CCP126 Purchasing Policies and Procedures_rev 21-10191
864426.1
CITY OF SAN JUAN CAPISTRANO
CITY COUNCIL POLICY 126
(Revised October 19, 2021)
SUBJECT: PURCHASING POLICES AND PROCEDURES
Effective: January 1, 2022
Policy Number: City Council Policy No. 126, replacing previous City Council Policy No.
126, City Council Policy No. 112 and Administrative Policies 504, 507, and 510
Contents
SECTION I – GENERAL INFORMATION ................................................................... 3
A. Glossary of Terms – The words defined in this Section shall have the meaning
set forth below whenever they appear in this Policy: ........................................... 3
B. Purpose and Goals ............................................................................................... 7
C. Roles and Responsibilities ................................................................................... 7
D. Purchasing Cycle .................................................................................................. 8
E. Purchase Orders .................................................................................................. 9
F. Signature Authorization within Departments ....................................................... 10
G. Ethics .................................................................................................................. 10
H. Emergency Purchases ....................................................................................... 12
I. Recycled Products .............................................................................................. 13
J. Energy Efficient Products ................................................................................... 23
K. Local Bidders ...................................................................................................... 24
SECTION II – MINOR PURCHASES ........................................................................ 24
A. Petty Cash .......................................................................................................... 25
B. Credit or Procurement Cards .............................................................................. 25
C. Check Requests ................................................................................................. 27
SECTION III – GOODS, SUPPLIES, EQUIPMENT, AND MATERIALS .................... 27
SECTION IV – SERVICE CONTRACTS (PROFESSIONAL AND MAINTENANCE) 28
SECTION V – PUBLIC WORKS PROJECTS ........................................................... 32
SECTION VI - CHANGE ORDERS FOR PUBLIC WORKS PROJECTS .................. 36
SECTION VII – BIDDING PROCEDURES ................................................................ 37
A. Introduction to Bidding Procedures ..................................................................... 37
Overview ................................................................................................................... 37
Documenting the Bid Process ................................................................................... 37
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B. Qualified Bidders List ........................................................................................... 38
C. Informal Solicitation of Qualifications ................................................................... 39
D. Lowest Responsible (Responsive and Qualified) Bidder ..................................... 40
E. Informal Quotes .................................................................................................... 41
F. Formal Request for Proposal or Request for Qualifications (RFP/RFQ) .............. 41
G. Informal Bid Process ........................................................................................... 46
H. Formal Bid Process ............................................................................................. 46
I. Exceptions to Competitive Bidding Requirements ............................................... 49
SECTION VIII – FEDERAL PROCUREMENT .......................................................... 50
SECTION IX – DISPOSTION OF SURPLUS PROPERTY/CAPITAL ASSETS
(OTHER THAN REAL PROPERTY).......................................................................... 53
APPENDIX A – PURCHASING AUTHORITIES ........................................................ 58
Uniform Public Construction Cost Accounting Resolution 06-09-19-04 approved
September 19, 2006 .......................................................................................... 58
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SECTION I – GENERAL INFORMATION
A. Glossary of Terms – The words defined in this Section shall have the meaning set
forth below whenever they appear in this Policy:
Amendment shall mean a properly executed written Contract entered into and
between the City and a Contractor covering modifications to the original Contract and
which may result in adjustments to provisions of the Contract, including, but not limited
to, terms, compensation, and/or period of performance.
Bid Recap Form shall mean the form required by the Finance Department to initiate
Purchase Orders that exceed certain dollar thresholds, and which is used to
demonstrate that the Procurement is carried out in a manner that is consistent with
this Policy.
Budgeted shall mean the amount of appropriations within a fund adopted for
expenditure by the City Council.
CalCard (Credit Card) shall mean the City issued credit cards provided as a method
to procure budgeted low value items, typically up to $500, similar to the process for a
check request or petty cash reimbursement.
Change Order shall mean a properly executed written order entered into and
between the City and the Contractor, or unilaterally issued by the City, covering
modifications to the Contract, which may result in changes to the scope of work,
contract amount, requirements, and/or period of performance.
Check Request shall mean a request for a check issuance for purchases of $10,000
or less, or where a Purchase Order would not be expedient.
Chief Financial Officer shall mean the Department Head for the Finance
Department, or his or her designee.
City Manager shall mean the City Manager of San Juan Capistrano, or his or her
designee.
Contract shall mean any type of agreement for the purchase of goods and/or
services. Contracts may be referred to in various ways, including "contract,"
"agreement," purchase order" and "task order."
Contract Transmittal Form shall mean a form containing a checklist of all
required documentation for the procurement of Goods, Supplies, Equipment, and
Materials or Service Contracts.
Contractor shall mean any person or entity that has a contract with the City.
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Department Head shall mean the person tasked with the responsibility for the day-
to-day operation of a department, including managing staff and developing plans in
collaboration with the City Manager for the future of the organization, or his or her
designee.
Emergency shall mean a sudden, unexpected occurrence that poses a clear and
imminent danger, requiring immediate action to prevent or mitigate the loss or
impairment of life, health, property, or essential public services.
Emergency Purchase Authorization Form shall mean the form required for a
Department Head to declare the need for an Emergency purchase.
Encumbrance shall mean the estimated amount set aside from the budget for a
particular Procurement.
Fee Recovery Vendors shall mean vendors on the Qualified Bidders list retained for
development projects, and who are paid by developers (examples: outside EIR, plan
check review).
Finance Department shall mean the department so designated by the City Manager
to be responsible for the day-to-day administration of the City’s purchasing policies
and procurement procedures.
Formal Bid Process shall mean the public bidding process used for purchases of
goods, supplies, equipment, materials or services. The process requires a public
notice inviting bids, availability of specifications, bid opening, determination of lowest
responsive and responsible bidder, awarding of the bid, and public access to the
results of the process.
Formal Request for Proposal (RFP)/ Request for Qualification (RFQ) shall mean
a selection process designed to ensure that the City has engaged the most qualified
consultant available for the services to be provided.
Goods, Supplies, Equipment and Materials shall mean fixed, movable, disposable,
and/or reusable products, commodities, or items used by the City, including, but not
limited to, office supplies, program supplies, subscriptions, vehicles, fuel and vehicle
supplies, tools, computers, computer hardware and software, landscape and irrigation
supplies, power tools, janitorial supplies, office furniture, and fixtures, which shall be
furnished to or used by any department.
Informal Bid Process shall mean a bidding process used, when applicable, for
purchases of goods, supplies, equipment, materials or services. The process
requires a notice inviting informal bids, which shall be mailed to contractors on the
Qualified Bidders List and, where applicable, advertised in designated construction
trade journals, availability of project details, bid opening, determination of successful
bidder, and awarding of the contract.
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Informal Quote shall mean a selection process used to assure the most competitive
price is received for an item, while avoiding the additional time and expense involved
in formal bidding.
Informal Solicitation of Qualifications (SOQ) shall mean the process that
establishes criteria for evaluating firms that request placement on the City’s Qualified
Bidders List.
Maintenance Services shall mean the furnishing of labor, time, or effort by a
contractor including, but not limited to (a) routine, recurring, and usual work for the
preservation or protection of a publicly-owned, or publicly-operated facility for intended
purposes; (b) minor repainting; (c) resurfacing of streets and highways at less than
one inch (1”); (d) landscape maintenance, including mowing, watering, trimming,
pruning, planting, replacement of plants, and servicing of irrigation and sprinkler
systems; and (e) work performed to keep, operate and maintain publicly-owned water
or waste disposal systems.
New Vendor Application Form shall mean a form required of all new vendors that
provides pertinent information, including information for the issuance of a federal W9
Request for Taxpayer Identification Number and Certification form.
Non-Fee Recovery Vendors shall mean vendors on the Qualified Bidders List that
have no offsetting revenue from developers.
Originating Department shall mean any department requiring goods, supplies,
equipment, materials, services, and/or construction procured.
Petty Cash shall mean a cash disbursement for authorized expenses up to a
maximum of $50.00 for such items as emergency supplies and tools not readily
available, or an approved meeting attendance.
Procurement shall mean the buying, purchasing, renting, leasing, or otherwise
acquiring of any goods, supplies, equipment, materials, services, and Public Works
projects. Procurement shall also include all functions that pertain to the obtaining of
any goods, services, or construction, including description of requirements, election
and solicitation of sources, preparation and award of contract, and all phases of
contract administration.
Professional Services shall mean those services provided by any specially trained,
educated, experienced or licensed person, company, corporation, or firm, and which
involve the exercise of discretion and independent judgment together with an
advanced or specialized knowledge, expertise, training, or unique skills gained by
formal studies or experience.
Professional Services Agreements (PSA) shall mean Contracts negotiated for
professional services, which are based on demonstrated competence, and
professional qualifications for the services required.
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Public Works Projects shall mean construction, reconstruction, erection, alteration,
renovation, improvement, demolition, and repair work involving any facility owned,
leased, or operated by the City as defined in California Public Contract Code section
22002, or as subsequently amended. The definition also includes painting/ repainting,
plumbing, electrical wiring, and/or other trade work for any facility owned, leased or
operated by the City. Construction, erection, improvement, or repair of dams,
reservoirs, and electrical transmission lines of 230,000 volts and higher that are owned
by the City, are also considered a Public Works project.
Purchase Order (PO) shall mean a commercial document issued by a buyer to a
seller, indicating types, quantities, and agreed prices for products or services the
seller will provide to the buyer.
Qualified Bidders List shall mean one list for ongoing service requirements for the
same or very similar services, including maintenance services, professional services,
and qualified construction contractors, categorized by the type of product sold or work
performed for use in soliciting bids.
Request for Purchase Order Modification (POM) Form shall mean a form that is
transmitted to the Finance Department to request a change in the amount
encumbered for a Purchase Order.
Requisition shall mean a document making a demand for goods, supplies,
equipment, and materials and quoting proper authority for the demand, funds, delivery
date, quantities, etc.
Responsible Bidder shall mean a bidder who has demonstrated the attribute of
trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily
perform the work proposed.
Responsive Bidder shall mean a bidder who has submitted a bid which conforms in
all material respects to the Notice Inviting Bids.
Sole Source shall mean an award for a commodity or service that can feasibly be
obtained from one source only.
Surplus Property means property, other than real property, no longer needed by City
departments for its operations, obsolete property, property in poor or non-working
condition, or property that is a by-product (i.e., scrap metal, used tires, oil, etc.).
Uniform Public Construction Cost Accounting (UPCCA) shall mean the provisions
of the Public Contracts Code Sections 22010 through 22045 (PCC 22010-22045), and
any subsequent amendments.
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B. Purpose and Goals
This Purchasing Policy ("Policy") sets forth a centralized system and outlines the
authorities and responsibilities of the Purchasing Officer or the designee to negotiate or
contract for professional and maintenance services, Public Works projects and to
purchase goods, supplies, equipment, and materials required by City departments. When
authorized to procure materials or professional or maintenance services, all City
employees shall follow this Policy to correctly and ethically process procurement and
ensure the efficient use of public funds. Funds for Capital Improvement projects (CIP)
are processed and administered by various City departments, each of which shall
follow applicable state and federal guidelines in the procurement of contracts and
Public Works projects. Direct payment by an insurer to a vendor shall be subject to
the requirements of said insurer and is not an expenditure of City resources subject to
the requirements of this policy and not recorded as such in the City’s accounting
records or in the City’s financial statements. In accordance with government
accounting standards, City expenditures are recorded net of insurance recovery when
the insurance recovery occurs in the same year as the insured loss.
The guiding principles of those involved in the purchasing function should be:
• To comply with State law, the City's Municipal Code, and the adopted budget
for all purchases and contracts.
• To procure the goods, supplies, equipment, materials and services needed by
the departments at the lowest possible cost, taking into consideration quality,
service levels, and time constraints.
• To act in a professional and ethical manner.
C. Roles and Responsibilities
Procuring Department Responsibilities
• To anticipate requirements sufficiently in advance to allow adequate time to
obtain goods and services in accordance with best purchasing practices.
• To not split orders for the purpose of avoiding purchasing requirements.
• To provide detailed, accurate specifications to ensure goods and services
obtained are consistent with requirements and expectations.
• To prepare requisitions in accordance with instructions so as to minimize the
processing effort.
• To minimize emergency and sole source purchases and to provide written
documentation when such purchases may be necessary.
• To complete the Contract Transmittal Form to ensure that a vendor complies
with all contract requirements (insurance certificates, business license, etc.) –
See Contract Transmittal Form in Appendix B.
• To consider the use of recycled products when it is practical and economically
feasible.
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Finance Department Responsibilities
Pursuant to the City Municipal Code, the City Manager, or the City Manager's designee,
shall serve as the Purchasing Officer. The City Manager has designated the Chief
Financial Officer to serve as the Purchasing Officer.
The Finance Department has overall responsibility for the procurement of business service
supplies, the administration of the purchasing policies, and the management of surplus
City property, not including real property. Other purchasing responsibilities are:
• To ensure full and open competition on all purchases as required by this Policy.
• To coordinate vendor relations, locate sources of supply and evaluate vendor
performance.
• To recommend revisions to purchasing procedures when necessary and keep
informed of current developments in the field of public purchasing.
• To prescribe and maintain all forms and records necessary for the efficient
operation of the purchasing function.
• To act as the City’s agent in the transfer and disposal of surplus equipment and
materials.
D. Purchasing Cycle
The purchasing cycle establishes the proper steps for City staff to follow when
requisitioning goods, supplies, materials and equipment; Public Works projects; and/or
professional and maintenance service contracts.
The Budget
The first step in the purchasing cycle is the approval of the City’s budget. The approved
budget provides authorization to the City Manager and designees to purchase the goods,
supplies, equipment, materials, and services listed in the line item budget document.
Such purchases are subject to additional rules, as set forth herein, including approval
limitations based on dollar amounts by Department Heads, the City Manager, or City
Council, and/or informal and formal bidding requirements.
