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O-3552-2-18ORDINANCE NO. 3552-2-18 ' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, AMENDING THE CODE OF ORDINANCES BY AMENDING CHAPTER 2, "ADMINISTRATION," ARTICLE VII, "ADMINISTRATIVE DEPARTMENTS", BY AMENDING SECTION 2-102 "CITY MANAGER" BY AMENDING SUBSECTIONS (d), (f), (h) AND ADDING A NEW SUBSECTION (k); PROVIDING A REPEALING CLAUSE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, THAT: SECTION 1. The Code of Ordinances of the City of Allen, Collin County, Texas, be and the same is hereby amended by amending Chapter 2, "Administration," by amending Article VII, "Administrative Departments" by amending Section 2-102, "City Manager', to read as follows: "ARTICLE VII. ADMINISTRATIVE DEPARTMENTS DIVISION 1. GENERALLY Sec. 2-101. - Establishing and changing divisions within departments; assignment of work. (a) There shall be established the following departments reporting to the city manager, in order to carry out the service and administrative functions of the city: police, fire, parks and recreation, ' library, public works, finance, city manager, personnel, planning and community development. (b) The city manager is delegated authority to establish, consolidate, divide, or abolish divisions within these departments that he or she determines are necessary to accomplish the Council's Ends Policies and to assign the work of these departments and divisions. Sec. 2-102.- City manager. (a) The city manager or designee shall have those powers and duties provided in the City Charter and as otherwise provided by the city council or by ordinance. (b) The purpose of this section is to delegate authority to the city manager or designee to make purchases, execute contracts and approve change orders and contracts for expenditures without further approval of the city council for all budgeted items not exceeding limits set by the city council. (c) Whenever this Code, another city ordinance or a city council resolution delegates a duty, power, or function to a specific employee who is responsible to the city manager, that duty, power or function may at the discretion of the city manager, as a chief administrative and executive officer of the city, also be performed or exercised by a city employee designated by the city manager to perform or exercise that duty, power or function. (d) A contract for personal or professional services, if provided to the budget, or in the capital improvement program provided there are funds available from general obligation or revenue bonds, ' certificates of obligation, type A and/or type B sales tax, state or federal grants may be authorized by the city manager by administrative action without further council action. (e) If an original contract was competitively bid with the provision for one (1) or more renewal options, the city manager may, by administrative action without further city council action, exercise ' each renewal option and authorize a contract for the specified renewal term. (f) No expenditure exceeding fifty thousand dollars ($50,000.00) or a greater amount if allowed by state law, may be made without competitive bids except when the expenditure falls within one of the general exemptions provided in V.T.C.A., Local Government Code § 252.022, as amended, provided, however, that in the event of an emergency expenditure, such emergency shall be declared by the city manager and approved or ratified by the city council or may be declared by the city council in its resolution authorizing execution of the contract. 1 (g) The city manager or designee is authorized to approve change orders subject to any restrictions imposed by state law provided, however, there are budgeted funds to cover any increase in costs to the city. (h) The city manager is ;granted actual and express authority to make purchases, execute contracts and approve change orders for the city. The city manager has implied authority to do what is proper, usual, and necessary to exercise the authority that has been expressly delegated to the city manager by ordinance, including, but not limited to, approval of a purchasing manual or policy, appointing a purchasing agent or other designee to sign and execute purchase orders, contracts and change orders on behalf of the city manager. (i) The city manager is authorized to initiate the process for contracts pertaining to public improvements or the maintenance of public property. 0) The city manager is authorized to execute easements, deeds or other instruments for budgeted items, approved capital projects and facilities agreements. (k) An expenditure not to exceed $100,000.00, if provided in the budget, or in the capital improvement program provided there are funds available from general obligation or revenue bonds, certificates of obligation, type A and/or type B sales tax, state or federal grants, may be authorized by the city manager by administrative action without further city council action." SECTION 2. All ordinances of the City of Allen, Collin County, Texas, in conflict with the provisions of this ordinance be, and the same are hereby, repealed; provided, however, that all other provisions of said ordinances not in conflict with the provisions of this ordinance shall remain in full force and effect. SECTION 3. Should any word, sentence, paragraph, subdivision, clause, phrase or section of this ordinance, as amended hereby, be adjudged or held to be void or unconstitutional, the same shall not affect the validity of the remaining portions of said ordinance, which shall remain in full force and effect. SECTION 4. This ordinance shall take effect immediately from and after its passage, as the law and charter in such cases provide. Ordinance No. 3552-2-18, Page 2 DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, ON THIS THE 27- DAY OF FEBRUARY 2018. APPROVED AS TO FORM: Peter G. Smith, CITY ATTORNEY (P S.1 -23-1895W6) 1 APP OVED: Stephen Terrell, MAYOR ATTEST: SheHeySheHey B MC, CITY SERE f Ordinance No. 3552-2-18, Page 3 CONTRACT/AGREEMENT COVER SHEET TO: CITY SECRETARY'S OFFICE Date: March 5.2018 From: (Department) Purchasing Contact Person: Debra Morris Subject/Project/CIP#: Amended Purchasing Policy and Amending the Code of Ordinances ❑x For City Manager Authorization (Contracts $15,000 and greater) ❑x For City Secretary to Attest ❑x For City Attorney Signature City Attorney Approved Template Used ❑x Date presented to City Council (required if over $50,000) 2/27/2018 © Council Communication Form is attached. Form 1295 - Disclosure of Interested Parties is attached. The document complies with the City's Procurement Policies and Procedures Manual. /j it does not, provide an explanation in the comments section below. The document meets the City's insurance requirements. The document does not meet the City's insurance requirements, but has been approved by Zach Cain, Risk Manager. ® All exhibits referenced in the document are included in the contract/agreement to be presented for City Manager's authorization. Interlocal Agreements — City Council Resolution Required Date Resolution approved Three original Procurement Policies are enclosed. Please insert the original ordinance with Ordinance No., replacing pages 32 & 33. Submit three (3) original signed documents to City Secretary's Office. Please print on front-page only and do not staple sheets together. Thank you. CITY OF ALLEN PROCEDURE MANUAL ADMINISTRATIVE DIRECTIVE SUBJECT: PROCUREMENT POLICY NUMBER: 9 AND PROCEDURES MANUAL EFFECTIVE DATE: AUGUST 2017 ORDINANCE 3552-02-18 AMENDS/SUPERSEDES: PROCEDURES APPROVED: EFFECTIVE APR 1988, MAY 2001, FEB PETER VARGAS, C MANAGER 2006, SEPT 2007, MAY 2011, NOV 2014, ' JUNE 2015, AUGUST 2017, MARCH 2018 U PROCUREMENT POLICY The City Manager has designated the Purchasing Division as being the central authority responsible for the procurement of merchandise and services required to operate and maintain the City. The Purchasing Division is responsible for procurement of these items at the best value, optimum delivery, and total overall quality to meet the requirements of the requisitioning departments. The Purchasing Division must ensure that these responsibilities are accomplished in compliance with Texas Local Government Code, including Chapters 252 and 271, Purchasing and Contracting Authority of Municipalities, other relevant federal, state and local statutes, and City of Allen policies, any and all of which may be reviewed and updated from time to time, and all of which take precedence over this Manual to the extent that they may conflict. This is accomplished primarily through competitive bids/proposals with the City's best interests always paramount. The City of Allen embodies best practices, promotes transparency, fairness and competitiveness in state and local government. This policy is provided to protect employees and the use of public funds. This Manual has been prepared for the use of City personnel and other interested parties to serve as policy for all procurement related activities. It is the responsibility of each employee involved in the procurement process to understand the policies, the meaning and intent. Continual training will be provided to employees to ensure employees become proficient in both policy and procedures. If there is a question or concern relative to either the policies or procedures, or the ability of the employee to respond effectively to the requirements, then it is the responsibility of the employee to bring such matters to the attention of the Purchasing Manager immediately. Individuals making purchases in a manner that does not adhere to the City Purchasing Policy, enters into a private transaction with the