIDDING Purchases $25,000 and greater are processed using the formal bid process. There are two approaches to purchases of this size - a bid or a request for proposal. Bids are generally used for tangible property and in instances where the purchaser knows what they want and the goal is to obtain the best price. Requests for proposal are generally used for services and in cases where the need is known but all the solutions are not. A BID 1, DEVELOPING SPECIFICATION The term "specification" refers to a description of the characteristics or a commodity or service required, It is the explicit requirement furnished with a solicitation upon which a purchase order or contract is to be bases Specifications are written not to restrict bidding but to encourage open competition. The goal is invite maximum reasonable competition. Checklist for Specifications: a. Specifications should be clear and accurate, yet simple. Do not make them so specific that a loophole eliminates competition and allows a vendor to take advantage of the purchaser. b. Specifications should be as flexible as possible, specifications defeat the competitive bid process. Inflexible c. Specifications must be written so it easy to check that the product or service meets the specification. d. Specifications should be reasonable. e. Specification should be as fair as possible and allow for competitive bidding by several bidders. 2. PROCEDURE FOR BID SOLICITATION Page 5 of 17 a. NOTICE - The notice inviting bids must set the date and place for the bid opening. The first publication shall be at LEAST two (2) weeks before the date of the bid opening. A longer time period might be preferable. Notice must be published at least twice, not less than one (1) week apart, in the official newspaper of the city. The notice should succinctly set forth the project to be done. Bid notice information must be forwarded to the City Clerk at least one full week before the first public notice is to appear. The notice must list the location of bid forms, bidders instructions, contract documents, general and special instructions, drawings and specifications as well as the name of the project manager. The city may require a deposit or charge for bid documents. b. PRE-BID CONFERENCE - The pre-bid conferences may be held to explain the item or project requirements. They should be announced to all prospective bidders known to have received an Invitation to Bid. The conference should be held long enough after the Invitation to Bid has been issued to allow bidders to become familiar with the project but long enough after to allow consideration of the conference results in bid preparation. Nothing in the pre-bid conference can change the Invitation to Bid unless a change is made by written addendum. If a transcript is made, it shall be a public record. A pre-bid conference is an excellent way to receive vendor input prior to a bid opening. Vendors have the opportunity to point out inconsistencies in specifications or provide suggestions on technical specifications that may benefit the city. 3. ADDENDA TO INVITATIONS TO BID a. Addenda to Invitations to bid shall be identified as such and shall ask that the bidder acknowledge receipt of all addenda issued. The addendum shall reference the portions of the Invitation for Bid it amends. b. Addenda shall be sent to all prospective bidders known to have received the invitation to bid. The City Clerk or Project Manager will notify all prospective bidders by fax or mail. Page 6 of 17 C. Addenda shall be distributed within a reasonable time to allow prospective bidders the opportunity to adjust bid preparation. If the date and time previously set for the bid opening do not accommodate such preparation the bid opening time must be increased and once again all prospective bidders notified by the City Clerk or Project Manager. A bid opening time should be documented in the addendum. 4. BID OPENING AND EVALUATION a. All bids must be received in the City Clerks office by the date and time specified in the Invitation to Bid. b. All bids must be signed. c. No bid received by the City may be withdrawn after the time set in the notice for the opening. d. The project manager prepares the bid tabulation sheet before the bid opening. e. The City Clerk publicly opens the bids at the time and place stated in the public notice. No person is denied the right to be present at the opening of bids. The first items read are the signature and the bid security information. If this information is not available the bid is void and cannot be considered. f. The City Clerk hands the bids to the Project Manager for review g. The Project Manager: . Attaches bid bond if required . Attaches acknowledgement of addenda is required. . Reference HV AC/Mechanical/Electrical subs if required . Fills out and totals bid schedule . Reads responsive bid amount out loud . States who the apparent low bid is . States that all bids will be evaluated for arithmetic correctness and other items as seemed appropriate .Announces the date that a recommendation of award will be presented to the City Council. h. Bid results are available in the City Clerk's Office to all interested parties. Page 7 of 17 i. If the lowest responsible bid is less than or equal to $25,000, city council action is not required. (The Mayor must sign all City contracts) j. If two or more bids are the same the City Council may accept the one it chooses. If no bids are received the City Council may make the expenditure without further compliance with this section. 5. CITY COUNCIL ACTION FOR BID DECISIONS THAT EXCEED $25,000 a. Staff recommendations are placed on the consent agenda. If the item is controversial or reflects policy that has not .been addressed it can be added to the City Council agenda for discussion. City Council may also pull consent items and ask for discussion with staff, At their discretion staff may choose to not place the item on the consent agenda and may present the contract to the City Council as a regular agenda item. b. The City Council may: 1. Accept staff recommendation. 2. Approve an alternate bid in accordance with state statute and city policy. 3. Defer action and request more information. 4. Reject all bids and re-advertise. 5. After rejecting bids the City Council may, after finding it to be a fact, pass a resolution declaring that the purpose of the expenditure can be realized more economically by day labor, or the materials or supplies furnished at a lower price in the open market. Upon adoption of the resolution, it may fulfill the purpose of the expenditure in the manner stated without further compliance with competitive bidding requirements. 