The Procurement Policy and Procedures is developed by the Purchasing
Department and its acceptance is subject to the approval of the Town
Board. It has been crafted so as to:
A. Establish a system that supports objective and unbiased competition;
B. Guard against favoritism and wastefulness;
C. Ensure that the results of procurement are to the Town's benefit;
and
D. Protect the best interests of the Town's residents and taxpayers.
All purchases for commodities, services and public works are
subject to federal, state, county and Town laws that regulate municipal
purchasing; the fundamentals for most of these regulations are as
follows:
A. New York State General Municipal Law §§ 103 and 104-b.
(1) Contained in New York State General Municipal Law Article 5A, §§ 100
through 109-b. In particular, New York State General Municipal Law
§ 103 relates to all governmental purchases of commodities,
services and technologies that are subject to the laws of competitive
procurement and are applicable for the following monetary thresholds:
commodity expenditures in excess of $20,000 and contracts for public
work involving expenditures in excess of $35,000. When using competitive
bidding, contracts are awarded to the "lowest responsible bidder"
after public advertisement for sealed bids.
(2) In January of 2012, changes were made to New York State General Municipal
Law § 103(1) which allow the Town to authorize, by local
law, the award of certain purchase contracts, including contracts
for services, subject to competitive bidding under General Municipal
Law § 103, on the basis of "best value" as defined in § 163
of the New York State Finance Law. The "best value" option may be
used, for example, if it is more cost efficient over time to award
the good or service to other than the lowest responsible bidder or
offeror if factors such as lower cost of maintenance, durability,
higher quality and longer product life can be documented.
(a)
This amendment provided that purchase contracts (including contracts
for service work, but excluding any purchase contracts necessary for
the completion of a public works contract pursuant to Article 8 of
the Labor Law) shall be awarded on the basis of best value rather
than to the lowest responsible bidder. Sections 3 through 11 amend
other subdivisions of § 103 and § 103-e of the
General Municipal Law to conform these subdivisions to allow for the
awarding of purchase contracts (including contracts for service work)
on the basis of best value.
(b)
Based on these changes to GML, the Town of Smithtown's
Procurement Policy and Procedures will now allow for the use of "best
value" as a method of awarding contracts in a manner that is in the
best interest of the Town.
(c)
Goods and services procured and awarded on the basis of "best
value" are those that are proven to optimize quality, cost and efficiency,
among responsive and responsible bidders/offerors. The determination
shall be based on an objective analysis of clearly described and documented
criteria as they apply to the rating of bids or offers. Where possible,
such determination shall also be based upon and include a quantifiable
analysis of the same. The criteria may include, but shall not be limited
to, any or all of the following:
[2]
Proximity to the end user if distance or response time is a
significant term;
[4]
Availability of replacement parts or maintenance contractors;
[6]
Product performance criteria and quality of craftsmanship.
(d)
Whenever any contract is awarded on the basis of best value
instead of lowest responsible bidder, the basis for determining best
value shall be thoroughly and accurately documented.
(3) Further amendments to General Municipal Law § 103 through
the addition of a new Subdivision (16) allow political subdivisions
"to make purchases of apparatus, materials, equipment or supplies,
or to contract for services related to the installation, maintenance
or repair of apparatus, materials, equipment, and supplies, . . .
as may be required by such county, political subdivision or district
therein through the use of a contract let by the United States of
America or any agency thereof, any state or any other county or political
subdivision or district therein..."
(a)
It is important to note that the use of such contracts ("piggybacking")
is conditioned on the contract that is to be utilized having been
"let in a manner that constitutes competitive bidding consistent with
state law, and made available for use by other governmental entities."
(4) Local Law No. 1-2015, passed April 23, 2015, allowed for the Town
of Smithtown Purchasing Department to utilize "best value" procurement
and "piggyback" on all contracts that were let in compliance with
NYS GML statutes.
B. Federal regulations.
(1) The GSA Cooperative Purchasing Program, authorized by statute, allows
state and local governments to purchase a variety of commercial supplies
(products) and services under specific GSA Schedule contracts to save
time, money and meet their everyday needs and missions. The Cooperative
Purchasing Program gives state and local government entities access
to:
(a)
Purchase information technology products and services, as well
as law enforcement, security, first responder, and marine craft equipment,
alarm and signal systems, and special purpose clothing (GSA Schedule
70);
(b)
A centralized IT and telecommunications source (GSA Schedule
84).
