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1989-24 Adopts Purchasing Rules and Regulations RESOLUTION N0. X4_89 A RESOLUTION OF THE VILLAGE COUNCIL. OF NORTH PALM BEACH, 'c'?.ORIDA, ADOPTING PURCHASING RULES AND REGULATIONS FOR THE VILLAGE OF NORTH PALM BEACH ANU REPEALING RESOLUTION 42-80. NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA; section 1. The purchasing rules and regulations for the village of North Palm Beach, attached hereto and by reference made a part hereof., are hereby adopted. Section 2. Resolutlon 42-80 is hereby repealed. Section 3. This Resolutlon shall take effect immediately 1 1 upon passage. PASSED AND ADOPTED THIS 24 DAY CF AUGUST , 1989. c , ~.~ MAYOR P.'1'TEST: 'fA111,1i OF (~N'I'I~.N'fS SECTION NUMBER TITLE PAGE 1. INTRODUCTION 1.01 Purpo- se o~ Manual . .... ............. 1 1.02 Objective of Cent ralized Purchasing............ t 1.03 Responsibilities: Finance Department.......... 1 1.04 Responsibilities: Village Clerk ............... 1 1.05 Responsibilitles: Operating Departments....... 1 1.06 Responsibilities: Village Manager ............. t 2. PURCHASING POLICY 2.01 eterm:n:ng urc asing Methods ................. 2 3. INITIATING A PURCHASE 3.01 Purchase equis:ton ...........................3 3.02 Requisition Preparation ........................3 9. PURCHASING PROCEDURES. BIDS. CONTRACTS 4.01 Formal B: :ng.. ...........................4 4.02 Writing Specifications .........................4 4.03 Identifying Suppliers ..........................4 4.04 Sealed Bid Opening .............................4 4.05 Sole Source Items ..............................4 5. PURCHASE ORDERS 5.01 se o Purc ase Orders... .. ........ ~ 5 5.02 a Purchase Order... Preparation and Issuance of 5 5.03 Cancellation of a Purchase Order ............... 6 5.04 Confirming Purchasing Orders ................... 6 5.05 Late Orders.. ... ................ ............ ... 6 5.06 Back Orders of Partial Payments ................ ? 5.07 Blanket Purchase Orders. .................. 7 5.08 Split Purchases (pyramiding) ................... ? 6. EMERGENCY PURCHASES 6.01 General Pol cy ................................. 8 6.02 Procedure ...................................... 8 7. MISCELLANEOUS 7.01 a ep one an Utility Bills ....................8 7.02 Inventoried Supplies. .. ....................8 7.03 Receipt of Goods and Services ..................9 7.04 Cancellation of Invoices .......................9 8. SURPLUS AND OBSOLETE MATERIAL AND EQUIPMENT 8.01 Methods of Disposition... ..............9 8.02 Procedure for Sale of Surplus Items............9 9. APPENDIX: PURCHASING FORMS A. urc ase equ:s~t:on ......................10 B. Purchase Order ............................11 C. Toll Call Report ..........................12 i INTRODUCTION 1.01 Purpose of Manual The purpose of these Purchasing one complete source of purchasing Village Departments in obtaining and services. It is intended purchases are to be made under nor it must be recognized that no manu eventuality. The Finance Depar clarification and assistance on manual and to offer suggestions purehas,ing matter. Regulations is to provide information to assist all needed supplies, materials to remove doubts about how mal circumstances; however, al can cover every possible tment is prepared to offer all subjects covered in the for handling any particular 1.02 Objective of Centralized Purchasing The primary objective of any purchasing operation is to maximize the value of the dollar spent. All Village Departments are responsible for accomplishing this objective by planning for future purchase needs and making them in an economical manner. 1.03 Responsibilities: Finance Department A. Maintaining an up-to-date vendor list B. Processing of purchase requisitions and preparation and processing of purchase orders 1.04 Responsibilities: Village Clerk A. Maintaining bid files 1.05 Responsibilities: Operating Departments A. Obtaining prices on comparable merchandise B. Searching for new sources of supplies and services C. Providing complete information on items to be purchased and preparation of purchase requisitions D. Providing appropriate documentation with purchase requisitions as required by purchasing policy E. Planning purchases ahead to eliminate avoidable emergencies F. Preparing technical specifications where applicable G. Availability of funds in the budgeted line item account 1.06 Responsibilities: Village Manager A. Advertising for bids; taking formal bids 2. PURCHASING POLICY 2.01 