HomeMy WebLinkAboutItem 6b. Update to Financial Management Manual Section 200 - Purchasing Policy Item 6b
Department: Finance
For Agenda of: 5/17/2022
Placement: Business
Estimated Time: 60 minutes
FROM: Brigitte Elke, Finance Director
Prepared By: Daniel Clancy, Financial Analyst
SUBJECT: UPDATE TO FINANCIAL MANAGEMENT MANUAL SECTION 200 -
PURCHASING POLICY
RECOMMENDATION
1. Approve a Resolution entitled, “A Resolution of the City Council of the City of San Luis
Obispo, California, Updating the City’s Financial Management Manual Section 200
Purchasing Policy” including applicable purchasing and competitive bid approval
thresholds; and
2. Consider changes to the local preference language for inclusion in the purchasing
policy.
DISCUSSION
Background
The City of San Luis Obispo adopts a two-year Financial Plan and appropriates annual
budgets to fund the services, programs, and projects the community expects from its
municipal government. To provide an open and public procurement process while
maintaining flexibility for the organization to execute its work programs, the City has adopted
an extensive purchasing policy to guide its procurement approach and required approvals.
This policy had last been reviewed by the Council when the City implemented its Enterprise
Resource Planning (ERP) system with Oracle in 2018. This system introduced a purchasing
module and provided the opportunity to update the policy accordingly.
Resolution No. 10888 (2018 Series) (Attachment A) established six purchase types and
five approval authority threshold levels. It mandated that the Finance Department
maintain purchasing policies and procedures that are as efficient and effective as possible
and remove any unnecessary administrative burden. Since that time, the City has
improved the ERP system and its purchasing processes and proposes further refinements
to enable proficient and efficient procurement.
Recommended Policy Updates
Utilizing the system and applying the purchasing types and thresholds adopted in 2018,
the City learned that the process is ineffective in providing efficient program and service
delivery, with too many purchase types creating an onerous approval process in the
Oracle ERP system. The policy update is the result of a collaborative effort over the past
four years amongst Finance staff, Department Heads, Fiscal Officers, City Attorney,
Business Analysts, the City Engineer, and Deputy Directors in Public Works and Utilities.
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Item 6b
The recommended approval thresholds are based on extensive research by Finance staff
on current best practices in municipal procurement, including California and National
Institute of Government Procurement award-winning agencies. The research supports
the recommended thresholds to allow for broader approval authority and administrative
flexibility.
If adopted, the updated approval thresholds will result in staff time efficiencies by reducing
the number of administrative tasks associated with them and provide improved turn -
around times in service, program, and project delivery (Attachment C – Benchmark
research & purchase data).
Local Purchasing Preference
The City's Municipal Code under Section 3.24.060E currently allows for local preference
to piggybacking on cooperative contracts and is mainly applied to fleet purchases. It states
that bidding procedures are not required "when the purchase will be made
cooperatively…or from a local dealer within the city limits who can provide the same
[good or service] identified in the cooperative contract at or below the cooperative cost
within the same terms and conditions."
On September 21, 2021, the Council held a study session to review strategies in support
of local contractors, vendors, and labor on public projects. This was one of the work
program components under the City’s 2021-23 Major City Goal for Economic Recovery,
Resiliency, and Fiscal Sustainability. The session was designed to gauge the Council’s
interest in the review for a stronger preference for local vendors. Council directed staff to
study such a preference for inclusion in the City’s purchasing policies. The preference
would only apply to goods and services as capital projects are covered under the State ’s
public contract code.
Staff research revealed that the most common local preference policy across California
government entities, such as the City of Santa Cruz, and County of Monterey apply a
legally binding percentage preference to local businesses, typically between 1 – 5%, with
5% being the most common. This means that when a local business submits a quote that
is up to 5% above a non-local business, the City would have the authority to consider it
the lowest bid at the quoted price point.
To further review the practicality of such an approach, Finance held two internal staff
meetings and has drafted a white paper of findings. The paper and the town -hall
presentation are included here for reference. (Attachment D – Local Preference Position
Paper and Local Preference Presentation)
The argument supporting local preference is financial; the City can direct its funds to local
businesses and show through policy actions its commitment to its business community.
In addition, local purchasing can increase the City's tax collections, secure employment,
and reduce the carbon footprint.
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Item 6b
The argument against local preference is that it leads to potentially higher costs to procure
goods and services. Additionally, similar policies in other jurisdictions in response could
place the City's businesses at a potential disadvantage in other jurisdictions, theoretically
leading to loss of business opportunity for local businesses. Administrative cost to
implement a preference increase as staff must consider factors to meet laws and
regulations and each additional requirement adds to the risk of error in bid evaluation,
calculation, and award. It's difficult to quantify if the potentially higher prices paid would
be recycled back to the community and achieve an overall positive economic impact. It is
for these reasons that government finance organizations have taken positions against
local preference policies, including the Government Finance Officers Association, the
National Institute of Government Procurement, the Council of State Governments, and
the International City and County Managers Association.
To better understand the City’s current local purchasing behavious, staff analyzed
purchase data in the City’s Oracle ERP system between October 1 , 2018 to April 1,
2022. It shows that the City’s current operating expenditures are 53% local (within the
City’s borders as defined by Municipal Code 3.24.060E ).
As such, staff recommends not to amend the current Municipal Code language for
additional local preference consideration. However, if Council chose to adopt a local
preference policy, staff would recommend aligning the City with the most common policy
across California jurisdictions and consider a 5% preference. (Attachment E – Draft
Ordinance and Local Preference Policy). Staff will then return to Council with a version
of Attachment E to implement the ordinance with the desired local preference.
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Item 6b
Sustainable Purchasing
Finance recommends in lieu of a focus solely on local preference, the City create a
comprehensive Sustainable Purchasing Policy that will amend the City’s
Environmentally Preferrable Purchasing Municipal Code Section 3.24.075, to
incorporate Environmental, Social, & Governance (ESG) principles. ESG is a holistic
philosophy that accounts for an organizations environmental performance, but also
measures social performance such as how an organization treats employees, and
customers, with consideration of diversity and equity and how the organization is
governed.
On August 18, 2020, Council amended the City’s investment policy to include ESG
investing; Finance recommends adding ESG criteria not just f or the City’s investments,
but also the City’s purchases of goods and services. The policy will concurrently include
metrics on sustainable purchasing to report on and proper management of ESG
principles and create meaningful measurements of success.
To that end, Finance staff is working with the Office of Sustainability and Natural
Resources to draft a Sustainable Purchasing Policy and will return to Council with an
appropriate recommendation by the end of calendar year 2022. The Purchasing Policy
update contemplated with this report contains the Municipal Code language as currently
written in section 3.24.075.
Additional Sections
To present a comprehensive picture of all applicable considerations when purchasing
and contracting on behalf of the City, staff added several new sections to the policy.
They are either administrative in nature or pertain to new State legislation that tri gger
purchasing considerations.
New: Section 277 - California SB 1383 Cal-Recycle Regulations for Paper Products
SB 1383 establishes statewide targets to reduce the amount of organic waste disposed
of in landfills (50% reduction by 2020 and 75% by 2025). In addition, SB 1383 mandates
that the City purchase at least 30% recycled-content paper if “fitness and quality are
equal”. The City's Municipal Code 3.24.075 allows for a ten (10%) price preference for
recycled content products; so the City is not man dated to purchase 30% (or higher)
recycled content paper products if they cost over 10% more than non-recycled products.
The purchasing division is working to establish preferred recycled paper product lists
and is working with the City’s printing contractors to use recycled content paper when
cost is feasible. Purchasing staff have led multiple trainings for staff around the SB1383
requirments, which has led to a significant increase in recycled-content paper products
purchases since the start of the year.
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Item 6b
New: Section 255 – Contract Terms and Conditions
The City uses standard templates when entering into contract with vendors and
consultants. They are approved by the City Attorney as to form. When reviewing the
current templates, it became apparent that they do not address the various
considerations that need to be given depending on the nature of the contractual
obligation and the product/service it contracts for. For completeness, staff created a new
section within the manual to outline the standardized and thematic templates now in use
to address the following considerations:
Cost efficiencies: standardization lowers transaction costs by reducing time
spent drafting;
Faster negotiation: standardization results in more certainty around contract
terms;
Mitigate risk: standardization locks in must-have terms and reduces one-on-one
negotiation;
Increase Staff Productivity: Reducing time drafting and negotiating contracts
results in efficiencies and time savings;
Mitigate Insurance Risk: Standardization of contracts also standardizes the
City's insurance coverage for each standardized contract type
New: Section 274 - Insurance – Contractual Risk Transfer Management
As mentioned above, the review of the contract terms and conditions also prompted a
review of the City’s current insurance requirements for certain contract types. The review
revealed that the City does not currently apply requirements according to the con tracted
product or service and uses instead a “one size fits all” approach. The review of the
policy triggered a different approach to better protect the City as all procurement and
contracting contains an element of risk exposure. Section 274 therefore i ntroduces
policies and procedures to standardize assessment of City procurement for potential risk
and assigns the appropriate insurance coverage. This work led to an expansion of the
City’s standardized insurance coverage templates from five (5) to twenty-six (26)
different coverage templates.
Administrative Changes
The review of the policy also offered staff an opportunity for several administrative
changes and corrections throughout the document. To facilitate the review of those
changes, staff drafted an abridged summary of changes to the policy that includes a full
redline document. Both documents are attached to this report under (Attachment F –
Summary of Changes including redline version)
Policy Context
The proposed updates comply with Municipal Code Section 3.24.040: “The City
administrative officer shall approve and implement a manual of purchasing policies and
procedures and shall make such a manual available to the Council for inspection.” (Ord.
1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.4)
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Item 6b
Public Engagement
Public Comment on the item can be provided to the City Council through written
correspondence prior to the meeting and through public testimony at the meeting.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in
this report because the action does not constitute a “Project” under CEQA Guidelines
Sec. 15378.
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Total $0 $0 $0 $0
All procurement and purchases are considered annually with the City’s budget
appropriation. As such, the update to the policy does not trigger an additional fiscal
impact, but provides efficiencies and the fiduciary oversight of how the City procures
goods, services, and public projects.
ALTERNATIVES
1. Council could decide not to approve the updates. This action is not recommended
since the updates ensure efficient program and service delivery while ma intaining
fiscally prudent oversight and approval thresholds.
2. Council could decide to approve selective parts to the update. This is not
recommended since the review of all components were carefully researched and
evaluated to provide the City with an updated purchasing policy in consideration of
best practices, Major City Goals, and organizational effectiveness.
ATTACHMENTS
A - Resolution 10888 (2018 Series) Policy Update
B - Draft Resolution approving an update to Policy Update
C - Benchmark Thresholds
D - Local Preference Memorandum and Presentation
E - Local Preference Draft Ordinance Example
F - Summary of Changes and redline version of policy
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Financial Management Manual
Purchasing Policy Update – October 2018
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 3
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201-1
Section 201
OVERVIEW
The purpose of this chapter is to guide staff members in purchasing goods and services on behalf
of the City by establishing responsibilities and authorization levels, outlining statutory
requirements, and setting forth the policies and procedures that govern purchasing activities.
These guidelines are not intended to address every issue, exception or contingency that may arise
in the course of purchasing activities. Accordingly, the basic standard that should always prevail
is to exercise good judgment in the use and stewardship of City resources. Any questions about
purchasing activities or proper purchasing process should be referred to the City’s Purchasing
Division.
PURCHASING SYSTEM OBJECTIVES
Along with three other key policy documents— the City Charter, purchasing ordinance (Chapter
3.24 of the Municipal Code) and purchasing resolution—the policies and procedures set forth in
this chapter form the City's purchasing system. This system has been developed in order to
achieve the following objectives:
Secure goods and services at the lowest cost possible commensurate with quality
requirements and the City’s needs.
Establish authority, responsibility and accountability for purchasing activities conducted on
behalf of the City.
Ensure appropriate levels of competition and provide an equal opportunity for all qualified
vendors to do business with the City.
Ensure compliance with purchasing policies and procedures.
Standardize procedures where appropriate to ensure that organization-wide policies and goals
are achieved.
Implement simple yet effective internal control procedures that appropriately support
planning, maximize productive use of public funds and protect City assets from unauthorized
use.
Coordinate organization-wide purchasing activities for commonly used items.
INTRODUCTION
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 4
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Introduction
PURCHASING AUTHORITY
The City's purchasing ordinance delegates purchasing authority to the City Manager as well as
any other representatives designated by her or him:
Developing and prescribing such administrative policies, forms and files as may be
reasonably necessary for the internal management and operation of City purchasing policies
and procedures.
Purchasing or contracting for supplies, equipment, services and construction projects as
required by the operating departments in accordance with City purchasing policies and
procedures.
Negotiating and recommending execution of contracts.
Ensuring appropriate levels of competitive bidding for all purchases.
Ensuring compliance with purchasing policies and procedures.
PURCHASING FUNCTION
The City’s purchasing functions is centralized within the Finance Department, Purchasing
Division, that coordinates purchasing processes and monitors compliance with the policies
contained in this manual. The Purchasing Division is managed by the City’s Purchasing Analyst
under direction of Finance Director.
The Purchasing Division shall be independent from other departments and the independent
exercise of procurement authority is an important piece of the City’s overall system of internal
controls.
To provide effective purchasing services throughout the City, the Purchasing Analyst shall be
tasked with:
Be aware of the needs of City departments and acquainted with sources and availability of
supplies, equipment, and certain services which will best fulfill these needs. This requires
an ongoing dialog with City departments in which their needs are discussed and during
which Purchasing indicates information required and lead-times necessary to complete
procurement transactions.
Arrange interviews between suppliers and representatives of the various City divisions to
discuss specific needs.
Coordinate bidding processes in compliance with these Policies.
Purchase all items at pricing and terms most advantageous to satisfy the normal needs of the
City for a reasonable length of time.
Process purchasing requests as expeditiously as possible, in a manner consistent with these
Policies.
General responsibilities for setting and implementing purchasing system policies and procedures
201-2
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 5
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are summarized in Exhibit 201-A.
PURCHASING SYSTEM OVERVIEW
Regardless of the type of item or service being acquired, virtually every purchase transaction
goes through seven distinct stages in varying degrees:
Assessing and determining resource needs.
Developing specifications.
Soliciting and evaluating quotations, bids or proposals.
Selecting the best proposal.
Awarding the contract or purchase order and authorizing work to proceed.
Receiving and inspecting goods or services to ensure they conform with specifications.
Paying the vendor when contract terms have been met.
The type of purchase as well as its estimated cost determine the formality with which each stage
is completed and documented. For this purpose, the City has identified five basic types of
purchases:
General Goods Purchases. Contracts and purchases for supplies and equipment, including
basic IT equipment.
General Services Purchases. Contracts and purchases for operating and maintenance
services, including basic IT maintenance services.
IT Systems Purchases. Contracts and purchases of large-scale IT systems.
Public Projects. Construction, reconstruction, erection, alteration, renovation, improvement,
demolition, painting, repainting, and repair work involving any publicly owned, leased, or
operated facility (Public Contract Code 22002c).
Consultant Services. Professional work provided to the City by specially trained and
experienced individuals or firms regarding economic, financial, engineering, planning,
architectural, environmental, legal or administrative matters.
Procedural categories, purchasing authority levels and features for each of these purchase types
are summarized in Exhibit 202-A.
201-3
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 6
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Purchasing System Responsibilities Exhibit 201-A
Approve City Charter
Adopt purchasing ordinance.
Adopt resolution setting purchasing guidelines.
Approve Requests for Bids (IFBs) and Requests for
Proposals (RFPs) documents for purchases specified in
Section 202.
Delegate authority to award contracts if they are within
budget to the City Manager.
Award contracts if they exceed the approved budget from
the RFB/RFP.
Implement purchasing policies.
Delegate purchasing authority.
Approve RFB’s/RFP’s for purchases specified in Section
202.
Award contracts as specified in Section 202.
Develop and implement purchasing guidelines.
Monitor and evaluate system performance.
Set payment schedule.
Approve Purchase Requests as specified in Section 202.
Develop and implement city-wide purchasing
procedures
Review and approve purchase orders and contracts for
proper authority and terms.
Route contracts for signature and maintain complete
database for all goods and services contracts.
Assist departments in development of solicitations (RFB,
RFP, RFQ, Quick Quote, etc.).
Create and manage master agreements and Blanket
Purchase Orders for centralized and aggregate
purchasing (e.g. office supplies; off-site copying,
scanning and document destruction).
Approve RFB Specifications for public projects.
Approve Job Order Contract (JOC) task orders for public
projects as specified in Section 202.
Voters
City Council
Purchasing Authority
City Manager/Designee)
Finance Director/Budget
Manager
Purchasing Analyst
City Engineer
201-4
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 7
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Develop and implement departmental purchasing
procedures.
Delegate departmental purchasing authority.
Approve departmental Purchase Requests and award
departmental contracts as specified in Section 202.
Purchase, receive and pay for goods and services in
accordance with City and departmental guidelines.
Approve invoices or payment requests for departmental
purchases.
Notify potential vendors/contractors of City Business
License requirement
Maintain required purchasing records.
Manage departmental inventories.
Department Heads
Authorized Employees
201-5
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 8
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Section 202
PERMITTED PURCHASING METHODS
There are three methods for departments to use to acquire goods and services:
1) Purchase Requisition/Purchase Order
2) City Credit Card (Purchasing or P-Card)
3) Emergency Purchases
For small or recurring purchases, the City encourages authorized employees the use of the City P-
Card (See Section 275). Exceptions to this rule may be set forth by Accounting Procedures Section
of the Financial Manual allowing the City Finance Department and/or Fiscal Officers payment with
credit card for specific purchases. For all other purchases, departments must use the requisition
process defined below:
Purchase Type Dollar Threshold Requirements
Purchase Requisition $0 – Unlimited Must obtain all approvals
required in this Section
below
P-Card $0 – $5,000* Not Permitted for large
purchases, purchases for
services, Capital Items
Emergency Purchase NA ONLY if there is an
immediate and serious
need for equipment,
supplies, or services that
cannot be met through
normal purchasing
procedures and where the
lack of such equipment,
supplies or services would
seriously threaten the
functioning of City
government, the
preservation of property,
or the health or safety of
any person;
Limit can be raised with Department Head approval.
PURCHASE REQUISITIONS AND PURCHASE ORDERS
Purchase Requisitions
All Purchase Requisitions, with the exception of purchases with a P-Card or Emergency Purchases,
must be done through a Purchase Requisition. A Purchase Requisition is an internal document
PURCHASING PROCESSPURCHASING PROCESS
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 9
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electronic form) created in the City’s financial system that:
Initiates an order by one or more departments;
Identifies the equipment, materials, supplies, goods or services required
Identifies the specific funds (account codes) that will be used to pay for the order
If known, identifies recommended or potential vendors, or leaves vendor selection up
to Purchasing
Is approved by appropriate City representatives to grant budget authority to make the
purchase
Upon approval, allocates or pre-encumbers funds to support the purchase.
All purchase requisitions will be entered into the financial system by the purchase requestor. The
requestor will be responsible for entering and validating the accuracy of the following:
1) Item/services description
2) Quantity
3) Price, or if price is not known, budgeted or estimated amount*
4) Commodity Code
5) Account code
6) Vendor (if known)
7) List all other required information
8) Attached Supporting Documents (attach all applicable):
a. Quotes/Proposals
b. Quote Summaries/Comparisons
c. Agreement (Standard Agreement, On-Call Agreement, Cooperative
Agreement)
d. JOC Task Order
e. RFP/RFB package
f. Sole Source Approvals
g. Council Action Report for Council approval
Purchase Requisition Process
Departments must submit requisitions in the ERP system. Purchase Request approval levels are
determined by which tier a specific purchase falls into, which is determined by the purchase type
and value. See Exhibit 202-A for purchase tier thresholds.
202-2
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 10
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Purchase Requisition Approvals & Solicitation Requirements
Tier Solicitation
Required
Level 1
Approver
Level 2
Approver
Level 3
Approver
Level 4
Approver
Purchasing
Involvement
1 None Fiscal Officer None None None None
2 Informal Quotes* Fiscal Officer Department
Head
None None Assist with Quotes
when requested
3 Formal Bidding* Fiscal Officer Department
Head
None None Assist with
RFP/RFB package
when requested
4 Formal Bidding* Fiscal Officer Department
Head
Budget
Manager
City Manager Assist with
RFP/RFB package
when requested
5 Formal Bidding* Fiscal
Officer**
None None None Assist with
RFP/RFB package
when requested
Note: Quotes and bidding processes are not required for purchases made pursuant to Sections X of this Manual.
All other approvals will be applied in the external Council Agenda Report process.
Purchase Orders
A purchase order is a document used to encumber funds and formalize a purchase transaction with a
vendor. It sets forth the vendor’s obligations as well as the City’s responsibilities and requirements.
Purchase Orders allow the City to clearly and explicitly communicate their intentions to vendors.
Purchase orders may include:
1) Price
2) Description of the requested item(s) or services
3) Delivery terms and transportation mode
4) Terms and conditions, and all other agreements pertinent to the purchase and its
execution by the vendor
5) Attached Supporting Documents
a. Incorporated Agreements (City Agreements, Cooperative Agreements)
b. Incorporated Quotes/Proposals
c. Council Action Report (if Council approval is required for award of a
contract/purchase order)
A vendor’s acceptance of a Purchase Order constitutes a contract. Purchase Orders shall be issued by
the Purchasing Division after all required procedures for selection are met.
There are three types of Purchase Orders:
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EXHIBIT A Page 11
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1) Regular Purchase Order - a nonrecurring order, written to a specific vendor for a definite
quantity of identified item(s). It is the most appropriate method used for purchase of supplies
and services.
2) Blanket Purchase Order – a Purchase order which authorizes repetitive purchases of goods and
services from a specific vendor up to a maximum, not-to-exceed dollar amount. It is valid from
date of issuance until the end of a fiscal year or specific date (unless funds are depleted sooner).
3) Contract Purchase Order – a Purchase order with an underlying Agreement that is set up for
encumbrance purposes only. This is used when all work descriptions, costs and terms are
incorporated in a City Agreement and the Contract PO is not distributed to the contractor.
202-4
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EXHIBIT A Page 12
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Purchase Order Process
Upon approval of a PR and after any competitive bidding is completed, the Purchasing Division will
create a Purchase Order. Purchase Order approval levels are determined by which tier a specific
purchase falls into, which is determined by the purchase type and value. See Exhibit 202-A for
purchase tier thresholds.
Purchase Order Approvals
Tier Level 1 Approver Level 2 Approver Level 3 Approver Purchasing Involvement
1 Purchasing Assistant None None Create PO and issue
2 Purchasing Assistant Purchasing Analyst None Assist with obtaining quotes
when requested; Review quote
summary; Create PO and issue
3 Purchasing Assistant
City Attorney (for
contract review only)
Purchasing Analyst None Coordinate RFP/RFB process;
Coordinate contract routing
and execution; Create PO and
issue
4 Purchasing Assistant
City Attorney (for
contract review only)
City Manager Purchasing Analyst Coordinate RFP/RFB process;
Coordinate contract routing
and execution; Create PO and
issue
5 Purchasing Assistant
City Attorney (for
contract review only)
City Manager* Purchasing Analyst Coordinate RFP/RFB process;
Coordinate contract routing
and execution; Create PO and
issue
City Manager approval is only required if the contract/PO award was delegated by Council. If a Council Action Report
approving the contract/PO is attached, City Manager approval is not required
PURCHASE CARD/CITY CREDIT CARD PURCHASES
Credit Card purchases are discussed in Section 275 of this manual.
EMERGENCY PURCHASES
Emergency Purchases are discussed in Section 220 of this manual.
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Purchasing Thresholds Exhibit 202-A
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Purchasing Thresholds Exhibit 202-A
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Section 203
For purchases exceeding the City’s thresholds listed in Exhibit 202-A which do not fall within the
exceptions listed in Section 220 of this Manual, City staff must engage in competitive bidding in
some form, as required by the Municipal Code. Departments should work with the Purchasing
Division for competitive bidding processes.
TYPES OF SOLICITATIONS
Requests for Bids (RFB)
An RFB is a request to vendors to submit an offer or quote for specific, defined goods or products.
An RFB should be used when seeking a fixed price for goods with known specifications (e.g. Dell
XPS 13 laptops). RFBs are used for Construction of Public Project and when setting up a Job Order
Contract (discussed in Section 250 of this Manual). RFBs must be posted on the City’s designated
solicitation site.
Requests for Proposals (RFP)
An RFP is a request to vendors to submit a proposal for goods or services for which the exact
specifications or methodology of providing the desired goods or services is not defined. An RFP is
generally used for more complex goods or services purchases. RFPs allow for consideration of factors
other than price, including the qualifications of the vendor and the vendor’s ability to perform. RFPs
must be posted on the City’s designated solicitation site.
Requests for Qualifications (RFQ)
An RFQ is a request for a statement of qualifications for a certain class of vendors or consultants.
RFQs are used to develop On-call or Master Agreements. RFQs must be posted on the City’s
designated solicitation site.
Informal Quotes/Quick Quotes
When formal bidding is not required by the City’s purchasing policy (see Section 202 of this Manual),
staff may seek informal quotes either by posting a Quick Quote request on the City’s online solicitation
program or by seeking quotes by verbal or written request. An informal or quick quote is a simple
request for pricing on simple, low-cost goods or services. If quotes are sought by verbal or written
request, staff must create a quote summary to record the quotations received.
BIDDING PROCESS
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 16
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BIDDING CRITERIA
RFB RFPs RFQ Quick Quotes
Formal Solicitation Yes Yes Yes No
Goal Lowest Price Lowest Responsible
Bidder
Most Qualified Bidder Lowest Price
Public Opening
Requirements
Opened publicly and
read aloud
Opened publicly and
pricing read aloud
Not opened publicly
List of vendors who
submit Qualifications
made publicly
available
Not opened publicly
Response Evaluated By Department with
Purchasing assistance
Department project
team
Formal Evaluation
Committee with
numerous
participants
Department with
Purchasing
assistance
Specific Evaluation
Process
Determine whether
Bid is responsive,
then select lowest
responsive Bid.No
scoring of
specification
response is involved.
Responses reviewed
to determine
responsibility of
proposals.
Responsible
proposals are
reviewed for factors
listed in Section
3.24.210 of the
Municipal Code
Statement of
qualifications
evaluated and a score
assigned.Some
specification
responses can be
pass/fail only with no
associated score.
Determine whether
Quote is responsive,
then select lowest
responsive Quote.
No scoring of
specification
response is involved.
Cost Evaluation Process Costs for responsive
bids are compared to
each other to identify
lowest cost
Cost for responsible
bids are compared to
each other to identify
lowest cost
If applicable,costs of
labor or services are
scored
Costs for responsive
quotes are
compared to each
other to identify
lowest cost
Negotiation Allowed
after Selection
No,unless all bidders
are asked for a Best
and Final Offer
BAFO)
Yes Yes No,unless all
bidders are asked
for a Best and Final
Offer BAFO)
Award Basis Lowest responsible
bidder wins
Lowest responsible
proposal wins
Evaluation Committee
Recommendation
Lowest responsive
quote wins
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EXHIBIT A Page 17
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BIDDING PROCESSES
RFB Process
The following process shall be employed when releasing an RFB:
RFB Package
The City’s template “RFB Package” must be used to create the RFB document provided to prospective
vendors (See Section 250 of this Manual). When posting the RFB, the following should also be
included:
1)A precise description of the desired goods;
2)The time and place of public opening of sealed Bids;
3) The location and deadline for submission of Bids;
4)The deadline for submission of questions (if applicable).
RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids or
with electronic encryption for electronic bids) and must be opened publicly at a designated location,
date and time.
Bids or proposals which are received after the date and time specified or in a different format than that
requested in the solicitation may not be considered.
RFB Evaluation/Bid Tabulation
Departments, in cooperation with Purchasing, must determine if the submitted bids are responsive
i.e.: did the bid provide quotes for the specified goods, as requested). Then, the lowest responsive
bid must be selected for award.
203-3
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RFB Award
Bidders should be notified when a bid has been selected for award and that award has been approved
see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). If the City
is unable to agree to contract terms with the selected vendor after a good faith effort, the award may
be given to the next lowest, responsive bid.
Non-Construction RFP Process
The following process shall be employed when releasing an RFP:
Non-Construction RFP Package
The City’s template “Regular RFP Package” must be used to create the RFP document provided to
prospective vendors (See Section X of this Manual). When posting the RFP, the following should
also be included:
1)A general description of the desired goods or services to be purchased;
2) The desired qualifications of proposers;
3)The information or documentation required for submission of proposals;
4)The date, time and location of public opening of sealed Proposals;
5)The location and deadline for submission of Proposals;
6)The deadline for submission of questions (if applicable);
7)The date, time and location of the pre-bid conference (if applicable).
Non-Construction RFP Submission and Opening
All RFP submissions (proposals) must be sealed (whether in a sealed, unopened envelope for paper
bids or with electronic encryption for electronic bids) and must be opened publicly at a designated
location, date and time.
Proposals which are received after the date and time specified or in a different format than that
203-4
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EXHIBIT A Page 19
Page 1063 of 1284
requested in the solicitation may not be considered.
Non-Construction RFP Evaluation/Bid Tabulation
The department in cooperation with Purchasing will first determine whether proposals are responsive
to the RFP. Then, a designated evaluation team (subject matter experts, department stakeholders) will
review responsive proposals using the criteria listed in Section 3.24.210 of the Municipal Code. The
lowest responsible proposal will then be recommended for award.
For professional services related to project management, construction management, design,
engineering, surveying, mapping, landscape architecture, or architectural related services are to be
evaluated based on demonstrated competence and qualifications for the type of professional services
desired. As such, price shall not be used as a criterion in the evaluation and ranking/selection of the
most highly qualified firm.
Non-Construction RFP Award
Proposers should be notified when a proposal has been selected for award and that award has been
approved (see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). If
the City is unable to agree to contract terms with the selected vendor after a good faith effort, the award
may be given to the next highest scored, responsive bid.
Construction/Public Project RFB
The following process should be employed when releasing an RFP related to construction or public
projects:
Public Project RFB Package
The City’s template “Public Project RFB Package” must be used to create the RFB document provided
to prospective bidders (See Section X of this Manual). When posting the RFB, the following should
also be included:
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 20
Page 1064 of 1284
1)A general description of the desired work, goods, or services to be purchased;
2)The desired qualifications of proposers, including licensing requirements;
3)The information or documentation required for submission of proposals, including bid bonds
requirements;
4)Information regarding applicable prevailing wage laws;
5)The date, time and location of public opening of sealed Proposals;
6)The location and deadline for submission of Proposals;
7)The deadline for submission of questions (if applicable);
8)The date, time and location of the pre-bid conference (if applicable).
Public Project RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids or
with electronic encryption for electronic bids) and must be opened publicly at a designated location,
date and time.
Bidders which are received after the date and time specified or in a different format than that requested
in the solicitation may not be considered.
Public Project RFB Evaluation/Bid Tabulation
The department will first determine whether proposals are responsive to the RFB. All responsive bids
will be tabulate and bid pricing compared. The lowest cost responsive bid will then be recommended
for award.
Public Project RFB Award
Bidders should be notified when a bid is recommended for award and that award has been approved
see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual).
RFQ Process
The following process shall be employed when releasing an RFQ for On-Call or Master Agreements:
203-5
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EXHIBIT A Page 21
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203-6
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EXHIBIT A Page 22
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RFQ Package
The City’s template “RFQ Package” must be used to create the RFQ document provided to prospective
vendors (See Section 250 of this Manual). When posting the RFQ, the following should also be
included:
1)A general description of the type of services to be included in the On-Call Contract or Master
Agreement;
2) The desired qualifications of proposers;
3)The information or documentation required for submission of qualifications;
4) The date, time and location of public opening of sealed Qualifications;
5) The location and deadline for submission of Qualifications;
6)The deadline for submission of questions (if applicable).
RFQ Submission and Opening
RFQ submissions (qualifications) do not need to be before opening. City Staff shall make the list of
vendors who submit Qualifications in response to an RFQ available to the public upon request.
Qualifications which are received after the date and time specified or in a different format than that
requested in the solicitation may not be considered.
RFQ Evaluation
The department will score the Qualifications submitted in response to the RFQ. The vendor(s) deemed
most qualified will then be recommended for award.
RFP Award
Vendors who submit Qualifications should be notified when an award has been approved (see
procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). Resulting On-
Call Contracts and Master Agreements must be re-bid every 5 years.
Quick Quote (Informal Quote) Process
Tier 2 purchases may be made utilizing an informal quotation process. Staff should seek at least three
quotes either in writing, by phone or utilizing the City’s electronic solicitation system. Staff must then
select the lowest responsive quote.
203-7
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EXHIBIT A Page 23
Page 1067 of 1284
204-1
Section 204
LOW COST PURCHASING
Tier 1 purchases do not require a competitive bidding process (see Section X for amount thresholds
for Tier 1 purchases). However, City staff should seek cost comparisons whenever practical.
SOLE SOURCE PURCHASING
General Rules
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or
services for specified dollar amounts and to select vendors on a competitive basis. However, pursuant
to San Luis Obispo Municipal Code Chapter 3.24.060 (C), certain acquisitions in which the products
or services may only be obtained from a single source may be purchased without engaging in bidding
procedures.
A “sole source” purchase may be entered into without a competitive process because only one known
source for the desired goods or services exists, only a single provider can fulfill the requirements to
meet the City’s needs, or the purchase constitutes an upgrade to an existing system adopted by the
City. In such circumstances, competition is not feasible and, therefore, the competitive process is
waived.
Some examples of legitimate sole source purchases include the following:
Purchases in which only one known source exists for the goods or services as determined by
documented research
Purchases in which there is no reasonable alternative source that meets the City’s needs
Purchases in which only one source meets the City’s business needs (e.g., compatibility with
existing systems, unique features that serve the desired goals of the City, etc.).
Purchases of proprietary items which only the manufacturer, owner, or designated re-seller is
permitted sell (this includes purchases in which purchasing from a non-designated seller
would result in nullification of manufacturer warranties)
Upgrades to existing systems where purchasing a different solution or product would result in
significant additional costs (e.g., data conversion, re-training of staff, new system
implementation costs)
Purchases of services from a contractor with specific and unique knowledge of existing City
systems, procedures or historical data that is critical to the project or city goals where use of
another contractor would result in significant costs or project delays due to lack of such
knowledge.
Some examples of non-legitimate sole source purchases include the following:
Purchases of proprietary goods or services that may be sold by more than one source (i.e.,
multiple resellers may sell one proprietary piece of software)
Brand name preferences
o Exception: If a specific line of products was previously chosen through a proper
process and has been adopted citywide (e.g.: Dell computer products)
Preferred vendors (i.e., vendors with whom the purchaser has a prior relationship)
NO-BID PURCHASING
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 24
Page 1068 of 1284
204-2
Procedure
Sole Source purchases must be justified in sufficient detail to explain the basis for suspending the
usual competitive procurement process and approved by the approving authority before such a
purchase is made. The City’s Sole Source Justification form (located in the Purchasing SharePoint
page) must be submitted to and approved by the Purchasing Analyst prior to any sole source purchase.
Approved Sole Source Justifications should be attached to Purchase Orders when submitted for a sole
source purchase.
Once approved, a sole source is effective for one-year (so, multiple purchases may be made under
one sole source approval if a department makes multiple purchases of the same products or services
throughout the year). The Purchasing Analyst shall maintain copies of approved sole sources.
EMERGENCY PURCHASING
General Rules
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or
services for specified dollar amounts and to select vendors on a competitive basis. However, pursuant
to San Luis Obispo Municipal Code Chapter 3.24.060 (B), purchases that address an immediate and
serious need for equipment, supplies or services may be purchased without engaging in bidding
procedures, if:
1)The City’s need for the equipment, goods or services cannot be met through the time
constraints of the normal purchasing procedures; and
2)The lack of the equipment, goods or services would seriously threaten the functioning of City
government, the preservation of property, or the health or safety of any person.
City staff must not use the emergency purchase process to circumvent general purchasing policy or
vendor licensing requirements. City staff should seek quotes and determine reasonableness of pricing
when making an emergency purchase whenever possible. Contracts for frequent as-needed
emergency services should be established with competitive bidding procedures.
Procedure
Emergency purchases must be justified in sufficient detail to explain the basis for suspending the
usual competitive procurement process. Whenever possible, City staff in need of an emergency
purchase should receive prior approval from the Purchasing Division by submitting the City’s
Emergency Purchase Justification Form (located in the Purchasing SharePoint page).
If prior approval is not feasible, City staff should submit the Emergency Purchase Justification Form
to the Purchasing Analyst as soon as possible and at least within 24 hours after the purchase has been
made.
Unless a City credit card is used for the purchase, City staff must enter a Purchasing Requisition for
the emergency purchase as soon as possible and should attach the Emergency Purchase Justification
Form to the requisition.
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 25
Page 1069 of 1284
204-3
COOPERATIVE AGREEMENT PURCHASING
City staff may use established cooperative agreements for purchases without a competitive bidding
process, if those cooperative agreements were competitively bid. City staff is responsible for
researching cooperative agreements to insure the bidding process complies with City competitive
bidding rules.
City staff should research the pricing for the goods or services being sought and compare the pricing
set forth in the cooperative agreement is reasonable. If the pricing set forth in a cooperative agreement
is not reasonable, City staff should initiate a competitive bidding process rather than leveraging the
cooperative agreement.
Local Dealers
If a local dealer within City limits can provide the same brand, model and configuration of any item
in a cooperative purchase agreement at or below the cooperative agreement vendor’s cost with the
same terms and conditions, City staff may use the local dealer without initiating a separate
competitive bidding process.
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 26
Page 1070 of 1284
215-1
Section 215
BUSINESS LICENSES
The City requires most entities doing business within or transacting with the City to obtain a business
license, pursuant to Chapter 5.01 of the Municipal Code. Therefore, for most purchases, City staff
must notify the vendor of the requirement and/or ensure that the vendor has a business license before
making the purchase. No purchases may be made from any vendor that does not have a valid business
license, unless specifically exempted from that requirement, as specified below.
Businesses that have a place of business within City limits must have a business license. City staff
may not transact with such businesses who have failed to maintain a business license.
Whenever possible, City staff should direct purchases to vendors who already have a valid business
license. A current listing of businesses who have valid business licenses is located in the Purchasing
SharePoint page.
EXCEPTIONS
The following types of vendors are exempt from the business license requirement:
Business that are owned and operated solely by minors under the age of 18;
Charitable, religious and nonprofit organizations;
Any business for which requiring a business license would violated Federal or State laws or
contractual agreements;
Out-of-state businesses (exempted by the Finance Director, pursuant to the adjustment powers
set forth in Section 5.01.501);
Businesses which are not located in the City and for which the only transaction or business with
the City is an online purchase initiated by the City (exempted by the Finance Director, pursuant
to the adjustment powers set forth in Section 5.01.501).
POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION)
Businesses who do not have a place of business within the City and do limited, low-cost (less than
5,000) and/or one-time transactions with the City may not be subject to the business license
requirement. This is determined on a case-by-case basis by the Purchasing Analyst, as the Finance
Director’s designee, after a determination of whether the busin ess has a sufficient nexus with the City.
City staff should contact Purchasing prior to making a purchase if there is any uncertainty as to
whether a business license is required.
BUSINESS LICENSE REQUIREMENT
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 27
Page 1071 of 1284
Section 295
In accordance with the policy framework set forth in Chapter 3.24 of the municipal code, City
purchases and contracts (including those for rentals and leases, but excluding those for real
property) will be made pursuant to these guidelines. Applicable competitive bidding categories,
authorization limits or contract award procedures will be based on unit cost, total purchase cost
for consolidated bid items or fiscal year aggregates in the case of blanket purchase orders or
similar ongoing purchasing arrangements. Staging of purchases in order to avoid these
competitive bidding procedures or authorization limits is prohibited.
Purchases and contracts for supplies, equipment, operating or maintenance services will be made
pursuant to the following guidelines (see Tier Structure in Section 202 of this Manual and Approval
Dollar Thresholds in Exhibit 202-A of this Manual):
A.Over-the-Counter. Purchase Requisition with cumulative costs which fall into the Tier 1
approval structure may be authorized by the Fiscal Officer. Purchase Orders for these
purchases may be authorized by the Purchasing Assistant. Although no specific solicitation
requirements are established for this level of purchase, competitive bidding should be used
whenever practical and City staff should ensure that pricing is reasonable.
B.Open Market. Purchase Requisitions with cumulative costs which fall into the Tier 2
approval structure must be approved by the Fiscal Officer and Department Head. Purchase
Orders for these purchases must be approved by the Purchasing Assistant and Purchasing
Analyst.
C.Formal Bids or Proposals. Purchases which fall into the Tier 3, Tier 4 or Tier 5 approval
structure will be made pursuant to the formal bidding requirements established in Chapter 3.24
Article III) of the municipal code. Authority to approve specifications, invite bids or request
proposals and award contracts will be as follows:
1.Purchase Requisitions with cumulative costs which fall within the Tier 3 approval structure
must be approved by the Fiscal Officer and Department Head. Purchase Orders for these
purchases must be approved by the Purchasing Assistant and Purchasing Analyst.