Method of Procurement
As the second step, the department will choose the method of procurement according to
the type of purchase, the dollar value of purchase, and the standards set forth in this
Policy. The different standards for procurement are set forth under the sections of this
Policy entitled "petty cash", "credit card", "check requests", "purchase orders", "goods,
supplies, equipment, and materials", "service contracts", and "Public Works projects."
Receiving and Acceptance
The receiving and acceptance functions represent the final phase in completing the
purchasing cycle. At this point, the product or service is either accepted or rejected, based
on the quantity, quality, and/or delivery compliance of the item(s). After this phase,
payment authorization can proceed.
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E. Purchase Orders
The purchase order (PO) is the primary and preferable procurement method and
serves as the main source of encumbering and procuring goods and services.
Exceptions to this rule include purchases of services, goods, supplies, equipment
and materials of $50.00 or less with petty cash (see Section II, Paragraph A below),
credit card (see Section II, Paragraph B below), and emergencies (see Section I,
Paragraph G below). Important to the procurement process is the system of
encumbrance accounting, which helps departments control spending on amounts
committed prior to the actual invoicing and payment of services. A verbal
commitment with a vendor and purchasing without a PO is not an acceptable
practice, and such transactions are voidable.
Generally, procurement of goods and services will require a standard City
agreement, which can be found on the City's Intranet. Each agreement must be
approved as to form by the City Attorney's Office. The PO is used to communicate
to a vendor the City's terms and conditions, authorize an encumbrance of City funds,
and serve as a contractual agreement to order goods and services. The PO is used
to process payment and track expenditures in the financial system. A PO shall be
obtained and funds encumbered for all purchases and contracts for services, goods,
supplies, equipment and materials exceeding $10,000. Use of purchase orders is
recommended for amounts smaller than $10,000 so that information regarding
available funds is properly reported by the City’s accounting system. Purchases of
the same or related items in a manner that evades or appears to evade limitations of
a predefined limit such as a procurement card purchase limit, signature limit, or bid
limit, and the intentional splitting of a purchase into two or more smaller orders for
the purpose of evading a provision of this Policy or bidding requirement are strictly
prohibited.
For a PO to be issued, the requestor shall first submit a copy of the Contract
Transmittal Form with attachments and purchase requisition to the City Clerk. The
requisition must be signed by the Department Head and Project Manager to
acknowledge the purchase.
Change Orders/Modifications to an Original Purchase Order
1. Change order/modification approvals to a PO are to be authorized by the
designated signature authority as defined in this Policy.
The amount to be approved is not a single change order, but rather, the cumulative
total of the original PO plus all subsequent change orders, which shall be authorized
by the designated signature authority as defined in this Policy. A change order request
must show all subsequent amounts approved on the Purchase Order Modification
Form (see Appendix B), the change order amount requested and the cumulative total.
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F. Signature Authorization within Departments
1. Each Department Head shall complete and forward to the Finance Department a
Signature Authorization form, identifying those employees approved by the
Department Head to sign off on various financial and other administrative
documents. The form shall be developed by the Finance Department and updated
annually.
2. The form shall identify specific Departments, Divisions or Projects, the employee’s
name and signature and list specific documents each employee is authorized to
sign. It is the Department Head’s responsibility to keep the information current.
3. Any documents missing the appropriate signature(s) will be returned to the
originating department.
4. Only Regular or Probationary City employees are authorized to sign off on
documents obligating the City to expend public monies. Temporary or Volunteer
employees, or individuals under contract with the City, may be able to acquire
items but any receipts must be countersigned by an authorized employee.
5. The number of authorized signatures should be kept to a minimum, to ensure
better control over departmental appropriations. In no event shall procurements
over $10,000 be approved by an employee other than the Department Head or
Acting Department Head.
G. Ethics
The purpose of this section is to provide a general code of conduct for all personnel who
may be engaged in the City's purchasing function. It is essential that all personnel
involved in the procurement process conduct themselves in a manner that maintains
impartiality and complete objectivity, to meet the continuing scrutiny of suppliers and the
public. In dealings with the business community, it is necessary to exercise a strict rule of
professional conduct to ensure that business relations are not compromised or even have
the appearance of being compromised. The City's reputation for fairness and integrity in
dealing with vendors and others must always be maintained.
The following are the City’s standards in ethics for purchasing:
• To buy on the basis of value, recognizing that value represents a combination
of quality, service and price which assures the greatest economy to the City.
• To recognize that permanent business relationships should be established on
the basis of honesty and fair dealings.
• To be courteous and considerate in all City dealings.
• To be prompt in all appointments and to negotiate with reasonable speed.
• To avoid statements that might injure or discredit legitimate vendors and to
avoid disclosure of confidential information that might give an unfair advantage
in a competitive business transaction.
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• To recognize that character is an important asset in commerce and should be
given major consideration in the selection of sources of goods or services.
• To adjust claims and settle disputes on the basis of facts and fairness.
• To decline politely any gratuity, rebates, kickbacks, accommodation, or other
unlawful consideration from any one supplier, vendor, or firm with whom the
City is currently doing or could potentially do business. (See also the Fair
Political Practices Commission guidelines in this policy.) All decisions and
actions regarding procurement should be based upon proper business
considerations, and purchasing decisions should not be influenced in any way
by personal obligations.
• To avoid the appearance of impropriety by declining to participate in the
selection process when there is a personal relationship with a person or
business entity seeking a contract with the City or where there is a personal
financial interest in the purchase or contract.
Fair Political Practices Commission (FPPC) Gift Disclosures and Prohibitions
The purpose of this section is to highlight FPPC regulations regarding gifts for all
personnel who may be engaged in the City's purchasing function, hold the office of a public
official or designated in the City’s conflict of interest code. It is essential that all personnel
involved in dealings with the business community exercise a strict rule of professional
conduct and abide by FPPC regulations when offered a “gift.”
Per the FPPC manual, a “gift” is any payment or other benefit provided to you that confers
a personal benefit for which you do not provide goods or services of equal or greater
value. A gift includes a rebate or discount in the price of anything of value unless the
rebate or discount is made in the regular course of business to members of the public
(Government Code Section 82028).
Except as discussed below, you have “received” or “accepted” a gift when you know that
you have actual possession of the gift or when you take any action exercising direction or
control over the gift, including discarding the gift or turning it over to another person (FPPC
Regulation 18941).
This overview of the Fair Political Practices Commission highlights provisions of the
California Political Reform Act; however, you should not rely on this alone to ensure
compliance with the Act. If you have questions, consult the Act and FPPC Regulations, the
City Clerk or legal counsel, or call the FPPC’s toll-free help line at 1-866-275-3772. Other
regulations and important information can be found at the FPPC website,
www.fppc.ca.gov.
Handbooks prepared by the California Fair Political Practices Commission can also be
downloaded from the FPPC website. The manuals used in the preparation of this
overview are:
• Your Duty to File: http://www.fppc.ca.gov/library/seibook9-04.pdf
• The Limitations and Restrictions on Gifts, Honoraria, Travel
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and Loans: http://www.fppc.ca.gov/factsheets/giftlocal.pdf
• FPPC Form 700: http://www.fppc.ca.gov/forms/700-06-07/Form700-06-07.pdf
City Gift Acceptance Policy
Per Administrative Policy 207, City employees shall not accept gifts from the public or
from private individuals with whom the City does business. It is the responsibility of the
employee to return any gift delivered to them and to notify the City Manager's Office of
such action. Acceptance of any unauthorized gift shall subject an employee to
disciplinary action.
This general prohibition does not include gifts such as cookies and candies as long as
such relatively inexpensive expressions of appreciation are placed on a public counter for
everyone to enjoy. The City Manager's Office shall be promptly notified so an appropriate
letter of thanks can be sent.
H. Emergency Purchases
The City Manager may authorize the purchase of goods, supplies, equipment,
materials, and services without following the standard purchasing procedures (i.e.
competitive bidding) where he or she deems that an emergency exists and the public
health, safety or welfare of the community would be affected. All emergency purchases
that would otherwise require City Council approval must be submitted to the City
Council for ratification at the next regular City Council meeting after the purchase is
authorized. The City Manager must declare the need for an emergency purchase
using the Emergency Purchase Authorization form. This form can be found on the
City’s Intranet and is included in the Appendix. The originator of the form should
describe the emergency, including its location, in the sections provided. The estimated
cost of the goods, supplies, equipment, materials, and/or services should be provided,
as well as the selected vendors based on the estimated costs given. If applicable, the
City Manager should also indicate on the Emergency Purchase Authorization form,
the date of the next City Council meeting at which time the emergency purchase can
be ratified.
After the Department Head of the originating department signs the form, the
Department Head will select the vendors to complete the necessary work. If time
permits and the duration of the work shall last longer than seven days, the originating
department will prepare two original contracts and obtain the selected vendor’s
signatures. If time is of the essence, then a signed proposal is sufficient to submit for
City Council ratification, if City Council ratification is required as provided below. The
Department Head then submits the required requisitions, Emergency Purchase
Authorization form with the Department Head’s signature, and the completed
contracts, if applicable, to the Finance Department. The Department Head shall issue
the notice to proceed for work up to a known or estimated amount that does not exceed
$25,000. The City Manager shall issue the notice to proceed for work up to a known
or estimated amount that exceeds $25,000. As emergency purchases are exempted
from competitive bidding, no Bid Recap form is required. The Finance Department will
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print the PO and mail it along with one original contract to the vendor.
If the emergency purchase would have otherwise required formal or informal bidding
procedures, irrespective of the dollar thresholds below, the originating department
must obtain City Council ratification of the purchase at the next regularly scheduled
meeting. The originating department will prepare the Agenda Report requesting City
Council ratification and attach a copy of the Emergency Purchase Authorization form.
The originating department should retain a copy of the Emergency Purchase
Authorization form for its records. For Public Works p rojects, the originating
department shall comply with the requirements set forth in Section 22050 of the Public
Contracts Code.
I. Recycled Products
Solid waste management poses an increasingly difficult problem as America’s
consumption increases and landfill space becomes scarce. As part of an effort to address
this issue, the City of San Juan Capistrano has developed a recycling program, both for
City residents, businesses, and for City employees. It is the intent of the City Council that
the City of San Juan Capistrano takes a leadership role not only in recycling its waste
products but in the purchase of recycled products for use in the delivery of City services.
It is the purpose of this policy to:
1. provide direction in the procurement and use of recycled products;
2. to assure the City meets the required Annual Recovered Organic Waste Product
Procurement Target mandated under 14 CCR Section 18993.1; and
3. to minimize the City’s contribution to climate change pollution, and solid waste
disposal.
Policy
1. It is the policy of the City of San Juan Capistrano to purchase recycled products
whenever possible and use or giveaway a quantity of Recovered Organic Waste
Products that meets or exceeds its Annual Recovered Organic Waste Product
Procurement Target.
2. Purchase of products which cannot be recycled or reused is strongly discouraged.
3. Recycled paper shall be purchased and used in all copy machines which will accept
it and shall also be used for printing purposes.
4. City departments and divisions shall use for their stationery and envelopes, recycled
paper which includes both secondary and post-consumer recycled content. The
percentages of post-consumer and secondary content shall be spelled out in the bid
specifications for letterhead and other paper grades based on industry availability. A
recycled paper designation shall be printed on all City stationery.
5. City departments shall examine their purchasing specifications and, where feasible,
restructure them to require the use of products which incorporate recycled materials
in their manufacture.
6. A five (5%) or greater price preference shall be given to recycled products, reusable
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products offered as alternatives to disposable products, and products designed to be
recycled where they are offered as alternatives to non-recyclable products, (exclusive
of Recycled-Content Paper Products and Recycled-Content Printing and Writing
Paper). Purchase of products which cannot be recycled or reused is strongly
discouraged. (See Municipal Code Section 3-4.402. Recycled Products). The
preference percentage shall be based on the lowest bid or price quoted by the supplier
or suppliers offering non-recycled products.
7. If fitness and quality of Recycled-Content Paper Products and Recycled-Content
Printing and Writing Paper are equal to that of non-recycled items, all departments
and divisions of City shall purchase Recycled-Content Paper Products and Recycled-
Content Printing and Writing Paper that consists of at least thirty percent (30%), by
fiber weight, postconsumer fiber, whenever the total cost is the same or a lesser total
cost than non-recycled items, consistent with the requirements of the Public Contract
Code, Sections 22150 through 22154 and Sections 12200 and 12209, as amended.
8. Comply with State requirements as contained in 14 CCR Division 7, Chapter 12,
Article 12 (SB 1383 procurement regulations) to procure a specified amount of
Recovered Organic Waste Products to support Organic Waste disposal reduction
targets and markets for products made from recycled and recovered Organic Waste
materials, and to purchase Recycled-Content Paper Products and Recycled-Content
Printing and Writing Paper.
9. All Paper Products and Printing and Writing Paper shall be eligible to be labeled with
an unqualified recyclable label as defined in Title 16 Code of Federal Regulations
Section 260.12 (2013).
10. Provide records to the Recordkeeping Designee of all Paper Products and Printing
and Writing Paper purchases within thirty (30) days of the purchase (both recycled-
content and non-recycled content, if any is purchased) made by a division or
department or employee of the City. Records shall include a copy of the invoice or
other documentation of purchase, written certifications as required by this policy for
recycled-content purchases, vendor name, purchaser name, quantity purchased, date
purchased, and recycled content (including products that contain none), and if non-
Recycled-Content Paper Products and/or non-Recycled-Content Printing and Writing
Paper are provided, include a description of why Recycled-Content Paper Products
and/or Recycled-Content Printing and Writing Paper were not provided.
The City shall cooperate with the County of Orange, Orange County cities, and other
governmental agencies in the development of programs and procedures which will further
this policy.
Recycled Products Definitions
Annual Recovered Organic Waste Product Procurement Target means the amount
of Organic Waste in the form of a Recovered Organic Waste Product that the City is
required to procure annually under 14 CCR Section 18993.1. This target shall be
calculated by multiplying the per capita procurement target, which shall be 0.08 tons of
Organic Waste per California resident per year, times the City’s residential population
using the most recent annual data reported by the California Department of Finance.
