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THE
PURCHASING POLICIES
OF THE
CITY OF MUSKEGON
EFFECTIVE: December 10, 1991
THE PURCHASING POLICIES
OF THE CITY OF MUSKEGON
SECTION I PURPOSE 1
SECTION II PURCHASING GOALS 1
SECTION Ill PURCHASING AUTHORITY 1
A. CITY COMMISSION 1-2
B. CITY MANAGER 2
C. ASSISTANT CITY MANAGER 2
D. CITY ATTORNEY 2
E. FINANCE DEPARTMENT 2
F. CITY DEPARTMENT HEADS 2
SECTION IV GENERAL PURCHASING POLICIES 3
A. DEFINITION AND SCOPE OF PURCHASING 3
B. SUBDIVISION PROHIBITION 3
C. PURCHASES UNDER $500 3
D. PURCHASES OF %500 OR MORE BUT LESS THAN $2,000 3
E. PURCHASES OF $2,000 OR MORE BUT LESS THAN $8,000 3
F. PURCHASES OF $8,000 OR MORE 3-6
G. AFFIRMATIVE ACTION 6
H. RECYCLED PRODUCTS 6
I. COOPERATIVE PURCHASING 6
J. PROCUREMENT OF PROFESSIONAL SERVICES 6
K. PURCHASES IN CASES OF EMERGENCY 6
L. CONSTRUCTION PROJECTS 7
M. INSURANCE REQUIREMENTS 7
N. POLICY EXCEPTIONS 7
0. AUDITING AND MONITORING 8
P. WAGE RATES 8
Q. LEASES AND LEASE-PURCHASES 8
SECTION V STANDARDS OF CONDUCT 8
SECTION VI AMENDMENTS TO PURCHASING POLICY 9
SECTION VII ADOPTION OF PURCHASING PROCEDURES 9
CITY OF MUSKEGON
PURCHASING POLICY
SECTION I - PURPOSE
This policy is established to provide parameters by which purchases will be made by the City
of Muskegon. It is the goal of the City, through this policy, to purchase all equipment,
supplies, and services required by the City of Muskegon's operation at the lowest possible
cost, consistent with proper quantity, quality, and delivery.
SECTION II- PURCHASING GOALS
The City Commission hereby establishes the goals of the City of Muskegon for all purchases of
goods and services made by the City, it agencies, and funds over which it has control as
follows:
A. Establish a level of specifications for goods or services which adequately identifies
the quality of the product or a service necessary to meet City objectives. City
objectives shall be identified either implicitly or explicitly in the specifications,
RFP's, and RFQ's.
B. Provide within the policies and procedures for a mechanism for participation by
the Commission and Administration in setting goals and objectives for purchasing
products and services.
C. Provide for the greatest competition among potential suppliers while limiting cost
to meet the quality of the product or service specified.
D. Award where possible to local bidders who meet specifications within the context
of "lowest responsible bidder."
E. Provide for a policy document which identifies those individuals responsible and
further permits adequate monitoring and reporting of purchasing.
F. Establish policies and procedures which are comprehensive, yet flexible; efficient,
yet provide adequate control.
SECTION Ill - PURCHASING AUTHORITY
The City Manager's Office shall be responsible for the administration of the purchasing
system of the City. Purchasing authority and responsibility shall be delegated as follows:
A. City Commission
1) Adopts purchasing policy
2) Approves all purchases for goods and services of $8,000 or more
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3) Approves change orders to contracts exceeding 20% of original contract or over
$30,000
B. City Manager
1) Recommends purchasing policy
2) Establishes purchasing procedures
3) Responsible for all purchasing action taken by the City consistent with the City
Charter and Commission Policy
4) Approves Change Orders between 10% and 20 % of the original contract, but not
to exceed $30,000
C. Assistant City Manager
1) Provides for the monitoring to be conducted and reports to the City Manager and
City Commission on compliance. Responsible for such other procedures as
established by the City Manager.
D. City Attorney
1) Prepares and/or reviews all contract documents for purchase of goods and
services as to legal form.
E. Finance Department
1) Reviews all documents as to Risk Management/Insurance requirements.
2) Recommends to the City Manager and Department Heads alternative sources of
financing available for purchase of goods or services.
3) Monitors purchases for budget compliance.
F. City Department Head
1) Purchases all supplies, equipment, materials, commodities, and services as may be
required by his/her department in accordance with the purchasing policy and
procedures.
2) Provides for efficiency, economy, and accountability in the purchasing for his/her
department.
3) Develops specifications and obtains bids or quotations for purchases in accordance
with the purchasing policy and procedures.
4) Evaluates bids, and when appropriate, makes recommendations to the Assistant
City Manager/City Manager/City Commissioners for purchases.