2.Purchase Requisitions with cumulative costs which fall within the Tier 4 approval structure
must be approved by the Fiscal Officer, the Department Head, the Budget Manager and the
City Manager. Purchase Orders for these purchases must be approved by the Purchasing
Assistant, the Purchasing Analyst and the City Manager. The City Attorney will also
review specified Purchase Orders by request of the Purchasing Analyst when contract
review is required.
3.Purchases with cumulative costs which fall within the Tier 5 approval structure must have
prior approval of the City Council attached (the Council Agenda Report process will be
used to obtain Council approval). Purchase Requisitions for these purchases must be
approved by the Fiscal Officer. Purchase Orders for these purchases must be approved by
the Purchasing Assistant and the Purchasing Analyst. Purchase Orders for which the
award was delegated to the City Manager by Council will additionally be approved by the
City Manager. The City Attorney will also review specified Purchase Orders by request
of the Purchasing Analyst when contract review is required.
PURCHASING GUIDELINES
295-1
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EXHIBIT A Page 28
Page 1072 of 1284
PUBLIC PROJECTS
Contracts for public projects are governed by the Public Contract Code including the Uniform
Public Construction Cost Accounting Act (Section 22000), which allows alternative bidding
procedures and job order contracting (Council Ord. 1435, 2003).
Job Order Contracts. Under the Job Order Contact provisions of Chapter 3.24.145 of the
municipal code for maintenance-related construction projects, individual Task Orders may be
approved as follows:
1.Purchase Requisitions for Job Order Contract Task Orders under $45,000 must be approved
by the City Engineer. Purchase Orders for these Task Orders must be approved by the
Purchasing Assistant and Purchasing Analyst.
2.Purchase Requisitions for Job Order Contract Task Orders between $45,000 and $174,999
must be approved by the City Engineer and the Budget Manager. Purchase Orders for these
Task Orders must be approved by the Purchasing Assistant.
3.Purchase Requisitions for Job Order Contract Task Orders with a cost of $175,000 or more
must be approved by the City Engineer, the Budget Manager and the City Manager if the
purchase is within the annual limit. Purchase Orders for these Task Orders must be
approved by the Purchasing Assistant and Purchasing Analyst.
4.If the Task Order cost is $175,00 or more and in excess of the annual limit must have prior
approval of the City Council attached (the Council Agenda Report process will be used to
obtain Council approval). Purchase Requisitions for these purchases must be approved by the
City Engineer. Purchase Orders for these purchases must be approved by the Purchasing
Assistant and the Purchasing Analyst.
Adopted by the Council on September 4, 2007, Resolution No. 9926, and amended by Council on May 1, 2018, Resolution No. X.
295-2
Resolution No. 10888 (2018 Series)
EXHIBIT A Page 29
Page 1073 of 1284
Page 1074 of 1284
R ______
RESOLUTION NO. _____ (2022 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, UPDATING THE CITY’S FINANCIAL
MANAGEMENT MANUAL – SECTION 200 PURCHASING POLICY
WHEREAS, in the course of conducting City operations it is necessary to purchase
a broad range of goods and services; and
WHEREAS, in addition to the requirements of the City's Charter, the Council has
adopted policies and procedures as set forth in Chapter 3.24 of the Municipal Code that
require the Council to specify by resolution the dollar amount of purchases and contracts
requiring the use of either open market or formal bidding procedures, and the level of
authority required to authorize solicitations, award contracts, and approve Job Order
Contract Task Orders; and
WHEREAS, on December 16, 2014, the City Council amended the Productivity
section of the City budget policies to include, "Maintaining City purchasing policies and
procedures that are as efficient and effective as possible;" and
WHEREAS, the Council adopted Resolution No. 16021 (2015 Series) which set
forth existing purchasing thresholds and authority levels; and
WHEREAS, in May 2018, in preparation for the implementation of the new
Enterprise Resource Planning (ERP) system that implemented a new purchasing module,
the City Council adopted Resolution 10888 (2018 Series) that amended the purchasing
policy as currently in use; and
WHEREAS, Council desires to update existing guidelines to reflect current
conditions and implement improved procedures, including implementing updated
approval authority thresholds, and updating guidance on policies and procedures for
California SB 1383 regulations, standardizing contract templates, and insurance risk
management; and
WHEREAS, the updated Purchasing policy will further streamline purchasing
processes to effectively use the Oracle system, while maintaining appropriate fiduciary
checks and balances.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City's Financial Manual purchasing guidelines are hereby
amended as set forth in Exhibit A to this resolution..
Page 1075 of 1284
Recolution No. _______ (2022 Series) Page 2
R ______
SECTION 2. Resolution Number 10888 (2018 Series) is hereby amended and
superseded to the extent inconsistent herewith.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 2022.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
__________________________
Teresa Purrington
City Clerk
Page 1076 of 1284
Update to Section 200
Financial Management Manual
Purchasing Policy
Page 1077 of 1284
1
Section 201
INTRODUCTION
Per requirement, in Chapter 3.24.040 of the Municipal Code, this chapter shall guide staff
in purchasing goods and services on behalf of the City and provide sufficient detail to enable City
departments to:
Be fully aware of, and comply with purchasing policies and procedures, and
Effectively and efficiently participate in the City’s purchasing program.
These guidelines do not address every issue, exception, or contingency that may arise in
purchasing activities. Accordingly, the primary standard that should always prevail is to exercise
sound judgment in the use and stewardship of City resources. Questions about the City’s purchasing
system and policies should contact the City’s Purchasing Division.
PURCHASING SYSTEM PURPOSE
The City's purchasing ordinance, Chapter 3.24 of the Municipal Cod e, the City Charter,
and the policies and procedures outlined in this manual form the City's purchasing control
system.
The purpose of the purchasing control system adopted in (Municipal Code 3.24.020) is:
To purchase goods, professional services, and public works projects at the lowest cost
commensurate with quality requirements;
To ensure effective financial control over expenditures;
To clearly define authority and accountability for the purchasing function;
To minimize the written documentation, administrative actions, and expense of
processing purchase transactions;
To assure the quality of purchases made on behalf of the City; and
To facilitate accurate forecasting and planning of department needs and expenditures .
(Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.2)
AUTHORITY
The City Manager, or their designated representative(s), shall be the purchasing authority
whose functions include the following powers and duties (Municipal Code 3.24.030)
To develop and prescribe, for the departments, such administrative policies, forms, and
files as may be reasonably necessary for the internal management and operation of these purchasing
procedures;
To purchase or contract for those items listed in Section 3.24.010 required by
departments following these purchasing procedures;
To ensure fair and open competition for purchases;
To develop and maintain department awareness of purchasing and pricing principles;
To consolidate department orders for like items, ensuring discount pricing whenever
possible;
Page 1078 of 1284
Introduction
2
To inspect supplies and equipment delivered, as well as contractual services performed,
to determine their conformance with the specifications in orders and contracts; and, in this connection,
to have the authority to require chemical, physical, or other tests of samples submitted with quotations
or bids, or of delivery samplings, which may be necessary to determine quality and conformance with
specifications;
To establish procedures for and assign duties to personnel engaged in receiving,
storing, and issuing purchased supplies, thereby ensuring that supply levels are consistent with usage
requirements;
Subject to Charter Section 906, to sell or exchange surplus supplies and equipment;
provided that the same cannot reasonably be used by any department. (Ord. 1618 § 1 (Exh. A (part)),
2015: Ord. 954 § 2 (part), 1983: prior code § 2950.3)
PURCHASING DIVISION
The City operates as a de-centralized procurement organization with policy compliance
auditing conducted by the Finance Department – Purchasing Division. Purchasing is independent of
other departments as the independent exercise of procurement authority is an important piece of the
City’s overall system of internal controls. The purchasing division's primary objectives include:
Supporting the City’s strategic goals and purchasing control system adopted in
(Municipal Code 3.24.020);
Develop and adopt clear written policies and procedures that appropriately balance the
culture of the City, the experience and knowledge of the staff, and compliance with regulations and
best practices;
Develop template documents for request for bids, proposals, qualifications (RFB, RFP,
RFQ), purchase orders, contracts, and insurance;
Work jointly with the City’s Risk Management Department to assess contractual risk
and coordinate with City Departments to ensure adequate insurance coverages on contracts
Report on citywide purchasing metrics;
Ensure fair and open levels of competition for all purchases;
Ensure compliance with administrative, state, and federal regulations and policies;
Audit citywide purchases and contracts to ensure compliance with City policies;
Develop policy and procedures to operate efficiently in the City’s finance Oracle ERP
system;
Provide training to staff delegated with responsibility for procurement and contracting.
Analyze purchasing of items to ensure pricing and terms are most advantageous to the
City and consolidate purchases for like items from multiple suppliers when feasible ((Municipal Code
3.24.030).
Page 1079 of 1284
Introduction
3
Exhibit 201A Purchasing Control System Responsibilities
Voters Approve City Charter
City Council Adopt purchasing ordinance
Adopt resolutions setting purchasing guidelines
Approve Requests for Bids (RFBs) and Requests for Proposals (RFPs)
documents for purchases specified in Section 202
Delegate authority to award contracts if they are within budget to the City
Manager
Purchasing Authority /
City Manager
Designee
Implement purchasing policies
Delegate purchasing authority
Approve RFP’s for purchases specified in section 202
Award contracts specified in section 202
Finance Director /
Budget Manager
Develop and implement purchasing guidelines
Monitor and evaluate system performance
Set payment schedules
Approve purchase requests in section 202
City Attorney Review City contracts to ensure compliance with the City’s policies,
rules, and laws
Financial Analyst
Purchasing
Develop and adopt clear written policies and procedures that
appropriately balance the culture of the City, the experience and knowledge of the staff,
and compliance with regulations and best practices.
Develop templates for requests for bids, proposals, qualifications (RFB,
RFP, RFQ), purchase orders, contracts, and insurance coverages.
Provide training to staff delegated with responsibility for procurement
and contracting.
Review and approve purchase requisitions, purchase orders, and
contracts for proper authority and terms
Coordinate and assist departments in the development of competitive bid
solicitations (RFB / RFP / RFQ)
Route contracts and maintain a complete database for all City contracts
Audit city departments for compliance with the city’s purchasing policies
Coordinate with the risk management administer to the city’s contractual
risk transfer program for the city’s contracts.
Risk Management Review and evaluate risk and insurance requirements for all City
contracts
Coordinate with the purchasing division on the city’s supplier risk
management policy and program for the city’s contracts.
Page 1080 of 1284
Introduction
4
City Engineer
Develop and implement procurement policies and procedures for the
city’s Public Works Capital Improvement Planning (CIP) Division
Approve RFB specifications for public projects
Approve Job Order Contracts (JOC) task orders for public projects as
specified in Section 202
Department Heads Develop and implement department purchasing procedures
Delegate departmental purchasing authority
Approve departmental purchase requests and award departmental
contracts as specified in section 202
Department Heads should make expectations clear to managers that they
will be held accountable for following proper procurement practices set forth in the City’s
policies
Authorized Employees Requisition goods and services in compliance with City purchasing
policies
Receive (approve) invoices or payment requests for departmental
purchases
Notify suppliers of business license requirements (when required)
Page 1081 of 1284
202-1
Section 202
PURCHASING TYPES AND APPROVAL AUTHORITY THRESHOLDS
Under the policy framework outlined in Chapter 3.24 of the Municipal Code, City purchases
and contracts (including those for rentals and leases, but excluding those for real property) will
be made according to these guidelines.
Approval authority applies thresholds to a single transaction purchase total and/or a cumulative
series of purchases over the fiscal year.
Staging purchases to avoid these competitive bidding procedures or authorization limits is
prohibited.
The City has three types of purchases:
Goods. Contracts and purchases for supplies and equipment.
Professional Services. Professional work is provided to the City by trained and
experienced individuals or firms.
Public Projects and Job Order Contracts. Construction, reconstruction, erection,
alteration, renovation, improvement, demolition, painting, repainting, and repair work involving
any publicly owned, leased, or operated facility governed by (Public Contract Code 22002c).
The type of purchase and its cost determine the approval authority levels.
Exhibit 202A and 203A summarize the authority levels and the approval process flows within
the City’s Oracle ERP system.
Page 1082 of 1284
Purchasing Types and Approval Authority Thresholds
202-2
Exhibit 202-A
General Goods
Tier Amount Approval Authority and workflow in Oracle ERP System
1 $0 - $10,000 No Bidding Process Required
Requisition approved by Fiscal Officer*
Purchase order approved by Finance - Purchasing
Division
2 $10,001 -
$74,999
Three written or electronic quotes
If only one quote? A sole source memo is required for
the purchase
Requisition approved by Fiscal Officer and Department
Head*
Purchase order approved by Finance - Purchasing
Division
3 $75,000 -
$199,999
Formal bidding process (RFP – RFB)
City Manager Report
Requisition approved by Fiscal Officer and Department
Head
Purchase order approved by Finance - Purchasing
Division
4 $200,000 or
more
Council approval through Council Agenda Report
Formal bidding process (RFP – RFB)
Requisition approved by Fiscal Officer
Purchase Order approved by Finance - Purchasing
Division
Page 1083 of 1284
Purchasing Types and Approval Authority Thresholds
202-3
Exhibit 202-A
Professional Services
Tier Amount Approval Authority and workflow in Oracle ERP System
1 Under $10,000 No Bidding Process Required
Requisition approved by Fiscal Officer*
Purchase order approved by Purchasing Division
2 $10,000 -
$39,999
Three written or electronic proposals / quotes
If only one quote? A sole source memo is required for
the purchase
Requisition approved by Fiscal Officer and Department
Head*
Purchase order approved by Purchasing Analyst
3 $40,000 -
$69,999
Formal bidding process (RFP – RFB)
Requisition approved by Fiscal Officer and Department
Head*
Purchase order approved by Purchasing Analyst
4 $70,000 -
$150,000
Formal bidding process (RFP – RFB)
City Manager approval through City Manager Report
Requisition approved by Fiscal Officer *
Purchase order approved by Purchasing Analyst
5 $150,000 or
more
Council approval through Council Agenda Report
Formal bidding process (RFP – RFB)
Requisition approved by Fiscal Officer
Purchase Order approved by Purchasing Analyst
Page 1084 of 1284
203-1
Section 203
PUBLIC WORKS PROJECTS, CONSTRUCTION CONTRACTS, AND
JOB ORDER CONTRACTS
The City awards construction contracts following the Uniform Public Construction Cost
Account Act.
Construction projects and bid procedures are managed by the City’s Public Works Department
with Finance and City Attorney oversight.
The City’s Public Works Department CIP Design Manual Guide governs policies and
procedures for entering into Construction Contracts, Construction Change Orders, and Job Order
Contracts.
See the CIP Manual at:
CIP Manual
Exhibit 203-A
Construction Public Projects
Tier Amount Approval Authority and workflow in Oracle ERP System
1 Under $15,000 No bidding process required
Requisition approved by Fiscal Officer
Purchase order approved by Purchasing Division
2 $15,001 -
$59,999
Three quotes (if possible)
If only one quote? A sole source memo is required for
the purchase
Requisition approved by Fiscal Officer*
Purchase order approved by Purchasing Analyst
3 $60,000 -
$199,999
Formal bidding process (RFP – RFB)
City Manager approval through City Manager Report
Requisition approved by Fiscal Officer *
Purchase order approved by Purchasing Analyst
4 $200,000 or
more
Council approval through Council Agenda Report
Formal bidding process (RFP – RFB)
Requisition approved by Fiscal Officer
Purchase Order approved by Purchasing Analyst
Page 1085 of 1284
Public Works Projects, Construction Contracts, and Job Order Contracts
203-2
*The purchase thresholds identified in the above section do not apply to purchase orders for on-call consultants
if the on-call consultants are selected from an RFP/RFQ. The reason is Council authorized the Finance Director to execute
contracts up to the project budget (i.e., budget per the Financial Plan)
Exhibit 203-A
JOB ORDER CONTRACTS
Tier Amount Approval Authority and workflow in Oracle ERP System
1 Under $60,000 Requisition approved by City Engineer
Purchase order approved by Purchasing Analyst
2 $60,001 -
$200,000
Requisition approved by Fiscal Officer & Department
Head
Purchase order approved by Purchasing Analyst
3 $200,000 or
more within annual
limit
City Manager approval through City Manager Report
Requisition approved by Fiscal Officer *
Purchase order approved by Purchasing Analyst
4 $175,000 or
more outside annual
limit
Council approval through Council Agenda Report
Requisition approved by City Engineer
Purchase Order approved by Purchasing Analyst
CONSTRUCTION CONTRACT CHANGE ORDERS
When the City awards a construction contract, the need for contract change orders (CCO) is
not unusual. A CCO is required whenever the scope of work changes from the original contract or an
unknown condition requires a change in the scope of work.
Usually, a contingency amount is established when the project is authorized for advertisement
or award to accommodate limited CCO’s. The purpose of this policy is to establish limits of authority
for approving construction project CCO.
GOALS
Ensure appropriate authority and accountability in the approval of change orders.
Minimize the time needed to approve a CCO to avoid project delays.
Establish a system at the organizational level at which the approval is commensurate
with the size of CCO and the project.
Eliminate the potential for approval of a CCO when contingency funds are insufficient.
POLICIES
Page 1086 of 1284
Public Works Projects, Construction Contracts, and Job Order Contracts
203-3
Conditions for Approval of CCO's by Staff
Sufficient contingency funds are budgeted and available for the Public Works Director
or City Manager (approved designees) to approve a CCO.
The nature of work in the CCO is not significantly different from that in the contract.
Authorization limits are based on an individual CCO amount, not the aggregate amount
of all CCO.
Authorization limits apply to CCO for increases in contract amounts only.
Work will not be broken up into multiple CCOs to circumvent this policy.
All CCO must be in writing and approved by the appropriate contract parties consistent
with the authorized limits established in this policy.
CONSTRUCTION CHANGE ORDERS
A copy of each approved CCO will be transmitted to the Finance Department with
monthly progress payments.
The Purchasing Authority may approve CCO over $199,999 under the following
circumstances (all three factors must be present):
Immediate approval of the CCO is necessary to avoid delay.
The CCO is an integral and mandatory component of the project.
The costs associated with the delay of the project would be excessive. The Project
Manager is responsible for carrying out this policy.
The Purchasing Authority is also authorized to approve CCO over $199,999 related to
Job Order Contract Task Orders.
AUTHORIZATION LIMITS
Public Works Director/ Designee
Not to exceed $60,000
Purchasing Authority (City Manager/Designee)
Not to exceed $200,000
City Council*
Greater than contract or $200,000
__________________________________________________________________________
______
* See circumstances above where the Purchasing Authority may approve CCO’s in excess of $200,000.
Originally Approved by the Council on August 3, 1993; Revised by the Council on April 15, 2003 , and June 2,
2015
Page 1087 of 1284
206-1
Section 204
PURCHASING METHODS
There are two purchase methods for departments to acquire goods and services:
1) Purchase Order via invoice account
2) Credit Card
The City’s preferred method for securing the majority of its purchases is by purchase order.
For a guide to purchase order types, see the City’s Purchasing SharePoint document
“what type of purchase order do I need?” See What type of PO do I need?
For credit card purchases, please refer to (See Section 275).
SUMMARY GUIDE TO PURCHASE TYPES:
Purchase Type Dollar
Threshold
Requirements
Purchase Order $100– Unlimited Must obtain approvals required in section 202; Exhibit
202-A
Credit Card $5,000 Manager
Card
$2,500 Single
Limit
$2,000
Employee Card
$900 Single
Limit
See Section 275 for credit card policy
PURCHASE REQUISITIONS
Purchase Requisitions
Purchase requisitions (PR) are a request to purchase goods and services. PR’s are entered
into the City’s Oracle ERP system. PR’s accomplish the following:
Initiates a purchase order request;
Identifies the equipment, materials, supplies, goods, or services required;
Identifies the specific funds (account codes) that will be used to pay for the order;
Is approved by appropriate City staff in Exhibit 202A to make the purchase;
Upon approval, pre-encumbers funds to support the purchase.
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279-2
All PR’s are entered into the Oracle ERP system by the requestor. The requestor is responsible
for entering and validating the accuracy of the following:
Item/services description
Quantity or Amount
If requesting Fiscal Year Open PO, a budgeted or estimated amount*
NIGP Expense Type Category *see NIGP code description document for more detail*
Charge Account
Supplier
Supporting Documents (attach all applicable):
Quotes/Proposals
Quote Summaries
Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)
JOC Task Order
Sole Source Approvals
Council Action Report or City Manager Report
PURCHASE ORDERS
A purchase order (PO) formalizes a purchase transaction with a supplier. It sets the supplier’s
obligations and the City’s responsibilities and requirements. POs should be issued after all required
policies and procedures are met.
A supplier’s acceptance of a PO constitutes a contract. POs allow the City to communicate
its intentions to suppliers, and their terms and conditions protect the City from risk.
When staff purchase goods and services outside of a PO, the City and its taxpayers face undue
risk.
POs include:
Quantity or Amount
Description of the requested item(s) or services
Delivery terms and transportation mode
Standard terms and conditions,
All supporting documentation submitted by the requisitioner
Quotes/Proposals
Quote Summaries/Comparisons
Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)
JOC Task Order
Sole Source Approvals
Council Action Report or City Manager Report
Page 1089 of 1284
279-3
PURCHASE ORDER TYPES
The City utilizes three main purchase order types.
1) Standard Purchase Order
A PO for a definitive quantity, amount, and delivery schedule.
It is most appropriate for one-off purchases of goods and services when you know the
amount, quantity, and delivery date.
2) Open Fiscal Year PO
A PO that allows for multiple purchases in a fiscal year (more than 12 times per fiscal year)
Ideal for ongoing goods and services purchases for approved suppliers
PO is an estimated budget amount, not a guarantee the City will purchase the total
amount
Staff must close open POs at the end of each fiscal year and choose whether or not to
re-open in the next Fiscal Year
3) Contract Purchase Order – tied to a City Contract
A PO tied to a formal contract.
Upon execution of a contract for a fixed dollar amount – an open PO can be issued for
that fixed amount
Fixed price contract POs can carry over multiple fiscal years until the end of the
contract term
NON-PURCHASE ORDER EXCEPTIONS
Below is a list of categories that do not require a PO
Bank fees
Page 1090 of 1284
279-4
Filing fees: used for filing city and county permits
Training
Postage
Travel Reimbursements and Advances
Tax payments; property taxes
Instructor and artist services related to programs offered through Parks & Recreation
community programs
Personal Protective Equipment (Boot Allowance) reimbursement
Dues, fees, and memberships in trade or professional organizations
Fees for trade or career fairs,
Fees for job-related seminars and training
Subscriptions, periodicals, newspapers, books and library materials, electronic
subscriptions, media maps, or similar publications in printed or electronic form
Water, sewer, telecommunications, electrical, or other utility services
Revenue refund or reimbursement payments
Payments related to fringe benefits (dental, vision, life insurance, employee assistance,
CalPERS)
NO BID PURCHASING
Municipal Code Chapter 3.24.060A sets forth guidelines for when bidding procedures are not
required. All Tier 1 purchases fall within this category. (see Exhibit 202A; 203A) for thresholds).
However, staff should seek cost comparisons whenever practical.
EMERGENCY PURCHASING
Municipal Code Section 3.24.060 B defines an emergency purchase as a purchase to address
a situation that is an immediate and serious need for goods or services that cannot be met through
normal purchasing procedures and where the lack of such goods or services would seriously threaten
the functioning of city government, the preservation of property, public peace, or the health or safety
of any person.
City staff must not use the emergency purchase process to circumvent the general purchasing
policy or supplier licensing requirements. City staff should seek quotes and determine the
reasonableness of pricing when making an emergency purchase whenever possible. Contracts for
frequent as-needed emergency services should be established with competitive bidding procedures.
Emergency purchases must be justified in sufficient detail to explain the basis for suspending
the usual competitive procurement process. Whenever possible, City staff in need of an emergency
purchase should receive prior approval from the Purchasing Division by submitting the City’s
Emergency Purchase Justification Form (located on the Purchasing SharePoint page).
Emergency PO template
If prior approval is not feasible, City staff should submit the Emergency Purchase Justification
Form to the Purchasing Analyst as soon as possible and at least within 24 hours after the purchase
Page 1091 of 1284
279-5
has been made.
Unless a City credit card is used for the purchase, City staff must enter a Purchasing
Requisition for the emergency purchase as soon as possible and should attach the justification backup
to the requisition.
SOLE SOURCE PURCHASING
Municipal Code Section 3.24.060 dictates that certain acquisitions can be purchased from a
single “sole-source” without engaging in bidding procedures. Staff must justify their sole-source
purchases through one of the following criteria as set forth below in Municipal Code 3.24.060:
A. When the amount to be expended is less than the bid requirement amount which shall
be specified by resolution of the council;
B. When an emergency purchase is made to address a situation that creates an immediate
and serious need for equipment, supplies, or services that cannot be met through normal purchasing
procedures and where the lack of such equipment, supplies or services would seriously threaten the
functioning of city government, the preservation of property, or the health or safety of any person;
C. When the item(s) to be purchased can be obtained from only one vendor or supplier;
D. When supplies or equipment have been uniformly adopted in the city or otherwise
standardized;
E. When the purchase will be made cooperatively with one, or more, other units of
government, or from a local dealer within the city limits that can provide the same brand, model and
configuration of item(s) identified in cooperative purchase agreement(s) at or below the cooperative
purchasing net cost within the same terms and conditions;
F. When reasonably necessary for the preservation or protection of public peace, health,
safety or welfare of persons or property; or
G. When, given the indeterminate nature of the city’s need, a request for proposal will
result in a more favorable and efficient comparison of supplies, equipment and/or services. (Ord.
1618 § 1 (Exh. A (part)), 2015: Ord. 1608 § 1, 2014; Ord. 954 § 2 (part), 1983: prior code § 2950.6)
Examples of non-legitimate sole source purchases include:
Purchases of proprietary goods or services that may be sold by more than one source
(i.e., multiple resellers may sell one proprietary piece of software)
Brand name preferences: exception: If a specific line of products was previously
chosen through a proper process and has been adopted citywide (e.g., Dell computer products)
The purchase will solely save staff time. Staff time must be accompanied by one of
the justification reasons set forth in Municipal Code 3.24.060.
Staff must draft a “Sole-Source” memorandum to justify the purchase using the template
Page 1092 of 1284
279-6
located on the purchasing SharePoint page at Sole-source template. Sole Source memos should provide
enough detail so that a person from the public, who has no information on the purchase can understand
the basis for the purchase. Sole Source memos are public records, and answers to the questions must
be accurate.
The Purchasing Analyst must approve the sole-source before the purchase. Approved Sole
Source Justifications should be attached to requisitions when submitted for a purchase order. An
approved sole source is effective for the term of the contract or purchase order.
COOPERATIVE AGREEMENT PURCHASING
Section 3.24.060 (E) - City staff may use established cooperative agreements for purchases
without a competitive bidding process. Cooperative agreements take advantage of already negotiated
competitively bid RFP contracts. City staff, in coordination with the Purchasing Division, are
responsible for researching cooperative agreements to ensure the bidding process complies with City
competitive bidding rules.
If a local dealer, as defined in Municipal Code 3.24.060 (E) as being a supplier within City
limits, can provide the same brand, model, and configuration of any item in a cooperative purchase
agreement at or below the cooperative agreement supplier’s cost with the same terms and conditions,
City staff may use the local dealer without initiating a separate competitive bidding process.
COPROCURE
Staff are encouraged to research active Cooperative Agreements at CoProcure at
https://www.coprocure.us/
SMART PROCURE
Staff are encouraged to research the pricing of products at Smart Procure – a site that
aggregates millions of contracts and purchase orders across the USA at https://smartprocure.us/
If the pricing in a cooperative agreement is not reasonable, City staff should initiate a
competitive bidding process rather than leveraging the cooperative agreement.
Page 1093 of 1284
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Section 207
SOFTWARE AND INFORMATION TECHNOLOGY CONTRACTS
The City’s Information Technology Policies and Procedures Manual governs software
and hardware related purchases.
Refer to the Policy at:
IT Policy
GUIDELINES
Direct purchases are prohibited; Staff must follow the procedures in the City’s IT
policy.
All software, software as service, and software-related contracts must be approved
by the IT steering committee before a purchase is made.
Staff must attach backup to all requisitions, including the approved steering
committee form documenting that the purchase was approved by IT.
All hardware and software purchases without the form attached will be rejected by
Finance.
COOPERATIVE PURCHASING AND PIGGYBACKING
The City will use cooperative purchasing through the State of California and
other Cooperative Purchasing Contracts in buying desktop and laptop workstations and mobile
data computers (MDC’s).
The City has used a number of Cooperative purchasing strategies over the years
in attempting to ensure quality, reliable computer workstations, laptops, and MDC’s at a reasonable
cost.
Staff should always research whether a Cooperative contract is available to
piggyback on, such as through the State’s California Multiple Award Schedule (CMAS) program,
Western States Contracting Alliance (WSCA), OMNIA Partners, Sourcewell, or similar cooperative
purchasing programs accomplish the following goals
Cooperative purchasing policy was approved by the Council on December 5, 1995
Revised by the City Manager on January 20, 2010, to expand to laptops and mobile data computers
Page 1094 of 1284
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SECTION 210
ETHICAL CONDUCT
The purpose of this policy is to set forth the ethical standards of professional behavior
expected of all officials and employees conducting purchasing activities on behalf of the City.
STANDARDS OF CONDUCT
Every employee or official engaging in purchasing activities on behalf of the City is required
to adhere to the following standards of conduct:
Consider, first, the interests of the City in all transactions and your fiduciary obligation to be
a responsible steward of the citizen's taxpayer funds.
Carry out the established policies of the City.
Purchase without prejudice, seeking to obtain the maximum value for eac h
expenditure of public funds.
Subscribe to and work for honesty and truth in buying and selling and to denounce all
forms and manifestations of commercial bribery.
Cooperate with all organizations and individuals engaged in activities designed to
enhance the development of purchasing practices.
Respect obligations to others, and require the same respect from others for their
obligations.
PROHIBITED PRACTICES
The following practices are prohibited in performing purchasing activities on behalf of the
City:
Having a financial or personal beneficial interest (directly or indirectly) in any contract
or purchase order for supplies, equipment, services, or projects furnished to the City.
Accepting or receiving (directly or indirectly) from any person, firm, or corporation
to whom any contract or purchase order may be awarded (by rebate, gift, or otherwise) any money or
anything of value, or any promise, obligation, or contract for future reward or compensation.
Inexpensive advertising items bearing the name of the firm—such as pens, pencils, paperweights, or
calendars—are not considered articles of value or gifts under this policy.
Using information available to officials and employees solely because of their City
position, for personal profit, gain, or advantage.
Directly or indirectly furnishing services or information not available to all
prospective bidders to any person or firm bidding on, or who may reasonably be expected to bid on,
a contract with the City.
Providing confidential information to persons to whom issuance of such information
has not been authorized.
Using a position or status in the City to solicit (directly or indirectly) business of any
kind, or to purchase products at special discounts or upon special concessions for personal private
use from any person or firm who sells or solicits sales to the City.
Serving the interests of any organization (either as an officer, employee, member of
Page 1095 of 1284
Ethical Conduct
279-2
the board of directors, or in any capacity for consideration) which transacts or attempts to transact
business with the City for profit when such employee holds a City position of review or control —
even though remote—over such business transactions.
RESPONSIBILITY
Employees. Each employee is responsible for following these practices. Violation of
this policy may result in disciplinary action, termination of employment, or criminal prosecution.
Department Heads. Department heads are responsible for ensuring that all employees
of their department who conduct purchasing activities possess a thorough understanding of these
standards of ethical conduct and prohibited practices.
Page 1096 of 1284
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Section 215
BUSINESS LICENSE AND TAX REQUIREMENT
BUSINESS LICENSES & TAX CERTIFICATE
The City requires entities that execute contracts with and do business within or transacting
with the City to obtain a business license and tax certificate, according to Chapter 5.01 of the
Municipal Code.
Businesses that have a place of business within City limits must have a business license. City
staff may not transact with such businesses that have failed to maintain a business license.
Consultants and services suppliers who execute contracts with the City for ongoing services,
whether or not they travel into the City to perform the services, must have a Business License.
Services providers who have a business address outside of City limits and travel into City
limits and perform services within the City must have a business license.
Whenever possible, City staff should direct purchases to suppliers who have a valid business
license.
A current listing of businesses that have valid business licenses is located with the City’s
Revenue Division.
No purchases may be made from any supplier that does not have a valid business license
unless specifically exempted from that requirement, as specified below.
EXCEPTIONS
The following types of suppliers are exempt from the business license requirement:(exempted
by the Finance Director, according to the adjustment powers outlined in Section 5.01.501)
A business owned and operated solely by minors under the age of 18;
Charitable, religious, and nonprofit organizations;
Any business for which requiring a business license would violate Federal or State
laws or contractual agreements;
Out-of-state businesses (exempted by the Finance Director, pursuant to the adjustment
powers set forth in Section 5.01.501;
Businesses which are not located in the City and for which the only transaction or
business with the City is an online purchase initiated by the City (exempted by the Finance Director,
pursuant to the adjustment powers set forth in Section 5.01.501.
POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION)
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Businesses who do not have a place of business within the City and do limited, low-cost (less
than $5,000) and/or one-time transactions with the City may not be subject to the business license
requirement. This is determined on a case-by-case basis by the Purchasing Analyst, as the Finance
Director’s designee, after a determination of whether the business has a sufficient nexus with the
City.
City staff should contact Purchasing prior to making a purchase if there is any uncertainty as
to whether a business license is required.
Page 1098 of 1284
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Page 1099 of 1284
255-1
SECTION 250
COMPETITIVE BIDDING CRITERIA AND STANDARD BID
DOCUMENTS
BIDDING TYPES AND AWARD CRITERIA
RFB RFPs RFQ Quotes
Goal Lowest
responsive bid
submitted by
responsible bidder
Most
qualified bidder
that provides
the best
proposal
Most qualified
bidder
Lowest amount
of most qualified bidder
Public
Opening
Requirements
Opened
publicly and read
aloud in public or
bidders are in
attendance
Opene
d publicly and
pricing read
aloud if public
or bidders are
in attendance
Not opened
publicly - List of suppliers
who submit qualifications
made publicly available
Not opened
publicly
Response
Evaluated By
Department
project team
Depart
ment project
team
Department
project team
Department
with purchasing
assistance
Specific
Evaluation Process
Determine
whether bid is
responsive, then select
lowest responsive bid
submitted by
responsible bidder.
No scoring of
specification response
is involved.
Respo
nses reviewed
to determine
most qualified
bidder
Responsible
proposals are
reviewed for
factors listed in
Section
3.24.210 of the
Municipal
Code
Statement of
qualifications evaluated
and a score assigned.
Some specification
responses can be pass/fail
only with no associated
score.
Determine
whether quote is
responsive, then select
lowest, most qualified
responsive quote. No
scoring of specification
response is involved.
Cost
Evaluation Process
Costs for
responsive bids are
compared to each
other to identify
lowest cost
Cost
for responsible
bids are
compared to
each other to
identify most
qualified lowest
cost bidder
If applicable,
costs of labor or services
are scored
Costs for
responsive quotes are
compared to each other
to identify lowest, most
qualified cost
Negotiatio
n Allowed after
Selection
No, unless all
bidders are asked for a
best and final Offer
(BAFO)
Yes Yes No, unless all
bidders are asked for a
best and final Offer
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Award
Basis
Lowest
responsible bidder
wins
Lowes
t most qualified
responsible
proposal wins
Evaluation
Committee
Recommendation
Lowest most
qualified responsive
quote wins
BID DOCUMENT TEMPLATES
Bid templates are located on the City’s contract template SharePoint site at: Contracts
Templates SharePoint. The templates contain the City’s standard terms and conditions, which are
not negotiable unless approved by the City Attorney. Staff should use the standard templates to
reduce the amount of time required for preparation and administrative review
The City advertises competitive bids via BidSync www.bidsync.com. The preferable method
for bid submission is in electronic format (paperless).
Public Works CIP bids are submitted according to the procedures in the CIP Design Manual.
(Bid documents for construction projects are excluded from the Purchasing SharePoint site since
Public Works centrally manages all construction projects, and they are responsible for maintaining
standard bid documents for construction projects.)
A procedure guide for drafting RFP’s can be found at RFP drafting procedure
Page 1101 of 1284
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Section 255
City Contracts
INTRODUCTION
The City enters into numerous types of contractual agreements with suppliers of goods and
services.
This procedure document is written for City employees who are tasked with drafting contracts
with suppliers to provide goods and services for their departments. The purpose of this procedure
document is to provide high-level clarity on roles and responsibilities in the contract drafting and
routing process and to equip the staff member tasked with entering a contract with guidance on
internal procedures for completing such a task. Additional detail on the City’s purchasing procedures
is set forth in Section 200 of the City's Financial Management Manual.
What is a contract, and what does it do?
A contract is a legal instrument that protects the City’s interests by clearly establishing the
roles and responsibilities of the parties to the contract and establishing the terms and conditions under
which a service is to be performed, or goods are to be provided.
Contract Templates
The City has standard templates for the following types of contracts:
1. Professional Services Agreement
2. Design Professional Services Agreement
3. Amendments to Template Agreement
4. Contract Instructor Agreement
5. Community Partnership Agreement
6. Special Events Agreement
7. Tree Maintenance Agreement
8. Developer Impact Fee Reimbursement Agreement
9. Standard Supplier Contract
If staff has questions about the appropriate template to use, please review the Contract
Template Matrix, and if questions remain, contact the Purchasing Analyst.
The City’s practice is to require suppliers to agree to its terms and conditions as set forth in
the City’s various template agreements.
This expectation and practice should be emphasized in the bid documents and consistently
signaled to interested suppliers throughout the negotiation process. There may be instances where the
City’s standard contract templates or specific provisions of a template are not appropriate to use for
a particular engagement, in which case staff should contact the Purchasing Division first, and if not
successful in negotiating after, contact the City Attorney’s Office.
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279-2
KEY ROLES IN CONTRACT DRAFTING AND ROUTING PROCESS
1. Initiating Staff Member (ISM): The ISM is any City staff member who has been
tasked with procuring goods or services for their respective department. The ISM is responsible for
ensuring their contract complies with the City’s Charter, Municipal Code, and Purchasing Policy, and
should work closely with the Purchasing Analyst to accomplish this and complete all Steps of the
contract’s procedure (which begins on the following page) (the “Procedure”). The ISM should also
reach out to the City Attorney’s Office with questions about contract terms, and the Risk Manager
with questions about insurance coverage requirements as soon as those questions arise (and well
before the contract is ready to route for signatures).
2. Purchasing Analyst: The Purchasing Analyst is a position in the Finance Department.
The Purchasing Analyst is the primary point of contact should an ISM have questions about
procurement methods or contract drafting procedures and will work closely with the ISM through all
Steps of the Procedure.
3. Risk Manager: Risk Manager is a position in the Human Resources Department. The
Risk Manager is the person most knowledgeable as to why the City’s insurance requirements are set
at certain levels and when they can be reduced or should be increased. If the ISM believes the City’s
standard insurance templates are not appropriate for a particular purchase or needs assistance making
that determination, the Risk Manager should be looped in early in the drafting process, but after the
ISM has complied with Steps 1 and 2 of the Procedure.
4. City Attorney’s Office (CAO): Requests for attorney assistance should be initiated
through the CAO intake form, located on the CAO’s SharePoint home page. Use of the form allows
workload to be distributed to the attorney best suited to answer an ISM’s questions within the shortest
timeframe. The CAO should be contacted if there are questions about the applicability of a template
to a specific purchase or if a bidder is requesting changes to the City’s contract terms. If this type of
assistance is needed it should be requested early in the drafting process.
Note: When the contract routes for signature (Step 7), the City Attorney will approve
“as to form” only. This is not the appropriate step to ask for substantive legal advice because it is
required that the ISM, with the assistance of the Purchasing Analyst, will have already worked
through all Steps of the Procedure to ensure all necessary authorizations have been obtained and
procurement methods followed as required by City rules and regulations. The CAO will rely on the
ISM’s compliance with the Procedure when approving “as to form.”
5. Approval Authority: The Approval Authority is the person authorized to execute the
final contract documents. The Approval Authority will vary based on the contract type and its dollar
amount. Determination of the appropriate Approval Authority is Step 1 of the Procedure and contract
signatories (Approval Authority and CAO) are relying on the ISM and Purchasing Analyst to have
completed all Steps of the Procedure prior to routing for signatures.
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CONTRACT DRAFTING & ROUTING PROCEDURE
The ISM responsible for drafting and routing a contract should follow the steps in the order
outlined below. The procedure set forth below applies to most City purchases of goods and services;
it does not apply to contracts for the use of City facilities or property, special events,1 developer
reimbursement agreements, or Public Works construction contracts.2
Step 1 (Identify Tier of Approval Authority): Determine the threshold approval authority
required for the contract pursuant to Section 202A of the City's Financial Management Manual.