Annually, CalRecycle will provide notice to each City of its Annual Recovered Organic
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Waste Product Procurement Target by posting such information on CalRecycle’s website
and providing written notice directly to the City.
Compost means the product resulting from the controlled biological decomposition of
organic solid wastes that are source separated from the municipal solid waste stream or
which are separated at a centralized facility or as otherwise defined in 14 CCR Section
17896.2(a)(4). Compost eligible for meeting the Annual Recovered Organic Waste
Product Procurement Target must be produced at a compostable material handling
operation or facility permitted or authorized under 14 CCR Chapter 3.1 of Division 7 or
produced at a large volume in-vessel digestion facility that composts on-site as defined
and permitted under 14 CCR Chapter 3.2 of Division 7. Compost shall meet the State’s
composting operations regulatory requirements.
Direct Service Provider means a person, company, agency, district, or other entity
that provides a service or services to City pursuant to a contract or other written
agreement or as otherwise defined in 14 CCR Section 18982(a)(17).
Electricity Procured from Biomass Conversion means electricity generated from
biomass facilities that convert recovered Organic Waste, such as wood and prunings
from the municipal stream, into electricity. Electricity procured from a biomass
conversion facility may only count toward the City’s Annual Recovered Organic
Waste Product Procurement Target if the facility receives feedstock directly from
certain permitted or authorized compostable material handling operations or
facilities, transfer/processing operations or facilities, or landfills, as described in 14
CCR Section 18993.1(i).
Organic Waste means solid wastes containing material originated from living
organisms and their metabolic waste products including, but not limited to, food, yard
trimmings, organic textiles and carpets, lumber, wood, Paper Products, Printing and
Writing Paper, manure, biosolids, digestate, and sludges, or as otherwise defined in
14 CCR Section 18982(a)(46). Biosolids and digestate are as defined in 14 CCR
Section 18982(a)(4) and 14 CCR Section 18982(a)(16.5), respectively.
Paper Products include, but are not limited to, paper janitorial supplies, cartons,
wrapping, packaging, file folders, hanging files, corrugated boxes, tissue, and
toweling; or as otherwise defined in 14 CCR Section 18982(a)(51).
Printing and Writing Papers include, but are not limited to, copy, xerographic,
watermark, cotton fiber, offset, forms, computer printout paper, white wove envelopes,
manila envelopes, book paper, note pads, writing tablets, newsprint, and other uncoated
writing papers, posters, index cards, calendars, brochures, reports, magazines, and
publications, or as otherwise defined in 14 CCR Section 18982(a)(54).
Pre-consumer material or by-products are generated after the manufacture of a
product is completed, but before the product has reached the end-use consumer.
Examples of pre-consumer recovered materials include obsolete inventories of
finished goods, rejected unused stock, and paper wastes generated during printing,
cutting and other converting operations.
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Post-consumer recycled materials are finished products that have served the
intended use and would normally be disposed of as solid waste. Examples of post-
consumer recovered materials include old newspapers, office paper, yard waste,
steel, glass, aluminum cans, plastic bottles, oil, asphalt, concrete and tires.
Recordkeeping Designee means the public employee appointed by the City Manager
or their designee to track procurement and maintain records of Recovered Organic Waste
Product procurement efforts both by the City and others, if applicable, as required by 14
CCR, Division 7, Chapter 12, Articles 12 and 13.
Recovered Organic Waste Products means products made from California, landfill-
diverted recovered Organic Waste processed at a permitted or otherwise authorized
operation or facility, or as otherwise defined in 14 CCR Section 18982(a)(60). Products
that can be used to meet the Annual Recovered Organic Waste Product Procurement
Target shall include Compost, SB 1383 Eligible Mulch, Renewable Gas from an in-vessel
digestion facility, and Electricity Procured from Biomass Conversion as described herein
and provided that such products meet requirements of 14 CCR, Division 7, Chapter 12,
Article 12.
Recycled material is waste and by-products that have been recovered or diverted
from the solid waste stream and that can be utilized in place of raw material in the
manufacturing of a product. Recycled materials may consist of materials derived
from post-consumer waste, manufacturing waste, industrial scrap, agricultural waste
and other items, all of which can be used in the manufacture of new products.
Recyclability means that the Paper Products and Printing and Writing Paper offered or
sold to the City are eligible to be labeled with an unqualified recyclable label as defined
in 16 Code of Federal Regulations Section 260.12 (2013).
Recycled-Content Paper Products and Recycled-Content Printing and Writing
Paper means such products that consist of at least thirty percent (30%), by fiber
weight, postconsumer fiber, consistent with the requirements of Sections 22150 to
22154 and Sections 12200 and 12209 of the Public Contract Code, and as amended.
Renewable Gas means gas derived from Organic Waste that has been diverted from a
landfill and processed at an in-vessel digestion facility that is permitted or otherwise
authorized by 14 CCR to recover Organic Waste, or as otherwise defined in 14 CCR
Section 18982(a)(62).
SB 1383 means Senate Bill 1383 of 2016, establishing methane emissions reduction
targets in a Statewide effort to reduce emissions of short-lived climate pollutants as
amended, supplemented, superseded, and replaced from time to time.
SB 1383 Eligible Mulch means mulch eligible to meet the Annual Recovered Organic
Waste Product Procurement Target, pursuant to 14 CCR Chapter 12 of Division 7. This
SB 1383 Eligible Mulch shall meet the following conditions for the duration of the
applicable procurement compliance year, as specified by 14 CCR Section 18993.1(f)(4):
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1. Produced at one of the following facilities:
i. A compostable material handling operation or facility as defined in
14 CCR Section 17852(a)(12), that is permitted or authorized under
14 CCR Division 7, other than a chipping and grinding operation or
facility as defined in 14 CCR Section 17852(a)(10);
ii. A transfer/processing facility or transfer/processing operation as
defined in 14 CCR Sections 17402(a)(30) and (31), respectively, that
is permitted or authorized under 14 CCR Division 7; or,
iii. A solid waste landfill as defined in Public Resources Code Section
40195.1 that is permitted under 27 CCR Division 2.
2. Meet or exceed the physical contamination, maximum metal concentration,
and pathogen density standards for land application specified in 14 CCR
Sections 17852(a)(24.5)(A)1 through 3.
SB 1383 Regulations means or refers to the Short-Lived Climate Pollutants: Organic
Waste Reduction regulations developed by CalRecycle and adopted in 2020 that created
14 CCR, Division 7, Chapter 12 and amended portions of regulations of 14 CCR and 27
CCR.
Recovered Organic Waste Procurement Target
1. City will annually procure for use or giveaway a quantity of Recovered Organic
Waste Products that meets or exceeds its Annual Recovered Organic Waste
Product Procurement Target through the implementation of this Policy.
2. To be eligible to meet the Annual Recovered Organic Waste Product Procurement
Target, products that may be procured include the following (provided that each
product meets the criteria included in their respective definition included in this
Policy):
i. SB 1383 eligible compost
ii. SB 1383 eligible mulch
iii. Renewable Gas (in the form of transportation fuel, electricity, or heat)
iv. Electricity procured from biomass conversion
Requirements for City Departments
A. Compost and SB 1383 Eligible Mulch procurement. Divisions and departments
responsible for landscaping maintenance, renovation, or construction shall:
1. Use Compost and SB 1383 Eligible Mulch produced from recovered
Organic Waste for landscaping maintenance, renovation, or construction,
as practicable, whenever available, and capable of meeting quality
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standards and criteria specified. SB 1383 Eligible Mulch used for land
application must meet or exceed the physical contamination, maximum
metal concentration and pathogen density standards specified in 14 CCR
Section 17852(a)(24.5)(A)(1) through (3).
2. When City uses Compost and SB 1383 Eligible Mulch and the applications
are subject to the City’s Water Efficient Landscaping Ordinance (WELO),
pursuant to Municipal Code Title 8, Chapter 20, Departments shall comply
with the City’s WELO.
3. Keep records, including invoices or proof of Recovered Organic Waste
Product procurement (either through purchase or acquisition), and submit
records to the Recordkeeping Designee, upon completion of project.
Records shall include:
a. General procurement records, including:
(i) General description of how and where the product was used
and applied, if applicable;
(ii) Source of product, including name, physical location, and
contact information for each entity, operation, or facility from
whom the Recovered Organic Waste Products were
procured;
(iii) Type of product;
(iv) Quantity of each product; and,
(v) Invoice or other record demonstrating purchase or
procurement.
b. For Compost and SB 1383 Eligible Mulch provided to residents
through giveaway events or other types of distribution methods, keep
records of the Compost and SB 1383 Eligible Mulch provided to
residents. Records shall be maintained and submitted to the
Recordkeeping Designee in accordance with the requirements
specified in this policy.
c. For procurement of SB 1383 Eligible Mulch, maintain an enforceable
mechanism(s) requiring that the mulch procured by the City or Direct
Service Provider meets the land application standards specified in
14 CCR Section 18993.1.
d. When Procurement of Recovered Organic Waste Products occurs
through a Direct Service Provider, enter into a written contract or
agreement or execute a purchase order with enforceable provisions
that includes: (i) definitions and specifications for SB 1383 Eligible
Mulch, Compost, Renewable Gas, and/or Electricity Procured from
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Biomass Conversion; and, (ii) an enforcement mechanism (e.g.,
termination, liquidated damages) in the event the Direct Service
Provider is not compliant with the requirements.
B. Renewable Gas procurement (used for fuel for transportation, electricity, or heating
applications whenever practical). For Renewable Gas procurement, City shall:
1. Procure Renewable Gas made from recovered Organic Waste for
transportation fuel, electricity, and heating applications to the degree that it
is appropriate and available for the City and to help meet the Annual
Recovered Organic Waste Product Procurement Target, which requires
compliance with criteria specified in 14 CCR Section 18993.1.
2. Keep records for the amount of Renewable Gas procured and used by the
City and submit records to the Recordkeeping Designee on a quarterly
schedule. The quarterly schedule shall be as follows: Renewable Gas
records are to be provided to the Recordkeeping Designee by April 15 for
January 1 through March 31, July 15 for April 1 through June 30, October
15 for July 1 through September 30, and January 15 for October 1 through
December 31.
3. If the City procures Renewable Gas from a POTW,
a. Annually verify that the Renewable Gas from the POTW complies
with the requirements specified in 14 CCR Section 18993.1(h),
including, but not limited to the exclusion in 14 CCR Section
17896.6(a)(1) and the items listed within this Section.
b. Annually receive a record from the POTW documenting the tons of
Organic Waste received by the POTW from: (i) a compostable
material handling operation or facility as defined in 14 CCR Section
17852(a)(12), other than a chipping and grinding operation or facility
as defined in 14 CCR Section 17852(a)(10), that is permitted or
authorized under 14 CCR Division 7; (ii) transfer/processing facility
or transfer/processing operation as defined in 14 CCR Sections
17402(a)(30) and (31), respectively, that is permitted or authorized
under 14 CCR Division 7; or (iii) a solid waste landfill as defined in
Public Resources Code Section 40195.1 that is permitted under 27
CCR Division 2.
c. Annually receive documentation from the POTW of the percentage
of biosolids that the POTW produced and transported to activities
that constitute landfill disposal in order to demonstrate that the
POTW transported less than twenty-five percent (25%) of the
biosolids it produced to activities that constitute landfill disposal. For
the purposes of this Policy, landfill disposal is defined pursuant to 14
CCR Section 18983.1(a) and includes final disposition at a landfill;
use of material as alternative daily cover or alternative intermediate
cover at a landfill, and other dispositions not listed in 14 CCR Section
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864426.1
18983.1(b). Alternative daily cover or alternative intermediate cover
are defined in 27 CCR Sections 20690 and 20700, respectively.
d. Annually receive documentation that the POTW receives vehicle-
transported solid waste that is an anaerobically digestible material
for the purpose of anaerobic co-digestion with POTW treatment plant
wastewater to demonstrate that the POTW meets the requirement of
14 CCR Section 18993.1(h)(2).
e. City shall submit these records to the Recordkeeping Designee on
an annual basis, not to exceed (30) days from receipt of notification
from the POTW.
C. Electricity Procured from Biomass Conversion whenever practical. For Electricity
Procured from Biomass Conversion, City shall:
1. Procure electricity from a biomass conversion facility that receives
feedstock from a composting facility, transfer/processing facility, a solid
waste landfill, and/or receives feedstock from the generator or employees
on behalf of the generator of the Organic Waste and to the degree that it is
available and practicable for the City and to help meet the Annual
Recovered Organic Waste Product Procurement Target, which requires
compliance with criteria specified in 14 CCR Section 18993.1.
2. Maintain records and conduct the following recordkeeping activities:
a. Keep records in the same manner indicated in Section A.3. above of
this Policy for the amount of Electricity Procured from Biomass
Conversion facilities, including the general procurement record
information.
b. Receive written notification by an authorized representative of the
biomass conversion facility certifying that biomass feedstock was
received from a permitted solid waste facility identified in 14 CCR
Section 18993.1(i).
c. Provide these records to the Recordkeeping Designee.
Requirements for Direct Service Providers
Direct Service Providers of landscaping maintenance, renovation, and construction shall:
1. Use Compost and SB 1383 Eligible Mulch, as practicable, produced from
recovered Organic Waste, for all landscaping renovations, construction, or
maintenance performed for the City, whenever available, and capable of
meeting quality standards and criteria specified. SB 1383 Eligible Mulch
used for land application shall comply with 14 CCR, Division 7, Chapter 12,
Article 12 and must meet or exceed the physical contamination, maximum
metal concentration and pathogen density standards specified in 14 CCR
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Section 17852(a)(24.5)(A)(1) through (3).
2. Direct Service Provider shall comply with the City’s WELO pursuant to
Municipal Code Title 8, Chapter 20.
