ORDINANCE NO.  94—1  

AN ORDINANCE SETTING FORTH THE POWERS OF THE CITY PURCHASING AGENT; ESTABLISHING PURCHASING PROCEDURES; PROVIDING PENALTIES; AND REPEALING ORDINANCE NO. 80-6.

The City of Sodaville ordains as follows:

Section 1. Short Title. 

This ordinance shall be known and be cited as the Purchasing Ordinance.

Section 2. Definitions.

For the purpose of this ordinance, the following terms, phrases, words and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future; words in the plural number include the singular number; and words in the singular number include the plural number. The word "shall" is always directory and not mandatory.

"Bid" means a competitive offer in which price, delivery (or project completion) and conformance to specifications will be the predominant award criteria; or a competitive proposal in which other criteria in addition to price, delivery and conformance to specification are the dominant award criteria.

"Board" means the local contract review board as established in this ordinance.

"City" means the city of Sodaville, Oregon.

"City council" means the council of the city of Sodaville.

"Formal bid" means a procedure in which written sealed bids are solicited by advertising using bidding instructions, specifications, and are opened at an announced place, date and time.

"Formal quotation" means a procedure in which written bids are solicited by advertising or other writing stating the quantity and quality of goods or services to be acquired, and which bids are received by the city on or before a stated date.

"Goods" means any tangible personal property including but not limited to materials, supplies and equipment.

"Industrial oil" means any compressor, turbine or bearing oil, hydraulic oil, metal-working oil or refrigeration oil.

"Informal quotation" means a procedure in which written or verbal bids are gathered by correspondence, telephone or personal contact.

"Lowest responsible bid" means the bid that is found to be the most acceptable on the basis of:

(a)  Provision of the goods or services that substantially comply with all prescribed public bidding procedures and requirements, and bid specifications;

(b)  Provision of the goods or services at the lowest cost to the city of those bids which meet vendor qualifications to execute and perform the contract to supply those goods or services;

(d)  Conformance to other published criteria which will be the dominant criteria used in evaluating the bids received.

"Lubricating oil" means any oil intended for use in an internal combustion crankcase, transmission, gearbox or differential or an automobile, bus, truck, vessel, plane, train, heavy equipment or machinery powered by an internal combustion engine.

"Personal services contract" means a contract with an independent contractor predominantly for services requiring special training or certification, independent judgment, skill and experience.  It may include but is not limited to a contract for the services of professionals, performing artists, visual artists, consultants, researchers, and computer programmers.

"Post-consumer waste" means a finished material which would normally be disposed of as solid waste, having completed its life cycle as a consumer item. "Post-consumer waste" does not include manufacturing waste.

"Public contract" means any purchase, lease or sale by the city of Sodaville of personal property, public improvements or services except personal service contracts.

"Public improvement" means projects for construction, reconstruction or major renovation on real property by or for the city of Sodaville. "Public improvement" does not include emergency work, minor alteration, ordinary repair, or maintenance necessary in order to preserve a public improvement.

"Purchasing agent" means the mayor of the city of Sodaville, or any person appointed by the mayor as an assistant to exercise the functions of purchasing agent in the manner prescribed by this ordinance.

"Recycled material" means any material that would otherwise be a useless, unwanted or discarded material except for the fact that the material still has useful physical or chemical properties after serving a specific purpose and can, therefore, be reused or recycled.

"Recycled oil" means used oil that has been prepared for reuse as a petroleum product by refining, rerefining, reclaiming, reprocessing or other means provided that the preparation or use is operationally safe, environmentally sound and complies with all laws and regulations.

"Recycled product" means all materials, goods and supplies, not less than 50 percent of the total weight of which consists of secondary and post-consumer waste with not less than 10 percent of its total weight consisting of post-consumer waste. "Recycled product" also includes any product that could have been disposed of as solid waste, having completed its life cycle as a consumer item, but otherwise is refurbished for reuse without substantial alteration of the product's form.

"Requisition" means purchase order.

"Service" means and includes all telephone, gas, water, electric light and power service, towel and cleaning service; insurance, leases for all grounds, buildings, offices, or other space required by the city; and the rental, repair, or maintenance of equipment, machinery, and other personal property.

