Charles County, MD Purchasing Procedures

Editor's Note: This ordinance supersedes the former provisions of Ch. 203, adopted 3-8-1977 by Res. No. 77-10.

§ 203-1 Purchasing and procurement policies generally.

Purchasing and procurement.

Purchasing and procurement authority designated. The Chief of Purchasing shall be responsible for purchasing or contracting for all supplies and contractual services required by using agencies, except those specifically exempted in writing by the County Commissioners.

[Amended 5-22-2013 by Bill No. 2013-07]

Unlawful purchases or procurements. It shall be unlawful for any officer or employee to purchase, contract or order any equipment, supplies or services except as authorized by the Chief of Purchasing or through the procedures defined herein, and the County shall not be responsible for payment for any such unauthorized purchase or procurement.

Competitive bidding. Unless otherwise provided by law or by these policies, all purchases or procurements with an aggregate value exceeding $25,000 shall be made by advertised bid. All solicitations for bids shall be advertised and posted pursuant to law. Full opportunity to bid shall be granted to all qualified responsive and responsible bidders. Vendors may be removed from the bidders' list by the Chief of Purchasing for any of the following reasons:

[Amended 2-28-2012 by Bill No. 2012-05; 5-22-2013 by Bill No. 2013-07]

Failure to reply to three successive bid invitations. A "no bid" shall be considered a reply.

Repeated delinquency in making deliveries or default.

If they have been suspended or debarred by any County, state or federal procurement authority.

[Amended 5-22-2013 by Bill No. 2013-07]

Joint or cooperative purchases and procurements. The Chief of Purchasing may engage in programs involving joint or cooperative purchases and procurements with other public jurisdictions, including independent agencies operating under state law, the State of Maryland, other counties and municipalities and volunteer fire departments and rescue squads of these jurisdictions. The Chief of Purchasing may utilize formal bid contracts established by these jurisdictions when beneficial to the County. This may be accomplished without specific Board approval for individual transactions.

Unit cost contracts. Unit cost contracts may be issued covering indeterminate requirements of specific commodities and services where the unit cost for the commodities or services is determined through competitive bidding procedures and agreed upon at the beginning of the contract period. The exact quantity to be purchased may be unknown. All unit cost contracts shall include instructions as to release format, item limitations, dollar limitations per purchase, if applicable, pricing provisions and billing instructions. The Chief of Purchasing shall distribute to all using agencies information detailing the provisions and pricing of unit cost contracts.

[Amended 5-22-2013 by Bill No. 2013-07]

Emergency and sole source procurement. If the purchase or contract is over $25,000, the President of the Board of County Commissioners shall approve it after review by the County Administrator. There are instances when an emergency or sole source procurement is necessary. The following is a list of examples:

[Amended 5-22-2013 by Bill No. 2013-07]

Emergency purchase is necessary. An emergency shall be deemed to exist when:

There is a danger of death or injury if uncorrected.

There is risk of destruction or serious damage to County property.

A breakdown of machinery or other incident threatens or terminates essential services to the public.

Supplies or services are proprietary in nature.

When competition is precluded because of secret manufacturing processes or patent and/or copyrights and control of basic raw materials which are only available from a single sole source and no equivalent processes, products, services or materials can reasonably be obtained.

When competition has been unsuccessfully attempted. In such case, the Chief of Purchasing shall document the firms and individuals contacted and the date of such contact.

In cases where no bids are received, or only a single bid is received, in response to formal advertising.

In circumstances when it is impracticable and/or in the best interest of the County.

Competitive pricing. Whenever practicable, it shall be the policy of the Purchasing Office to secure adequate competition to assure that the purchase or procurement is made at the lowest possible cost consistent with the quality and delivery requirements of the using agency and the provisions of this section. Competitive pricing shall be obtained and at least three quotes documented in all transactions estimated to result in expenditures of $5,000 to $24,999. If three quotes cannot be obtained, information shall be documented in the file to that effect. Phone quotes or written quotes may be utilized.

[Amended 2-28-2012 by Bill No. 2012-05; 5-22-2013 by Bill No. 2013-07]

Small procurements. Small procurement cards may be issued covering indeterminate requirements of commodities and services. This system is to provide an expeditious means of obtaining incidental items as needed. Small procurement cards are limited to $1,000 per purchase. All small procurement cards shall include instructions to the vendor as to release format, item limitations, dollar limitations, billing instructions and identification of persons expressly authorized to conduct such orders. Employees authorized to purchase under the small procurement card procedures are provided with identification cards, which are issued by and may be rescinded by the Chief of Purchasing. Small procurement cards must be turned in to Purchasing upon the termination of employment of the cardholder.