5) Executes requisitions and purchase orders in accordance with purchasing
procedures.
6) Maintains adequate inventories of materials and supplies.
7) Receives and inspects all materials and supplies ordered.
8) Approves change orders up to 10% of the original contract but not to exceed
$30,000.
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SECTION IV- GENERAL PURCHASING POLICIES
A. Definition and Scope of Purchasing
Purchasing activity, as herein used, shall mean any action taken by the City acting as
buyer for the purpose of obtaining goods and services from a Vendor, whether by
purchase, rent, lease, lease-purchase or other similar methods of acquisition as may
be used by the City.
B. Subdivision Prohibition
No purchase shall be subdivided for the purpose of circumventing the dollar value
limitations imposed by the Charter, this Policy or any procedures established by the
City Manager.
C. Purchases under $soQ
For purchases of items which will cost under $500 within one year, departments shall
seek bids or quotations whenever possible to allow for competition. Local firms shall
be solicited unless valid reasons determine this is not in the best interest of the City.
Local shall mean the City of Muskegon.
D. Purchases of $500 or More but Less than $2,000
Any expenditure for goods and services in the amount of $500 or more but less than
$2,000 within one year shall be based upon the solicitation of no less than three (3)
verbal or telephonic price quotations when practical and feasible to do so; and shall
be made from the lowest cost vendor unless good cause exists not to do so. Factors
including but not limited to product quality, serviceability, delivery, emergencies and
other considerations of a similar kind normally relevant to the exercise of good
business judgement shall constitute sufficient and good cause on which to base such
decisions. Local firms shall be solicited unless valid reasons determine this not to be in
the best interest of the City.
E. Purchases or contracts of $2,000 or More but Less than $8,000
Any expenditure for goods and services, the cost of which is $2,000 or more but less
than $8,000 within one year, shall be made based upon the solicitation of no less than
three (3) written price quotations, subject to the same guidelines specified in Section
IV-D. In addition, such purchases shall also be preapproved by the Assistant City
Manager.
F. Purchases or Contracts or $8,000 or More
Any expenditure for goods, equipment, materials, commodities, supplies or services,
for the cost of $8,000 or more within one fiscal year shall be made by the Department
Head only after notification of the Finance Director, the endorsement by the City
Manager, and approval of the City Commission has first been secured. Formal bids
shall be required subject to the following regulations:
1) Definition - A formal bid or proposal shall be defined as the submission of a
written, sealed price quotation by a Vendor to the City pursuant to the
issuance of public notice thereof or solicitation of qualified vendors by the
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City. It is based on written specifications and standard conditions stipulated
by the City for the purpose of procuring goods and services for the City.
Professional/technical services may be secured through selective
competitive proposals of qualified firms (local firms shall be considered to
determine if sufficient qualified competition exists prior to advertisement
for professional/technical services).
2) Scope - The $8,000 bid requirement shall apply to all goods and services
that can be purchased through this process within one fiscal year. This limit
shall apply to recurring commodities in addition to one time purchases,
unless specifically authorized otherwise by the City Manager for good
reasons submitted by the Department Head and Assistant City Manager.
3) Invitation for Bids - An Invitation for Bids shall be issued and shall include a
purchase description and/or specifications and all contractual terms and
conditions applicable to the procurement. The Invitation for Bids shall be
mailed or otherwise distributed by the requisitioning department to at
least three reliable vendors if available to ensure and maintain the integrity
and competitiveness of the bid process.
4) Public Notice and Advertising - Adequate public notice of the Invitation for
Bids when required shall be given prior to the date set forth therein for the
opening of the bids. A minimum of ten (10) days notice must be given prior
to bid opening with the advertisement for bids having been posted on the
City's website, mailed or emailed to those individuals/companies who have
expressed an interest in receiving bid notification and mailed or emailed to
those individuals/companies who have placed a bid with the City of
Muskegon on the same typed of service within the last 24 months
(exception to the ten (10) day notice must be approved by the City
Manager). Professional/technical services need not be publicly advertised;
however, must ensure competition based upon proposals secured from
qualified firms. 1
5) Bid Opening- Bids shall be opened publicly in the presence of one or more
witnesses at the time and place designated in the Invitation for Bids. The
amount of each bid and other relevant information together with the name
of each bidder shall be recorded by the City Clerk or designee; the record
and each bid shall be open to public inspection.
6) Bid Acceptance and Evaluation - Bids shall be accepted (with the exception
of late bids, which shall not be accepted) without alteration or correction,
except as otherwise authorized by these Policies, the Purchasing
Procedures adopted by the City Manager, or the factors stipulated in the
Invitation for Bids. Bids shall be evaluated based on the requirements set
forth in the Invitation for Bids and Bid Documents, which may include
criteria to determine acceptability such as cost, quality, serviceability,
workmanship, delivery, inspection, testing and suitability for a particular
purpose. Those criteria that well affect the bid price and be considered in
evaluation for award shall be objectively measureable, such as discounts,
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This Section amended on December 8, 2015 at a Regular City Commission Meeting.
