The provisions of this division place responsibility of each purchase with the department head that requires the item to produce budgeted products or services. Through adoption of written policies and procedures, each purchase, whether large or small, shall be viewed as a contract. The procedures set forth in this division are designed to minimize costs while maximizing the benefit to the town within each purchase contract by extracting from each contract the best possible terms through negotiations as well as proactive contract administration. Each internal act of approval and/or exchange of information and documentation will be completed in a timely manner to further efficiency. Our overall budget objective is to give our customers, the citizens of the town, excellent services for their money.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1101)
(a)
Purchasing starts each year with the adoption of the annual budget. At the conclusion of the budget process, a schedule of items that are anticipated to be purchased during the year is generated.
(b)
Each department head is responsible for making the purchases of his/her department. General supplies better purchased collectively are the only exception. It is the responsibility of the department head to ensure funds are available before a purchase is made. The town administrator and/or town secretary will provide support on bid procedures on any purchase over $50,000.00.
(c)
Each department head may want to designate an employee in their department to assist with the purchasing function. Those involved with the purchasing will need to be very familiar with the town’s purchasing policy and procedures, as well as the laws of the state.
(d)
All purchases over $500.00 but under $3,000.00 must be authorized in advance by the department head. Purchases over $3,000.00 require prior approval of the town administrator.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1102)
(a)
Purchases under $500.00.
Purchases under $500.00 must be verbally approved by the department head prior to purchase or the ordering of products. If a department has access to petty cash, it should be utilized for purchases under $50.00. A receipt must accompany the petty cash form signed by the employee making the purchase. Any purchases made over $500.00 must be approved in advance by the department head or town administrator.
(b)
Purchases from $500.00 to $3,000.00.
The department head must approve all purchases over $500.00 but under $3,000.00 in writing prior to the purchase being made or placing an order.
(c)
Purchases from $3,000.00 to $49,999.00.
Purchases over $3,000.00 but under $50,000.00 require town administrator approval prior to placing an order or making a purchase. The employee should find the best terms available and submit the request to the department head for approval. The request will include the following information: item(s) to be purchased, three (3) faxed, electronically transmitted or phone quotes from competing providers, identify budget expenditure line item and department head signature. The request will be forwarded to the town administrator to determine the availability of funds and for final approval. The town administrator may choose to refer the purchase request to the mayor and/or town council. Once approved, the purchase can be made.
(d)
Purchases of $50,000.00 or more.
Purchases of $50,000.00 must be made by sealed bid, per state law, with town council approval.
(1)
Permission.
Before this competitive bidding process can begin, one has to determine if the amount will exceed $50,000.00. If indeed the contract amount will exceed the $50,000.00, permission must be granted from the town council to request sealed bids, or RFPs/proposals. Once permission is granted from the town council, several steps are involved in completing this process.
(2)
Specifications.
Bids specifications must be written by the department head and/or consultant and provided to the town secretary prior to advertisement. In addition, the department head will also need to provide specific information to the town secretary regarding who should receive bid packet information.
(3)
Advertisement.
Notice of the time and place at which the bids will be publicly opened and read aloud must be published at least once a week for two consecutive weeks in a newspaper published in the municipality. The date of the first publication must be before the 14th day before the date set to publicly open the bids and read them aloud. (Local Government Code, section 252.041) The town secretary will assist the department head in preparing the bid packet and will arrange for publication in the official newspaper of the town.
(4)
Award of contract.
If the competitive sealed bidding requirement applies to the contract for goods or services, the contract must be awarded to the lowest responsible bidder or to the bidder who provides goods or services at the best value for the municipality. (Local Government Code section 252.043) The town administrator will arrange for the town council to award the contract at the next town council meeting after bids are opened and publicly read aloud.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1103)
(a)
Each department is responsible for making the most of the resources available in their budget. That charge extends to the purchasing function for those goods and services specific to that department. In most cases, the department will better understand what are the best available terms and conditions.
(b)
When an employee or department head needs a good or service estimated to cost more than $3,000.00 but less than $50,000.00, he/she:
(1)
Identifies the item to be purchased.
(2)
Specifies or describes the item.
(3)
Contacts all potential vendors.
(4)
Obtains at least three bids, of which two must be from historically underutilized businesses.
(5)
Submits a request to the department head and to the town administrator for final approval.
(6)
Makes the purchase after approval.
(7)
Confirms receipt and performance.
(8)
Presents a voucher along with a statement or invoice to the town administrator for payment. Department heads are encouraged to retain a copy of the invoice or statement for their department records.
(9)
Tracks continuing purchasing issues such as warranty, replacement, maintenance, etc.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1104)
(a)
A request for purchase over $3,000.00 but under $50,000.00 must contain the following information:
(1)
Description of each item to be purchased;
(2)
Selected vendor, address, phone number, and contact person;
(3)
At least three bids, two of which must be from historically underutilized businesses;
(4)
Date of request;
(5)
Shipping instructions if applicable;
(6)
Itemized purchase price and quantities, with total;
(7)
Date required, and approximate date to be delivered or picked up;
(8)
Expenditure number;
(9)
Signature of department head;
(10)
Other approvals as required.