[Amended 5-22-2013 by Bill No. 2013-07]

Requisitions. The purchase requisition or online request shall be used in all cases as an instrument for requesting contractual services or commodities. Requisitions shall be approved by the appropriate supervisor prior to submitting to Purchasing. Requisitions with incomplete information shall be rejected by Purchasing.

Purchase orders. Purchase orders shall not be prepared without a substantiating, approved requisition from the using department. All purchases greater than $1,000, unless excepted, but less than $25,000 shall be prepared on a purchase order form, except for long-term supply contracts and small dollar purchases, which may be accomplished via other methods described herein. In the instance of long-term supply contracts or advertised procurement, a contract award notice will be mailed to the vendor.

[Amended 5-22-2013 by Bill No. 2013-07]

Verification of funds prior to purchase required. Except for emergency purchases, no purchase exceeding $1,000 shall be made until the availability of funds for the designated purpose is verified.

[Amended 5-22-2013 by Bill No. 2013-07]

Negotiations with vendors. No officer or employee of the County shall negotiate directly or indirectly with any vendor except with the approval of the Chief of Purchasing. Contact with employees in using departments by suppliers' representatives should be through or with the knowledge of the Chief of Purchasing.

Communications with vendors. Insofar as possible or practical, any communications with vendors should be in writing to avoid misunderstandings and to provide an historical file.

Purchases considered as possible conflicts of interest. Purchases of supplies, materials or services from a member of the governing body of Charles County or from members of his or her immediate family; or from any other officer or employee of the County or members of his or her immediate family; or from any member or employee of a commission, board or corporation controlled or appointed by the Commissioners or from members of his or her immediate family shall be documented to provide a record for the public establishing that the purchase was made in the best interest of the County, price and other factors considered. All such purchasing activity must comply with the provisions of the Charles County Code of Ethics, Chapter 170 of the Code of Charles County.

Purchases of capital assets. Purchases of capital assets, items with a useful life exceeding three years and costing $5,000 or more, shall require a purchase order. Trade-ins of assets shall be performed by the Chief of Purchasing only, and should only be done if the Chief of Purchasing can demonstrate that it is highly probable that this would provide a better economic value than if the asset were auctioned. Trade-ins also require the approval of the Chief of Purchasing. Rental/Purchase arrangements shall be coordinated only by the Chief of Purchasing, and approved in advance, similar to other capital purchases. Purchases of used assets must be specifically approved by the Chief of Purchasing.

[Amended 5-22-2013 by Bill No. 2013-07]

Public availability of pricing information. An open record policy shall be maintained whereby prices obtained through open competition and quotations are available to the public after a purchase is made upon receipt of a written request to the Chief of Purchasing.

Purchasing and procurement standards.

[Amended 2-28-2012 by Bill No. 2012-05]

Preferential purchasing and contracts prohibited. Except as proved by this section, it is not permissible to favor any particular individual or firm with orders or to give those submitting bids or quotations information which will give anyone advantage over others seeking County business.

Local purchases and contracts. Unless otherwise provided by this section or by other applicable law, purchasing of goods or services from vendors whose principal place of business is physically located in Charles County is considered in the best interest of the County, provided that cost, quality, specifications and delivery are deemed equivalent. In the event that these provisions cannot be met, it then shall be considered in the County's interest to procure from a vendor whose principal place of business is located in the State of Maryland.

Small Local Business Enterprise Program. This section establishes the Small Local Business Enterprise (SLBE) Program. Under this program, preference may be given to Charles County Small Businesses which qualify pursuant to the provisions of this section and become registered in the program. Preferences utilized shall include, but may not necessarily be limited to, a percentage preference applied to bids, preference points applied to proposal evaluations, and a small local business reserve. The Purchasing Division of the Department of Fiscal and Administrative Services shall implement the SLBE Program and adopt detailed procurement and purchasing processes, procedures and guidelines for using agencies and vendors necessary for the efficient administration of the program.

The initial preference percentages, evaluation points, reserve level and caps shall be established by Commissioner resolution and shall be part of and incorporated into this section by reference. Future modifications, if any, to these parameters, or the definition of a local business, shall be by resolution of the County Commissioners.

Definitions. In this section, the following words have the meanings indicated:

BROKER

A person that conducts business other than real estate, investment or insurance sales on a pass-through basis with respect to supplies and services.

