POLICY TITLE: Purchasing (POLICY #: 1600-015 CURRENT)

PURPOSE:

To establish a policy to obtain services or make its purchases from reliable suppliers, recognizing that although price is important, other elements of value, including quality, experience, environmental impact, ability to deliver at required times, service and customer relations, constitute the total cost to the Town.

DEFINITIONS:

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POLICY:

1.0 Where advantageous participation in Group Purchasing is authorized.

2.0 All purchasing is authorized through the adoption of the Financial Plan except when authorized under the Emergency Plan.

PROCEDURES:

SELECTION OF SUPPLIERS AND CONTRACTORS

1.0 Suppliers and contractors will be selected to ensure a high degree of flexibility, a good level of competition and a constant awareness of product development and technical improvements. They must possess high ethical standards, quality service, a good record of adhering to specification and maintaining timely deliveries.

2.0 All supplies of goods and services to the Town must be able to show, if requested, that they hold a valid business license at the time of supply.

3.0 Telephone orders may be placed for ‘rush’ type orders or services where there is only one source. Orders over $500.00 must not be placed without a purchase order.

4.0 When there is only one available supplier of a required product or service that meets the Town’s needs, terms or conditions for the purchase are completed through negotiation. Approval of the Director of Financial Administration or Chief Administrative Officer is required.

5.0 Emergency purchases involving safety and security may bypass purchasing policies but at the first available opportunity the appropriate authorization must be obtained.

APPROVAL AUTHORITY

a) Council - Over $50,000 b) Chief Administrative Officer - Up to $50,000 if approved in the Financial Plan c) Department Heads (including Finance Manager) - Up to $15,000 if within the budget amount identified and approved in the Financial Plan d) Superintendent of Transportation & Engineering; Engineering Technologist; Parks Supervisor - Up to $2,500 if within budget amount identified and approved in the Financial Plan e) Other Authorized Staff - Up to $1,000 as determined by the Chief Administrative Officer (Treasurer) and if within budget amount identified and approved in the Financial Plan

PURCHASING PROCEDURES

a) Purchases of less than $500

– No purchase order necessary but must be authorized by 3 (d) or (e)

b) Purchases between $500 and $5,000

– Preferably three telephone quotes (see Appendix A) – Lowest quote shall be accepted in all instances, except where there may be difference in availability, quality or service. – If the lowest bid is not accepted, the Chief Administrative Officer or Director of Financial Administration must approve the purchase order prior to issuance. Satisfactory justification should be provided for non-acceptance of the low bid based on difference in availability, quality, service or environmental impact.

c) Purchases between $5,000 and $10,000

– Three written quotations (or proposal call) (see Appendix B) – The Department Head or their designate will prepare and forward to the Finance Department a purchase order for all purchase requests in excess of $5,000 prior to the purchase being committed. – If the lowest bid is not accepted, the Chief Administrative Officer or Director of Financial Administration must approve the purchase order prior to issuance. Satisfactory justification should be provided for non-acceptance of the low bid based on difference in availability, quality, service or environmental impact.

d) Purchases between $10,000 and $25,000

– Formal written quotation or call for proposal required. – Each supplier is to be provided with the written specifications and/or terms of reference. – Lowest quote shall be accepted in all instances, except where there may be difference in availability, quality or service. Competitive quotations are not required to be opened in public. – At least 3 quotations should be received, subject to the availability of three suppliers. – If the lowest bid is not accepted, the Chief Administrative Officer or Director of Financial Administration must approve the purchase order prior to issuance. Satisfactory justification should be provided for non-acceptance of the low bid based on difference in availability, quality, service or environmental impact.

e) Purchases over $25,000

– Either written tender or proposal call – Written instructions to be issued by appropriate department – Selective invitation and/or public advertising – Department Head shall determine process and prepare purchase documents – Tenders, etc. shall be submitted sealed to Director of Financial Administration who will record date and time received and sign the envelope – Tenders shall be opened by the Director of Financial Administration and appropriate Department Head (see Appendix C) – In the event the lowest bid is not acceptable, or the purchase exceeds the budget appropriation, the purchase shall be approved by resolution of Council, upon recommendation from the Chief Administrative Officer and appropriate Department Head. – Purchases over $25,000 when not the lowest bid shall be approved by Council – Purchases over $50,000 shall be approved by Council – Reports to Council making recommendations on purchases must have approval of Director of Financial Administration and Chief Administrative Officer – Purchases of goods and services over $100,000 and Construction over $250,000 are subject to the Agreement on Internal Trade (AIT) and the following apply:

