Chapter 2. ADMINISTRATION

Article VI. FINANCE

Division 1. GENERALLY

§ 2-513. Purpose.

Latest version.

(a)

Purchasing objectives.

(1)

It is the purpose of this section to establish that the principle of competitive bidding and economical procurement practices shall be applicable to all purchases as herein described.

(2)

The city encourages local businesses and minority and woman owned business enterprises to bid on city purchases and projects.

(3)

The commissioner of accounts and finance shall be the general purchasing agent of the city. Subject to the terms of this section, said commissioner or his/her designee shall purchase all materials, supplies, services and equipment necessary for the operation of the city.

(4)

Procurement procedures shall be consistent with any applicable federal, state and local laws and any contractual obligations with other governmental agencies.

(5)

The purchasing requirements as herein established are to be construed as minimum requirements which do not restrict those authorized to make purchases for the city to go beyond these requirements.

(6)

The purchasing requirements will not necessarily govern every purchasing situation which may arise. In the event a specific purchase is not covered by these requirements, the purchase shall be made based on these objectives following consultation with the commissioner of accounts and finance.

(b)

Competitive bidding requirements.

(1)

General rules and requirements.

Purchases and contracts shall be competitively bid based on the requirements set forth herein, except as otherwise provided herein.

For the purposes of competitive bidding, purchases in this category are those that are non-routine and non-day-to-day in nature. These purchases shall be for either goods or services.

The purchasing requirements, as herein described, shall apply to all leases, where the city is the lessee, where the total amount of the lease payment shall be construed as the total purchase amount. The leasing of real property shall not be controlled by this section.

No purchases or contracts shall be split into parts for the purpose of avoiding the provision of the otherwise applicable bidding requirements.

Purchases which are competitively bid shall be generally awarded to the lowest responsible bidder. For the purpose of this section, "responsible bidder" shall have the meaning as that term is defined in Ordinance No. 9-1998. However, the city shall go beyond the cost and consider longevity, delivery time, service cost, reliability, experience, qualifications, quality and suitability of the goods for the purpose intended and the amount of city labor associated with the purchase when making a purchase. The city may, in its discretion, award a bid based partially or wholly for reasons other than price alone.

Bulk purchases and interdepartmental purchases are encouraged in order to take advantage of quantity discounts.

Explanations for purchases and contracts which were not incorporated into the fiscal year budget and which cost in excess of $1,000.00 of that budget account number shall be documented and attached to the informal or formal bid sheets as provided in the following paragraphs (b)(2) and (3).

(2)

Informal bids for purchases and contracts in excess of $5,000.00 and up to $20,000.00.

For all purchases and contracts in excess of $5,500.00 and up to $20,000.00, an attempt shall be made to obtain three or more quotations as provided in paragraph (b)(2)b. and the order shall be awarded to the lowest responsible bidder.

Quotations may be obtained by telephone, e-mail or fax except when the specifications cannot be effectively expressed orally. In such case, a written request for quotation will be sent to potential bidders.

All quotations shall be documented on an informal bid sheet (see Appendix A). If three quotations cannot be obtained or if other than the lowest quote is being recommended for purchase, the reasons shall be documented on the informal bid sheet.

A copy of the informal bid sheet shall be attached to a purchase order, which is completed and approved by the respective department head prior to making a purchase. The original shall be maintained in the project file. The purchase order shall be signed by the department head and co-signed by the commissioner of the department for purchases in excess of $5,000.00 and up to $20,000.00. For any purchases originated by the commissioner of accounts and finance, the mayor shall co-sign.

(3)

Purchases and contracts less than $5,000.00.

Purchases and contracts of $5,000.00 or less may be made without bids, although the responsibility still exists for making the most economical purchases through periodic bidding or spot price checks. A department head or his or her designee may make purchases of $5,000.00 or less. However, no such purchases may be made unless the same has been previously budgeted and is in the usual and ordinary course of business. Any expenditure exceeding $200.00 which is not in the usual and ordinary course of business shall require the express, prior approval of the city council.

(4)

Formal bids for purchases in excess of $20,000.00.

For all purchases and contracts in excess of $20,000.00, bids shall be obtained as provided in paragraph (b)(4)b. and c. and the contract shall be awarded to the lowest responsible bidder as determined by applying the general rules and requirements provided, however, if there is a conflict between state law and this section in determining the lowest responsible bidder for public improvements that state law shall control.

Bids shall be obtained through the use of bidders' lists and by publishing notice of a request for bids in a newspaper of general circulation throughout the city and/or applicable trade publications.

Advertisement for bids shall be published at least ten days, excluding Sundays and legal holidays, in advance of the due date announced in the advertisement for bid opening.