(2) Provide commodities/services for law enforcement and safety and security
purposing.
(3) In addition, there are hundreds of detailed rules and regulations
regarding the process/manner of the use of federal grant funds specific
to issuing agencies and intended usages.
C. Suffolk and other counties. Suffolk County and other county contracts
are acceptable, as permissible.
D. Town of Smithtown. Upon adoption of this Procurement Policy and Procedures,
the Town Board authorizes the award of certain purchase contracts,
including contracts for services, subject to competitive bidding under
General Municipal Law § 103, on the basis of "best value"
as defined in § 163 of the New York State Finance Law. The
Town law, in addition to requiring compliance with all applicable
federal, state, and county statutes, also has laws that have been
enacted solely by the Town. They are:
(1) Apprenticeship Training Program (ATP).
(a)
The Town of Smithtown requires any contractor or subcontractor,
prior to entering into a construction contract with the Town, to have
apprenticeship agreements, appropriate for the type and scope of work
to be performed, which have been registered with and approved by the
New York Commissioner of Labor in accordance with Article 23 of the
New York Labor Law, anything in § 5103 of the New York General
Municipal Law to the contrary notwithstanding.
(b)
If the amount bid for a construction contract awarded by the
Town, or the aggregate value of the individual construction contracts
on multi-prime contracts that comprise a project, is in excess of
$500,000, the contract(s) will be subject to Town Board Resolution
No. 2009-226, which requires that firms entering into contracts with
the Town for such work participate in registered and approved apprenticeship
training programs. The contractor and his subcontractors shall provide
evidence of participation in approved apprenticeship training programs
that are appropriate for the type and scope of work to be performed
under the agreement. In addition to this policy, any contract to be
awarded by the Town shall be subject to the requirements and conditions
set forth in the bid documents.
(2) Bid submission requirement.
(a)
To maintain the integrity of the bid process, the Town reserves
the right to reject any bids that are deemed incomplete, conditional,
obscure, or which contain irregularities of any kind, including unbalanced
bids. An unbalanced bid is one in which the amount bid for one or
more separate items is substantially out of line with current market
prices for the materials and/or work covered thereby.
(b)
"Tie bids" are low, responsive bids from responsible bidders
that are identical in price and which meet all the requirements and
criteria set forth in the Town's bid solicitation. As applicable,
a "tie bid" will be awarded by applying the following tie-breaking
criteria, in the order as stated:
[1]
To a vendor offering the highest prompt payment discount.
[2]
To a vendor with a principal place of business listed on the
bid document that is within the Township of Smithtown.
[3]
To a vendor with a principal place of business listed on the
bid document that is within the County of Suffolk, New York.
[4]
To a vendor with a principal place of business listed on the
bid document that is within the State of New York.
[5]
The drawing of lots, if all prior criteria are the same for
included vendors.
[a]
In the event that lots must be drawn to determine the award,
all tied bidders will be given the opportunity to witness the drawing.
[b]
Bidders will be given a minimum of five business days'
advanced written notice as to the place and time the drawing will
be conducted.
[c]
The drawing will be conducted by the Purchasing Department and
witnessed by at least one representative from the Town of Smithtown's
Town Clerk's office.
(c)
If, during the term of the contract, the contractor and/or his/her
subcontractor is not in compliance with these regulations, the Town
may suspend the work and/or take whatever action is deemed appropriate
as defined in the bid terms and conditions.
(3) Determination of need for formal bid or quotation.
(a)
Monetary thresholds.
[1]
In accordance with General Municipal Law § 103, competitive
bidding is required where it is reasonably anticipated that the aggregate
amount of the goods or services to be contracted for within one fiscal
year will exceed the monetary thresholds under General Municipal Law
§ 103 ($20,000 for the purchase of commodities, or $35,000
for public works or non-professional services as defined below).
[2]
No anticipated contract or purchase shall be divided or structured
with the intent of avoiding the requirements set forth in the Town
Procurement Policy and Procedures, and statutory law.