Determining Purchasing Methods A. All purchases having an estimated cost in excess of $5,001: 1) Must be formally advertised in a newspaper of general circulation with the advertisement being no less than five (5) working days prior to the opening of bids 2) Must be awarded on a sealed bid basis, by vote of Village Council B. All purchases having an estimated cost between $1,001 and $5,000: 1) Must be made by price quotation; (minimum three (3) quotations must be obtained) 2) Must be budgeted item 3) Must be authorized by Village Manager 4) Except that the written price quotes (minimum (3) if possible) required for purchases greater than $2,001 and less than $5,000. C. All purchases having an estimated cost between $501 and $1,000: 1) Require three (3) quotations 2) Must be budgeted items 3) Shall be authorized by Department Head or Village Manager D. Purchases having an estimated cost of u~t_o ~$_~500_~, unless unless otherwise described in this manual- 1) Do not require bids or 3 quotes; Department Heads are encouraged to obtain the best "price" 2) Must be budgeted item 3) Shall be authorized by Department heads E. Exceptions: In certain instances, exceptions to the above may exist 1) Purchases may be accomplished through the use of the emergency purchase provisions as provided for in Section 6 (Emergency Purchases) of this manual. 2) When annual contracts exist, i.e. gas, oil, tires, office supplies, etc. 3) When requirements imposed by Federal, State, or County grants provide different regulations 4) When the Village Manager deems it appropriate to use procedures of more formality than set out above 2 3. INITIATING A PURCHASE 3.01 Purchase Requisition Purchase Requisition is to be filled out and submitted to the Finance Department with the appropriate documentation attached. Where equipment is covered by maintenance contracts, requests for service may be made directly by the respective department. 3.02 Requisition Preparation A. How regular requisitions are processed: 1) The original is sent to the Finance Department (up to $1,000) or Village Manager (for approval over $1,000) and second copy is kept in the requesting depart- ment's file. 2) Upon receiving the requisition, Finance will determine the availability of funds in the department account. If the funds are available, preparation and processing of the purchase order will proceed. 3) Requisitions between $1,001 and $5,000 will be re- viewed by the Village Manager. Requisitions over $5,001, subject to the bidding process and upon approval of the Village Council, the Finance Depart- ment will prepare and process a purchase order. 4) Type or print the requisition giving the following: a) Requisition number (for your department use only) b) Date c) Original copy of the purchase order destination d) Account number e) Signature of department head f) Delivery location g) Complete, detailed description of items desired h) Quantity i) Suggested vendor j) Estimated cost of purchase (Including shipping ~ handling) 5) Bid documentation, when necessary, i.e., telephone bids, request for quotations, etc. should be attached to purchase requisition. 3 PURCHASING PROCEDURES, BIDS, CONTRACTS, VENDOR SELECTION, ETC. 4.01 Formal Bidding Formal bids are required for purchases in excess of $5,001. 4.02 Writing Specifications Upon submitting a request for formal bidding, departments should also transmit desired specifications to be included as a part of the bidding process. Care should be taken to design specifications so that they are not so narrow as to limit competition unnecessarily. Department heads are responsible for complying with this guideline. 4.03 Identifying Suppliers Operating departments are responsible for maintaining a comprehensive, updated list of suppliers of various products frequently purchased by that department. It is the Village's policy to award to the lowest bidder offering merchandise conforming to predefined specifications. 4.04 Sealed Bid Opening All sealed bids are to be opened at the exact time, date, and place specified in the bid package. A bid package contains: (1) Notice to bidders; (2) complete bid specifications, and (3) contract documents, if appropriate. All bids are to be opened publicly with a tabulation being made available to all vendors participating. Formal bids are to be checked for proper submission of any required bid deposits, bonds, etc. All sealed bids will be opened by a bid board consisting of the Village Manager and department head concerned and the Village Clerk. After evaluation, a recommendation will be made by the Village Manager for transmittal to the Village Council. 