93 ORDINANCE NO. 93
ty
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF GRAND TERRACE, CALIFORNIA, ADOPTING
POLICIES AND PROCEDURES FOR THE PURCHASING
OF SUPPLIES AND EQUIPMENT BY THE CITY OF
GRAND TERRACE
WHEREAS, Government Code Sections 54202 and 54203 provide
for the adoption by Cities, by Ordinance, of policies and
procedures, including bidding regulations, for the purchasing
of supplies and equipment :
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GRAND
TERRACE DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. That the City of Grand Terrace Purchasing
Manual , as revised on July 1985, is hereby adopted by reference
and is attached hereto as Exhibit "A" and is incorporated
herein .
Section 2. Effective Date . This Ordinance shall be in
j full force and effect at 12 :01 A.M. on the thirty first day
after its adoption .
Section 3. Posting. The City Clerk shall cause this
Ordinance to be posted in three (3 ) public places within
fifteen (15 ) days after its passage, as designated for such
purpose by the City Council .
Section 4. First read at a regular meeting of the City
Council of said City held on the 8th day of August
1985, and finally adopted and ordered posted at a regular
meeting of said City Council on the 22nd day of August
1985.
ADOPTED this 22nd day of August 1985
ATTEST:
City Clerk 9f the City of May o Grand
Grand Terra e and of the Terrace a d the C y
City Council thereof. Council t eof.
I, ILENE DUGHMAN, City Clerk of the City of Grand Terrace,
do hereby certify that the foregoing Ordinance was adopted at a
regular meeting of the City Council of the City of Grand Terrace
held on the 22nd day of August 1985 by the
following vote :
AYES: Councilmembers Matteson, Petta, Pfennighausen, Evans;
Mayor Grant
NOES: None
ABSENT: None
ABSTAIN: None
City e
,/
Approved as to form:
C ty A r
ney
CITY OF GRAND TERRACE
PURCHASING PROCEDURES MANUAL
I. PURPOSE
The purpose of this manual is to set forth a guide to be applied in the
purchasing function for the maintenance of intelligent, constant and har-
monious relationships with suppliers and their representatives and the City
of Grand Terrace. The success of the purchasing program may be determined
by the manner in which these relationships are fostered.
II. RELATIONS WITH OTHER DEPARTMENTS
The Purchasing Division exists as a service agency for all City depart-
ments. Co-operation is essential for the successful operation of the
purchasing function. Throughout this manual the principles and responsi-
bilities are set forth for all departments of the City in connection with
the purchasing function. The purpose of this section is to emphasize these
responsibilities
A. Purchasing Division's Responsibility:
1. To become acquainted with the needs of the various departments of
the City.
2. To know the availability and the delivery time of the various
material needed.
B. Using Departments' Responsibility:
1. To consider the lead time necessary for the Purchasing Division
to obtain items ordered, planning requisitions accordingly.
Rush orders can sometimes cause the item to be purchased from the
nearest supplier at a higher cost.
2. To prepare specifications for materials that require engineering or
technical background.
3. To be specific and complete, to include equivalent brand or model
numbers, in describing the material or items required, remembering
that a requisition is an internal form.
4. To refrain from making contacts with suppliers directly whenever
possible and in no case obligate the Purchasing Division without
prior authorization.
III. RELATIONS WITH SUPPLIERS' REPRESENTATIVES
The promotion of good supplier relations is an important function of the
Purchasing Division. It is important that the Purchasing Division be aware
of all transactions that are conducted between the City and its suppliers.
It is necessary that the various other departments be free from the routine
visits of suppliers. Much of the supplier's and the City's time will be
saved by observing the following rules and principles:
A. All suppliers representatives shall receive courteous and prompt
attention.
B. All suppliers' representatives are to be received in the Purchasing
Division.
C. The Purchasing Division will arrange interviews between the supplier's
representatives and the other departments of the City.
D. The Purchasing Division shall pass on to other departments useful
information obtained from interviews, direct mail , and advertising.
E. All correspondence with suppliers shall be conducted by the Purchasing
Division except on subjects requiring technical details which must
necessarily be supplied by other departments, in which case letters may
be written directly to suppliers with copies forwarded to the
Purchasing Division.
F. All requests for prices, catalogs, samples, etc. , are to be made
through the Purchasing Division.
G. Every employee of the City shall keep himself free of obligation by
refusing to accept gratuities of any value in any form offered by
suppliers or their representatives.