3. Keep and provide records of Procurement of Recovered Organic Waste
Products (either through purchase or acquisition) to Recordkeeping
Designee, upon completion of projects. Information to be provided shall
include:
a. General description of how and where the product was used and if
applicable, applied;
b. Source of product, including name, physical location, and contact
information for each entity, operation, or facility from whom the
Recovered Organic Waste Products were procured;
c. Type of product;
d. Quantity of each product; and,
e. Invoice or other record demonstrating purchase or procurement.
Requirements for Paper Product Vendors
All vendors that provide Paper Products (including janitorial Paper Products) and Printing
and Writing Paper to City shall:
1. Provide Recycled-Content Paper Products and Recycled-Content Printing
and Writing Paper that consists of at least thirty percent (30%), by fiber
weight, postconsumer fiber, if fitness and quality are equal to that of non-
recycled item, and available at equal or lesser price.
2. Provide Paper Products and Printing and Writing Papers that meet Federal
Trade Commission Recyclability standard as defined in Title 16 Code of
Federal Regulations Section 260.12 (2013).
3. Certify in writing the minimum percentage of postconsumer material in the
Paper Products and Printing and Writing Paper offered or sold to the City.
This certification requirement may be waived if the percentage of
postconsumer material in the Paper Products, Printing and Writing Paper,
or both can be verified by a product label, catalog, invoice, or a
manufacturer or vendor internet website.
4. Ensure that the Paper Products and Printing and Writing Paper offered or
sold to the City is eligible to be labeled with an unqualified recyclable label
as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).
5. Provide records to the City Department or Division of all Paper Products
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and Printing and Writing Paper purchased from the vendor within thirty (30)
days of the purchase (both recycled-content and non-recycled content, if
any is purchased) made by a division or department or employee of the City.
Records shall include a copy of the invoice or other documentation of
purchase, written certifications as required in items 3 & 4 of this Section for
recycled-content purchases, purchaser name, quantity purchased, date
purchased, and recycled content (including products that contain none).
6. All vendors providing printing services to the City via a printing contract or
written agreement, shall use Printing and Writing Paper that consists of at
least thirty percent (30%), by fiber weight, postconsumer fiber, or as
amended by Public Contract Code Section 12209.
Recordkeeping Responsibilities
A. The Public Works Department will be the responsible department and will select
an employee to act as the Recordkeeping Designee that will be responsible for
obtaining records pertaining to Procurement of Recovered Organic Waste
Products and Recycled-Content Paper Products and Recycled-Content Printing
and Writing Paper.
B. The Recordkeeping Designee will do the following to track Procurement of
Recovered Organic Waste Products, Recycled-Content Paper Products, and
Recycled-Content Printing and Writing Paper:
1. Collect and collate copies of invoices or receipts (paper or electronic) or
other proof of purchase that describe the procurement of Printing and
Writing Paper and Paper Products, including the volume and type of all
paper purchases; and, copies of certifications and other required
verifications from all departments and/or divisions procuring Paper Products
and Printing and Writing Paper (whether or not they contain recycled
content) and/or from the vendors providing Printing and Writing Paper and
Paper Products. These records must be kept as part of City’s
documentation of its compliance with 14 CCR Section 18993.3.
2. Collect and collate copies of invoices or receipts or documentation
evidencing procurement from all departments and divisions procuring
Recovered Organic Waste Products and invoices or similar records from
vendors/contractors/others procuring Recovered Organic Waste Products
on behalf of the City to develop evidence of City meeting its Annual
Recovered Organic Waste Product Procurement Target. These records
must be kept as part of the City’s documentation of its compliance with 14
CCR Section 18993.1.
3. Collect, collate, and maintain documentation submitted by the City, Direct
Service Providers, and/or vendors, including the information reported to the
Recordkeeping Designee in accordance with this Policy.
4. Compile an annual report on the City’s direct procurement, and
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vendor/other procurement on behalf of the City, of Recovered Organic
Waste Products, Recycled-Content Paper Products, and Recycled-Content
Printing and Writing Paper, consistent with the recordkeeping requirements
contained in 14 CCR Section 18993.2 for the Annual Recovered Organic
Waste Product Procurement Target and 14 CCR Section 18993.4 for
Recycled-Content Paper Products and Recycled-Content Printing and
Writing Paper procurement. This report shall be made available to the City’s
responsible entity for compiling the annual report to be submitted to
CalRecycle (which will include a description of compliance on many other
SB 1383 regulatory requirements) pursuant to 14 CCR Division 7, Chapter
12, Article 13.
Criteria for Selecting Recycled Materials for Purchase
If a decision has been made to purchase recycled materials, the recommended
products should contain, in order of preference, the highest percentage of recycled
content of post-consumer recovered material available in the marketplace.
Recycled products should also be expected to perform as well as non-recycled
products, to be purchased at a reasonable price and to be available within a
reasonable time period. In addition to the recovered material content of a product,
important criteria in selecting products should also be the ability of the product and
its packaging to be reused, reconditioned for use or recycled through existing
recycled collection programs. Preferred products and packaging are those designed
to minimize waste and toxic by-products in their manufacture, use, and disposal.
J. Energy Efficient Products
The City of San Juan Capistrano endeavors to purchase durable, low maintenance
energy-efficient equipment and products to reduce greenhouse gas emissions and to
lower the City’s cost of electricity consumption.
Policy
1. All Departments are encouraged to purchase energy-consuming equipment that
meets either Energy Star specifications or achieve performance in the upper 25%
of energy-efficiency, based on criteria established by the U.S. Department of
Energy. Specific “Energy Star” labeled products are identified on the following
website: www.energystar.gov. These products must also meet user requirements
for quality, performance, and durability.
2. The equipment categories covered under this policy include, but are not limited to:
• Office equipment, heating and cooling equipment
• Exit signs
• Lighting
• Appliances
• Other commercial products that consume electricity
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3. In addition, employees will use appliances and equipment in a manner that
optimizes their energy efficiency features by following manufacturer’s instructions.
To accomplish this policy, City employees will be educated about the economic
savings and environmental benefits of Energy Star compliant equipment, as well
as other practices that minimize energy use.
K. Local Bidders
It is the intent of the City Council to encourage uniform bidding to obtain full and open
market competition. However, the City Council also recognizes that promoting the
economic viability of the City’s local businesses is critical to economic health of the city in
that local businesses provide tax revenue to the city and jobs for local inhabitants. In an
effort to support competitive bidding and the City’s local vendors, staff is encouraged to
obtain bids from local qualified vendors whenever possible.
L. New Vendor Procedure
The Finance Department requires every new vendor to complete a Business License
Application and W9 form. The Vendor Approval Application (see Appendix B) gives
the vendor the opportunity to give the City correct information such as address,
phone and fax numbers, Taxpayer Identification number, sales representative or
contact name and references. It also allows the vendor to indicate the specific
commodities on which they wish to bid. Should a department anticipate using a new
resource, the vendor should complete the Vendor Approval Application and the W9
form and forward to the Finance Department. The Vendor Approval Application Form
and the W9 Form are available from the Finance Department, or they can be
downloaded from the City of San Juan Capistrano’s web site. Upon receiving the
completed forms, the Finance Department will set up the new vendor in the financial
system.
SECTION II – MINOR PURCHASES
Minor purchases do not require competitive bids. The value of a minor purchase is
$10,000 or less. This value represents a one-time, per fiscal year purchase, or the
total value of multiple purchases of the same item or group of similar items throughout
the fiscal year. Minor Purchase Example: One Air Compressor @ $2,200. A minor
purchase may be a single item or a group of like items that relate to one another, e.g.
sprinkler bodies and sprinkler heads, waterlines, backflow devices, fencing, etc., or as
otherwise determined by the Department Head. Agreements to purchase, on an
annual basis, (annual purchase order or other form of agreement) of an item or group
of items that relate to one another, fall into two categories:
• An annual fiscal year total value for the product or non-professional service of
$10,000 or less will be considered a minor purchase.
• An annual fiscal year total value for the product or service exceeding $10,000
will require competitive quotes for award per this policy and are not considered
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864426.1
minor purchases.
A. Petty Cash
An employee may get reimbursed for authorized expenses up to a maximum of $50.00.
Eligible expenses are such items as emergency supplies and tools not readily available,
or an approved meeting attendance. Amounts of reimbursement will be charged to the
appropriate departmental account. Departments shall make deliberate effort to use City
issued credit cards where possible in order to minimize petty cash disbursements.
Procedure for Petty Cash Reimbursement
1. Upon purchase of an item, a receipt should be retained by the employee.
2. A Petty Cash Request form (form available from the Finance Department) should be
filled out by the employee specifying:
• Name of employee
• Date of purchase
• Amount of reimbursement for the item purchased
• Account number to which the amount should be charged
• Purpose of the reimbursement
• Approval by the Department Head or their designee
Petty Cash Request forms may be obtained from the Finance Department.
3. Each department should designate in writing, in advance, one or more persons who
have authority to approve Petty Cash Requests. The Department Head or their
designee must sign approval of the Petty Cash Request form prior to submittal for
reimbursement.
4. The completed Petty Cash Request form and the receipt should be submitted to the
Cashier for prompt reimbursement.
5. Requests for reimbursement must be submitted within five (5) working days from the
date of purchase.
6. Mileage requests should be submitted monthly.
B. Credit or Procurement Cards
City issued credit or procurement cards are provided as a method of purchasing goods
similar to the process for a check request or petty cash reimbursement and are used to
procure budgeted low value items. The purchase order (PO) is the primary and
preferable procurement method and serves as the main source of encumbering and
procuring services, goods and materials and is recommended for all purchases. Credit
card purchases may include, but are not limited to, meals, meeting attendance, travel
arrangements, etc. The cardholder and cardholder's manager are responsible for
proper use of the credit or procurement card. The cardholder's manager is to designate
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864426.1
original and subsequent spending limits and types of authorized purchases. It is in
the City's best interest to pay the credit/procurement card billing in a timely manner
and avoid any interest expense. When cardholders render a timely accounting of their
purchases along with the receipts, the matching of the itemized billing to the
cardholder's records results in a time-saving process. This can minimize the amount
of time spent administering the account.
1. Use of Credit and Procurement Cards
A Division Manager or Department Head shall determine which City staff members
shall be assigned credit or procurement cards. The credit and procurement cards may
only be used for budgeted City-related business expenses. Original and subsequent
single and monthly transaction limits are to be authorized by the cardholder's manager
and in no case shall exceed $5,000 unless authorized by the City Manager. Once
such cards are assigned, staff shall abide by the policy set forth herein. The Finance
Department policies and procedures shall be adhered to according to this policy.
These cards may only be used by the employees they are issued to.
2. Purchases of Services
Services are typically not to be paid for with a credit or procurement card. On-site
services are not authorized to be ordered and paid for utilizing a credit card. Any
variance from this rule must be in writing from the Chief Financial Officer. Offsite
minor service purchases, such as printing, blade sharpening, picture framing, etc.
are permitted as long as the vendor is legally established as an incorporated
business entity. Non-Incorporated service vendors will require the use of a Purchase
Order and it shall be the responsibility of the Finance Department to identify non-
incorporated business entities.
3. Procedure for Payment of Credit or Procurement Cards
a. Upon purchase of goods or services, a receipt will be retained by the employee
detailing the goods and services purchased.
b. Where not otherwise evident, the employee shall indicate on the receipt how the
expenditure pertains to bonafide City business.
c. Each employee will receive a monthly credit card statement from the issuing bank
and must approve the charges as well as attach the appropriate receipts and return
it to the Finance Department within five working days. Goods or services ordered
by phone may not have receipts but should provide a brief written explanation of
the expenditure.
d. Failure to provide receipts or other misuse of City credit cards can result in
disciplinary actions as appropriate.
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C. Check Requests
Check requests may be issued for purchases of $10,000 or less, or where a PO would
not be expedient. Check requests in excess of $10,000 are subject to approval by the
City Manager. The Finance Department may issue "off-cycle" checks under
circumstances where time is of the essence or for emergency purchases. As a general
rule, departments are to plan their activities to preclude the necessity to request an "off-
cycle" check.
SECTION III – GOODS, SUPPLIES, EQUIPMENT, AND MATERIALS
"Goods, supplies, equipment and materials" means fixed, movable, disposable, and/or
reusable products, commodities, or items used by the City, including, but not limited to,
office supplies, program supplies, subscriptions, vehicles, fuel and vehicle supplies, tools,
computers, computer hardware and software, landscape and irrigation supplies, power
tools, janitorial supplies, office furniture, and fixtures, which shall be furnished to or used
by any department. In instances where goods and services are purchased together from
one vendor, this section shall only apply if the predominant portion of the purchase is
goods. For example, a purchase of equipment for $1,000 with a $300 installation fee
would be covered under this section of the policy. A repair of equipment for $1,000 in
labor and $300 in parts would be covered under Section IV - Service Contracts.
Generally, authority is established by the dollar amount of the purchase. There are three
levels of authority for normal purchases: Department/Division/Project Manager Award,
City Manager Award, and City Council Award. The following matrix provides purchasing
procedures when purchasing goods, supplies, equipment and materials. The department
must state in the Bid Recap Form how the quotes obtained for the supplies, equipment,
and material substantially conform to the required specifications.
For the thresholds below, the term “contract” is not limited to formal contracts and includes
all procurement with a vendor for a given scope of work as defined by the procurement
action. Work shall not be split into separate procurement actions with the sole intent of
circumventing the thresholds below. However, similar work with the same vendor for
different projects may be considered separate procurement acts for the purposes of
applying the thresholds below.
For amendments to existing agreements, the thresholds below take into account the
cumulative total of all of the following: the original amount of the agreement, all agreement
amendments/change orders to date, plus the anticipated agreement/change order.
$10,000 or less
• No bidding or quotes required.
• Purchase Order is recommended, but not required.
• Department Head or designee signs invoice and
submits to the Finance Department.
Purchases over
$10,000 up to
• City Manager approves original purchase and change
orders up to a cumulative amount of $25,000.
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$25,000 • Follow informal quote procedures (See Section VII.
Paragraph E).
• Department selects vendor.
• Department submits requisition with Department
Head signature and bid recap to Finance
Department.