vendor, assumes responsibility for payment and may be subject to disciplinary action. POLICY STATEMENT Purchasing is a function of all Departments. Department Directors or Assistant Directors are responsible for ensuring that departmental purchases follow the approved budget and the city's purchasing policy. Purchasing procedures are guided by several established policies. These policies are: • All purchasing shall adhere to sound purchasing policies to ensure that Allen taxpayers receive the best value for city purchases. • Regardless of the expenditure, it is the policy of the City of Allen to earner competition that produces the highest quality goods and services at the lowest possible price whether the item or service is subject to bid or not. The Purchasing Manager is charged with establishing procedures and controls in the purchasing process to comply with all applicable laws and regulations. • It is the policy of the City to allow the City Council to make final award on any expenditure of $50,000 or greater in accordance with Texas Statutes. • All purchasing shall be in accordance with the laws of the State of Texas including Chapters 252 and 271 of the Texas Local Government Code, and City of Allen City Charter. httl)://www.statutes.legis.state.tx.us/Docs/LG/litm/LG.252.11tm http://www.statutes.lei4s.state.tx.us/Docs/LG/htin/LG.27 I.htm • Purchasing activities will be managed with proper controls, and all requisitions will be processed in a timely manner to ensure efficient practices. • When required or preferred, a competitive bidding process will be utilized to obtain purchases at the lowest possible cost, and to provide for an open and fair process for all interested vendors. • No officer or employee of the City shall have a financial interest, direct or indirect, in any contract with the City, nor shall be financially interested, directly or indirectly, in the sale to the City of any land, or rights or interest in any land, materials, supplies or service except on behalf of the City as an officer or employee. Any knowing violation of this section shall constitute malfeasance in office, and any officer or employee of the City found guilty thereof shall be subject to removal from such office or position. Any violation of this section shall render the contract voidable at the discretion of the City Council. (City of Allen Charter, Section 10.05) • Legislation for Economic Development Corporations (the Development Corporation Act) does not contain a provision that subjects Economic Development Corporations to municipal procurement requirements. Neither the Texas Attorney General nor the Texas courts have directly addressed this question. (See page 13) • City Ordinance No. 1869-09-00 establishes the Powers and Authority of the City Manager to make purchases, execute contracts and approve change orders as provided by City Council (Attachment "A"). BIDDING PARAMETERS Purchases less than $3000 Quotes are recommended but not required. A purchase order will be processed following workflow approvals. The Procurement Card is the preferred method of payment for purchases up to $3,000. Purchases of $3000 and less than $50,000 Requires three (3) informal, written quotes, completed by the department or Purchasing and should be electronically attached to the requisition. At least two (2) of the contacts solicited for quotations must be from vendors on the Texas Department of Commerce Certified Listings for Disadvantaged Business Enterprises (DBE's), aka Historically Underutilized Businesses (HUBS). If the list fails to identify a disadvantaged business in the county in which the city is situated, the city is exempt from this section. Purchases of $50,000 and greater are governed by competitive purchasing requirements of state law State law requires competitive purchasing for expenditures or procurements by the City of $50,000 or more. The City may use either Request for Bid or Request for Proposals for expenditures or procurements by the City of $50,000 or more. Notice to bidders must be publicly advertised in the newspaper for two (2) consecutive weeks, with the first date of publication being at least fourteen (14) days prior to the opening of the bids or proposals. Purchases of $100,000 and greater require approval and award by City Council City Council has approval authority for all Purchases and/or Contracts with either a one-time or anticipated annual expenditure of $100,000 and above. hr addition, City Council has approval authority for all Change Orders greater than 25% of the original Contract. City Council has delegated authority to the City Manager for approval authority for all Purchases and/or Contracts with either a one-time or anticipated annual expenditures less than $100,000. City Manager has approval authority for items greater than $100,000 if they meet the parameters outlined in this Administrative Directive. Items meeting this parameter include: • TML • Utilities • Gasoline • Vehicle Replacements • Software Maintenance Interlocal and Cooperative Purchasing Agreements — As provided in Chapter 791, Texas Government Code, and Chapter 271 of the Texas Local Government Code, the City may enter into an agreement with another public entity in the United States for the purpose of pooling resources to obtain favorable pricing for goods and services. A purchase through an approved Interlocal and/or a Cooperative Purchasing Agreement satisfies the requirement for competitive bidding. City Manager has delegated authority to execute purchases and or contracts utilizing Interlocal and Cooperative Purchasing Agreements for an amount less than $100,000. Exceptions to competitive purchasing requirements: Exemptions to the competitive purchasing requirements are outlined in the Texas Local Government Code Section 252.022. Any questions regarding these exceptions or their application should be directed to Purchasing. Electronic Bidding: Electronic bidding is a solution to automate procurement quotes and bids, streamline vendor communications, increase competition (to all registered vendors including Disadvantaged Business Enterprises and Historically Underutilized Businesses) and eliminate redundant administrative costs. Historically Underutilized Vendors The City of Allen, in making an expenditure of more than $3,000 but less than $50,000, is required by state law to contact at least two historically underutilized businesses on a rotating basis, based on information provided by the General Services Commission. If the list fails to identify a historically underutilized business in the county in which the municipality is situated, the municipality is exempt from this requirement. httpwww.cpa. stzte.tx.uspro�entcmbl cmblhub.html Please contact the Purchasing Division for a listing of historically underutilized businesses within the particular commodity for which you may be soliciting pricing. PURCHASING CODE OF ETHICS This Policy is designed to assist all employees in following all laws and regulations related to purchasing and to treat vendors in a fair manner, while avoiding the perception of immoral, illegal or unethical behavior. It shall also serve as a reminder that behavior which is considered acceptable in the private sector may be inappropriate for the public sector. Acting in a manner true to these values is essential to preserve the public's trust. Employee Responsibility to the City of Allen * Follow the policies and lawful instructions of the City. * Understand the purchasing authority granted to the employee by the City. * Avoid activities that would compromise or give the perception of compromising the best interest of the City. * Reduce the potential for any charges of preferential treatment by actively promoting the concept of competition. Manager Responsibility to the City of Allen * Be proactive in monitoring subordinates' purchasing activities. * Require employees to enter requisitions prior to making purchases so that budgets may be monitored and purchasing policy and laws are followed. * Review all attached documentation prior to workflow approval. * Keep up to date on changes to Purchasing policy so other employees may be mentored. 11. Conflict of Interest * Conflicts of interest arise when personal involvement and/or gain in a decision could lead to prejudice, or the appearance of prejudice in that decision. * All employees shall comply with the conflicts of interest provisions found in the Personnel Policies and Procedures, "Standards of Conduct." III. Employee Relations with Businesses or People Doing Business with the City * No city employee shall accept any gift that might reasonably tend to influence the employee in the discharge of his or her official duties, or grant any improper favor, service or thing of value. Neither shall any employee use his or her official position to secure special privileges or exemptions for themselves or others. [Refer to Personnel Policies and Procedures, "Standards of Conduct."] * Bidding and contracting can bring great discredit upon the City if it is not conducted in a legal and appropriate manner. Any private gain by employees of the City or any gain beyond reasonable compensation for the contractor is prohibited. IV. Relations with Those to Whom Services are rendered # No gift, reward, favor or any other considerations shall be accepted or retained for services rendered by the employee. The employee shall notify his or her supervisor and the Purchasing Manager of such offer and the employee's refusal. # Gifts, rewards, favors or any other considerations which are given to an employee under circumstances which do not permit the employee's immediate refusal shall be reported and given to the