Note: If City Council approval is required, the ISM will need to coordinate placing the item
on a meeting agenda and drafting a staff report seeking authorization to issue bid documents and/or
execute the contract, and if City Manager approval is required, the ISM will need to draft and route
a City Manager Report requesting authorization for the same.
Step 2 (Identifying Procurement Method): Determine the appropriate method for soliciting
and procuring the necessary goods and services pursuant to Section 203 of the City's Financial
Management Manual and Chapter 3.24 of the Municipal Code. Contact the Purchasing Analyst for
assistance as needed to determine the appropriate procurement method. If applicable, prepare the
appropriate bid document using the RFP/RFQ/RFB template provided on the City’s Contract
SharePoint site.
Caveat for IT Services:
o Purchases for IT Services are often made pursuant to a Cooperative Agreement
pursuant to Section 3.24.060(E) of the Municipal Code. Contact the Purchasing Analyst for assistance
researching existing Cooperative Agreements.
o Staff must follow the City’s Information Technology Policy and Procedures for all
hardware and software purchases.
o Notify the City’s IT Manager and IT Analyst of the planned purchase and fill o ut the
IT Steering Committee Project Proposal Form. If approved by IT, review the City’s IT Service
Agreement template to determine if it’s appropriate for the purchase (see Step 3).
Step 3 (Identifying Contract Template): Identify and prepare the appropriate contract
template for the engagement. This template will be an exhibit to the bid document. If no bid document
is required under Step 2, contract will simply be routed to the Supplier under Step 5, along with the
insurance requirements required in Step 4. Contract templates can be found on the City’s Contract
SharePoint page. Contact the Purchasing Analyst for assistance determining the appropriate contract
template.
1 The procedure for executing facilities use and special events agreements are specifically excluded from this
Procedure as those contracts are managed by Parks & Recreation. Please contact the Recreation Manager (Facilities)
for questions about the procedure for executing those agreements.
2 The procedure for construction contracts is specifically excluded from this document as those projects are managed
by Public Works, and they are responsible for maintaining standard bid documents. Please refer to CIP De sign and
Construction Guide for procedures related to Public Works Construction contracts: CIP Design and Construction
Guide.docx
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Step 4 (Identifying Insurance Coverage Requirements): Identify the appropriate insurance
coverage template that will be an exhibit to the contract. The standard insurance templates are located
on the City’s Contract SharePoint page in the same folder as the correspondence insurance template
(e.g., the standard Professional Services Insurance Template is in the Professional Services contract
folder). The ISM should evaluate the risk of the engagement, understanding that there may be
instances where the City’s standard insurance coverage templates are not appropriate to use for a
particular engagement.3 Determining appropriate insurance coverage is dependent on a variety of
details and the ISM should always reach out to the Risk Manager with any questions or concerns.
Necessary coordination with the Risk Manager regarding insurance coverage requirements and/or
refinements to language should occur well in advance of proceeding to Step 5.
Step 5 (Obtaining Approval Authority Authorization): Once the ISM has prepared the
draft bid document under Step 2, if applicable, and the draft contract under Steps 3 and 4, the package
should be routed to the Approval Authority for review and approval.
Caveat for contracts requiring RFP/RFQ: Typically, if Council approval is required
for a purchase that will be procured by an RFP or RFQ, staff will request Council approval through
a Council Agenda Report to issue the bid documents and also to delegate authority to execute the
contract with the selected bidder to the City Manager if the bid is within a certain dollar amount, so
staff does not have to return to Council for approval of the award once the bidder has been selected.
Similarly, if City Manager approval is required for a purchase that will be procu red by an RFP or
RFQ, staff will request City Manager approval through a City Manager Report to issue the bid
documents and to delegate authority to execute the contract with the selected bidder to the appropriate
Department Head.
Caveat for contracts not requiring RFP/RFQ: If bid documents are not required under
Step 2 and the ISM is presenting the contract to the Approval Authority for authority to execute, the
ISM must obtain the signature of the Supplier on the agreement prior to presenting it to the Approval
Authority.
Step 6 (Posting of Bid Package—if applicable): If the procurement method determined by
Step 2 requires issuance of RFP or RFQ send the approved bid package to the Purchasing Analyst.
This package should contain the RFP or RFQ document, the contract template selected under Step 3,
and the insurance coverage requirements identified under Step 4. The Purchasing Analyst will
complete a final review and post the documents to BidSync, the City’s electronic bid platform.
Step 7 (Selecting the Bidder—if applicable): If the procurement method determined by Step
2 results in issuance of an RFP or RFQ, Purchasing Division staff will open the bids and post the bid
responses in a shared folder for the project review team. Project review team will review and
recommend to the originating department to award the contract to the “lowest responsible bidder.”4
Note: As the City’s RFP/RFQ template states, if a bidder wishes to request changes to
the City’s standard contract terms and conditions, this should be done within the proposal/submission
of qualifications. This allows such requests to be considered when determining whether to award the
3 Additional non-standard insurance templates that may better suit the ISM’s needs are located on the Contract
SharePoint page: Insurance Templates
4 Section 3.24.210 of the Municipal Code identifies the criteria the review team may consider when selecting the
“lowest responsible bidder.”
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contract or not, with any proposed changes being reviewed with the CAO prior to award of the
contract.
Step 8 (Routing of Contract for Signature): Once Steps 1-7 have been satisfied, ISM should
forward the contract to the Purchasing Analyst or their department-designated staff for routing to all
parties via DocuSign (the City’s electronic signature software platform).
■ Note: The Clerk’s Office will route contracts requiring Council approval, specifically
those requiring the Mayor’s signature, through DocuSign. See step 5 for additional detail regarding
when the Mayor’s signature may be required, or when contract execution can be delegated to the City
Manager, in which case the contract can be routed through the Purchasing Division.
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Section 256
CONTRACT MANAGEMENT
Following the award of a contract, management actions must be taken to ensure full
compliance with the terms and conditions contained within the contract document, including price.
Payment, monitoring of progress, inspection and acceptance, quality assurance, monitoring and
surveillance, modifications, negotiations, contract closeout, and other activities encompass contract
management.
Project Managers are responsible for the day-to-day management of their contracts and should
be aware of the contract terms and scope of work and be aware of renewal dates.
For each contract executed with a supplier, it is the responsibility of the project manager
assigned to oversee the project to ensure that the contract performs to the requirements, standards,
and deliverables established in the contract.
The contract manager performs periodic inspections and reviews of the contractor’s
performance and provides feedback to the contractor to maintain a regular crossflow of information
and feedback. As much as possible, contract managers should document such communication in
writing, whether it be of a positive or negative nature, as this information is critical to resolving
disputes and as a reference for future Supplier performance reviews.
Contract managers assigned to oversee Supplier performance must attend contracts
administration training provided by the Purchasing Department. Staff members who do not attend
this training should not be appointed as contract managers.
The contract manager’s responsibilities include, but are not limited to:
After execution of the agreement, keep a file a copy of the executed agreement.
Submitting a requisition for a purchase order to encumber the funds.
The Supplier must not begin any performance until an executed contract is approved.
On construction projects, the purchase order may serve as the Notice to Proceed.
Notifying the contractor when to begin work.
Monitoring contract compliance.
Reviewing progress reports, status reports, and compliance with time schedules.
Approving the final goods or services by accepting the deliverables in writing.
Providing copies of any contract administration documentation or communication to
the Purchasing Department.
Monitoring expenditures, ensuring funding availability, and proper fiscal
encumbrances through purchase orders when the contract extends over multiple years.
Verifying the accuracy of invoices and approving those invoices for payment.
Requesting amendments, addendums, change orders, and/or contract renewals in a
timely manner.
Verifying all work is completed and accepted by the department prior to the contract
expiration date.
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Performing contract closeout activities:
Notifying the Finance Department when funds can be dis-encumbered.
Reporting any contract disputes immediately to the Purchasing Department.
Keeping an accurate, auditable, documented trail of contract administration.
Contract managers are not authorized to:
Instruct the contractor to start work before the contract is fully executed.
Change the scope of the agreement without doing so through the formal process set
forth in this policy
Direct the contractor to perform work that is not described in and funded by the
contract.
Extend the time period of the contract without the execution of an approved
amendment.
Allow the contractor to incur any additional costs over the limit set by the contract.
Sign a contract as the department’s authorized signatory unless authorized in writing.
Sign any contractor’s contract form.
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Section 257
CONTRACT AMENDMENTS
After contract award—whether by purchase order or formal contract—amendments may be
needed to reflect changes in the scope of goods or services to be provided. The following summarizes
what is required to authorize and document contract changes.
The City’s contract amendment templates are on the Contracts Policy and Procedures
SharePoint site.
Amendments should be numbered.
AUTHORIZING AGREEMENT CHANGES
Construction Contracts
Authorization levels for approving construction contract change orders are outlined in Section
203 of this manual.
Goods
General Policy. Staff has the authority to amend agreements to the cumulative amended
contract amount (original amount of the contract plus the amount of any amendments) that they are
otherwise authorized to award contracts. (See exhibit A)
In those cases where a higher purchasing authority awarded the original contract, staff have
the authority to amend those contracts by a cumulative amendment amount (amount of only the
amendment itself) that they are otherwise authorized to award contracts. (See exhibit B)
Budget Constraints. In all cases, however, staff authorization to increase contract amounts is
subject to existing budget availability.
Staging of Contract Costs and Amendments. Using the amendment process to avoid
competitive bidding or higher authorization levels at the contract award stage is prohibited.
The following provides general guidelines for authorization levels in approving changes to
purchase orders and agreements.
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Exhibit A – Amendments originally approved by a lower authority
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Exhibit B - Amendments originally approved by a higher authority
__________________________________________________________________________
______
Revised September 2, 2003, to reflect changes in the City’s Purchasing Guidelines approved by the Council
on April 15, 2003, and again on June 2, 2015
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Section 274
RISK MANAGEMENT & INSURANCE
Purchasing and Risk Management may require insurance coverage from the supplier selected
for the award to protect the interests of the City. The insurance coverage shall be in the form and
amounts as required by the solicitation.
All City procurements should be assessed for potential risk. If the risk is low, then generally,
staff can proceed with the procurement. If risk assessment is medium to high – staff should consult
with Purchasing, Risk Management, and the City Attorney’s office to determine appropriate
insurance coverage.
Factors to Determine Risks for Statements of Work and Terms and Conditions
Provide a description of what service and information the good or service will
provide
Is there a high level of complexity in the services procured?
Will the contract terms be non-standard? High dollar? Environmental concerns?
Is the procurement mission-critical, highly visible, or potentially controversial?
Is the procurement funded by grants with expiration dates?
What security, access, confidentiality, or customer information is necessary to
perform the work?
What City systems are impacted, or will it require an interface to implement or use
this software?
Will the supplier require access to the City’s network during the performance of the
work?
Will the contractor be on-site on City property during the performance of the
contract?
Will chemicals or hazardous materials be purchased – will they require pollution and
professional liability coverage
Contract awards may be contingent upon the submission of required insurance coverage and
performance and payment bonds. If the Supplier selected for the award fails to fulfill these
requirements, default actions can be initiated.
For contracts up to Tier 3, the City Manager or designee may render the Supplier in default,
re-award the contract to the next lowest-priced responsive and responsible supplier, and subject the
defaulted Supplier to re-procurement charges, or forfeiture of the bid, or offer bond, or security in an
amount equal to the damages sustained by the City because of the default.
For contracts greater than Tier 4, the City may re-award to a new Supplier who participated
in the solicitation but was not awarded any portion of the contract. The City Manager will obtain
approval from the City Council.
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If the City Manager determines that the Supplier should not be suspended or debarred, the
City Manager shall have the right to require certain corrective actions by the Supplier by a
prescribed date and time.
The decision of the City Manager in these proceedings shall be final and not open to appeal
by the Supplier or the Supplier’s legal representative.
The City shall reject any offer to do business from a Supplier who is suspended or debarred
under these procedures for the entire term of the suspension or debarment.
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Section 275
CITY-ISSUED CREDIT CARDS
POLICY OVERVIEW
To provide secure payment options for employees who travel or at times have to make
emergency purchases, the City issues credit cards registered to individuals under the City umbrella.
In this context, it is important to understand the fiduciary responsibility of utilizing a City
credit card and the required audit control over purchases. This policy outlines the use, accounting,
and reporting obligations that come with this fiduciary responsibility and the ramification of violating
these obligations.
Employees assigned a City credit card will be bound to the criteria outlined in this policy, and
individual user agreements will be signed to ensure that a contract between the City and the credit
card holder exists for reference.
This policy establishes the City's allowable uses, the fiduciary responsibility, the procedures,
and reporting obligations when using City credit cards in making emergency purchases or paying for
travel and training-related expenses. Refer to the City's Municipal Code for the definition of an
emergency purchase @ Municipal Code
This policy cannot cover every scenario, exception, or contingency that may arise in using
City credit cards. Accordingly, the primary standard that should always prevail is to use common
sense and good judgment in the use and stewardship of City financial resources.
POLICIES AND PROCEDURES AT-A-GLANCE
A summary document of primary cardholder responsibilities has been made available for easy
reference. See policies & procedures At-A-Glance @ At a Glance
A procedure handbook for how to request a card; due dates for reconciliations; How to Oracle
guides for expense report submission; and compliance auditing can be found @ Credit Card
Procedure Handbook
The Oracle' how-to' guide for submitting expense reports can be found @ Expense Report -
How to Submit Guide
1.0 GENERAL GUIDELINES
Charges can originate in-store, online, or by phone. The primary responsibility for ensuring
the appropriate use of credit cards lies with each employee holding a card. Acceptance of a City
credit card indicates an employee's agreement to follow all poli cies and procedures, laws, and
regulations.
1.1 EMERGENCY OPERATIONS CENTER - EMERGENCIES
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Emergency Operations Center (EOC) - In cases of declared emergencies, the City Manager
or their designee may authorize an increase in credit card limits and individ ual transaction limits as
well as authorize cards to be temporarily re-assigned to designated staff. The Procurement
Cardholder whose Procurement Card was temporarily reassigned shall include a cover memorandum
explaining the date and reasons for activation of the EOC with the monthly statement of account and
affirm that the Procurement Card was temporarily reassigned in accordance with this policy. All
receipts must be submitted in accordance with the rest of this policy.
2.0 TRAINING
Cardholders are strongly encouraged to attend training on their role and responsibilities
outlined in this policy. Cards are issued to cardholders who certify they have read, understand, and
will comply with this policy. Failure to follow this policy may result in termination of card privileges
and disciplinary action.
Given the ramifications tied to incorrect administration of credit cardholder responsibilities,
the Finance Department will hold annual training opportunities to ensure that roles and
responsibilities are clearly understood and cardholders have all the tools necessary to complete their
administrative obligations correctly. The material is available online and can be accessed at any time.
The training module is located on the Purchasing SharePoint site at Training.
Once the training is completed, you are required to sign the user agreement; once signed,
Finance will activate the credit card. This same process is followed for department cards.
3.0 TYPES OF CITY CREDIT CARDS
Standard Credit Card – a card issued to individual City employees similar to a consumer
credit card but is paid in full at the end of each month. The card can be used for acquiring goods and
services in emergency situations or when encountering unexpected circumstances in the field. The
card does not replace the purchasing guidelines set in section 202 of the City's Purchasing Policy and
should not be used to circumvent planning and requisitioning. The card can be used for training,
travel, and meeting-related expenses, as explained in the Travel & Meeting Policy of the Financial
Management Manual - Section 350.
Department Card – A multi-user card issued to a division. A department card is issued to a
specific employee recognized as the Card Coordinator or Reconciler. A Department card will have
the name of the specific department or workgroup that it is assigned to.
4.0 LIMITS AND INCREASE REQUESTS
Department Heads and managers have two options for spending limits for employees:
Department / Division Cards:
Option 1 - Monthly limit of $5,000 with a single purchase limit of $2,500/$5000
Individual Cards
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Option 1 – Monthly limit of $5000 with a single purchase limit of $2500
Option 2 - Monthly limit of $2,000 with a single purchase limit of $900
Managers and Supervisors are more appropriate for option 1.
Employees under a manager's responsibility are more appropriate for option 2.
Purchase limits can be increased but must be approved by Finance. Cardholders should send
an email requesting the increase to their Department Head, the Program Administrator, and Financial
Analyst - Purchasing and include the following:
Amount requested for the single purchase or monthly limit and business reason for the
increase
Supplier name for whom the single purchase is requested
If a single purchase or monthly limit exceeds the amounts outlined, you must obtain approval
from the Fiscal Officer/Department Head before making the purchase or using the purchase order
process.
5.0 COMPETITIVE BIDDING THRESHOLDS
City employees shall not piecemeal credit card purchases to circumvent the allotted maximum
credit card limit. If the cost of an emergency purchase exceeds the limit, staff can request a temporary
limit increase as outlined in this policy.
6.0 TRAVEL EXPENSES
The City credit card must be used in paying for travel expenses to avoid personal
reimbursements. Please reference the City's travel and meeting policy for all applicable rules and
regulations. Please note food purchases while traveling cannot be paid via the City's credit card as
they are reimbursed/advanced per diem.
7.0 PERSONAL USE OF CITY CREDIT CARDS STRICTLY PROHIBITED
Employees shall not use City credit cards for personal expenses even if the intent is to
reimburse the City later. Nor can personal credit cards be used for City business. Charging personal
expenses on City credit cards is a misuse of City funds and a breach of the City's ethics policy. The
same holds true for the use of a personal credit card for City busines ses in order to reap the benefits
in the form of travel miles or other incentives.
Note: it is strictly prohibited to register City Cards to any personal accounts such as Uber,
Instacart, or Amazon. Purchases on Amazon can only be approved through the City's Amazon
account.
A violation, as outlined above, will lead to suspension of the credit card upon the second
violation. The first violation will lead to a violation notices, the second violation will lead to a one-
year suspension of card privileges. Should subsequent violations occur, card privileges will be
terminated.
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8.0 NEGLECT OR VIOLATION OF THE MONTHLY FIDUCIARY OBLIGATION
The monthly credit card statements are distributed on or around the first day of the month. It
is the credit card holder's responsibility to submit the reconciling expense report, including all
itemized receipts, through the Oracle system no later than the 10th day of the month.
The following will lead to the suspension of credit card privileges:
Itemized receipt is missing
Expense report is submitted past the 10th of the month
Expense report is submitted incorrectly despite multiple training opportunities
The expense report submitted does not match the bank statement
Violations, as outlined above, will lead to suspension of the credit card as follows:
The second violation will lead to a six-month suspension;
The third violation will lead to a one-year suspension of card privileges. Should a
subsequent violations occur, the card would be terminated.
Please note: if you are not able to submit your expense report due to extenuating
circumstances (such as a personal/family emergency), it is your responsibility to delegate the
submittal of the report or inform Finance of the delay in the submittal.
9.0 PROJECT ACCOUNTS
At no time shall credit cards be used for project-related expenditures. Using a credit card to
circumvent payments of project-related expenditures that are subject to requisitioning will lead to
immediate termination of the credit card privileges.
10.0 FRAUD
Employees are responsible for ensuring that City-issued credit cards are protected from
fraudulent use or loss and for ensuring that all purchases are made in accordance with the City's
policies. Failure to follow policies and procedures regarding the use of credit cards is no different
from failure to follow policies and procedures in any other aspect of an employee's job.
It is the cardholders' responsibility to immediately alert the bank should any suspicious
activity occur on the card statement.
11.0 LOST OR STOLEN CARDS
Cardholders are responsible for ensuring that the issuing bank and the Department of Finance
are notified immediately if the card is lost or stolen. The cardholder has been set up to directly contact
the issuing bank (using the bank's customer service number) to report a lost or stolen card. Failure to
do so may result in holding the cardholder responsible for any fraudulent use of the card.
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12.0 DISPUTED CHARGES
Cardholders are responsible for ensuring that the Supplier and issuing bank are notified
immediately of any charges that are disputed. The City pays the statement in full, including any
disputed amounts, to avoid finance charges and late fees; when resolved, the amount will be credited
to the account on the next monthly statement. Any charge that has not been validated and accepted
in Oracle Expense Management within a month is deemed a disputed charge, and it is the
responsibility of the cardholder and the applicable department to have the dispute resolved before the
next billing cycle.
13.0 CREDIT CARD FEES
Any processing fee or charge from the issuing bank is the responsibility of the cardholders'
department operating budget like any other charge on the monthly expense statement.
14.0 SURRENDER OF CARD UPON REQUEST OR TERMINATION
Cardholders will immediately surrender their credit card upon request of their department
head. Departments are responsible for retrieving the credit card when an employee separates from the
City and returning the card to the Finance Department for cancellation and destruction. The use of
the credit card for any purpose after its surrender is prohibited.
15.0 MISUSE OF CARDS
Misuse of City funds is a serious breach of the City’s ethics policy. Doing so – even if the
intent is to reimburse the City later – can result in disciplinary actions, up to and including
termination. The Finance Department will notify Department Heads and Human Resources for
appropriate follow-up.
RESTRICTED CATEGORIES
The City's credit card policy allows for the blocking of 'Merchant Category Classification'
(MCC Codes). The code identifies the Supplier's primary product or service. Examples of blocked
MCC codes include liquor stores, cocktail lounges, nightclubs, spas, and massage parlors, and
gambling casinos.
The Finance Director has the authority to designate any MCC code as restricted.
ROLES AND RESPONSIBILITIES DEFINITIONS
Credit Card Holder – Employee given responsibility for a City credit card to use for
purchasing required in their job-function
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Credit Card Reconciler or Group Reconciler – Cardholder or employee designated to
perform the transaction reconciliation process in Oracle for an individual account or a group in a
division. If an employee is reconciling more than one account, they are known as a 'Group Reconciler'
Credit Card Approver – The manager responsible for the approval of charges to an
individual card within the system approval process. This process includes not only pertain to
approving the monthly expense report but each induvial charge itself. An employee acting as a
reconciler for charges cannot be the approver of those charges. A charge must be approved by
someone other than the Credit Card Reconciler, most likely the cardholder's supervisor.
Department Credit Card Coordinator/Reconciler – The individual responsible for a
Department Card is called the Department Card Coordinator. The employee is responsible for
securing the card and tracking the use/users of the card. The Card Coordinator is responsible for
reconciling the transactions in Oracle. The coordinator and reconciler may be two different people.
Internal Credit Card Compliance Auditor – The employee responsible for monitoring
credit card transactions and policy compliance. For the City of San Luis Obispo, this is performed by
the Program Administrator ( Financial Analyst – Purchasing) with oversight from the Finance
Director.
Outside Accounting Auditor – External Accounting Auditors or Auditing Firm employed
by the City of San Luis Obispo to complete the annual audit of the City Accounting functions.
Department Head - Department Heads determine the type of card the employee will carry
and are responsible for ensuring that their staff is aware of their responsibilities and for implementing
review and payment procedures within their department.
Financial Analyst - Purchasing - Manager of the Purchasing Division and responsible for
internal audit of credit card transactions, compliance to policy, and training
Program Administrator – The designated City employee who serves as the point of contact
between the City and the bank. This position has authority over the program in Policy and Procedures
with the Financial Analyst – Purchasing and is generally the first stop for any issues pertaining to the
credit card program.
Finance Director - The Finance Director is responsible for administering the review of credit
card statements to ensure that the proper documentation and purchase approvals have been provided.
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SECTION 276
SUSTAINABLE PURCHASING
Municipal Code 3.24.075
It is the intent of the City Council that the City of San Luis Obispo takes a leadership role not only in recycling
its waste products but also in the purchase of recycled products for use in the delivery of City services. It is the purpose
of this section to provide direction to the City Administrative Officer in the procurement and use of recycled products.
For the purpose of this section, “recycled materials” are defined as any materials (e.g., glass, paper, plastic, etc.) that
are separated by type, reprocessed by industrial methods, and used as raw materials for the manufactu re of new
products.
It is the policy of the City of San Luis Obispo to purchase and use recycled products whenever possible to the
extent that such use does not negatively impact health, safety, or operational efficiency.
It is the policy of the City of San Luis Obispo to encourage the purchase of products that can be recycled or
reused.
The City will purchase and use recycled paper for masthead stationery, envelopes, and printing purposes. In
addition, recycled paper shall be purchased and used in all copy machines which will accept it. City staff will
encourage the copier industry to develop high-speed copiers which will accept recycled paper.
City departments shall examine their purchasing specifications and, where feasible, purchase equipment,
supplies, and services that result in less harm to the natural environment. This involves the purchase of equipment,
supplies, and services in a manner that uses less harmful materials, employs recycled or recovered materials (where
appropriate and available), and utilizes techniques intended to result in less impact on the environment than other
available methods.
It is the policy of the City of San Luis Obispo that City funds shall not be used to purchase single-use plastic
bottled beverages of less than twenty-one ounces or single-use plastic drink containers or single-use plastic beverage
containers, as provided in Chapter 8.07.
A ten percent preference, not to exceed one thousand dollars per contract, may be given to recycled products.
The fitness and quality of the recycled product must be at least equal to unrecycled products as determined by the City.
The preference percentage shall be based on the lowest bid or amount quoted by the supplier or suppliers offering
nonrecycled products.
Amount preferences may be offered in excess of the ten percent ceiling established in this section, if it can be
shown that purchase of a recycled product or material will result in greater long-term savings to the City. Award of a
bid in excess of the ceiling, however, requires the approval of the ci ty administrative officer or city council as
established in the City’s purchasing manual. (Ord. 1644 § 2, 2018: Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 1178 § 1,
1990)
Ord. No. 1178 added § 3.24.080, which the editor has renumbered § 3.24.075 since the chapter already contained a
§ 3.24.080.
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Section 277
Recycled Content Paper Procurement Requirements – SB 1383
This policy provides guidelines for the City to follow in its effort to meet or exceed Senate
Bill 1383 regulatory requirements related to recycled content paper purchasing. This policy also
supports the City’s sustainability policy (Section 277), and the City’s commitment to achieving
carbon neutrality.
REQUIREMENTS FOR DEPARTMENTS
Option 1. Comparable or more favorable pricing: If fitness and quality of Recycled-Content
Paper Products and Recycled-Content Printing and Writing Paper are equal to that of non-recycled
items, all City departments and divisions shall purchase Recycled-Content Paper Products and
Recycled-Content Printing and Writing Paper that consists of at least thirty percent (30%), by fiber
weight, post-consumer fiber, whenever available at the same or a lesser total cost than non-recycled
items, consistent with the requirements of the Public Contract Code, Sections 22150 through 22154
and Sections 12200 and 12209, as amended.
Option 2. If fitness and quality of Recycled-Content Paper Products and Recycled-Content
Printing and Writing Paper are equal to that of non-recycled items, all City departments and divisions
shall purchase Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper
that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, whenever the total
cost is the same or a lesser total cost than non-recycled items or whenever the total cost is no more
than 10 percent (10%) of the total cost for the non-recycled items, consistent with the requirements
of the Public Contract Code, Sections 22150 through 22154 and Sections 12200 and 12209, as
amended.
BAll Paper Products and Printing and Writing Paper shall be eligible to be labeled with an
unqualified recyclable label as defined in Title 16 Code of Federal Regulations Section 260.12
(2013).
Provide records to the Purchasing Division of all Paper Products and Printing and Writing
Paper purchases on a schedule to be determined by Recordkeeping Designee. (both recycled-content
and non-recycled content, if any is purchased) made by a division or department, or employee of the
City. Records shall include a copy of the invoice or other documentation of purchase, written
certifications as required in Section 2.2.A.3-4 for recycled-content purchases, Supplier name,
purchaser name, quantity purchased, date purchased, and recycled content (including products that
contain none), and if non-Recycled-Content Paper Products and/or non-Recycled-Content Printing
and Writing Paper are provided, including a description of why Recycled-Content Paper Products
and/or Recycled-Content Printing and Writing Paper were not provided.
REQUIREMENTS FOR SUPPLIERS
A. All Suppliers that provide Paper Products (including janitorial Paper Products) and
Printing and Writing Paper to the City shall:
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1. Provide Recycled-Content Paper Products and Recycled-Content Printing and Writing
Paper that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, if fitness
and quality are equal to that of the non-recycled item and available at an equal or lesser price or
available at no more than 10% of the total cost for non-recycled paper products.
2. Only provide Paper Products and Printing and Writing Papers that meet the Federal
Trade Commission Recyclability standard as defined in Title 16 Code of Federal Regulations Section
260.12 (2013).
3. Certify in writing, under penalty of perjury, the minimum percentage of postconsumer
material in the Paper Products and Printing and Writing Paper offered or sold to the City. This
certification requirement may be waived if the percentage of postconsumer material in the Paper
Products, Printing, and Writing Paper, or both can be verified by a product label, catalog, invoice, or
a manufacturer or Supplier internet website.
4. Certify in writing, under penalty of perjury, that the Paper Products and Printing and
Writing Paper offered or sold to the City is eligible to be labeled with an unqualified recyclable label
as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).
5. Provide records to the Recordkeeping Designee of all Paper Products and Printing and
Writing Paper purchased from the Supplier within thirty (30) days of the purchase (both recycled-
content and non-recycled content, if any is purchased) made by a division or department or employee
of the Jurisdiction. Records shall include a copy of the invoice or other documentation of purchase,
written certifications as required in Section 2.2.A.3-4 for recycled-content purchases, purchaser
name, quantity purchased, date purchased, and recycled content (including products that contain
none), and if non-Recycled-Content Paper Products and/or non- Recycled-Content Printing and
Writing Paper are provided, include a description of why Recycled-Content Paper Products and/or
Recycled-Content Printing and Writing Paper were not provided.
B. All Suppliers providing printing services to the City via a printing contract or written
agreement shall use Printing and Writing Paper that consists of at least thirty percent (30%), by fiber
weight, post-consumer fiber, or as amended by Public Contract Code Section 12209.
Recordkeeping Responsibilities
A. The Finance Department will be the responsible department and will select an
employee to act as the Recordkeeping Designee that will be responsible for obtaining records
pertaining to Procurement of Recycled-Content Paper Products and Recycled-Content Printing and
Writing Paper, as well as reporting such records to the Reporting Designee.
B. The Recordkeeping Designee will do the following to track Procurement of Recycled-
Content Paper Products and Recycled-Content Printing and Writing Paper:
1. Collect and collate copies of invoices or receipts (paper or electronic) or other proof
of purchase that describe the procurement of Printing and Writing Paper and Paper Products,
including the volume and type of all paper purchases; and copies of certifications and other required
verifications from all departments and/or divisions procuring Paper Products and Printing and
Writing Paper (whether or not they contain recycled content) and/or from the Suppliers providing
Printing and Writing Paper and Paper Products. These records must be kept as part of the City’s
documentation of its compliance with 14 CCR Section 18993.3.
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3. Collect, collate, and maintain documentation submitted by the City departments and
divisions, Direct Service Providers, and/or Suppliers, including the information reported to the
Recordkeeping Designee in accordance with Section3.A.5.
4. Compile an annual report on the City’s direct procurement and Supplier/other
procurement on behalf of the City of Recycled-Content Paper Products and Recycled-Content
Printing and Writing Paper, consistent with the recordkeeping requirements and 14 CCR Section
18993.4 for Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper
procurement. This report shall be made available to the City’sresponsible entity for compiling the
annual report to be submitted to CalRecycle (which will include a description of compliance on many
other SB 1383 regulatory requirements) pursuant to 14 CCR Division 7, Chapter 12, Article 13.
This Policy shall go into January 1, 2022.
Authority cited: Public Resources Code Sections 40502, 43020, 43021, and 42652.5, and Health and Safety
Code Section 39730.6. Reference: Public Resources Code Section 42652.5; Health and Safety Code Section 39 39730.6;
and Public Contracts Code Sections 22150, 22151, 22152, 22153, and 22154.
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SECTION 279 –
NIGP – NATIONAL INSTITUTE OF GOVERNMENT PROCUREMENT
COMMODITY CODE CLASSIFICATION SYSTEM
The NIGP Commodity/Services Code classifies products and services in public
procurement. The codes are the standard taxonomy for classifying commodities and services for
1000’s government entities across the USA and the world.
The codes are used to track data within strategic sourcing and spending to detail where the
money is spent and what kinds of items are purchased most. The City uses these codes to track
purchasing activity and expense report purchases for budgeting and management reporting, for
tracking purchases, and for classifying suppliers by the types of products they provide.
The codes allow the City to look at suppliers' spending across all departments and also
compare spending across peer governments. Is Utilities paying the same amount as Public Works?
Is a peer government getting a better rate for a category than SLO?
The codes are classified by digit categories; the longer the digits, the more detailed the
classification.
The City uses the NIGP 5 Digit code structure to classify spending.
Structure Sample Code Description
3 Digit (Class) Code 918 Consulting Services
5 Digit (Class-Item) 918-43 Consulting Services –
Environmental
There are over 98,000 codes and subcodes to choose from. The City does not use all 98,000
codes.
To increase operational efficiencies and simplify the process for staff choosing amongst
the 1000’s NIGP codes, the City has developed a smaller standardized list.
The City’s most common NIGP codes are in the below link:
SLO NIGP Code Master List
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Section 280
PROCURE TO PAY PROCESS (P2P)
The procure-to-pay (P2P) process begins with the requisition of goods or services by a
requesting department and ends with payment to the supplier.
Between these two points, common practices and procedures must be followed.
Delivery of goods/services to the City does not constitute acceptance for payment.
Final acceptance for payment shall be given only after delivery and inspection by department
requesters that the good/service meets the purchase order conditions.
Final acceptance for payment is verified by departments ‘receiving’ the invoice in Oracle,
ensuring the PO# is on the invoice, and sending the validated final received invoice to Finance for
payment.
The following activities and department responsibilities form the P2P process.
Department Responsibility
Requesting
Department
Determine need
Prepare requisition in Oracle
Attach to the requisition detailed specifications, quotes,
sole-source, CMR, contract, etc.
Budget Budget approval will auto-approve in Oracle
Purchasing Review purchase requests for appropriate backup
documentation, scope, quote, contracts, authority, etc.
Ensure policy requirements are met by requesters
Review purchase terms and conditions
Supplier Ship supplies to departments or performs service
Submit the invoice to the requester who will receive the
invoice in Oracle and send to accounts payable for payment
Requesting
Department
Accept and inspect supplies or service for compliance
Resolve non-compliant purchases
Receive purchase in Oracle
Send invoice to Accounts Payable for payment
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Finance
Department
Enter invoice for payment into Oracle
Match PO, receiving, and invoice for payment
Responsibilities
Finance Department – It shall be the responsibility of the Finance Department to develop
and implement procedures for the following:
Notifying departments of improper invoicing. (within 10 days of receipt of the invoice
in AP);
Providing prompt payment of invoices within 30 days of receipt by the Finance
department;
Entering invoices, credit memos, etc. required for payment into the Oracle accounts
payable system;
Providing payment processing procedures to be followed by all City departments.
Requesting Departments – It shall be the responsibility of the departments to develop and
implement procedures for the following:
Entering requisition information with appropriate charge account, amount, and
descriptions of what is being purchased into the Oracle system;
Ensuring that all purchases, except for non-PO exceptions, have purchase order
numbers;
Entering receiving information into Oracle;
Identifying and resolving receiving issues;
Working with Finance to resolve payment disputes and issues.
General - The following applies to all external procurement of goods or services for the City:
1. All
invoices must be received by the requester in Oracle then sent to Accounts Payable.
2. Accounts Payable will pay after delivery and receiving of the goods/services by the
departments and matching the supplier’s invoice with the purchase order (3-way match)
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3. If an invoice is sent directly to the department – the department shall verify if the invoice
is tied to a purchase order. If so, invoice can be sent to Accounts Payable for payment.
4. If the invoice does not have a purchase order number and does not meet an exception,
the requester must submit the invoice for a purchase order number, even if after the fact purchase.
5. The invoice shall contain:
Name of the supplier
Date of invoice
Invoice number
The authorizing City purchase order number
The correct quantity, amount, and total cost
Manufacturer name and item number of the goods
Address to which payment should be made
6. Invoices sent to Accounts Payable must have the purchase order number and receipt
number stamped on the invoice.
It is the responsibility of the Finance Department (AP) to conduct the 3-way match.
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PUBLIC CONTRACT CODE – SB1383
PUBLIC CONTRACT CODE – PCC DIVISION 2. GENERAL PROVISIONS [1100 -
22355]; ( Division 2 enacted by Stats. 1981, Ch. 306. ) PART 3. CONTRACTING BY LOCAL
AGENCIES [20100 - 22178]; ( Part 3 added by Stats. 1982, Ch. 465, Sec. 11.); CHAPTER 3.5.
Recycled Product Procurement Mandates Pertaining to Local Governments [22150 - 22154]; (
Chapter 3.5 added by Stats. 2005, Ch. 590, Sec. 39.)
22150.
(a) If fitness and quality are equal, each local public entity shall purchase recycled products,
as defined in Section 12200, instead of nonrecycled products whenever recycled products are
available at the same or a lesser total cost than nonrecycled items.
(b) A local public entity may give preference to suppliers of recycled products.
(c) A local public entity may define the amount of this preference.
(Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.)
22151.
In bids in which the local government has reserved the right to make multiple awards, the
recycled product preference cost shall be applied, to the extent possible, so as to maximize the dollar
participation of firms offering recycled products in the contract award.
(Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.)
22152.
(a) All local public entities shall require all business, as defined in Section 12200, to certify
in writing the minimum, if not exact, percentage of postconsumer materials in the products, materials,
goods, or supplies, offered or sold. All contract provisions impeding the consideration of recycled
products shall be deleted in favor of performance standards.
(b) With respect to printer or duplication cartridges that comply with the requirements of
subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the
cartridges so comply.
(Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.)
22153.
All printing contracts made by any local public entity shall provide that the paper used shall
meet the recycled content requirements of Section 12209.
(Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.)
22154.
(a) All businesses shall certify in writing to the contracting officer, or his or her
representative, the minimum, if not exact, percentage of postconsumer material in the products,
materials, goods, or supplies being offered or sold to any local public entity.
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(b) With respect to printer or duplication cartridges that comply with the requirements of
subdivision (e) of Section 12156, the certification required by this section shall specify that the
cartridges so comply.
(c) A local public entity may waive the certification requirement if the percentage of
postconsumer material in the products, materials, goods, or supplies can be verified in a written
advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or Supplier
Internet Web site.
(Amended by Stats. 2007, Ch. 130, Sec. 198. Effective January 1, 2008.)
PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000
- 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.); PART 3. STATE PROGRAMS
[42000 - 42999]; ( Part 3 added by Stats. 1989, Ch. 1096, Sec. 2.);CHAPTER 13.1. Short-Lived
Climate Pollutants [42652 - 42654]; ( Chapter 13.1 added by Stats. 2016, Ch. 395, Sec. 6. )
42652.5.
(a) The department, in consultation with the State Air Resources Board, shall adopt
regulations to achieve the organic waste reduction goals for 2020 and 2025 established in Section
39730.6 of the Health and Safety Code. The regulations shall comply with all of the following:
(1) May require local jurisdictions to impose requirements on generators or other relevant
entities within their jurisdiction and may authorize local jurisdictions to impose penalties on
generators for noncompliance.
(2) Shall include requirements intended to meet the goal that not less than 20 percent of edible
food that is currently disposed of is recovered for human consumption by 2025.
(3) Shall not establish a numeric organic waste disposal limit for individual landfills.
(4) May include different levels of requirements for local jurisdictions and phased timelines
based upon their progress in meeting the organic waste reduction goals for 2020 and 2025
established in Section 39730.6 of the Health and Safety Code. The department shall base its
determination of progress on relevant factors, including, but not limited to, reviews conducted
pursuant to Section 41825, the amount of organic waste disposed compared to the 2014 level, per
capita disposal rates, the review required by Section 42653, and other relevant information provided
by a jurisdiction.
(5) May include penalties to be imposed by the department for noncompliance. If penalties
are included, they shall not exceed the amount authorized pursuant to Section 41850.
(6) Shall take effect on or after January 1, 2022, except the imposition of penalties pursuant
to paragraph (1) shall not take effect until two years after the effective date of the regulations.
(b) A local jurisdiction may charge and collect fees to recover the local jurisdiction’s costs
incurred in complying with the regulations adopted pursuant to this section.
(Added by Stats. 2016, Ch. 395, Sec. 6. (SB 1383) Effective January 1, 2017.)
PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000
- 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.)PART 1. INTEGRATED WASTE
MANAGEMENT [40000 - 40511]; ( Part 1 added by Stats. 1989, Ch. 1096, Sec. 2. )
CHAPTER 3. Department of Resources Recycling and Recovery [40400 - 40511]; (
Heading of Chapter 3 amended by Stats. 2009, Ch. 21, Sec. 7.);ARTICLE 3. Powers and Duties
[40501 - 40511];( Article 3 added by Stats. 1989, Ch. 1095, Sec. 22. )
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40501.