6. If no bids are received the City may make the expenditure without further compliance with competitive bidding requirements. This includes buying the material and supplies and/or having city employees do the work. 7. The Project Manager will notify the successful bidder of the award of the bid. 6. MISTAKES IN BIDS a. Reference Idaho Code §5A-1904 (B-B) for specific reasons for (and ramifications of) withdrawing a bid. Page 8 of 17 7. ADDITIONAL PUBLIC WORKS REQUIREMENTS Public Works contractors have additional requirements for construction projects. a. Must be bondable for performance and payment. b. Must have a valid Public Works License through the State of Idaho. c. Must have class of license specific to dollar value of project. d. Must satisfy insurance requirements. e. May have to hold certain specialty license. IV. REQUEST FOR PROPOSAL A. A request for proposal is generally utilized in the acquisition of services or complex purchases. A RFP describes a problem or need in general terms and seeks a written response including pricing information, which describes the solution or means of providing the property requested by the request for Proposal. Price might be an evaluation criterion for proposals. but will not necessarily be the predominant basis for contract award. B. Specific criteria are applicable to professional service contracts with design professionals, construction managers, and professional land surveyors. These criteria are described in. Idaho Code §67 -2320 State Government and State Affairs, Chapter 23, Miscellaneous Provisions, Professional Service Contracts With Design Professionals, Construction Managers And Professional Land Surveyors. C. To choose between a request for proposal or competitive sealed bidding consider the following factors: 1. Whether the relative skills, expertise, or technical capability of the offers will have to be evaluated. 2. Whether the cost is secondary to the characteristics of the property or service sought, as in a work of art. 3. Whether the conditions of the service, property or delivery conditions are unable to be sufficiently described in the Invitation to Bid. 4. Whether the acquisition is for highly complex or technical property of services and evaluation of the vendor's approach. management capabilities, innovation, or other technical factors are secondary to cost. D. The RFP is written so that potential offerers understand the problem they are being asked to address. Any limits or conditions that apply must be Page 9 of 17 included. The RFP must state in general terms all of the evaluation factors and their relative importance, including price. E. Evaluation of Proposals The evaluation must be based on the evaluation factors set forth in the RFP. Numerical rating systems are generally used but are not required. Factors not specified in the Request for Proposal shall not be considered in evaluating offers or determining award of contract. F. Award 1. A written determination shall be made explaining how the award was found to be most advantageous for the agency based on the evaluation criterion set forth in the Request for Proposal. 2. If only one proposal is received in response to a Request for Proposal, the City, as it deems appropriate, may make an award, reject the proposal, or if time permits, re-solicit for the purpose of obtaining additional proposals. V. DETERMINATION OF NEED TO CONTRACT A. A contract may be established as the result of a bid or a RFP. Agreements where someone is performing a service defined by the City that will exceed $5,000 generally require a written contract. B. The Mayor must approve contracts for $25,000 or less. C. All contracts exceeding $25,000 will be placed on the city council consent agenda. If the council requires discussion they can be pulled from the consent agenda and discussed. Staff may also request such contract not be placed on the consent agenda. D. The city attorney must review all contracts for legal adequacy. E. All contracts must be signed by the Mayor and attested by the City Clerk. F. The original signed copy of every contract must be retained in a central file in the City Clerk's office. The City Clerk will forward a signed copy to the Finance Department for payment verifications. G. The City Attorney must a pprove a ny decision made to breech a contract due to failure to perform. The City Attorney will perform the steps necessary to legally terminate the contract. VI. LEASES Page 10 of 17 A, The City may enter into lease agreements. If possible the City will use the competitive bidding process. B. All leases exceeding $25,000 will be placed on the city council consent agenda. If the council requires discussion they can be pulled from the consent agenda and discussed. C. The City Attorney must review all lease agreements for legal adequacy. D. The Mayor must sign all lease agreements and City Clerk attest to the Mayor's signature. E. The original signed copy of every lease agreement must be retained in a central file in the City Clerk's office. The City Clerk will forward a copy to the Finance Department for payment verifications. VII. RISK MANAGEMENT AND INSURANCE REQUIREMENTS A. Public Works Department is responsible for ensuring that all insurance requirements are met for their projects. Public Works Department will maintain necessary documentation in their offices and have available for audit upon request. B, Project Managers for all other city contracts that require insurance will be responsible for obtaining proof of insurance and having the documents available for audit upon request. C. Workers Compensation Insurance - providers of services to the city may be required to file a certificate of Workers Compensation Insurance Each department is responsible for ensuring a copy of the certificate is filed with the contract if appropriate. Contact the City Treasurer to determine if the certificate is necessary. VIII. EXCEPTIONS TO COMPETITIVE BIDDING A. COOPERATIVE BIDDING The Department may use the established state, federal, city, or county contracts to make purchases. Attach a printout of the pertinent information from the state's web page to the purchase order. The Division of Purchasing contract information is located at: h tto :llwww2.s tate. id. U 51 ad m/ou rchas inol ao vi n fo. h tm Departments may also piggyback on other city or county bids within six months of the original bid award if the pricing is consistent the original bid Page 11 of 17 and the bid process followed Idaho Code §50-341 and Idaho Code §67- 2349. All bid documentation must accompany the purchase order. City employees are strongly urged to use State of Idaho contracts. State contracts