employee's department head immediately. The department head shall return the gift with a proper letter expressing gratitude and explanation to the person giving the gift. A copy of the letter will be sent to the City Manager and the Purchasing Manager. # When a gift, reward, favor or any other consideration cannot be returned it will be used for the benefit of all employees in the department involved or otherwise disposed of so that no individual gains from the gift. The manner of disposal of the gift shall be reported in writing to the City Manager. Small items such as cakes, cookies and candy may be accepted if used for the entire department. Large gifts or donations of gratitude to benefit the employees of a department are not permitted. Any such individual or group wishing to express their gratitude may contribute to a charitable organization in the name of that department. * Promote positive supplier relationship through courtesy and impartiality in all phases of the purchasing cycle. * Any service rendered by an employee is considered part of the employee's job and since the employee is paid, no special gratitude is necessary. # Know and obey the spirit and letter of the laws governing the purchasing function and remain alert to the legal ramifications of purchasing decisions. PURCHASING PROCEDURE VIOLATIONS This policy is provided to protect employees and the use of public funds. Employees will be held accountable for the proper use and administration of the Purchasing Process. The Department Head or Approving Manager is responsible for ensuring that employees comply with the policies outlined in this manual. Purchasing will retrain the employee with notification to the department of the first error on an informal basis, continued failure to correct procedural errors will result in continual training of the employee and manager. Violations of Local Government Code will include disciplinary action up to and including termination. LOCAL GOVERNMENT CODE 252.062 — CRIMINAL PENALTIES A municipal officer or employee commits an offense if the officer or employee intentionally or knowingly makes or authorizes separate, sequential, or component purchases to avoid the competitive bidding requirements of Section 252.021. An offense under this subsection is a Class B misdemeanor. http://www.statutes.legjs.state.tx.us/Docs/LG/htn/LG.252.htm "Component purchases" means purchases of the component pans of an item that in normal purchasing practices would be purchased in one purchase. "Separate purchases" means purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase. "Sequential purchases" means purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase. PURCHASING PROCEDURES All purchases require pre -authorization to ensure 1) the appropriate budget is available, 2) City management and/or City Council approves of the purchase, 3) City policy is followed and 4) State laws are enforced. The purchasing process is completed only after the items are satisfactorily received and payment is complete. All employees will be provided training to utilize the software for processing and to stay current on the requirements of this purchasing policy. When weaknesses are shown, employees will be required to attend additional training. Purchase Requests and Workflow Approvals By entering a requisition, employees are establishing the need, product or scope, date, location and obtaining pre -approval by requesting funds to make a purchase and management is reviewing and giving approval prior to the purchase. As soon as the requisition is entered, budgeted funds are set aside (pre -encumbered) in the general ledger account(s) to prevent overspending of budgets. Supporting documentation most be scanned and electronically attached to the requisition for management review. After the requisition is entered, completed and released, it goes through a workflow approval process. The approval process is based on workflow established for each Department. Each approver checks for items within their responsibility. A requisition may be rejected and returned if the information is incorrect or incomplete. A requisition without the attached backup documentation would be considered incomplete. The requisition travels through each workflow level and should be monitored by the end user until final conversion to a PO. If the level is met it must be approved before advancing to the next level. Management should not approve the requisition unless the scanned documentation is attached and reviewed. All requisitions will be converted to a PO by the Purchasing Division. The order and number of steps in the workflow approval process is subject to change as needed and is addressed in employee training sessions. The official budget encumbrance is created once the Purchase Order is posted and printed. Receipting cannot occur unless the Purchase order is posted. Receiving and Inspection The purchasing function is not accomplished by simply placing an order with a supplier. It is the duty of the individual department to inspect all items or services received. Sometimes satisfactory delivery requires expediting, cancellation or changes. When ordered items are received, the department that placed the order is responsible for inspecting the shipment and receipting the item in the system. This should be done upon receipt to take advantage of early payment discounts and allow the payment processing time it needs to avoid interest penalties. Inspection should include checking for damaged or defective goods, verification of correct quantities, product, delivery site and verification of correct P.O. number on the packing slip. If the items delivered are not acceptable, notify the vendor at once. Departments me required to take immediate action to return product or obtain replacements by the vendor. Adjustments/Change Orders The purchase order is a legal contract, locks in price and authorizes the vendor to shin the materials, as specified. Since a purchase order is a legal document, it cannot be amended unless a change order is processed. To address differences (quantity, quality, damages, additions) a change order must be processed. The workflow approval process for PO's will also apply to Change Orders. After required workflow approvals, a Change Order P.O. will be issued for all adjustments. Departments are responsible for monitoring encumbrances and cancelling their own PO's. PAYMENT OF INVOICES Invoices with PO numbers The P.O. instructs vendors to submit all Invoices to the Finance Department. An invoice contains the same information as the purchase order and is the means for settlement of financial obligations incurred. The invoice is not required to receipt items received and employees should not have vendors send invoices to the employee's attention. If the PO, receipt and invoice (three-way match) agree, the invoice will be processed by the Finance department for payment. After invoicing, the encumbrance is liquidated and creates an actual expenditure. If there is a discrepancy between the original P.O. and the receiving paperwork that results in the P.O. and invoice not matching, the department will be notified to research the discrepancy and determine if a change order is needed. Invoices without PO numbers When a purchase is made without a PO, the invoice will be processed using a P -card or the "Request for Check" (RFC) program. This program allows users to request invoice payments that do not ream a purchase order. The RFC program checks for available budget but does not post encumbrances. Workflow matches the requisition/PO process and once released and converted to an Accounts Payable Invoice, the Request for Check is reviewed and processed by Accounts Payable staff for payment. The RFC program should be utilized 1) for invoices under $3,000, and 2) at year end when the Finance Department decides which fiscal year the expenditure is recorded in. Common uses for the RFC program are employee expense reimbursements, dues and subscriptions, etc. Prompt Payment Texas Government Code Chapter 2251 stipulates that all local govemments shall pay for goods and services within thirty (30) days of the delivery or invoice date or interest is automatically imposed. To comply with Chapter 2251 and avoid interest penalties, change orders and receipting must be completed and the vendor must send all invoices directly to the Finance Department. TYPES OF PURCHASES Purchase Order A Purchase Order is a written contract to a vendor formalizing the terms and conditions, description and quantity of product, delivery schedule, terms of payment and transportation. Blanket Purchase Order Blanket Purchase Order (BPO) allows departments to utilize the same PO number throughout the year for the purchase of contracted goods and services. Funds are encumbered when the BPO is issued. Contracted Purchases Annual contracts are awarded to vendors for the purchase of supplies, equipment and services routinely required by one or more departments. Contracts protect pricing for a one-year period allowing departments a planned method to purchase. Contracted purchases are typically the result of a competitive process. A contract award for services can be made to multiple suppliers based on the lowest total price or best value for all items within a specific group, classification, commodity code or category in its best interest. This method allows a logical grouping of bid items to a supplier for contract management purposes. Examples of contracted services by commodity or classification are: Custodial, Printing, Vehicle Maintenance, Electrical, Plumbing, Cell Phone Services, etc. Lease Agreement Contracted lease purchases and all capital