"Supplies" means and includes all supplies, materials, and equipment.

Section 3. Designation.

(1)  The city council is hereby designated the local contract review board for the city, and, as provided in this ordinance, shall exercise all powers and duties granted to a local contract review board by state law.

(2)  The mayor may appoint an assistant responsible to the mayor for an indefinite term on the basis of merit and fitness to perform such duties in regard to purchasing as may be assigned by the mayor. Any person so authorized shall serve at the pleasure of the mayor, shall receive compensation as fixed by the council, shall be bonded by an official bond for the faithful performance of duties in an amount of $5,000.00, premiums of which shall be paid by the city; and the mayor may assign said assistant such duties in regard to purchasing as the mayor shall see fit.

Section 4. Council Regulation.

(1)  This ordinance declares the regulations and policies of the council regarding:

(a)  Public contracts or classes of public contracts exempt from competitive bidding;

(b)  The use of brand name, mark, manufacturer or seller in public contract specifications;

(c)  Exemption and waiver of bid security or performance bonds on public contracts or classes of 

contracts;

(d)  Hearing and determination of appeals from the decision of the purchasing agent regarding disqualification of bidders for public contracts; and,

(e)  Other policy matters relating to the award of public contracts where rulemaking discretion is imposed by law upon the council.

(2)  Before adopting the regulations and policies required by subsection (1) of this section or any modification thereto, the proposed ordinance shall be placed on a regular council meeting agenda and public testimony invited thereon. After which, the council shall adopt, modify, or reject the ordinance.

(3)  As part of the city's annual audit the purchasing agent's application and performance of the council's regulations and policies regarding city contracts and of the purchasing agent's rules,  regulations and procedures shall be reviewed.

Section 5. Purchasing  Agent Powers and Duties.

The city purchasing agent shall have the power and duty to:

(a)  Purchase or contract for all supplies and contractual services needed by the city, in accordance with this ordinance and the purchasing procedures established hereunder.

(b)  Establish and amend rules, regulations, and procedures deemed reasonably necessary and proper to fulfill the intent of this ordinance. In promulgating such rules, regulations and procedures, the purchasing agent shall:

1.  Establish procedures that do not encourage favoritism or substantially diminish competition;

2.  Determine that there will be a substantial cost savings to the city;

3.  Consider other factors such as the public policy encouraging competition; the type, cost and amount of the contract; the number of persons available to bid; market realities; and modern or innovative contracting and purchasing methods; and

4.  Establish purchasing practices that assure, to the maximum extent economically feasible, purchase of materials, goods and supplies that may be recycled or reused when discarded. In the event of delegated responsibility, all changes shall be subject to the approval of the purchasing agent.

(c)  Prescribe and maintain such forms as reasonably necessary in the operation of this ordinance.

(d)  Declare vendors in default in their quotations, or irresponsible bidders, and disqualify them from receiving any business from the city for a stated period of time not to exceed three years.

(e)  Except when this ordinance reserves the power to the council, without further authorization from the council, make all expenditures for which there is an appropriation.

(f)  Recommend to the council professional people to perform professional services which are unique in nature and not ordinarily subject to competition.

(g)  Make all purchases by purchase order signed by the purchasing agent.

Section 6. Competitive Bids; Exemptions.

(1)  It is the policy of the city to encourage public contracting competition that supports openness and impartiality to the maximum extent possible. The council finds that:

(a)  Competition exists not only in prices, but in the technical competence of suppliers, in their ability to make timely deliveries and in the quality and performance of their products and services and that a balance must exist between performance competition and price competition;

(b)  The nature of effective competition varies with the product or service being procured and that while competitive sealed bids are a common method of procurement, it is not always the most advantageous or practical method of source selection; and

(c)  Meaningful competition can be achieved through a variety of methods when procuring products or services. The methods include but are not limited to:

1.  Price competition as represented by the initial or acquisition price;

2.   Competition  as represented by price and performance evaluations of the competing items and suppliers;

3.  Competition as represented by evaluation of the capabilities of bidders or proposers to perform needed services;

4.  Competition as represented by evaluation of the capabilities of the bidders or proposers to perform the services followed by a negotiation or price; or

5.  Competition as represented by another method of procurement that is reasonably calculated to satisfy the city's need.