The Department of Resources Recycling and Recovery may hold any hearings and conduct
any investigations in any part of the state necessary to carry out its powers and duties.
(Amended by Stats. 2009, Ch. 21, Sec. 15. (SB 63) Effective January 1, 2010.)
40502.
(a) The board shall adopt rules and regulations, as necessary, to carry out this division in
conformity with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The board shall make available to any person, upon request, copies of
proposed regulations.
(b) (1) The board shall adopt regulations regarding city, county, and regional agency source
reduction and recycling elements and nondisposal facility elements, required to be submitted to the
board pursuant to Section 41791.5, which shall be deemed to be emergency regulations and shall be
considered by the Office of Administrative Law as necessary for the immediate preservation of public
peace, health and safety, or general welfare. These emergency regulations shall not alter the
deadlines for the submission of countywide and regional agency integrated waste management plans
specified in Section 41791.
(2) Prior to adopting the emergency regulations required pursuant to paragraph (1), the
board shall do all of the following:
(A) Make available to any person, upon request, a copy of the proposed regulations at least
30 days prior to adoption.
(B) Hold at least two public hearings in different parts of the state in order to receive public
comment on the regulations.
(C) Publish notice in the California Regulatory Notice Register of the proposed adoption of
the emergency regulations, the identity of a contact person at the board from whom copies of the
proposed regulations may be obtained, and the dates, times, and locations of the public hearings that
are required pursuant to subparagraph (B).
(c) Any emergency regulations adopted by the board pursuant to paragraph (1) of subdivision
(b) shall be filed with the Office of Administrative Law at the earliest feasible date, but not later than
December 31, 1993. Notwithstanding subdivision (e) of Section 11346.1 of the Government Code,
any emergency regulations adopted pursuant to paragraph (1) of subdivision (b) shall remain in
effect for not more than three years from the date of adoption.
(Amended by Stats. 1993, Ch. 1169, Sec. 3. Effective October 11, 1993.)
PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000
- 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.); PART 4. SOLID WASTE
FACILITIES [43000 - 44820]; ( Part 4 added by Stats. 1989, Ch. 1095, Sec. 22.); CHAPTER 1.
Solid Waste Facility Standards [43000 - 43050];( Chapter 1 added by Stats. 1989, Ch. 1095, Sec.
22.); ARTICLE 2. Handling and Disposal Standards [43020 - 43035]; ( Article 2 added by Stats.
1989, Ch. 1095, Sec. 22. )
43020.
The board shall adopt and revise regulations which set forth minimum standards for solid
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waste handling, transfer, composting, transformation, and disposal, in accordance with this
division, and Section 117590 of, and Chapter 6.5 (commencing with Section 25100) of Division 20
of, the Health and Safety Code. The board shall not include any requirements that are already
under the authority of the State Air Resources Board for the prevention of air pollution or of the
state water board for the prevention of water pollution.
(Amended by Stats. 1996, Ch. 1023, Sec. 405. Effective September 29, 1996.)
43021.
Regulations shall include standards for the design, operation, maintenance, and ultimate
reuse of solid waste facilities, but shall not include aspects of solid waste handling or disposal which
are solely of local concern or which are within the jurisdiction of the State Air Resources Board, air
pollution control districts and air quality management districts, or the state water board or regional
water boards.
HEALTH AND SAFETY CODE – HSC; DIVISION 26. AIR RESOURCES [39000 -
44474]; (Division 26 repealed and added by Stats. 1975, Ch. 957.); PART 2. STATE AIR
RESOURCES BOARD [39500 - 39961]; ( Part 2 added by Stats. 1975, Ch. 957.); CHAPTER 4.2.
Global Warming [39730 - 39734]; ( Chapter 4.2 added by Stats. 2014, Ch. 523, Sec. 1. )
39730.6
(a) Consistent with Section 39730.5, methane emissions reduction goals shall include the
following targets to reduce the landfill disposal of organics:
(1) A 50-percent reduction in the level of the statewide disposal of organic waste from the
2014 level by 2020.
(2) A 75-percent reduction in the level of the statewide disposal of organic waste from the
2014 level by 2025.
(b) Except as provided in this section and Section 42652.5 of the Public Resources Code,
the state board shall not adopt, prior to January 1, 2025, requirements to control methane
emissions associated with the disposal of organic waste in landfills other than through landfill
methane emissions control regulations.
(Added by Stats. 2016, Ch. 395, Sec. 3. (SB 1383) Effective January 1, 2017.)
PUBLIC CONTRACT CODE – PCC; DIVISION 2. GENERAL PROVISIONS [1100 -
22355]; ( Division 2 enacted by Stats. 1981, Ch. 306.; PART 2. CONTRACTING BY STATE
AGENCIES [10100 - 19150]; ( Heading of Part 2 added by Stats. 1982, Ch. 1120, Sec. 6.);
CHAPTER 4. State Agency Buy Recycled Campaign [12153 - 12217]; ( Heading of Chapter 4
amended by Stats. 2005, Ch. 590, Sec. 7. ); ARTICLE 4. Recycled Materials, Goods, and
Supplies [12200 - 12217]; ( Article 4 added by Stats. 1989, Ch. 1094, Sec. 10. )
12200.
For the purpose of this article, the following definitions shall apply:
(a) “Board” means the California Integrated Waste Management Board, as defined
pursuant to Section 40110 of the Public Resources Code.
(b) “Business” includes bidders, contractors, and other interested parties that provide
services to, or sell products to, the state.
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(c) “Department” means the Department of General Services.
(d) “Director” means the Director of General Services.
(e) “Postconsumer material” means a finished material that would have been disposed of as
a solid waste, having completed its life cycle as a consumer item, and does not include
manufacturing wastes.
(f) “Product categories” include paper products, printing, and writing papers, compost,
cocompost, or mulch, glass, oil, plastic, paint, tires, tire-derived products, antifreeze, and metal.
(g) “Purchase” means any contractual agreement that state agencies use to obtain goods or
materials.
(h) “Recycled products” mean goods or materials that meet the requirements identified in
Section 12209, including any good or material that has been reused or refurbished without
substantial alteration of its original form.
(i) “Reportable purchase” means the purchase of any goods or materials, with recycled
content or not, that may be reported or categorized or classified within one of the product
categories identified in Section 12207.
(j) “Reportable recycled product purchase” means the purchase of any goods or materials
that meet the requirements identified in Section 12209, that may be reported or categorized or
classified within one of the product categories identified in Section 12207, including any good or
material that has been reused or refurbished without substantial alteration of its original form.
(k) “SABRC” means the State Agency Buy Recycled Campaign.
(l) “Secondary material” means fragments of finished products or finished products of a
manufacturing process, that has converted a resource into a commodity of real economic value, but
does not include excess virgin resources of the manufacturing process, such as fibers recovered
from wastewater, trimmings of paper machine rolls, mill broke, plastic, or metal trimmings, or
shavings, or other residue from a manufacturing process. Secondary material does not include
postconsumer material, so that the secondary material plus the postconsumer material plus the
virgin material adds up to 100 percent of the product.
(m) “State agency” means each entity identified in Section 11000 of the Government Code,
and includes the California State University.
(Amended by Stats. 2005, Ch. 590, Sec. 25. Effective January 1, 2006.)
12201.
(a) The Legislature finds and declares that it is the policy of the state to conserve and
protect its resources. The Legislature further finds and declares that the use of recycled products
produced as the result of the superior waste management efforts by the state and local
governmental entities will help conserve resources.
(b) It is the intent of the Legislature that the state pursue all feasible measures to improve
markets for recycled products including, but not limited to, bid evaluation preferences for
purchases made by the state.
(c) If fitness and quality are equal, each state agency shall purchase recycled products
instead of nonrecycled products whenever recycled products are available at the same or a lesser
total cost than nonrecycled products.
(Added by Stats. 2005, Ch. 590, Sec. 26. Effective January 1, 2006.)
12203.
Each state agency shall ensure each of the following:
(a) (1) Before January 1, 2020, at least 50 percent of reportable purchases are recycled
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products.
(2) On and after January 1, 2020, at least 75 percent of reportable purchases are recycled
products, except for paint, antifreeze, and tires.
(3) On and after January 1, 2020, at least 50 percent of reportable purchases of paint,
antifreeze, and tires are recycled products.
(b) The requirements specified in this article apply to all reportable purchases of state
agencies for product categories listed in this article.
(c) The reportable purchases of state agencies shall meet each requirement for, and be
applied to the total dollar amount of, each specified product category as defined in this article. The
purchase of a recycled product from one category may not be applied toward the requirements for,
or the total dollar amount of, any other category listed in this article.
(d) Each state agency shall require the businesses with whom it contracts to use, to the
maximum extent economically feasible in the performance of the contract work, recycled products.
(Amended by Stats. 2014, Ch. 617, Sec. 1. (AB 2675) Effective January 1, 2015.)
12205.
(a) (1) All state agencies shall require all businesses to certify in writing the minimum
percentage, if not the exact percentage, of postconsumer material in the products, materials, goods,
or supplies offered or sold to the state regardless of whether the product meets the requirements of
Section 12209. The certification shall be furnished under penalty of perjury. The certification shall
be provided regardless of content, even if the product contains no recycled material.
(2) With respect to printer or duplication cartridges that comply with the requirements of
subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the
cartridges so comply.
(3) A state agency may waive the certification requirement if the percentage of
postconsumer material in the products, materials, goods, or supplies can be verified in a written
advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or
Supplier Internet Web site.
(b) (1) All businesses shall certify in writing to the contracting officer or his or her
representative the minimum percentage, if not the exact percentage, of postconsumer material in
the products, materials, goods, or supplies being offered or sold to the state regardless of whether
the product meets the requirements of Section 12209. The certification shall be furnished under
penalty of perjury. The certification shall be provided regardless of content, even if the product
contains no recycled material.
(2) With respect to printer or duplication cartridges that comply with the requirements of
subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the
cartridges so comply.
(3) A state agency may waive the certification requirement if the percentage of
postconsumer material in the products, materials, goods, or supplies can be verified in a written
advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or
Supplier Internet Web site.
(Repealed and added by Stats. 2005, Ch. 590, Sec. 29. Effective January 1, 2006.)
12207.
This article applies to the purchase of goods and materials from the following product
categories:
(a) Paper products, including, but not limited to, paper janitorial supplies, cartons,
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wrapping, packaging, file folders, and hanging files, building insulation and panels, corrugated
boxes, tissue, and toweling.
(b) Printing and writing papers including, but not limited to, copy, xerographic, watermark,
cotton fiber, offset, forms, computer printout paper, white wove envelopes, manila envelopes, book
paper, note pads, writing tablets, newsprint, and other uncoated writing papers, posters, index
cards, calendars, brochures, reports, magazines, and publications.
(c) Mulch, compost, and cocompost products including soil amendments, erosion controls,
soil toppings, ground covers, weed suppressants, and organic materials used for water
conservation.
(1) “Compost” means a product that meets the following requirements:
(A) It results from the controlled biological decomposition of organic materials, including,
but not limited to, yard trimmings and wood byproducts that are separated from the municipal solid
waste stream at the source of generation or at a centralized facility, or other source of organic
materials.
(B) It is produced by a public or private supplier that is in compliance with the board’s
composting operations regulatory requirements.
(2) “Cocompost” means a product that meets the following requirements:
(A) It results from the controlled biological decomposition of a blend of organic materials,
including, but not limited to, yard trimmings and wood byproducts that are separated from the
municipal solid waste stream at the source of generation or at a centralized facility, and also
including, but not limited to, biosolids or other comparable substitutes such as livestock, horse, or
other animal manure, food residues, or fish processing byproducts.
(B) It is produced by a public or private supplier that is in compliance with the board’s
composting operations regulatory requirements.
(3) “Mulch” means a product that meets the following requirements:
(A) It results from the mechanical breakdown (chipping and grinding) of materials,
including, but not limited to, yard trimmings and wood byproducts that are separated from the
municipal solid waste stream at the source of generation or at a centralized facility.
(B) It is produced by a public or private supplier that is in compliance with the board’s
composting operations regulatory requirements.
(d) Glass products including, but not limited to, windows, test tubes, beakers, laboratory or
hospital supplies, fiberglass (insulation), reflective beads, tiles, construction blocks, desktop
accessories, flat glass sheets, loose-grain abrasives, deburring media, liquid filter media, and
containers.
(e) Lubricating oils including, but not limited to, any oil intended for use in a crankcase,
transmission, engine, power steering, gearbox, differential chainsaw, transformer dielectric fluid,
cutting, hydraulic, industrial, or automobile, bus, truck, vessel, plane, train, heavy equipment, or
machinery powered by an internal combustion engine.
(f) (1) Plastic products including, but not limited to, printer or duplication cartridges,
diskette, carpet, office products, plastic lumber, buckets, wastebaskets, containers, benches, tables,
fencing, clothing, mats, packaging, signs, posts, binders, sheet, buckets, building products, garden
hose, and trays.
(2) For purposes of this subdivision, “printer or duplication cartridges” has the same
meaning as described in paragraph (2) of subdivision (f) of Section 12209.
(g) Paint, including, but not limited to, water-based paint, graffiti abatement, interior and
exterior, and maintenance.
(h) Antifreeze, including recycled antifreeze, and antifreeze containing a bittering agent or
Page 1134 of 1284
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made from polypropylene or other similar nontoxic substance.
(i) Tires including, but not limited to, truck and bus tires, and those used on fleet vehicles
and passenger cars.
(j) Tire-derived products including, but not limited to, flooring, mats, wheelchair ramps,
playground cover, parking bumpers, bullet traps, hoses, bumpers, truck bedliners, pads, walkways,
tree ties, road surfacing, wheel chocks, rollers, traffic control products, mudflaps, and posts.
(k) Metal including, but not limited to, staplers, paper clips, steel furniture, desks, pedestals,
scissors, jacks, rebar, pipe, plumbing fixtures, chairs, ladders, file cabinets, shelving, containers,
lockers, sheet metal, girders, building and construction products, bridges, braces, nails, and
screws.
(Added by Stats. 2005, Ch. 590, Sec. 30. Effective January 1, 2006.)
12209.
For purposes of this article, the following minimum content requirements apply:
(a) Recycled paper products shall consist of at least 30 percent, by fiber weight,
postconsumer fiber.
(b) (1) Recycled printing and writing paper shall consist of at least 30 percent, by fiber
weight, postconsumer fiber.
(2) Printed newspapers that meet the requirements of Chapter 15 (commencing with Section
42750) of Part 3 of Division 30 of the Public Resources Code shall be considered in compliance
with the requirements of this section.
(c) For recycled compost, cocompost, and mulch, at least 80 percent of the product shall
consist of materials, including, but not limited to, the materials listed in subdivision (c) of Section
12207, that would otherwise be normally disposed of in landfills.
(d) For recycled glass, the total weight shall consist of at least 10 percent postconsumer
material.
(e) Rerefined lubricating oil shall have a base oil content consisting of at least 70 percent
rerefined oil.
(f) (1) For recycled plastic products, other than printer or duplication cartridges, the total
weight shall consist of at least 10 percent postconsumer material.
(2) Recycled printer or duplication cartridges shall comply with either the requirements set
forth in subdivision (e) of Section 12156 or the general requirement for recycled plastic products
set forth in paragraph (1).
(g) Recycled paint shall have a recycled content consisting of at least 50 percent
postconsumer paint. Preconsumer or secondary paint does not qualify as “recycled paint”
pursuant to this subdivision. If paint containing 50 percent postconsumer content is unavailable, or
is restricted by a local air quality management district, a state agency may substitute paint with at
least 10 percent postconsumer content.
(h) Recycled antifreeze fluid shall have a recycled content of at least 70 percent
postconsumer materials.
(i) Retreaded tires must use an existing casing that has undergone an approved or accepted
recapping or retreading process, in accordance with Chapter 7 (commencing with Section 42400)
of Part 3 of Division 30 of the Public Resources Code.
(j) For tire-derived products, the total content shall consist of at least 50 percent recycled
used tires.
(k) For recycled metal products, the total weight shall consist of at least 10 percent
postconsumer material.
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(l) For reused or refurbished products, there is no minimum content requirement.
(Added by Stats. 2005, Ch. 590, Sec. 31. Effective January 1, 2006.)
12211.
(a) A state agency shall report annually to the board its progress in meeting the recycled
product purchasing requirements using the SABRC report format provided by the Department of
Resources Recycling and Recovery.
(b) On or before October 31 of each year, the department shall provide to the Department
of Resources Recycling and Recovery the following information:
(1) A list, by category, of individual reportable recycled products, materials, goods, and
supplies that were available for purchase by state agencies from a statewide-use contract,
agreement, or schedule during the previous fiscal year.
(2) A list, by category, of all reportable products, materials, goods, and supplies that were
available for purchase by state agencies from a statewide-use contract, agreement, or schedule,
including contract, agreement, or schedule tracking numbers, during the previous fiscal year.
(Amended by Stats. 2014, Ch. 617, Sec. 2. (AB 2675) Effective January 1, 2015.)
12215.
Each state agency may, at the discretion of the individual agency director or his or her
designee, print a statement on recycled products selected by the agency director. This statement
shall be determined by the department, in consultation with the board, and shall be similar to the
following: “Contains at least ____ percent postconsumer material.”
(Added by Stats. 2005, Ch. 590, Sec. 35. Effective January 1, 2006.)
12217.
(a) If at any time a requirement has not been met, the department, in consultation with the
board, shall review purchasing policies and shall make recommendations for immediate revisions
to ensure that the recycled product purchasing requirements are met.
(b) In determining purchasing specifications, with the exception of any specifications that
have been established to preserve the public health and safety, all state purchasing specifications
shall be established in a manner that results in the maximum state purchase of recycled products.
(c) If a recycled product, as defined in subdivision (h) of Section 12200, costs more than the
same product made with virgin material, the state agency shall, if feasible, purchase fewer of those
more costly products or apply the cost savings, if any, gained from buying other recycled products
towards the purchase of those more costly products to meet the solid waste diversion goals of
Section 41780.
(d) Each state agency shall establish purchasing practices that ensure the purchase of
goods and materials that may be recycled or reused. Each state agency shall continue activities for
the collection, separation, and recycling of recyclable materials and may appoint a recycling
coordinator to assist in implementing this section.
(e) To assist the state in meeting the requirements of this article, each state agency, and the
department, in consultation with the board, may also establish recycled product-only bids,
cooperative purchasing arrangements, or other mechanisms to meet the requirements for recycled
products and to encourage the maximum state purchase of recycled products.
(f) The department, in consultation with the board, shall review and revise the purchasing
specifications used by state agencies in order to eliminate restrictive specifications and
discrimination against the purchase of recycled products and to ensure that they are drafted in a
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manner that results in the maximum state purchase of recycled products. All contract provisions
impeding the consideration of recycled products shall be deleted in favor of performance standards.
(g) Any state agency that is required to submit an SABRC report to the board, pursuant to
Section 12211, is subject to a review conducted by the board or its designee.
(Added by Stats. 2005, Ch. 590, Sec. 36. Effective January 1, 2006.)
PUBLIC CONTRACT CODE – PCC DIVISION 2. GENERAL PROVISIONS [1100 -
22355]; ( Division 2 enacted by Stats. 1981, Ch. 306); PART 2. CONTRACTING BY STATE
AGENCIES [10100 - 19150]; ( Heading of Part 2 added by Stats. 1982, Ch. 1120, Sec. 6.);
CHAPTER 4. State Agency Buy Recycled Campaign [12153 - 12217]; ( Heading of Chapter 4
amended by Stats. 2005, Ch. 590, Sec. 7.); ARTICLE 1. General Provisions [12153 - 12156]; (
Article 1 added by Stats. 1989, Ch. 1094, Sec. 10. )
12156.
(a) Except as provided in subdivision (b), no state agency shall purchase any printer or
duplication cartridge for which the manufacturer, wholesaler, distributor, retailer, or
remanufacturer places restrictions on the recycling or remanufacturing of that cartridge by any
other person. For purposes of this section, these restrictions include, but are not limited to, all of
the following:
(1) Reducing the price of the cartridge in exchange for any agreement not to remanufacture
the cartridge.
(2) A licensing agreement on the cartridge that forbids remanufacturing.
(3) Any contract that forbids the remanufacturing or recycling of the cartridge.
(b) Notwithstanding subdivision (a), a manufacturer, wholesaler, distributor, retailer, or
remanufacturer who establishes a recycling or remanufacturing program that is available to its
customers may enter into signed agreements with those customers consenting to the return of the
used cartridge to the manufacturer, wholesaler, distributor, retailer, or remanufacturer, only for
either of the following purposes:
(1) Recycling and remanufacturing, for purposes of making the remanufactured cartridge
available for purchase.
(2) Recycling.
(c) Each state agency shall print a statement on the cover of its printer or duplicator
cartridge bid packages, or in some other noticeable place in the bid packet, notifying all bidders
that it is unlawful to prohibit a printer or duplication cartridge that is sold to the state from being
recycled or remanufactured, except as specified in subdivision (b).
(d) This section does not authorize any violation of the Cartwright Act (Chapter 2
(commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code) or
the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the
Business and Professions Code).
(e) As used in this section, the following terms mean:
(1) “Printer or duplication cartridge” means a cartridge, including, but not limited to, a
toner or ink cartridge, used in printer or duplication equipment for business or personal use.
(2) “Recycled” means a printer or duplication cartridge that would otherwise become solid
waste, but which has undergone a process of collecting, sorting, cleansing, treating, or
reconstituting, and which has been returned for the manufacture of new products or the
remanufacture of used cartridges.
(3) “Remanufactured” means a printer or duplication cartridge that has served its intended
Page 1137 of 1284
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end use, but, rather than being discarded or disposed of, has instead been restored, renovated,
repaired, or recharged, without substantial alteration of its form.
(Added by Stats. 1999, Ch. 910, Sec. 1. Effective January 1, 2000.)
Page 1138 of 1284
Approval Thresholds – Benchmark Research
Santa Cruz (pop. 65,000)
Under $10,000 Small purchase
$10,000 - $99,999 Informal Bid - Quotes
$100,000 or more Formal Bid (RFP)
Santa Barbara (pop. 91,000) 6 purchasing staff
Under $7,500 One quote
$7,501 - $75,000 Three quotes Informal
$75,001 and above RFP (Goods and Professional Services)
$75,001 and above RFP (Maintenance)
Paso Robles (pop. 31,000)
Under $5,000 One quote – No purchase order required
$5,000 – 10,000 Three quotes – Purchase order required before purchase
$10,000 and above RFP
Up to $20,000 City Manager Approval
$20,000 and above Council Approval
Monterey, CA (pop. 28,000)
Goods, Professional Services, and Consultant Professional Services
Under $12,000 One quote
$12,000 – 75,000 Three quotes
$75,000 and above Formal Bid (RFP)
Legal Professional Services
Under $100,000 City Attorney Approval
Over $100,000 Council Approval
Page 1139 of 1284
County of Alameda
Goods and Services
Under $100,000 Informal request / quotes
$100,000 and above Formal Bids
County of SLO
Goods
Less than $5000 No PO; or purchasing approval. Department places order pay using AP invoice
$5000 - $25,000 At least 2 quotes
$25,000 or greater Formal Bid Required
Services
Less than $5000 No PO; or purchasing required. Department places order pay using AP invoice
$5000 - $25000 At least 2 quotes; Purchase Order Required
$25,000 - $100,000 At least 3 quotes; Purchase Order Required
$100,000 or greater Formal Bid Required
Page 1140 of 1284
National Inst. Of Government Procurement (Award winning Agencies – procurement policies)
St. Petersburg FL (pop. 261,000) (Centralized) Procurement Director - 26 staff
Under $5,000 Best quote
$5,000-$9,999 Three telephone quotes
$10,000-$99,999 Five written quotes
$100,000 or more Council
Portland, OR (pop. 645,000) Centralized – Chief Procurement Officer and 42 staff
Under $5,000 Small purchase – 3 quotes recommended – not required – purchases subject to
audit
Non-Construction
$5,000 – $50,000 – 3 quotes required
$50,000 - $500,000 – RFP Required
$500,000 or more – Council
Port St. Lucie, FL (pop. 179,000) Centralized – Procurement Director - 7 buyers
Under $5,000 One verbal quote (Fiscal Officer Approval)
$5,000 - $50,000 Three quotes (Dept Head Approval)
$50,000 - $74,999 Three quotes (City Manager Approval)
$75,000 and over Formal Bid – (City Council)
Longmont, CO (pop. 94,000)
Under $5,000 One quotes – PO or Credit Card – Processed directly by departments
$5,000 – 50,000 Three quotes
$50,000 over RFP
Mesa, AZ (pop. 499,000)
Under $5,000 One quote
$5,000 – 25,000 Goods and Non-Professional Professional Services – 3 quotes (Dept Head
Approval)
$5,000 – 50,000 Consultant Professional Services – 3 quotes (Dept Head Approval)
Over $25,000 Goods and Non-Professional Professional Services – RFP - Council Approval
Over $50,000 Consultant Professional Services – RFP - Council Approval
Page 1141 of 1284
2020‐21 Purchase Order Data
Row Labels PO Amount Goods
General Goods 14,559,185.47
New Flyer of America, Inc. 909,259.00 Total PO's 512 14,559,185.47
Proterra, Inc. 835,000.00
JB Dewar Inc 695,498.82 Reduced RFP 29 1,487,671.55
Commline, Inc. 649,999.99 Increase in CMR's 1 67,452.14
DELL MARKETING L P 525,853.99 Increase in CAR's 6 1,026,438.92
Cal Poly‐University Cashier 520,000.00
Badger Meter, Inc 479,449.03 # CMR (old) 17
IPS Group Inc 466,209.31 # CMR (new) 12
JCI Jones Chemical, Inc 436,000.00 # CAR (old) 17
CAL POLY CORPORATION ‐ CAL POLY ARTS 323,351.00 # CAR (new) 23
Motorola Solutions Inc. 319,717.89
Cal Poly Performing Arts Center 318,351.00
Springbrook Software LLC 291,768.00
Ascent Environmental 287,500.00
Cdce Inc 279,333.39 Services
Quinn Company 266,440.40
WatchGuard Video 231,684.21 Total PO's 225 7,947,388.56
SHI International Corp 194,532.89
Olin Corporation Chlor Alkali 189,000.00 Reduced RFP 26 2,272,512.02
CDW Government Inc 184,190.39 Reduced CMR's 3 157,026.93
Swca Enviromental Consultants 155,078.25 CAR's 0
National Auto Fleet Group 153,474.01
Tyler Technologies 150,163.38 #CMR (old) 14
Zoll Medical Corporation 149,139.93 #CMR (new) 11
Citig, Inc. 148,335.78 #CAR (old) 9
Hanson Aggregates Inc 131,451.47 #CAR (new) 9
Statewide Traffic Safety & Signs Inc 124,674.53
GHD, Inc. 111,144.00
Pacific Polymers, Inc. 103,768.56
REACH 100,000.00
POLYDYNE INC 92,875.00
Traffic Management Products, Inc. 88,238.63
Hub Parking Technology USA Inc. 84,669.05
Bauer Compressors Inc 76,469.62
THATCHER COMPANY OF CALIFORNIA INC 67,452.14
ECS Imaging, Inc 64,193.26
Hach Company 62,974.16
Simpson Gumpertz & Heger, Inc. 62,000.00
Mustangs Sports Properties 62,000.00
Sierra Display, Inc. 58,563.73
Gilmore Liquid Air 57,500.00
SOFTWARE SOLUTIONS TEAM 57,059.75
Ferguson Enterprises LLC #1350 56,042.98
PERRY FORD LINCOLN MERCURY JEEP 52,856.00
Poor Richard's Press 52,699.35
Thermo Scientific Portable Analytical Instrument 52,420.38
Staples Business Advantage 52,346.31
Ditch Witch West 51,920.66
Smith & Sons Restoration and Construction 50,000.00
Columbia Cascade Company 49,258.02
Sybertech Waste Reduction, Ltd. 48,969.86
Burt Industrial Supply 48,851.55
Badger Branding 48,756.34
Charles P. Crowley Company, Inc. 48,569.79
Boone Printing and Graphics, Inc. dba Central Co 47,578.95
Perry's Electric Motors 47,319.77
Aviate Enterprises, Inc. 47,016.87
Famcon Pipe & Supply, Inc. 45,791.45
Dell Computer Corp 45,663.23
Brenntag Pacific, Inc. 45,500.00
Davey Resource Group, Inc. 44,571.00
Carquest Of Arroyo Grande 43,616.12
LN Curtis & Sons 43,471.07
Calportland Construction 40,160.95
Napa Auto Parts 37,155.97
Miwall Corporation 36,674.17
Bound Tree Medical LLC 36,356.73
ATT&T California, ATT&T Wholesale, AT&T DataC 36,021.88
STERLING WATER TECHNOLOGIES 36,000.00
Pureflow 34,465.00
Cal Poly Corporation 33,900.00
VWR International Inc 33,215.34
CHEMTRADE CHEMICALS US LLC 32,000.00
Page 1142 of 1284
Furniture Installation Team, Inc 31,359.57
Contractor's Glass Company 30,562.00
SM Tire 30,077.66
Security Lines US 30,057.06
California Water Technologies, LLC 30,000.00
Ewing Irrigation Products, Inc. 29,970.26
Municipal Maintenance Equip Inc 28,000.00
D&H Water Systems Inc 27,472.36
PC Mechanical Inc 27,193.42
Smardan Hatcher Co #106430 26,700.00
Contractor's Maintenance Services 26,659.11
California Hotel & Lodging Association 26,565.60
Avtec Inc 26,562.37
CED 26,512.53
PACIFIC PETROLEUM 26,428.23
NexTech Systems, Inc. 26,342.60
Miner's Ace Hardware 26,340.70
Lincoln Aquatics 25,750.00
Shore Microsystems 25,600.00
Koehler Plumbing, Inc. 25,360.00
A1 Surveillance Systems LLC 24,461.59
San Luis Powerhouse Inc 23,845.00
eSCRIBE Software, Ltd 23,770.00
Arms Unlimited, Inc. 23,738.00
Aggson's Glass 23,678.61
Town and Country Fencing 23,237.00
ICONIX Waterworks 22,981.95
Haaker Equipment Co 21,861.44
Fence Factory Santa Maria 20,882.00
Pacific Overhead Door Service 20,786.87
Aquafix, Inc. 20,638.33
GE Digital LLC. 20,534.24
Applications Software Technology LLC 20,400.00
SLO Noor Foundation 20,000.00
Coast Riders Powersports 20,000.00
Core‐Rosion Products 19,780.00
T Ketcham Fence/Tyler Ketcham 19,700.00
Imagetrend Inc 19,669.09
Southland Printing Company, Inc. 18,869.50
San Luis Obispo Repertory Theatre 18,800.00
Associated Traffic Safety, Inc. 18,745.00
The Tire Store 18,465.75
MID‐State Containers 18,064.27
Economic & Planning Systems Inc 18,000.00
Traffic Logix Corporation 17,609.87
Advanced Infrastructure Tech 17,449.70
Drive Customs 16,985.59
Cal‐State Auto Parts Inc 16,318.40
League Of California Cities ‐ Channel Counties Div 16,197.00
Dell EMC 16,102.87
Noble SAW Inc 15,704.37
Coastal Reprographics Inc 15,044.60
South Coast Emergency Vehicle Services 14,840.20
Desert Sun Marketing Company, Inc. 14,815.63
Idexx Distribution Inc 14,722.05
Kelly‐Moore Paint Company 14,653.78
Grainger 14,461.54
Columbia Cascade Co 14,418.63
Stainless Steve 14,188.00
Anixter, Inc. 14,135.61
The Sign Place 14,065.97
SLO City/County Library 14,000.00
Asphalt Zipper Inc 13,880.69
Safety‐Kleen Systems, Inc 13,855.88
Shoreline Awning & Patio, Inc. 13,810.00
Peloton Interactive, Inc. 13,626.87
Casa 13,485.00
Berchtold Equipment Company 13,053.50
Kiefer Aquatics, The Lifeguard Store, All America 12,976.85
Southwest Lift & Equipment 12,663.61
Absolute Auto Tech Inc 12,643.80
SAN LUIS OBISPO MUSEUM OF ART 12,500.00
Gala Pride and Diversity Center 12,500.00
Central Coast Truck Center SLO 12,212.10
Farm Supply Company 11,947.24
Harrington Industrial Plastics 11,657.29
Applied Concepts Inc 11,536.32
Page 1143 of 1284
Royal Industrial Solutions 11,000.00
Bill Gaines Audio, Inc. 10,992.63
J Carroll Corporation 10,933.19
Tri County Office Furniture 10,890.01
LPS Tactical & Personal Security 10,866.57
First Spear Of California LLC 10,818.20
Battery Systems 10,800.82
The Webstaurant Store, Inc. 10,600.00
Wastequip, LLC 10,509.00
DDL Traffic, Inc 10,374.17
Fastenal Company 10,364.05
S & L Safety Products 10,004.17
Kadence Corporation 10,003.46
SAN LUIS OBISPO COUNTY ARTS COUNCIL 10,000.00
San Luis Obispo Children's Museum 10,000.00
SLO International Film Festival 10,000.00
Diversity Coalition San Luis Obispo County 10,000.00
American General Media ‐ California Inc 9,760.00
Central Sanitary Supply 9,704.29
BC Construction & Electric 9,702.00
Eaton Corporation 9,295.16
Hazmat Resource 9,257.45
McMaster‐Carr 9,202.12
All Safe Industries, Inc. 9,064.21
DIG‐SMART, LLC 9,000.00
Linson Signs 8,987.18
Rain For Rent 8,945.40
Oilfield Enviro & Compliance Inc 8,914.20
LogMeIn USA, Inc. 8,730.00
Hayward Lumber Company 8,621.01
Central Coast Landscape Products 8,552.83
Core & Main LP 8,500.00
ProForce Law Enforcement 8,473.82
MAR‐Co Equipment Company 8,420.47
Rademaker Design 8,413.34
Takken's Inc 8,350.93
Quality Tinting & Signs 8,106.00
S&S Worldwide 8,021.27
Truckvault Inc 7,998.89
Manley Bros. of Indiana, Inc. 7,975.82
Eagle Energy Inc 7,897.76
SANS Institute 7,836.50
Westside Auto Supply 7,715.66
CI Technologies Inc 7,628.00
Office Depot, Inc 7,617.54
Nacto 7,500.00
Cal Coast Machinery Inc 7,500.00
SLO Life Magazine 7,499.00
South Coast Automation Systems Inc 7,308.00
Cuesta Polygraph ‐ John E. Odum 7,305.57
JTB Supply Company Inc 7,148.36
Peak Racks, Inc. 7,134.44
Creative Fence Co 6,815.00
Templeton Uniforms 6,650.61
Soils Solutions LLC 6,647.75
Central Coast Traffic Safety, Inc. 6,490.00
Integra Chemical Company 6,485.80
Allstar Industrial 6,448.29
Harrell's LLC 6,382.25
GT Molecular LLC 6,195.00
Srixon/Cleveland Golf/XXIO 6,108.20
Sequoia Rain Wolfe 6,100.00
Street Smart Solutions, LLC 6,095.50
ERA 6,073.12
Smartcover Systems 6,060.00
GIBBS TRUCK CENTERS 6,032.50
Range Servant America, Inc. 5,956.93
Culligan Water 5,950.72
Noble Power Equipment 5,792.49
APPLIED TECHNOLOGY GROUP INC 5,729.82
Odin Systems Inc 5,689.20
Flow N Control Inc 5,671.96
Adamson Police Products 5,602.22
Mullahey Ford 5,529.02
MK Battery 5,465.52
LC Action Police Supply 5,444.72
Lawson Products Inc 5,222.20
Page 1144 of 1284
Dan's Landscaping Company, Inc. 5,080.00
Nutrien Solutions, Inc. 5,062.20
Intrepid Networks, LLC 5,040.00
Alameda Electrical Distributors 5,036.23
Thycotic Software LLC 5,025.18
History Center Of San Luis Obispo 5,000.00
Headstrong Fit, LLC 5,000.00
A2LA Workplace Training 5,000.00
CompTIA Member Services LLC 4,900.00
Critical Incident Videos, LLC 4,900.00
Sunshine Supply Co., Inc. 4,855.41
Emergency Repair Door Service, Inc. 4,748.10
Altec Industries, Inc. 4,657.80
Jam Services 4,617.12
Winema Industrial & Safety Supply 4,568.74
Peterson U‐Cart 4,544.47
Thales Consulting Inc 4,500.00
Golden Bell Products, Inc. 4,307.00
Pioneer Athletics 4,290.24
Code R Decals And Graphics 4,285.00
American Water Works Association 4,269.00
Harvey's Honey Huts 4,247.96
PolyJohn Enterprises Corp. 4,107.61
Pump Check 4,045.00
PCS Mobile 4,040.63
Mark's Tire Service 3,851.17
Solutions II Inc 3,700.00
FLO SYSTEMS INC 3,647.43
Axon Enterprise Inc 3,615.11
Dependable Fire Protection 3,604.75
Sun Badge Company 3,573.87
United Rentals Northwest Inc 3,533.20
PTC Inc. 3,515.00
Forest Nurseries, Inc 3,500.00
America's Tire 3,490.54
Thermo Eberline LLC 3,400.00
Hydro Solutions, Inc. 3,362.90
Stover Seed Company 3,342.94
Floor Connection Inc 3,300.00
Doghouse Promotions 3,214.40
One Cool Earth 3,200.00
Airgas USA LLC 3,109.73
Allen Instruments & Supplies, LLC 3,108.00
Men & Mice, Inc. 3,100.00
MISCOwater 3,087.60
Rick Scott 3,053.15
KRONOS INC 3,028.33
Volvik USA Inc 3,001.02
SLO Coast Wine Collective 3,000.00
Knorr Systems Inc 3,000.00
Jason Terry Mitchell 3,000.00
Let's Ride Motorsports, Inc. 2,912.69
Nightforce Optics 2,865.50
USA Blue Book 2,850.42
Christian's Solid Wood, Inc. 2,688.77
Eco‐T Tire & Retreading, LLC 2,687.23
Huber Technology Inc 2,615.19
Ernest Packaging Solutions 2,612.73
Basile Inman 2,600.00
Rutter Armey, Inc. 2,500.18
Tolar Mfg Co Inc 2,500.00
San Luis Obispo Symphony 2,500.00
Wilshire Health & Community Services 2,500.00
SLO Classical Academy 2,500.00
Spokes 2,500.00
San Luis Obispo Master Chorale 2,500.00
Caliper Corporation 2,500.00
Court Appointed Special Advocates 2,500.00
Golding Concrete Sawing 2,500.00
BIKE SLO COUNTY 2,500.00
Eckerd Connects 2,500.00
Central Coast State Parks Association 2,500.00
FOUNDATION FOR THE PERFORMING ARTS 2,500.00
Front Porch SLO 2,500.00
Civic Ballet 2,500.00
JEWISH COMMUNITY CENTER OF SLO 2,500.00
Center for Family Strengthening 2,500.00
Page 1145 of 1284
California Electric Supply 2,459.71
Left Coast T‐Shirt Company 2,452.00
Independent Electric Supply Inc 2,441.90
NorCal Turf Tech and Reels 2,438.19
Central Coast Tourism Council 2,350.00
Wittek Golf 2,338.02
Kelly Donohue 2,325.00
Safeplay by Design, Inc. 2,300.00
Gordon Sand Company 2,280.00
Bentley Systems Inc. 2,259.00
Rogue Fitness 2,253.25
Infrastructure Technologies LLC 2,250.00
Vineyard Mechanical 2,190.00
MSM Sales and Distribution Inc. 2,186.07
Teledyne Instruments, Inc. 2,159.15
Judd and Judd Ltd 2,150.00
National Pen Company Inc 2,148.14
Coast Window Fashions 2,140.33
U.S. Bank 2,117.50
Arrivalist Co. 2,100.00
3 Ink Screenprinting, Inc 2,090.24
Allied 100, LLC 2,056.84
Infor (US) Inc 2,050.41
CENTRAL COAST PROPANE 2,031.92
Trench Drain Systems 2,002.08
Range Master 1,997.02
Michael Wolf 1,990.00
WAY SINE LLC 1,976.52
ReadyRefresh by Nestle 1,956.84
Waterline Tile Design 1,950.00
New Pig Corporation 1,928.66
Carrot‐Top Industries 1,913.62
Industrial Scientific Corporation 1,906.60
Ultrex Business Products 1,898.71
Smith Manufacturing 1,860.01
PTS 1,800.00
Rainscape 1,800.00
Fence Factory Atascadero 1,758.22
All Cal Equipment Services Inc. 1,750.00
Bell's Plumbing Repair Inc 1,750.00
Joan K. Reilly 1,740.00
Scott O'Brien Fire & Safety Co., Inc. 1,625.54
MBS Land Surveys 1,595.00
SAF‐T‐FLO Water Services, Inc. 1,576.47
EMERGENCY VEHICLE SPECIALISTS INC 1,555.91
Santa Maria Tool Inc 1,539.63
Midwest Contract Operations, Inc. 1,525.00
HD Supply Facilities Maintenance, Ltd. 1,500.00
Choice Label, Inc. 1,473.93
Whenever Communications LLC 1,470.88
Central Coast Spring 1,459.60
Roar Berg‐Johansen 1,451.39
AM Conservation Group Inc 1,436.02
Tileco Distributors, Inc. 1,432.21
Card Integrators Corporation 1,415.00
Bridgestone Golf, Inc. 1,394.03
Draeger Inc. 1,392.66
MarBorg Industries 1,390.28
Industrial Radiator Service Inc 1,375.51
California Rural Water Association 1,367.00
Wagner's Import Service Center 1,360.00
Turf Star Western 1,326.32
Continuing Education Of The Bar‐Regents of Univ 1,320.36
Evantec Corporation DBA, Evantec Scientific 1,301.45
USA Softball of Central California 1,300.00
Sherwin‐Williams Company 1,284.70
Swank Motion Pictures Inc 1,280.00
Valin Corporation 1,262.71
Rockart Industries, LLC 1,259.38
JTS, Inc. 1,250.00
Taylor Technologies Inc 1,200.00
April Flowers 1,157.88
Robert Daniels Deep Tine Service 1,150.00
Nixon Egli Equipment, Co. Inc. 1,108.32
Central Coast Plastics 1,086.12
Watereuse Association 1,070.00
O'Reilly Auto Parts 1,061.39
Page 1146 of 1284
Snap‐On Industrial 1,059.07
davesimmons.io 1,050.00
Satcom Global FZE 1,026.00
Stratus Streaming 1,000.00
Wayne Cooper Ag Services LLC 1,000.00
Transit Information Products 1,000.00
American Muffler & Trailer Hitch 1,000.00
efurnitureMax, LLC 999.90
Cole Chrysler Dodge 993.20
H2O Engineering Inc 992.00
Eschat 969.84
Trimble, Inc. 960.00
DOJ Office of Justice Programs 957.00
Ruffoni Services, Inc. 954.36
Advanced Test Equipment Corporation 945.60
La Quinta by Wyndham ‐ San Luis Obispo Downto 945.08
OCV Control Valves, LLC 933.20
Uncharted 924.00
Farmload Distributors Inc 921.84
Air‐Rite Refrigeration,Heating 900.00
Coast Electronics 892.39
Political Data, Inc. 880.86
Transoft Solutions 880.00
Rob Derrick 870.00
PRW Steel Supply, Inc 823.94
Central Coast Bearing 818.00
Haztech Systems Inc 813.28
Alfano Motorcars Inc 804.54
Amrep Manufacturing, LLC 791.46
Eutek Systems, Inc. 778.18
GT Golf Holdings Inc 778.00
Ponton Industries 771.71
Traffic Safety Store 738.44
Dooley Enterprises Inc 727.36
Extensis 710.00
Fisher Scientific Co LLC 709.22
Recognition Works 700.35