are developed to include price, delivery, reporting capability and other beneficial services. They meet the important competitive bidding criteria and save the time and effort the employee spends shopping around. B. EMERGENCY PURCHASING Any sum may be expended by the city in the event of an emergency. The Mayor must designate the emergency and provide expenditure approval. Per Idaho Code §50-341 in the event of an emergency such as "extraordinary fire, flood, storm, epidemic or 0 (her disaster, 0 fit is necessary to do emergency work to prepare for national or local defense or to safeguard life, health, or property." Such contracts may not be for a period that exceeds one year, C. SOLE SOURCE PURCHASING - PURCHASES UNDER $25,0000 Competitive bidding requirements may be waived if the there is only one vendor for the goods or services to be acquired: Sole source acquisitions must be approved by the department's liaison prior to purchase Examples of sole source purchases: . Where the compatibility of equipment, components, accessories, computer software, replacement parts, or service is the paramount consideration . Where a sole supplier's item is needed for trial use or testing . Purchase of video's, books, or other copyrighted materials . Purchase of property for which it is determined there IS no functional equivalent . . Purchases of public utility services D. PROFESSIONAL OR CONSULTANT SERVICES - CONTRACTS LESS THAN $25,000 Professional service contracts for less than $25,000 may be entered into without formal bidding. Professional service contracts require review by the City of Meridian attorney for legal adequacy and the Mayor's signature. Page 12 of 17 Consultant Services: Work rendered by either independent individuals or firms who possess specialized knowledge, experience, and expertise including but not limited to such areas as management, personnel, finance, accounting, planning and data processing. The consultant's work will be performed a ccording to the consultant's methods without being subject to the control of the city. Professional Services: Work rendered by ani ndependent contractor w ho has a professional knowledge of some department of learning or science. This includes but is not limited to accounting and auditing, legal, education, engineering, architecture, and research. SPECIAL CONDITIONS EXIST FOR PROFESSIONAL SERVICE CONTRACTS WITH DESIGN PROFESSIONALS, CONSTRUCTION MANAGERS, AND PROFESSIONAL LAND SURVEYORS. See Idaho Code §67-2320. Use Internet to go to Access Idaho - Government - Legislature - Idaho Statutes - Title 67 - Chapter 23 E. USE OF CORRECTIONAL INDUSTRIES The city can purchase Correctional Industries furniture and other goods or services without competitive bidding. The city may also utilize Idaho Department of Correction labor crews without competitive bidding. IX. PAYMENT PROCESSING A. Access Purchase Order System This system was designed to bring uniformity to the City's purchase orders and to give Departments their actual budget balance at any given time. To maintain accuracy it is important that all purchases be entered into the system, regardless of amount. Purchases under the purchase order requirement dollar limit may be entered in the system without generating an actual purchase order. This system is not I inked to the City's accounting system so the balance in the purchase order system must be balanced to the accounting system financial reports on a monthly basis. B. Purchase Order Requirements 1. The purpose of a purchase order is to obtain and document approval to purchase BEFORE the purchase is made. The purchase order should be completely filled prior to approval. 2. All fields on the purchase order should be filled out: Page 13 of 17 a. Bill To: City Hall address b. Ship To: Purchaser's Location c. Complete vendor name and address d. Item description, account coding and price e. Reason for purchase 3. There is a cost associated with generating purchase orders. Recognizing that the City does not require purchase orders for purchases under $1,000, items on an existing contract (reference original purchase order number on invoice), or utility charges. C. Invoice Processing 1. All invoices will be processed and paid by the City's Finance Department. All vendors should be directed to use one address, the city hall address: City of Meridian Attn: Accounts Payable 33 East Idaho Avenue Meridian,IO 83642 O. Central accounts payable will open mail and distribute invoices to the correct departments. Statements will be retained and reviewed in Accounts Payable. 1. All receiving documents must be initialed and dated a nd included with the payment invoice. 2. Upon receipt of invoice departments will match receiving documents, purchase orders if appropriate, bid documents if appropriate, to invoices. 3. Each invoice will be stamped with a stamp that provides Accounts Payable with the information necessary to enter the invoice in the accounting system. This information includes account number or numbers, purpose of purchase and approval signature. 4. Completed invoices should be sent back to the City Hall Accounts. Payable office as soon as necessary documents are assembled. All invoices for the month MUST be received in Accounts Payable by the 5th of the following month. 5. Purchase orders or either the department head or the city council liaison must sign invoices before they are sent to Accounts Payable. Page 14 of 17 6. Accounts Payable will batch department payment requests and generate and mail vendor payments. The invoice is paid the 10th of the month following the date of the invoice. 7. Review of Purchases The accounting department will review invoices for compliance with city and statutory rules and regulations, However the primary responsibility for the propriety of the expenditure rests with the Department Director who signed the invoice. 