(2)   Except as provided in this ordinance, all public contracts shall be based upon bids evaluated and awarded based on optimal value to the city, and made under conditions that foster competition among a sufficient number of potential suppliers and contractors that offer a wide spectrum of products and services and that represent a broad marketplace. Fostering competition shall be reflected in:

(a)  Writing specifications and procurement documents in a simple and easy to read format;

(b)  Searching for new sources of supply;

(c)  Attempting to make solicitation documents simple and inviting;

(d)  Everyday courtesy shown to prospective suppliers and contractors; and

(e)  The way information on contracting opportunities is provided to suppliers and contractors, including but not limited to advertisement in publications of general circulation, and any other reasonable methods that encourage competition and are consistent with this ordinance.

(3)  The city may evaluate every aspect of competition in its effort to purchase products or services, choose the appropriate solicitation process in accordance with the criteria in subsection  (1) of this section, and arrive at offers that represent optimal value to the city. Except as provided in this ordinance, all public contracts shall be based upon competitive bids and awarded to the lowest responsible bidder.

(4)  The purchasing agent shall maintain a record of all public contracts awarded including those exempt under this ordinance. Except for contracts under $2,500, the record shall include the bids solicited and received and determinations made by the purchasing agent.

(5)  Notwithstanding provisions of law requiring the city to enter into contracts with the lowest responsible bidder and subject to subsection (6) of this section, the purchasing agent, when purchasing materials and supplies, shall give preference to materials and supplies manufactured from recycled materials.

(6)  The city shall give preference to materials and supplies manufactured from recycled materials if:

(a)  The recycled product is available;

(b)  The recycled product meets applicable standards;

(c)  The recycled product can be substituted for a comparable nonrecycled product; and

(d)  Recycled products costs do not exceed the costs of nonrecycled products by more than five percent.

(7)  The city shall purchase lubricating oil and industrial oil from the seller whose oil product contains the greater percentage of recycled oil, unless a specific oil product containing recycled oil is:

(a)  Not available within a reasonable period of time or in quantities necessary to meet the city's needs;

(b)  Not able to meet the performance requirements or standards recommended by the equipment or vehicle manufacturer, including any warranty requirements; or

(c)  Available only at a cost greater than 105 percent of the cost of comparable virgin oil products.

(8)  The following classes of public contracts are exempt from competitive bidding as public contracts that do not encourage favoritism or substantially diminish competition and that result in substantial cost savings:

(a)  Contracts made with other governmental agencies;

(b)  Contracts made with qualified nonprofit agencies providing employment opportunities for disabled individuals;

(c)  Contracts determined by the purchasing agent to be available only through a sole supplier of goods, services, or both;

(d)  Contracts for which the prices or suppliers are established by governmental regulatory authorities;

(e)  Contracts for the purchase of personal property, public improvements or services that are based upon contracts currently in force awarded by any other public agency that is governed by state competitive bidding requirements.

(f)  Contracts for insurance, including employee benefit insurance.

(g)  Contract amendments for additional goods, services, or both, or for changes in the original specifications which increase the original contract price, provided:

1.   The original contract terms and conditions apply to the performance of the amendments; or

2.   The cost of all amendments does not exceed 10% of the original contract price. This 10% limitation may be increased an additional 10% upon determination by the purchasing agent that it is not reasonably feasible to require additional bidding to complete the purpose of the contract;

(h)  Contracts for equipment repair or overhauling provided the service or parts required are unknown and the cost cannot be determined without extensive preliminary dismantling or testing;

(i)  Contracts for any purchase the amount of which is less than $500;

(j)  Contracts for the purchase of the following forms of advertising: newspaper, trade journal, magazine, television, radio, and display signs.