• Finance Department prints and mails Purchase Order
to vendor.
Purchases over
$25,000 up to
$45,000
• City Manager approves original purchase and change
orders up to a cumulative amount of $45,000.
• Follow Formal Request for Proposal bidding
procedures (See Section VII. Paragraph F).
• Department selects vendor.
• Department submits requisition with Department
Head signature and bid recap to Finance
Department.
• Finance Department prints and mails Purchase Order
to vendor.
Purchases over
$45,000
• City Council approves original purchase and change
orders that would result in cumulative value of
Purchase Order (change orders plus original
contract) to exceed $45,000.
• Follow Request for Proposal bidding procedures (See
Section VII. Paragraph F).
• Department prepares formal bid specifications.
• Department prepares Agenda Report requesting City
Council action.
• City Council awards bid/contract.
• Department prepares two contract documents and
obtains vendor signatures.
• Department prepares Contract Transmittal Form with
attachments, purchase requisition and submits to the
City Clerk.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase Order
to vendor.
SECTION IV – SERVICE CONTRACTS (PROFESSIONAL AND MAINTENANCE)
Professional services include those services provided by any specially trained, educated,
experienced or licensed person, company, corporation, or firm, and which involve the
exercise of discretion and independent judgment together with an advanced or
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864426.1
specialized knowledge, expertise, training, or unique skills gained by formal studies or
experience. Contracts negotiated for professional services must be based on
demonstrated competence, professional qualifications for the services required,
availability, and fair and reasonable cost. Consultant services include services that are
of an advisory nature, which involve the consultant providing a recommended course of
action based on Professional expertise, and results in an end product in the form of a
written transmittal of information.
Maintenance services include the furnishing of labor, time, or effort by a contractor
including, but not limited to (a) routine, recurring, and usual work for the preservation or
protection of a publicly-owned, or publicly-operated facility for intended purposes; (b)
minor repainting; (c) resurfacing of streets and highways; (d) landscape maintenance,
including mowing, watering, trimming, pruning, planting, replacement of plants, and
servicing of irrigation and sprinkler systems; and (e) work performed to keep, operate and
maintain publicly-owned water or waste disposal systems.
For the purposes of this policy, professional and maintenance services contracts will
include, but not be limited to, a wide variety of expertise and specialized crafts. Examples
include:
Accounting
Affordable Housing
Alarm Systems
Auditing
Archaeology
Architecture*
Building/Engineering Plan Check/Inspection
Cable TV
Community Planning and Development
Computer Management
Cultural Resource Management (Archaeology, History)
Construction Management*
Document Processing Services
Engineering including Civil, Mechanical, Electrical, Structural, and Seismic*
Environmental (CEQA/NEPA services)*
Finance
Fleet Maintenance
Entertainment
Equipment Rental
Geotechnical
Ground Water Recovery
Human Resources
Information Technology
Inspection Services
Janitorial
Landscape Architecture/Arboriculture*
Legal Consultants
Mapping, Maintenance and Refurbishing of Public Facilities and Lands
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864426.1
Material testing and laboratory work
Payroll
Pest Control
Sound (Noise) Attenuation
Security
Surveying*
Technical Assistance
Traffic and Related Equipment and Service
Uniforms
Any other professional service as deemed appropriate by the City Manager.
∗ Subject to heightened approval requirement under Government Code Section
4526. The City cannot award contracts for these specialized services unless the
award is based on the “demonstrated competence and qualification for these
type of services at fair and reasonable prices.”
When contracting for professional services, the formal Request for Proposals or Request
for Qualifications (RFP/RFQ) procedures (see Section VI., Paragraph F) as specified in
Section VI., Paragraph F of this Policy shall be utilized where applicable and to the
maximum extent possible, as time and circumstance allow. The RFP/RFQ procedure is
required for all Professional and Maintenance service contracts over $25,000 (See
Exceptions to Competitive Bidding Requirements in Section VII). For all service contracts,
the standard "Professional Services Agreement" shall be used and a separate Scope of
Work attached to each Agreement. The following matrix provides purchasing procedures
when contracting for Professional and Maintenance services.
Standard Professional and Maintenance Service Contracts (includes contracts for
Fee Recovery Vendors 1)
For the thresholds below, the term “contract” is not limited to formal contracts and includes
all procurement with a vendor for a given scope of work as defined by the procurement
action. Work shall not be split into separate procurement actions with the sole intent of
circumventing the thresholds below. However, similar work with the same vendor for
different projects may be considered separate procurement acts for the purposes of
applying the thresholds below.
For amendments to existing agreements, the thresholds below take into account the
cumulative total of all of the following: the original amount of the agreement, all agreement
amendments/change orders to date, plus the anticipated agreement/change order.
1 See Section VI for definition of Fee Recovery Vendors.
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864426.1
$10,000 or less
• No bidding or quotes required.
• Purchase Order is recommended, but not required.
• Department Head or designee signs invoice and
submits to the Finance Department.
Contracts over
$10,000 up to
$25,000
• City Manager approves contracts and change orders
up to a cumulative value of $25,000 (change orders
plus original contract).
• Follow informal solicitation of qualifications or
informal quotes procedures (See Section VII.,
Paragraph C and Section VII., Paragraph E).
• Department selects vendor.
• Department prepares two contract documents and
obtains vendor signatures.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase Order
to vendor.
Contracts over
$25,000 up to
$45,000
• City Manager approves contracts and change orders
up to a cumulative value of $45,000 (change orders
plus original contract).
• Follow formal RFP/RFQ bidding procedures (See
Section VII. Paragraph D).
• Department selects vendor.
• Department prepares two contract documents and
obtains vendor signatures.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase Order
to vendor.
Contracts over
$45,000
• City Council approves contracts and change orders
that would result in cumulative value (change orders
plus original contract) exceeding $45,000.
• Follow formal RFP/RFQ bidding procedures (See
Section VII. Paragraph D).
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864426.1
• Department prepares Agenda Report requesting City
Council action.
• City Council awards bid/contract.
• Department prepares two contract documents and
obtains vendor signatures.
• Department prepares Contract Transmittal Form and
submits to the City Clerk.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it with requisition to Finance Department.
• Finance Department prints and mails Purchase Order
to vendor.
* For Professional Services associated with Public Works projects, including, but not
limited to, construction management, design, or study projects, where a Professional
Services Agreement is executed, an Amendment to the Professional Services Agreement
is required if the projected final cost exceeds the original contract amount. Limited to
Professional Services for Public Works projects, the City Manager shall be authorized to
negotiate and execute, without City Council action, one or more Change Orders to the
Professional Services Agreement, provided that the amount is within the contract
contingency and project budget, and the Change Order does not exceed 10% of the
original contract amount or $50,000, whichever is less.
SECTION V – PUBLIC WORKS PROJECTS
Public Works projects include construction, reconstruction, erection, alteration,
renovation, improvement, demolition, and repair work involving any facility owned, leased,
or operated by the City as defined in California Public Contract Code section 22002, or
as subsequently amended. The definition also includes painting/ repainting, plumbing,
electrical wiring, and/or other trade work for any facility owned, leased or operated by the
City. Construction, erection, improvement, or repair of dams, reservoirs, and electrical
transmission lines of 230,000 volts and higher that are owned by the City, are also
considered a public project.
A public project does not include maintenance work, consisting of routine, recurring, and
usual work for the preservation or protection of facilities owned or operated by the City,
including minor repainting. Street and highways resurfacing at less than one inch (1”)
deep, landscape maintenance (mowing, watering, trimming, pruning, planting,
replacement of plants, and servicing of irrigation and sprinkler systems) are not a public
project and contracts for services related to this maintenance work is covered under
Section IV – Service Contracts.
It is the City of San Juan Capistrano’s policy to follow the Uniform Construction Cost
Accounting Procedures (UCCAP) for all Public Projects, as set forth in the Public Contract
Code Article 2, commencing with Section 22010 (see Appendix A). Also, see City
Resolution 06-09-19-04 as approved on September 19, 2006 in Appendix A. It is also the
City of San Juan Capistrano’s policy to adopt the purchasing limits and policies as set
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864426.1
forth in Public Contract Code Sections 22030 to 22045, as amended (See Appendix A).
In the event there is an inconsistency between the policies stated herein and Public
Contract Code Sections 22010, et seq., the provisions of the Public Contract Code
Sections 22010, et seq., shall prevail.
If an informal bid result for the lowest and most qualified bidder results in a bid over
$200,000, the project may proceed with the informal bid process, and the City Council
must approve such an award by four-fifths vote consistent with Public Contract Code
Section 22034. If an informal bid result for the lowest and most qualified bidder is over
$212,500, the project must be formally re-bid for City Council approval. The following
matrix provides purchasing procedures when contracting for Public Construction projects.
Contracts up to
$45,000
• City Manager approves contracts and change orders
that would result in cumulative value (change orders
plus original contract) not to exceed $45,000. The
Department Head is authorized to issue change
orders for changes or additions to the original scope
of work that result in up to 10% aggregate change in
the contract price, provided the amount is within the
contract contingency and project budget.
• City Manager awards and signs contract.
• Department prepares two contract documents and
obtains vendor signatures.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase
Order to vendor.
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864426.1
Contracts over
$45,000 and up to
$60,000
• City Council approves contracts and change orders
that would result in cumulative value (change orders
plus original contract) not to exceed $60,000. The
City Manager is authorized to issue change orders
for changes or additions to the original scope of work
that result in up to 10% aggregate change in the
contract price, provided the amount is within the
contract contingency and project budget.
• City Council adopts plans, specifications, and
working details.
• Department prepares Agenda Report requesting City
Council action.
• Department prepares two contract documents and
obtains vendor signatures.
• City Council awards bid/contract.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase
Order to vendor.
Contracts over
$60,000 and up to
$200,000 2
• City Council approves contracts and change orders
that would result in cumulative value (change orders
plus original contract) not to exceed $200,000. The
City Manager is authorized to issue change orders
for changes or additions to the original scope of work
that result in up to 10% aggregate change in the
contract price provided the amount is within the
contract contingency and project budget.
• Follow informal bidding procedures (See Section VII.
Paragraph G).
• City Council adopts plans, specifications, and
working details.
• Department prepares Agenda Report requesting City
Council action.
• Department prepares two contract documents and
obtains vendor signatures.
• City Council awards bid/contract.
• Department submits to City Clerk Contract
2 This limit is tied to Public Contract Code Section 22032. Any changes to limits set forth in the UPCCA are hereby adopted as part of
this policy.
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864426.1
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase
Order to vendor.
Contracts over
$200,000
• City Council approves contracts exceeding $200,000.
The City Manager is authorized to issue change
orders for changes or additions to the original scope
of work that result in up to 10% aggregate change in
contract price provided the amount is within the
contract contingency and project budget.
• Follow formal bidding procedures (See Section VI.
Paragraph H).
• City Council adopts plans, specifications, and
working details.
• Department prepares Agenda Report requesting City
Council action.
• Department prepares two contract documents and
obtains vendor signatures.
• City Council awards bid/contract.
• Department submits to City Clerk Contract
Transmittal Form with attachments and purchase
requisition signed by Department Head.
• City Clerk signs Contract Transmittal Form and
forwards it along with requisition to Finance
Department.
• Finance Department prints and mails Purchase
Order to vendor.
Additionally, for all Public Works contracts (for a “public works” as defined in Labor Codes
1720 and 1720.3), the following legal requirements shall be incorporated into all
procurements:
• For contracts over one thousand dollars ($1,000), the contract shall require that
prevailing wage be paid (not applicable to janitorial services).
• For contracts over $25,000, the contractor that is awarded a public works contract
shall, before commencement of work, file a payment bond with and approved by
the Finance Department that is no less than 100 percent of the total amount due
under the contract, and all bids for such contracts shall state that such payment
bond is required.
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864426.1
Prequalification of Contractors Seeking To Bid on Public Works Projects
In accordance with the provisions of California Public Contract Code section 20101, the
City may establish a program to pre-qualify contractors and subcontractors to bid on the
City's Public Works projects.
SECTION VI - CHANGE ORDERS FOR PUBLIC WORKS PROJECTS
These guidelines shall govern the process and administration of Public Works project
contracts including change orders, time extensions, and budgetary amendments relating
to Capital Improvement Projects. Implementation of these guidelines will allow the City
to implement Public Works projects and Capital Improvement projects in a timely fashion.
For Change Orders for Public Works Contracts, all of the following shall apply:
1. The total of all Change Orders approved without prior City Council Authorization
shall not exceed the project contingency as established by the City Council at the
time of the award of bid (typically 10% above the approved bid amount).
2. The City Manager may, at her/his discretion, bring any Change Order before the
City Council.
3. During the construction period, pursuant to a contract awarded by the City Council,
the City Manager is authorized to negotiate and execute without City Council
action, one or more Change Orders provided that they do not exceed 10% of the
original contract provided the amount is within the contract contingency and project
budget. In no case shall this change order authority exceed $100,000.
4. The Project Manager is responsible to process required paperwork to modify the
Contract to reflect the approved change order(s) and Contract Amendments.
5. Any deviations from the policy must be reviewed and approved by the City Council.
TIME EXTENSIONS
1. The City Manager may approve any time extension required that is caused by
weather delays and/or material availability delays.
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864426.1
SECTION VII – BIDDING PROCEDURES
A. Introduction to Bidding Procedures
Overview
This policy requires that certain bidding procedures be followed when purchasing goods,
supplies, equipment and materials; contracting for professional and maintenance
services; and contracting for non-public works and Public Works projects. The competitive
bidding process ensures that the City will obtain the best combination of pricing, quality,
service, and availability of products and services. Splitting a purchase to circumvent the
bidding limits is specifically prohibited by the City’s Municipal Code and by State law.
The total dollar value of the goods, services, or projects determines whether formal or
informal bidding procedures must be followed, as shown below. In certain instances,
bidding procedures may not be required.