• local preference does not apply
• tenders are to be advertised electronically or on BC Bid (www.pc.gov.bc.ca) and must contain bid proposal information

f) Exemptions

The policies detailed in division four may be bypassed with the approval of the Director of Financial Administration when there is only one supplier or when the Town has an established practice of utilizing a unique brand or type of product (approval authority limits outlined in division three still apply)

PROFESSIONAL AND TECHNICAL SERVICES

– The retention of consultants or other professionals who have provided services and have gained specific expertise with respect to the Town may be exempt from the normal tendering policy. This may apply to lawyers, accountants, traffic engineers, insurance, banking, etc. and shall be approved by the Director of Financial Administration or Chief Administrative Officer. – The retention of consultants for a fixed term requires the approval of Council. This applies but is not restricted to Auditors and Legal Counsel.

AWARD OF TENDERS

Tenders / Requests for Proposals cannot be accepted without the Chief Administrator’s, Director of Financial Administration’s and/or Council’s approval if they exceed the amount included in the Financial Plan.

PURCHASES EXEMPT FROM PURCHASE ORDERS

– Costs directly related to court actions and damage claims – Subscriptions, publications, dues and fees – Telephone rental fees (including long distance tolls) – Electricity accounts – Travel expenses or advances including mileage and lodgings – Water purchase – Salaries: wages – casual help and related disbursements – Municipal and inter-municipal grants, fees and payments – Fees for exams, courses and conventions, etc. – Property purchases – Insurance premiums – Employee benefit premiums – Supplies drawn from inventory – Postal charges – Professional services

MINOR EXPENDITURES

a) Purchasing Cards

– The Director of Financial Administration may maintain a Purchasing/Credit Card program for purchases up to $500 each. – The responsible Department Head must authorize all purchases made under the Purchasing/Credit Card program. – The Director of Financial Administration or designate must review the performance of the Purchasing/Credit Card program on a regular basis to ensure the recorded purchases comply with the authority of this policy.

UNAUTHORIZED EXPENDITURES

Council may require that employees reimburse the Town for unauthorized expenditures. Such reimbursement may be sought through legal proceedings.

CONTINGENCIES

The Chief Administrative Officer shall have the authority to bypass normal procedures as outlined above in the event of a disaster, labour dispute or emergency.

i. An emergency is defined as a “sudden or unexpected occurrence giving rise to the necessity of immediate action”. ii. Any expenditure that has occurred as per Division Ten (i) shall be reported to Council at the next regular Council meeting (Section 333(4)(b) of the Local Government Act). iii. The Financial Plan shall be amended as soon as practical for any expenditure occurring under Division Ten (i).

ATTACHMENTS:

Appendix “A” Appendix “B” Appendix “C”

DISTRIBUTION:

Electronic file Y:\Administration\0340 Circulars, Directives, Orders, Manuals, Policies\50 Policies and procedures\Policies - Final\1600 - Finance

APPENDIX "A": TELEPHONE QUOTATIONS

Procedures

Request at least three suppliers to participate, subject to time constraints and the resulting cost/benefit.

Summarize the quoted responses on the form provided and attach to purchase order.

Award of telephone quote

Make award by issuing Purchase Order.

APPENDIX "B": WRITTEN QUOTATIONS

Preparation

Draft applicable details of materials, equipment or services required on the quotation summary.

Note Business Licence number if applicable.

When quoting materials that are to be tax exempt, this should be stated on the quotation summary.

Invitations may be made to vendors of past quotations and new vendors from department vendor lists where available.

Receipt of Quotations

Only bids that have been received up to the time designated for receipt of quotes shall be eligible for consideration.

No bids shall be accepted for any reason after the occurrence of the receipt of quotation time.

A revision to a quotation must be submitted in writing prior to the required time of receipt of quotations.

Telephone revisions to a quoted price, are not acceptable. The written confirmation must be received at the place designated for the receipt of quotations, prior to the designated time.

Disqualification of Quotations

Bids shall be rejected for any of the following reasons: (a) Bid is received after the designated date and time. (b) Vendor’s delivery date for the item or service is not satisfactory. (c) The bid is modified by a statement that gives the bidder an unfair advantage over the other bidders. (d) During verification of unit prices and extensions, it is found that the bidder has made a gross error in the unit prices.

Awarding of Quotations

Any or all quotation may not necessarily be accepted.

If the lowest bid is not accepted, the Chief Administrative Officer or Treasurer must approve the purchase order prior to issuance. Satisfactory justification should be provided for non-acceptance of the low bid based on difference in availability, quality, service or environmental impact.