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transportation costs, maintenance costs, and total or life cycle costs. The
Invitation for Bids may set forth the evaluation criteria to be used.
7) Bid Prices - Bid prices should be valid for one year unless identified at the
time of purchase to be multi-year; in which case must be specified.
8) Correction or Withdrawal of Bids - Correction or withdrawal of
inadvertently erroneous bids before or after award, or cancellation of
awards or contracts based on such bid mistakes, shall be permitted in
accordance with the Purchasing Procedures established by the Manager.
After bid opening, no changes in bid process or other provisions of bids
prejudicial to the interest of the City or fair competition shall be permitted.
Except as otherwise provided, all decision to permit the correction or
withdrawal of bids, or to cancel awards or contracts based on bid mistakes,
shall be supported by a written determination made by the Department
Head and endorsed by the City Manager and approved by the City
Commission.
9) Award - Only the City Commission shall award a public contract. The
Commission shall retain the right to take any of the following actions:
a) Award a contract to the lowest responsible and responsive bidder
who has submitted a bid most advantageous to the City.
1) Definition of Responsible Bidder: A responsible bidder is
herein defined to mean a person or firm who has the capability
in all respects to perform fully the contract requirements, and
the integrity and reliability which will assure good faith
performance.
2) Definition of a Responsive Bidder: A responsive bidder is
herein defined to mean a person or firm who has submitted a
bid which conforms in all material respects to the descriptions,
specifications, terms, conditions, and other factors called for in
the Invitation for Bids.
b) Accept or reject in part or in whole any or all bids.
c) Waive any informality or irregularity in the bids.
d) Authorize City staff to negotiate any viable modifications in prices,
terms, conditions, or specifications with the low bidder that would
be advantageous to the City.
e) Award a contract to other than the low bidder should the
Commission determine such action to be in the best public interest.
f) Award a contract by division among two or more vendors if such
alternatives are duly indicated in the original Invitation for Bids.
g) Authorize a negotiated contract for goods or services should no bids
be received.
10) Waiver of Bid Requirement - The City Commission shall retain the right to
waive bid requirements subject to the following conditions:
a) Such action is found to be to the advantage and in the best interests
of the City.
b) Sole Source Purchases - A contract may be awarded by Commission
for supply, service, equipment, or construction item without
competition when the department making the purchase has advised
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the City Manager in writing and certified that there is only one
source vendor available
c) Lower prices can be obtained without soliciting competitive bids.
d) The City Department has been engaged in cooperative procurement
bids of goods and/or services in conjunction with another
governmental agency where bids have been taken.
e) The purchase is through an intergovernmental agreement or non-
profit agency.
G. Affirmative Action
The City of Muskegon encourages all vendors to establish and maintain an affirmative
action program. In addition, all vendors awarded a construction, professional, or
service contract with the City in the amount of $8,000 or more must submit to the City
an affirmative action plan consistent with the City's plan.
H. Recycled Products
The City shall make every effort to purchase recycled products whenever possible. A
ten percent (10%) cost preference may be given to recycled products, reusable
products offered as alternatives to disposable products, and products designed to be
recycled where they are offered as alternatives to non-recyclable products. Analysis
and recommendation of percentage of recycled materials in products will be
submitted with any preference bid.
I. Cooperative Purchasing
Each department shall endeavor to participate with other local and state
governmental agencies in cooperative bids for the procurement of goods or supplies
subject also to Commission approval of contract and waiver of bids as indicated in
Section IV-F-9-d of these policies. It shall be the policy of this City to engage in those
joint purchasing efforts whenever such activity is feasible and economically
advantageous to the City.
J. Procurement of Professional Services
The procurement of certain services where technical/professional expertise or
knowledge of a specialized field are critical to the performance of that service
including but not limited to physicians, engineers, planning consultants, architects,
accountants, and other similar professionals, are at times necessary. The same
regulations of Section IV-C, D, E, and F shall apply for the procurement of these
professional services. In addition to the aforementioned regulations, an attempt shall
be made to procure these services from vendors located in the City. If e3nough
qualified local vendors are available to meet the provisions of the purchasing policies,
then the services must be obtained locally.
K. Purchases in Cases of Emergency
Notwithstanding any other provisions of this Policy, the City Manager or a designee
may make or authorize others to make emergency purchases when there exists a
threat to public health, welfare, safety conditions, or a hardship to the performance of
City business as defined in regulations or procedures promulgated by the City
Manager, provided such emergency purchases shall be made with such competition as
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is practicable under the circumstances. An after-the-fact written determination of the
basis for the emergency and for the selection of the particular vendor shall be
included with the purchase order.