[3]
Prior to issuance of a purchase order pursuant to acceptance
of a competitive bid under an approved Town of Smithtown contract
(posted on the "R" drive), the Purchasing Department must possess
copies of documentation of required insurance and contract security
or performance bond, as applicable. Purchases should be made from
vendors with existing Town of Smithtown contracts, if a contract exists.
In these instances, blanket purchase orders are encouraged and should
be used to the extent permissible and practical.
[4]
When submitting a purchase order for payment on any purchase
order originally issued in an amount exceeding $20,000, the originating
department must submit a Contractor Performance Report (CPR) by scanning
it into KVS, before submitting the request to the Comptroller's
office. Any questions regarding this matter should be directed to
the Purchasing Department.
[5]
Any purchases exceeding $750 for non-Public Works projects (including non-professional services) or $1,499.99 for public works projects and professional services must adhere to the following applicable procedures (under §§
57-4 and
57-5) and have a Town-approved purchase order. Exceptions to this rule requiring a purchase order are expenditures for certain bills, including, but not limited to, insurance, performance bond reimbursements, snow contractors, tax bills, permit refunds, travel and mileage reimbursements, release of escrow, Medicare reimbursements, inter-governmental and intra-governmental purchases, petty cash reimbursements and invoices from outside counsel. All of these may be processed using vouchers. For convenience, blanket purchase orders should be used for gas, fuel oil, electric, phones, water, office supplies, equipment leases, dumpster fees, consultants, instructors and similar expenditures that are likely to result in an annual aggregate vendor expenditure exceeding $1,499.99.
[6]
No purchase order or contract shall be issued for an amount
that exceeds the competitive bidding thresholds stated above prior
to undertaking the formal bid process, except for those limited circumstances
set forth under this policy and applicable law.
(b)
Annual aggregate amount.
[1]
Every noncontract purchase that will require a purchase order
must be initially reviewed by the Purchasing Department to determine
whether it falls into the category of a commodities purchase or a
public works procurement request. Once that determination is reached,
a good faith effort must be extended to determine whether it is known
or can reasonably be expected that the annual aggregate amount to
be spent on the commodity or service exceeds the competitive bidding
thresholds.
[2]
Annual aggregate purchases shall be evaluated to determine cumulative
dollar amounts expected within 12 months or a given expected contract
term. As necessary, user departments' anticipated requirements
will be evaluated in an attempt to determine yearly values of commodities
and/or services. In addition, past history will also be taken into
consideration in evaluating the yearly cost associated with the purchase
of commodities and services.
[3]
If it is expected that the bid limit will be exceeded for any
one type of noncontracted commodity or service, completion of the
formal bid process shall take place. The decision to require the formal
bid process shall rest with the designated authority appointed by
the Purchasing Department.
For the purpose of the Town Procurement Policy and Procedures,
the following terms shall have the meanings as set forth herein:
BLANKET PURCHASE ORDER
A blanket purchase order gives authority to the vendor to
deliver subsequently authorized goods or services, as instructed by
a Town department and approved by the Director of Purchasing. These
subsequent instructions will indicate the specific services, goods
and quantities to be delivered and the specific delivery times, dates
and locations.
COMMODITIES
Standard articles of commerce in the form of material goods,
supplies, products, equipment or similar items with no more than incidental
labor required.
NON-PROFESSIONAL SERVICES
Performance of a task (labor) that may include providing
incidental materials in connection with said service.
PROFESSIONAL SERVICES
Services requiring specialized skill, training, knowledge,
expertise and technical skill, and involving the exercise of professional
judgment and discretion.
PUBLIC WORKS
Contracts for services, labor, construction, repairs and/or
maintenance or other work, that include the furnishing of supplies
or materials incidental to the work.
PURCHASE ORDER
Official documents that evidence the expenditure as authorized
by the designee for a commodity, public work or service on a one-time
basis or multiple purchases or blanket order, as may be applicable.
PURCHASE REQUISITION
The initial document generated in the accounts payable computer
software (presently KVS) pursuant to the process as stated in these
policies and procedures in order to generate a purchase order. It
must be created before committing to a purchase.
REQUIREMENTS CONTRACT
A contract for a specified period, with fixed unit pricing
and for an indefinite amount of goods or services to be furnished
as ordered.