8. Opening Credit Accounts For purposes of good internal control the use of store lines of credit will be discouraged. The decision to open a line of credit is the responsibility of the Finance Director. City employees are not authorized to open lines of credit and apply for and receive charge cards. Such accounts will be canceled. IIX. SURPLUS PROPERTY A. DEFINITION OF SURPLUS PROPERTY Personal property owed by the city where the cost of maintenance, transportation, storage, or other costs exceed the economic or useful life of the property. B. DISPOSAL Surplus property will be disposed of in the manner that maximizes the value received by the City of Meridian in accordance with the following guidelines All employees of the City, including their spouses, dependents, or any person acting on the employee's beha/~ are prohibited from acquiring surplus property form the City UNLESS the property is acquired through a competitive bid process, such as an auction or sealed bid. C. GUIDELINES The following guidelines determine the method used to dispose of property. Nominal Value 1. Item has a value of zero or less than what it would cost to dispose of the property. Page 15 of 17 2. Dispose of item by donating to charitable organization that qualifies under Section 501 (c) and 501 (c) (19) of the Internal Revenue Service or to any state or local government pursuant to Idaho Code §50-1405 or: Dispose of item at local refuse site or have it removed by outside party willing to pay for removal. Less Than $1,000 Value Sell or transfer to another state or local government pursuant to Idaho Code §50-1405 without public advertisement or competitive bid or Sell at public auction conducted by a licensed auctioneer or: Sell to the highest bidder in response to notice of public sale advertised for at least one week in a newspaper of general circulation. Greater Than $1,000 Value Sell at public auction conducted by a licensed auctioneer or: Sell after receipt of sealed bids to the highest responsible bidder after notice of public sale. D. EXCEPTIONS With approval from the City Council and the Mayor items of greater than nominal value may be donated to 501 (c) (3) and 501 (c) (19) charitable organization or to the state or other local governments pursuant to Idaho Code §50-1405. E. PROCEDURES FOR DISPOSAL 1. To dispose of an item a Property Disposal Authorization Request must be completed. See Attachment B - Property Disposal Authorization Request. 2. Once the form is complete it should be routed as follows: a. Signature of Department Head with Date. Page 16 of 17 b. Send to Accounting Department. Accounting will review the form for completeness, sign and date. c. Accounting will route to Mayor for approval, Mayor will sign and date and return to accounting. d. Accounting will return the Property Disposal Authorization Form to the requesting Department so they can proceed with disposal A copy of the form will be maintained in Accounting. e. Once the property is disposed of the Department will note on the form the final disposition of the property and forward to the Accounting Department with asset change form. f. It is the responsibility of each Department to document actual final disposal of the property. Failure to do so will be noted on the monthly property disposal report prepared for the Mayor and City Council g. Accounting will update the fixed asset system and remove the item. Accounting will retain the documentation for audit purposes. h. Once a month accounting will prepare a report for the Council summarizing the month's disposal requests and actions. The council president will initial the report indicating that it has been reviewed. Page 17 of 17 CITY OF MERIDIAN PURCHASING POLICY DEPARTMENT OF FINANCE Jk,1'1t, 2-OD2- VVl~ím Adopted Purpose Commodities and services purchased in the public sector represent a direct cost to the taxpayer. Every purchase that city employees make is subject to public scrutiny. Competition is the central principal of public procurement. The rules and regulations in this procedure were developed to encourage competitive solicitation for sound value, guard against favoritism and profiteering and promote the interest of local economies by providing equal opportunities to compete for government business. References Procedure detaii can be found in specific purchasing and expenditure processing field memorandum. See Attachment A Definitions Public Purchasing: The purchasing or procurement of an item or a service that meets the need of the city, at the best price, from the most responsive and responsible vendor. Idaho Code: This policy refers to several Idaho Statutes. See attachment A for a list of all statutes that impact public purchasing. The city follows Title 50 Municipal Corporations Chapter 3 Powers and follows code written for state purchasing whenever practical. Purchasinq Ethics and Vendor Relationships Every city employee has a personal responsibility to conduct government business in an ethical manner and assure the integrity of the city purchasing and procurement processes. Department managers a re responsible for adherence to City and State purchasing rules and regulations. A. Prohibitions The City has adopted the following state statutes in regard to purchasing prohibitions: I.C.#67-5726 - Conflict of interest regarding the holding of contracts or selling to the City property or supplies by City employees. . I.C.#67-5726 - Prohibition regarding the influencing or conspiring to influence public purchasing decisions and contract awards. Attempts at influence may include kickbacks and bribes, peddling or payment of a fee, back door selling, hard-sell tactics, fraternization, or offering gifts to avoid following published procedures or gain advantages. . I.C.#67-5726, I.C.#67-5717 - Circumventing Purchasing Authorization- Prohibits efforts by employees to obtain products or services by avoiding the competitive process by splitting purchases, creating false emergency situations and non-use of City-wide contracts. B. Code of Ethics All City of Meridian employees responsible for procuring goods or services will: 1. Follow the rules and regulations of the City of Meridian and the laws of the state of Idaho. 2. Avoid activities that would compromise or give the perception of compromising the best interests of the City. 3. Reduce the potential for any charges of preferential treatment by actively promoting the concept of competition. 4. Act as good custodians of public money by obtaining maximum benefit for funds spent. 