leases shall be coordinated with the Finance Department because this type of purchase and financing is unique and accounted for differently. Emergency Purchases Emergency purchases are those needed to avoid interruption in City Services or to protect public health and safety. Purchases made in emergency situations are generally more costly than routine purchases, therefore, must be kept to a minimum. Poor planning, overlooked requirements, or negligence are not true "emergencies". Emergency purchases must meet one of the qualifications for exempt purchases in Section 252.022 of the Texas Local Government Code. The three (3) true emergency exemptions, as listed in the above statute, are listed below: 1) A purchase made because of a public calamity and the prompt purchase of items is required to provide for the needs of the public or to preserve the property of the City. 2) The item is necessary to preserve or protect the public health or safety of the residents of the City. 3) The item is made necessary by unforeseen damage to public machinery, equipment or other property. When emergencies arise and there are no applicable maintenance agreements or a P.O. in place, please follow the procedures set forth below under "Requisitioning of Emergency Purchases." Requisitioning of Emergency Purchases If time permits, the purchase order is completed according to procedure. Otherwise, the purchase is completed by telephone, and the purchase order is completed, after the fact, and delivered to the vendor. For other than normal working hours, when purchasing support is unavailable, the responsible official of the department takes whatever steps are necessary to procure needed supplies, services or equipment to relieve the emergency. If possible, only those goods or services needed to remedy the emergency are procured. The Department Head of the department must certify, in writing and attach backup documents electronically the next business day, or as soon thereafter as possible, that the purchase involved was necessary because of one of the three reasons listed as emergency exemption in Texas Local Government Code. If an Emergency Purchase exceeds $50,000 and is not covered by a contract, the City Manager will review and submit the proper documentation to the City Council for ratification. Sole Source Purchases (http://www.allenpridewire.org/DocumentCenterNiew/454) These purchases are handled the same as other purchases except a "Sole Source Justification" form must be signed by the Department and Purchasing and electronically attached to the requisition. The following are reasons why a purchase might be practical from only one vendor. 1. There is no competitive product. The good/service is a one -of -a -kind, a patented product or a copyrighted publication available from only one source, or a unique item such as a work of art. 2. The product is only available from a regulated or natural monopoly. For example: utilities, gravel from the only pit in the area, etc. 3. The product is a component of an existing, system that is only available from one supplier. The replacement of a component or a repair part may be only available from the original supplier. Refer to the Administrative Directive for incidental and small dollar purchases The Procurement Card (P -Card) Program The P -card is a method that allows employees to make small dollar approved City purchases quickly and efficiently by paying vendors immediately with a credit card. The Procurement Card is the preferred method of payment for purchases up to $3,000. A purchase should not be made with a card unless it is the most productive purchasing method. All employees issued a P -Card are expected to understand all City policies related to using City funds. At no time does the use of the P -card override the City's procurement policy, which is guided by state procurement law. The City bears no legal liability from inappropriate use. (See P -Card Section) Procurement Guidelines for the Allen Economic Development Corporation The City of Allen provides certain purchasing and financing services to the Allen Economic Development Corporation (AFDC). The AEDC is a Texas non-profit corporation formed by the City Council pursuant to the Texas Development Corporation Act, Chapters 501-505 of the Texas Government Code. 1. The AEDC is not subject to the same state laws governing procurement and purchasing that apply to the City of Allen, including but not limited to Chapter 252 Texas Local Government Code. 2. The AEDC is not required to conduct competitive bidding or solicit competitive proposals for expenditure of AEDC funds. 3. The AEDC is not required to contact historically underutilized business before making an expenditure of AEDC funds. 4. The AEDC is not subject to the same state law requirements that apply to the City of Allen regarding the sale, lease or purchase of real property and improvements. 5. The AEDC may expend funds for the purchase and service of alcoholic beverages in connection with marketing and business development activities undertaken by the AEDC. 6. The AEDC, Executive Director is authorized to make payments relating to AEDC grants and incentives in accordance with the terms and conditions agreements approved by the AEDC Board of Directors. 7. The AEDC, Executive Director is authorized to expend AEDC funds for contracts for goods and services, if provided in the AEDC budget without further action by the AEDC Board of Directors. COMPETITIVE BID PROCESS GUIDELINES FOR PURCHASES OF $3,000 AND LESS THAN $50,000 Request for Quote Requires three (3) informal, written quotes, completed by the department or Purchasing and should be electronically attached to the requisition. At least two (2) of the contacts solicited for quotations must be from vendors on the Texas Department of Commerce Certified Listings for Disadvantaged Business Enterprises (DBE's), aka Historically Underutilized Businesses (HUBS). If the list fails to identify a disadvantaged business in the county in which the city is situated, the city is exempt from this section. http://www.window.state.tx.us/procuremmt/mbl/cn Price quotations should be solicited from an adequate number of vendors to ensure competition. Procedures for obtaining price quotations are not established by state law or structured to the needs of the City of Allen. To protect the integrity of the process, all solicitations of quotes shall comply with the following. A. Vendors should be rotated to ensure competition. B. Purchasing should be contacted if additional vendors for a product or service are needed. C. Purchasing may utilize e -bidding for vendor notification and competition. D. Quotes are confidential until after award. E. Quotes should be electronically attached to requisition F. The user department shall never place orders unless a purchase order has been obtained through the procedures established in the Purchasing Manual G. Contact Purchasing staff with any concerns or questions you may have. GUIDELINES FOR PURCHASES $50,000 AND OVER Request for Bid State law requires competitive purchasing for expenditures or procurements by the City of $50,000 or more. The City may use either Request for Bid or Request for Proposals for expenditures or procurements by the City of $50,000 or more. Notice to bidders must be publicly advertised in the newspaper for two (2) consecutive weeks, with the first date of publication being at least fourteen (14) days prior to the opening of the bids or proposals. Purchases of $50,000 and greater require approval and award by City Council. Local Government Code Chapter 252.022 Competitive Requirements for Purchases defines general exemptions: http://www.statutes.legis.state.tx.us/Docs/LG/hbn/LG.252.htm Prior to development of specifications, the initiating department should schedule a meeting with the appropriate Purchasing personnel to brainstorm the needs and wants of the products or services needed. A. Establish and verify the funding source (Initiating Department) B. Create a bid schedule (Purchasing / Initiating Department) C. Specification Development (Purchasing / Initiating Department) D. Bid Packet Development (Purchasing) E. Release of Bid (Purchasing) F. Advertisement in local newspaper for two consecutive weeks G. Pre-bid Conference (Purchasing / Initiating Department) H. Opening of Bids (Purchasing / Initiating Department) I. Evaluation of Responses (Purchasing / Initiating Department) J. Verify Insurance and Bonding Requirements (Purchasing/Initiating Department) • Payment Bonds are required for Public Works & Construction Projects over $50,000 in the amount of the contract • Performance Bonds are required for Public Works & Construction Projects over $100,000 in the amount of the contract J. Award Recommendation Awards may be made to the bidder providing the best value to the City of Allen. In determining to whom to award a contract, the City may consider the following: • The purchase price; • The reputation of the vendor and of the vendor's goods or services; • The extent to which the goods or services meet the City's needs; • The vendor's past relationship with the City; • The impact on the ability of the City to comply with laws and rules relating to historically underutilized businesses; The total long-term cost to the City to acquire the vendor's goods or services; and • Any other relevant factor specifically listed in the request for bids or proposals. K. Contract Development (Purchasing) Purchasing is responsible for all contract development activities related to any item that comes through the Purchasing Division, with exception of construction projects. L. Follow-up on Delivery (Initiating Department) M. Renewal (Purchasing) N. Close-out (Purchasing/Initiating Department) Purchases of $50,000 and greater require advertisement and a competitive procurement process. Request for Proposal A procurement method for obtaining goods, services and construction for public use in which discussion and negotiations may be conducted with responsible vendors who submit responsive proposals. All Requests for Proposals are acknowledged by public announcement of vendor name only, to avoid disclosure of the contents of proposals to competing proposers until after the award of the contract. Contracts awarded by proposals are awarded by the City Council. The process for a Request for Proposal is the same process as the Request for Bid with the following exceptions: A. No formal bid opening B. No bid tabulation upon opening C. Opportunity for interview with selected vendors D. Provides for the negotiation of all terms, including price E. Award based upon established criteria F. Price is not a primary evaluation factor Acceptance of Bids City Manager, Department Directors, Assistant Directors and Purchasing have the discretion to select which vendor/bid acceptance to buy from on purchases up to $100,000. On orders $100,000 and over, the City Council will make the final award. BID SPECIFICATIONS Definition A specification is a concise description of goods or services the City seeks to buy, and the requirements the vendor must meet to be considered for the award. A specification may include requirements for testing, inspection or preparing an item for delivery, or preparing or installing it for use. The specification is the fatal description of the purchase. Purpose The purpose of any specification is to provide personnel with clear guides to purchasing, and to provide vendors with firm criteria of minimum product or service acceptability. A good specification has four characteristics: 1. It sets a minimum acceptability of the goods or services. The tern "minimum acceptability" is key since the vendor must know the minimum standard to determine what to provide. A standard too high means tax dollars will be wasted. A standard too low means the goods or services will not meet the expectations of the user. 2. It should promote competitive bidding. The maximum number of responsible vendors should be able to bid the specification. Restrictive specifications decrease competition. 3. It should contain provisions for reasonable tests and inspections for acceptability of the good or service. The methods and timing of testing and inspection most be indicated in the specification. Tests should refer to nationally recognized practices and standards, whenever possible. 4. It should provide for an equitable award to the lowest responsible bidder. The buyer obtains goods or services that will perform to expectations, and the vendor is able to provide the goods or services at an agreeable price. CONTESTED BIDS/PROTESTS If a department is made aware of, or is contacted by a vendor regarding a protest relating to advertising of bid notices, deadlines, bid opening and all other related procedures under the Local Government Code, as well as any protests relating to alleged improprieties or ambiguities in the specifications, the department should either contact the Purchasing Manager, or instruct the vendor to contact the Purchasing Division. The Purchasing Manager will attempt to determine the reasons behind the potential protest, and failing to satisfy the vendor, will instruct the vendor to prepare a written protest. The written protest should: • Include both the name and address of the protester, as well as the vendor they represent, if different. • Identify the bid number and the item. • Contain a statement of the grounds for protest and any supporting documentation. • Protests must be submitted within five (5) days of the bid opening. A decision and response to the protest will be prepared by the Purchasing Manager, in consultation with the initiating department, within ten (10) days of receipt of the protest. The response to the protest will include information regarding the appeal of the staff determination to the City Manager. Staff Recommendations Protests relating to staff recommendations for awards of less than $50,000 may be directed to the Office of the City Manager. APPEAL OF WRITTEN PROTEST Appeals of protests of awards for $50,000 and over shall be filed with the City Secretary with a concurrent copy to the City Manager and City Attorney. The appeal filed shall: a. Include both the name and address of the protester, as well as the vendor they represent, if different. b. Identify the bid number and the item. C. Contain a statement of the grounds for protest and any supporting documentation. d. Appeals must be submitted within ten (10) days prior to the bid award date. COOPERATIVE PURCHASING The action taken when two or more entities combine their requirements to obtain advantages of volume purchases including administrative savings and other benefits. An Interlocal Cooperative Agreement between the parties must be executed by the City Manager. Examples of local cooperative agreements: . Buyboard- httos://www.buvboard.com 4. CCGPF Collin County Governmental Purchasers Forum Governmental Entities- Plano, McKinney, Frisco, Richardson, Dallas, Grand Prairie, etc. Choice Partners http://www.choicepartncrs.org DIR Department of Information Resources http://www.dir.state.tx.us GSA General Services Administration-https://www.asa.gov H -GAC Houston -Galveston Area Council http://www.h-gac.com/home NIPA National Intergovernmental Purchasing Alliance http://www.nationalipa.org/agreements NJPA National Joint Powers Alliance http://www.nipacoop.ore NPP Gov Non -Profit Purchasing Government Cooperative Fire Rescue and Law Enforcement www.nppgov.com PACE Purchasing Cooperative www.pacecoop.ore e. SmartProcure Partners www.smartprocure.us TCPN The Cooperative Purchasing Network http://www.tcl)n.ore TIPS The Interlocal Purchasing System http,//www.tips-usa.mm TXMAS Texas Multiple Award Schedule hgps: Hco=troller.texas. eov/purchasinvJwntracts/txmas/ US Communities http://www.usco=unities.org GUIDELINES FOR CONTRACTS Contract Execution The City Manager will execute all contracts based on the authority established by the Council. Contracts that exceed the Manager's limits established by the Council will be sent to the Council for consideration. Department Directors and Assistant Directors are authorized to sign contracts less than $20,000 at the discretion of the City Manager. The City Manager may approve contracts for less than $100,000. A contract of $100,000 or more must be approved by the City Council. Following the bid process and award recommendation, purchasing will create a contract. Final execution by the City of Allen will occur after Council approval if the expenditure is $50,000 or greater. A notice to proceed will be forwarded to the awarded vendor by Purchasing. After Council approval, the department will enter requisitions utilizing the awarded contract. If the competitive sealed bidding requirement applies to the contract for goods or services, the contract must be awarded to the lowest responsible bidder or the bidder who provides goods or services at the best value. Awarded vendors must be used as awarded. The written contract represents the legal agreement between the parties. The terms and conditions, prices, and technical performance requirements are contained within the contract. Agreements outside of the contract are generally not enforceable. The award of the service and the execution of the contract is just the start of a long-term relationship. It is a prologue to what may possibly become years of service delivery. This process ensures that industry best practices, processes and procedures are applied. The City of Allen is committed to the integrity of the procurement process. Access to solicitation and awarded contracts is restricted for City of Allen business transactions only. Annual Contracts Annual contracts may be initiated by either Purchasing or initiating departments. (If the initiating department finds themselves repeatedly purchasing the same type of item over a short period of time, they should work with the Purchasing Division to establish an Annual Contract to provide for ease of purchasing and ensure a certain pricing structure.) Purchasing will notify the department following Council approval. Departments will submit a requisition for a Contract/Blanket PO for the needed items utilizing Contractual Services funding. Contracts that do not contain a commitment to purchase on the part of the City and simply establish a fixed price or fixed pricing structure with a vendor do not require the funds to be encumbered. If a contract is of the maintenance or service variety and the exact cost is known, funds should be encumbered by entering a requisition for a Blanket Purchase Order and utilizing Contractual Services funding. If the award of the contract went through a competitive procedure, departments are required to use contracted vendors. Contract Administration Contract monitoring is the primary means of safeguarding against vendor performance problems. It is an essential function of the contract administration process to review a vendor's performance. This information assists the Purchasing Division in the review of the vendor, the service or supply being provided and the effectiveness of the contract or bid specifications. The following procedures have been established for the vendor performance review based upon the type of award. This procedure is only required for contracts or bids processed by the Purchasing Division. Annual Contracts The initial request from Purchasing