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HomeMy WebLinkAboutCS 30/01 ~ REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: September 20,2001 REPORT NUMBER: CS 30-01 SUBJECT: Request for Proposal RECOMMENDATION: It is recommended that Report CS 30-01 of the Director, Corporate Services & Treasurer be received for information. ORIGIN: Director, Corporate Services & Treasurer AUTHORITY: - The Municipal Act, R.S.O. 1990, as amended and Regulations Thereunder FINANCIAL IMPLICATIONS: Not applicable. EXECUTNE SUMMARY: Not applicable. BACKGROUND: Over the course of the last month, Purchasing and Finance staff have held a number of meetings to develop a Purchasing By-law. This initiative was undertaken as it was time to review the current Purchasing Policy and to address concerns raised around Request for Proposal procedures. Weare now at the stage where we are just completing some fine tuning. I have attached a copy of the draft by-law for your information and expect this by-law to be forwarded to the Finance Committee for final approval in October. - In addition, I have included an excerpt from the draft Purchasing Procedures that covers detailed procedures pertaining to Request for Proposal. While staff procedures are not normally submitted to a Committee or Council it was felt that, due to the nature of this item, it was appropriate in this case. There are still a number of meetings to be held which have been scheduled over the next couple of weeks. We are targeting that the Purchasing Procedures will be released around the same time. However, timing restrictions may precipitate that the Purchasing Procedures be released in November. Report to Council CS 30-01 Subject: Request for Proposal Date: September 20, 2001 Page 2 ATTACHMENTS: 1. Draft Purchasing By-Law 2. Draft Purchasing Procedures GAP:vw Recommended for the consideration of Pickering City Council Thomas J. uinn, Chief Administrative Officer - - Prepared / Approved / Endorsed By: ~~- '-1JiUis A. Paterson Director, Corporate Services & Treasurer Pickering draft policies and procedures September 19,2001 2.0 PURCHASING BY -LAW ATTACHMENT#-L- TO REPORT#~ ~o- OJ - THE CORPORATION OF THE CITY OF PICKERING BY-LAW NUMBER- l>~~1" ESTABLISHING POLICIES GOVERNING THE PURCHASE AND DISPOSAL OF GOODS AND SERVICES (Hereinafter called the Purchasing By-law) WHEREAS the Council of the Corporation of the City of Pickering (hereinafter the City) has sole authority to allocate funds through its adoption of budgets for approved corporate programs and objectives; AND WHEREAS the City recognizes the need for sound and effective purchasing policies for the commitment of public funds in the acquisition of goods and services; AND WHEREAS this by-law establishes the authority and responsibilities governmg the purchase and disposal of goods and services subject to certain exceptions; AND WHEREAS in the interests of administrative efficiency and the elimination of unnecessary __ duplication of service, the Library Board has historically adopted the purchasing policies and procedures of the City and have relied on the staff of the City to provide certain services for their purchasing needs; AND WHEREAS the City of Pickering and the Town of Ajax have formed the Ajax Pickering Transit Authority as a separate entity as in a board o.r commission; AND WHEREAS this by-law anticipates the continuation of the cooperative arrangements between the City and the Library Board; AND WHEREAS the Council of the Corporation has by resolution adopted on ( date) authorized the enactment ofthis by-law and the repeal of resolution #35/89 item #15 and any other By-laws or resolutions formerly governing the subject matter of this by-law; NOW THEREFORE the Council of the Corporation enacts as follows: - 4 Pickering draft policies and procedures September 19,2001 PURCHASING POLICY DRAFT 1.00 PURCHASING PRINCIPLES The Manager, Supply & Services (hereinafter referred to as the Manager) shall: 1.01 Be responsible for the provision of purchasing services for the acquisition and disposition of all goods and services required by the City, the library Board and the Ajax Pickering Transit Authority (hereinafter referred to collectively as the City). 1.02 Arrange for the procurement, by purchase, rental or lease, the required quality and quantity of goods and services in an efficient and cost- effective manner. 1.03 Ensure the greatest value for the City by exercising professional purchasing practices, free from influence and interference, and encourage where practical, standardization and open and competitive bidding. 1.04. Promote acceptance of bids based on total acquisition and life cycle cost rather than the lowest bid received. 1.05 Provide for the appropriate level of delegated commitment authority to enable clients to - meet service level expectations. 1.06 Assist in the facilitation, comparison and assessment of alternate service delivery options. 1.07 Encourage wherever possible, specifications that are environmentally responsible and friendly. 2.00 AUTHORITIES AND RESPONSIBILITIES 2.01 The Manager, who shall report to the Director of Corporate Services and Treasurer, (hereinafter referred to as the Treasurer) is hereby given the authority and responsibility to operate a centralized purchasing program on behalf of the City of Pickering in accordance with the requirements of this By-law and to act on behalf of the City in entering into contracts with third parties for the purchase and disposal of all goods and servIces. 