CHAPTER I. ADMINISTRATIONCHAPTER I. ADMINISTRATION\ARTICLE 9. PURCHASE AND SALES POLICY

The governing body does hereby establish a policy for the purchase and sale of certain goods and services for the government of the City of De Soto, Kansas.

(Ord. 913; Ord. 2003; Ord. 2390)

It is the policy objective of the governing body that the city establish uniform and efficient procedures for the purchase of supplies, equipment, construction, and certain other services for the City of De Soto. A uniform and established policy should assure the City pays the lowest cost commensurate with the highest quality of goods and services.

Within this policy, the governing body desires to show a commitment to local businesses in the City of De Soto by seeking to source goods and services from local suppliers, merchants or vendors to the greatest extent possible. The objective is to stimulate economic activity and growth by maximizing the use of local businesses and to solicit competitive pricing in supplying materials, supplies, goods, and services purchased on behalf of the city.

(Ord. 913; Ord. 2003; Ord. 2390)

The following criteria (listed in order of importance) will be considered when evaluating all bid proposals submitted to the City for the purchase of goods, materials, supplies, or services:

(a)   Local Business.

(b)   Lowest price and best value.

(c)   Quality of product.

(d)   Quality of service and warranty.

(e)   Timeliness of service and delivery.

(Ord. 913; Ord. 2003; Ord. 2390)

The following guidelines will be used to implement the city’s local preference [applicable to purchases of $5,000 or less] when purchasing goods, materials, supplies, or services:

(a)   "Local" is defined as a business operating within the corporate limits of the City of De Soto with the majority of its primary business operations occurring within the corporate boundaries of the city. To be considered for the local preference policy, a business entity must:

(1)   Have an established permanent place of business within the corporate boundaries of the city, and which business and location have been in existence at least six (6) months prior to the submittal of a bid; and

(2)   Have its place of business in a location where the principal use of the location is for business purposes, and such locations will not include a post office box, and cannot be within or part of a residential location, including but not limited to, a home, residence, hotel or motel; and

(3)   Not have any unpaid and delinquent utility bills, taxes, liens, fines or unsatisfied final judgments owed to the city.

(b)   Businesses excluded from being considered “local” for local preference:

(1)   Those businesses with only a local De Soto post office box with physical business locations outside the corporate boundaries of the city; or

(2)   Those businesses with a sales presence in the city, but with no physical business location within the corporate boundaries of the city; or

(3)   Home-based businesses that merely take orders for products shipped from out-of-town to their customers; or

(4)   Those businesses that do not otherwise operate or maintain a business within the corporate limits of the City De Soto.

(c)   Local businesses shall receive first opportunity and consideration when bids are solicited for the purchase of goods, materials, supplies, or services that can be acquired locally on behalf of the city. When circumstances dictate that the purchase of goods, materials, supplies or services for the City of De Soto require solicitations from non-local businesses, then the following guidelines shall be used when giving consideration to local business preference on bid proposals:

(1)   Purchases up to $1,000. A bid proposal from a local business  --  on city purchases of a value up to one thousand dollars ($1,000.00)  --  that is no more than ten percent (10%) over the lowest bid proposal of a non-local business may be given preference if the local business agrees to match the lowest non-local bid submitted.

(2)   Purchases from $1001 to $5,000.           A bid proposal from a local business  --  on city purchases of a value between one thousand and one dollars ($1,001.00) and five thousand dollars ($5,000.00)  --  that is no more than five percent (5%) over the lowest bid proposal of a non-local business may be given preference if the local business agrees to match the lowest non-local bid submitted.

Notwithstanding the foregoing, the local bidder must otherwise meet any other qualifications and procurement policy requirements set forth by the city. If a member of the governing body has concern that a particular purchase or purchases is inconsistent with the local preference provisions stated herein, the concern should first be discussed with the city administrator and then, if not resolved within ten (10) days of such discussion, the concern can be raised and resolved with the entire governing body.

(Ord. 913; Ord. 2003; Ord. 2390)

All purchases of goods and services made after the effective date hereof shall be subject to the above Sections 1-903 and 1-904, and the following guidelines and policy.

(a)   Petty Cash.  The Finance Officer is the petty cash custodian.  Any expenditures from the petty cash fund must be matched to and accompanied by a receipt for the expenditure. 

(b)   Purchases up to $500 (No purchase order required).  Department head, or designee, can authorize purchases without prior authorization from city administrator or a purchase order if funds exist in the budget.  When invoices are received for payment, the department head or designee shall:

(1)   Write the appropriate budget account number on the invoice.

(2)   Provide a description of the item(s) purchased on the invoice.

(3)   Initial the invoice and submit it to the finance office for payment.

(c)   Purchases from $501 to $1,000. Department head must review appropriate budget to determine the availability of funds and, when practical, obtain three (3) verbal bids for the purchase.  Department head must provide prior authorization by issuing an initialed purchase order indicating the amount approved for the purchase, the appropriate budget account number, a description of the item(s) to be purchased, and the name of the vendor. When an invoice is received it will be attached to the purchase order, initialized by the department head, and submitted to the city administrator before being forwarded to the finance office for payment. Payment will be based on the amount indicated on the invoice.

(d)   Purchases of $1,001 to $5,000.  Department head must, when practical, obtain three (3) written bids for the purchase. City administrator must review appropriate budget to determine the availability of funds.  Department head or designee must obtain prior authorization from city administrator and receive a signed purchase order indicating the amount approved for the purchase, the appropriate budget account number, a description of the item(s) to be purchased, and the name of the vendor.  

When an invoice is received it will be attached to the purchase order, initialized by the department head, and submitted to the city administrator before being forwarded to the finance office for payment.  Payment will be based on the amount indicated on the invoice.  The governing body will be notified of any payments made for an amount over $2,500, but such notices shall not include payments previously authorized by the governing body.