5. Never solicit or accept money, loans, credits or prejudicial discounts, gifts or entertainment material in nature (generally exceeding $100) favors or services from your present or potential suppliers, which might influence or appear to influence purchasing decisions. C. Vendor Relationships Developing and maintaining good relationships with our suppliers is important. Maintain and practice, to the highest degree possible, business ethics, professional courtesy, and competence in all transactions. Adhere to and protect the supplier's business and legal rights to confidentiality for trade secrets, and other proprietary information. Procedure Acquisition cost includes unit price plus delivery and installation. I. PURCHASING AUTHORITY: each Department Director or designee within the city will have the authority to acquire goods or service in accordance with the following guidelines. A. PURCHASES UP TO $1,000 Each Department Director or designee can make purchases up to $1,000 at their discretion without purchase orders or competitive bidding as long as the expenditure is within their appropriated budget. B. PURCHASES FROM $1,000 to $5,000 Such purchases can be made with the approval of the Department Director but must be accompanied by a purchase order. The approval shouid take place when the purchase order is issued, before any obligation has been incurred. If the item is already on contract or an open purchase order a purchase order is not required but the initial contract purchase order should be referenced on the invoice. C. PURCHASES MORE THAN $5.000 and LESS THAN $25,000 These purchases require informal, written bids and issuance of a purchase order. See informal bid procedures below. Each Department's City Council Liaison must sign all purchase orders in this range. D. PURCHASES $25,000 OR GREATER Expenditures at this level must go through a formal bid process in compliance with State Code Section 50-341. See formal bid procedures below. II. INFORMAL BIDDING A. At least three bids must be obtained if possible and at least three of those must be from vendors with a significant Idaho presence ( if possible). There is no maximum number of bids. Idaho Code Section 50-341 defines significant Idaho presence as follows: "For the purposes of this section, any bidder domiciled outside the boundaries of the state of Idaho may be considered as an Idaho domiciled bidder, provided that there exists for a period of one (1) year preceding the date of the bid a significant Idaho economic presence as defined herein. Significant Idaho presence shall consist of the following: 1. That the bidder maintain in Idaho fully staffed offices, or fully staffed sales offices or divisions, or fully staffed sales outlets, or manufacturing facilities, or warehouse or other necessary related property; and 2. If a corporation be registered and licensed to do business in the state of Idaho with the office of the secretary of state." B. The request for quotation may be written or oral. Both must be documented with date, name or person providing quote and signed by the City employee obtaining the quote. C. Splitting of Requirements: Acquisition requirements shall not be divided to avoid bid statutes, rules, or policies. D. The award shall be made to the bidder offering the lowest acceptable quotation. If a bid is not acceptable retain written explanation of the reason. This is to provide support documentation in the event of challenge by an unsuccessful vendor. 1. AWARDING BIDS - Awards may be made in any of the following ways. (Documentation demonstrating the informal bid process was followed needs to be forwarded to accounting with the request for payment.) a. Lowest Cost- Generally, awards are made to the lowest cost responsible bidder. Responsible bidder is defined as the vendor whose bid conforms in all material respects to the request for quotation and reflects the lowest acquisition price. Comparisons of costs should include all costs, including such items as delivery costs, setup charges, removal charges, labor charges, any additional materials required, and other elements described in the quotation. b. Best Value or Weighted Cost - To determine best value a weighted analysis may be used, In a weighted analysis, cost is only one factor in determining the award Other factors may include evaluation of specifications, comparative performance examinations, vendor references, product usability, flexibility, maintenance, company resources, previous experience, etc. To assure a fair determination of award, identified factors are weighted according to importance in the overall purchasing decision. Relative scores are assigned to each factor, including price, to determine the lowest acquisition cost. c. Life - Cycle Costing Awards may also be made to bidders offering the lowest life cycle cost. Life cycle costing means the total cost of an item for its entire life span. It includes initial purchase price, operating supplies, maintenance, repairs, salvage value, and disposal costs. III. FORMAL BIDDING Purchases $25,000 and greater are processed using the formal bid process There are two approaches to purchases of t his size - a bid 0 r a request for proposal. Bids are generally used for tangible property and in instances where the purchaser knows what they want and the goal is to obtain the best price, Requests for proposal are generally used for services and in cases where the need is known but all the solutions are not. A. Bid 1. Developing Specification The term "specification" refers to a description of the characteristics or a commodity or service required. It is the explicit requirement furnished with a solicitation upon which a purchase order or contract is to be bases. Specifications are written not to restrict bidding but to encourage open competition. The goal is invite maximum reasonable competition. Checklist for Specifications: a. Specifications should be clear and accurate, yet simple. Do not make them so specific that a loophole eliminates competition and allows a vendor to take advantage of the purchaser. b. Specifications should be as flexible as possible. specifications defeat the competitive bid process. c. Specifications must be written so it easy to check that the product or service meets the specification d. Specifications should be reasonable. e. Specification should be as fair as possible and allow for competitive bidding by several bidders. Inflexible 2. Procedure for Bid Solicitation a. NOTICE - The notice inviting bids must set the date and place for the bid opening. The first publication shall be at LEAST two (2) weeks before the date of the bid opening. A longer time period might be preferable. Notice must be published at least twice, not less than one (1) week apart, in the official newspaper of the city. The notice should succinctly set forth the project to be done. Bid notice information must be forwarded to the City Clerk at least one full week before the first public notice is to appear. The notice must list the location of bid forms, bidders instructions, contract documents, general and special instructions, drawings and specifications as well as the name of the project manager. The city may require a deposit or charge for bid documents. b. PRE-BID CONFERENCE Pre-bid conferences may be held to explain the item or project requirements. They should be announced to all prospective bidders known to have received an Invitation to Bid. The conference should be held long enough after t he I nvitation to Bid h as been issued to allow bidders to become familiar with the project but long enough after