EAM Solutions 700.00
Critical Reach 700.00
Edwards & Cromwell., Inc. 680.00
Great West Equipment Inc 669.92
National Auto Glass 669.87
UGSI Chemical Feed, Inc. 666.40
CSG Systems Inc 650.44
Seton 643.32
WATTCO 642.27
Air Vol Block Inc 615.01
Tremco Police Products 611.70
Texas Refinery Corp 608.59
R & R Products Inc 603.84
TWR Lighting, Inc. 600.00
Kitzman Water 600.00
Mid‐State Instruments 581.85
Big Brand Tire & Service 571.30
CALED 570.00
MID Coast Fire Protection Inc 568.40
Lehr Auto 559.61
Musco Sports Lighting, LLC 548.42
Precise Weighing Systems 540.00
B&B Steel & Supply of Santa Maria 538.75
PSI Water Technologies, Inc. 530.92
Target Specialty Products 516.93
Ennis‐Flint, Inc. 509.22
Aramsco, Inc. 507.44
Landers Roofing 500.00
International Town And Gown Assoc 500.00
Genfare 500.00
Nafco 495.52
DAO Associates 473.22
TSSI Holdings, Inc. 472.00
Igoe & Company, Inc. 455.00
Paso Robles Truck Center 452.77
Central Coast Coffee Roasting Company, Inc. 448.15
SLO TOW 443.75
Robert H Wager Company, Inc. 432.84
Compliance Signs, LLC 432.00
Martin's Auto Service Inc 426.00
Page 1147 of 1284
Multiquip Inc 421.71
Negranti Construction 407.50
Miracle Playsystems, Inc. 406.13
Placer Title Company 400.00
Helping Hand Health Education, LLC 396.00
Lifeloc Technologies Inc. 395.64
American Flag And Gift Inc 391.19
Port San Luis Boatyard 391.12
The Fitting Image 370.00
Trophy Hunters 369.58
Ascap 367.00
Christopher J. Adamczyk 366.35
Wearcheck Lubrication Services LLC 360.00
American Leak Detection 350.00
All Green Electronics Recycling, LLC 350.00
B & B Steel & Supply Of Santa Maria 342.61
MFASCO Health & Safety Company 322.96
Keylock Security Specialists, Inc. 320.00
Hoffman Family Plumbing 300.00
Spikes Golf Supplies Inc 292.80
Indian Springs Mfg Co Inc 285.00
Mccarthy Steel Inc 283.70
Merco Marine, Inc 279.56
Cummins Sales & Service 273.45
Miracle Embroidery 270.82
Grignard Company LLC 253.92
IDN‐Wilco Inc 252.71
Coastline Equipment 245.89
Apollo Safety, Inc. 240.00
Bestway Laundry Solutions 219.00
Landscape Structures Inc 216.55
Recwest Outdoor Products Inc 216.55
Paso Robles Safe & Lock, Inc 215.00
Douglass Truck Bodies Inc 202.25
Trevor Monroe 200.00
Channel Counties Division 200.00
BridgePay Network Solutions 190.40
CS‐Amsco 190.00
Central Coast Fence Inc 190.00
Robert W. Moon 166.67
Sunbelt Rentals Inc 163.76
San Luis Auto Glass 152.31
SLO Firefighters Association Local 3523 150.00
SLOFIST 150.00
College Of The Sequoias 145.00
Gibbs International 136.39
Delta Liquid Energy 130.00
Cristando House Inc 125.00
Speedy Enterprise Inc 115.78
Toyota San Luis Obispo 101.79
Cal‐Line Equipment Inc 98.37
Procare Janitorial Supply 48.88
Mcdaniel Reporting & Video Conf Inc 0.00
Asap Reprographics 0.00
Envision Solar International, Inc. 0.00
Services 7,947,388.56
First Transit Inc 2,820,950.00
ALEXANDER'S CONTRACT SERVICES INC 310,000.00
TENNIS LANDSCAPE 299,697.00
All Ways Clean, Inc 290,347.83
DLT Solutions, LLC 270,958.81
SP Maintenance Services Inc 223,401.23
BUNYON BROTHERS TREE CARE INC 176,190.00
United Staffing Associates 171,135.66
KD JANNI LANDSCAPING INC 161,055.00
Karson Butler Events 148,258.83
Downtown SLO 139,866.00
Electricraft 129,979.74
Infosend, Inc. 123,870.35
Questica, Inc 119,885.29
2 Mexicans LLC 113,750.00
Passport Labs, Inc. 109,619.71
REPUBLIC ELEVATOR COMPANY 108,092.12
Verizon Wireless 107,979.84
Mission Linen Service 83,843.02
Weston Solutions, Inc. 69,028.00
Ray Morgan Company 55,358.93
Page 1148 of 1284
Azteca Systems Inc 51,000.00
Govconnection, Inc 50,668.00
EXCEL CLEANING INC 48,096.46
Cold Canyon Landfill Inc 47,502.50
BRANDAN'S STEAM CLEANING & JANITORI 47,050.00
Granicus LLC 46,571.58
Mccain Inc 44,937.86
Central Coast Earthscapes, Inc dba Earthscapes 42,500.00
Visit SLO Cal 40,000.00
Allweather Landscape Maintenance, Inc. 38,550.25
AdastraGov, Inc. 38,000.00
Whitlock & Weinberger Transportation, Inc. 37,960.00
MEDSTOP URGENT CARE 37,575.38
Info‐Tech Research Group, Inc. 34,458.44
2G Energy Inc 34,311.56
Alpha Fire & Security Corp 33,298.74
Packet Fusion Inc 31,993.43
CAN/AM TECHNOLOGIES, INC 31,740.00
CARTEGRAPH SYSTEMS, INC 31,130.00
D. Garcia Jr. Excavating Inc. 30,870.00
Community Action Partnership 30,633.41
US Digital Designs Inc 29,943.00
DocuSign 29,140.66
Smith Mechanical Electrical Plumbing 28,775.00
Stanley Convergent Security Solutions Inc 25,861.93
NTT America Solutions, Inc. 23,308.56
Accela 22,600.00
New Times 22,517.00
PG&E 22,500.00
Weldon, Williams, & Lick, Inc. 22,114.96
Pathpoint 20,800.00
Aqua Metrology Systems Limited 19,950.00
GARDA CL WEST 19,686.84
GovernmentJobs.com, Inc., DBA NEOGOV 18,478.50
CIO Solutions LP 17,776.64
KCBX 16,920.00
Host Compliance LLC 16,333.00
SoCalGas 15,017.07
ASSETWORKS 14,730.20
Promotional Concepts 13,848.14
Relx Inc 13,835.99
Five Cities Security Inc 13,800.00
Sancon Technologies, Inc. 12,630.00
EMTS, Inc. 12,500.00
Thomson Reuters ‐ West 12,064.40
CrowdRiff 12,000.00
MAC Painting 11,650.00
Suez WTS Analytical Instruments Inc 11,542.08
Jensen Audiovisual Inc 11,060.55
Gold Coast Environmental 10,970.50
Vital Records Control 10,542.73
Fluid Resource Management 10,276.69
Corrpro Companies Inc 10,235.00
Zero Waste USA Inc 10,143.54
Literacy For Life 10,000.00
Dimes Media 9,720.00
Brezden Pest Control Inc 9,670.00
Advantage Technical Services 9,379.00
Underground Service Alert 9,350.03
Coastal Rolloff 9,260.76
Cuesta Polygraph ‐ John E. Odum 8,950.00
Advantage Answering Plus 8,739.29
Nice InContact, Inc. 8,679.00
Thinkst Applied Research (PTY) Ltd 8,150.00
In Time Services, Inc. 8,064.00
Pulsepoint Foundation 8,000.00
Thoma Electric Inc 7,901.25
Costera Landscape 7,780.00
GREENVALE TREE COMPANY 7,525.00
San Luis Garbage Company 7,520.00
Environmental Water Solutions Inc 7,499.40
California ‐ West, Inc. 7,499.00
Wells Fargo Financial Leasing 7,460.00
Layfield USA Corporation 7,400.00
Environmental Laboratory Accreditation Program 7,373.00
Health and Human Resource Center, Inc. 7,344.00
Periscope Intermediate Corporation 7,210.00
Page 1149 of 1284
The Bank Of New York Mellon 7,166.94
CPC Systems Inc 6,970.00
Pacific Builders 6,905.76
MC Etter Painting 6,900.00
Klir, Inc. 6,600.00
Spectre Security, Inc. 6,500.00
Zoom Video Communications, Inc. 6,496.55
KIRK CONSTRUCTION 6,460.00
Opengov Inc 6,240.00
Air Exchange Inc 6,156.17
Quadient Leasing 6,045.06
Netfile Inc 6,000.00
Quaglino Roofing 5,950.00
Achievement House, Inc. 5,850.00
Bluebeam 5,828.00
Clean Harbors Environmental Services, Inc. 5,735.76
Brinks Incorporated 5,623.32
Bobs Crane Service 5,250.00
Browder Painting Co. Inc. 5,203.80
Sally A. Lamas 5,168.80
Zee Medical Service Co #34 5,143.10
Responder Training Enterizes, LLP 5,120.49
Underwriters Laboratories Inc 5,048.00
Databrook LLC 5,000.00
KSBY‐TV 5,000.00
Shower the People 5,000.00
Pars 4,800.00
Action Rooter 4,700.00
Target Solutions Learning 4,545.00
Fedex Office 4,515.60
WIP 4,398.17
SHANNON ELLINGTON CLEANING 4,305.00
Aster Bio, Inc. 4,300.00
Airx Testing Services, Inc. 4,295.00
Abalone Coast 4,235.00
Code Publishing Inc 4,000.00
Alpha Electrical Service 3,753.35
Allan Hancock JCCD 3,641.50
Stericycle Inc 3,631.63
Serological Research Institute 3,500.00
Johnson Aviation, Inc 3,388.00
Enplug, Inc. 3,240.00
Servicemaster Clean Anytime 3,100.00
Gemini Group LLC 3,084.00
Alpine Technical Services, LLC 3,078.00
The Tribune 3,000.00
Addiction Medicine Consultants, Inc. 3,000.00
A & M Roofing 3,000.00
Cole Pro Media, LLC 3,000.00
Green Halo Systems 2,916.00
United Refrigeration Inc 2,750.00
Committee for Children 2,713.32
Vortex Industries Inc 2,704.27
STR Inc 2,700.00
WIN‐911 Software 2,640.00
Sterling Communications Inc. 2,604.26
Asbury Environmental Services dba World Enviro 2,541.03
Restorative Partners, Inc. 2,500.00
Special Services Group, LLC 2,400.00
Balance Engineering 2,400.00
Marcy Jaffe 2,350.00
Digital West 2,170.46
Mia Pelayo Franco 2,100.00
AET Orkin Pest Control 2,000.00
Coastal Janitorial 2,000.00
Russ Bassett Corp. 1,999.89
Enterprise Security, Inc. 1,800.00
Comprehensive Drug Testing, Inc 1,800.00
Power Plumbing Inc 1,726.00
Knecht's Plumbing & Heating Inc 1,718.65
KNB Advertising Specialties 1,689.39
QED Enviromental Systems Inc 1,546.50
Johnson Aviation 1,540.00
Mustang Media Group 1,500.00
A Superior Crane LLC 1,500.00
Arbor First 1,475.00
MESA ENERGY SYSTEMS, INC. 1,459.00
Page 1150 of 1284
Transunion Risk And Alternative 1,400.00
AM PAC Repair 1,382.30
Metromedia Inc 1,320.00
Municipal Emergency Services Inc 1,299.08
Deep Blue Integration Inc 1,268.00
Quiky Car Wash LP 1,250.00
Dutch Window Cleaning Artist 1,180.50
Johnboys Towing 1,170.00
Mission Communications LLC 1,126.80
Water Fixers 1,060.19
Total Plumbing 989.00
Servpro Of San Luis Obispo 963.55
West Coast Safety Consultants 876.00
Gardensoft 795.07
HP Communications 787.92
Iron Mountain 750.00
All Green Electronics Recycling, LLC 749.00
Central Coast R&R Lock 745.29
Teamsideline.Com 699.00
ATSI 698.13
Burlingame Engineers, Inc. 678.83
Coastal View Window Cleaning 656.10
Redwood Toxicology Laboratory 650.00
Bockelman Illustration 561.40
Erin Clausen Photography 560.30
The Tribune ‐ Renewals 554.69
California Municipal Statistics Inc 500.00
Ian Gaffney Landscape 500.00
Drain Doctors Plumbing 470.00
UNITED PARCEL SERVICE 450.00
Mccall's Meter Sales & Services 450.00
Terri Recchia Bledsoe 450.00
Laurie Suzanne Estes 450.00
Julia Jackson Clark 428.40
O'Connor Pest Control 405.00
Mr. Rooter Plumbing Of Central Coast 392.76
Language Network, Inc. 391.25
Alluviam LLC 375.00
Pauls Dry Cleaners Inc 350.00
Robert Horch 350.00
Lenhardt Engineering Inc 344.18
Coulton's Appliance Service 339.00
Creative Services of New England 326.95
Califitness 276.00
United States Postal Service 245.00
Ball Bee Co. 195.00
Michelle Miller Massage 150.00
Sunset North Car Wash 99.42
Jack's Helping Hand 22.00
Macks Canvas & Awning 0.00
Grand Total 22,506,574.03
Page 1151 of 1284
Page 1152 of 1284
1
Local Preference in Public Procurement
What is San Luis Obispo's current policy for local vendors?
SLO Municipal Code - Bidding procedures— not required when.
3.24.060E. When the purchase is made cooperatively with one, or more, other units of government or from
a local dealer within the city limits that can provide the same brand, model, and configuration of item(s)
identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within
the same terms and conditions.
Does the City Council need to pass a local preference ordinance?
Yes.
What is a local preference?
Local preference happens when Cities establish a legally binding preference that gives a direct financial
advantage to local companies to benefit the local economy. The Government Finance Review (June 2012)
reviewed local preference policy outcomes in both cities and counties and found that preference given to
local businesses ranges from 1-5%, with 5% being the most common. Another type of local preference is
limiting the eligible bidders to the local area so that non-local firms can't even compete.
Considerations
A local preference is an indirect cost increase. Local preferences have the potential to dismantle the
competitive process by reducing the incentive for local businesses to provide the best value for the dollar.
Companies may decide not to bid when they know they don't have the same chance to compete and
reduce the incentive for local businesses to provide the best value for the goods/services they offer.
However, a study, Local Preference in Municipal Audit Markets, conducted by Vanderbilt University
concluded that local preference laws could serve their purpose - it always increases the likelihood that
local firms win.
Overall, studies have shown that a local preference results in jurisdictions paying more money for the
goods and services subject to the preference.
Therefore, the decision to consider a local preference becomes a judgment call as to whether the extra
cost is worth it.
Who is local?
In terms of geography, the City defines local businesses as entities having a physical presence
within SLO's borders. But is a PO BOX local? Should a local preference reach beyond the city
limits to the County? Is a business headquartered in the City, but most of its business is
Page 1153 of 1284
2
conducted elsewhere local? Or vice-versa: is a business located in a neighboring town but
doing substantial business locally and employing locals, local? Ownership and management are
also complicated; for example, is the local branch of a national company a local business, like
Amazon?
Multiplier Effect
The economic benefit of keeping local dollars in the local economy is known as the 'multiplier effect.'
The concept was developed by John Maynard Keynes and is used to measure the economic impact of
laws, trade, etc. It's a measure of how a government's spending ripples through the economy. At the
local level, the multiplier effect represents three rounds of spending, 1. The source of the funds or the
budget, 2. The public expenditure, 3. How do the recipients spend the money within the local area? As
local tax dollars are spent in SLO, theoretically, more jobs are maintained and created, and income is
generated for residents.
The multiplier effect is difficult to quantify and varies depending on the item purchased. For example,
some businesses (primarily service businesses) must pay out most of their receipts to their employees;
these dollars are recycled when the employees spend them locally. Other businesses, however, are
capital intensive, with relatively few employees and most of the receipts going into the cost of sales,
distribution, or production of goods and products; those expenditures may or may not involve other
local suppliers or manufacturers. For example, when SLO purchases a car from a local dealer, a small
portion of the cost goes to the dealer's employees and local profits, but most of the funds go to the
manufacturer, generally not a local firm. However, the City does realize significant gross tax receipts
from local vehicle sales.
Although dollars are always recycled, and the multiplier effect is a genuine economic factor, the true
measure of the multiplier effect is very difficult to measure. Ideally, the goal of a preference program
would be to create a structure that guarantees enough of an actual economic advantage to the jurisdiction
to financially offset the direct cost of the preference in higher bid prices or reduced competition.
Sustainability
Purchasing local has the potential to reduce shipping distances of goods in particular, which aligns with
the City's Climate Action Goals of Carbon Neutrality. What is the price the City is willing to pay for this? If
you found a good, for example, a pipe sold in SLO that was 5, 10, 15% more expensive than the same
product from a supplier in Bakersfield, should the City buy it from the local dealer?
Retaliation
Other governmental jurisdictions do not like to see their local businesses at a financial disadvantage in
competing with vendors in other localities. This reaction has led to the development of reciprocal
preferences. These laws (which might be better called negative preferences) require retribution
against companies located in areas that have a local preference when these companies try to do
business elsewhere. The financial preference that a firm receives in its home jurisdiction becomes a
Page 1154 of 1284
3
financial penalty if it tries to compete for governmental business in a jurisdiction with a reciprocal
preference.
Administrative Costs
Preferences and reciprocal preferences add to the administrative cost of procurement. Staff must
consider factors to meet basic purchasing laws and regulations, and each additional requirement adds to
the time required to review and adds to the risk of the possibility of human error in bid evaluation,
calculation, and award. Therefore, it raises the ultimate costs to citizens of the jurisdiction.
Have national and state organizations taken a position on local preferences?
Several professional organizations that deal with government purchasing and procurement
have examined the pros and cons of local preferences and have taken the position that local
preferences are not cost-effective. These organizations include:
x NIGP – National Institute of Government Procurement
x The International City and County Managers Association
x The Government Finance Officers Association (GFOA)
x The Council of State Governments
Page 1155 of 1284
Local PreferenceWhatis a local preference?•Cities establish a legally binding preference that gives a direct financial advantage to local companies and workforce to benefit the local economy. City of San Luis Obispo •A supplier ‘within City limits’•Municipal Code 3.24.060E. •When the purchase will be made [from a cooperative agreement] with one, or more, other units of government or from a local dealer within the city limitsthat can provide the same brand, model, and configuration of item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions.Page 1156 of 1284
3 Types of Local Preference Policies•Hiring Preferences – Contractors must hire a certain % of local workers •Purchasing Preferences – Contractors must purchase local supplies and materials•Contract Award Preferences – Give local bidders an advantage in the award of contractsPage 1157 of 1284
4 Types of Contract Award Preferences1. % price decrease to local bidders – advantage to local firms even if their bid is higher price.2.SLO’s Current Policy•Gives local bidders the opportunity to match the lowest bid3. Reciprocal Preference: Applies a price increase to non-local bidders only if the non-local bidder’s City applies a local-preference policy4. Tie Bid: Local bidder will win bid if non-local bid is equal in price and qualityPage 1158 of 1284
% Price Decrease to Local Bidders•Non-local XYZ bids ---- $100,000 •Local bids ----------------$105,000•Policy would reducelocal bid by 5% - but still pay $105,000 •Award to local bidder – if local bidder is ‘lowest most responsible bidder’ •Still have to evaluate bids for all other factorsPage 1159 of 1284
Bid Matching•Gives local bidders the opportunity to match the lower price•Current City Policy •Lowest most responsible non-local bid = $100,000 •Local bidder is within 5% of the non-local bid•Policy would require the City to give the local bidder to opportunity to match the pricePage 1160 of 1284
Reciprocal Preference•City would increase non-local bidders price 5% •If that bidder’s jurisdiction also had a local preference policy•City of Santa Cruz has a 5% preference policy•Santa Cruz firm bids $100,000 for consultant project•SLO would add 5% to pricePage 1161 of 1284
Tie Bid Preference•If local and non-local bid are equal in quality and price•Local bidder will win the awardPage 1162 of 1284
ProsSupport local business•Financial – direct more funds to local businesses•Political – showing local business actionable policy•Tax base – increased sales and property tax (businesses relocate) •Reduce the City’s carbon footprintIncrease employmentInstitute for Local Self-Reliance – many studies support local preferences •https://ilsr.org/rule/local-purchasing-preferences/Page 1163 of 1284
Cons•Indirect tax increase•Retaliation of other jurisdictions – can lead to less jobs – SLO business at disadvantage in other markets •Increased staff administrative costs –Adds layers to procurement process; increased risk of errors •Negligible carbon impacts – Products sold in SLO are not manufactured in SLO – shipped to SLO. •Difficult to quantify benefit – is a 5% preference recycled back to the local economy?National Finance Organizations – Against local preference policies•National Institute of Government Procurement•Government Finance Officers Association•International City and County Managers Association•The Council of State GovernmentsPage 1164 of 1284
Local54%Non-Local46%Local v. Non Local LocalNon-LocalLocal$54,328,663Non-Local$46,704,64PURCHASE ORDERS - OPERATING SPEND 2018-2022Page 1165 of 1284
2020TransactionsAmount%SLO1557157,984.2126%Non-Local2344461,397.6874%Total3901619,381.892021TransactionsAmount%SLO2321269,653.6724%Non-Local4344842,262.1576%Total66651,111,915.822022TransactionsAmount%SLO50154,449.7119%Non-Local945225,719.0581%Total1446280,168.76CREDIT CARD SPENDING – 2020-2022 LOCAL v. NON-LOCALPage 1166 of 1284
Local53%Non-Local47%PURCHASE ORDERS + CREDIT CARDS OPERATING SPENDLOCAL v. NON-LOCAL (2018-22)$103,044,776LocalNon-LocalNon-Local$48,234,025Local$54,810,750Page 1167 of 1284
LOCAL PREFERENCE – TIER 2-5*TIER 2 – STAFF COSTS – TOO COSTLY FOR DIVISION STAFF TO IMPLEMENTPage 1168 of 1284
If adopted•Requires passing an Ordinance – Limited to non-public works goods and services only•Finance recommends a 3-5% contract award preference (Tier 3-5 only) •Local Business as defined as ‘within City limits’•Valid Business License•Not delinquent in any City payments•No active code enforcement or planning actions•Applies only to non-public works goods and professional servicesPage 1169 of 1284
Exemptions•Purchases under the limits (Tier 1-2)•Sole-source purchases•Construction projects•Emergency purchases •Cooperative agreement purchases•Purchases funded by outside agencies that prohibit the use of preferences (grant funding)•Purchases made by credit cardsPage 1170 of 1284
Should Council Amend Current Local Policy? (Purchasing) Recommendation•Do not adopt policy•Costs outweigh benefits for staff to administer•Retaliation against SLO business in other jurisdictions •Alternative programs and funding to support local business (TBID; Economic Development Programs, etc.)•Municipal Code 3.24.060E. •When the purchase requires a formal competitive bid will be made [from a cooperative agreement] with one, or more, other units of government or from a local dealer within the city limitsthat can provide the same brand, model, and configuration of item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions.aPage 1171 of 1284
Page 1172 of 1284
ORDINANCE NO. _____ (2022 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, TO ADOPT A LOCAL PURCHASING
PREFERENCE FOR NON-PUBLIC PROJECTS GOODS AND SERVICES
PURCHASES
WHEREAS, Local businesses contribute significantly to the economic health of
our city and to the quality of life of our citizens and visitors. The city encourages the growth
of local businesses by means of increasing the participation of these businesses in the
city’s purchase of goods and services; and
WHEREAS, the city manager, or his/her designee, shall be responsible for
enforcement of this chapter; and
WHEREAS, a five percent (5%) evaluation preference will be applied to any
competitive process for goods, supplies, equipment, materials, services, or professional
services from a business designated as a local business; and
WHEREAS, when a nonlocal business has submitted the lowest responsive
responsible bid, and when one or more local businesses, as defined by this chapter,
have also bid, the local business’ total bid amount will be reduced by the preference
percentage of five percent for bid comparison purposes. If the net amount is lower than
the lowest bid, the contract will be awarded to the local business for the full amount of its
bid. When a request for proposals is used, t he preference will reduce only the price
component of the evaluation criteria; and
WHEREAS, A business shall comply with all of the following to be designated a
local business:
1. The provisions of this chapter shall apply to:
(a) The business shall have an office with at least one employee within
the city of San Luis Obispo.
(b) The business shall not be delinquent with any payments to the city.
(c) The business shall hold a valid city of San Luis Obispo business
license and tax certificates.
2. The provisions of this chapter shall not apply to:
(a) Purchases under the informal bid limit
(b) Sole source purchases.
(c) Construction projects.
(d) Urgent purchases necessary to protect public health, welfare or
safety.
(e) Purchases made under a cooperative agreement.
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(f) Purchases made by credit card, petty cash, or on claims.
(g) Purchases funded by outside agencies that prohibit the use of
preferences.
(h) Professional services requests for proposals where price is not
considered in the selection of which service provider to engage in
negotiations.
In addition, the city council shall have the authority to waive application of the local
business preference at its discretion.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. A local purchasing preference for non-public projects, goods, and
service purchases with an allowable, up-to five percent (5%) evaluation preference as
provided herein.
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SECTION 2. A summary of this ordinance, together with the names of Council
members voting for and against, shall be published at least five (5) days prior to its final
passage, in The New Times, a newspaper published and circulated in this City. This
ordinance shall go into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED on the ____ day of ____, 202X, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 202X, on the following
vote:
AYES:
NOES:
ABSENT:
__________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
Page 1175 of 1284
Page 1176 of 1284
Summary of Policy Changes
Purchasing Policy Update
As of April 2022
Section Summary of Change
Introduction 2018 policy references small, selected sections of purchasing Muni
Code.
2021 update fully incorporates language to fully explain the
Municipal Code language in the policy
Purchasing Division
Summary
Updated to more accurately reflect the City’s organizational
structure as a de-centralized purchasing organization; rather than
centralized – as described in the 2018 update.
Exhibit 201A Added City Attorney in the roles and responsibilities
Added Risk Management in the roles and responsibilities
Updated job roles and responsibilities
Updated the City Engineer role to accurately reflect their position in
the purchasing and procurement of Public Projects
202 – Purchase Types 2018 policy had five purchase types
2021 update will simplify and reduce the number of purchase types
for goods, professional services, public projects, and JOC
202 A
Thresholds
Update to the approval authority thresholds
*See accompanying memo in support*
202 A
Non-Purchase Order
Threshold
The update provides a non-purchase order allowance of up to $100
203 The update creates a CIP and Public Project purchases subsection
Reference the CIP design manual – maintained by the Public Works
Department that governs policies and procedures for CIP and Public
Projects
203 Update thresholds to align with UPCCC thresholds (increase)
203 Update thresholds for Construction Contract Change Orders
204 Update the City’s main purchase methods to align with the updated
thresholds
204 Update to purchase order types
Page 1177 of 1284
Section Summary of Change
- Defines purchase order types
- Defines criteria for open Fiscal Year purchase orders
Update to this section reflects how the City operates in the Oracle
ERP system taking into account staff costs in requisitioning /
receiving/payment
204 Defines non-purchase order allowance and non-purchase order
exceptions
204 Update to further define Emergency Purchasing with reference to the
City’s Municipal Code
Emergency purchase justification forms must be submitted with the
purchase
204 Sole Source Purchasing reference to the Municipal Code language
The updated thresholds will tighten the scrutiny for sole-sourcing
due to the increase in the no-bid thresholds and expanding the three-
quote price range before an RFP is required.
207 IT Procurement
Reference the City’s Information Technology Policy and
Procedures.
Establish procedures for purchasing IT-related goods and services
and contract templates
At the end of the project will develop contract templates for each of
the IT categories the City purchases. (hardware, software,
consulting, SaaS, IaaS, PaaS, and others).
Developed a checklist from identifying the need and assessing the
risk to making the purchase or signing a contract
255 Establish contract process and procedures
256 Establishes Contract Management Best Practices and Future
Training Opportunities
Defines authorities to change and/or modify contracts
257 Update to language to clearly define Contract Amendment policy
and procedures.
Page 1178 of 1284
Section Summary of Change
274 Introduce ‘Risk Management’ policy and procedures to the City’s
contracts to ensure the City’s contractual transfer risk procedures and
policies are followed by staff procuring goods and services. Every
purchase will be evaluated for the risk it presents to the City.
275 Credit Card Policy (updated in Spring 2022)
New purchase thresholds, mandatory training for end-users, and
ramifications for violation of policy rules.
276 Sustainable purchasing policy – integrated current Municipal Code
Language. It will be further developed in collaboration with the
Office of Sustainability and will be returned to Council for
consideration.
277 SB 1383 – update to introduce the State of CA, SB 1383 mandate for
recycled content paper products, 30% post-consumer recycled paper
requirement when feasible, and the reporting requirements to the
State
278 NIGP code – classification of purchase orders through the National
Institute of Government Procurement commodity code for analysis
of cumulative spending on different procurement types.
279 Procure to Pay Process – explains the entirety of a procurement cycle
– from the sourcing of a product, policies, and procedures for staff
to follow, and describes what is expected of each division and
department in the process.
Formatted Table
Page 1179 of 1284
Update to Section 200
Financial Management ManualFinancial
Management Manual
Purchasing Policy and Procedures Update –
October 20182019 2022
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Page 1180 of 1284
Page 1181 of 1284
INTRODUCTIONSection 201 .......................................................................................................... 2
INTRODUCTION .......................................................................................................................... 2
OVERVIEW ...................................................................................................................................... 2
PURCHASING SYSTEM OBJECTIVES ......................................................................................... 2
PURCHASING AUTHORITY .......................................................................................................... 3
PURCHASING FUNCTION ............................................................................................................. 3
PURCHASING SYSTEM OVERVIEW ........................................................................................... 4
Section 202 ........................................................................................................................................ 7
PURCHASING PROCESS PURCHASING PROCESS................................................................. 7
PERMITTED PURCHASING METHODS ...................................................................................... 7
PURCHASE REQUISITIONS AND PURCHASE ORDERS .......................................................... 8
PURCHASE CARD/CITY CREDIT CARD PURCHASES .......................................................... 11
EMERGENCY PURCHASES ........................................................................................................ 11
Section 203 ...................................................................................................................................... 15
BIDDING PROCESS .................................................................................................................. 15
TYPES OF SOLICITATIONS ........................................................................................................ 15
BIDDING CRITERIA ..................................................................................................................... 16
BIDDING PROCESSES .................................................................................................................. 17
Section 204 ........................................................................................................................................ 1
NO-BID PURCHASING ................................................................................................................ 1
LOW COST PURCHASING ............................................................................................................. 1
SOLE SOURCE PURCHASING ....................................................................................................... 1
EMERGENCY PURCHASING ........................................................................................................ 2
COOPERATIVE AGREEMENT PURCHASING............................................................................ 3
Section 215 .................................................................................................................................... 561
BUSINESS LICENSE REQUIREMENT .................................................................................... 561
BUSINESS LICENSES ................................................................................................................. 561
EXCEPTIONS ............................................................................................................................... 561
POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION) ........................................ 561
Section 225 .................................................................................................................................... 562
CONSTRUCTION CONTRACT CHANGE ORDERS ................................................................ 562
OVERVIEW .................................................................................................................................. 562
GOALS .......................................................................................................................................... 562
Section 255 .................................................................................................................................... 564
Amendments to Agreements ................................................................................................. 564
DOCUMENTING WORKSCOPE CHANGES ............................................................................ 564
AMENDMENT TO AGREEMENT NO. ...................................................................................... 568
Section 295 ........................................................................................................................................ 1
PURCHASING GUIDELINES ....................................................................................................... 1
PUBLIC PROJECTS ......................................................................................................................... 2
HYPERLINK "bookmark://_Toc528329925"PUBLIC 561
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Page 1182 of 1284
Section 201
Per requirement in Chapter 3.24.040 of the Municipal Code this chapter shall guide staff members
in purchasing goods and services on behalf of the City by establishing responsibilities and
authorization levels, outlining statutory requirements, and setting forth the policies and procedures
that govern purchasing and provide sufficient detail to enable City departments to:
• Be fully aware of, and comply with purchasing policies and procedures, and
• Effectively and efficiently participate in the City’s purchasing program.
These guidelines do not are not intended to address every issue, exception, or contingency that may
arise in the course of purchasing activities. Accordingly, the basic standard that should always
prevail is to exercise good judgment in the use and stewardship of City resources. Questions Any
questions about the City’s purchasing system and policies activities or proper purchasing process
should contact the be referred to the City’s Purchasing Division.
PURCHASING SYSTEM PURPOSE SYSTEM OBJECTIVES
The City's purchasing ordinance, Chapter 3.24 of the Municipal Cod e, the delegates
purchasing authority to the City Manager as well as any other representatives designated by her or
him:
Along with three other key policy documents— the City Charter, and purchasing ordinance (Chapter
3.24 of the Municipal Code) and purchasing resolution—the policies and procedures set
forthoutlined in this manual chapter form the City's purchasing control system.
The purpose of the purchasing control system adopted in (Municipal Code 3.24.020) is:
This system has been developed in order to achieve the following objectives:
• To purchase supplies, services, equipment, and public works projects at the lowest cost
commensurate with quality requirements;
• To ensure effective financial control over expenditures;
• To clearly define authority and accountability for the purchasing function;
• To minimize the written documentation, administrative actions and expense of processing
purchase transactions;
• To assure the quality of purchases made on behalf of the City; and
• To facilitate accurate forecasting and planning of department needs and expenditures. (Ord.
1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.2)
AUTHORITY
The City Manager, or his/her designated representative(s), shall be the purchasing authority whose
functions include the following powers and duties (Municipal Code 3.24.030)
• To develop and prescribe, for the departments, such administrative policies, forms and files
as may be reasonably necessary for the internal management and operation of these
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Commented [CD1]: The 5/1/2018 policy copied in only
selected sections of the Muni Code in the Authority section.
I’ve pasted all of the section language in for accuracy and
completeness
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Commented [CD2]: These bullet points were all in the last
policy adopted. Too wordy and too many objectives in my
opinion
The 3 policy documents:
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Page 1183 of 1284
purchasing procedures;
• To purchase or contract for those items listed in Section 3.24.010 and required by departments
in accordance with these purchasing procedures;
• To ensure full and open competition as possible on all purchases;
To procure the needed quality in supplies, services, equipment and public works projects not
controlled by the Charter, at minimum expense;
Secure goods and services at the lowest cost possible commensurate with quality requirements and
the City’s needs.
• To develop and maintain department awareness of purchasing and pricing principles,
marketing conditions and new products;
• To consolidate department orders for like items, ensuring discount pricing whenever possible;
• To inspect supplies and equipment delivered, as well as contractual services performed, to
determine their conformance with the specifications set forth in the orders and contracts; and,
in this connection, to have the authority to require chemical, physical or other tests of samples
submitted with quotations or bids, or of delivery samplings, which may be necessary to
determine quality and conformance with specifications;
• To establish procedures for, and assign duties to, personnel engaged in receiving, storing and
issuing purchased supplies, thereby ensuring that supply levels are consistent with usage
requirements;
• Subject to Charter Section 906, to sell or exchange surplus supplies and equipment; provided,
that the same cannot reasonably be used by any department. (Ord. 1618 § 1 (Exh. A (part)),
2015: Ord. 954 § 2 (part), 1983: prior code § 2950.3)
■ Establish authority, responsibility and accountability for purchasing activities conducted on
behalf of the City.
■ Ensure appropriate levels of competition and provide an equal opportunity for all qualified
suppliers to do business with the City.
■ Ensure compliance with purchasing policies and procedures.
■ Standardize procedures where appropriate to ensure that organization-wide policies and goals
are achieved.
■ Implement simple yet effective internal control procedures that appropriately support
planning, maximize productive use of public funds and protect City assets from unauthorized
use.
■ Coordinate organization-wide purchasing activities for commonly used items.
Commented [HM3]: Might want to consider loosening
this up a little. All purchases don’t have open competion
like emergency projects and small dollar purchases (like a
cup of coffee)
Commented [CD4R3]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can
change without passing a new ordinance
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Commented [HM5]: This seems odd to have in the muni
code and purchasing policy.
Commented [CD6R5]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can
change without passing a new ordinance
Commented [HM7]: I don’t think that we are formally
doing this. If we are not doing this, we should remove and
include in some future update when necessary storage and
inventory space and procedures have been developed.
Commented [CD8R7]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can
change without passing a new ordinance
How do we start to develop?
The City has multiple Assest management software systems
in place – how are they being used to manage assets,
inventory, and work orders?
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Commented [CD9]: Procuedure – Delete
Procedure should be department specific – each department
has different management structures – procedures should be
removed from the ‘Policy’
Commented [CD10]: Procedure and internal strategy -
Delete
Page 1184 of 1284
Introduction
PURCHASING AUTHORITY
The City's purchasing ordinance delegates purchasing authority to the City Manager as well as any
other representatives designated by her or him:
• Developing and prescribing such administrative policies, forms and files as may be
reasonably necessary for the internal management and operation of City purchasing policies
and procedures.
• Purchasing or contracting for supplies, equipment, services and construction projects as
required by the operating departments in accordance with City purchasing policies and
procedures.
■ Negotiating and recommending execution of contracts.
• Ensuring appropriate levels of competitive bidding for all purchases.
■ Ensuring compliance with purchasing policies and procedures.
PURCHASING DIVISION FUNCTION
The City’s purchasing division oversees City-wide purchasing under the direction of the Finance
Director. The City operates in a de-centralized procurement model with centralized oversight and
auditing conducted by the purchasing division. Purchasing functions is centralized within the Finance
Department, Purchasing Division, that coordinates purchasing processes and monitors compliance
with the policies contained in this manualshall be independent of other departments as the
independent exercise of procurement authority is an important piece of the City’s overall system of
internal controls. . The pPurchasing dDivision primary objectives include: is managed by the City’s
Purchasing Analyst under direction of the Finance Director.