(9)  The following classes of public contracts are hereby created and when the procedure for each class is followed such contracts do not encourage favoritism nor substantially diminish competition and do result in substantial cost savings to the city:

(a)  Contracts $500 to $2,500. The purchasing agent shall establish the procedures for awarding contracts for an amount $500 or more, but less than $2,500 in value for goods, services, or both, or for public improvements;

(b)  Contracts $2,500 to $10,000. All contracts for an amount which is valued $2,500 or more but less than $10,000 shall be based on informal quotations unless in the discretion of the purchasing agent the nature of the proposed contract requires formal quotations or formal bids.  The purchasing agent shall seek quotations from a sufficiently large number of potential bidders to insure sufficient competition to meet the best interests of the city. The council shall award the contract after receiving at least three responsive quotes. An award based on receiving less than three quotes may be made only on a determination by the council that poteiitial bidders were given a reasonable opportunity to submit quotes.

(c)   Contracts $10,000 to $50,000. All contracts for an amount which is valued $10,000 or more but less than $50,000 shall be based on formal quotations unless in the discretion of the purchasing agent the nature of the proposed contract requires formal bids. The council shall award the bid. 

Unless the purchasing agent determines that mailed invitations will notify a sufficiently large number of potential bidders to insure sufficient competition to meet the interests of the city or that an invitation published in a trade journal will give better notice to potential bidders, the solicitation of formal quotations shall be published at least once in a newspaper of general circulation the Sodaville area.

(d)  Contracts over $50,000. All contracts for $50,000 value or more shall be based on formal bids. 

The solicitation for bids shall be published at least once in a newspaper of general circulation in the Sodaville area and if the proposed contract is for a public improvement, the solicitation shall also be published in a trade newspaper of general state-wide circulation.

The purchasing agent shall avoid purchasing practices which segregate a public contract into contracts of lesser amounts for the sole purpose of avoiding the regulations of this subsection.

(10)  The contract review board may, by resolution, exempt other contracts from competitive bidding if it finds:

(a)  Granting the exemption is unlikely to encourage favoritism or substantially diminish competition for public contracts; and

(b)  The exemption will result in substantial cost savings to the City.

In making such finding, the board may consider the nature of the project; the estimated cost of the project; the cost savings anticipated by the exemption and the reasons competitive bidding would be inappropriate; proposed alternative contracting and purchasing practices to be employed; and the estimated date by which it would be necessary to let the contract.

(11)  Unless the product is exempt under provisions of this ordinance, specifications for public contracts shall not expressly or implicitly require any product by brand name or mark, nor the product of any particular manufacturer or seller. Specifications for public contracts may require a  product by brand name or mark, or the product of a particular manufacturer or seller if:

(a)  The product is copyrighted;

(b)  There is only one manufacturer or seller of the product of the quality required;

(c)  The efficient use of existing equipment or supplies requires acquisition of compatible equipment or supplies; or

(d) If the purchasing agent finds that it is unlikely that the exemption will encourage favoritism in awarding the public contract or substantially diminish competition for public contracts; and the specification yields substantial savings to the city.

A prospective bidder may, up to five days before the deadline for receiving bids, appeal in writing to the council any specification adopted pursuant to subsection (3). The notice of appeal shall state the reasons for the protest and any proposed changes to the specifications. Unless the appellant and the council agree to a longer period, an appeal shall be heard within 15 days of the receipt of the notice of intent to appeal. At least 10 days before the hearing, the purchasing agent shall mail notice of the time and location of the hearing to the appellant. The council shall hear and determine the appeal on the basis of the appellant's written statement, the purchasing agent's written report of his or her findings and the product(s) specified, and any additional evidence the council deems appropriate. The council may permit the appellant to present testimony  and oral argument. The bid opening date shall be extended if necessary to allow consideration of the appeal and issuance of addenda to bid documents.

(12) The purchasing agent shall follow the following procedures in competitive bidding:

(a)  The purchasing agent shall solicit bids by:

(1)  Direct mail request to the prospective bidders;

(2)  Telephone;

(3)  Public notice posted on the bulletin board of the Sodaville city hall;

(4)  Advertisement in a newspaper of general circulation in the city of Lebanon;

(5)  Advertisement in newspaper which in the opinion of the purchasing agent is likely to promote bids; or

(6)  By a combination of two or more of the above.