2.02 The Manager, with the approval of the department head responsible for the employees concerned, may delegate to an employee or employees who are not in Supply & Services, all or part of the authority to purchase goods and services up to an amonnt of $500 on the understanding that employees use their own judgement to promote the objectives of this by-law in any competitive or direct purchase. _ 2.03 Goods and services with an estimated total purchase price greater than $500 and not exceeding $5,000, shall be obtained by the Manager by whatever method of purchase deemed appropriate. Informal written quotations should be sought whenever possible for 5 Pickering draft policies and procedures September 19'8~ purchases between $5,000 and $25,000. After consultation with the appropriate ~P}" department head, the Manager shall approve an award upon such terms and conditions deemed beneficial to the City on the understanding that the objectives of this by-law in any competitive or direct purchase are met. 2.04 Goods and services with an estimated total purchase price greater than $25,000 and not exceeding $100,000, shall be obtained by the Manager by endeavouring to obtain a minimum of three written quotations. Where the compliant quotation meeting specifications and offering the best value to the City is acceptable, and subject to consultation with the appropriate department head, the Manager shall approve the award. 2.05 Goods and services with an estimated total purchase price greater than $100,000 shall be obtained by the Manager by sealed public tender. Tenders will be publicly advertised or by invitation from a list of qualified bidders, or a combination thereof, Tenders will be issued, received and then opened in public. Tenders that are late, illegible, unsigned, contain insufficient deposit, contain uncertified cheques, or do not include a deposit, bond or surety, shall be rejected. The terms and conditions of the deposit, bond or surety are subject to the approval ofthe Treasurer. Where the compliant tender meeting specifications and offering the best value to the City is acceptable, and subject to consultation with the appropriate department head, the ,- Manager will recommend or concur in a recommendation to the Chief Administrative Officer who shall approve the award. In the case of purchase arrangements that exceed one year or allow for extension for more than one year subject to satisfactory negotiations, and the value of the original term or results of any extension will result in the total contract price exceeding $100,000 the report recommending award shall so indicate. 2.06 Where the recommended tender is not from the lowest acceptable bidder, the award must be approved by Council. 2.07 Notwithstanding the provisions of Section 2.00, goods and services including but not limited to the acquisition of consulting and professional services may also be made through the use of Requests for Proposals (RFP). The Manager, subject to consultation with the appropriate department head shall approve the award of a proposal for the purchase of goods and services up to $25,000. The Manager, subject to consultation with the appropriate department head, will recommend or concur in a recommendation to the Chief Administrative Officer who shall approve the award of a proposal for the purchase of goods and services from $25,000 - $50,000. - Where it expected that the total purchase price is greater than $50,000, a selection committee shall be established consisting of the Manager, the initiating department head 6 - Pickering draft policies and procedures septemb.J:;J~l4J:r and other individuals having appropriate expertise. The selection committee shall determine a recommendation for award. A joint report setting out the recommendation shall be submitted by the Manager and department head to the appropriate Standing Committee and Council who shall approve the award. In the case of purchase arrangements by Request for Proposal (RFP) that exceed one year or allow for extension for more than one year subject to satisfactory negotiations, and the value of the original term or results of any extension will result in the total contract price exceeding $50,000 the report recommending award shall so indicate. 2.08 The Manager shall ensure that all recommendations dealing with the award of tenders or proposals contain the appropriate funding statement from the Treasurer. 2.09 Notwithstanding 2.01, subject to ~tatutory requirements and where all the requirements of this By-law have been met, the appropriate officials are authorized to execute formal contracts. 2.10 Authorities and responsibilities shall be applied and administered having regard to the provisions ofthe Corporate Financial Controls By-law. 2.11 Authorization limits shall adjust annually in accordance with the Consumer Price Index as - published by Statistics Canada and the Manager shall advise accordingly. 2.12 Where an official of the City is authorized to act pursuant to this By-law such act may be done by such official's authorized designate. 3.00 NEGOTIATION The Manager, is authorized to enter into negotiations without formal competitive bids, under the following circumstances: 3.01 When an event which could not be foreseen occurs, that is a threat to public health, service, welfare or public property, and requires the immediate delivery of supplies or performance of service. 3.02 When competition is precluded because of the existence of a sole source, patent rights, copyrights, secret processes, control of basic raw material or similar circumstances. 3.03 When bids have been solicited and no responsive bid has been received, or the lowest bid received exceeds the estimated cost, or the lowest bids received are identical. 