At a minimum, all requests for bids shall include the time, date, location of the bid opening, general conditions and requirements, detailed specifications, a proposal sheet requiring the bidder's signature and any other information deemed appropriate to maximize competition.

All formal bids must be sealed and submitted to the city prior to the date and time stated for the opening of bids.

Formal bid results shall be documented on a formal bid sheet (see Appendix B). If three bids cannot be obtained, or if other than the lowest bid is being recommended for purchase, the reasons shall be documented along with the formal bid sheet.

All contracts to be awarded pursuant to formal bids shall be approved by the city council.

The formal bid sheet shall be attached to a purchase order which shall be completed and approved prior to making a purchase. The purchase order shall be signed by the department head and co-signed by the appropriate commissioner.

(5)

Term contracts.

Bids for supply contracts for a definitive term may be sought for supplies, materials, services or equipment.

Term supply contracts shall be awarded pursuant to the informal and formal bid procedures in paragraphs (b)(2) and (3).

(6)

Construction contracts.

Competitive bidding shall be used for all contracts for public improvements in excess of $20,000.00.

For construction contracts in excess of $20,000.00, bids shall be secured by a certified check, bank draft, satisfactory bid bond or approved letter of credit in the amount of ten percent of the total bid price.

The successful bidder on all construction contracts shall also be required to furnish and pay for satisfactory performance, labor and material payment bonds in the amount of 110 percent of the contract amount and any other security required by law or by the specifications for the particular project.

Bid deposits shall be held for a period as is specified in the bidding instructions.

No bid shall be withdrawn for a period of 30 days or the time indicated in the contract subsequent to the opening of bids without the consent of the city.

Insurance coverage shall be required of all bidders. The extent of coverage and terms shall be included in the bidding instructions.

All construction contracts shall include provisions that the successful bidder comply with the prevailing wage rates and all other applicable city ordinances.

(c)

Emergency procurements.

(1)

Purchases may be made or contracts awarded by the following succession of city officials:

The mayor;

Commissioner of the department for which purchase is being made;

Any other commissioner;

The department head pertinent to the emergency.

Only in the absence of all preceding official(s) will a subsequent official be called upon to make an emergency purchase decision. For instance, the only time a department head would be asked to make an emergency purchase decision would be in the absence of both the mayor and all commissioners. For terms of this policy, the absence of the preceding official(s) will mean either a vacancy in the position or the inability to make physical, voice or other forms of communicative connection to that official. The purchase will be made without competitive bidding if an emergency occurs which affects the public health, safety or welfare where the amount thereof is not in excess of $20,000.00.

(2)

The commissioner of accounts and finance shall report any emergency purchases in excess of $10,000.00 to the city council at its next regular meeting following said emergency purchase, giving the name of the vendor, date, description of the item or items purchased, the amount of the purchase, the nature of the merchandise and the justification of the emergency purchase.

(d)

Bid exemptions.

(1)

Unless prohibited by state or federal law, the following contracts and any other contracts, which by their nature are not adapted to award by competitive bidding, shall be exempt from the competitive bid procedures specified by paragraphs (b)(2) and (3):

Purchases with individuals or firms holding a professional license or possessing a high degree of performance;

Items available only from a single or dual source(s);

Utilities;

Purchases of magazines, papers, books or similar articles of an educational or instructional nature;

Procurements through state, federal, local or other governmental agency contracts;

Classifieds;

Licenses and permits;

Contracts for maintaining or servicing equipment, providing repair parts or supplies for equipment which are made with the manufacturers or authorized service agent of that equipment where the provision of parts, supplies, maintenance or servicing can best be performed by the manufacturer or authorized service agent;

Contracts for the printing or engraving of bonds, water certificates, tax warrants and other evidences of indebtedness.

(2)

Purchases meeting any of the above mentioned bid exemptions but are in excess of $10,000.00 shall require approval by the city council.

(3)

Purchases exempt from competitive bid procedures shall competitively negotiate the final cost of the good or service to be purchased.

(4)

By a two-thirds vote of the members of the city council then holding office the council may waive competitive bidding for any contract.

(e)

Opening of bids.

(1)

All formal bids shall be opened publicly by the purchasing agent or by a department head or his/her designee at the time and place stated in the invitation for bids.

(2)

All formal bids shall be open to a public inspection for a period of at least 48 hours before a contract is awarded, except such information that discloses proprietary or financial information submitted in response to qualification statements.

(f)

Rejection of bids.

(1)

The city reserves the right to reject any or all bids, to waive any minor informality or irregularity in any bid, to negotiate changes and/or modifications with the lowest responsible bidder and to make award to the response deemed to be the most advantageous to the city. Bidders shall be required to comply with all applicable federal, state and local laws, including those relating to employment of labor without discrimination on the basis of age, race, color, handicap, sex, national origin or religious creed.