4.05 Sole Source Items Sole Source items must be designated. as such when requisitions or specifications are submitted. (Every reasonable effort must be made to locate competitive suppliers.) Only the Village Manager may certify an item as "Sole Source." 5. PURCHASE ORDERS 5.01 Use of Purchase Order For all regular purchases, the purchase order will be used. This will be used for items except as provided in Section 5.04, and Sections 6 and 7. A. On a monthly basis, all duplicate copies of the purchase orders will be used for account encumbrance by the Finance Department. B. Upon receipt of goods or services, ell department heads will forward the department's copy of the purchase order and bill to the Finance Department for payment. The Finance Department will not process an bill for pay- ment until: 1) Department's copy of the purchase order is attached 2) Approval of the department head on the bill, for the satisfactory receipt of goods and services is attach- ed. 3) Amount to be paid and account number to be charged are either underlined or circled 4) Funds are available in the account C. After payment has -been made, the department's copy, attached to the bill will be filed. 5.02 Preparation and Issuance of a Purchase Order A. Procedure for issuing a Purchase Order: 1) The purchase order is prepared in triplicate 2) The purchase order is typed giving the following information: a) Date b) Shipping point c) Required delivery date d) Description of goods e) Quantity ordered f) Unit price and total amount g) Account number h) Village Manager's signature, (including shipping) if applicable 5 B How purchase orders are processed: 1) The vendor's copy (original) is mailed to directly to the vendor exec t where~ecifieally req~ested to do otherwise by a or er:ng epartment. ei~vendor copy is retained by the vendor. 2) The second copy is retained in the Finance Department for account encumbrance and is attached to the original of the purchase requisition. 3) The third copy is sent to the Department Head of the requisitioning department. When the requested items are delivered and are determined to have been received in good condition, and quantity, quality and specifications have been met, the receiving copy is dated and signed by the department head and returned to the Finance Department. 5.03 Cancellation of a Purchase Order All cancellations of orders must be made by forwarding to the Finance Department the receiving copy of the purchase order with the word "VOID" printed across the face of said copy. The Department Head should sign and date all voided purchase orders, as well as provide a brief reason for the void. 5.04 Confirming Purchase Orders Maintenance Agreements, equipment repairs, maintenance materials and supplies, or other items purchased at the time of need may be handled as follows: A. When a department needs a purchase order number for an item in this category, the Finance Department should be contacted. The Finance Department will assign a purchase order number to that item and record the vendor's name, purchase order number, approximate cost and account number. B. The Finance Department will process the purchase order in the normal fashion except that the notation "CONFIRMING" will be printed in bold letters across the face of the purchase order. C. "CONFIRMING" orders will be kept to a minimum and used only when it is not reasonable to use the normal purchasing method. 5.05 Late Orders Once the Finance Department has issued a purchase order, no follow-up work is done on the order by Finance. It will be the responsibility of the operating department to perform follow-up. 6 5.06 Backorders of Partial Payments When several items are ordered, the supplier may deliver only a portion of the quantity requested. He may then advise you that the remainder of the order has been backordered. The department head should retain the copy__o_f the purchase order untill a~items are a ver~~ ou t e vendor invoice or the part:a or er el vered, the following partial payment procedure can be implemented: A. When the invoice is received, the department head should forward the invoice to the Finance Department with his or her approval of the partial payment. Notations should be made on the invoice that the order is "INCOMPLETE" and the purchase order number circled, or noted if it is not mentioned on the invoice. The Finance Department will use this as authority for partial payment. Documentation must be sent to the Finance Department indicating which items have been received before the Finance Department makes the payment on such invoice. B. The department copy of the purchase order remains in the department until the entire order is filled, invoiced or balance cancelled. 