(b)
All requests for payment/check must be made by the department head on the appropriate voucher form and contain the following:
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1105)
All purchases in excess of $50,000.00 shall be bought on a sealed competitive bid basis. Department heads must be aware of statutes governing specific types of purchases. Department heads should confirm with the town secretary that all statutes are being followed.
(1)
Once the bid package is submitted, the town secretary:
(2)
The department head making the purchase:
(A)
Prepares the bid package with assistance from the town secretary or town administrator.
(B)
Identifies the budget line item number to be charged.
(C)
Attends the bid opening.
(D)
Issues the notice to proceed or award of bid letter.
(E)
Sends all requests for payment/check to the town administrator.
(F)
Administers the contract.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1106)
(a)
If the budget line item lacks a sufficient balance or there is no budget line item, it will be referred to the town administrator. Again, it is the responsibility of the department head to ensure funds are available prior to each purchase.
(c)
Such a budget transfer or supplement should be fully explained in writing and presented to the town administrator for recommendation to the town council.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1107)
Purchases for any material or service over $3,000.00 which can only be supplied by one source should be accompanied by a written memo explaining and fully describing the conditions that make the supplier an only source. Make sure it is an only source. Also, the need to purchase a specific make and/or model of equipment requires justification as described above. The town administrator will attach the signed copy of this memo to the request for purchase and/or voucher. “Only source” purchases are to be approved by the town administrator.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1108)
This procedure authorizes various purchases from companies with whom we conduct business on a day-to-day basis. Therefore, only small purchases up to $500.00 should be charged on open account as administered and approved by department heads. (Example: Office Depot, Nu-art Printing, etc.)
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1109)
Employees may use a town-issued credit card for charges in accordance with the procedures set forth in this division. Specifically, credit card purchases are subject to the monetary limitations in section 1.07.033 of this division. Under no circumstances shall an employee of the town use a town-issued credit card for personal use.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1110)
Emergencies requiring procedures outside normal methods need to be approved by the town administrator or the department head depending on the circumstances. Staff needs to strive to avoid emergencies caused by lack of planning. Because purchasing procedures can be an area of public concern, it is important to minimize emergency purchases.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1111)
Proper administration of warranties will ensure that repairs that should be paid by the vendor are not paid by the town. This is the responsibility of the department making the purchase.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1112)
Contracts, applications for title, tax exemption certificates, agreements and contracts for utilities shall not be signed by any employee unless authorized in writing by the town administrator.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1113)
When an order is received in partial shipment, the department head should note on his/her copy the amount received, date, damage, or any other pertinent information. When the order is complete, the department head should note on the request for payment the completeness of the order.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1114)
The invoice is checked against the request for purchase for correctness as to quantity and price. If no exceptions are found, the invoice and request for purchase are processed for payment by the department head. If there is a difference in the invoice and the request for purchase, it will be returned to the department head for an explanation.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1115)
Grants normally have their own set of purchasing requirements, which may or may not coincide with the usual methods. The town contracts to accept those requirements in return for receiving the funds. If the process is significantly different, it is important to create a field with the process written on a “note to file” to ensure compliance and adequate recordkeeping. Follow the process exactly. Most grant records need to be maintained for at least five (5) years. If in doubt, check with the town secretary.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1116)
Relations with vendors pertains to all purchasing activities that extend beyond the town government itself and reflect upon the public image of the town’s purchasing system. Such relations include the following:
(1)
The town maintains regular contact with many persons and companies in the course of its purchasing activities. The manner in which the contacts are maintained reflects on the town. Those involved in the purchasing function must exercise excellent negotiating skills remembering:
(A)
Fairness.
(B)
Cooperation, but not to the town’s detriment.
(C)
Consideration of difficulties.
(D)
Truthfulness in every transaction.
(E)
Respecting the confidence of each vendor.
(F)
Keeping free of any personal obligation to a vendor.
(G)
Maintaining a courteous and polite manner regardless of personal feelings.
(H)
Promoting the good will of the town.
(2)
Cultivation of a satisfactory relationship with representatives of vendors and others who supply goods and services to the town is essential to establish a mutual feeling of trust in all business dealings. These representatives can be of much benefit as a source of information, a problem solver, and an expediter and innovator of ideas.
(3)
Sales representatives who contact the town should be treated courteously and fairly and not be imposed upon or antagonized. They should be given reasonable time to make their inquiry or presentation. The authority to purchase should never be flaunted or used to suggest anything but an arm’s length business relationship as required by municipal staff. Employees involved with purchasing should avoid awarding bids and making purchases from people with whom they have a personal relationship. Employees shall not accept gratuities from outside vendors according to policy.
(Ordinance 447-08 adopted 2/19/08; 2004 Code, sec. 9.1117)