Finance Committee Agenda and Packet 2021 05 17

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SUBJECT: PURCHASING POLICY DATE: MAY 17, 2021 PAGE3OF4 Section III — Purchase Requisitions • The Policy requires purchase requisitions to initiate the purchase of materials or services of $2,500 or more. A purchase requisition, when required, should be submitted for approval prior to the incurrence a liability. • Purchase requisitions are prepared and submitted by departments and approved by Finance and City Manager. Approved purchase requisitions result in purchase orders. Section IV — Purchase Orders • A purchase order authorizes a vendor to release goods or services to the City and informs them that funds have been encumbered (committed) to pay for the goods or services. A purchase order becomes a binding contract when the order is completed and signed by an authorized representative of the City and the vendor demonstrates his acceptance of the purchase order through the initiation of some action to fill the order. • The Policy gives the Finance Department the responsibility for the completion and issuance of all purchase orders following the approval of the purchase requisition. • The Policy lists types of payments that are exempt from the purchase requisition/order procedures. Section V — Bidding • The Policy goes into great detail on the types of bids/quotes/proposals and the required procedures, including bonding requirements and insurance requirements. • The Policy allows suspension of bidding procedures when using other approved bid lists (State, MAPO, GSA, etc.) Section VI — Sole Source Purchases, Local Vendor Purchases, and Ethics • The Policy allows suspension of bidding procedures when there is an approved sole source purchase. • A sole source purchase may be made if there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. • The Policy stipulates a local vendor preference. Bids may be awarded to local vendors providing the bid/quote/proposal is within 5% or $1000 (whichever is Tess) of the lowest bid. Section VII — Purchasing During Emergency of Disaster Conditions • The Policy defines "emergency" and grants Department Directors, the Finance Director, and the City Manager the authority to make certain purchases outside of the purchasing level requirements. CITY COUNCIL COMMUNICATION 8