to allow consideration of the conference results in bid preparation. Nothing in the pre-bid conference can change the Invitation to Bid unless a change is made by written addendum. If a transcript is made, it shall be a public record. A pre-bid conference is an excellent way to receive vendor input prior to a bid opening. Vendors have the opportunity to point out inconsistencies in specifications or provide suggestions on technical specifications that may benefit the city. 3. ADDENDA TO INVITATIONS TO BID a. Addenda to Invitations to bid shall be identified as such and shall ask that the bidder acknowledge receipt of all addenda issued The addendum shall reference the portions of the Invitation for Bid it amends b. Addenda shall be sent to all prospective bidders known to have received the invitation to bid. The City Clerk or Project Manager will notify all prospective bidders by fax or mail. c. Addenda shall be distributed within a reasonable time to allow prospective bidders the opportunity to adjust bid preparation. If the date and time previously set for the bid opening do not accommodate such preparation the bid opening time must be increased and once again all prospective bidders notified by the City Clerk or Project Manager. A bid opening time should be documented in the addendum. 4. BID OPENING AND EVALUATION a. All bids must be received in the City Clerks office by the date and time specified in the Invitation to Bid. b. All bids must be signed c. No bid received by the City may be withdrawn after the time set in the notice for the opening d. The project manager prepares the bid tabulation sheet before the bid opening e. The City Clerk publicly opens the bids at the time and place stated in the public notice. Nopersonis denied the right to be present at the opening of bids. The first items read are the signature and the bid security information. If this information is not available the bid is void and cannot be considered. f. The City Clerk hands the bids to the Project Manager for review. The Project Manager: . Attaches bid bond if required .Attaches acknowledgement of addenda is required. . Reference HVAC/Mechanical/Electrical subs if required . Fills out and totals bid schedule . Reads responsive bid amount out loud . States who the apparent low bid is . States that all bids will be evaluated for arithmetic correctness and other items as seemed appropriate . Announces the date that a recommendation of award will be presented to the City Council. g. Bid results are available in the City Clerks Office to all interested parties. h. If the Lowest responsible bid is less than or equal to $25,000 council action is not required. (The Mayor must sign all City contracts) i. If two or more bids are the same the city council may accept the one it chooses. If no bids are received the council may make the expenditure without further compliance with this section. 5. Council Action for bid decisions that exceed $25,000 a. Staff recommendations are placed on the Consent agenda. If the item is controversial or reflects policy that has not been addressed it can be added to the Council agenda for discussion. Council may also pull Consent items and ask for discussion with staff. At their discretion staff may choose to not place the item on the consent agenda and may present the contract to the Council as a regular agenda item. b. The City Council may: 1. Accept staff recommendation 2. Approve an alternate bid in accordance with state statute and city policy 3. Defer action and request more information 4. Reject all bids and re-advertise 5. After rejecting bids the City Council may, after finding it to be a fact, pass a resolution declaring that the purpose of the expenditure can be realized more economically by day labor, or the materials or supplies furnished at a lower price in the open market. Upon adoption of the resolution, it may fulfill the purpose of the expenditure in the manner stated without further compliance with competitive bidding requirements. 6. If n 0 b ids a re received the City may rn ake the expenditure without further compliance with competitive bidding requirements. This includes buying the material and supplies and/or having city employees do the work. 7. The Project Manager will notify the successful bidder of the award of the bid. 6. MISTAKES IN BIDS a. Reference Idaho Code 5A-1904 (B-B) for specific reasons for (and ramifications of) withdrawing a bid. 7. ADDITIONAL PUBLIC WORKS REQUIREMENTS Public Works contractors have additional requirements for construction projects. 1. Must be bondable for performance and payment 2. Must have a valid Public Works license through the State of Idaho 3. Must have class of license specific to dollar value of project 4. Must satisfy insurance requirements 5. May have to hold certain specialty license IV REQUEST FOR PROPOSAL A. A request for proposal is generally utilized in the acquisition of services or complex purchases. A RFP describes a problem or need in general terms and seeks a written response including pricing information, which describes the solution or means of providing the property requested by the request for Proposal. Price might be an evaluation criterion for proposals, but will not necessarily be the predominant basis for contract award. B. Specific criteria are appiicable to professional service contracts with design professionals, construction managers, and professional land surveyors. These criteria are described in Idaho Statute 67-2320 State Government and State Affairs, Chapter 23, Miscellaneous Provisions, Professional Service Contracts With Design Professionals, Construction Managers And Professional Land Surveyors. C. To choose between a request for proposal or competitive sealed bidding consider the following factors: 1. Whether the relative skills, expertise, or technical capability of the offers will have to be evaluated 2. Whether the cost is secondary to the characteristics of the property or service sought, as in a work of art 3. Whether the conditions of the service, property or delivery conditions are unable to be sufficiently described in the Invitation to Bid. 4. Whether the a cquisition is for highly complex or technicai property of services and evaluation of the vendor's approach, management capabilities, innovation, or other technical factors are secondary to cost. D. The RFP is written so that potential offerers understand the problem they are being asked to address. Any limits or conditions that appiy must be included. The RFP must state in general terms all of the evaluation factors and their relative importance, including price. E. Evaluation of Proposals The evaluation must be based 0 n the e valuation factors set forth i n the RFP. Numerical rating systems are generally used but are not required. Factors not specified in the Request for Proposal shall not be considered in evaluating offers or determining award of contract. F. Award 1.A written determination s hall be made explaining how t he award was found to be most advantageous for the agency based on the evaluation criterion set forth in the Request for Proposal. 