LOCAL BUSINESS

A business in Charles County that has:

SMALL LOCAL BUSINESS RESERVE

Its principal place of business in Charles County; or

[2]

Twenty five percent of its number of full-time equivalent employees domiciled in Charles County; or

[3]

Has a branch or satellite office in the County that generates at least 25% of the company's annual gross sales.

SMALL BUSINESS

A business that is certified and maintains its certification in the State of Maryland Small Business Reserve Program.

SMALL LOCAL BUSINESS

A for-profit business, other than a broker, that meets the definitions and criteria for both a small and local business under this section.

Those procurements that are limited to responses from local small businesses as defined herein and which do not exceed informal bid limits as may be adopted and modified from time to time by the County Commissioners.

Small local business eligibility.

A small local business shall be certified in the State of Maryland Small Business Reserve Program (SBPR), shall maintain that certification and shall comply with all provisions of the state program, including annual recertification.

[2]

In addition to obtaining and maintaining certification in the state program, a small local business shall meet all additional County program requirements at the time of the submission of a bid or proposal in order to be eligible for any SLBE program preference.

[3]

A small local business is no longer eligible to participate in the program when:

[a]

The business has received more than $3 million in awards within any sixty-month period based upon their SLBE status either as a prime contractor or a subcontractor, or

[b]

The business exceeds the maximum annual gross sales or maximum number of employees established in the criteria for certification in the Maryland Small Business Reserve Program; or

[c]

No longer complies with the definition of a local business.

Discontinuation of Maryland Small Business Reserve Program. In the event the State of Maryland discontinues its Small Business Reserve Program, the County Small Local Business Enterprise Program shall continue under the last small business reserve gross sales, employee and other criteria in effect at the time of the termination of the state program and the Purchasing Division shall establish procedures to implement and maintain an equivalent small business certification process to that of the state program.

Exclusions. In addition to the exclusions contained in the aforementioned resolution, the President of the County Commissioners may waive the application of this section to a specific contract, bid or proposal if it conflicts with the overall objectives and responsibilities of this chapter or would be contrary to the best interests of the County.

Enforceability. This section does not give any person, including a small local business, any right or status, including standing, to challenge the award of a contract or subcontract under the County procurement system.

Penalties. A person must not willfully make a false statement to a County employee for the purpose of obtaining eligibility in the Small Local Business Enterprise Program under this section or fraudulently obtain, or attempt to obtain, or aid another person in fraudulently obtaining or attempting to obtain a contract or funds to which the person is not entitled to under this section. A violation of this section shall be deemed to constitute a material breach of any contract awarded by the County and the Purchasing Division may terminate the contract or exercise any other appropriate remedy available to it. In addition, any person or firm found to have violated these provisions may be disqualified by the Purchasing Division from doing business with the County for up to two years.

Maintenance of files and records. Complete files are to be maintained in the Purchasing Division consisting of at least the following:

[Amended 5-22-2013 by Bill No. 2013-07]

Requisitions and purchase orders and copies of related correspondence.

General correspondence.

Bidders' lists.

Bids and quotations.

Negotiated purchase substantiations.

[1]Violations of policies and procedures. The Director of Fiscal Services shall immediately report to the County Administrator the following for administrative action or referral to the County Attorney:

Any violations of purchasing and procurement policies.

Any situation where a vendor is not responsive or cooperative in providing requested information or invoices after reasonable attempts to secure same have been made.

Any unusual delays in awarding contracts due to nonresponsiveness of using agencies.

Abuse of the emergency purchase order system by a particular employee, division or agency.

Capital purchases, not properly charged to capital outlay or preapproved by the County Administrator.

Editor’s Note: Former Subsection R, regarding additional detailed purchasing and procurement procedures, was repealed 5-22-2013 by Bill No. 2013-07. This bill also redesignated former Subsection S as Subsection R.

§ 203-2 Competitive bidding.

Specifications.

Preparation; changes or modifications. The preparation of proper specifications is jointly the responsibility of the requesting department and the Purchasing Division. Prior to obtaining bids, the Chief of Purchasing may modify those specifications submitted by the using agency to permit competitive bidding and provide for a level of quality commensurate with the intended use of the article. The Chief of Purchasing shall notify the using agency of his intent and provide the agency with full particulars regarding the need, reason, extent and nature of the changes. Disputes shall be referred through the Director of Fiscal Services to the County Administrator for resolution.

Standards of quality. A primary consideration in the preparation of specifications shall always be that the proposed expenditures are derived from public funds and administered by public agencies. Therefore, luxury or deluxe level of quality may not be in the public interest. The specifications shall reflect an adequate, standard quality of merchandise consistent with the end use requirements and shall represent an optimum relationship between quality and prices.