H. Offer of any gratuity to any official or employee of the City by a
vendor or contractor may be cause for declaring such individual or firm
an irresponsible bidder and debar him from bidding.
IV. PURCHASING PROCEDURES
Purchase Orders are used when a department is purchasing materials or
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services.
A. Purchase Requisition is the means used to correctly define th
requirements of the using department. The Requisition is a form which
is to be completed by the using department, supp-lying as much
information as is known by the requesting department in order to allow
the Purchasing Division to properly process it and make the most
economical purchase.
B. Information on Requisitions
Requisitions shall be comp eted by the requesting department giving the
following information:
1. Date issued - the date the purchase requisition is written.
2. Issued by - the name of the using department.
3. Approved (Department Head) - the signature of the approving
department head.
4. Required Delivery - state a definite delivery date (do not use sub-
stitutions such as "Rush", 'Immediately", "As soon as possible").
Constant requests for rush orders are indicative of poor planning
on the part of the requesting department.
5. Deliver to - the location at which material is to be delivered,
listing street address. If not applicable, leave blank.
6. Quantity - the number or amount required.
7. Unit - state whether item is procured by dozen, gross, board feet,
pints, etc.
8. Description - Adequate description of the item(s) requisitioned, by
catalog number or specification, etc. This is necessary for
obtaining the best quality, service and price.
9. Account number - the proper budget code account number to which the
material will be charged.
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AZ 10. Unit Price - the ESTIMATED unit price or last unit price paid for
the item. -
11. Total - estimated total amount of the requisition.
12. Remarks and Suggested Sources suggested sources of supply and any
additional information which will help the Purchasing Division.
C. Distribution of Requisitions
The original will be routed to the Purchasing Division and the copy
retained by the requisitioning department.
D. Request for Quotations and Bids
Upon receipt of a Purchase Requisition, the Purchasing Division shall
obtain a source of supply. This is done by selecting from a bidder's
list, firms that will give the best price, proper quality and service.
To secure the best quality, service and price, quotations shall be
secured from several sources. It is the policy, whenever possible,
that no less than three suppliers be invited to quote on all purchases.
If the amount is $5,000 or less, the standard form Request for
Quotation may be used. If the amount exceeds $5,00 Formal Contract
roce ure shall be followed.
When negotiating for the purchase of materials or services which have,
in the course of the City's operations, become highly standarized and
which do not fluctuate appreciably in price or quality, the Purchasing
Division may request quotations covering unspecified quantities to be
delivered within specified periods; the prices quoted shall apply to
all shipments made within such periods.
Blanket Purchase Orders will be issued to the lowest responsible bidder
specifying the period covered, the items and prices that are to be
invoiced.
All quotations become a part of the Purchasing Division's records and
may be reviewed upon request by those persons interested.
E. Purchase Order
Purchase Order authorizes the seller to ship and invoice materials or
services as specified. Phraseology in the text of the Purchase Order
should be clear and precise; if this is not adhered to, misunderstand-
ings will occur, unnecessary correspondence will result and procedure
will be delayed.
1. Issuance of Purchase Orders - Purchase Orders shall be issued based
upon Re uisit ons s gnedby a ep�artment head. All Requisitions
shall be filed w th the Purchasing Division and no purchase s a
be made until a Purchase Order has been obtained.
2. Purchase Order Form - a sta�rd Purchase Order form is used for
all purchases. Each order is a snap-out form consisting of an
original and four copies; white, yellow, green, blue, and
goldenrod.
a. White Copy - the white copy is mailed to the vendor to be used
as authority to furnish the City such materials or service as
indicated.
b. Yellow Copy - the yellow copy is kept in the Finance Department
and the proper account encumbered by the the amount of the
Purchase Order.
c. Green Copy - the green copy is retained by the Purchasing Div-
ision and filed in numerical order.
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d. Blue Copy - the blue copy is sent to the department head making
the request, to be held until the materials or services are
received. Upon completion of the order or contract, the blue
copy will be signed and dated by the department head and
returned to the Finance Department for discounting and
processing for payment. If a partial shipment is received,
make a copy of the receiving copy and note the quantity
received, sign, date and forward to the Finance Department.
The blue copy is sent to Finance when order is complete.
e. Goldenrod Copy - the goldenrod copy will be sent to the
requisitioning department to file with the requisition.
F. Conditions of Purchase Order
It is important ttgat the vendor and the buyer be familiar with all
conditions of the purchase order. A better understanding of procedures
is thus obtained and acts contrary to the conditions of the purchase
order will not take place. The terms and conditions which are integral
parts of the purchase order follow:
1. Render invoice in duplicate.
2. The purchase order number must appear on all invoices, delivery
slips, and correspondence.