(e)   Purchases of $5,001 to $10,000.  The governing body must approve any project or item, and it expects that, when practical, the city administrator will obtain at least three written quotes.  Upon receipt of the written quotes, the city administrator will proceed with the project or acquisition of item if it is within the amount approved by the governing body.  If not within the approved amount, new figures will be presented to the governing body.

If the project or acquisition of an item is within the approved amount, the department head upon receipt of invoices shall submit a purchase order to the city administrator indicating the amount approved for the purchase, the appropriate budget account number, a description of the item(s) to be purchased, and the name of the vendor.

(f)   Purchases of $10,001  to $50,000.  At least three written quotes must be obtained, when practical.  Upon receipt of the quotes, the governing body will authorize the mayor, city administrator, or appropriate department head to enter into an agreement or a contract before a project begins or an item is purchased.

All items or projects will be assigned an identification number or descriptive title.  All invoices must be accompanied by a purchase order.  The purchase order shall indicate the project identification number or descriptive title, budget account number, description of items purchased, and be initialed by the department heads before submitting it to the city administrator.

(g)   Purchases $50,001 and over. A sealed bid process should be followed, except for instances where the products, goods, equipment, or services cannot be directly compared due to differences in process, design, manufacturing, or proprietary components.

The following shall apply to each purchase for $50,001 or over:

(1)   Notice of Inviting Bids.  Notices inviting sealed bids shall include a general description of the article(s) or services to be purchased or supplied, shall state where bid forms and specifications may be obtained, and the time and place for opening bids. The notice shall specify the amount and form of the bidder’s security deposit if required. The notice shall state that bids shall be submitted and contracts awarded pursuant to the provisions of this Policy and any other applicable rules, regulations or conditions. The notice shall state that the governing body may reject any and all bids for any reason.

       Notices inviting bids shall be published on an electronic plan distribution room of general use within the contracting community in the region. A notice shall also be posted on the city’s website. This does not preclude, when deemed advantageous, the use of any other means of notice.

(2)   Bid Opening.  Sealed bids shall be submitted as set forth in the published notice, and shall be identified as “bids” on the envelope and opened by the city administrator, or their designee, at a time and place stated in the published notice. A tabulation of all bids received shall be open for public inspection at the De Soto City Hall.

(3)   Bid Rejection, Re-advertisement.  The governing body may, in its discretion, reject any and all bids and may re-advertise for bids pursuant to the procedures prescribed by this Policy.

(4)   Tie Bids.  If two or more bids are received for the same total amount or unit price and all other applications being found equal, the governing body may accept either bid.

(5)   Performance Bond.    The City of De Soto may require a performance bond in such amount as it may deem necessary to protect the interests of the City and the form and amount of such bond shall be specified in the notice inviting bids.

(6)   Security Deposit.  In transactions where sealed bids are required, the governing body or the city administrator may require and specify the amount and form of the bidder’s security deposit in the call for bids. The City Attorney may review such security agreements.

       The security deposit of the successful bidder shall be held to secure the capacity, readiness, and willingness of the successful bidder to execute the contract. The successful bidder shall forfeit the deposit of bid security upon refusal or failure to execute the contract within ten (10) days’ notice, unless otherwise specified, of award of the contract.

       The governing body may, on refusal or failure of the successful bidder to execute the contract, award the contract to the next lowest responsible bidder, the amount of the previous successful bidder’s security may be applied by the City to the difference between the initial failed bid and the next lowest responsible bid; and the surplus, if any, shall be forfeited as the reasonable cost to the City of De Soto for delay and/or administrative cost involved in re-letting the contract.

(7)   Special Services and Equipment.  Recognizing that acquisition of some goods, services, or professional services, are of such a unique or complex nature that a structured competitive bid process based solely upon the lowest price would detract from the City’s ability to acquire the most appropriate goods or services, the city administrator and/or the governing body may determine that is in the best interest of the City of De Soto to base the expenditure upon criteria other than the lowest cost. In such cases, the city administrator or their designee may prepare requests for proposals, and such proposals may be accepted, rejected, or negotiated prior to final contract approval by the governing body.

(h)   Exceptions.  Exceptions from the purchasing policy will be made for the following items or circumstances:

(1)   For emergency maintenance of structures, city infrastructure, and equipment that cannot be postponed until action can be taken by the governing body.

(2)   Fuel, oil, chemicals, or other commodities for which budget accounts have been established.

(3)   Regular monthly utility payments.

(4)   For Professional Services which are selected based on qualifications rather than price.

(i)    Change Order Policy.  If a change order or price change occurs for a project or item that has been approved by the governing body, the city administrator may be authorized to approve change orders within 10% of the approved project/item cost if the revised amount does not exceed the amount budgeted for the project/item and the revised amount does not exceed $5,000.

If the change order or price change exceeds 10% of the approved amount, exceeds $5,000, or exceeds the amount budgeted for the project/item, the city administrator will bring the project/item back to the governing body for reconsideration.

(j)    Procedures for Issuance of Checks and Payments.  City checks will only be prepared for signatures by the city finance officer, or their designee, upon presentation of an invoice, statement, or other writing by the city administrator or department head for a previously approved expenditure. No check shall be valid unless it is signed by any three (3) of the following individuals, who are the only persons authorized to sign checks: Mayor, city council president, city administrator, and city clerk.

A record of all payments (via check or Automated Clearing House), and associated budget codes or accounts, shall be made available to the governing body at each regularly scheduled council meeting, and the council will authorize and approve such payments by passage of an Ordinance (“the Pay Ordinance”).

(Ord. 913; Ord. 2003; Ord. 2390)