(b)  The purchasing agent shall require bid security not to exceed ten percent of the base bid(s) for public improvement contracts in excess of $50,000. When deemed necessary, the purchasing agent may require bid security even though the contract is of a class previously exempted from the requirement. Bid security not to exceed ten percent of the bid may be required by the purchasing agent, and, if required, shall be stated in the bid documents. Bid security shall not be required for contracts of less than $10,000 unless the purchasing agent finds that this does not discourage competition.  The bid security shall be forfeited if the bidder fails to execute the contract promptly and properly if awarded.  The bid security of unsuccessful bidders shall be returned after the contract has been executed or all bids have been rejected. The following forms of bid security will be accepted by the City provided they are fully assigned to the City or payable to the City on demand:

(1)  Surety bond from a surety company authorized to do business in Oregon;

(2)  Cashiers check, certified check, or savings and loan secured check;

(3)  Other types of bid security approved by the purchasing agent prior to bid opening.

Except as provided above, all other public contracts shall be exempt from the requirement for bid security and bond unless the purchasing agent determines it is in the City's best interest to require bid security or a bond.

(c)   The purchasing agent shall have the authority to reject all or any part of any bid not in compliance with all prescribed bidding procedures and requirements. Reasons for rejection may include, but are not limited to finding that:

(1)  The bidder has not prequalified or has been disqualified under ORS 279.039; or

(2)  The bidder has been declared ineligible by the Commissioner of the Bureau of Labor & Industries;

(3)  The bid is nonresponsive;

(4)  The supply, service, or construction item offered in the bid is unacceptable by reason of its failure to meet the requirements of the bid documents or permissible alternates or other acceptable criteria set forth in the bid documents; or

(5)  The bidder has failed to provide performance security, if required; or

(6)  The bidder is not capable of satisfying the terms and conditions of the public contract in a timely manner due to financial incapacity, inability to obtain bonding, loss of license, or other objective cause; or

(7)  The bidder within the last five years has been found to have committed fraud, misrepresentation, price-rigging, unlawful anti-competitive conduct, or similar behavior in a civil, criminal, or administrative proceeding; or

(8)  The bidder has repeatedly breached contractual obligations to public or private contracting agencies in the last three calendar years from the scheduled date of the bid opening; or

(9)  Other circumstances of the particular bid, proposal, or bidder indicate that acceptance of the bid would impair the integrity of the selection process or result in an imprudent contract by the City; or

(10)  The bid is not in the public interest.

(d)   Except as provided in this paragraph, the purchasing agent shall require that all public improvement contracts for $10,000 or more be secured by a good and sufficient bond to assure performance of the contract and payment of the obligation incurred in the performance. For all other contracts, when deemed necessary by the purchasing agent, a good and sufficient performance and payment bond may be required. The bid solicitation shall indicate if performance and payment bonds shall be required.  The requirements of this paragraph may be waived for contracts awarded based upon the purchasing agent finding an emergency exists requiring prompt execution of the contract, unless the council requires otherwise upon receiving the purchasing agent's report of the emergency conditions.

(e)  The purchasing agent shall have the authority to award all bids or contracts except those which are awarded by the city council.

(f)   Contracts shall be awarded based on the lowest responsible bid, as that term is defined in Section 1 of this ordinance. Notwithstanding this requirement, the purchasing agent and city council shall give preference to the purchase of materials and supplies manufactured from recycled materials if:

(1)  The recycled product is available;

(2)  The recycled product meets applicable standards;

(3)  The recycled product can be substituted for a comparable nonrecycled product; and

(4)  Recycled products costs do not exceed the costs of nonrecycled products by more than five percent.

(g)  The city shall purchase lubricating oil and industrial oil from the seller whose oil product contains the greater percentage of recycled oil, unless a specific oil product containing recycled oil is:

(1)  Not available within a reasonable period of time or in quantities necessary to meet the city's needs;

(2)  Not able to meet the performance requirements or standards recommended by the equipment or vehicle manufacturer, including any warranty requirements; or

(3)  Available only at a cost greater than 105 percent of the cost of comparable virgin oil products.

(h)  When the award is not given to the lowest bidder, a full and complete statement of the reasons for placing the order elsewhere shall be prepared by the purchasing agent, filed with other papers relating to the transaction.