3. All claims for labor and materials furnished must be filed within
thirty (30) days.
4. All packages, cartons or other containers must be plainly marked
with the purchase order number.
5. All purchases are to be F.O.B. Grand Terrace, California, unless
otherwise specified on bid or purchase order.
6. Substitutions may be made only upon approval of the Finance
Director.
7. The City of Grand Terrace shall not be responsible for articles
furnished officials or employees without a purchase order signed by
the Finance Director or his authorized representative.
G. Purchase Order Acknowledgment
An acknowledgment of the City's purchase order by the supplier is
simply an agreement on his part to furnish the items specified in
accordance with our terms and conditions.
Some suppliers have the practice of sending their own forms of
acknowledgment. These forms should be sent to the Purchasing Division
without signature because such acceptance on our part will mean that we
have—accepted all of the supplier's terms and conditions as printed on
his acknowledgment form, thereby making a contract which supersedes the
conditions of our purchase order.
H. Follow-up
The process of procurement is not accomplished by simply issuing an
order. Satisfactory delivery must also be made. The basis for
successful follow-up lies, first of all, in the proper stipulations of
purchase. The purchase order should state when delivery is wanted.
Date and method of follow-up will depend upon the nature of the order
and the promised delivery date.
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I. Eliminating Rush Orders
If the using departments will plan their work carefully, marw needless
rush orders for materials will be eliminated and there will be no need
for arty particular follow-up other than routine. Constant requests to
suppliers for rush service destroys the effectiveness of such requests,
and extra expense for long distance telephone calls, and special
service add to both the buyer's and seller's costs.
J. Receiving Procedure
The blue copy of the purchase order serves as the receiving report. It
is forwarded immediately to the location where the material will be
received.
1. Receiving Report Requirements - the person receiving delivery of
materials or services shall immediately complete the receiving
report by verification of actual count of the items delivered. He
shall enter on the receiving report the actual quantities of all
items received in specific terms such as tons, gallons, cubic
yards, etc. He shall also enter the date the material is received
and he shall sign the report.
2. Routing Receiving Report - when the information has been added to
the receiving report, it will be forwarded immediately to the
Purchasing Division in order to clear the records of that office.
It will then be forwarded to Accounts Payable for final accounting
and payment.
3. Blanket Purchase Order - the person receiving materials or services
under the provisions of a blanket purchase order shall obtain at
that time an invoice, delivery slip or other form of receipt for
materials or services received. This documentation will be deliv-
ed to the Purchasing Division on the next working day and will be
annotated "Blanket P.O." along with the purchase ordef number.
K. Emergency Purchases
While the need for occasional emergency purchases is recognized, the
practice shall be curtailed as much as is possible by anticipating
needs in time for the use of regular purchasing procedures.
1. Approval of Emergency Purchases - like regular purchase orders,
emergency purchase orders shall be approved only when requisitioned
by heads of departments.
2. Procedure for Emergency Purchases - during regular working hours,
the using department shall call the Purchasing Division, advising
of the emergency which has arisen, and shall request a purchase
order number on which to proceed. On the day following the
emergency, the requisition shall be prepared and processed as
usual . The invoice or delivery slip shall accompar(y the requistion
to the Purchasing Division, and a confirming purchase order will be
prepared accordingly. The requisition shall contain the phrase
"CONFIRMATION - EMERGENCY PURCHASE', and the purchase order number
which the Purchasing Division has authorized to be used.
During other than normal working hours, the using department shall
obtain the material or service needed and a delivery slip or
invoice, from the vendor. On the day following the emergency the
requisition shall be prepared and processed as usual. The invoice
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or delivery slip shall accompany the requisition to the Purchasing
Division and a confirming purchase order will be prepared
accordingly. The requisition shall contain the phrase
"CONFIRMATION - EMERGENCY PURCHASE". A brief report including the
date, time and nature of the emergency shall accompany the
requisition.
L. Request for Payment
A Request for Payment is used when paying for dues, subscriptions,
registration for seminars, etc. , NOT FOR PURCHASE OF MATERIALS OR
SERVICES.
The Request for Payment is in 2 part paper, white and one copy.
1. White copy will—be kept with the warrant in the Finance Dept.
2. Yellow Copy - will be returned to requesting department when
warrant is issued.