5.07 Blanket Purchase Orders Blanket Purchase Orders can be requested from the Finance Department for small, routine daily purchases for each vendor the department intends to use frequently during the year. The Blanket Purchase Order is limited up to $500 as authorized by the Department Head (up to $1,000 with the Village Manager's approval) for each vendor. 5.08 Split Purchases (Pyramiding) A. Split purchases or pyramiding is defined as issuing more than one purchase order on the same product [with the intent of circumventing these regulations and/or budget limitations] within an unreasonably short time period such that the totals of the P.O.'s equal an amount great- er than that authorized by these regulations. B. Split purchases are prohibited. EMERGENCY PURCHASES 6.01 General Polie True emergencies do occur as a result of parts, supplies, and labor needed to repair equipment and facilities that are needed to provide services for the health, welfare and safety of the public. Anticipating needs in advance, whenever possible will hold emergency purchases to a minimum and allow the use of standard procedures. 6.02 Procedure A. Emergency purchases between $500 to $1,000, mark invoice "EMERGENCY PURCHASE." Must be submitted to Department Head, subject to con irmation by Village Manager. B. Emergency purchase from $1 001 to $5 000, mark invoice "EMERGENCY PURCHASE" an con act t e t age Manager for approval. C. Emergency purchases over $5 001 are not to be made without prior approval y~b~lie t Tage Manager, subject to confirmation by the Village Council. 7. MISCELLANEOUS 7.01 Telephone and Utility Bills All Village telephone and utility bills are processed through the Finance Department to verify proper billing for each department and for long distance service. Any bills received in another department should be forwarded to the Finance Department. Telephone bills must be verified by the depart- ment head and forwarded to Finance. 7.02 Inventoried Supplies In order to obtain a cost savings on those items used frequently by all departments for normal office operations, the Village will bid those items on an annual basis in October of each fiscal year. All departments will estimate their respective needs for items required on a frequent basis. All orders will be processed by the General Services Department. Those items will be inventoried and charged back to each department as they draw down on supplies. General Services "Inventory Requisitions" will be used to account for all "drawn" items. 8 7.03 Receipt of Goods and Services Upon receipt of goods and services which satisfy outstanding purchase orders or which have been purchased through some other provision of this regulation, all items, including pur- chase orders and invoices, shall be marked "RECEIVED," dated and account coded as well as signed by the affected department head prior to forwarding to the Finance Department for payment. In no event shall payment be made prior to the aforesaid documentation. 7.09 Cancellation of Invoices Upon payment of invoices by the Finarfee Department, each invoice will be marked "PAID," and a copy of our three - part accounts payable check attached. 8. SURPLUS AND OBSOLETE MATERIAL AND EQUIPMENT 8.01 Methods of Disposition A. Surplus, worn out or obsolete material and equipment may be disposed of in any of the following ways: 1) By transferring to other departments 2) By returning to the manufacturer or supplier 3) By trading in on new equipment 4) By junking 5) By advertising for sale B. Each department shall report its surplus or obsolete stock, equipment or materials to the Finance Department. C. All Capital Equipment shall be declared Surplus by Village Council before processing as Surplus. 8.02 Procedure for Sale of Surplus Items A. If surplus material is sold, it shall be accomplished by the affected department in conformance with competitive practices. B. Surplus property may be disposed of by auction. Final approval for sales will be made by the Village Manager or his designee. Advertisement for such sales will be made in a local newspaper at least one time no less than five (5) days prior to sale or ,auction. 8