Goods, Supplies, Equipment and Materials and Non-Public Works Projects
Contracts
• No Bidding Required: Less than $10,000
• Informal Quote: $10,000 - $25,000
• Formal Bidding (RFP): Over $25,000
Professional and Maintenance Services Contracts
• No Bidding Required: Less than $10,000
• Informal Quote: Contracts up to $25,000
• Formal RFP/RFQ Bidding: Contracts over $25,000
Public Projects
• No Bidding Required: Contracts up to $60,000
• Informal Bidding: Contracts $60,000 to $200,000
• Formal Bidding: Contracts over $200,000
The Contract Transmittal Form (See Appendix B) requires the identification of the project,
funding sources, contract type, insurance and bond requirements, and sets forth the
type(s) of publications required, including whether the City Clerk needs to publish a Notice
Inviting Formal Bids. In some instances, the City Manager may require City Council
approval prior to advertising.
Documenting the Bid Process
Bidding procedures must always be documented. The originating department is
responsible for completing a Bid Recap form for all purchases and contracts of $10,000
or more. The Bid Recap form identifies the vendors who have been contacted, the name
of the successful bidder, the amount of the contract, and the reason(s) for the successful
bidder’s selection.
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864426.1
B. Qualified Bidders List
In some instances it is in the best interest of the City to have current ongoing contracts
with multiple consultants for the same or very similar services (i.e. services that can be
defined as to scope of work but not as to required events such as contract planning
services, soils testing, contract building maintenance services, etc.). These services
would best be handled by establishing a qualified bidders list and by entering into an
ongoing professional services contract when the service is required.
There are generally three categories of contractors that are placed on the Qualified
Bidders List. The first is maintenance contractors that provide services with recurring
and usual work for the preservation or protection of any publicly owned or publicly
operated facility for its intended purposes. The second is professional service
contractors that are educated or licensed specialists who provide services of an advisory
nature and provide recommendations for a course of action, an end product, or the
transmittal of information. The third is qualified construction contractors who are
called upon through an informal bidding process to perform Public Works projects
pursuant to subdivision (b) of Section 22032 of the Public Contract Code (See Section VI.
Paragraph E below for procedural guidance on the informal bidding process).
There shall be one Qualified Bidders List (vendor, consultant and/or contractor) for
ongoing service requirements related to professional services, maintenance services,
and Public Works projects, categorized by the type of product sold or work performed for
use in soliciting bids. A “qualified” bidder is a bidder that demonstrates the following
characteristics:
• Can provide product quality, fitness, and capacity for the required usage.
• Has the ability, capacity and skill to perform the contract or provide the service
required.
• Has demonstrated character, integrity, reputation, judgment, experience, and
efficiency, particularly with reference to past purchases by the City or other
public agencies.
• Has the ability to perform within the time required.
• Has shown quality of performance and/or of products provided in previous
contracts or services with the City or other public agencies.
• Can meet all insurance requirements.
The process for selecting qualified bidders to be placed on the Qualified Bidders List
shall begin with an Informal Solicitation of Qualifications. Criteria required for the
development of an Informal Solicitation of Qualifications can be found in Section VII,
Paragraph C below. For each of the three categories of service associated with the
Qualified Bidders List, the City shall endeavor to obtain Statements of Qualifications
(SOQ’s) from a minimum of three vendors. After evaluation of the SOQ’s received,
qualified bidders shall be added to the Qualified Bidders List based on the
considerations identified below.
Evaluation of SOQ’s for Placement on Qualified Bidders List: The Department/Division
Head or designee(s) shall select the consultants which, in their evaluation process, is the
most qualified to perform the work. The evaluation and selection process shall be based
upon the following considerations:
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864426.1
1. General quality and responsiveness to the request, including but not limited to:
• Responsiveness to the terms, conditions, and items of performance.
• Grasp of the problem, work to be performed, and approach to be used.
2. Organization and personnel making the proposal must provide:
• Evidence of good organizational and management practices.
• Qualification of the personnel.
• Specialized experience of the firm and its personnel relative to the required
services.
• References who can be contacted to verify past record of performance (i.e.,
completion of a quality product in a timely manner and within budget constraints).
• Previous consultant experience.
• The financial condition of the firm.
• Capacity of the firm to perform the subject project within a required timeframe.
3. If appropriate, the price, in any of the following formats, may be considered.
• Total price and price breakdown.
• Price range.
• Cost schedule.
The Qualified Bidders List shall be approved by the City Council at least every three years.
All vendors on the Qualified Bidders List shall be reviewed and approved by the City
Manager on at least an annual basis. Vendors can be added at any time as long as the
process prescribed herein for the Informal Solicitation of Qualifications is adhered to and
City Council approval is obtained for any such additions. Professional Services
Agreements (PSA) for qualified bidders will not be executed until selected to perform a
service. At that time, and through the term of the contract, the terms of the PSA for the
selected vendor will be controlling for any subsequent projects undertaken by the same
or different departments. However, at the Department Head’s sole discretion, a separate
PSA may be entered into for the vendor to reflect project-specific terms. PSA’s associated
with vendors on the Qualified Bidders List can be amended at any time and are subject
to the signature authority limits indicated in this policy. All contracts shall have a defined
end date.
C. Informal Solicitation of Qualifications
An Informal Solicitation of Qualifications refers to the process that establishes criteria for
evaluating firms that request placement on the City’s Qualified Bidders List. Such firms
must submit a Statement of Qualifications (SOQ) setting forth the qualifications of
members of the firm and providing any other information required by the announcement
of the project or desired service. The Department/Division shall strive to, whenever
possible, solicit at least three qualifications/proposals in writing. When it is not practical,
nor cost effective, to receive three qualifications/proposals in writing, the Department
Head at his/her discretion, may choose the vendor best suited for the needs of the
particular project or service category.
A public notice shall be advertised on the City’s website and in applicable publications to
obtain SOQ’s from qualified service providers. It is important that the specifications are
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864426.1
accurate and comprehensive. Informal quotations must be documented to the satisfaction
of the City Manager or the Chief Financial Officer. Ideally, documentation should include:
• The name of the company.
• The person giving the quote.
• The date and time of the phone call.
• Understanding of the required scope of services.
• Specialized experience of the firm and its personnel relative to the required
services.
• References who can be contacted to verify past record of performance, i.e.,
completion of a quality product, in a timely manner, and within budget constraints.
• The capacity of the firm to perform the subject project within a required timeframe.
• Estimated price.
As events occur and need arises, work will be assigned to the firms/individuals on the
Qualified Bidders List at the sole discretion of the Department Head, subject to the
signature limits in this policy. A separate solicitation of bids is not required for vendors
selected from the preapproved Qualified Bidders List, except for qualified construction
contractors who must be called upon through an informal bidding process to perform
Public Works projects pursuant to subdivision (b) of Section 22032 of the Public Contract
Code.
Negotiation: The Department Head or designee(s) shall discuss with the highest ranked
firm(s) the requirements of the project, the scope of services needed to meet the
requirements, and negotiate a reasonable fee for the established work assignment.
D. Lowest Responsible (Responsive and Qualified) Bidder
For procurement not involving vendors selected from the Qualified Bidders List, bids
should be awarded to the responsive and qualified bidder who submits the lowest bid. A
responsive bid is one that is in substantial conformance with the requirements of the
invitation to bid, including specifications and the City’s contractual terms and conditions.
Conformance may also include providing proof of insurance, completed forms,
references, and all other information as requested in the bid document. Bidders who
substitute terms and conditions or who qualify their bids in such a manner as to nullify or
limit their liability shall be considered non-responsive bidders.
Cost is not necessarily the only determining factor when selecting the successful bidder.
In addition to price, the following elements should also be considered in determining
whether a bid is responsible:
1. The successful bidder must demonstrate the ability to fulfill a contract, including
providing subsequent and continuing service. Staff may request proof of a prospective
bidder’s reliability, proof of financial resources, a list of current or previous customers,
and other pertinent data. Such requests may also be taken after receipt of bids.
2. A bidder may be determined to be non-responsible if the bidder fails to furnish proof
of qualifications when required.
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864426.1
3. The products offered provide the quality, fitness, and capacity for the required usage.
4. The bidder has the ability, capacity and skill to perform the contract satisfactorily and
within the time required.
5. The bidder’s experience regarding past purchases by the City or other public agencies
demonstrates the reliability of the bidder to perform the contract.
When a department recommends awarding a bid to other than the low bidder, written
justification must be provided on the Bid Recap form and the City Council agenda report
if City Council approval is required.
E. Informal Quotes
Informal quotes should be used to assure the most competitive price is received for an
item, while avoiding the additional time and expense involved in formal bidding. The
Department/Division shall make every attempt to receive at least three bids in writing or
over the phone if not already obtained from the Qualified Bidders List. Bids must be
documented in the Bid Recap Form to the satisfaction of the City Manager. The
Department/Division should make every reasonable attempt to obtain at least three bids.
In the event that three viable quotes are not received, the division shall provide to the City
Manager a written explanation as to what steps were taken to obtain quotes, any vendors
contacted that were nonresponsive, and if applicable why it is not practical to receive
three quotes. At the City Manager’s sole discretion, such requested procurement actions
may proceed.
The Department/Division/Project lead shall evaluate the three informal quotes received
and determine the lowest most responsible bid. The City reserves the right to accept that
bid which is in the best interest of the City.
When selecting the recommended bidder the Department/Division Head will take into
consideration:
• Price.
• Ability, capacity, and skill.
• Ability to meet time requirements.
• Character, integrity, and reputation.
• Previous vendor experience.
• Financial resources available for contract performance.
F. Formal Request for Proposal or Request for Qualifications (RFP/RFQ)
The Request for Proposals (RFP) or Request for Qualifications (RFQ) bidding process is
designed to ensure the City that it has engaged the most qualified consultant available
for the engagement. This process generally takes more time and expense than informal
solicitations of qualifications and in some instances may actually not be the most cost-
effective approach. Unlike formally bid contracts, the City Clerk does not publicly open
requests for proposals or requests for qualifications for professional services.
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1. Because RFP/RFQ’s ask for a subjective product, they should contain the greatest
detail possible, and may include the following:
a. A precise description of the problem or objective
b. The services to be performed
c. The product to be provided
d. The anticipated time schedule for:
• Submittal of RFP/RFQ (date and time).
• Any pre-proposal conference (date, time and location).
• Review and evaluation of the proposals.
• Award of the contract.
• Commencement of work on the project.
• Completion date.
e. Evaluation factors and the relative importance of each.
f. Expectations or limitations on the part of the City, including:
• The format, form and quantity of any expected reports.
• The extent/nature of assistance/cooperation available from the City.
g. Expected content of the RFP/RFQ, including:
• The overall description of techniques to be used.
• Listing of similar services provided to other clients.
• Listing of available references to contact.
• Description and qualifications of assigned lead and supporting personnel.
• Time and staff expected to be expended.
• Facilities and equipment to be used.
• Portion of contract to be performed by sub-contractors.
• Subcontractors’/Sub-consultants’ qualifications.
• Cost, in summary and total, and desired method of payment. The RFP/RFQ for
services may, but is not required to, state the amount budgeted for the service.
h. Contractual requirements including, but not limited to:
• Prohibition against assignment.
• Indemnification.
• Insurance requirements.
• Bonding requirements.
• Warranties.
• Compliance with federal, state and City laws, rules and regulations.
• Compliance with any grant related regulations.
• Sample contract.
• Requirement to pay prevailing wages, if applicable.
i. Construction project management service RFP’s/RFQ's may require evidence be
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864426.1
provided of experience in construction project design review and evaluation,
construction mobilization and supervision, bid evaluation, project scheduling, cost-
benefit analysis, claims review and negotiation, and general management and
administration of a construction project.
j. Additional requirements specific to the scope of work as determined by the
responsible department and/or Finance Department.
2. Issuing the RFP
To ensure maximum exposure and competition, the responsible department shall prepare
a list of potential firms to receive the RFP/RFQ.
a. If required or desired, the responsible department will submit the RFP notice to be
advertised on the City’s website, online through the City’s bidding web service, or
in a local newspaper of general circulation. The notice will be published one or
more times beginning at least fourteen calendar days prior to the designated
closing. Additional advertisements may be placed in a regional newspaper of
general circulation; appropriate professional or trade journals; and state or
governmental publications designed for public notice.
b. A reasonable length of time between solicitation and closing dates must be allowed
to provide potential respondents time for preparation in accordance with the
complexity, the size of the project, and the scope of advertising.
c. City staff may conduct conferences to explain the requirements of the project. A
sufficient amount of time should be allowed after the RFP has been issued to allow
potential respondents to become familiar with the project. Any clarification or
changes required to the RFP/RFQ, as a result of the conference, shall be added
as a written amendment. A summary of the conference shall be provided to all
prospective respondents receiving the request.
d. The requesting department shall prepare sufficient copies of the RFP to allow
distribution to potential respondents of record and responses to the published
advertisements. In addition, the department shall maintain a list of RFP’s issued
and responses.
e. Amendments should be used to make any changes in quantities, descriptions,
schedules, or to correct defects or ambiguities in the original RFP/RFQ.
Amendments are provided to ensure that all potential respondents are furnished
with the same information with which to prepare proposals.
f. Amendments to the RFP/RFQ shall be identified as such and shall require
acknowledgment as such by firms receiving the RFP/RFQ. Amendments shall be
sent to all known recipients of the RFP/RFQ within a reasonable time period before
the closing date. If the time and date established for the receipt of proposals does
not allow sufficient time for consideration and changes, the time and date will be
modified by amendment.
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3. Proposal Receipt and Opening:
a. Proposals shall be submitted to the originating department and shall be clearly
identified with the Proposal number on the envelope. Faxed or other electronic
proposals are not acceptable.
b. All proposals shall be time stamped and those received by 5:00 p.m. of the
designated closing day will be opened on the following workday for preliminary
review.
c. Any proposal received after the time specified in the RFP/RFQ shall be returned
unopened.
d. To avoid disclosure of the contents of competing RFP/RFQs, proposals will be
opened in the presence the Department Head or his or her designee.
e. Respondents may modify or withdraw their proposals prior to the established
closing date and time, without penalty. However, any modifications submitted after
the established closing date and time will not be accepted. Such modifications will
be returned to the respondent, unopened.
f. The Department shall maintain a list of proposals received, including name and
address of respondent, the number of modifications received, if any, and any
additional information requested. The register will be open to inspection after the
award of the contract or the rejection of all proposals.
g. Proposals and modifications shall be shown only to the evaluation committee
personnel, and the Department Head until a recommendation is made to City
Council or all proposals have been rejected.