When a department wishes to pay for dues, subscriptions, etc. the
Request for Payment is filled out as follows:
I.Vendor name and address
2. Date request is filled out
3. Description of why request is needed
4. Amount
5. Account number(s)
6. Signature of requesting Department Head
7. Attach ORIGINAL Invoice NOT copy
8. Forward to Purchasing Division for authorization
When the Request for P_U_ment has been received in Purchasing Division
the Finance Director will verify that this can be paid by Reauuesstt
for Payment and should not be paid by Purchase Order. It will then be
signed by purchasing and the Finance Director andorwarded to Accounts
Payable for processing, and be distributed as above.
V. PETTY CASH PROCEDURES
There is established in the Finance Department a PettyCash Fund of $200.
This fund is established for the purpose of convene—in purchasing small
inexpensive items required in an emergency situation.
Departments are authorized to make purchases from the _P�etty Cash Fund up to
$15.00 in value, at their discretion. Following a purciase,—Te >Tepartment
Head writes the account number on the receipt or invoice and signs it.
Following these actions, the Department Head, or his representative will
deliver the invoice or receipt to the Finance Department and obtain a
refund.
VI. CONTRACT PROCEDURES
In order to clarify the sequence of events and delineate the
responsibilities involved in cases where a CONTRACT will be signed for the
performance of work, the following are set or . Although financial
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payments are referred to in this section, this section is not intended to
fully cover the responsibilities and requirements for financial payments of
work in progress or completed.
A. It shall be the responsibility of the using department, by virtue of
their technical knowledge, to prepare the specifications and
requirements for the work done.
B. It shall be the responsibility of the Finance Director to issue the
Notice Inviting Bids and receive the completed bids from prospective
bidders.
C. The Finance Director, the Department Head of the using department and
any other person the City Manager may designate shall be present at the
opening of the bids. Bids shall be opened and read publicly.
D. Following the opening of bids, all bid securities will be detached and
forwarded by the Finance Director to the Finance Department for safe
keeping. It shall be the responsibility of the Finance Director, after
receiving the recommendation of the Department Head of the using
department, to forward all completed bids, together with recommendation
of the Department Head of the using department for award, to the City
Manager for Council action.
E. Following Council action, the City Clerk's office shall:
1. Notify unsuccessful bidders of Council decision and award.
2. Prepare the contract documents in quadruplicate.
iw 3. Have the documents signed by the City Attorney as to form and
content.
4. Transmit the contract documents along with a letter of notification
and instruction to the successful bidder.
5. When the contract documents have been returned by the contractor,
forward to the City Clerk and Mayor for their signatures.
6. After signatures, distribute contracts as follows:
a. Original to City Clerk
b. Copy to Contractor
c. Copy to Origination Department
d. Copy to Purchasing Department
e. Copy to Finance Department
F. Following finalization and distribution of the contract documents, it
shall be the responibility of the Department Head of the using
department to:
1. Supervise the execution of the contract.
2. Where periodic payments are involved, prepare and forward to the
Finance Department, progress payment recommendations for Council
action.
3. Prepare and forward to the City Manager periodic progress reports
as may be required by the C i ty Manager.
4. When the work has been completed according to the contract and
specifications, forward to the City Manager a report of completion
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and acceptance. (City Manager will so certify to the City
Council . If, in its discretion, the City Council finds the work
has been completed according to the contract, it will thereupon so
find and shall order the recordation of a "Notice of Completion and
Acceptance". The City Manager will notify the Finance Department
that at the expiration of 35 days following the date of recordation
of the "Notice of Completion and Acceptance" the Contractor is to
be paid the full total contract price.)
5. Contract bonds as specified in the Purchasing Policy Manual shall
be maintained by the Contractor in full force and effect until the
completed work is accepted by the City Council, and until all
claims for materials and labor are paid, and shall otherwise comply
with the Civil Code of the State of California, Section 3239.
VII. WARRANTY OR GUARANTEE
The City purchases many items which have a Warranty or Guarantee for a
certain period of time such as batteries, office machines and other
equipment. Before these items are repaired or replaced, the Purchasing
Division should be consulted to see if the item is covered by such Warranty
or Guarantee.
Each department should forward all such Warranties or Guarantees with
complete information to Purchasing Division at the time the item or
equipment is purchased to be maintained in an active up-to-date file.
VIII SIGNATURES
Contracts, Applications for Title, Tax Exemption Certificates, Agreements
and Contracts for Utilities shall not be signed by any City employee unless
authorized in writing by the City Manager or other proper official.
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