• Support the City’s strategic goals and purchasing control system adopted in (Municipal Code
3.24.020);
• Be aware of the needs of City departments and acquainted with suppliers that best fulfill those
needs to support operations;
• Report on citywide purchasing performance metrics;
• Audit the purchase of goods, services, consulting services, and public works projects to ensure
department purchases comply with City policy;
• Assist departments in developing procedures to operate efficiently in the City’s Oracle ERP
system;
• Analyze purchasing of items to ensure pricing and terms are most advantageous to the City
and to consolidate purchases for like items from multiple suppliers ((Municipal Code
3.24.030);
• Encourage efficiency in financial operations around the ‘procure to pay process’
Commented [CD11]: Procedure - Delete
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Commented [CD12]: Procedural – Each City Dept has
different staff that negotiate contracts, source suppliers, etc.
City staff are the SME on many of their projects –
purchasing staff can ensure compliance with City policies;
ensure contract templates are used; negotiate on standard
terms; but subject matter experts should be the lead
negotiators on work scope; etc.
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Commented [CD13]:
The word ‘centralized’ is mis-leading. The City’s
organizational model is de-centralized.
The purchasing division oversees and audits purchasing for
compliance to policy, recommends cooperative agreements
and alternative suppliers when pricing is not competitive.
Purchasing does not carry out out the physical act of the
purchase – tracking, receiving, etc. The ERP motion project
was explained in multiple roadshows that purchasing was
moving to a ‘centralized’ system and led to mis-perceptions
amongst the departments. We don’t have a centralized
system in place, and it may not be the best organizational
model for the City.
A discussion with the leadership and fiscal officers would
help. What model is best for SLO?
The white paper link below lays out pros/cons of the 3
primary organizational models most public entities follow –
currently SLO is between #2 & 3
1. Fully centralized
2. Hybrid
3. Fully Decentralized.
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/S
hared%20Documents/Purchasing/Policy%20and%20Procedu
res/Centralized%20v.%20Decentralized.pdf
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Page 1185 of 1284
The Purchasing Division shall be independent from other departments as and the independent
exercise of procurement authority is an important piece of the City’s overall system of internal
controls.
To provide effective purchasing services throughout the City, the Purchasing Analyst shall be
tasked with:
■ Be aware of the needs of City departments and acquainted with sources and
availability of supplies, equipment, and certain services which will best fulfill these needs.
This requires an ongoing dialog with City departments in which their needs are discussed and
during which Purchasing indicates information required and lead-times necessary to complete
procurement transactions.
■ Arrange interviews between suppliers and representatives of the various City divisions
to discuss specific needs.
■ Coordinate bidding processes in compliance with these Policies.
■ Purchase all items at pricing and terms most advantageous to satisfy the normal needs
of the City for a reasonable length of time.
■ Process purchasing requests as expeditiously as possible, in a manner consistent with
these Policies.
General responsibilities for setting and implementing purchasing system policies and procedures are
summarized in Exhibit 201-A.Exhibit 201A Purchasing Control System Responsibilities
Voters • Approve City Charter
City Council • Adopt purchasing ordinance
• Adopt resolutions setting purchasing guidelines
• Approve Requests for Bids (RFBs) and Requests for Proposals (RFPs) documents
for purchases specified in Section 202
• Delegate authority to award contracts if they are within budget to the City
Manager
• Award contracts if they exceed the approved budget from the RFB/RFP
Purchasing Authority /
City Manager
Designee
• Implement purchasing policies
• Delegate purchasing authority
• Approve RFB’s / RFP’s for purchases specified in section 202
• Award contracts specified in section 202
Finance Director /
Budget Manager
• Develop and implement purchasing guidelines
• Monitor and evaluate system performance
• Set payment schedules
• Approve purchase requests in section 202
201-2
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Commented [CD14]: Remove – City staff in divisions are
the subject matter experts – in a centralized purchasing
system – the subject matter expert would sit in the larger
‘procurement’ office and arrange interviews – SLO is not
staffed in this way.
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Commented [HM15]: Council can delegate authority as
they deem appropriate right? I would think they can
delegate to any staff member no matter what the cost.
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Page 1186 of 1284
City Attorney • Review City contracts to ensure compliance with the City’s policies, rules, and
laws
Financial Analyst
Purchasing
• Develop and implement city-wide purchasing policies and procedures
• Review and approve purchase requsitionsrequisitions, purchase orders, and
contracts for proper authority and terms
• Coordinate and assist departments in the development of competitive bid
solicitation on the City’s electronic bidding platform (RFB / RFP / RFQ )
• Route contracts and maintain a complete database for all City contracts
• Audit city deparmentsdepartments for compliance with the City’s purchasing
policies
• Coordinate with the risk management to develop risk templates and risk
assessment toolkits to enable departments to make good decisions when
addressing risk and insurance requirements in contracts
Risk Management • Review and evaluate risk and insurance requirements for all City contracts
• Coordinate with the purchasing division to develop risk templates and risk
assessment toolkits to enable departments to make good decisions when
addressing risk and insurance requirements in contracts
City Engineer • Approve RFB specifications for public projects
• Approve Job Order Contracts (JOC) task orders for public projects as specified in
Section 202
Department Heads • Develop and implement department purchasing procedures
• Delegate departmental purchasing authority
• Approve departmental purchase requests and award departmental contracts as
specified in section 202
Authorized Employees • Requisition goods and services in compliance with city purchasing policies
• Receive (approve) invoices or payment requests for departmental purchases
• Notify suppliers of business license requirements (when required)
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Commented [HM16]: Does it seem odd the the finance
director is developing guidelines and analyst is developing
policies? Seems like this should be reversed.
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Commented [BJC17]: Should copies of the procedures be
provided to Purchasing for records and reference?
Commented [CD18R17]: Good idea. I know Public
Works has a CIP design manual which covers their
purchasing procedures. I’m not sure of other departments
having written procedures – the policy / procedure to follow
is the exhibit 202A
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Page 1188 of 1284
PURCHASING SYSTEM OVERVIEW
Regardless of the type of item or service being acquired, virtually every purchase transaction
goes through seven distinct stages in varying degrees:Purchasing
)purchases
■ Assessing and determining resource needs.
■ Developing specifications.
■ Soliciting and evaluating quotations, bids or proposals.
■ Selecting the best proposal.
■ Awarding the contract or purchase order and authorizing work to proceed.
■ Receiving and inspecting goods or services to ensure they conform with specifications.
■ Paying the supplier when contract terms have been met.
The type of purchase as well as its estimated cost determine the formality with which each stage is
completed and documented. For this purpose, the City has identified five basic types of
purchases:
■ General Goods Purchases. Contracts and purchases for supplies and equipment, including
basic IT equipment.
■ General Services Purchases. Contracts and purchases for operating and maintenance
services, including basic IT maintenance services.
■ IT Systems Purchases. Contracts and purchases of large-scale IT systems.
■ Public Projects. Construction, reconstruction, erection, alteration, renovation,
improvement, demolition, painting, repainting, and repair work involving any publicly owned,
leased, or operated facility (Public Contract Code 22002c).
■ Consultant Services. Professional work provided to the City by specially trained and
experienced individuals or firms regarding economic, financial, engineering, planning,
architectural, environmental, legal or administrative matters.
Procedural categories, purchasing authority levels and features for each of these purchase types
are summarized in Exhibit 202-A.
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Commented [BJC19]: Maybe a quick comment about
contract administration. This is important for service
contracts.
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Commented [CD20]: Consider removing the 7 stages of a
purchase – I don’t think it’s adding any value or is necessary
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Commented [CD21]: Remove category – IT systems is an
initial ‘Goods’ purchase usually followed by a contract of
‘Services’ purchases
Commented [CD22]: Add JOC?
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Page 1189 of 1284
Purchasing System Responsibilities Exhibit 201-A
■ Approve City Charter
■ Adopt purchasing ordinance.
■ Adopt resolution setting purchasing guidelines.
■ Approve Requests for Bids (IFBs) and Requests for Proposals
(RFPs) documents for purchases specified in Section 202.
■ Delegate authority to award contracts if they are within
budget to the City Manager.
■ Award contracts if they exceed the approved budget from the
RFB/RFP.
■ Implement purchasing policies.
■ Delegate purchasing authority.
■ Approve RFB’s/RFP’s for purchases specified in Section 202.
■ Award contracts as specified in Section 202.
■ Develop and implement purchasing guidelines.
■ Monitor and evaluate system performance.
■ Set payment schedule.
■ Approve Purchase Requests as specified in Section 202.
■ Develop and implement city-wide purchasing procedures
■ Review and approve purchase orders and contracts for proper
authority and terms.
■ Route contracts for signature and maintain complete database for
all goods and services contracts.
■ Assist departments in development of solicitations (RFB, RFP,
RFQ, Quick Quote, etc.).
■ Create and manage master agreements and Blanket Purchase
Orders for centralized and aggregate purchasing (e.g. office
supplies; off-site copying, scanning and document
destruction).program
■ Approve RFB Specifications for public projects.
■ Approve Job Order Contract (JOC) task orders for public
projects as specified in Section 202.
■ Develop and implement departmental purchasing procedures.
Voters
City Council
Purchasing Authority
(City Manager/Designee)
Finance Director/Budget
Manager
Purchasing Financial
Analyst
City Engineer 201-3 Formatted: Font: 10 pt
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Commented [CD23]: The City Attorney should be within
this flow?
Commented [CD24]: The City as it currently is structured
is a “hybrid” purchasing model more decentralized then
centralized.
The ERP motion project assumed centralized purchasing –
for every single type of purchase regardless of specialization
- the system flows in a decentralized manner.
We can work centralize certain commodity types (office
supplies, furniture, janitorial services, linen, janitorial
products, safety supplies, etc.
We can drive departments to consolidate suppliers – ie we
don’t need 6 different rubber gloves suppliers – but we
should also keep decentralized for the more complex
purchases which is what is being practiced currently.
The issue is how do we make it flow most efficiently inside
Oracle and the larger financial system.
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Page 1190 of 1284
■ Delegate departmental purchasing authority.
■ Approve departmental Purchase Requests and award
departmental contracts as specified in Section 202.
■ Purchase, receive and pay for goods and services in
accordance with City and departmental guidelines.
■ Approve invoices or payment requests for departmental
purchases.
■ Notify obtainpotential suppliers/contractors of City Business
License requirement
■ Maintain required purchasing records.
■ Manage departmental inventories.
Department Heads
Authorized Employees
201-4
201-5
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Commented [CD25]: Should we discuss AP in the
process?
Authorized employees do not pay for the goods they only
receive them, AP pays?
Procedure for ‘receiving your Purchase Order?
Receiving of PO’s by Departments has been challenging –
requesters do not receive their PO’s, receive incorrect
amounts, etc.
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Commented [CD26]:
Commented [HM27]: Can we delete this? I’m thinking
that all purchasing records are now kept in Oracle and now
that is something that happens automatically during the
purchasing process.
Commented [CD28R27]: Yes – I’d delete
Commented [HM29]: Can we delete this as well? Some
items are reasonable to have an inventory on hand and some
are not. I’m concerned this may weaken our arguments
when we need to make an emergency purchase.
Page 1191 of 1284
Section 202
PURCHASING TYPES AND APPROVAL AUTHORITY THRESHOLDS
PURCHASING PROCESS PURCHASING PROCESS
Under the policy framework outlined in Chapter 3.24 of the Municipal Code, City purchases and
contracts (including those for rentals and leases, but excluding those for real property) will be
made according to these guidelines.
Competitive bidding categories, approval authorization limits, and contract award procedures are
based on total purchase cost, a n d approval authority apply thresholds apply to both a single
transaction purchase total, and/or a cumulative series of purchases over the fiscal year.
Staging of purchases to avoid these competitive bidding procedures or authorization limits is
prohibited.
The City has three types of purchases:
• General Goods & Services Contracts and purchases for supplies and equipment, including
IT equipment, operating and maintenance services, including IT maintenance services.
• Consultant Services. Professional work provided to the City by specially trained and
experienced individuals or firms regarding economic, financial, engineering, planning,
architectural, environmental, legal, or administrative matters.
• Public Projects and Job Order Contracts. Construction, reconstruction, erection, alteration,
renovation, improvement, demolition, painting, repainting, and repair work involving any
publicly owned, leased or operated facility (Public Contract Code 22002c).
The type of purchase and its cost determine the approval authority levels. Exhibit 202A and 203A
summarize the authority levels and the approval process flows within the City’s Oracle ERP system.
Formatted: Normal
Commented [CD30]: Remove category – IT systems is an
initial ‘Goods’ purchase usually followed by a contract of
‘Services’ purchases;
Combine Goods and Services into one – many times a goods
purchase has both components – someone fixes something,
and installs, parts, etc. Most City’s in benchmark research
do not separate General Goods vs. General Services and set
differing price approval tiers. It leads to staff confusion.
Commented [CD31]: Add JOC?
Commented [CD32]: Job Order Contracts purchase types
are not in Oracle
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numbering
Commented [CD33]: @Horn, Matt@Elke,
Brigitte@Stanwyck, Shelly@Bell Jr., Charles
The ‘fiscal officer’ does not approve purchases in Public
Works in Oracle flow like other departments; we either need
to change the policy to allow for division manager approval,
or configure Oralce to have designated fiscal officers
approve purchase requistions and remove the division
managers as level 1 approvers of their own purchase
requests.
Page 1192 of 1284
Exhibit 202-A
General Goods and Services Purchases
Tier Price Approval Authority and workflow in Oracle ERP System
0 Under $100 • No purchase order required
• *if you plan to make a series of purchases over the fiscal year over this
amount contact the City’s Purchasing Division to discuss open
purchase order options
1 $101 - $9999 • No Bidding Process Required
• Requisition approved by Fiscal Officer*
• Purchase order approved by Purchasing Division
2 $10,000 - $24,999 • Three quotes (if possible)
• If only one quote? A sole source memo is required for the purchase
• Requisition approved by Fiscal Officer and Department Head*
• Purchase order approved by Purchasing Analyst
3 $25,000 - $49,999 • Formal bidding process (RFP – RFB)
• Requisition approved by Fiscal Officer and Department Head
• Purchase order approved by Purchasing Analyst
4 $50,000 - $149,999 • Formal bidding process (RFP – RFB)
• City Manager approval through City Manager Report
• Requisition approved by Fiscal Officer *
• Purchase order approved by Purchasing Analyst
5 $150,000 or more • Council approval through Council Agenda Report
• Formal bidding process (RFP – RFB)
• Requisition approved by Fiscal Officer
• Purchase Order approved by Purchasing Analyst
Commented [CD34]: Propose merging general goods and
general services into one category from the current two
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Commented [CD35]: @Elke, Brigitte@Horn, Matt
Proposing an allowable non-PO amount under $500 possibly
slightly higher but not much, which will mirror the low value
amounts on the credit cards. This is in line with other City’s
in benchmark research
The staff costs to process from requisition to approval to po
to receipt to AP match under this level outweigh the value
of the data.
We can get the data in other ways than the PO.
1. Pull data from 3 sources and combine for analysis (PO,
credit card, and invoices (by charge account)
2. With that date identify volume contract opportunities
(prining, off-contract landscaping, off-contract electrician
services, etc.)
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Page 1193 of 1284
Exhibit 202-A
Consulting Services
Tier Price Approval Authority and workflow in Oracle ERP System
0 Under $500 • No purchase order required
• *if you plan to make a series of purchases over the fiscal year over this
amount contact the City’s Purchasing Division to discuss open
purchase order options
1 $1000 - $7499 • No Bidding Process Required
• Requisition approved by Fiscal Officer*
• Purchase order approved by Purchasing Division
2 $7500 - $14,999 • Three quotes (if possible)
• If only one quote? A sole source memo is required for the purchase
• Requisition approved by Fiscal Officer and Department HEad*
• Purchase order approved by Purchasing Analyst
3 $15,000 - $39,999 • Formal bidding process (RFP – RFB)
• Requisition approved by Fiscal Officer and Department Head
• Purchase order approved by Purchasing Analyst
4 $40,000 - $99,999 • Formal bidding process (RFP – RFB)
• City Manager approval through City Manager Report
• Requisition approved by Fiscal Officer *
• Purchase order approved by Purchasing Analyst
5 $100,000 or more • Council approval through Council Agenda Report
• Formal bidding process (RFP – RFB)
• Requisition approved by Fiscal Officer
• Purchase Order approved by Purchasing Analyst
SECTION 203
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Commented [CD36]: $15,000 is low value for RFP trigger
compared to benchmark Cities. Consider upping this limit to
$25,000
And re-evaluating the Tier 3-4 thresholds
Page 1194 of 1284
PUBLIC WORKS PROJECTS, CONSTRUCTION CONTRACTS, AND JOB ORDER
CONTRACTS
The City awards construction contracts following the Uniform Public Construction Cost Account Act.
Construction contracts bid procedures are managed by the City’s Public Works Department with
Finance and City Attorney oversight.
The City’s Public Works Department CIP Design Manual Guide governs policies and procedures for
entering into Construction Contracts, Construction Change Orders and Job Order Contracts.
See CIP Manual at:
https://slocitycloud.sharepoint.com/:w:/s/SLOHub/Public-
Works/cipengineering/EXkv0X4GWbRPtKA_2LaCJnQBIKIos0X4LltyHTJHAg2uXQ?e=dN1aqR
Exhibit 203-A
Public Projects
Tier Price Approval Authority and workflow in Oracle ERP System
1 Under $15,000 • No bidding process required
• Requisition approved by Fiscal Officer
• Purchase order approved by Purchasing Division
2 $15,001 - $59,999 • Three quotes (if possible)
• If only one quote? A sole source memo is required for the purchase
• Requisition approved by Fiscal Officer*
• Purchase order approved by Purchasing Analyst
3 $60,000 - $199,999 • Formal bidding process (RFP – RFB)
• City Manager approval through City Manager Report
• Requisition approved by Fiscal Officer *
• Purchase order approved by Purchasing Analyst
4 $200,000 or more • Council approval through Council Agenda Report
• Formal bidding process (RFP – RFB)
• Requisition approved by Fiscal Officer
• Purchase Order approved by Purchasing Analyst
*The purchase thresholds identified in the above section would not apply to purchase orders under $60,000 for on -call
consultants if the on-call consultants were selected from and RFP/RFQ. The reason is Council authorized the Finance
Director to execute contracts up to the project budget (i.e. budget per the Financial Plan )
Commented [BJC37]: Always recommend writing out
definition before making it an acronym.
Commented [BJC38]: Where is this guide located? Nice
to help staff know where to find a document.
Page 1195 of 1284
Exhibit 203-A
JOB ORDER CONTRACTS
Tier Price Approval Authority and workflow in Oracle ERP System
1 Under $45,000 • Requisition approved by City Engineer
• Purchase order approved by Purchasing Analyst
2 $45,001 - $200,000 • If only one quote? A sole source memo is required for the purchase
• Requisition approved by Fiscal Officer & Department Head
• Purchase order approved by Purchasing Analyst
3 $175,000 or more within
annual limit
• City Manager approval through City Manager Report
• Requisition approved by Fiscal Officer *
• Purchase order approved by Purchasing Analyst
4 $175,000 or more within
annual limit
• Council approval through Council Agenda Report
• Requisition approved by City Engineer
• Purchase Order approved by Purchasing Analyst
Construction Contract Change Orders
When the City awards a construction contract, the need for contract change orders (CCO) is not
unusual. A CCO is required whenever the scope of work changes from the original contract or an
unknown condition requires a change in the scope of work.
Usually a contingency amount is established when the project is authorized for advertisement or award
to accommodate limited CCO’s. The purpose of this policy is to establish limits of authority for
approving construction project CCO.
GOALS
• Ensure appropriate authority and accountability in the approval of change orders.
• Minimize the time needed to approve a CCO to avoid project delays.
• Establish a system at the organizational level at which the approval is commensurate with the
size of CCO and the project.
• Eliminate the potential for approval of a CCO when contingency funds are insufficient.
Commented [CD39]: @Horn, Matt@Nelson, Brian
In Oracle we don’t even have JOC’s as a purchase type. Not
sure why, these tier grapsh were supposed to mirror approval
flows in Oracle.
Should we even have a JOC tier graph at all?
Delete?
Commented [HM40R39]: I think we still need it or it
would fall into a public projects purchasing process. I will
add recommended dollar amount adjustments.
Commented [CD41R39]: We classify JOC’s as a public
purchase in Oracle because we have not other type to assign
it.
Commented [HM42]: 60k
Commented [HM43]: 200k
Commented [HM44]: This should be deleted
Commented [CD45]: @Horn, Matt@Nelson, Brian Tier 3
and 4 do not make sense in current policy? Both are same $
amounts with different approval procedures?
Can we discuss?
Commented [NB46R45]: @Clancy, Daniel I Tier 4
should say "outside annual limit", which implies we would
be asking Council for additional budget to support the work
Commented [CD47]:
Commented [HM48]: If we are going back to council we
should update by reference so we don’t get stuck with old
limits. Current limits are:
Tier 2: 60k
Tier 3: 200k
I think we should also consider raise tier 1 up as well. 15k
sounds about right to me, but we should chat to find out if
everyone is comfortable with that.
Commented [NB49R48]: Agree Tier 1 should be
increased to allow greater flexibility for minor work. Not
much can be accomplished for less than $7,500 these days. I
think an $10k increase is reasonable for a limit UP TO (not
under) $17,500.
Commented [HM50]: JOC have an existing contract in
place. Tier 2 indicates that are getting three quotes. We
typically only have one contractor under contract for a
specific type of JOC. It doesn’t make sense to get quotes for ...
Commented [CD51R50]: @Horn, Matt@Nelson, Brian
In Oracle we don’t even have JOC’s as a purchase type. Not ...
Commented [HM52R50]: @Clancy, Daniel When the
system was first implemented, there was a JOC workflow
process. Something changed and I believe the Jesus is ...
Commented [CD53R50]: @Horn, Matt Thanks. There
was a flow on paper in the policy but never configured in
Oracle – so we have been coding JOC’s as public project ...
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Page 1196 of 1284
POLICIES
Conditions for Approval of CCO's by Staff
• Sufficient contingency funds are budgeted and available for the Public Works Director or City
Manager (approved designees) to approve a CCO.
• The nature of work in the CCO is not significantly different from that in the contract.
• Authorization limits are based on an individual CCO amount, not the aggregate amount of all
CCO.
• Authorization limits apply to CCO for increases in contract amounts only.
• Work will not be broken up into multiple CCO to circumvent this policy.
• All CCO must be in writing and approved by the appropriate contract parties consistent with
the authorized limits established in this policy.
Construction Change Orders
• A copy of each approved CCO will be transmitted to the Finance Department with monthly
progress payments.
• The Purchasing Authority may approve CCO over $199,999 under the following
circumstances (all three factors must be present):
o Immediate approval of the CCO is necessary to avoid delay.
o The CCO is an integral and mandatory component of the project.
o The costs associated with the delay of the project would be excessive. The Project
Manager is responsible for carrying out this policy.
• The Purchasing Authority is also authorized to approve CCO over $199,999 related to Job
Order Contract Task Orders.
Authorization Limits
Public Works Director/ Designee
• Not to exceed $60,000
Purchasing Authority (City Manager/Designee)
• Not to exceed $200,000
City Council*
• Greater than contract or $200,000
________________________________________________________________________________
* See circumstances above where the Purchasing Authority may approve CCO’s in excess of $175,000.
Originally Approved by the Council on August 3, 1993; Revised by the Counci l on April 15, 2003 and June 2, 2015.
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Commented [CD54]: Tier 4 approval in Oracle is
redundant process – purchase already approved by City
Manager Report there’s no need to have a 7 layer approval
flow in Oracle – the purchase was already approved by City
Manager Report
Page 1197 of 1284
SECTION 204
PURCHASING METHODS
There are two three purchase methods for departments to use to acquire goods and services:
1) Purchase Requisition/Purchase Order
2) City Credit Card (Purchasing or P-Card)
2) Emergency Purchases
3)
The City’s preferred method for securing the majority of its purchases is by purchase order.
For a guide to purchase order types see the City’s Purchasing SharePoint document “what type of
purchase order do I need?”
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
For low value, small or recurring purchaseone-time, unforeseen maintenance, emergency, travel, and
education-related purchases, s, the City encourages authorized employees to use the use of the City
credit card P-Card (See Section 275).
Summary Guide to Purchase Types:
Purchase Type Dollar Threshold Requirements
Purchase
Requisition/Purchase
Order
$500 – Unlimited Must obtain approvals required in section 202; Exhibit
202-A
CreditP- Card $0 – $5,000 (one-month
cumulative maximum)
City credit cards may be used for low value (under $500),
one-time, unforeseen maintenance*, emergency, travel,
and education-related purchases.
Purchases between $501-$2500 generally should be done
by purchase requisition and purchase order.
Purchases that exceed the single transaction purchase
limit of $2500 must-have approval before purchasing on
the card.P-Card may be used for small or recurring or
emergency purchases. P-Card may not be bused for Not
Permitted for purchases in excess of limits. large
purchases, purchases for services, cCapital iItems
Emergency Purchase NA ONLY if there is an immediate and serious need for
equipment, supplies, or services that cannot be met
through normal purchasing procedures and where the
lack of such equipment, supplies or services would
seriously threaten the functioning of City government,
the preservation of property, or the health or safety of any
person;
* Single transaction purchases over $2500 must-have approval before being made on the City Credit Card
Commented [CG55]: I too think it would be helpful to
have the same tier threshold for goods and services. In
mantenance and operation, it's very rare to to contract only
services, there is uausally a good (parts) included the
contract.
Commented [CD56R55]: @Cruce, Greg I agree with you.
I’d like to see 3 purchase types (goods/services; consultant;
public projects)
Commented [HM57]: What do you think about setting a
lower limit that does not require approval? If I have a credit
card I can buy small dollar amounts without fiscal officer or
other approvals. If I process an invoice for the same amount
or try to get a PO for that same dollar amount, I need
concurrence of others and likely multiple vendor proposals.
Commented [CD58R57]: @Horn, Matt I talked with
Brigitte this week about this topic – I agree there should be
an allowable non-PO limit – that perhaps also matched the
credit card ‘single transaction limit’
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Commented [HM59]: The credit card section isn’t in this
document. We should double check that se ction to ensure
that it matches the purchasing process. My recollection
(which is foggy) is credit cards are only to be used for
emergencies in section 275.
Commented [CD60R59]: It’s merged into it now. The
current CC policy is vague on defined purchase levels and
does not align with the purchasing process.
Formatted Table
Commented [HM61]: We should consider revising the
lower limit. Every department violates the PR/PO process
by completing a PR after the cost has been incurred.
Commented [CD62R61]: @Horn, Matt@Elke, Brigitte
I’m open to this. But at what dollar limit?
Departments are violating some are violating at a much
higher % than others.
The underlying premise should not change that there should
be fiscal officer approval of all purchases
...
Commented [HM63]: Deleted these items because “large”
is a subjective term. Deleted services since that will likely
lead to violations (if I take a chainsaw to noble saw to have it ...
Commented [CD64R63]: We are going to define more
clearly
Commented [CD65]: Delete chart – define in words
Page 1198 of 1284
* Maintenance divisions small value purchase limits are set a higher low-value limit to allow for operational flexibility
* Monthly spend limits can Limit can be raised with Department Head approval – generally only for Department Cards..
* See Section 275 – Credit Card Policy
Page 1199 of 1284
PURCHASE REQUISITIONS AND PURCHASE ORDERS
Purchase Requisitions
PRP-Card or Emergency PurchasesPPurchase rRequisitions are entered into the City’s Oracle ERP
system.. A Ppurchase Rrequisition is a ‘request’ to purchases goods and services and accomplishes n
internal document (electronic formthe following:
■• Initiates ana purchase order request;by one or more departments;
■• Identifies the equipment, materials, supplies, goods or services required;
■• Identifies the specific funds (account codes) that will be used to pay for the order;
■• If known, identifies recommended or potential suppliers, or leaves supplier selection up to
Purchasing;
• Is approved by appropriate City representatives to grant budget authority to make the purchase;
■• See eExhibit 202A; 203A; which shows the approval process and the designated City
representative that will approve the requisition in the City’s Oracle ERP system;
■• Upon approval, allocates or pre-encumbers funds to support the purchase.
All purchase requisitions are entered into the Oracle ERP financial system by the purchase requestor.
The requestor is responsible for entering and validating the accuracy of the following:
1) Item/services description, quantity, amount
1)2) If requesting Fiscal Year Open PO, a or if price is not known, budgeted or estimated
amount*
2)3) NIGP Commodity Code *see NIGP code description document for more detail*
3)4) Account code
4)5) Supplier (if known)
5) List all other required information
6) Attached Supporting Documents (attach all applicable):
a. Quotes/Proposals
b. Quote Summaries/Comparisons
c. Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)
d. JOC Task Order
e. RFP/RFB package
f. Sole Source Approvals
g. Council Action Report for Council approval
Purchase Requisition Process
Departments must submit requisitions in the ERP system. Purchase Request approval levels are
determined by tier a specific purchase falls into, which is determined by the purchase type and value.
See Exhibit 202-A for purchase tier thresholds.
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Commented [CD66]: @Horn, Matt@Elke,
Brigitte@Stanwyck, Shelly
@Bell Jr., Charles
The ‘fiscal officer’ does not approve purchases in Public
Works in Oracle like other departments; we either need to
change the policy to allow for division manager approval, or
configure Oralce to have designated fiscal officers approve
purchase requistions and remove the division managers as
level 1 approvers of their own purchase requests.
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Page 1200 of 1284
Purchase Requisition Approvals & Solicitation Requirements
Tier Solicitation
Required
Level 1
Approver
Level 2
Approve
r
Level 3
Approver
Level 4
Approver
Purchasing Involvement
1 None Fiscal
Officer
None None None None
2 Informal
Quotes*
Fiscal
Officer
Depart
ment
Head
None None Assist with Quotes when
requested
3 Formal
Bidding*
Fiscal
Officer
Depart
ment
Head
None None Assist with RFP/RFB
package when requested
4 Formal
Bidding*
Fiscal
Officer
Depart
ment
Head
Budget
Manager
City Manager Assist with RFP/RFB
package when requested
5 Formal
Bidding*
Fiscal
Officer**
None None None Assist with RFP/RFB
package when requested
* Quotes and bidding processes are not required for purchases made pursuant to Section 204 of this Manual.
** All other approvals will be applied in the external Council Agenda Report process.
Note: The Level 1 Approver is an authorized employee in each department such as a Fiscal Officer.
Purchase Orders
A purchase order is a document that formalizes encumber funds and a purchase transaction with a
supplier. It sets forth the supplier’s obligations and the City’s responsibilities and requirements.
Purchase Orders are issued after all required policies and procedures are met. A supplier’s acceptance
of a Purchase Order constitutes a contract.
Purchase Orders allow the City to communicate its intentions to suppliers and its terms and conditions
protect the City from risk. When staff purchase outside of a purchase order and bypass the City
purchasing policy, the City and its taxpayers to face undue risk..
Purchase orders may include:
1) Price
2) Description of the requested item(s) or services
3) Delivery terms and transportation mode
4) Terms and conditions,
5) and allAll supporting documentation submitted by the requisitioner other agreements pertinent
to the purchase and its execution by the supplier
Commented [CD67]: Delete Chart
The chart is redundant of the approval thresholds graphic
Purchasing’s involvement does not mirror what is on the
chart
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Page 1201 of 1284
a. Quotes/Proposals
b. Quote Summaries/Comparisons
c. Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)
d. JOC Task Order
e. RFP/RFB package
f. Sole Source Approvals
g. Council Action Report for Council approval
a. Attached Supporting Documents
b. Incorporated Agreements (City Agreements, Cooperative Agreements)
c. Incorporated Quotes/Proposals
d. Council Action Report (if Council approval is required for award of a contract/purchase
order)
A supplier’s acceptance of a Purchase Order constitutes a contract. Purchase Orders shall be issued
by the Purchasing Division after all required procedures for selection are met.
There are three types of Purchase Orders:
There are three main purchase order types utilized by the City.
1) Standard Regular Purchase Order
- aA one-time PO nonrecurring order, to a written to a supplier for a definite quantity, price, and
delivery schedule.
1)• of identified item(s) or cost. It is the most appropriate for one-off purchases of goods and
services when you know know the price, quantity, and delivery date. method used for
purchase of supplies and services.
2) Open Fiscal Year Not-to-Exceed Blanket Purchase Order
A purchase order not tied to a formal contract that allows for multiple purchases in
a fiscal year (more than 12 times per fiscal year)
– a Purchase order which authorizes repetitive purchases of goods and services from a specific supplier
up to a maximum, not-to-exceed dollar amount. It is valid from date of issuance until the end of a
fiscal year or specific date (unless funds are depleted sooner).
• Ideal for ongoing services purchases
• PO is an estimated budget amount, not a guarantee the City will purchase the full amount
• Staff must close fiscal year open POs at the end of each fiscal year and choose whether or
not to re-open in next Fiscal YearY.
3) Open Contract Purchase Order – tied to a multi-year City Contract
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Commented [BJC68]: Repetitive.
Commented [CD69R68]: @Bell Jr., Charles I inserted
this language in because staff submit requisitions after the
purchase is already made. These purchases violate the
policy.
We’ve communicated to the analysts the violations, they still
happen, and this is not uncommon across other City’s I’ve
reached out to other procurement directors about it.
For tier 1 purchases (lowest value) we don’t challenge every
purchase – but for any tier 2 purchase – (higher value) – if
the requisition is done after the fact – it’s immediately
challenged – department staff I believe don’t always
understand the risks in not having a PO# in place for higher
priced purchases.
Commented [CD70]: Matt Horn note: List what
requirements you are looking for or reference if documented
in policy
Commented [CD71R70]: @Horn, Matt – The
requirements are described above in both the requisition and
purchase order
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Page 1202 of 1284
A purchase order tied to a formal contract that allows for multiple purchases for one fiscal year,
and/or over multiple fiscal years.
• Upon execution of a contract for a fixed dollar amount – an open PO can be issued for that
fixed amount
• Contract open PO’s can carry over multiple ffiscal yyears until the end of the contract
Contract Purchase Order – a Purchase order with an underlying Agreement that is set up for
encumbrance purposes only. This is used when all work descriptions, costs and terms are
incorporated in a City Agreement and the Contract PO is not distributed to the contractor.
NON-PURCHASE ORDER EXCEPTIONS
Below is a list of categories that can be paid without a purchase order
• Bank fees
• Filing fees: used for filing city and county permits
• Training
• Postage
• Travel Reimbursements and Advances
• Tax payments; property taxes
• Instructor and Artist services related to programs offered through Parks & Recreation
community programs for art, instructors, tutors, referees, etc.
• PPE (Personal Protective Boot Allowance) – Takken’s and Boot Barn reimbursements
• Dues and memberships in trade or professional organizations, fees for trade or career fairs,
fees for job-related seminars and training
• Subscriptions, periodicals, newspapers, books and library materials, electronic subscriptions,
media maps, or similar publications in printed or electronic form
• Water, sewer, telecommunications, electrical, or other utility services
• Revenue refund or reimbursement payments
Payments related to fringe benefits (dental, vision, life insurance, employee assistance,
CalPERS
•
202-4
202-
5
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Commented [CD72]: Contract PO’s do not exist in
Oracle.
Commented [HM73R72]: Should we take the Contract
Purchase Order language and include it under Standard
Purchase Orders then?
Commented [CD74R72]:
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Page 1203 of 1284
Purchasing Thresholds Exhibit 202-A
Page 1204 of 1284
Purchasing Thresholds Exhibit 202-A
Page 1205 of 1284
Purchasing Thresholds Exhibit 202-A
Page 1206 of 1284
Section 203
BIDDING PROCESS
For purchases exceeding the City’s orthresholds listed in Exhibit 202-A which do not fall within the
exceptions listed in Section 220 of this Manual, City staff must engage in competitive bidding in some
form, as required by the Municipal Code. Departments should work with the Purchasing Division for
competitive bidding processes.
TYPES OF SOLICITATIONS
Requests for Bids (RFB)
An RFB is a request to suppliers to submit an offer or quote for specific, defined goods or products.
An RFB should be used when seeking a fixed price for goods with known specifications (e.g. Dell
XPS 13 laptops). RFBs are used for Construction of Public Project and when setting up a Job Order
Contract (discussed in Section 250 of this Manual). RFBs must be posted on the City’s designated
solicitation site.
Requests for Proposals (RFP)
An RFP is a request to suppliers or consultants to submit a proposal for goods or services for which
the exact specifications or methodology of providing the desired goods or services is not defined. An
RFP is generally used for more complex goods or services purchases. RFPs allow for consideration
of factors other than price, including the qualifications of the supplier and the supplier’s ability to
perform. RFPs must be posted on the City’s designated solicitation site.
Requests for Qualifications (RFQ)
An RFQ is a request for a statement of qualifications for a certain class of suppliers or consultants.
RFQs are used to develop On-call or Master Agreements. RFQs must be posted on the City’s
designated solicitation site.
Informal Quotes/Quick Quotes
When formal bidding is not required by the City’s purchasing policy (see Section 202 of this Manual),
staff may seek informal quotes either by posting a Quick Quote request on the City’s online solicitation
program or by seeking quotes by verbal or written request. An informal or quick quote is a simple
request for pricing on simple, low-cost goods or services. If quotes are sought by verbal or written
request, staff must create a quote summary to record the quotations received.
203-1
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Commented [CD75]: Move to Section 250 - Delete all of
203
Commented [CD76]: Public Projects are considered
complex which mostly go out as RFB this ancillary sentence
is not needed.
Commented [CD77]: We don’t have a quick quote online
solicitation program, not sure we need it? I’d consider
removing this sentence and just leaving the seeking quotes
by verbal or written request
Commented [HM78R77]: Works for me
Page 1207 of 1284
BIDDING CRITERIA
RFB RFPs RFQ Quick Quotes
Formal Solicitation Yes Yes Yes No
Goal Lowest Price that provides the best
proposal to complete the
workLowest
Responsible Bidder
Most Qualified Bidder Lowest Price
Public Opening
Requirements
Opened publicly and
read aloud
Opened publicly and
pricing read aloud
Not opened publicly -
List of suppliers who
submit Qualifications
made publicly available
Not opened publicly
Response Evaluated By Department with
Purchasing assistance
Department project
team
Formal Evaluation
Committee with
numerous participants
Department with
Purchasing
assistance
Specific Evaluation
Process
Determine whether Bid
is responsive, then
select lowest responsive
Bid. No scoring of
specification response is
involved.
Responses reviewed to
determine responsibility
of proposals.
Responsible proposals
are reviewed for factors
listed in Section
3.24.210 of the
Municipal Code
Statement of
qualifications evaluated
and a score assigned.
Some specification
responses can be
pass/fail only with no
associated score.
Determine whether
Quote is responsive,
then select lowest
responsive Quote.
No scoring of
specification
response is
involved.
Cost Evaluation Process Costs for responsive
bids are compared to
each other to identify
lowest cost
Cost for responsible
bids are compared to
each other to identify
lowest cost
If applicable, costs of
labor or services are
scored
Costs for responsive
quotes are compared
to each other to
identify lowest cost
Negotiation Allowed
after Selection
No, unless all bidders
are asked for a Best and
Final Offer (BAFO)
Yes Yes No, unless all
bidders are asked for
a Best and Final
Offer (BAFO)
Award Basis Lowest responsible
bidder wins
Lowest responsible
proposal wins
Evaluation Committee
Recommendation
Lowest responsive
quote wins
BIDDING PROCESSES
RFB Process
The following process shall be employed when releasing an RFB:
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Commented [CD79]: Brigitte, is there language you’d like
to to include regarding Municipal Code requirements to
accept lowest bid for RFB?
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Commented [CD80]: DELETE
The City generally only goes out for RFB on construction
and public projects – consider removing the non-construction
RFB
Further, the City should not RFB goods and then consider
only lowest price. For example: The City issues an RFB for
paper products – the winning bid company is from Asia –
half-way around the world – the City needs to consider other
factors – (local, environmentally preferable product criteria,
shipping distances, etc., the City should issue RFPs in most
all non-public works circumstances. Government purchasing
does not solely consider pricing – social policy,
environmental policy, etc. are all factors.
Commented [CD81]:
DELETE THE PROCESS FLOW CHART
The left side of the flow appears to be describing approval
flow outside of Oracle and depending on Tier level should
involve budget approvals if necessary, or involve budget
generally. The 1st question should be ‘do we have budget
and approval to draft RFB/RFP?
This is not how workflow currently proceeds Citywide.
There are dual procedures – one outside and one inside of
Oracle.
This RFB flow will be different depending on the Tier levels
For Public Works – purchasing should be or at present ...
Page 1208 of 1284
RFB Package
The City’s template “RFB Package” must be used to create the RFB document provided to
prospective suppliers (See Section 250 of this Manual). When posting the RFB, the following should
also be included:
1) A precise description of the desired goods;
2) The time and place of public opening of sealed Bids;
3) The location and deadline for submission of Bids;
4) The deadline for submission of questions (if applicable).
RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids
or with electronic encryption for electronic bids) and must be opened publicly at a designated location,
date and time.
Bids or proposals which are received after the date and time specified or in a different format than
that requested in the solicitation may not be considered.