Types of specifications.

Technical or design specifications. These shall describe in detail the construction of the item desired.

Performance specifications. These describe the function and use of the product as the basic definition.

"Or equivalent" notation. This may be used to identify the level of quality desired and must always be used when a brand name is noted on a request.

In using any of the above types of specifications, it shall be the responsibility of the Chief of Purchasing to afford a basis for full and fair competitive bidding.

[Amended 2-28-2012 by Bill No. 2012-05]

Bid security and/or performance bonds. The use of bid surety and/or performance or payment bonds is at the discretion of the Chief of Purchasing. Bid security, in the form of a certified check or bonds, shall be for a specific sum of money. All bid and performance bonds shall be issued by companies licensed to do business in the State of Maryland. Bid securities shall be returned to the unsuccessful bidders immediately after award of the contract and to the successful bidder only after receipt of his performance and payment bonds and proper execution of the contract. Failure to execute the contract or furnish required bonds within the specified time may result in forfeiture of the bid security to the County Commissioners as liquidated damages.

Receipt and opening of bids.

Sealed bids must be received and opened at the prescribed time and date. Bids received after the prescribed time, regardless of reason, will be returned to the bidder unopened, with a letter of explanation. No bids may be changed or withdrawn after bid opening.

The Chief of Purchasing shall be responsible for setting the amount of bid bond required, if any. If a bid invitation specifies that a bid surety shall be submitted and such surety is omitted, the bid will not be read, recorded or considered.

All bids shall be publicly opened, read aloud and recorded. The tabulation shall be available for inspection in the Purchasing Office and made available to vendors in attendance. The Chief of Purchasing shall not attempt to give interpretations or answer questions until such time as he has had adequate time to review and study proposals.

A representative from the using agency or department is encouraged to attend the bid opening. At times, when an unusually complex or extensive bid is to be opened, the Chief of Purchasing may request the attendance of the County Attorney.

Contract award.

All formally advertised contracts shall be awarded by the Board of County Commissioners through the County Administrator, upon recommendation of the Department of Fiscal and Administrative Services, in accordance with budget policies and delegated authorities and procedures adopted by the Board as may be modified from time to time. Any extensions or modifications of existing contracts may be approved based upon the following delegations. For conract extensions, the delegation limit is based upon the annual maximum value of the contract extension. For contract modification, the delegation limit is based upon the cost of the modification, if any. Modifications resulting in an increase of more than 10% of the original contract amount must be submitted to the County Administrator for approval, regardless of the actual dollar amount of the modification.

[Amended 5-22-2013 by Bill No. 2013-07]

The Director of Fiscal and Administrative Services shall submit a written award recommendation to the President of the Board of County Commissioners through the County Administrator covering each formally advertised contract in excess of $25,000. This award recommendation shall include the following information:

[Amended 5-22-2013 by Bill No. 2013-07]

The bid number, title and opening date.

The department.

A tabulation of bids received.

(d)

Award recommendations.

(e)

Basis of award recommendations.

(f)

The signature of the County Attorney attesting to the legal sufficiency of the contract documents.

Notification to bidders.

Successful bidders. After a bid has been awarded by the Board of County Commissioners, the Chief of Purchasing shall notify the successful bidder. The following methods of notification may be used:

A contract award notice shall be mailed to the vendor.

A letter of award with a request for submission of performance and payment bonds, when applicable, shall be sent to the bidder.

A notice to proceed, with a copy of the executed contract, shall be sent to the bidder.

Unsuccessful bidders. The Chief of Purchasing shall be required to issue notifications to the unsuccessful bidders and return bid bonds or a certified check if included as a bid requirement.

§ 203-3 Disposition of surplus property.

Methods of disposition. The Chief of Purchasing is responsible for the disposition of surplus, obsolete and scrap supplies and equipment. Disposition may be made in any of the following ways:

Request vendor to substitute for other material.

Transfer to other County departments or agencies.

Return to supplier for credit.

Outright sale via advertised bid or auction.

Scrapping by disposal in the landfill or by other appropriate means when the item has no cash value, or when the cash value is less than the administrative costs to process the item for sale. The Chief of Purchasing shall make this determination.

[Amended 5-22-2013 by Bill No. 2013-07]

Trade-in, with the approval of the Chief of Purchasing.

[Amended 5-22-2013 by Bill No. 2013-07]

Sell for salvage value.

[Added 5-22-2013 by Bill No. 2013-07]

(8)

By donation with the approval of the County Administrator.