will occur after one (1) month. Vendor performance will be monitored periodically throughout the life of the contract. A list of annual contracts may be found on PrideWire and the M -drive. Renewed or Re -Awarded Vendors If no previous problems exist, this review will be requested annually. If there is a previous history of problems this review will occur monthly until three (3) months of positive reports. At that time the vendor review will occur quarterly. VENDOR PERFORMANCE Elements of Monitoring Vendor Performance (Purchasing and Department) Contract Relations o Initial meeting with vendor after bid award o Continuous monitor— vendor interaction o Formal and informal vendor feedback The Contract o Specific performance standards o Penalties for nonperformance spelled out Contract Administration o Comprehensive list of duties Poor Performance The Purchasing Division should be notified immediately of any situation regarding poor or inadequate performance, as contracts are often used by multiple departments. Citywide requirements should always be considered. Action plan for addressing poor performance Step 1 Department attempts to resolve the issue by working directly with the vendor. Step 2 If not resolved, establish a time for resolution (i.e., five days, two weeks, etc.) and inform Purchasing. Step 3 Written notice to the vendor restating the nature of the issue and the time allowed for correction. Step 4 If the issues persist, a formal meeting is held. Minutes of the meeting are taken. The vendor should be reminded of the possible course of action as authorized in the contract. Step 5 Enforcement requires the Purchasing Manager issue a "Cure Notice" notifying the vendor to cure the issue. Specific dates and a description of any liquidated damages due if the vendor fails. Step 6 If all attempts to resolve the issue have failed, the Purchasing Manager will need to cancel the contract. Simultaneously, action must be taken to collect a settlement. Establishing a cooperative and effective working relationship with the vendor is the key to good contract administration. It needs to be balanced with strong ethical considerations. "Good faith" is used to describe a contractual relationship. Failure of the vendor to cooperate, performance failures, and abuse of power are all examples of "bad faith" on the part of the vendor. Timely resolution of contract problems is also a major goal of effective contract administration. Vendor Relations If the department experiences problems with a vendor pertaining to delinquent delivery, quality of product or service, invoicing problems, etc., please notify Purchasing Division as soon as possible. These problems should be handled professionally, and persistent problems should be documented in writing for future vendor evaluation. INSURANCE Vendors on City property or public right-of-way for the City of Allen shall provide the City a certificate of insurance evidencing the coverage's and coverage provisions identified. Contractors shall provide the City evidence that all subcontractors performing work on the project have the same types and amounts of coverages as required or that the subcontractors are included under the contractor's policy. All insurance and cer[ificate(s) of insurance shall contain the following provisions: (1) name the City, its officers, agents and employees as additional insured's as to all applicable coverage with the exception of Workers Compensation Insurance; (2) provide for at least thirty (30) days prior written notice to the City for cancellation, non -renewal, or material change of the insurance; (3) provide for a waiver of subrogation against the City for injuries, including death, property damage, or any other loss to the extent the same is covered by the proceeds of insurance. All insurance companies providing the required insurance shall be authorized to transact business in Texas and rated at least "A" by AM Best or other equivalent rating service. Vendor shall during the term hereof maintain in full force and affect the required insurance. The City reserves the right to amend or require addition all types depending on the nature of the work. PROCUREMENT CARD PROGRAM The Procurement Card (P -Card) Program is a method that allows employees to make approved City purchases quickly and efficiently by paying vendors immediately with a credit card. A purchase should not be made with a card unless it is the most productive purchasing method. The City promotes progressive, productive work practices and supports "planning ahead" to achieve the best possible results. Poor planning does not constitute an emergency by City policy and state law. The card should not be used as a substitute for the lack of planning. This necessitates establishment of strong internal controls to prevent unauthorized City purchases and to protect employees by defining employee responsibilities in using the P -Card. All employees issued a P -Card are expected to understand City policies related to using City funds. At no time does the use of the P -card override the City's procurement policy, which is guided by state procurement law. The City bears no legal liability from inappropriate use. The Finance/Purchasing Department will be responsible for maintaining the web -based P -Card system, provide support to P -Card users, conduct compliance audits, and process the monthly payment to the P -Card company according to established deadlines. To ensure continued use of the P -Card Program, the following guidelines apply to all employees and departments: CARD CONTROLS AND LIMITS Each card issued will have specific card controls and limits established based on the functional area of responsibility and needs of the individual cardholder/department. Specific limits will be assigned when completing the Cardholder Application and reviewed during training. Controls established per card are: • Single transaction maximum dollar limit (including shipping and handling) per state procurement law is $3,000 • Monthly transaction dollar limit not to exceed $5,000 • Merchant Category Code (MCC) restrictions If changes are required to the standard transaction limits, a memo is required with a description of the requested new limits, authorized by the Director and submitted to Purchasing for final approval by the Chief Financial Officer. ISSUING THE P -CARD Requests for P -Cards are made by completing a P -Card application and submitting it to the Purchasing Division. Approval will be based on purchasing needs as determined by the department and Finance/Purchasing management. Upon receipt of the credit card, the cardholder will be required to sign the Cardholder Agreement form to acknowledge the responsibilities associated with use of the card. USING THE P -CARD • Card Security: Authorized use of the P -Card is limited to the employee in whose name the card is issued. The cardholder will ensure that the card is kept in a secure location and the account number on the card is protected from misuse. At no time should the P -Card be given to another employee for use. • Spending Limitations: Each P -Card holder is responsible for understanding their departmental budget, account numbers and the limits set for their individual card. • Receipts: Original receipts (not copies) most be submitted for each item appearing on the P - Card monthly statement. Receipts need to include the event, date and names of participating employees. • Using the Internet: Purchases using the P -card should be made on secure websites only. International purchases are not allowed. • Contract Vendors: The City has existing contracts and price agreements with designated vendors for specific goods and services. The City has a contractual obligation to make all purchases from these vendors whenever price agreements or contracts exist. To maintain these beneficial relationships with contract vendors, P -Card users must continue to order from the contract vendors. Anyone who makes a purchase in a manner which does not follow purchasing procedures enters into a private transaction with the vendor and assumes responsibility for payment. • Unauthorized purchases with a P -Card • Any item committed on a Purchase Order • A separate, sequential or component purchase • Capital items • Sales Taxes: All purchases using the P -Card should only be for official City purposes; therefore, purchases are not subject to state or local sales tax. The City is not exempt from paying hotel/motel taxes. The City's tax-exempt status number is imprinted on the face of the P -card as a reminder to request non -tax purchases. If sales taxes are paid, the P -card holder is required to ask the vendor to reverse the sales tax charge. If sales taxes cannot be reversed the employee should provide an explanation. • Travel Expenses: The City's Travel Policy should be followed for all travel related purchases made using the P -Card. Approved travel authorizations should be obtained prior to using the P -Card and a signed Travel Authorization form along with original receipts must be submitted with the monthly P -Card Accounting Code Detail/Expense Report. Final hotel and airline reservations must show the employee's name; price quotes are not acceptable verification of expenditures • Conflict of hnerest: It is prohibited to use your P -Card at establishments owned by City personnel or elected public officials, due to a conflict of interest. Meal Expenses: Meal receipts must show details of items ordered and should include the business purpose of the expense, who attended and show details of the items ordered. The credit card receipt showing only the total charged amount is not acceptable documentation. Alcohol