(2)

Any bid not in conformity with the specifications or requirements set forth by the city in the bid request may be rejected.

(g)

Award of bid.

(1)

Formal bid submission shall be tabulated and a recommendation shall be prepared by the department making a purchase subject to the formal bid requirements provided in paragraph (b)(4) and sent to the commissioner of accounts and finance for review. If an award is to be made to other than the lowest bidder or if the purchase was not included in the fiscal year budget, justification must be made in writing.

(2)

The commissioner of accounts and finance shall send a recommendation and tabulation of all formal bids received for purchases meeting the requirements provided in paragraph (b)(4) to the mayor and the council for consideration of awarding a formal contract.

(h)

Termination of contracts.

(1)

Any bidder may be suspended or disqualified from participation in the bidding process for violation of city ordinances or for failure to abide by past contracts with the city or with other governmental bodies.

(i)

Change orders.

(1)

After a contract is awarded pursuant to the competitive bid procedures specified herein, additional purchases or modifications may be made under the contract, or the terms of the contract may be extended, without rebidding the materials, supplies, services or equipment involved, provided that the change order:

Is not of such a size or nature as to undermine the integrity of the original bidding process; and

Is germane to the original contract; and

Does not exceed 20 percent of the contract amount; and

Is approved by the city council.

Change orders for contracts for public improvements shall be as provided by state law.

(j)

Petty cash.

(1)

Petty cash accounts may be established, with the approval of the commissioner of accounts and finance, to expedite miscellaneous small purchases. Petty cash can be used by all departments for facilitating the transaction of city business but shall not normally be authorized for purchases in excess of $100.00.

(2)

The use of petty cash shall be limited to:

The payment of handling or C.O.D. charges for goods delivered.

Small purchases that must be made in a timely fashion.

The filing of all ordinances, resolutions, etc., with LaSalle County until such a time that the county will accept either a credit card or bill the city for such services—this item is exempt from the $100.00 limitation detailed in subsection (j)(1).

(3)

Petty cash requests must be accompanied by a receipt and approved by the department head for which the purchase was made. The expense account number must be included on the receipt.

(k)

Spending limits.

(1)

Department heads of the city, in the performance of their respective duties on behalf of the city, shall be empowered to authorize the ordering or purchase of budgeted materials, fixtures, equipment, services and supplies as may be deemed essential in the normal, day-to-day course of business up to $500.00, in conformance with this section.

(2)

The mayor and commissioners in the performance of their respective duties on behalf of the city, shall be empowered to authorize the ordering or purchase of budgeted materials, fixtures, equipment, services and supplies as may be deemed essential in the normal, day-to-day course of business up to $7,500.00, in conformance with this section.

(3)

Authorization of any expenditure in excess of the limits prescribed above shall be granted only by action of the city council and may be subject to competitive bidding as prescribed in (b)(4) above.

(l)

Spending procedures.

(1)

Any expenditure on behalf of the City of Ottawa shall comply with the provisions of section 2-551 of this Code. The exceptions to this rule are those purchases made on site where either petty cash or a city credit card is used. Petty cash procedures were detailed in (j) above. Credit card procedures will be described in (l)(2) below. Purchase orders will be secured from the finance department. Reimbursements for city purchases or expenditures, including travel expenses, may be obtained by submitting a completed expense report, with receipts and signed by the department head, to finance. A reimbursement check will then be issued.

(2)

City debit/credit cards are issued to those staff members that regularly make purchases that either require a debit/credit card for payment or the use of a debit/credit card makes the purchase substantially less cumbersome. Debit/credit cards can be issued only with the approval of the commissioner of accounts and finance and the respective department head.

(Ord. No. O10-2007, § 1, 3-6-2007; Ord. No. O37-2007, § 1, 8-7-2007; Ord. No. O29-2010, § 1, 8-3-2010)

APPENDIX A

CITY OF OTTAWA
INFORMAL BID LIST
(For purchases in excess of $1,000 and up to $20,000)

Vendors:

1. _____	2. _____	3. _____
_____	_____	_____
_____	_____	_____
_____	_____	_____
_____	_____	_____
_____	_____	_____

Note: Include the name of the vendor's representative from whom the quote is received. If necessary, use more than one sheet.

_____

Quantity	Description	Vendor #1	Vendor #2	Vendor #3

TOTALS:

_____
Signed (person obtaining quotes)

_____
Date

Comments:

APPENDIX B

CITY OF OTTAWA
FORMAL BID SHEET

_____
Item(s)

_____
Bid Opening Date

VENDORS	BASE BID AMOUNT	*OTHER	NET BID AMOUNT	BID SECURITY


_____ Signed

_____ Attest

* Other — Trade-in, delivery costs, etc.

                    
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