RFB Evaluation/Bid Tabulation
Departments, in cooperation with Purchasing, must determine if the submitted bids are responsive
(i.e.: did the bid provide quotes for the specified goods, as requested). Then, the lowest responsive
bid must be selected for award.
RFB Award
Bidders should be notified when a bid has been selected for award and that award has been approved
(see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). If the City
is unable to agree to contract terms with the selected supplier after a good faith effort, the award may
be given to the next lowest, responsive bid.
Non-Construction RFP Process
The following process shall be employed when releasing an RFP:
203-3
Commented [CD82]: Purchasing has little to no
involvement in whether bids are responsive and awarded
aside from ensuring the City is in compliance with the
Policy. Award determinations are made by department
project teams; purchasing functions more on coordinating the
process and ensuring compliance to policy
Commented [CD83]: There is no procedure written in the
current policy manual
Commented [CD84]: DELETE
Procedureal Flow
See RFB notes – same comments
Page 1209 of 1284
Non-Construction RFP Package
The City’s template “Regular RFP Package” must be used to create the RFP document provided to
prospective suppliers (See Section 203 of this Manual). When posting the RFP, the following should
also be included:
1) A general description of the desired goods or services to be purchased;
2) The desired qualifications of proposers;
3) The information or documentation required for submission of proposals;
4) The date, time and location of public opening of sealed Proposals;
5) The location and deadline for submission of Proposals;
6) The deadline for submission of questions (if applicable);
7) The date, time and location of the pre-bid conference (if applicable).
Non-Construction RFP Submission and Opening
All RFP submissions (proposals) must be sealed (whether in a sealed, unopened envelope for paper
bids or with electronic encryption for electronic bids) and must be opened publicly at a designated
location, date and time.
Proposals which are received after the date and time specified or in a different format than that
requested in the solicitation may not be considered.
Non-Construction RFP Evaluation/Bid Tabulation
The department in cooperation with Purchasing will first determine whether proposals are responsive
to the RFP. Then, a designated evaluation team (subject matter experts, department stakeholders)
will review responsive proposals using the criteria listed in Section 3.24.210 of the Municipal Code.
The lowest responsible proposal will then be recommended for award.
For professional services related to project management, construction management, design,
engineering, surveying, mapping, landscape architecture, or architectural related services are to be
evaluated based on demonstrated competence and qualifications for the type of professional services
203-4
Commented [CD85]: If a qualified supplier misses the
electronic submission – should we automatically disqualify
the bidders? I’d argue no. Deadlines are at times missed due
to circumstances – The City should not miss out on the
potential value of the most qualified proposal and should
consider submissions submitted via email perhaps by 5pm
the same day the bid ends (our set time for bid endings is 3
pm.
Commented [CD86]: Purchasing has little to no
involvement in whether bids are responsive and awarded
aside from ensuring the City is in compliance with the
Policy.
Award determinations are made by department project
teams; purchasing functions more on coordinating the
process and ensuring compliance to policy
Commented [CD87]: RFP’s are not awarded by lowest
bid – consider removing this entire sentence
Page 1210 of 1284
desired. As such, price shall not be used as a criterion in the evaluation and ranking/selection of the
most highly qualified firm.
Non-Construction RFP Award
Proposers should be notified when a proposal has been selected for award and that award has been
approved (see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual).
If the City is unable to agree to contract terms with the selected supplier after a good faith effort, the
award may be given to the next highest scored, responsive bid.
Construction/Public Project RFB
The following process should be employed when releasing an RFP related to construction or public
projects:
Public Project RFB Package
The City’s template “Public Project RFB Package” must be used to create the RFB document
provided to prospective bidders (See Section 250 of this Manual). When posting the RFB, the
following should also be included:
1) A general description of the desired work, goods, or services to be purchased;
2) The desired qualifications of proposers, including licensing requirements;
3) The information or documentation required for submission of proposals, including bid bonds
requirements;
4) Information regarding applicable prevailing wage laws;
5) The date, time and location of public opening of sealed Proposals;
6) The location and deadline for submission of Proposals;
7) The deadline for submission of questions (if applicable);
8) The date, time and location of the pre-bid conference (if applicable).
Public Project RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids
or with electronic encryption for electronic bids) and must be opened publicly at a designated location,
date and time.
Commented [CD88]: There is no procedure for approval
in the manual
Commented [CD89]: The City generally only goes out for
RFB on construction and public projects – consider
removing the non-construction RFB
Further, the City should not RFB goods and then consider
only lowest price. For example: The City issues an RFB for
paper products – the winning bid company is from Asia –
half-way around the world – the City needs to consider other
factors – (local, environmentally preferable product criteria,
etc., the City should issue RFPs in most all non-public works
circumstances. Government purchasing does not solely
consider pricing – social policy, environmental policy, etc.
are all factors.
Commented [HM90R89]: Dan – Based on your
understanding of how we process construction related RFBs,
does this flow chart follow our practice. I’m thinking that
PW doesn’t follow this flow, but do others?
Commented [CD91R89]: The flow should be taken out of
the policy. This is internal procedure and we should refer to
the CIP design manual for PW RFP public construction
projects.
Page 1211 of 1284
Bidders which are received after the date and time specified or in a different format than that requested
in the solicitation may not be considered.
Public Project RFB Evaluation/Bid Tabulation
The department will first determine whether proposals are responsive to the RFB. All responsive
bids will be tabulate and bid pricing compared. The lowest cost responsive bid will then be
recommended for award.
Public Project RFB Award
Bidders should be notified when a bid is recommended for award and that award has been approved
(see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual).
RFQ Process
The following process shall be employed when releasing an RFQ for On-Call or Master Agreements:
203-6
Commented [CD92]: No procedure in manual
Commented [CD93]: The CIP design manual goes into
much more detail on this flow chart – consider removing and
referring to the CIP design manual.
The City can follow this process for non-public works
contractors – I’ve had discussions with IT regarding how to
incorporate their services contractors into this flow. Needs
more clarification.
Page 1212 of 1284
RFQ Package
The City’s template “RFQ Package” must be used to create the RFQ document provided to
prospective suppliers (See Section 250 of this Manual). When posting the RFQ, the following should
also be included:
1) A general description of the type of services to be included in the On-Call Contract or Master
Agreement;
2) The desired qualifications of proposers;
3) The information or documentation required for submission of qualifications;
4) The date, time and location of public opening of sealed Qualifications;
5) The location and deadline for submission of Qualifications;
6) The deadline for submission of questions (if applicable).
RFQ Submission and Opening
RFQ submissions (qualifications) do not need to be before opening. City Staff shall make the list of
suppliers who submit Qualifications in response to an RFQ available to the public upon request.
Qualifications which are received after the date and time specified or in a different format than that
requested in the solicitation may not be considered.
RFQ Evaluation
The department will score the Qualifications submitted in response to the RFQ. The supplier(s)
deemed most qualified will then be recommended for award.
RFP Award
Suppliers who submit Qualifications should be notified when an award has been approved (see
procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). Resulting On-
Call Contracts and Master Agreements must be re-bid every 5 years.
Quick Quote (Informal Quote) Process
Tier 2 purchases may be made utilizing an informal quotation process. Staff should seek at least three
quotes either in writing, by phone or utilizing the City’s electronic solicitation system. Staff must
then select the lowest responsive quote. NO BID PURCHASING
Municipal Code Chapter 3.24.060 sets forth guidelines for when bidding procedures are not required.
TIER 0 and 1 LOW COST PPURCHASING
Section 3.24.060 A – When the purchase amounts are less than the bid requirements. All Tier 1
purchases all within this category. do not require a competitive bidding process (see Exhibit 202A;
203A) Section 202 for thresholds) for Tier 1 purchases). However, City staff should seek cost
comparisons whenever practical.
Commented [CD94]: The City does not have an electronic
solicitation system for Tier 1 and 2 purchases.
Remove? Selecting the lowest quote depends on the type of
purchase. If a simple goods lowest price is fine, but if it’s
services, consultants, factors other than lowest price are to be
considered.
Section 295 also specified that staff should write sole source
memos for this level if they could not get more than one
quote. Given the smaller market size of SLO this
requirement warrants further discussion. I’d recommend
moving sole source memos to Tier 3-5 levels (individual
purchase and cumulative)
Page 1213 of 1284
EMERGENCY PURCHASING
Section 3.24.060 B – an emergency purchase is made to address a situation that creates an immediate
and serious need for equipment, supplies, or services that cannot be met through normal purchasing
procedures and where the lack of such equipment, supplies or services would seriously threaten the
functioning of city government, the preservation of property, public peace, or the health or safety of
any person.
City staff must not use the emergency purchase process to circumvent the general purchasing policy
or supplier licensing requirements. City staff should seek quotes and determine the reasonableness
of pricing when making an emergency purchase whenever possible. Contracts for frequent as-needed
emergency services should be established with competitive bidding procedures.
Emergency purchases must be justified in sufficient detail to explain the basis for suspending the
usual competitive procurement process. Whenever possible, City staff in need of an emergency
purchase should receive prior approval from the Purchasing Division by submitting the City’s
Emergency Purchase Justification Form (located in the Purchasing SharePoint page).
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
If prior approval is not feasible, City staff should submit the Emergency Purchase Justification Form
to the Purchasing Analyst as soon as possible and at least within 24 hours after the purchase has been
made.
Unless a City credit card is used for the purchase, City staff must enter a Purchasing Requisition for
the emergency purchase as soon as possible and should attach the justification backup to the
requisition.
SOLE SOURCE PURCHASING
Section 3.24.060 (C) General Rules
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or
services for specified dollar amounts and to select suppliers on a competitive basis. However,
pursuant to San Luis Obispo Municipal Code Chapter 3.24.060 (C), certain acquisitions in which the
products or services can be purchased may only be obtained from a single “sole-source” may be
purchased without engaging in bidding procedures..
Examples of legitimate sole source purchases include the following:
• Only one known source exists for the goods or services as determined by documented research
and there is no reasonable alternative source that meets the City’s needs
• When only one source meets the City’s business needs and avoids high switching costs (e.g.,
compatibility with existing systems, unique features that serve the desired goals of the City,
etc.)
• Purchases of proprietary items which only the manufacturer, owner, or designated re-seller is
the permitted seller (this includes purchases in which purchasing from a non-designated seller
would result in nullification of manufacturer warranties)
• Purchases of services from a contractor with specific and unique knowledge of existing City
systems, procedures or historical data that is critical to the project or city goals where the use
of another contractor would result in high switching costs or project delays due to lack of such
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Commented [CD95]:
Consider adding to the CIP guide. And, also Purchasing can
try to make sure to follow up on emergencies follow up and
make sure requisitions happen in a timely fashion.
Page 1214 of 1284
knowledge.
Examples of non-legitimate sole source purchases include:
• Purchases of proprietary goods or services that may be sold by more than one source (i.e.,
multiple resellers may sell one proprietary piece of software)
• Brand name preferences: exception: If a specific line of products was previously chosen
through a proper process and has been adopted citywide (e.g.: Dell computer products)
A “sole source” purchase may be entered into without a competitive process because only one known
source for the desired goods or services exists, only a single provider can fulfill the requirements to
meet the City’s needs, or the purchase constitutes an upgrade to an existing system adopted by the
City. In such circumstances, competition is not feasible and, therefore, the competitive process is
waived.Staff must draft a “Sole-Source” memorandum to justify the purchase. The City’s Sole Source
Memorandum template is located in the Purchasing SharePoint page.
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
Sole Source memos explain the basis for suspending the competitive procurement process and
provide enough detail so that a person from the public, who has no experience, or info on a purchase,
could read the memo and understand the basis for the sole-sourcing of the purchase.
Sole Source memos are public record, and answers to the questions should be accurate, so if the City
ended up in litigation, the department staff who drafted the request, and the purchasing analyst, can
assert the answers are accurate in a court of law.
The Purchasing Analyst must approve the sole-source before the purchase. Approved Sole Source
Justifications should be attached to requisitions when submitted for a purchase order. An approved
sole source is effective for the term of the contract, or if no contract, for three years.
Some examples of legitimate sole source purchases include the following:
■ Purchases in which only one known source exists for the goods or services as determined
by documented research
■ Purchases in which there is no reasonable alternative source that meets the City’s needs
■ Purchases in which only one source meets the City’s business needs (e.g., compatibility
with existing systems, unique features that serve the desired goals of the City, etc.).
■ Purchases of proprietary items which only the manufacturer, owner, or designated re-
seller is permitted sell (this includes purchases in which purchasing from a non-
designated seller would result in nullification of manufacturer warranties)
■ Upgrades to existing systems where purchasing a different solution or product would
result in significant additional costs (e.g., data conversion, re-training of staff, new
system implementation costs)
■ Purchases of services from a contractor with specific and unique know ledge of existing
Commented [CD96]: @Elke, Brigitte I’m not sure the
non-legitimate examples add clarity or value? But open to
keeping in.
Commented [BJC97]: Random thought. Any benefit in
having a definitions section in the manual? One place to go
and not have to find definition in the document.
Commented [CD98R97]: Yes. I have one drafted for the
credit card section but will expand to the full
policy
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Page 1215 of 1284
City systems, procedures or historical data that is critical to the project or city goals
where use of another contractor would result in significant costs or project delays due
to lack of such knowledge.
COOPERATIVE AGREEMENT PURCHASING
Section 3.24.060 (E) - City staff may use established cooperative agreements for purchases without
a competitive bidding process. Cooperative agreements take advantage of already negotiated
competitively bid RFP contracts. , if those cooperative agreements were competitively bid. City staff
in coordination with the Purchasing Division are is responsible for researching cooperative
agreements to einsure the bidding process complies with City competitive bidding rules.
City staff should research the pricing for the goods or services being sought and compare the pricing
set forth in the cooperative agreement is reasonable. If the pricing set forth in a cooperative agreement
is not reasonable, City staff should initiate a competitive bidding process rather than leveraging the
cooperative agreement.
For more detail on cooperative agreements, why the City uses them, and a current list of suppliers
with cooperative agreements the City can purchase from, refer to the purchasing SharePoint site
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
Local Dealers
Local Preference
If a local dealer, as defined in Municipal Code 3.24.060 (E) as being a supplier within City limits
can provide the same brand, model and configuration of any item in a cooperative purchase agreement
at or below the cooperative agreement supplier’s cost with the same terms and conditions, City staff
may use the local dealer without initiating a separate competitive bidding process.
SECTION 205
ETHICAL CONDUCT
The purpose of this policy is to set forth the ethical standards of professional behavior expected of all
officials and employees conducting purchasing activities on behalf of the City.
STANDARDS OF CONDUCT
Every employee or official engaging in purchasing activities on behalf of the City is required to
employ the following standards of conduct:
Consider, first, the interests of the City in all transactions.
• Carry-out the established policies of the City.
• Purchase without prejudice, seeking to obtain the maximum value for each expenditure of
public funds.
• Subscribe to and work for honesty and truth in buying and selling, and to denounce all forms
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Commented [CD99]: Section 205 was not included in
5/1/18 Council Approved Update
Commented [BJC100R99]: Good add. Just consider
updating the formatting before finalization so all part of on
document.
i.e. Section ___Ethical Standards of Conduct
Commented [HM101]: Note there could many different
perspectives on this. One staff member may think that
buying the lowest cost widget is in the best interest of the
City, some may think a widget of higher quality or a widget
that can be procurded faster is in the best interest of the City.
Commented [CD102R101]: @Horn, Matt
The premise of this is geared towards examples of using a
supplier who may be their salesperson friend, and that
supplier is inflating their pricing by a large margin over their
competition, the manager knows this, but still keeps using
their salesperson friend.
*note this particular example I’ve described has happened
this past year, and discovered through the ERP data.
It’s hard to include every scenario with Ethics policy.
This ethics policy language is from the 2015 Policy – I
haven’t changed or edited the language in this update.
Page 1216 of 1284
and manifestations of commercial bribery.
• Cooperate with all organizations and individuals engaged in activities designed to enhance
the development of purchasing practices.
• Respect obligations to others, and require the same respect from others for their obligations.
PROHIBITED PRACTICES
The following practices are prohibited in performing purchasing activities on behalf of the City:
• Having a financial or personal beneficial interest (directly or indirectly) in any contract or
purchase order for supplies, equipment, services, or projects furnished to the City.
• Accepting or receiving (directly or indirectly) from any person, firm, or corporation to whom
any contract or purchase order may be awarded (by rebate, gift or otherwise) any money or
anything of value, or any promise, obligation or contract for future reward or compensation.
Inexpensive advertising items bearing the name of the firm—such as pens, pencils,
paperweights or calendars—are not considered articles of value or gifts with this policy.
• Using information available to officials and employees, solely because of their City position,
for personal profit, gain or advantage.
• Directly or indirectly furnishing services or information not available to all prospective
bidders to any person or firm bidding on, or who may reasonably be expected to bid on, a
contract with the City.
• Providing confidential information to persons to whom issuance of such information has not
been authorized.
• Using a position or status in the City to solicit (directly or indirectly) business of any kind; or
to purchase products at special discounts or upon special concessions for personal private use
from any person or firm who sells or solicits sales to the City.
• Serving the interests of any organization (either as an officer, employee, member of the board
of directors, or in any capacity for consideration) which transacts or attempts to transact
business with the City for profit when such employee holds a City position of review or
control—even though remote—over such business transactions.
RESPONSIBILITY
• Employees. Each employee is responsible for following these practices. Violation of this
policy may result in disciplinary action, termination of employment or criminal prosecution.
• Department Heads. Department heads are responsible for ensuring that all employees of
their department who conduct purchasing activities possess a thorough understanding of these
standards of ethical conduct and prohibited practices.
Page 1217 of 1284
Section 215
BUSINESS LICENSE AND TAX-FORM REQUIREMENT
BUSINESS LICENSES
The City requires entities that execute contracts with and do business within or transacting with the
City to obtain a business license and tax certificate, according to Chapter 5.01 of the Municipal Code.
Businesses that have a place of business within City limits must have a business license. City staff
may not transact with such businesses who have failed to maintain a business license.
Consultants and services suppliers who execute contracts with the City for ongoing services, whether
or not they travel into the City to perform the services, must have a Business License.
Services providers, who have a business address outside of City limits, and travel into City limits and
perform services within the City must have a business license.
Whenever possible, City staff should direct purchases to suppliers who have a valid business license.
A current listing of businesses who have valid business licenses is located in the Purchasing
SharePoint page.with the City’s Revenue Division.
No purchases may be made from any supplier that does not have a valid business license, unless
specifically exempted from that requirement, as specified below.
EXCEPTIONS
The following types of suppliers are exempt from the business license requirement:(exempted by the
Finance Director, according to the adjustment powers outlined in Section 5.01.501)
• Business A business that are owned and operated solely by minors under the age of 18;
• Charitable, religious and nonprofit organizations;
• Any business for which requiring a business license would violated Federal or State laws or
contractual agreements;
• Out-of-state and on-line businesses whose only business conducted is a purchase initiated by
the City to supply goods over a cumulative amount of $100,000 (See South Dakota v. Wayfair 585
US (2018) The Court held that out of state sellers were required to collect and remit sales tax if they sold more
than $100,000 of goods or services or engaged in 200 or more transactions)
Commented [HM103]: We should have HR review this
section for concurrence.
Commented [BJC104]: Same comment as with Ethics
section.
Commented [HM105]: PW Commonly purchase printing
for plans and specification which is completed off-site. I just
want to make sure that we are still allowed to complete this
type of purchase without going through finance.
Commented [CD106R105]: This entire section should be
deleted in my opinion; this is old policy language from 2015
policy. Yes, you can still purchase printing for plans, etc.
But we may in the future have contracts in place that govern
the pricing for your purchases
Commented [HM107]: What does this term mean?
Commented [CD108R107]: I don’t know. I think we
should delete this entire section; it’s from 2015; and it is not
followed
Commented [BJC109]: Consider adding when this should
not be done. Leaving it wide open can lead to abuse.
Commented [BJC110]: Consider updating the Terms and
Conditions Template section since right now it makes it
appear that all contracts require a business license. Maybe
something like license required unless prior authorization
received from Purchasing that an exception to the license
apples.
Commented [CD111]: No language on Tax Certificate.
Business License and Tax Certificate are together on same
application
The Finance Director has the power to waive License only
but not Tax (per Municipal Code disconnect)
Commented [CD112]: Coordinate with revenue? Provide
an active link of current business license businesses? Not
everyone in the City has access to HDL. – I’m concerned
about this language since renewals happen all year, but
mostly in June.
Commented [HM113]: We should include a link to this
document. I’m thinking that folks would actually look at this
more often if it didn’t require reaching out to other staff
located in another work area to determine.
Commented [CD114]: The City needs a stronger
definition of “Nexus” to enforce.
Superme Court decision defines Nexus as out-of-state ...
Commented [BJC115R114]: Where is the memo located?
Commented [CD116R114]: @Bell Jr., Charles
https://slocitycloud.sharepoint.com/:w:/s/SLOHub/Finance/E
ZpeRRJKq8FNhjg-4cfdVIIBodYsvAzCQOvHK-...
Commented [CD117]: Examples? What scenarios violate
State or Federal Law?
Commented [CD118]: I’m using federal law criteria, I
realize the City can make this $$ figure what it wants it to
be, but must balance it against costs of enforcement. ...
Page 1218 of 1284
Section 225
CONSTRUCTION CONTRACT CHANGE ORDERS
OVERVIEWin accordance with the Uniform Public Construction Cost Account Act.
When the City awards a construction contract, the need for contract change orders (CCO) is not
unusual. CCO are required whenever the scope of work changes from that in the original contract or
an unknown condition of the site requires a change in the scope of work. Usually a contingency
amount is established when the project is authorized for advertisement or award budget is finalized
upon contract award to accommodate limited CCO’s. The purpose of this policy is to establish limits
of authority for approving construction project CCO.
GOALS
■ Ensure appropriate authority and accountability in the approval of change orders.
■ Minimize the time needed to approve a CCO in order to avoid project delays.
■ Establish a system under which the organizational level at which approval is given is
commensurate with the size of CCO and size of project.
■ Eliminate the potential for approval of a CCO when contingency funds are insufficient.
POLICIES
Conditions for Approval of CCO's by Staff
■ Sufficient contingency funds are budgeted and available in order for the Public Works
Director or City Manager (approved designees) to approve a CCO.
■ The nature of work in the CCO is not significantly different from that in the contract.
■ Authorization limits are based on an individual CCO amount, not the aggregate amount of all
CCO.
■ Authorization limits apply to CCO for increases in contract amounts only.
■ When the aggregate amount of CCO reaches 75% of the contingency, the awarding authority
shall be informed of the status of the project and the sufficiency of funding to complete the
project.
■ Work will not be broken up into multiple CCO in order to circumvent this policy.
■ All CCO must be in writing and approved by the appropriate contract parties consistent with
the authorized limits established in this policy.
Construction Change Orders
■ A copy of each approved CCO will be transmitted promptly to the Finance Department with
monthly progress paymentsDivision.
■ The Purchasing Authority may grant approval of CCO in excess of $175,000 under the
Commented [BJC119]: Always recommend writing out
definition before making it an acronym.
Commented [BJC120]: Where is this guide located? Nice
to help staff know where to find a document.
Commented [HM121]: If we are going back to council
we should update by reference so we don’t get stuck with old
limits. Current limits are:
Tier 2: 60k
Tier 3: 200k
I think we should also consider raise tier 1 up as well. 15k
sounds about right to me, but we should chat to find out if
everyone is comfortable with that.
Commented [NB122R121]: Agree Tier 1 should be
increased to allow greater flexibility for minor work. Not
much can be accomplished for less than $7,500 these days. I
think an $10k increase is reasonable for a limit UP TO (not
under) $17,500.
Commented [HM123]: JOC have an existing contract in
place. Tier 2 indicates that are getting three quotes. We
typically only have one contractor under contract for a
specific type of JOC. It doesn’t make sense to get quotes for
a JOC purchase.
Page 1219 of 1284
following circumstances (all three factors must be present):
o Immediate approval of the CCO is necessary to avoid delay.
o The CCO is an integral and mandatory component of the project.
o The costs associated with delay of the project would be excessive. The Project
Manager is responsible for carrying out this policy.
■ The Purchasing Authority is also authorized to approve CCO in excess of $175,000 related to
Job Order Contract Task Orders.
Authorization Limits
■ Public Works Director/ Designee Not to exceed $6045,000
■ Purchasing Authority (City Manager/Designee) Not to exceed $200175,000
■ City Council* Greater than contract or $200175,000
________________________________________________________________________________
* See circumstances above where the Purchasing Authority may approve CCO’s in excess of $175,000.
Originally Approved by the Council on August 3, 1993; Revised by the Counci l on April 15, 2003 and June 2, 2015.
Page 1220 of 1284
SECTION 250
COMPETITIVE BIDDING CRITERIA AND STANDARD BID DOCUMENTS
BIDDING TYPES AND AWARD CRITERIA
RFB RFPs RFQ Quotes
Yes Yes Yes No
Goal Lowest responsive bid
submitted by
responsible bidder
Most qualified
bidder that
provides the
best proposal
Most qualified bidder Lowest price of most
qualified bidder
Public Opening
Requirements
Opened publicly and
read aloud if public or
bidders are in
attendance
Opened
publicly and
pricing read
aloud if public
or bidders are
in attendance
Not opened publicly - List
of suppliers who submit
qualifications made
publicly available
Not opened publicly
Response Evaluated
By
Department project
team
Department
project team
Department project team
Department with
purchasing assistance
Specific Evaluation
Process
Determine whether bid
is responsive, then
select lowest
responsive bid
submitted by
responsible bidder.
No scoring of
specification response
is involved.
Responses
reviewed to
determine most
qualified bidder
Responsible
proposals are
reviewed for
factors listed in
Section
3.24.210 of the
Municipal Code
Statement of qualifications
evaluated and a score
assigned. Some
specification responses can
be pass/fail only with no
associated score.
Determine whether quote
is responsive, then select
lowest, most
qualifiedresponsive
quote. No scoring of
specification response is
involved.
Cost Evaluation
Process
Costs for responsive
bids are compared to
each other to identify
lowest cost
Cost for
responsible bids
are compared to
each other to
identify most
qualified lowest
cost bidder
If applicable, costs of labor
or services are scored
Costs for responsive
quotes are compared to
each other to identify
lowest, most
qualifiedcost
Negotiation
Allowed after
Selection
No, unless all bidders
are asked for a best
and final Offer
(BAFO)
Yes Yes No, unless all bidders are
asked for a best and final
Offer
Award Basis Lowest responsible
bidder wins
Lowest most
qualified
responsible
proposal wins
Evaluation Committee
Recommendation
Lowest most qualified
responsive quote wins
BID DOCUMENT TEMPLATES
With the assistance of the City Attorney, the Purchasing Division maintains the City’s contract
Commented [BJC124]: @Just noting for clean up when
doc ready for final. Make title same as other sections.
Formatted Table
Commented [NB125]: Check table formatting
Page 1221 of 1284
agreement templates on the Purchasing SharePoint site. The templates contain the City’s standard
terms and conditions which are not negotiable unless approved by the City Attorney.
The City advertises its competitive bids electronically via BidSync www.bidsync.com. The
preferable method for bid submission is in electronic format (paperless), unless the bid is submitted
for Public Work CIP bids.
The advantage of standard templates is to reduce the amount of time required for preparation and
administrative review; unless deviations are highlighted, reviewing staff will assume departments
have faithfully used the standard documents, and will not review them in detail.
(Bid documents for construction projects are excluded, since Public Works manage all construction
projects, and they are responsible for maintaining standard bid documents for construction projects.)
Additionally, these standard specifications can be used for the more price-sensitive Invitation for Bid
process (IFB) as well as the Request for Proposal (RFP) process where criteria other than price may
be significant factors in making the purchasing decision.
For detailed procedures and descriptions on how to draft RFP’s from the standard templates
refer to the City Purchasing SharePoint site at “procedures for competitive bidding advertising
and BidSync procedures”
Page 1222 of 1284
Section 255
CONTRACTS, CONTRACT ADMINISTRATION, CONTRACT AMENDMENTS
The City enters into numerous types of contractual agreements with suppliers throughout the fiscal
year. This procedure document is written for employees who have responsibility for entering into
contracts with suppliers to provide goods and services for their departments.
A contract is a legal instrument that protects the City’s interests by clearly establishing the
responsibility of all parties and establishes the terms and conditions under which a service is to be
performed.
The City’s contract templates can be found on the purchasing SharePoint site..
Examples of City contracts may include, but are not limited to:
1. Professional Services Agreements
2. Professional Services Agreements resulting from an RFP/RFQ
3. Bid Contracts (IFB)
4. Purchase Orders
5. Amendments
6. Parks & Recreation Instructor Agreements
7. Grant Agreements
8. Cooperative Agreements
1.9.Leases
For Public Works Construction Contracts – routing procedures, and contract administration
are outlined in the CIP design manual on the Public Works SharePoint site.
The manual is located on the Public Works SharePoint site.
https://slocitycloud.sharepoint.com/:w:/s/SLOHub/Public-
Works/cipengineering/EXkv0X4GWbRPtKA_2LaCJnQBIKIos0X4LltyHTJHAg2uXQ?e=dN1aqR
For Goods and Services, Consulting, RFQ on-call contracts, software agreements, instructor
agreements, and leases, the following procedure should be followed.
Contact the purchasing department to obtain the City’s standard contract template or refer to
the purchasing SharePoint site to download the City’s contract template at
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
• If staff receive a contract from a supplier not in the City’s standard format contact the City
Attorney’s office to determine whether the City’s standard contract template should apply.
\
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Page 1223 of 1284
• FOR IT / Software contracts staff should notify the City’s IT department for their review
and approval.
Draft the contract incorporating the supplier's scope of work and proposal and send a Word
draft version to the Legal Department for review
• Determine with the City’s Risk Managerment department pthe required insurance coverage.
• If the contract is from an RFP/RFQ/RFB staff should have contacted the Risk Managerment
to determine the appropriate insurance coverages before issuing the RFP
• The required insurance coverage will be an exhibit in the RFP; verify the coverages are what
the City asked for in the RFP.
• The City’s has boilerplate insurance templates on the Ppurchasing SharePoint site; but you
should still check with Risk Management for appropriate coverage for your scenario.
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/purch/SitePages/Home.aspx
• After review by the City Attorney’s office; and upon obtaining the supplier's proof of
insurance, forward the contract to purchasing or your administrative assistant for electronic
signature routing via Docu-Sign, the City’s electronic signature software for contracts.
Docu-Sign is the City’s mandatory routing software, contracts shall not be routed for wet
signatures.
• If the department routes a contract through its Administrative Assistant, the department must
cc: the City purchasing department on all contract routings.
Contract Records Management
Departments and Project Managers should be aware of their contract terms and scope of work and be
aware of renewal dates. For more detail on contract routing procedures refer to the Purchasing
SharePoint site.
Amendments to Agreements – Non-Construction Agreements
Commented [BJC126]: Risk Management is not a
separate department.
Commented [BJC127]: @Clancy, Daniel Maybe a
statement that DocuSign is the City mandatory system for
document execution.
Page 1224 of 1284
CONTRACT AMENDMENTS SCOPE
After contract award—whether by, purchase order or formal contract—amendments may be needed
to reflect changes in the scope of goods or services to be provided. The following summarizes what
is required to authorize and document contract changes.
The City’s contract amendment templates are in the Purchasing SharePoint site. Attached is a sample
“Amendment to Agreement” that can be used in approving contract changes.
Amendments should be numbered.
AUTHORIZING AGREEMENT CHANGES
Construction Contracts
Authorization levels for approving construction contract change orders are set forthoutlined in
Section 203 of this manual.
General Goods and Services
The specific authority for approving contract amendments is usually set forthoutlined in the
agreement itself (Section 5 of the standard agreement template).
General Policy. Staff Staff has the authority to amend agreements to the cumulative amended contract
amount (original price of the contract plus the price of any amendments) that they are otherwise
authorized to award contracts. In those cases where the original contract was awarded by a higher
purchasing authoritya higher purchasing authority awarded the original contract, then they have the
authority to amend those contracts by a cumulative amendment amount (price of only the amendment
itself) that they are otherwise authorized to award contracts.
Budget Constraints. In all cases, however, staff authorization to increase contract amounts is subject
to existing budget availability.
Staging of Contract Costs and Amendments. Using the amendment process in order to avoid
competitive bidding or higher authorization levels at the contract award stage is prohibited.
The following provides general guidelines for authorization levels in approving changes to purchase
orders and agreements.
Commented [CD128]: Thanks! Much more clear
Page 1225 of 1284
Goods and Services & Consultant Contract / Purchase Order Amendments
For contract and purchase orders purchases at Tier 1 level: (See section 202-A)
A contract or purchase order awarded initially as a Tier 1 amount requires Fiscal Officer approval to
a maximum amount of:For a contract originally awarded as a Tier 1 purchase:
• $10,000 for Goods and Services
• $7500 for Consulting
The Fiscal Officer has the authority to amend at Tier 1 approval authority:
The Fiscal Officer has the authority to amend the cumulative amended contract price authority to
amend the cumulative amended contract price or purchase order by an amount not to exceed the
maximum cumulative amount of: amount of the maximum by a Tier 1 price of:not to exceed amount
of the maximum Tier 1 price of:
■• Goods: $10,000 for Goods and Services
• $7500 for Consulting IT Systems,
Amendments or change orders that cumulatively add to the original contract or purchase order to Tier
2 & 3:
• $10,000 - $49,999 for Goods and Services
• $7500 - $39,999 for Consulting
• Requires Fiscal Officer and Department Head Approval
• Tier 3 levels if not competitively bid through an RFP/RFQ or purchased off a cooperative
contract the contract or purchase order requires a sole-source memorandum at this amount
•
• $15,000 for Public Projects
If the cumulative amended contract amount exceeds a Tier 1 pIf amendments beyond these limits are
needed, i.e. exceed a Tier 1 purchase price, it will require the approval of a higher purchasing
authority according to thresholds set forth in section 202, exhibit 202-A. Amendments or change
orders that cumulatively add to the original contract or purchase order to Tier 4:
• $50,000-$149,999 Goods and Services
• $40,000 - $99,999 Consultant
• Requires City Manager Report
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum at this amount
Amendments of change orders that cumulatively add to the original contract or purchase order to
Tier 5:
Commented [JM129]: Link to, or include the tiers in this
policy
Commented [CD130R129]:
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Commented [VM131]: amount
Commented [VM132]: amount? For consistency in terms
Commented [JM133R132]: Agreed. Dan, let us know
whether you’d like to use “price” or “amount” and please
update accordingly throughout.
Commented [CD134R132]: Amount? Or delete price
Commented [VM135]: By an amount not to exceed?
Commented [JM136R135]: Agreed. Updated
accordingly.
Commented [VM137]: not to exceed a cumulative
amended contract amount (original contract price + price of
amendment(s)) of the maximum Tier 1 price of:
Commented [JM138R137]: Yes, agreed. We need to
define “cumulative amended contract amount” in the body of
the text either as a parenthetical like you suggest, or simply
saying, “which is defined to mean…”
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Commented [VM139]: amounts don’t line up perfectly
with flow chart
Commented [JM140R139]: Agreed. Dan, are there
updated tier amounts we should be referring to? Also, I’d
suggest listing the types of contracts first in each bullet and
then : the price.
Commented [CD141R139]: The amounts are for the
proposed updated thresholds – I’m proposing merging goods
and services together – raising some thresholds
Commented [VM142]: If the cumulative amended
contract amount exceeds a Tier 1 purchase price, …
Commented [VM143]: Use the tier that the Cumulative
Amendment Amount falls into, UNLESS the Cumulative
Amendment Amount causes the Cumulative Amended
Contract Amount to fall into a higher tier than it was
approved for, in which case approval from the higher tier is
needed.
Commented [VM144R143]: If the Amendment does not
push the contract into a new tier, then use the tier the
amendment price falls into.
If the Amendment pushes the contract price into a higher
tier, then get approval from the higher tier.
Page 1226 of 1284
• Over $150,000 Goods and Services
• Over $100,000 Consultant
• Require Council Approval
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum
(** PROPOSED LANGUAGE**)
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Page 1227 of 1284
For contract and purchase orders purchases at at Tier 2 & 3 levels
For a A contract or purchase order originally awarded as a Tier 2 purchase amount requires Fiscal
Officer and Department Head approval – maximum amounts:
• $10,000 - $24,999 for Goods and Services
• $7500 - $14,999 for Consulting
A contract or purchase order originally awarded as a Tier 3 purchase amount requires Fiscal Officer
and Department Head approval – maximum amounts:
• $10,000 - $24,999 for Goods and Services
• $7500 - $14,999 for Consulting
Tier 3 must be competitively bid through RFP/RFQ, or purchased off a cooperative agreement; or
requires a sole-source
The Fiscal Officer has the authority to amend at Tier 1 approval authoritythe contract or purchase
order by a cumulative amendment amount not to exceed their tier 1 authority of: maximum Tier 1
• $10,000 for Goods and Services
• $7500 for Consulting
The Fiscal Officer and Department Head have the authority to amend the contract or purchase order
by a cumulative amendment amount not to exceed their tier 2 & 3 authority of:
• $10,000 - $49,999 for Goods and Services
• $7500 - $39,999 for Consulting
price.
Amendments or change orders that cumulatively add to the original contract or purchase order to Tier
4:
• $50,000-$149,999 Goods and Services
• $40,000 - $99,999 Consultant
• Requires City Manager Report
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum at this amount
Amendments or change orders that cumulatively add to the original contract or purchase order to
Tier 5:
• Over $150,000 Goods and Services
• Over $100,000 Consultant
• Require Council Approval
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum
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Commented [JM145]: I think we should be more explicit
about the process, even if it seems like overkill. I’d suggest
saying something like: “The Fiscal Officer has the authority
to amend if the amendment cost is within Tier 1…”
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Page 1228 of 1284
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Page 1229 of 1284
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 2 price.to amend at Tier 2 approval authority.
The Fiscal Officer and Department Head have authority to amend the cumulative amended contract
price by a not to exceed amount of the maximum Tier 2 price of:
• Goods and Services : $25,000
• Consulting:
• Public Projects $60,000
If the cumulative amended contract price exceeds a Tier 2 purchase priceIf amendments beyond these
limits are needed, i.e. exceed a Tier 2 purchase price, it will require the approval of a higher
purchasing authority according to thresholds set forth in section 202, exhibit 202-A. (** PROPOSED
LANGUAGE**)
■
■ IT Systems: $24,999
■ Consulting: $14,999
For contract purchases at Tier 3 level
For a contract originally awarded as a Tier 3 purchase:
The Fiscal Officer has the authority to amend the contract by a cumulative amendment amount not to
exceed the maximum Tier 1 price.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 2 price.
The Fiscal Officer has the authority to amend at Tier 1 approval authority
The Fiscal Officer and Department Head have the authority to amend at Tier 2 approval authority.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 3 price.
at Tier 3 approval authority.
The Fiscal Officer and Department Head have authority to amend the cumulative amended contract
price by a not to exceed amount of the maximum Tier 3 price of:
• Goods and Services : $50,000
• Consulting: 40,000
• Public Projects $200,000
If the cumulative amended contract price exceeds a Tier 3 purchase price, If amendments beyond
these limits are needed, i.e. exceed a Tier 3 purchase price, it will require the approval of a higher
purchasing authority according to thresholds set forth in section 202, exhibit 202-A. (** PROPOSED
LANGUAGE**)
For contract purchases at Tier 4 level
Commented [JM146]: Are these essentially saying the
same thing? If so, let’s condense. If not, I’d appreciate an
explanation as to how they differ. Thanks!
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Indent at: 0.5"
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Commented [JM147]: Similar edit to the tier 2 section
above. I think we need to be really clear about how we work
down in terms of authority if the original contract required a
higher approval authority and the amendment cost falls into a
lower tier
Commented [CD148]: @Bell Jr., Charles@Elke, Brigitte
This is older policy language it’s hard to follow
If we enter into a contract at $7500 – it’s Tier 1. We amend
it one month later to $15,000– now it’s Tier 2. As the current
policy reads, we’d treat the amendment approval as a Tier 1
approval flow even thought the value of the contract went
above into Tier 2 approval authority.
I think we need it to say, if the amendment triggers the total
value of the contract to go into the next Tier level it triggers
that Tier levels approval authority flows.
The second scenario is when a a higher approval authority
enters a contract at for example Tier 2 at $15,000. We
amend it by $1000 (a Tier 1 level), only the Fiscal Officer
needs to approve that amendment, which is OK since the
cumulative Tier level did not change.