purchases are prohibited for use with the P -Card. Receiving Goods and Materials: All merchandise purchased with the P -Card should be sent directly to the employee's City address. Itemized receiving documentation that accompanies the order should be kept as documentation with the original transaction receipt. Note: A packing slip that does not include price(s) is not sufficient documentation for record retention yarnoses. Returns/Credits/Disouted Transactions: Employees are encouraged to resolve disputes immediately and directly between the cardholder and the vendor. Documentation of the return (i.e. credit receipt) should be kept for reconciliation purposes of the monthly P -Card Accounting Code Detail/Expense Report. Disputed items should be reported within thirty (30) days of the P -Card statement date so the credit card company can investigate the dispute on the cardholder's behalf and assist in a resolution. The Finance department should be utilized to help solve the discrepancy and assist with the completion of a Transaction Dispute Form if needed. EXAMPLES OF ACCEPTABLE PURCHASES • Car rentals • Dues/Subscriptions • Memberships • Training Courses and Seminars • Travel Related purchases (airfare/hotel reservations)/family excluded • Contractual Services EXAMPLES OF UNACCEPTABLE PURCHASES • Alcoholic beverages (even during city -related travel) • Capital Items • Computer Hardware/Software • Entertainment • Medical/Insurance Services • Personnel Services • Personal Charges of any description MONTHLY P -CARD RECONCILIATION After the monthly billing cycle closes, employees will be notified to reconcile their P -card account promptly for payment. This requires approved budgeted account numbers, a detailed description of the expense, scanned original receipts to match each expenditure and attached to the expenditure record, and submitting it to workflow for management review and approval. Management will be responsible for auditing and verifying that all P -Card charges are for City related business, City policies have been followed, correct budgeted expense accounts are used, workflow is approved timely and original receipts and reconciled statement are submitted to Finance Department by the required due date. Directors follow the same procedures as employees but the workflow advances their P -card expenditures to the Chief Financial Officer for final approval. NOTE: P -card holders can code only their P -card charges. Administrative Assistants are authorized to code all employees in their department that are issued P -cards. Also, employees have specific budget account authority, therefore, should not use their P -card to make purchases for budgets they are not authorized to. A monthly exception report will be maintained by the Finance Department to monitor discrepancies to determine if additional training is needed or if P -Card privileges should be revoked. METHOD OF PAYMENT The Finance Department is responsible for validating the total monthly amount due and processing the payment. Only one payment is issued per month for all P -Cardholders. DOUBLE -BILLING CAUTION: To safeguard against the possibility of double -billing, original receipts are scanned and attached to the electronic expenditure and submitted with a paper printed reconciled monthly statement. CARD CANCELLATION/REPLACEMENT Card cancellation may occur if purchasing misuse is detected and/or an employee fails to complete the monthly online reconciliation and submit original receipts and reconciled monthly report in a timely manner as outlined previously. The Finance Department should be notified immediately to deactivate the P -card when an employee is terminated, the card is lost or the employee is no longer eligible to use it. LOST OR STOLEN CARDS If a cardholder's P -Card is lost or stolen, the cardholder must immediately notify the Customer Service number given at the time of card issuance and the Purchasing Division. The Purchasing Division will work with the employee to resolve issues associated with the lost card and obtaining a replacement. CARD MISUSE Cardholders are expected to utilize the P -Card for business purposes only. All transactions utilizing the P -Card should be made with good judgment, within the functional responsibilities of the cardholder and according to established City policies. Violations of these requirements may result in revocation of use privileges and/or disciplinary action, up to and including termination of employment. Employees who are found to have inappropriately used or violated the policy and procedures of the P -Card program will be required to reimburse the City of Allen for all costs. DISPOSAL OF CITY OWNED SURPLUS PROPERTY The Purchasing Division is responsible for the final disposition of City -owned, surplus property, ranging from rolling stock (automobiles, trucks, tractors, backhoes, etc.) to antiquated equipment, furniture, or fixtures. Disposal of this surplus property is accomplished by a Public Internet Auction to the highest bidder. This section provides for disposal of property that has been deemed to be no longer useful for City use (surplus) or is found to be confiscated or abandoned and unclaimed property by the Police Department. City Owned Surplus Property Once a department has determined property owned by the City is no longer useful, the property will be turned over to the Purchasing Division for disposal with appropriate fixed asset information. For asset tracking and reporting of obsolete property, a list must be provided to Purchasing to include a product description and the original location of the property. If the property has value, as determined by the Purchasing Division, the property will be relocated to another City Department, sold at auction, or disposed of by any other method permitted under State Law. Departments are required to remove any equipment, city logos or insignia from the vehicle/equipment prior to selling in an auction. If property has no value, or if the value is less than the cost to process for auction or donation, it will be disposed of by the most convenient method. Finance must be notified so that tracking of fixed assets can be maintained. Abandoned and Confiscated Property All property (except weapons) that has been deemed not needed in the prosecution of an active case: 1. If owner is unknown, Police Department (PD) holds property for thirty (30) days (per CCP18.17 (a)) or if valued at $500 or more, Police holds for ninety (90) days after publication (per CCP18.17(c)). 2. If owner is known, a certified letter will be sent by the Police Department to the last known address giving owner ninety (90) days to retrieve property (per CCP 18.17 ro». a. If owner acknowledges, item is returned. b. If owner does not acknowledge, item is sent to designated Police Department personnel for disposal (if it has value as determined by the PD). Police Department personnel shall prepare an inventory of items released to Purchasing which will accompany items upon delivery. c. Designated Police Department personnel secures property. d. The Purchasing Manager, Directors or designee determine if the property has value. If property has no value, or if the value is less than the cost to process for auction or donation, it will be disposed of by the most convenient method. For asset tracking and reporting of obsolete property, a list must be provided to the Finance Department to include a product description and the original location of the property. e. No less than twenty-one (21) days prior to the sale of the property, a notice of such sale shall be placed in a newspaper of general circulation in the City. The Purchasing Manager, or designee, will determine what property is sold or donated. Sales or donations may be made at any time according to the criteria deemed appropriate by the Purchasing Manager. Weapons, when deemed no longer needed in the prosecution of a case, or property which considered contraband, shall be disposed of by the Police Department in accordance with State Law. PROCUREMENT OF PROFESSIONAL SERVICES Texas Government Code Chanter 1254 Professional Services Procurement Act: this act states that contracts for the procurement of defined professional services may not be awarded on the basis of bids. A government entity may not select professional services, a group or association of providers, or award a contract for the services on the basis of competitive bids submitted for the contract or for the services, but shall make the selection and award on the basis of demonstrated competence and qualifications to perform the services, and for a fair and reasonable price. The professional fees under the contract must be consistent with and not higher than the recommended practices and fees published by the applicable professional associations and do not exceed any maximums provided by law. Professional Services As defined by Texas Goverment Code Chapter 2254 Professional and Consulting Services Procurement Act, "means services within the scope of the practice, as defined by state law of, accounting, architecture, landscape architect, land surveying, medicine, optometry, professional engineering, real estate appraising, or professional nursing or provided in connection with the professional employment or practice of a person who is licensed or registered as a certified public accountant, licensed architect, land surveyor, physician including a surgeon, optometrist, registered surveyor, professional engineer, a state certified or state licensed real estate appraiser or a registered nurse. When procuring architectural, engineering or land surveying services, the initiating department shall select the most