The Municipality may reserve the right to accept only specific items referred to in the quotation, unless denied by the bidder when quoting.

Bidders may be notified of bid submissions and price levels, if requested.

The delivery date stated by the bidder is to be strictly adhered to or the Municipality may cancel the contract and obtain the materials or services elsewhere.

A purchase order will be issued to the successful bidder, which has the authority of acceptance of the bidder's offer as quoted.

Summarize details on quote summary and attach to yellow copy of purchase order.

APPENDIX "C": OPENING OF TENDERS

Tenders shall be called only when there is a definite intention to award a contract and where it is considered that there is a reasonable chance that the work can be done for the amount of money budgeted.

Preparation

a) Draft applicable contract documents, including specifications, bid documents and submission instruction b) Determine contract timeline and key dates such as tender closing date/time and contract completion date etc. c) Prepare advertisement if necessary d) Run off sufficient copies of tender and allow two sets for signing.

The following clauses shall be included in all tender documents: i. The municipality shall not be obligated to accept the lowest or any tender and may reject any or all tenders without giving reasons therefore. The municipality may accept the tender, which it believes is in its best interest. ii. The municipality may waive any minor lack of compliance with the tender documents or specifications. iii. The municipality may, prior to contract award, negotiate changes to the scope of the works or to the contractual documents with the selected tenderer without having any duty or obligation to advise other bidders or to allow them to vary their bid as a result of changes to the scope of work or to the documents.

Written competitive quotations and formal tenders shall be submitted, as sealed bids to the office of the Director of Financial Administration at which time the date and time of receipt shall be recorded on the bid envelope and signed by the person accepting the bid, unless specified otherwise in the tender/quotation document. The time of receipt shall be recorded from the clock in the receiving area.

General Conditions

Tender openings shall, at all times, be formal, correct, and well documented.

All tenders shall be opened publicly at Town of View Royal, Municipal Hall, 45 View Royal Avenue, Victoria, BC.

The occurrence of the receipt of tender time shall be noted and announced at the opening.

After the announcement, no bids shall be accepted for any reason.

A revision to a tender price must be submitted prior to the time of receipt of tenders.

Telephone revisions to a tender price are not acceptable. The written confirmation must be received at the place designated for the receipt of tenders, prior to the designated time. Facsimile revisions will be accepted if signed by the same person that signed the original tender.

Only tenders that have been received up to the time designated for receipt of tenders shall be eligible for consideration. The number so received shall be declared publicly.

Procedures

1. At bid openings, the Director of Financial Administration or designate shall open the bids in the presence of the appropriate Department Head, unless specified otherwise in the tender/quotation document.
2. At the official time for receipt of tenders, an announcement will be made that the time has occurred.
3. Tenders shall be opened at this time.
4. The opening shall be done in the following order: (a) Tenders are to be opened and as each tender is opened, the tender security requirements are to be checked for compliance with the documents. If they are found not be in order, the tender is to be put aside and not considered. The price is not to be read out. (b) As each tender is opened, it is to be checked and the name of the bidder and price announced (c) The tender is to be recorded on the tender record form. (d) All late tenders shall be officially declared invalid and recorded as such. (e) Under no circumstances shall a bidder be permitted to alter their tender after the tender opening times has been announced or after their tender has been opened. (f) All tenders submitted late shall be returned by the tendering authority, unopened, to the sender with the tender envelope stamped or written, "Late Tender - Unopened".
5. A tender opening record form shall be completed, requiring: (a) The names of the authorized personnel in attendance. (b) The official time the "receipt of tenders" was closed. (c) The names of all persons in attendance together with company affiliations. (d) Amount of each bid (e) Tender opening record form to be signed off by authorized personnel in attendance

Disqualification of Tenders

Tenders shall be rejected for any of the following reasons: (a) The requirements for tender security are not ratified. (b) The tender is not signed by an authorized person or is not witnessed or sealed. (c) The bid bond does not relate directly to the tender and principal contractor. (d) Tender documents received by facsimile.

Acceptance of Tenders

Tenders are to be accepted by a letter of award, stating that the Municipality accepts the offer to do the work for the tender amount, to sign the agreement and to provide the required security.

All tender comparisons and reports should be attached to the letter of award and forwarded to the Finance Department.

The Municipality may, prior to contract award negotiate changes to the scope of the work or to the contractual documents with the selected tenderer, without having any duty or obligation to advise other bidders or to allow them to vary their bid as a result of changes to the scope of work or to the documents.