2. If only one proposal is received in response to a Request for Proposal, the City, as it deems appropriate, may make an award. reject the proposal, or if time permits, re-solicit for the purpose of obtaining additional proposals. V. DETERMINATION OF NEED TO CONTRACT A. A contract may be established as the result of a bid or a RFP. Agreements where someone is performing a service defined by the City that will exceed $5,000 generally require a written contract. B. The Mayor must approve contracts for $25,000 or less. C. All contracts exceeding $25,000 will be placed on the city council consent agenda. If the council requires discussion they can be pulled from the consent agenda and discussed. Staff may also request such contract not be placed on the consent agenda. D. The city attorney must review all contracts for legal adequacy, E. All contracts must be signed by the Mayor, City Clerk attests to Mayor's Signature. F. The original signed copy of every contract must be retained in a central file in the City Clerk's office. The City Clerk will forward a signed copy to the Finance Department for payment verifications. G. The City Attorney must approve any decision made to breech a contract due to failure to perform. The City Attorney will perform the steps necessary to legally terminate the contract. VI. LEASES A. The City may enter into lease agreements. If possible the City will use the competitive bidding process. B. All leases exceeding $25,000 will be placed on the city council consent agenda. If the council requires discussion they can be pulled from the consent agenda and discussed. C. The city attorney must review all lease agreements for legal adequacy, D. The Mayor must sign all lease agreements and City Clerk attest to Mayor's signature. E. The original signed copy of every lease agreement must be retained in a central file in the City Clerk's office. The City Clerk will forward a copy to the Finance Department for payment verifications. VII. Risk Management and Insurance Requirements A. Public Works is responsible for ensuring that all insurance requirements are met for their projects. Public Works will maintain necessary documentation in their offices and have available for audit upon request. B. Project Managers for all other city contracts that require insurance will be responsible for obtaining proof of insurance and having the documents available for audit upon request. B. Workman's Compensation - providers of services to the city may be required to file a certificate of Workers Compensation Insurance. Each department is responsible for ensuring a copy of the certificate is filed with the contract if appropriate. Contact the City Treasurer to determine if the certificate is necessary. VIII. EXCEPTIONS TO COMPETITIVE BIDDING A. COOPERATIVE BIDDING The Department may use the established state, federal, city, or county contracts to make purchases. Attach a printout of the pertinent information from the state's web page to the purchase order. The Division of Purchasing contract information is located at: hUD://www2.state.id.us/adm/Durchasino/aovinfo.htm Departments may also piggyback on other city or county bids within six months of the original bid award if the pricing is consistent the original bid and the bid process followed state statute 50-341 and state statute 67-2349 All bid documentation must accompany the purchase order. City employees are strongly urged to use State of Idaho contracts. State contracts are developed to include price, delivery, reporting capability and other beneficial services. They meet the important competitive bidding criteria and save the time and effort the employee spends shopping around. A. EMERGENCY PURCHASING Any sum may be expended by the city in the event of an emergency. The Mayor must designate the emergency and provide expenditure approval. Per Idaho Statute 50-341 in the event of an emergency such as "extraordinary fire, flood, storm, epidemic or other disaster. of it is necessary to do emergency work to prepare for national or local defense or to safeguard life, health, or property." Such contracts may not be for a period that exceeds one year. B. SOLE SOURCE PURCHASING - Purchases under $25,0000 Competitive bidding requirements may be waived if the there is only one vendor for the goods or services to be acquired: Sole source acquisitions must be approved by the department's liaison prior to purchase Examples of sole source purchases: . Where the compatibility of equipment, components, accessories, computer software, replacement parts, or service is the paramount consideration . Where a sole supplier's item is needed for trial use or testing . Purchase of video's, books, or other copyrighted materials . Purchase of property for which it is determined there is no functional equivalent . Purchases of public utility services C. PROFESSIONAL OR CONSULTANT SERVICES - contracts less than $25,000 Professional service contracts for less than $25,000 may be entered into without formal bidding. Professional service contracts require review by the City of Meridian attorney for legal adequacy and the Mayor's signature. Consultant Services: Work rendered by either independent individuals or firms who possess specialized knowledge, experience, and expertise including but not limited to such areas as management, personnel, finance, accounting, planning and data processing. The consultant's work will be performed according to the consultant's methods without being subject to the control of the city. Professional Services: Work rendered by an independent contractor who has a professional knowledge of some department of learning or science. This includes but is not limited to accounting and auditing, legal, education, engineering, architecture, and research. SPECIAL CONDITIONS EXIST FOR PROFESSIONAL SERVICE CONTRACTS WITH DESIGN PROFESSIONALS, CONSTRUCTION MANAGERS, AND PROFESSIONAL LAND SURVEYORS. SEE IDAHO CODE 67-2320 Use Internet to go to Access Idaho - Government - Legislature- Idaho Statutes - Title 67 - Chapter 23 D. Use of Correctional Industries The city can purchase Correctional Industry furniture and other goods or services without competitive bidding. The city may also utilize Idaho Department of Correction labor crews without competitive bidding. IX. PAYMENT PROCESSING A. Access Purchase Order System This system was designed to bring uniformity to the City's purchase orders and to give Departments their actual budget balance at any given time. To maintain accuracy it is important that all purchases be entered into the system, regardless of amount. Purchases under the purchase order requirement dollar limit may be entered in the system without generating an actual purchase order. This system is not linked to the City's accounting system so the balance in the purchase order system must be balanced to the accounting system financial reports on a monthly basis. B. Purchase Order Requirements 1. The purpose of a purchase order is to obtain and document approval to purchase BEFORE the purchase is made. The purchase order should be completely filled prior to approval. 