4. Rejection of Proposals: The City reserves the right to reject any and all proposals, to
accept or reject any one or more items of a proposal, or to waive any irregularities or
informalities in the proposal or the RFP/RFQ process if to do so is deemed to best
serve the interests of the City. The authority to reject any proposal shall be consistent
with the levels of authority based on dollar thresholds described above.
5. Evaluation Factors and Method: Because unique services are requested, cost is not
considered the primary selection criteria.
a. Evaluation factors may include:
• General quality and responsiveness of the proposal, including but not limited
to:
Responsiveness to the terms, conditions, and items of performance;
Completeness and thoroughness of the proposal;
Grasp of the problem, work to be performed, and approach to be used.
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• Organization and personnel making the proposal:
Evidence of good organizational and management practices;
Qualification of the personnel;
Specialized experience of the firm and its personnel relative to the required
services;
References who can be contacted to verify past record of performance, i.e.,
completion of a quality product, in a timely manner, and within budget
constraints;
The financial condition of the firm;
Capacity of the firm to perform the subject project within a required time
frame.
• If appropriate, the price, in any of the following formats, may be considered.
Total price and price breakdown;
Price range;
Cost schedule.
b. A Selection Committee shall be formed to evaluate the submitted data and
determine the products that should receive further consideration. The Committee
shall be appointed by the Department Head, subject to the approval of the City
Manager or the Chief Financial Officer, and may consist of more than one
department.
c. The Selection Committee may choose to interview all of the responding
consultants, only the top few ranking consultants or to not perform interviews.
d. After the interviews (if applicable), the Selection Committee shall rank the
consultants based on their proposals, interviews, and references.
6. Exceptions to Formal RFP/RFQ: The formal RFP/RFQ process may be bypassed in
the following three instances:
a. In emergency situations where time is of the essence, the City Manager may
dispense with the formal RFP/RFQ process to obtain services necessary in dealing
with the emergency. Immediately following the emergency, the City Manager shall
submit to Finance Department an Emergency Authorization Form.
b. When one known service provider is available, the Department Head shall prepare
a report for City Manager or City Council approval, depending on the dollar
threshold, requesting an exemption from the RFP/RFQ procedures and, if
applicable, awarding the bid to the “sole source.”
c. When there are extenuating circumstances that would make the formal RFP/RFQ
process not the most cost effective approach. This often relates to qualitative,
artistic or proprietary software/technological issues. The appropriate Department
Head shall prepare a report to the City Council requesting an exemption from the
formal RFP/RFQ process.
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7. Negotiation: The Department Head or designee(s) shall discuss with the highest
ranked firm(s) the requirements of the project, the scope of services needed to meet
the requirements, and negotiate a reasonable fee/contract for the established work
assignment.
G. Informal Bid Process
The department shall prepare a Notice Inviting Informal Bids to describe the project in
general terms, how to obtain more detailed information on the project, and the time and
place for the submission of bids. The proposed contract and applicable bond and
insurance requirements should always be included in this Notice Inviting Informal Bids.
The department also completes the Contract Transmittal Form (See Appendix B) that
identifies the project, funding sources, contract type, insurance and bond requirements,
and the type(s) of publications required, including whether the City Clerk needs to publish
a Notice Inviting Informal Bids. In some instances, the City Manager may require City
Council approval prior to advertising.
The department mails the Notice Inviting Informal Bids to all construction contractors
on the Qualified Bidders List (See Section VI.C for more information on developing the
Qualified Bidders List) for the category of work being bid and advertises in all designated
construction trade journals not less than 10 calendar days before bids are due.
Additionally, the Department Head is encouraged to post the Notice Inviting Informal Bids
to the City’s web site. The City Clerk will publicly open all bids at the time and place stated
in the public notices.
For all Public Works projects up to $200,000, the City shall comply with all statutory
requirements for informal bidding procedures as set forth in Public Contract Code
sections 22030, et seq.
After the successful bidder has been selected, the department prepares two original
contracts and obtains the contractor’s signature. After the contract is approved (signed)
by the City Manager, the department then submits a completed Contract Transmittal
Form, bid recap and the signed contracts to the City Clerk’s Office.
H. Formal Bid Process
The City shall solicit formal bids in accordance with Public Contract Code Sections 22037-
22044. (See Appendix A)
The initiating Department/Division shall be responsible for completion of the formal bid
process; however, the process shall be coordinated with the City Clerk’s Office and the
Finance Department.
1. Bid Forms: The initiating department shall prepare a bid form including detail
specifications for the services to be purchased. The following format is suggested for
competitive bids:
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a. Submission of bids (or proposals) – Include date, time, location and bid number
as assigned by the City Clerk. Include a detail list of the information the bid or
proposal should contain.
b. Questions – List the name, address, and telephone number of the City person
to be contacted concerning questions about the project.
c. Background - Provide as much background as necessary to give the bidder an
understanding of the environment in which the job will be performed and to
which the job relates.
d. Scope of work – Describe in detail the requirement for the job and detail
specification.
e. Desired project schedule – Be as specific as possible.
f. Minimum and desirable qualifications – Be as specific as possible.
g. Performance Bond- Whether a performance bond is required and if so, the
amount and form of bidders security.
h. Sample Contract- A sample of the contract that is expected to be used should
be included in the bid package.
2. Notice Inviting Bids: The initiating department shall also prepare a notice inviting
bids that includes the following:
a. A general description of the services to be purchased.
b. A statement indicating where bid forms, specifications and bonding
requirements can be obtained.
c. A statement specifying the time and place for the opening of the bids.
d. The notice shall be published at least fourteen calendar days before the date
of the opening of bids in a newspaper of general circulation, printed and
published in the City. (It is recommended that it be published twice, not less
than five days apart).
e. The notice shall also be mailed to all construction trade journals specified in
Section 22036 of the Public Contract Code. The notices shall be mailed at least
thirty (30) calendar days before the date of opening the bids.
3. Bid Opening
a. Sealed bids shall be submitted to the City Clerk’s office and shall be clearly
identified with the Bid number on the envelope. Upon receipt, the City Clerk
shall date and time stamp the envelope. Faxed or other electronic bids are not
acceptable.
b. Bids shall be opened in public at the time and place stated in the public notice.
c. The City Clerk or his/her designee shall open the bids and shall record all bids
received.
d. Any bid received after the time specified in the notice shall be rejected.
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e. When a bidder’s security is required, it will be announced in the public notice
inviting bids. The amount shall be determined at the time of preparation of the
bid. It shall be in the form of cash, certified or cashier’s check, certificate of
deposit in the City of San Juan Capistrano’s name or bid bond made payable
to the City of San Juan Capistrano. When a bidder’s security is required, a bid
shall not be considered unless one of the aforementioned forms of security
accompanies the bid. Bidders shall be entitled to return of the bid security with
the following exception:
The successful bidder must execute the contract and file acceptable
documents within thirty (30) calendar days from the date of award unless
extended by the City Manager. Failure to execute the contract shall be just
cause for annulment of the award and forfeiture of the bidder’s security, not as
a penalty, but as liquidated damages. The City Council may, upon refusal or
failure of the successful bidder to execute the contract, award the contract to
the next lowest responsive and responsible bidder.
f. All bids received shall be available for inspection during regular business hours
in the City Clerk’s office for a period of not less than thirty (30) calendar days
after the bid opening.
g. All bids received shall be available for inspection during regular business hours
in the City Clerk’s office for a period of not less than thirty (30) calendar days
after the bid opening.
4. Rejection of Bids: The City reserves the right to reject any and all bids, to accept or
reject any one or more items of a bid, or to waive any irregularities or informalities in the
bids or the bidding process if to do so is deemed to best serve the interests of the City. If,
after the first invitation of bids, all bids are rejected, the City may elect to re-advertise for
bids or have the project done by force account. (See Section 22038 of the Public Contract
Code for Procedures and limitations).
5. Determining Lowest Responsive and Responsible Bidder: Award of bid shall be
to the lowest responsive and responsible bidder. All valid responsive and responsible bids
shall be considered in determining the lowest bid. Before the award, the bidder may be
required to furnish evidence of capability, equipment and financial resources to
adequately perform the work. Bidders not found to be responsive or qualified may have
their bid rejected.
6. Tie Bids: If tie bids are received, quality and service being equal, the contract shall be
awarded to a local bidder.
If the above condition is not applicable, the City may, at its discretion:
a. Reject any and all bids presented and re-advertise; or
b. City may accept either one or accept the lowest bid made by negotiation with the
tie bidders; or
c. Award the bid to any one of the low tie bidders by public drawing.
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7. Awarding the Bid: Once the bids have been evaluated, the Department Head/Division
Head shall prepare a report to Council recommending the most responsive and
responsible bidder. The Council shall then award the bid in a public meeting.
All public project contracts exceeding $45,000 must be awarded by the City Council.
Otherwise:
a. Such purchases are void and not considered an obligation of the City.
b. Invoices may be returned to the contractor/service provider unpaid.
c. The person ordering the unauthorized purchase may be held personally liable for
the costs of the contract.
I. Exceptions to Competitive Bidding Requirements
The bid process may be bypassed with Department Head approval in the following four
instances:
1. In emergency situations where time is of the essence, the appropriate Department
Head may dispense with bidding procedures with City Manager approval. For the
purpose of this section, emergency situations are those procurements required to
prevent the immediate interruption or cessation of necessary City services or to
safeguard life, property, or the public health and welfare. If the emergency
procurement would have otherwise required formal or informal bidding procedures,
the department must obtain City Council ratification of the purchase at the next
regularly scheduled meeting. See Section I. Paragraph G. for additional information
on emergency purchases.
2. When the commodities or services that are required for a purchase can be obtained
from only one vendor, the Department Heads shall document that it is a “sole source”
purchase on the Bid Recap form. Most sole source purchases shall be the result of
the City deciding that it is in its best interest to use a specific vendor or proprietary
brand item or when one vendor has the required expertise to perform the needed
service. All sole source purchases must be justified by written documentation (bid
recap) signed by the appropriate department head and approved by the City Manager
prior to being forwarded to the Finance Department. The sufficiency of the justification
for sole sourcing will be at the sole discretion of the City Manager in consultation with
the department head and will take into account the facts and circumstances relevant
to the purchase.
3. When the City Manager determines that compliance with the above procedures for a
procurement of goods, supplies, equipment, materials or services cannot be achieved
due to timing requirements, which could have not otherwise been avoided, the City
may proceed with an informal solicitation of quotes from at least three vendors. A
description of the circumstances, the quotes received, and the basis for vendor
selection shall be approved by the City Manager.
4. When there exists other governmental contracts that were competitively bid (such as
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State Contracts, DGS, etc.) that the City is eligible to use
SECTION VIII – FEDERAL PROCUREMENT
Federal procurement applies to expenditures made for a project or program for which a
Federal award was received. A Federal award is the Federal financial assistance or a
cost-reimbursement contract that the City receives directly from a Federal awarding
agency or indirectly from a pass-through entity such as the county or state. All non-
Federal entities, including subrecipients of a state, must follow Code of Federal
Regulations, PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST
PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS.
A. Definitions
1. Federal financial assistance.
Assistance that non-Federal entities receive or administer in the form of:
a. Grants;
b. Cooperative agreements;
c. Non-cash contributions or donations of property (including donated surplus
property);
d. Direct appropriations;
e. Food commodities;
f. Loans;
g. Loan Guarantees;
h. Interest subsidies;
i. Insurance; and
j. Other assistance.
2. Cooperative agreement.
a. A legal instrument of financial assistance between a Federal awarding agency or
pass-through entity and a non-Federal entity that is used to enter into a
relationship the principal purpose of which is to transfer anything of value from
the Federal awarding agency or pass-through entity to the non-Federal entity to
carry out a public purpose authorized by a law of the United States; and not to
acquire property or services for the Federal Government or pass-through entity's
direct benefit or use. It is distinguished from a grant in that it provides for
substantial involvement between the Federal awarding agency or pass-through
entity and the non-Federal entity in carrying out the activity contemplated by the
Federal award.
3. Grant agreement.
a. A legal instrument of financial assistance between a Federal awarding agency or
pass-through entity and a non-Federal entity that is used to enter into a
relationship the principal purpose of which is to transfer anything of value from
the Federal awarding agency or pass-through entity to the non-Federal entity to
carry out a public purpose authorized by a law of the United States; and not to
acquire property or services for the Federal awarding agency or pass-through
entity's direct benefit or use. It is distinguished from a cooperative agreement in
that it does not provide for substantial involvement between the Federal awarding
agency or pass-through entity and the non-Federal entity in carrying out the
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activity contemplated by the Federal award.
4. Loan.
a. A Federal loan or loan guarantee received or administered by a non-Federal
entity, except as used in the definition of program income.
5. Non-Federal entity.
a. A state, local government, Indian tribe, institution of higher education, or nonprofit
organization that carries out a Federal award as a recipient or subrecipient.
6. Pass-through entity.
a. A non-Federal entity that provides a subaward to a subrecipient to carry out part
of a Federal program.
7. Period of performance.
a. The time during which the non-Federal entity may incur new obligations to carry
out the work authorized under the Federal award. The Federal awarding agency
or pass-through entity must include start and end dates of the period of
performance in the Federal award.
8. Program income.
a. Gross income earned by the non-Federal entity that is directly generated by a
supported activity or earned as a result of the Federal award during the period of
performance. Program income includes but is not limited to income from fees for
services performed, the use or rental or real or personal property acquired under
Federal awards, the sale of commodities or items fabricated under a Federal
award, license fees and royalties on patents and copyrights, and principal and
interest on loans made with Federal award funds. Interest earned on advances
of Federal funds is not program income. Except as otherwise provided in Federal
statutes, regulations, or the terms and conditions of the Federal award, program
income does not include rebates, credits, discounts, and interest earned on any
of them.