L. Construction Projects
Construction projects are also subject to the provisions of this purchasing policy.
Additionally, the following will apply to the procurement for construction projects:
1) Prevailing Wage Rates -The City will require the use of the most recent
Federal Prevailing (Davis-Bacon) Wage Rates for City construction projects.
The commercial wage rates will be used for all projects except residential
construction which will use the residential wage rates. The following
construction is exempted from the Federal Prevailing Wage Rate provision:
a) The Residential Rehabilitation Program administered by the City in
accordance with regulations from the U.S. Department of Housing and
Urban Development.
b) Construction where the source of revenue makes determinations
regarding the use of prevailing wage rates.
2) Change Orders -The Department Head in charge of the construction
project shall have the authority to approve individual change orders up to
10% of the cost of the construction but not more than $30,000. The City
Manager is authorized to approve change orders and contract expenditures
between 10% and 20% but not more than $30,000. All final payments of
construction projects shall require the Department Head's, the Finance
Director's, and Assistant City Manager's signature.
3) Bid Bond -All construction projects shall require a bid bond from each
bidder in the amount of five percent (5%) of their bid. The bond will secure
the bid. The bond will be released upon award of the contract by the City
Commission for unsuccessful bidders and upon execution of the contractor
for the successful bidder. (Lesser amounts than 5% may be permitted by
exception for good cause upon approval by the City Commission.)
4) Performance Bond - All construction projects shall require a performance
bond from the successful bidder for the full amount of the contract or as
specified by bid document. This bond will be written in such a manner to
ensure satisfactory completion of the project. The bod shall be in effect for
one full year after completion of the project. The bond will be released only
after the department head in charge of the project and the Assistant City
Manager is satisfied that the project was properly completed and one year
has elapsed.
M. Insurance Requirements
Vendors and contractors will be required to carry adequate insurance coverage in
accordance with the Purchasing Procedure established by the City Manager.
N. Policy Exceptions
Any exceptions to the policy, as approved by the City Commission, shall be noted in
the recommendations submitted.
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0. Auditing and Monitoring
It shall be the policy of the City Commission to provide a mechanism on an annual
audit basis which tests, on a random sample basis, the application of purchasing
procedures. This shall be in addition to internal monitoring and controls. This shall be
performed by the City's auditors during conduct of the City's audit of funds.
P. Wage Rates
The purchasing of goods and services shall comply with the wage rate policies
established either by the federal, state, or local government where applicable.
Q. Leases and Lease-Purchases
Leases and Lease-Purchases will be governed by the same provisions of other
purchases for the same amount of money.
SECTION V- STANDARDS OF CONDUCT
Recognizing that City purchases involve the use of public funds, the following standards shall
apply to all purchases made by the City;
A. All vendors, current and prospective, shall be treated equitably. Purchasing
decisions shall be based upon price, quality, delivery, written standards, previous
service, and other relevant factors promoting the best interest of the City.
B. Employees shall be prohibited from furnishing to any prospective bidder
information that would give any vendor an unfair advantage over other
prospective vendors.
C. Purchasing records shall be retained by the purchasing department for public
review.
D. Employees shall not utilize the City's purchasing system to purchase items for
personal use.
E. Employees shall be prohibited from accepting rebates, gifts, gratuities, or favors
from vendors extended for the purpose of influencing a favorable award. Any
extra option or alternative providing benefit to the City shall be explained in the
bid.
F. Employees shall have no financial or beneficial interest in any contract or purchase
order for goods and services used by the City. Any potential conflict of interest
shall be reported to the City Manager prior to bidding.
G. Vendors Muskegon be businesses in good standing with the City.
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SECTION VI - AMNEDMENTS TO PURCHASING POLICY
Any amendments to this Purchasing Policy will be submitted to the City Commission by the
City Manager and shall require Commission approval by resolution.
SECTION VII -ADOPTION OF PURCHASING PROCEDURES
Consistent with this purchasing Policy and the City Charter, the City Manager Is hereby
authorized to adopt and amend as necessary Purchasing Procedures which are consistent
with this policy for the administration of the City's purchasing functions.
APPROVED BY COMMISSION RESOLUTION
91-121 (a)
Date of Approval:
December 10, 1991
Section IV-F (3) Amended 12/8/2015
Modified 12/8/2015
The modified policy requires the City to place all bid notifications on the
City's website and social media and allow any company or individual to sign up
to receive notification of new bids by registering on our website. Staff is also
required to notify all bidders who have bid on a similar project within the last two
years.
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