*See proposed new language to Tier 1
*See older language for Tiers 2-5
Page 1230 of 1284
A contract or purchase order originally awarded as a Tier 4 purchase amount requires a City Manager
Report – maximum amounts:
• $50,000-$149,999 for Goods and Services
• $40,000-$99,999 for Consultants
Tier 4 must be competitively bid through RFP/RFQ, or purchased off a cooperative agreement; or
requires a sole-source
The Fiscal Officer has the authority to amend the contract or purchase order by a cumulative
amendment amount not to exceed their tier 1 authority of:
• $10,000 for Goods and Services
• $7500 for Consulting
The Fiscal Officer and Department Head have the authority to amend the contract or purchase order
by a cumulative amendment amount not to exceed their tier 2 & 3 authority of:
• $10,000 - $49,999 for Goods and Services
• $7500 - $39,999 for Consulting
City Manager Report is required to amend the contract or purchase order by a cumulative
amendment amount not to exceed tier 4 authority of:
• $50,000 - $149,999 for Goods and Services
• $40,000 - $99,999 for Consulting
Amendments or change orders that cumulatively add to the original contract or purchase order to
Tier 5:
• Over $150,000 Goods and Services
• Over $100,000 Consultant
• Require Council Approval
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum
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Page 1231 of 1284
For a contract originally awarded as a Tier 4 purchase:
The Fiscal Officer has the authority to amend the contract by a cumulative amendment amount not to
exceed the maximum Tier 1 price.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 2 price.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 3 price.
The The Fiscal Officer has the authority to amend at Tier 1 approval authority
The Fiscal Officer and Department Head have the authority to amend at Tier 2 approval authority.
The Fiscal Officer and Department Head have the authority to amend at Tier 3 approval authority.
City Manager Report approval has the authority to amend the contract by a cumulative amendment
amount not to exceed the maximum Tier 4 price.is required to amend at a Tier 4 approval authority.
The Fiscal Officer, Department Head, and/or City Manager Report approval have authority to amend
the cumulative amended contract price by a not to exceed amount of the maximum Tier 4 price of:
• Goods and Services : $150,000
• Consulting: $100,000
• Public Projects $200,000
If the cumulative amended contract price exceeds a Tier 4 purchase price,If amendments beyond these
limits are needed, i.e. exceed a Tier 4 purchase price, it will require the approval of a higher
purchasing authority according to thresholds set forth in section 202, exhibit 202-A. (** PROPOSED
LANGUAGE**)
For contract purchases at Tier 5 level
For contract purchases at Tier 5 level
A contract or purchase order awarded initially as a Tier 5 purchase amount requires Council approval:
• Over $150,000 for Goods and Services
• Over $100,000 for Consultants
Tier 5 must be competitively bid through RFP/RFQ, or purchased off a cooperative agreement; or
requires a sole-source
The Fiscal Officer has the authority to amend the contract or purchase order by a cumulative
amendment amount not to exceed their tier 1 authority of:
• $10,000 for Goods and Services
• $7500 for Consulting
The Fiscal Officer and Department Head have the authority to amend the contract or purchase order
by a cumulative amendment amount not to exceed their tier 2 & 3 authority of:
• $10,000 - $49,999 for Goods and Services
• $7500 - $39,999 for Consulting
Commented [JM149]: Similar edit to the tier 2 section
above. I think we need to be really clear about how we work
down in terms of authority if the original contract required a
higher approval authority and the amendment cost falls into a
lower tier
Commented [JM150]: Same comments as above
regarding working down. We should use the term
“cumulative amendment cost” to help explain this.
Commented [CD151]: @Bell Jr., Charles@Elke, Brigitte
If we enter into a contract at $7500 – it’s Tier 1. We amend
it $15,000– it’s Tier 2. As the current policy reads, we’d treat
the amendment approval as a Tier 1 approval flow even
though the cumulative value of the contract went into Tier 2
approval authority.
If the amendment triggers the cumulative value of the
contract to go into the next Tier it triggers that Tier level
approval authority flows.
The second scenario
A higher approval authority enters a contract at for example
Tier 2 at $15,000. We amend it by $1000 (a Tier 1 level),
only the Fiscal Officer needs to approve that amendment
because the cumulative Tier level did not change.
Page 1232 of 1284
City Manager Report is required to amend the contract or purchase order by a cumulative
amendment amount not to exceed tier 4 authority of:
• $50,000 - $149,999 for Goods and Services
• $40,000 - $99,999 for Consulting
Amendments of change orders that cumulatively add to the original contract or purchase order to
Tier 5:
• Over $150,000 Goods and Services
• Over $100,000 Consultant
• Require Council Approval
• If not competitively bid through an RFP/RFQ or purchased off a cooperative contract, the
contract or purchase order requires a sole-source memorandum
Page 1233 of 1284
PUBLIC PROJECTS CONTRACT AMENDMENTS AND CHANGE ORDERS
[FILL]
JOB ORDER CONTRACT AMENDMENTS AND CHANGE ORDERS
[FILL]
For a contract originally awarded as a Tier 5 purchase:
The Fiscal Officer has the authority to amend the contract by a cumulative amendment amount not to
exceed the maximum Tier 1 price.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 2 price.
The Fiscal Officer and Department Head have the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 3 price.
The City Manager Report approval has the authority to amend the contract by a cumulative
amendment amount not to exceed the maximum Tier 4 price.The Fiscal Officer has the authority to
amend at Tier 1 approval authority
The Fiscal Officer and Department Head have the authority to amend at Tier 2 approval authority.
The Fiscal Officer and Department Head have the authority to amend at Tier 3 approval authority.
City Manager Report approval is required to amend at a Tier 4 approval authority.
Council has the approval authority to amend the cumulative amended contract price at:
• Goods and Services: $150,000 or more
• Consulting: $100,000 or more
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Commented [JM152]: Similar edit to the tier 2 section
above. I think we need to be really clear about how we work
down in terms of authority if the original contract required a
higher approval authority and the amendment cost falls into a
lower tier
Commented [JM153]: Same comments as above.
Commented [JM154]: Let’s be sure to include all types of
contracts represented on the most updated tier chart
Page 1234 of 1284
Examples of Amendments
WeExample 1:
• The City enters into a $6,500 consulting contract requiring Tier 1 approval by Fiscal Officer
(see Section 202, exhibit 202-A, “Consulting Services” bracket).
• WeThe City wants to extend the contract out six months and decides to amend the contract
adding $12,500 to the contract cost.
• The cumulative amended contract price is now $20,000, which requires meaning wethe City
must get Tier 2 approval from Fiscal Officer and Department Head to amend the contract.
Example 2:
• A higher approval authority The City enters into a goods and services purchase order contract
atfor $15,000, requiring Tier 2 approval by the Fiscal Officer and Department Head (see
Section 202-A)
• , exhibit 202-A, “Goods and Services” bracket). The CityWe wishes to amend itthe purchase
order agreement by $1,000. The amendment value required Fiscal Officer approval; does not
push the cumulative amended amountcontract price (now $16,000) (original purchase +
amendment) into the neis still Tier 2 – only Fiscal Officer approval is required. xt tier, Tier 3,
and the amendment value itself is only Tier 1 (i.e., cumulative amendment cost), meaning
only the Fiscal Officer needs to approve the amendment.The Fiscal Officer can amend up to
a cumulative amount of $24,999.
Exceptions
If a If greater discretionary authority at the Department Head or Purchasing Authority level is desired
than indicated abovgreater discretionary authority at the Department Head or Purchasing Authority
level is desired than indicated above. In that case, this should be clearly identified in the City Manager
or Council Agenda Report approving the bid/RFP documents or awarding the contract.
DOCUMENTATION
Amendment requests (such as the City Manager or Council Agenda Report) should include a cost
summary of the original contract amount, any amendments to-date, the proposed
amendmentmendments to date, the proposed amendment, and the revised contract total.
________________________________________________________________________________
Revised September 2, 2003, to reflect changes in the City’s Purchasing Guidelines approved by the Council on April
15, 2003, and again on June 2, 2015
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Commented [VM155]: Insert purchasing policy flow
chart, amounts need to line up (chart itself needs update?)
Page 1235 of 1284
AMENDMENT TO AGREEMENT NO.
THIS AMENDMENT TO AGREEMENT is made and entered in the City of San Luis Obispo on [date], by
and between the CITY OF SAN LUIS OBISPO, a municipal corporation, herein after referred to as City, and
[CONTRACTOR NAME], hereinafter referred to as Contractor.
WITNESSETH:
WHEREAS, on [date] the City entered into an Agreement with Contractor for [generally describe the
original agreement workscope] per Specification No. [xxxxxx]; and
WHEREAS, the City desires to amend the scope of services to include [generally describe the proposed
change in the workscope] and Contractor has submitted a proposal for this purpose that is acceptable to the City.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter
contained, the parties hereto agree as follows:
1. The scope of services and related compensation is hereby amended as set forth in Exhibit A
attached hereto. [Attach proposal letter or other itemization of proposed work and agreed upon compensation
referencing the Amendment Number]
2. All other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year
first written above.
ATTEST: CITY OF SAN LUIS OBISPO
By:
City Clerk Purchasing Authority (City Manager/Designee)
APPROVED AS TO FORM: CONTRACTOR
City Attorney By:______________________________________
Commented [CD156]: Remove template
This is a template form that will change over time this is
procedure not policy
Page 1236 of 1284
275
CREDIT CARD POLICY
OVERVIEW
To provide secure payment options for employees who travel or at times have to make emergency
purchases, the City issues credit cards registered to individuals under the City umbrella.
In this context, it is important to understand the fiduciary responsibility of utilizing a City credit card
and the required control over purchases. This policy outlines the use, accounting, and reporting
obligations that come with this fiduciary responsibility.
Employees assigned a City credit card will be bound to the criteria outlined in this policy that outlines
not only the obligations but also the ramifications of violating the policy. Individual user agreements
will be signed to ensure that a contract between the City and the credit card holder exists for
reference.
This policy establishes the City's allowable uses, the fiduciary responsibility, the procedures, and
reporting obligations when using City credit cards in making emergency purchases or paying for
travel and training related expenses. Refer to the City’s Municipal Code for the definition of an
emergency purchase @ Muni Code
This policy cannot cover every issue, exception, or contingency that may arise in using City credit
cards. Accordingly, the primary standard that should always prevail is to use common sense and
good judgment in the use and stewardship of City resources.
POLICIES AND PROCEDURES AT-A-GLANCE
A summary document of primary cardholder responsibilities has been made available for easier
reference. See policies & procedures At-A-Glance @ At a Glance
A procedure handbook for how to request a card; due dates for reconciliations; how to Oracle guides
for expense report submission; and compliance auditing can be found @ Credit Card Procedure
Handbook
The Oracle ‘how-to’ guide for submitting expense reports can be found @ Expense Report 'How To'
Guide
GENERAL GUIDELINES
Charges can originate in-store, on-line, or by phone. Transactions are audited internally by finance
and externally by the City's outside accounting firm.
The primary responsibility for ensuring the appropriate use of credit cards lies with each employee.
Acceptance of a City credit card indicates an employee’s agreement to follow all policies and
procedures, laws, and regulations.
Page 1237 of 1284
TRAINING
Cardholders are required to attend training on their role and responsibilities outlined in this policy.
The City’s training module is located on Oracle @[_______].
Once training is completed and the user agreement has been signed, the program administrator will
activate the card. This same process is followed for department cards.
TYPES OF CITY CREDIT CARDS
Standard Credit Card – a card issued to individual City employees similar to a consumer credit
card but is paid in full at the end of each month. The card can be used for acquiring goods and services
when the purchase requisition process cannot meet the operational needs required. The card does not
replace the purchasing guidelines set in section 202 of the Purchasing Policy. The card may also be
used for travel and meeting-related expenses, as explained in the Travel & Meeting Policy of the
Financial Management Manual Section 350.
Department Card – A multi-user card issued to a division. A department card is issued to a specific
employee recognized as the Card Coordinator or Reconciler. A Department card will have the name
of the specific department or workgroup that it is assigned to.
LIMITS AND INCREASE REQUESTS
Department Heads and managers have two options for spending limits for employees:
Option 1 - Monthly limit of $5000 with a single purchase limit of $2500
Option 2 - Monthly limit of $2500 with a single purchase limit of $1000.
Managers are more appropriate for option 1. Employees under a manager's responsibility are more
appropriate for option 2. Purchase limits can be increased but must be approved by Finance.
Cardholders should send an email requesting the increase to their Department Head, the Program
Administrator, and Financial Analyst - Purchasing and include the following:
• Amount requested for the single purchase, or monthly limit and business reason for the
increase
• Supplier name for whom the single purchase is requested
If a single purchase, or monthly limit exceeds the amounts outlined, you must obtain approval before
making the purchase or use the purchase order process.
COMPETITIVE BIDDING THRESHOLDS
City employees must not piecemeal credit card purchases to circumvent the allotted maximum credit
card limit. If the cost of a purchase exceeds the limit and the purchase order process doesn’t meet the
operational needs required staff must request a limit increase as outlined in this policy.
Commented [CD157]: Need to create live PPT training
guide and load it to Oracle under ‘on-boarding’ section or
training section
Commented [CD158]: New spend limits; open for
discussion
Page 1238 of 1284
TRAVEL EXPENSES
The City credit card must be used in paying for travel expenses. However, the City’s travel and
meeting expenses policy applies to all such credit card payments, including the use of travel
authorizations and per diem meal allowances.
PERSONAL USE OF CITY CREDIT CARDS
Employees must not use personal credit cards for City purchases and must not use City credit cards
for personal expenses even if the intent is to reimburse the City later. Charging personal expenses on
City credit cards is a misuse of City funds and a breach of the City’s ethics policy.
FRAUD
Employees are responsible for ensuring that City-issued credit cards are protected from unwarranted
use or loss and for ensuring that all purchases are made in accordance with the City’s policies. Failure
to follow policies and procedures regarding the use of credit cards is no different from failure to
follow policies and procedures in any other aspect of an employee’s job.
LOST OR STOLEN CARDS
Cardholders are responsible for ensuring that the issuing bank and the Department of Finance are
notified immediately if the card is lost or stolen. The cardholder has been set up to directly contact
the issuing bank (using the bank’s customer service number) to report a lost or stolen card. Failure
to do so may result in making the cardholder responsible for any fraudulent use of the card.
DISPUTED CHARGES
Cardholders are responsible for ensuring that the vendor and issuing bank are notified immediately
of any of the charges that are disputed. The City pays the statement in full, including any disputed
amounts, to avoid finance charges and late fees; when resolved, the amount will be credited to the
account on the next monthly statement. Any charge that has not been validated and accepted in Oracle
Expense Management within a month is deemed a disputed charge and it is the responsibility of the
department to have the dispute resolved before the next billing cycle.
CREDIT CARD FEES
If there is a processing fee or a charge from the issuing bank, this charge, if any, is the department’s
cost responsibility.
Commented [WS159]: Should we include that food
CANNOT be purchased on City credit cards? @Clancy,
Daniel
Page 1239 of 1284
RETURN OF CARD UPON REQUEST OR TERMINATION
Cardholders will immediately surrender their card upon request of their department head.
Departments are responsible for retrieving the credit card when an employee separates from the City
and returning the card to the Finance Department for cancellation and destruction. The use of the
credit card for any purpose after its surrender is prohibited.
DISCIPLINARY ACTION
Conduct in conflict of any of the above standards is a breach of these policies and will result in
disciplinary action, up to and including removal of the City credit card and termination of
employment. Finance in collaboration with Department Heads and Human Resources are responsible
for all disciplinary action surrounding misuse of cards, including cancellation of card privileges.
MERCHANT CATEGORY CODES
The City of San Luis Obispo’s Credit Card Program allows for the blocking of ‘Merchant Category
Classification’ (MCC Codes). MCC Codes are numeric, 4-digit codes assigned by banks to vendors.
The code identifies the vendor’s primary product or service. Some of the examples of blocked MCC
codes include, liquor stores, cocktail lounges and nightclubs, spas and massage parlors, and gambling
casinos.
The Finance Director has the authority to designate any MCC code as restricted.
ROLES AND RESPONSIBILITIES DEFINITIONS
Credit Card Holder – Employee given responsibility for a City credit card to use for a purchasing
role in their job-function
Credit Card Reconciler or Group Reconciler – Cardholder or employee designated to perform the
transaction reconciliation process in Oracle for an individual account or a group in a division. If an
employee is reconciling more than one account, they are known as a 'Group Reconciler'
Credit Card Approver – The manager responsible for the approval process of charges to an
individual card. This process includes not only the physical action of approving the reconciled
charge, but also the charge itself. An employee acting as a reconciler for charges cannot be the
approver of those charges. A charge must be approved by someone other than the Credit Card
Reconciler.
Department Credit Card Coordinator/Reconciler – The individual responsible for a Department
Card is called the Department Card Coordinator. The employee is responsible for securing the card
and tracking the use/users of the card. The reconciler is responsible for reconciling the transactions
in Oracle. The coordinator and reconciler may be two different people.
Page 1240 of 1284
Internal Credit Card Compliance Auditor – The employee responsible for monitoring credit card
transactions, and policy compliance. For the City of San Luis Obispo, this is performed by the
Program Administrator & Financial Analyst - Purchasing with oversight from the Finance Director.
Outside Accounting Auditor – External Accounting Auditors or Auditing Firm employed by the
City of San Luis Obispo to complete an audit of the City Accounting functions.
Department Head - Department Heads determine the type of card the employee will carry and are
responsible for ensuring that their staff are aware of their responsibilities, and for implementing
review and payment procedures within their department.
Financial Analyst Purchasing - Manager of the Purchasing Division responsible for internal audit
of credit card transactions, compliance to policy, and training
Program Administrator – The designated City employee who serves as the point of contact
between the City and the bank. This position has authority over the program in Policy and Procedures
with the Financial Analyst – Purchasing and is generally the first stop for any issues pertaining to the
credit card program.
Finance Director - The Finance Director is responsible for administering the review of credit card
statements to ensure that the proper documentation and purchase approvals have been provided.
Page 1241 of 1284
SECTION 276
ENVIRONMENTALLY PREFERABLE PURCHASING (EPP)
Municipal Code 3.24.075
It is the intent of the city council that the City of San Luis Obispo take a leadership role not only in recycling its waste
products but also in the purchase of recycled products for use in the delivery of city services. It is the purpose of this
section to provide direction to the city administrative officer in the procurement and use of recycled products. For the
purpose of this section, “recycled materials” are defined as any materials (e.g., glass, paper, plastic, etc.) that are
separated by type, reprocessed by industrial methods, and used as raw materials for the manufacture of new products.
It is the policy of the City of San Luis Obispo to purchase and use recycled products whenever possible to the extent
that such use does not negatively impact health, safety, or operational efficiency.
It is the policy of the City of San Luis Obispo to encourage the purchase of products which can be recycled or reused.
The City will purchase and use recycled paper for masthead stationery, envelopes and printing purposes. In addition,
recycled paper shall be purchased and used in all copy machines which will accept it. City staff will encourage the
copier industry to develop high-speed copiers which will accept recycled paper.
City departments shall examine their purchasing specifications and, where feasible, purchase equipment, supplies, and
services that result in less harm to the natural environment. This involves the purchase of equipment, supplies, and
services in a manner that uses less harmful materials, employs recycled or recovered materials (where appropriate
and available), and utilizes techniques intended to result in less impact on the environment than other available
methods.
It is the policy of the City of San Luis Obispo that city funds shall not be used to purchase single-use plastic bottled
beverages of less than twenty-one ounces or single-use plastic drink containers or single-use plastic beverage
containers, as provided in Chapter 8.07.
A ten percent preference, not to exceed one thousand dollars per contract, may be given to recycled products. The
fitness and quality of the recycled product must be at least equal to unrecycled products as determined by the City. The
preference percentage shall be based on the lowest bid or price quoted by the supplier or suppliers offering
nonrecycled products.
Price preferences may be offered in excess of the ten percent ceiling established in this section, if it can be shown that
purchase of a recycled product or material will result in greater long-term savings to the City. Award of a bid in excess
of the ceiling, however, requires the approval of the city administrative officer or city council as established in the
City’s purchasing manual. (Ord. 1644 § 2, 2018: Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 1178 § 1, 1990)
Ord. No. 1178 added § 3.24.080, which the editor has renumbered § 3.24.075 since the chapter already contained a § 3.24.080.
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Page 1242 of 1284
ENVIRONMENTALLY PREFERABLE PURCHASING (EPP)
The City of San Luis Obispo is committed to efficient use of resources and other sustainable actions.
The purpose of the provisions of this section are to promote the procurement of environmentally
preferable products or services throughout all city departments in order to foster the practice of
sustainable purchasing choices that reduce impacts on the public health and the environment and
support markets for environmentally preferable products or services.
If fitness and quality are equal, and use does not negatively affect health, safety, or operational
efficiency, City Departments shall procure environmentally preferable products and services taking
into consideration that:
• EPP products or services are available at the same or lesser total cost than competing products
or services that serve the same purpose; A ten percent preference, not to exceed one thousand
dollars per contract, may be given to recycled products per Municipal Code 3.24.075
• The life-cycle cost of the product or service is determined to be less when taking into
consideration quality, performance, range of activities, from the extraction of raw materials
from the Earth and the production and distribution of energy, through the use, and reuse, and
final disposal of a product.
City Departments should require, when feasible, its janitorial contractors to use third-party green-
certified janitorial cleaning products, in particular, Green Seal, or EcoLogo certified cleaning
products. (See Green Seal standard GS37 for industrial and institutional cleaners, and Standard GS-8 for general-purpose, bathroom, glass,
and carpet cleaners used for household purposes) and EcoLogo (Standard UL 2759; 2777 for hard surface cleaners, and hard floor care products)
https://www.greenseal.org/standards/standards-list/; https://industries.ul.com/environment/certificationvalidation-marks/ecologo-product-
certification
City Departments, when feasible, shall designate environmentally preferable products or services
from contractors or consultants and, if applicable shall require contractors or consultants to specify
the minimum percentage of recycled content in the products offered.
City Departments shall require the use of 30% post-consumer recycled paper and/or GreenSeal
certified paper on all outside print jobs
To reduce transportation-related greenhouse gas emissions, stimulate the local economy, and support
environmentally friendly business practices, all City Departments shall make an effort to procure
goods and services from local contractors or consultants – defined in the Municipal Code as
businesses within City limits. All City Departments should consider whether its suppliers are
engaged in environmentally friendly business practices and/or that demonstrate a high level of
environmental, social and governance responsibility (ESG) by:
• Assisting the City in documenting and reporting its environmental and social benefits for the
products it sells to the City
• Assisting the City with end of useful life management through free or low cost take back
services
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Commented [CG160]: I don't see the cleaning products
identified in MC 3.24.075, where did this info come from?
Commented [CD161R160]: @cruce It’s a proposed
update to the policy –
The Code states “City departments shall…purchase..
products that result in ‘less harm to the natural
environment’it defines recycled products, but not janitorial
products, the EPP policy is proposed to incorporate this
category and define it further and bring SLO in line with
other municipalities across the state and the USA.
The key term is ‘when feasible’ it allows for flexibility for
staff but encourages more environmentally responsible
products and puts a definition on them.
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Page 1243 of 1284
References
Sustainable Purchasing Leadership Council. Programs Overview at https://www.sustainablepurchasing.org/programs/
Keating, Michael, Socially responsible and environmentally sustainable purchasing at https://www.americancityandcounty.com/2019/04/10/socially-
responsible-and-environmentally-sustainable-purchasing/
Responsible Purchasing Network, The Buck Starts Here: Sustainable Procurement Playbook for Cities
http://www.responsiblepurchasing.org/purchasing_guides/playbook_for_cities/index.php
City of Santa Monica “Purchasing Decisions Made Easy” Guide to making decisions that bring the greatest value while reducing the negative
impacts on our environment. https://www.smgov.net/Departments/OSE/easyguide/
City of Portland, Oregon. Sustainable Procurement Policies at https://www.portlandoregon.gov/brfs/37755
Buying Green Guide. California Department of General Services at https://www.dgs.ca.gov/PD/Resources/Find-EPP-Goods-and-Services
Environmentally Preferable Purchasing Program. California Department of General Services at https://www.dgs.ca.gov/PD/About/Page-Content/PD-
Branch-Intro-Accordion-List/Engineering/Environmentally-Preferable-Purchasing-Program
City of Portland, Oregon. Bureau of Revenue and Financial Services. Sustainable Procurement at https://www.portlandoregon.gov/brfs/37732
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Diversity / MWBE / ESG
For the City to adopt a purchasing preference policy to Minority Women Business Enterprise
(MWBE) and/or Disadvantaged Business Enterprises (DBE), the City must first conduct a
‘disparity analysis’ study as per US Supreme Court precedent. City of Richmond v. J.A. Croson,
Co., 488 US 469 (1989) at https://supreme.justia.com/cases/federal/us/488/469/
In addition, MWBE/DBE businesses must be certified by either the City itself, and/or a third-party
agency – it’s not enough to simply ask for a supplier to state they are a MWBE; criteria must be
met to be certified.
Disparity analysis studies must be carefully designed – and would likely require consultant support.
Court’s have struck down MWBE polices based on flawed studies.
Local Business Community
The SLO Chamber of Commerce as of June, 11, 2020, does not classify SLO County businesses by
MWBE/DBE.
The City can engage in outreach and collaboration efforts with the Mission Community Services
Corporation (MCSC) at https://www.mcscorp.org/.
MSCS’s mission is “dedicated to enhancing opportunities for potential entrepreneurs and small
business owners to become self-sustaining, successful contributors to their communities, with
special assistance for women, low-income, minority, veterans, and non-profit businesses in San
Luis Obispo, Kern, and Monterey Counties.”
Example of Cities with MWBE policies are below which are generally passed by Ordinance – see
example below of the specificity.
City of Ft. Myers, Florida
MBE policy in place in the form of an ordinance since May 19, 2003.
A business whose primary place of business is within Lee County, and who has been certified as a
DBE by the Florida Office of Supplier Diversity is considered an MBE and receives a 7% (in
dollars) preference on solicitations between $3,000 and $25,000 and 6% on solicitations over
$25,000.
Staff adds those percentages to the lowest responsive responsible bidders' bid and then if the MBE's
bid falls within that dollar amount, and depending whether the total dollars meet the threshold for
going before City Council for approval, the MBE is either awarded the contract, or, the
recommendation to award to the MBE goes before City Council as an agenda item.
The Purchasing and Contracts Administrator and Division Manager doubles as the City's MBE
Coordinator. The MBE Coordinator, as well as staff members are always available and reach out to
the local community to teach business owners, or those who would like to be business owners, how
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to do business with the City.
Staff participates in the Small Business Development Center events that are held in conjunction
with Florida Gulf Coast University, and at workshops held locally in Lee County's South West
Florida Enterprise Center.
The City also has a 15% MBE subcontractor goal in its formal bid solicitations.
The City has a Local Vendor Preference policy, in the form of an ordinance. a 5% preference (or
$25,000, whichever is less) is given to City of Fort Myers businesses, and a 3 % (or $25,000,
whichever is less) preference is given to Lee County businesses.
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ESG
The City is considering an Environmental, Social, Governance, (ESG) approach to its investment
policies.
The City is already leading by example with many ESG type initiatives, Climate Action,
Affordable Housing, Energy Efficiency, Open Space, etc.
What can procurement add to ESG?
ENVIRONMENTAL - How a company limits its environmental impact and carbon footprint
What can purchasing do?
• Expand EPP policies to be cleaner in spend (janitorial contracts; paper)
• Consider the supply chain impacts of its purchases – shipping distances
• Consider companies ESG scores and do business with only good ESG ranked suppliers
1. Sustainalytics https://www.sustainalytics.com/
2. EcoVadis https://ecovadis.com/plans-pricing/
3. TruCost https://www.trucost.com/
4. Carbon Disclosure Project - CDP https://www.cdp.net/en
• Direct spend to ‘B Corps” like SLO local business - Ten Over Studies
https://bcorporation.net/
*Risks* - Greenwashing – ESG is a marketing strategy – Exxon Mobil publishes an ESG report;
Wal-Mart scores very high in “E” but is well known for paying it’s employees very low wages
(low “S” and “G”).
SOCIAL How a company treats its employees, customers, community, and other companies with
which it interacts
What can purchasing do?
• Encourage spend to companies and organizations scoring high on ‘social’ metrics in ESG
reports
• Develop a MWBE/DBE policy
GOVERNANCE – How a company is led, including executive pay and any internal controls
• Encourage spend to companies and organizations scoring high on ‘social’ metrics in ESG
reports
• Internally measure diversity - Human Resources – hiring policies, data on employee
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diversity, etc.
References
State and Local Governments Eye ESG Investing Strategies for Returns and Impact at https://www.plansponsor.com/state-local-governments-eye-
esg-investing-strategies-returns-impact/
PFM Presentation
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/Shared%20Documents/Forms/AllItems.aspx?originalPath=aHR0cHM6Ly9zbG9j aXR5Y2
xvdWQuc2hhcmVwb2ludC5jb20vOmY6L3MvU0xPSHViL0ZpbmFuY2UvRXZIWGIwX2pUeDlJaVJSWENOMGpWSzRCRW9VWTRZZFBoZ2k4d0hL
MU9rUC05UT9ydGltZT01M1o5bTRVTzJFZw&viewid=d6296557%2Dd8d4%2D42f7%2Db145%2D988093e7d8be&id=%2Fsites%2FSLOHub%2
FFinance%2FShared%20Documents%2FPurchasing%2FPolicy%20Update%20%2D%20Master
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SECTION 277
NIGP CODES
Guide to the City of San Luis Obispo Purchasing Classification System
The NIGP Commodity/Services Code classifies products and services in public procurement. The
codes are the standard taxonomy for classifying commodities and services for 1000’s of
government entities across the USA and the world.
The codes are used to track data within strategic sourcing and spend to detail where the money is
spent and what kinds of items are purchased most. The City uses these codes to track purchasing
activity and expense report purchases for budgeting and management reporting; for tracking capital
assets and inventory; and for classifying suppliers by the types of products they provide.
The codes allow the City to look at suppliers spend across all departments and also compare spend
across peer governments. Is Utilities paying the same price as Public Works? Is a peer government
getting a better rate?
The codes are classified by digit categories, the longer the digits, the more detailed the
classification.
The City uses the NIGP 5 Digit code structure to classify its spend.
Structure Sample Code Description
3 Digit (Class) Code 918 Consulting Services
5 Digit (Class-Item) 918-43 Consulting Services – Environmental
There are over 98,000 codes and subcodes to choose from. The City does not purchase all 98,000
codes.
To increase operational efficiencies and simplify the process for staff choosing amongst the 1000’s
of NIGP codes, the City has developed a smaller standardized list.
The City’s most common NIGP codes are in the below link:
• SLO NIGP Code Master List
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Section 277
PROCURE TO PAY PROCESS (P2P)
The procure to pay (P2P) process begins with the requisition of goods or services by a
requesting department and ends with payment to the supplier.
Between these two points, common practices and procedures must be followed.
A flowchart, as shown in Exhibit 1 “Procure to Pay Process” (P2P) diagrams the procedures.
The flowchart shows the role each department function plays in the process.
Delivery of goods/services to the City does not constitute acceptance for payment.
Final acceptance for payment shall be given only after delivery and inspection by department
requesters that the good/service meets the purchase order conditions.
Final acceptance for payment is verified by departments ‘receiving’ the invoice in Oracle;
ensuring the PO# is on the invoice; and sending the validated final received invoice to Finance
for payment.
The following activities and department responsibilities form the P2P process.
Department Responsibility
Requesting Department • Determine need
• Prepare requisition in Oracle
• Attach to the requisition a detailed specification, quote,
specification, sole-source, CMR, contract, etc.
Budget • Budget approval will auto-approve in Oracle
Purchasing • Receive and review purchase requests with
attached backup documentation, scope, quote,
contract, etc.
• Ensure policy requirements are met by requesters
• Review terms and conditions with legal for contract
agreements and route contracts for departments
• Ensure the price is fair and competitive
• Coordinate RFP/RFB process with departments and
manage public bids on the City’s public bid platform
• Work with departments to assess the type of purchase
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City Council • Approve purchase request in Tier 5 thresholds (see Exhibit 2)
Supplier • Ship supplies to departments or performs service
• Submit the invoice to AP@slocity.org for payment
Requesting Department • Accept and inspect supplies or service for compliance
• Resolve non-compliant purchases
• Receive purchase in Oracle
Finance Department • Enter invoice for payment into Oracle
• Match PO, receiving, and invoice for payment
Commented [CD162]:
For open discussion?
Should department requesters get the invoice 1st?
I think yes. We have a de-centralized organization –
requesters send their own PO’s so invoice receiving should
be mirror that organizational structure.
City of Apsen, CO. Implemented Oracle before SLO – tried
sending inovices to AP direct per GFOA recommendation –
it didn’t work there, and they changed course.
Technology led fix via OCR will not fix the issue of
duplicates, lack of receiving, etc.
Certain departments like Park I’ve had talks with and they
instructed suppliers to send them invoices first not AP. Their
department is consistently current on the majority of its
outstanding invoices.
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Responsibilities
Finance Department – It shall be the responsibility of the Finance Department to develop and
implement procedures for the following:
1. Notifying departments of improper invoicing within 10 days of receipt of the invoice in
AP;
2. Date stamping of all invoices and all other documents for payment;
3. Providing prompt payment of invoices within 30 days of receipt by the Finance
department;
4. Entering invoices, credit memos, etc. required for payment into the Oracle accounts
payable system;
5. Providing payment processing procedures to be followed by all City departments.
Requesting Departments – It shall be the responsibility of the departments to develop and
implement procedures for the following:
1. Entering requisition information (with appropriate charge account), price, and
descriptions of what is being purchased into the Oracle system;
2. Ensuring that all purchases, except for non-PO exceptions have purchase order numbers;
3. Entering receiving information into Oracle;
4. Identifying and resolving receiving issues;
5. Cooperating with Finance to resolve payment disputes and issues.
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General - The following applies to all external procurement of goods or services for the
City:
1. All invoices must be sent to _________.
2. Accounts Payable will pay after delivery and receiving of the goods/services by the
departments and matching the supplier’s invoice with the purchase order (3-way match)
3. If an invoice is sent directly to the department – the department shall send the
invoice to Accounts Payable for date stamping and loading into Oracle.
4. The invoice shall contain:
- Name of the supplier
- Date of invoice
- Invoice number
- The authorizing City purchase order number
- The correct quantity, price, and total cost
- Manufacturer name and item number of the goods
- Address to which payment should be made
5. After date stamping of invoices invoice reports will be sent to departments for
final receiving/approval for payment.
6. Invoices sent back to Accounts Payable must have the purchase order number and
receipt number stamped on the invoice.
7. It is the responsibility of the Finance Department (AP) to conduct the 3-way match –
match purchase order, receipt, and vendor invoice for final payment.
Commented [CD163]: Open to changing course send
invoices direct to department requesters
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E x h i bit i1t
Q te Re
ce Processe P rc se Or er
ce De vere
rc se
ece ve Or c e G rvice Re ere
Page 1254 of 1284
DEFINITIONS
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Purchasing Policy UpdateMay 17, 2022
Recommendation1.Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, updating the City’s Financial Management Manual Section 200 – Purchasing Policy” including applicable purchasing and competitive bid approval thresholds; and 2.Consider changes to the local preference language for inclusion in the purchasing policy.
Comprehensive UpdateAdministrative UpdatesComprehensive Review and UpdatesNew SectionsProvide a comprehensive and all-encompassing purchasing guideOracle System EfficienciesLessons learned and adjustments madeOrganizational RealitiesAddress efficient and effective service and program delivery while retaining fiduciary control and oversight.
BID THRESHOLDSEFFICIENCY & FIDUCIARY CONTROL Finance Mandate:Ensure policies are effective, efficient to reduce unnecessary administrative processes while maintaining fiduciary control.Review of applicable ThresholdsBenchmark research against twenty (20) California and national citiesThresholds align with best practices and industry standardsAdministrative updates to allow for staff efficienciesLessons learned since Oracle ERP rollout in 2018Four-year collaborative effortData driven recommendations
APPROVAL THRESHOLDSEFFICIENCY & FIDUCIARY CONTROL Process & System Efficiencies Maintaining Fiduciary ControlBest PracticesGeneral ServicesIT SystemsGeneral Goods Professional ServicesPublic ProjectsGeneral GoodsPublic ProjectsConsultant Services
APPROVAL THRESHOLDS General GoodsTier 2018 20221Under $10,000• PR approved by Fiscal Officer• PO approved by PurchasingUnder 10,000• PR approved by Fiscal Officer• PO approved by Purchasing2$10,000 – 39,999• PR approved by Fiscal Officer • PO approved by Purchasing $10,001 – 74,999• PR approved by Fiscal Officer • PO approved by Purchasing3$40,000 – 69,999• RFP Required• PR approved by Fiscal Officer & Dept. Head• PO approved by Purchasing$75,000 – 199,999• RFP Required• PR approved by Fiscal Officer & Dept. Head• PO approved by Purchasing4$70,000 – 199,999• RFP Required & City Manager Report• PR approved by Fiscal Officer, Dept. Head, Budget, City Mgr.• PO approved by Purchasing & Finance Director$200,000 or more• RFP Required & City Manager Report• PR approved by Fiscal Officer• PO approved by Purchasing5$200,000 or more• RFP Required & Council Approval• PR approved by Fiscal Officer • PO approved by Purchasing
Tier 2018 20221Under $7500 (Services & Consulting)• PR approved by Fiscal Officer• PO approved by PurchasingUnder $10,000• PR approved by Fiscal Officer• PO approved by Purchasing2$7500-24,999 (Services)$7500-14,999 (Consulting)• PR approved by Fiscal Officer • PO approved by Purchasing $10,000 – 39,999• PR approved by Fiscal Officer • PO approved by Purchasing 3$25,000-49,999 (Services)$15,000-39,999 (Consulting)• RFP Required• PR approved by Fiscal Officer & Dept. Head• PO approved by Purchasing$40,000 – 69,999• RFP Required• PR approved by Fiscal Officer & Dept. Head• PO approved by Purchasing4$50,000-149,999 (Services)$40,000-99,999 (Consulting)• RFP Required & City Manager Report• PR approved by Fiscal Officer, Dept. Head, Budget, City Mgr.• PO approved by Purchasing & Finance Director$70,000 - $150,000• RFP Required & City Manager Report• PR approved by Fiscal Officer• PO approved by Purchasing5$150,000 or more (Services)$100,000 or more (Consulting)• RFP Required & Council Approval• PR approved by Fiscal Officer • PO approved by Purchasing$150,000 or more• RFP Required & Council Approval• PR approved by Fiscal Officer• PO approved by PurchasingAPPROVAL THRESHOLDS Professional Services
Approval ThresholdsPublic Projects - ConstructionTier 2018 20221 Under $7500• PR approved by Fiscal Officer• PO approved by PurchasingUnder $15,000• PR approved by Fiscal Officer• PO approved by Purchasing2 $7500 – 44,999• PR approved by Fiscal Officer • PO approved by Purchasing$15,001 – 59,999• PR approved by Fiscal Officer • PO approved by Purchasing3 $45,000 – 175,000• RFP Required & City Manager Report• PR approved by Fiscal Officer, Dept. Head, Budget, City Mgr.• PO approved by Purchasing & Finance Director$60,000 – 199,999• RFP Required & City Manager Report• PR approved by Fiscal Officer• PO approved by Purchasing4 $175,000 or more• RFP Required & Council Approval• PR approved by Fiscal Officer • PO approved by Purchasing$200,000 or more• RFP Required & Council Approval• PR approved by Fiscal Officer • PO approved by Purchasing
Local PreferenceCurrent Municipal CodeMunicipal Code 3.24.060E•When the purchase will be made from a cooperative agreement or from a local dealer within the city limits that can provide the same brand, model, and configuration identified in the cooperative agreement at or below the cooperative purchasing net cost within the same terms and conditions.
How Local is San Luis Obispo in City Purchasing?Local53%Non‐Local47%Operating SpendLocal v. Non‐Local (2018‐22)$103,044,776LocalNon‐LocalNon‐Local$48,234,025Local$54,810,750
Local PreferenceCase For• Support local business• Financial – direct more funds to local businesses• Political – showing local business actionable policy• Tax base – increased sales and property tax (businesses relocate) • Reduce the City’s carbon footprint• Increase employmentCase AgainstRetaliation of other jurisdictions.Increased staff costsNegligible environmental benefitDifficult to quantify benefitNational organizations advocate against local preferenceProfession Organization Best Practices – No preference
Additional Sections Contracts and Insurance RequirementReduce risk exposureProvide comprehensive guide to procurement20185 Templates• Supply & Equipment• Operation & Maintenance• Environmental Consultants• Consultants•CIP202226 Templates• Goods• Chemicals• Tree Maintenance• Recreation•Transit•IT• Design Professionals• Leases• Community Partners
13Sustainable Purchasing Policy Climate Action Plan Resolution 10388 (2012) Eliminate Purchasing of Plastic BottlesMunicipal Code 8.07 Expanded Polystyrene OrdinanceMunicipal Code 8.06Environmentally Preferred PurchasesMunicipal Code 3.24.075Carbon Neutral Operations (Sector 7)Procurement, Budget, Finance Green Team
Recommendation1.Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, updating the City’s Financial Management Manual Section 200 – Purchasing Policy” including applicable purchasing and competitive bid approval thresholds; and 2.Consider changes to the local preference language for inclusion in the purchasing policy.
Non-PO Threshold