9. Project cost.
a. Total allowable costs incurred under a Federal award and all required cost
sharing and voluntary committed cost sharing, including third-party contributions.
10. Recipient.
a. A non-Federal entity that receives a Federal award directly from a Federal
awarding agency to carry out an activity under a Federal program.
11. Subaward.
a. Award provided by a pass-through entity to a subrecipient for the subrecipient to
carry out part of a Federal award received by the pass-through entity. It does not
include payments to a contractor or payments to an individual that is a beneficiary
of a Federal program. A subaward may be provided through any form of legal
agreement, including an agreement that the pass-through entity considers a
contract.
12. Subrecipient.
a. A non-Federal entity that receives a subaward from a pass-through entity to carry
out part of a Federal program; but does not include an individual that is a
beneficiary of such program. A subrecipient may also be a recipient of other
Federal awards directly from a Federal awarding agency.
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B. Additional Procurement Procedures
1. In addition to the purchasing policies and procedures in Sections I through VII, the
following procedures will apply:
a. No employee, officer, or agent may participate in the selection, award, or
administration of a contract supported by a Federal award if he or she has a
real or apparent conflict of interest. Such a conflict of interest would arise
when the employee, officer, or agent, any member of his or her immediate
family, his or her partner, or an organization which employs or is about to
employ any of the parties indicated herein, has a financial or other interest in
or a tangible personal benefit from a firm considered for a contract.
Disciplinary actions under Rule 11 of the Personnel Rules will be applied for
violations of such standards by officers, employees, or agents of the non-
Federal entity.
b. Procurement using the formal bidding or formal RFP/RFQ procedures must
be followed for purchases over $250,000, except during periods of an
emergency as defined by this policy or a public exigency that requires or
demands immediate aid or action.
c. Formal bidding is the preferred method for procuring construction when the
procurement lends itself to a firm fixed price contract and the selection of the
successful bidder can be made principally on the basis of lowest responsive
and responsible bidder.
d. Procurements must take the following steps to assure minority businesses,
women’s business enterprises, and labor surplus area firms are used when
possible:
1. Placing qualified small and minority businesses and women's
business enterprises on solicitation lists;
2. Assuring that small and minority businesses, and women's
business enterprises are solicited whenever they are potential
sources;
3. Dividing total requirements, when economically feasible, into
smaller tasks or quantities to permit maximum participation by
small and minority businesses, and women's business
enterprises;
4. Establishing delivery schedules, where the requirement permits,
which encourage participation by small and minority businesses,
and women's business enterprises;
5. Using the services and assistance, as appropriate, of such
organizations as the Small Business Administration and the
Minority Business Development Agency of the Department of
Commerce; and
6. Requiring the prime contractor, if subcontracts are to be let, to
take the affirmative steps listed in paragraphs 1 through 5 of this
section.
e. Procurements must avoid acquisition of unnecessary or duplicative items.
f. A cost or price analysis in connection with every procurement action in excess of
$250,000 must be performed and must include independent estimates before
receiving bids or proposals.
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g. Profit must be negotiated as a separate element of the price for each contract in
which there is no price competition and in all cases where cost analysis is
performed. To establish a fair and reasonable profit, consideration must be given
to the complexity of the work to be performed, the risk borne by the contractor,
the contractor's investment, the amount of subcontracting, the quality of its record
of past performance, and industry profit rates in the surrounding geographical
area for similar work.
h. Costs or prices based on estimated costs for contracts are allowable only to the
extent that the cost accounting principles for determining costs incurred or cost
estimates included in negotiated prices comply with Federal cost principles.
i. The cost plus a percentage of cost and percentage of construction cost methods
of contracting must not be used.
SECTION IX – DISPOSTION OF SURPLUS PROPERTY/CAPITAL ASSETS (OTHER
THAN REAL PROPERTY)
Surplus Property Definition
Supplies and equipment are considered surplus if they are no longer required by the using
department, because of decreased use, poor condition, damage not worth the cost of
repair, and/or obsolescence. Examples of property include small items, such as binders,
calculators, and electric staplers, as well as inventoried items, such as printers, pool cars,
and desks. Property can also include capital assets, which are the items that generally
have a higher unit cost and are inventoried as capital assets. Examples of capital assets
are water fountains, playground equipment, and building or structural components, such
as roofs, restrooms, and roadways. This definition of surplus property excludes real
property.
Surplus Property Determination/Valuation
The Department Head should first determine if a supply, piece of equipment, or capital
asset has become surplus, based on the definition given above. The next step is to
determine the current value of the surplus property item, either from an existing source
document or a reasonable estimate of replacement value, if the original source document
is no longer available through the City’s records management system.
If the current value of the surplus property item is less than $500, the Department Head
or designee should bring the surplus property item directly to Finance Department in order
to log its receipt, determine its disposition, and then coordinate its disposal.
Surplus Property/Capital Asset Disposition Form (See Appendix B)
If the property item is deemed surplus and its current value is over $500, then the
Department Head must complete a Surplus Property/Capital Asset Disposition form. This
form is available on the City’s Intranet. One copy of the form should be circulated for
signatures.
On the disposition form, the Department Head should list the item’s description, serial
number, fixed asset tag number (if applicable), location, and condition. The Department
Head should indicate the property’s condition (good, fair, poor, or broken) and then
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recommend a method of disposal for the property (see the following section for
descriptions of disposal methods). After selecting the recommended action and noting
any other comments, the Department Head must sign and date the Surplus
Property/Capital Asset Disposition form and forward it to the Purchasing Officer.
Methods of Disposal
There are several ways to dispose of surplus property, including:
• Transfer to another department;
• Trade in for new material, equipment or credit;
• Sell;
• Donate; or
• Scrap.
Transfer to another Department
Departments can transfer surplus property to one another, subject to the approval of both
of the Department Heads affected by the transfer. If the current value of the item is $500
or above, the department transferring out the property should initiate a Surplus
Property/Capital Asset Disposition form and both Department Heads should sign the
form. If a fixed asset is being transferred (unit price of $2,000 and above), the Accounting
staff will record the new location of the property in the City’s fixed asset system.
Trade-In
Surplus property can be offered as trade-in for new equipment or material or for credit
towards the acquisition of new property. If the current value of a surplus property item
slated for trade-in is $500 or over, then a Surplus Property/Capital Asset Disposition form
should be completed. The estimated trade in value of the surplus property or capital asset
should be noted on the Surplus Property/Capital Asset Disposition form and on the
purchase order issued for any new property resulting from the trade in.
Selling Surplus Property
Surplus property may be offered for sale. All surplus property is for sale “as is” and “where
is,” with no warranty, guarantee, or representation of any kind, expressed or implied, as
to the condition, utility or usability of the property offered for sale. For any sale of surplus
property with a current value of $500 or above, the Department Head should indicate on
the Surplus Property/Capital Asset Disposition form the recommended selling method
and any other notations in the Department Head approval. Appropriate methods of sale
are as follows:
a. Public Auction – City staff may conduct public auctions or the City may contract
with a professional auctioneer and/or an Internet auctioneer for this service.
b. Sealed bids – Sealed bids may be solicited for the sale of surplus property.
Surplus property disposed of in this manner shall be sold to the highest
responsible bidder.
c. Negotiated Sale – Surplus property may be sold outright if the Purchasing
Officer determines that only one known buyer is available or interested in
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acquiring the property.
d. Selling to City Employees – If recommended by the Purchasing Officer and
approved by the City Manager, certain surplus property items may be offered
for sale to City employees on an exclusive basis or in conjunction with sales to
the public; however, those employees whose job responsibilities involve central
purchasing administration and/or functional control over the surplus property
are not permitted to participate in such sales.
e. Selling as Salvage – Equipment, materials, supplies, fixtures, or facility
components that are no longer capable of performing their intended function
without extensive repair, or that are of no value except for reclamation
purposes, may be considered salvage. Surplus property may be sold as
salvage if the Purchasing Officer deems that the value of the raw material
exceeds the value of the property as a whole.
Donation of Surplus Property
The Department Head may recommend and the Purchasing Officer may authorize,
subject to the approval of the City Manager, the donation of surplus property to a non-
profit organization or school district located or operating in San Juan Capistrano or,
secondarily, to any other non-profit organization or private organization that provides
assistance to nonprofit organizations. If surplus property has been approved for donation,
the Purchasing Officer will notice the availability of such property for donation, indicating
the quantity, description, and location of the surplus property, by one or more of the
following methods: in a local newspaper and on the City’s web site. This notice will also
indicate a closing date for the receipt of all requests for donation and indicate the way in
which interested parties can receive additional information.
Requests for donation will be accepted on a first-come, first-serve basis. The Purchasing
Officer will send a letter to the non-profit organization(s) or school district(s) that respond
to the notice to advise them of the City’s terms and conditions of the donation. The terms
and conditions that the requestors must meet are: (1) accepting the property “as is,” with
no implied warranties, (2) stating an immediate need for the property and putting it into
immediate use; (3) agreeing that the property will not ever be sold or otherwise transferred
for profit; and (4) assuming all costs and liability associated with the removal and
transportation of the surplus property from the City. A return letter, signed by an
authorized agent from the non-profit organization or school district, accepting the City’s
terms and conditions is required before the surplus property can be released.
If, in the opinion of the Purchasing Officer, the donated property has a current value of
less than $1,000, then the City Manager can approve the release of the property to the
recipient(s) that meet the above criteria and agree to the City’s terms and conditions. If,
in the opinion of the Purchasing Officer, the donated property has a current value of
$1,000 or more, the Purchasing Officer will prepare a report to identify the specific
property to be donated, the estimated current value of the property, and the proposed
recipient(s) of the property for approval by City Council. After City Council’s approval, the
surplus property approved for donation may then be released.
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The department from which the donated property is being taken should remove any fixed
asset or San Juan Capistrano property tags before the property is officially transferred to
the recipient organization(s).
Scrap/No Value Item
Scrap, as one method of surplus property disposal, essentially means throwing an item
into the trash. Scrap is recommended only after determining that none of the other
methods of disposal – selling, exchange, trade-in, donation, or salvage - is feasible.
Broken items that can be repaired economically will be fixed and returned to the using
department. For any broken or inoperable piece of property that, based on the
recommendation of the Department Head and the judgment of the Purchasing Officer,
cannot be economically repaired, traded in, sold, auctioned, donated or salvaged, the
item may be scrapped, regardless of the original purchase price.
If the Department Head or designee recommends that an unbroken surplus property item
with a current value below $500 or several unbroken surplus property items with a
collective current value below $1,000 be scrapped, then he/she should bring the item(s)
directly to the Purchasing Division for disposal. If the surplus property is obsolete or
nonfunctional and cannot be traded in, sold auctioned, donated or salvaged, the
Purchasing Officer, with the approval of the City Manager, may scrap such surplus
property.
If a surplus property item recommended to be scrapped is not broken and has a current
value equal to or above $500, or for multiple items, a combined current value equal to or
above $1,000, then the Department Head must complete a Surplus Property/Capital
Asset Disposition form. Under these conditions, especially if City staff will directly dispose
of the item(s), Council approval to scrap will also be required. If City staff does not directly
scrap this category of surplus property but a contractor is instead hired to remove and
replace the property, then the disposal method is considered to be a trade in, not scrap,
and the City Council approval requirement does not apply.
For multiple items proposed to be scrapped, the size of the lot and thus the total current
value will be based on the items and values entered on the Surplus Property/Capital Asset
Disposition form(s) submitted by the department. Splitting of surplus lots on these forms
to avoid the City Council reporting requirements is prohibited.
The report to City Council to request approval to scrap will be prepared by the Purchasing
Division after receipt of the completed Surplus Property/Capital Asset Disposition form.
Once City Council approval is granted, the Purchasing Officer will then scrap the item(s).
Purchasing Officer’s Review and Final Disposition
In the case of surplus property items with a current value below $500 for a single item or
below $1,000 for multiple items within one lot, the departments do not have to complete
a Surplus Property/Capital Asset Disposition form. Instead, the departments will
physically bring the items to the Finance Department. Finance Department will receive
these items from the department, and the Purchasing Officer will determine the best
method for disposal of these items. A description of these surplus property items, as well
as the date received from the departments, the disposal method, and the disposal date
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will be recorded on a surplus property log maintained by Finance Department.
For all surplus property items with a current value equal to or above $500 for a single item
or equal to or above $1,000 for multiple items within one lot, the Purchasing Officer will
review the department’s completed Surplus Property/Capital Asset Disposition form,
concur with or recommend an alternate action, and then forward the form to the City
Manager for approval. The Purchasing Officer will also ascertain whether City Council
approval is required to donate or scrap surplus property items, depending on the current
value of the items listed on the form. If further City Council action is required, then the
Purchasing Officer will indicate that a report to City Council for final approval will be
necessary. After the City Manager has approved the Surplus Property/Capital Asset
Disposition form, it will be returned to the Purchasing Officer for either preparation of a
report to City Council, if needed, or for final disposition of the property.
After the disposal of the surplus property, the Purchasing Officer will complete and sign
the Surplus Property/Capital Asset Disposition form, noting the date, disposal method,
and any proceeds received, if the property was sold. The Purchasing Officer will also note
the date that City Council approved the donation or scrapping of surplus property if that
level of approval was required.
After all signatures have been obtained, a copy of the form will be sent to the initiating
department and to the Accounting Division, which will remove any surplus property items
that had been classified as fixed assets from the City’s Fixed Asset Records. Purchasing
will keep the completed original form on file.
Proceeds
Any proceeds received from the trade-in or sale of surplus property will be credited to the
General Fund or the Facilities Operations Fund as appropriate.
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APPENDIX A – PURCHASING AUTHORITIES
Uniform Public Construction Cost Accounting Resolution 06-09-19-04 approved
September 19, 2006
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