highly qualified individual or firm capable of performing the service, on the basis of demonstrated competence and qualifications. The department shall then enter into negotiations on a contract at a fair and reasonable price. If the department is unable to negotiate a satisfactory contract with the most highly qualified individual or firm, it shall formally end negotiations with that person or firm, and then proceed to the next most highly qualified and repeat the process. Negotiations are carried on in this sequence until a contract is made. If any agreement or contract is entered into with one of the above mentioned professionals on the basis of a competitive bid, it is contrary to public policy and is void. Request for Qualifications (RFQ) is the formal procurement method used to solicit and select firms to provide professional services. The selection of the firm is primarily the focus on qualifications of the potential providers. Primary qualifications include experience of key staff, relevant experience of the company and client references. The RFP or RFQ process requires a technical and management approach and often, a fee proposal. An engineer or architect may be selected after the evaluation of Statements of Qualifications or it may be necessary to interview several of the firm's and further evaluate them based on the interview or a presentation, narrowing the field until one firm is selected for negotiation. When negotiations are successfully concluded, a recommendation will be made to the City Council that a contract is awarded to the chosen firm. A tabulation showing all the firms submitting Statements of Qualifications and each firm's score, by criterion, will he attached to the recommendation. A modified process may be utilized when the most highly qualified firm is identified by the basis of a continuing phase (or adjacent project) of a project (public or private), partnership with the private sector or a partnership with another governmental agency. In these situations, where a provider of services is already working on an earlier project and has a superior knowledge of the area, partners, and project that would make the formal process an ineffective use of the City's or other service providers resources to determine the most highly qualified firm. SPECIAL CONDITIONS 1. This policy does not pertain to contracts administered by another agency to which the City is signatory. 2. For contracts of an emergency nature any or all of the above steps may be waived at the discretion of the City Manager or City Council. 3. Additional steps and procedures may be added as determined necessary, i.e. request for Statement of Qualifications prior to Request for Proposal. DEFINITIONS The basic methods for obtaining supplies, equipment and services are explained in detail in this manual, but for introduction, they are briefly outlined below. Best Value A procurement method that emphasizes value over price. The best value may not be the lowest cost. Value may include a combination of reputation, quality, long-term cost, services and time. Bid Types Request for Quote (RFQ) Procurement process for purchases $3,000- $49,999 Request for Bid (RFB) Procurement process for $50,000 and greater Request for Proposal (RFP) Negotiable Procurement process for $50,000 and greater Bill to Addresses The P.O. instructs vendors to submit all Invoices to the Finance Department. Blanket Purchase Order (BPO) Annual P.O. generated for recurring purchases with approved contracted vendors. Change Orders If changes are made to the original Purchase Order, a change order must be processed. Change orders may address differences in order quantity, quality, damages and or additions. The change order will be processed following workflow approvals. Invoices most match the PO and receipt record. The original contract price may not be increased (under section 252.048 of the Local Government Code) by more than 25%. The original contract price may not be decreased under this section by more than 25% without the consent of the contractor. All Change Orders must be entered into the system to adjust an existing PO with attached supporting documentation. Check Request The Request for Check program is utilized by users to request invoice payments that do not require a purchase order or accept P -card payment. Commodity Codes The State of Texas encourages agencies to make the most efficient use of tax dollars. Organizations use the Commodity Code to monitor and track spending. The bid requirements will apply to commodity expenses. Example, if the City spends $50,000 or more for furniture (previously purchased from several vendors), the City will issue a bid and award to vendors responding to such bid. Contracted or Preferred Vendor A vendor awarded an agreement to provide goods, perform a service, construct a work or lease real property, for appropriate consideration and terms, generally established through the competitive bid process. Contractual Goods or Services An agreement between two or more parties to provide goods, perform a service, construct a work or lease real property, for appropriate consideration and terns, generally established through the competitive bid process. Cooperative Procurement The action taken when two or more entities combine their requirements to obtain advantages of volume purchases or a variety of arrangements whereby two or more public procurement units purchase from the same vendor using a single iFB or RFP. Emergency Purchase Order Emergencies are defined to remove hazards, to protect property and people, to alleviate financial loss and operation damage and to expedite repairs. Under certain circumstances, purchasing will issue a verbal P.O. number. A confirming requisition, authorized by the department head, must be submitted by the next working day. Encumbered Contract Encumbered contracts are used when the total value of the contract is known as well as the total amount of each account that is to be charged. These contracts record encumbercd amounts against the project ledger and general ledger at the time the contract is entered. Available budget for project ledger strings and general ledger accounts are shown and budget checks are performed for current year and new year entries. Accounts and amounts may cross fiscal years. Generally, encumbered contracts are best used with detail bids associated with specific capital projects. Fiscal Year October 1 — September 30 Professional Services Services rendered by members of a recognized profession possessing a special skiliteducation as defined in Local Government Code. A consultant is not a Professional Service. Purchase The act of obtaining approved goods or services by an authorized City representative. Purchase Order (PO) Legal contract for purchase of goods and services establishing terms and conditions and incurs a financial obligation. The Purchasing Division will not issue Purchase Orders "after the fact", unless authorized by the City Manager or his designee. Purchase Requisition The purchase requisition is an automated process used to validate budget, obtain management approval to purchase specific products or services and to communicate with purchasing a need for product or services. Separate Purchases Purchases, made separately of items that in normal purchasing practices would be purchased in one purchase. Sequential Purchases Inappropriate separation of purchases to avoid the required process of obtaining quotes or bids. Ship to Addresses City of Allen facility locations for the delivery of ordered items. Signature Authority Department Directors and Assistant Directors have simature authority on any agreement binding the City in instances requiring an expenditure of less than $20,000. All agreements at $20,000 or greater must be signed by the City Manager or his designee. Express authority was granted by Council on December 8, 2015, authorizing the City Manager to delegate signature authority to a Parks and Recreation designee to execute contracts for Professional Services for an amount greater than $20,000 and less than $50,000, as provided and approved in the annual budget. Express authority was granted by Council on February 27, 2018, authorizing the City Manager to execute contracts for an amount less than $100,000, in accordance with the procurement laws of the State of Texas and as approved in the annual budget. Sole Source Purchases Purchases that can be made from only one vendor as defined by State law. Specifications Detailed description for an item or service. Specifications must be complete and sufficiently defined to provide the exact product or service required. Tax Exemption The City is exempt from paying any local or state sales tax, and federal excise tax. The City is not exempt from the Hotel Occupancy Tax. Three -Way Match Required verification of a match of the purchase order, receipt and invoice. With a three-way match, the system provides a method to match the invoice, purchase order and receipt to ensure all three documents contain the same detailed information. Workflow The approval process is based on workflow business rules established for each Department. Each workflow level is reviewed and requires approval before advancing to the next level. The workflow approval process may include Information Technology for IT purchases, Budget, Grant, Replacement Fund and Capital expenditure approvals by Finance staff. Workflow for encumbered contracts will be approved by the department and both Finance and Purchasing staff. All requisitions over $15,000 will require approval by the City Manager. Final approval of all requisitions and change orders is completed by the Purchasing Division.