VOUCHER
A purchasing document that is generated subsequent to purchase
of goods or services and receipt of an invoice from a vendor. The
circumstances that make use of a voucher appropriate are stipulated
in these policies and procedures.
Department heads may not obligate funds nor enter into any agreement
in excess of these limits without prior written approval from the
Purchasing Department.
A. P-Card or voucher.
(1) $0.01 to $750 ($0.01 to $1,499.99 with P-Card): Use of a Town of
Smithtown purchasing card (P-Card) or voucher enables authorized employees
to make purchases directly from any vendor that accepts the card or
for a purchase without a purchase order. Town departments participate
in the P-Card program on a voluntary basis. Use of the card or a voucher
eliminates the need to process individual purchase orders for most
small transactions; however, any such purchases can only be charged
to budget codes having adequate unencumbered balances to accommodate
the purchase. When using the P-Card, detailed card usage reports will
be provided to participating departments and to individual employees
authorized to use a P-Card. The P-Card may not be used for any personal
or unauthorized charges.
B. Purchase orders.
(1) $750.01 to $1,499.99: For purchases in the amount of $750.01 to $1,499.99
(except when using a P-Card as permitted), the department shall enter
a purchase requisition into the purchasing software. Such purchases
are at the discretion of the department head or his/her designee.
A Town-approved purchase order is required before the purchase.
(2) $1,500 to $2,999.99: For purchases in the amount of $1,500 to $2,999.99,
the department shall enter a purchase requisition into the purchasing
software. Such purchases are at the discretion of the department head
or his/her designee and will be made from the responsive, responsible
vendor offering lowest price, provided at least one other quotation
is received. Evidence of the second quotation shall be documented
in the purchasing software (currently KVS). A Town-approved purchase
order is required before the purchase.
(3) $3,000 to $19,999.99: For purchases in the amount of $3,000 to $19,999.99,
the department shall enter a purchase requisition into the purchasing
software with attachments detailing three written/fax/internet website
price quotes from three different vendors. The purchase requisition
shall include a detailed description of the required goods/services,
the appropriate budget code(s), a "ship to" location, a requisition
number, an estimated price (including applicable shipping charges),
suggested vendor(s) and department head's approval. The Purchasing
Department shall maintain the records of such quotes. A Town-approved
purchase order is required before the purchase.
(4) $20,000 and over: Purchase contracts for goods involving an expenditure
of $20,000 or greater, under General Municipal Law § 103
(for one purchase or multiple purchases of a particular item within
12 months), shall require competitive bidding. A Town-approved purchase
order is required before the purchase.
Department heads may not obligate funds nor enter into any agreement
in excess of these limits without prior written approval from the
Purchasing Department.
A. Voucher.
(1) $0.01 to $1,500: Use of vouchers may be used as noted above under §
57-4, Procedures for goods and services purchases. Any such purchases can only be charged to budget codes having adequate unencumbered balances to accommodate the purchase.
B. Purchase orders.
(1) $1,500.01 to $4,999.99: For purchases in the amount of $1,500.01
to $4,999.99, the Department shall enter a purchase requisition into
the purchasing software. Such purchases are at the discretion of the
department head or his/her designee and will be made from the responsive,
responsible vendor offering lowest price, provided at least one other
quotation is received. Evidence of the second quotation shall be documented
in the purchasing software (currently KVS). A Town-approved purchase
order is required before the purchase.
(2) $5,000 to $34,999.99: For purchases in the amount of $5,000 to $34,999.99,
the department shall enter a purchase requisition into the purchasing
software, attaching details of three written/fax/internet website
price quotes from three different vendors. The purchase requisition
shall include a detailed description of the required goods/services,
the appropriate budget code(s), a "ship to" location, a requisition
number, an estimated price (including applicable shipping charges),
suggested vendor(s) and department head's approval. The Purchasing
Department shall maintain the records of such quotes. A Town-approved
purchase order is required before the purchase.
(3) $35,000 and over: Public works or services involving an expenditure
of $35,000 of greater, under General Municipal Law § 103,
for a one-time public works or service purchase shall require competitive
bidding. A Town-approved purchase order is required before the purchase.