(13)  When the purchasing agent finds an emergency exists because of circumstances that could not have been reasonably foreseen that create a substantial risk of loss, damage, interruption of services or threat to the public health or safety that requires prompt execution of a contract to remedy the condition, (s)he may waive any of the requirements of this ordinance when awarding a public contract. When a contract for $10,000 or more is awarded after such a waiver, at the next meeting of the council following the waiver, the purchasing agent shall submit a written report stating with specificity the emergency conditions necessitating prompt execution, the provisions waived, the public contracts for $10,000 or more awarded under this subsection, and the length of time the emergency conditions are expected to persist. Upon receiving the purchasing agent's report required by this subsection, the council may modify or reject the decisions of the purchasing agent. In any event, any contract awarded under this subsection must be awarded within 60 days following the declaration of the emergency by the purchasing agent, unless the council grants an extension. Furthermore, the cost of contracts awarded under this subsection shall not exceed the unexpended appropriation for operating contingencies. At the conclusion of emergency authorization, the purchasing agent shall submit to the council another written report of the public contracts awarded under waivers for $10,000 or more during the emergency. A contract may also be exempted from competitive bidding if the board, by unanimous vote, determines that emergency conditions require prompt execution of the contract. A determination of such an emergency shall be entered into the record of the meeting at which the determination was made. 

Section 6. Hearing on Appeal of Disqualification.

The procedure in this section shall apply when the city determines to require pre-qualification of all bidders for a particular public contract. A person who has been disqualified as a bidder by the purchasing agent may appeal such disqualification to the board as provided in this subsection: 

(a)  The person shall notify the purchasing agent in writing that he or she wishes to appeal a disqualification within three business days after receipt of the notice of disqualification, and shall state specifically wherein there was error by the purchasing agent.

(b)  Immediately upon receipt of such written notice of appeal, the city purchasing agent shall inform the board.

(c)  Upon receipt of notice of appeal, the board shall notify the person appealing of the time and place of the hearing.

(d)  The board shall conduct the hearing according to the provisions of ORS 279.045(3) and decide the appeal within 10 days after receiving the notification. The board may affirm, reverse or modify the decision of the purchasing agent, and shall set forth in writing the reasons for its decision.

Section 7.  Disposal of Surplus Property.

The purchasing agent shall have the authority to declare personal property surplus, and to dispose of the surplus personal property by:

(a)  Trading it in on the purchase of replacement equipment or goods;

(b)  Selling it to the highest bidder at an advertised public auction or after an advertised call for bid;

(c)  Selling it at liquidation sale if the price of each item is $2,500 or less; or

(d)  Selling it at private sale without further advertising or taking of bids.

The purchasing agent shall select the method of disposal which maximizes the value the city will realize from disposal of the surplus property.

Section 8. Prohibition  of Interest.

In developing requests for proposals or bids, in soliciting bids or awarding any public contract, the purchasing agent or any officer or employee of the city shall comply with the state laws regarding government ethics.

Section 9. Gifts and Rebates.

The purchasing agent and every officer and employee of the city are expressly prohibited from accepting, directly or indirectly, from any person, company, firm, or corporation to which any purchase order or contract is or might be awarded, any rebate, gift, money, or anything of value whatsoever, except where given for the use and benefit of the city.

Section 10. Unauthorized Purchases. 

Except as provided in this ordinance, it shall be unlawful for any officer or employee of the city to purchase any supplies or make any public contract other than through the purchasing agent; and any purchase order or contract made contrary to the provisions hereof shall not be approved by the city officials; and the city shall not be bound thereby.

Section 11. Street, Sewer, and Water Improvements. 

Nothing contained in this ordinance shall be construed in any manner to render invalid any street, sidewalk, sewer, or water improvement or assessment.

Section 12. Penalties.

Any person violating any provision of this ordinance shall, upon conviction thereof, be punished by a fine not to exceed $500.00. Each violation of a provision of this ordinance shall constitute a separate offense; and each day or portion thereof over which the same violation occurs shall constitute a separate offense.

Section 13. Validity.

If any section, subsection, sentence or part of this ordinance shall be held to be void by any court of competent jurisdiction, the remaining parts of this ordinance shall remain and be in full force and effect; and the council hereby declares that the provisions of the ordinance are not interdependent.

Passed by the Council in 1994