[Added 5-22-2013 by Bill No. 2013-07]

Lists of obsolete or scrapped supplies or equipment.

Submission; contents. All agencies shall periodically submit to the Chief of Purchasing a listing of any supplies and equipment which are no longer used or which have become obsolete, worn out or scrapped. This listing should include a full description, including serial numbers, condition, estimate of value, suggested disposition and when and where the item(s) can be inspected.

Review. The Chief of Purchasing will review all lists to determine the possible use of any surplus property by another agency.

Sale of property.

Bids. All bids are to be properly recorded with each transaction and held available for inspection in the files of the Purchasing Office.

Notification; transfer of title. Notification of award shall be made by letter from the Chief of Purchasing. After payment, a receipt issued by the Chief of Purchasing shall constitute transfer of title to the property to the buyer.

Transfer of title of motor vehicles will be conducted by the Fleet Manager of Department of Public Works-Facilities.

[Added 5-22-2013 by Bill No. 2013-07]

Use of proceeds. Gains on disposal of assets shall be calculated and reported in a separate general ledger revenue account in the general fund or an enterprise fund, as applicable. Such gains, if significant, may be used as a revenue source for purchases of replacement assets, if specifically approved by the County Commissioners.

§ 203-4 Law enforcement supplies and equipment.

The responsibilities and authorities of the Charles County Chief of Purchasing and the County Commissioners, as defined in this chapter, shall be delegated to the Sheriff of Charles County for the purchase of all materials, equipment and services for agencies over which the Sheriff has expenditure control and responsibility.

The Charles County Sheriff shall otherwise comply with all other purchasing policies and procedures as defined under this chapter to the extent applicable.

The Charles County Purchasing Office shall be available to assist the Sheriff in providing information regarding potential suppliers, specifications, open supply contracts and other relevant information.

The Charles County Sheriff shall establish internal controls surrounding purchasing transactions to ensure that:

Proper purchasing and accounting records are maintained.

Proper approvals for purchases are obtained.

Competitive bidding policies and procedures are followed.

Sole-source or emergency purchases are documented and approved.

Receipt of merchandise is properly controlled and documented.

Inventory records are properly maintained.

Check requests to the Department of Fiscal Services are adequately documented.

(8)

Disposition of surplus property is properly controlled and recorded in the Accounting records.

The internal control policies and procedures established by the Sheriff shall be documented, in writing, and are subject to the approval of, modification by or audit ordered by the County Commissioners of Charles County.

The Director of the Department of Fiscal and Administrative Services and the internal auditor for the County Commissioners shall be available to assist in documenting or setting up internal control policies and procedures for the Charles County Sheriff.

[Added 5-22-2013 by Bill No. 2013-07]

Article II Minority Business Policies and Procedures

[Adopted 5-22-2013 by Bill No. 2013-07[1]]

MINORITY BUSINESS ENTERPRISES

Editor’s Note: This article was originally adopted as Ch. 204, but was redesignated to maintain the organization of the Code.

§ 203-5 Definitions.

As used in this article, the following terms shall have the meanings indicated:

As defined in the State of Maryland Department of Transportation's Minority Business Enterprise Program for state contracts, which includes African Americans, American Indians/Native Americans, Asians, Hispanics, women and physically or mentally disabled persons and disabled American veterans.

§ 203-6 Qualifications.

Minority businesses can be qualified through Federal 8(A) Registration, the State of Maryland Department of Transportation's Minority Business Enterprise Program registration or a Charles County government-administered certification process.

§ 203-7 Minority Business Program.

Policy. The following practices and procedures apply to the minority business enterprises (MBES) in County procurement activities for commodities and sources.

Practices/procedures. The Charles County Purchasing Office shall:

Maintain/provide information regarding the state of Maryland Department of Transportation's certified MBE/business and program. Provide technical assistance regarding forms to complete, where to submit certification application form(s), who to contact for technical questions, and related matters.

Provide maximum opportunity for MBES to participate in the County's procurement process through dissemination of bid information and solicitations in publications which primarily target MBE firms.

Include a mandatory MBE questionnaire in all bid solicitations which would identify the MBE status of a given firm and the total percentage of the overall contract which would be provided by MBE firms.

Include in every bid solicitation package either a copy of the entire MBE program or those elements of the program which would apply to that particular solicitation.

Include a statement in every bid solicitation that "certified minority business enterprises are encouraged to respond."

Encourage the use of MBE subcontractors by contractors which have been awarded County construction contracts in order to meet the established 15% and 25% short and long-term goals, respectively.