2. All fields on the purchase order should be filled out: a. Bill To: City Hall address b. Ship To: Purchaser's Location c. Complete vendor name and address d. Item description, account coding and price e. Reason for purchase 3. There is a cost associated with generating purchase orders. Recognizing this the City does not require purchase orders for purchases under $1 ,000, items on an existing contract (reference original purchase order number on invoice), or utility charges. C. Invoice Processing 1. All invoices will be processed and paid by the City's Finance Department. All vendors should be directed to use one address, the city hall address: City of Meridian Attn Accounts Payable 33 East Idaho Meridian, Idaho 83642 D. Central accounts payable will open mail and distribute invoices to the correct departments. Statements will be retained and reviewed in Accounts Payable. 1. All receiving documents must be initialed and dated and included with the payment invoice. 2. Upon receipt of invoice departments will match receiving documents, purchase orders if appropriate, bid documents if appropriate, to invoices. 3. Each invoice will be stamped with a stamp that provides Accounts Payable with the information necessary to enter the invoice in the accounting system. This information includes Account number or numbers, Purpose of Purchase, and Approval Signature 4. Completed invoices should be sent back to the City Hall Accounts Payable office as soon as necessary documents are assembled. All invoices for the month MUST be received in Accounts Payable by the 5th of the following month. 5. Purchase orders or either the department head or the city council liaison must sign invoices before they are sent to Finance. 6. Accounts Payable will batch department payment requests and generate and mail vendor payments. Invoice is paid the 10th of the month following the date of the invoice. 7. Review of Purchases The accounting department will review invoices for compliance with city and statutory rules and regulations. However the primary responsibility for the propriety of the expenditure rests with the Department Director who signed the invoice. 8. Opening Credit Accounts For purposes of good internal control the use of store lines of credit will be discouraged. The decision to open a line of credit is the responsibility of the Finance Director. City employees are not authorized to open lines of credit and apply for and receive charge cards. Such accounts will be canceled. IIX. SURPLUS PROPERTY A. DEFINITION OF SURPLUS PROPERTY Personal property owed by the city where the cost of maintenance. transportation, storage, or other costs exceed the economic or useful. life of the property. B. DISPOSAL Surplus property will be disposed of in the manner that maximizes the value received by the City of Meridian in accordance with the following guidelines: All employees of the City, including their spouses, dependents, or any person acting on the employee's beha/~ are prohibited from acquiring surplus property form the City UNLESS the property is acquired through a competitive bid process, such as an auction or sealed bid. C. GUIDELINES The following guidelines determine the method used to dispose of property. Nominal Value: 1. Item has a value of zero or less than what it would cost to dispose of the property. 2. Dispose of item by donating to charitable organization that qualifies under Section 501 (c) and 501 (c) (19) of the Internal Revenue Service or to any state or local government pursuant to I.C 50-1405 or: Dispose of item at local refuse site or have it removed by outside party willing to pay for removal. Less Than $1,000 Value Sell or transfer to another state or local government pursuant to I.C. 50- 1405 without public advertisement or competitive bid or: Sell at public auction conducted by a licensed auctioneer or: Sell to the highest bidder in response to notice of public sale advertised for at least one week in a newspaper of general circulation. Greater Than $1,000 Value Sell at public auction conducted by a licensed auctioneer or: Sell after receipt of sealed bids to the highest responsible bidder after notice of public sale. D. EXCEPTIONS With approval from the City Council and the Mayor items of greater than nominal value may be donated to 501 ( c) (3) and 501 ( c ) (19) charitable organization or to the state or other local governments pursuant to I.C. 50-1405. E. PROCEDURES FOR DISPOSAL 1. To dispose of ani tem a Property Disposal Authorization Request must be completed. See Attachment S, Property Disposal Authorization Request 2. Once the form is complete it should be routed as follows: a. Signature (and date) of Department head b. Send to Accounting Department. Accounting will review the form for completeness, sign, and date. c. Accounting will route to Mayor for approval, Mayor will sign and date and return to accounting. d. Accounting will return the Property Disposal Authorization Form to the requesting Department so they can proceed with disposal. A copy of the form will be maintained in Accounting. e. Once the property is disposed of the Department will note on the form the final disposition of the property and forward to Accounting with asset change form. f. It is the responsibility of each Department to document actual final disposal of the property. Failure to do so will be noted on the monthly property disposal report prepared for the Mayor and Council. g. Accounting will update the fixed asset system and remove the item. Accounting will retain the documentation for audit purposes. h. Once a month accounting will prepare a report for the Council summarizing the month's disposal requests a nd a ctions. The council president will initial the report indicating that it has been reviewed.