3.04 When all bids fail to comply with the specifications or conditions and it is impractical to recall. -- 3.05 When the extension or reinstatement of an existing contract would prove most cost- effective or beneficial. The extension shall not exceed one year. 7 Pickering draft policies and procedures September DRAFT 3.06 When a fluctuating market prevents the Manager from obtaining price protection or owing to market conditions, required goods or services are in short supply. 4.00 EMERGENCY PURCHASE 4.01 In a situation where the immediate purchase of goods or services is essential to prevent serious delays, further damage, threat to life, restore minimum service, the Manager shall, on the approval of the appropriate department head obtain such goods and services at the lowest obtainable prices given the emergent nature of the situation. In the event that the purchase amount exceeds $5,000, the Treasurer is to be notified at the earliest time. In the event that the purchase amount exceeds $50,000 a report of the incident shall be submitted to the appropriate Committee and Council at the earliest time. 5.00 CO-OPERATIVE PURCHASING 5.01 The Manager may enter into arrangements with municipalities, local boards and other public bodies or public authorities on a co-operative or joint venture basis where there are economic advantages and where the best interests of the City would be served in so doing; providing that under such arrangements the method of acquisition used is a competitive method similar to that described in this By-law; and the awarding and _ reporting of such contracts is generally in accordance with the requirements of this By- law. 6.0 DISPOSAL OF SURPLUS PROPERTY 6.01 The Manager is authorized to dispose of surplus or obsolete goods and equipment by using it in other departments or, if no longer useful for municipal purposes, arranging for their disposal in a cost effective and efficient manner. The Manager is authorized to dispose of real property in accordance with the policies adopted by Council from time to time. 7.00 PROHIBITIONS 7.01 Subject to the Municipal Conflict of Interest Act, no member of City Council, Standing Committee or Board, or officer of the City is or will become interested directly or indirectly as a contracting party or otherwise in or in the performance of the contractor or in the supplies, goods, or business to which it relates or in any portion of the profits thereof, or in any such supplies to be used therein or in any of the monies to be derived there from. 7.02 No employee or member of City Council, Standing Committee or Board shall bid on the _ sale of goods except those disposed of by public auction. 8 Pickering draft policies and procedures septemt!;)~'t Fr 7.03 The City shall make no personal purchase for any employee, member of City Council, Standing Committee or Board, unless specifically authorized by Council. 7.04 No employee, or member of City Council, Standing Committee or Board, shall purchase or offer to purchase on behalf of the City except as may be provided for in this By-law. 7.05 No requirement for goods or services shall be divided to avoid the requirements of this By-law and the total project or annual requirement shall be considered. 8.0 CODE OF PURCHASING ETHICS 8.01 The code of purchasing ethics established by the National Institute of Governmental Purchasing Inc. and the Purchasing Management Association of Canada shall apply to all staff involved in the procurement process 9.0 EXEMPTIONS 9.01 Items listed in Appendix "A" are excluded from the requirements of this By-law. Notwithstanding, department heads are expected to provide details to the Treasurer and the Chief administrative Officer of any contractual arrangements ( under Appendix 'A') with third parties that exceed $25,000 annually or are for more than one year. These _ include, but are not limited to arrangements for insurance and brokerage, counselling, banking, audit, legal, survey and property appraisal. 10.0 ADMINISTRATIVE PROCEDURES 10.01 This By-law shall be read in conjunction with any written administrative policies and procedures. The Manager shall prepare and maintain administrative procedures to implement this By- Law. The Treasurer and Chief Administrative Officer shall approve such procedures. - 9 .- Pickering draft policies and procedures September 0>>1 APPENDIX 'A' -EXEMPTIONS '4J:r The following items are excluded from the requirements of this By-law and expenditures will be in accordance with established procedures. Notwithstanding, it is expected that the objectives of this by-law will be promoted in any expenditures for goods and services. 1. Petty Cash expenditures 2. Training and Education a) Conference, Course, Convention and Seminar b) Magazines, Books, Periodicals, Subscription c) Membership 3. Refundable Employee Expenses a) Advances b) Meal Allowances c) Travel 4. Advertising 5. Special Fees a) Counselling service b) Medical service c) Banking, brokerage or underwriting service d) Insurance and related costs (Liability, Property etc., Premiums, Payments and Adjusting Fees) - 6. Professional Fees a) Consultant fee related to litigation b) External auditor c) Legal services fees d) Ontario Land Surveyor e) Property Appraisal 7. Utility Services a) Gas and heating oil b) Sewer and water c) Postage and related costs d) Hydro e) Telephone 8. Tenders or quotations for goods or services to be provided by Utilities, Provincial or Federal Agencies, Crown Corporations, Municipalities, public agencies, when similar goods or services are not available from other sources. - 10 - Pickering draft policies and procedures September 19,2001 REQUEST FOR PROPOSALS ATTACHMENT # L TO REPORT # C~ 3!lR4.Fr 11.1 Overview 11.0 The Request for Proposals (RFP) method of purchase is a competItIve method of purchase that mayor may not include Vendor pre-qualification. The process generally follows the activities included in a typical procurement cycle (see 1.0 General). Depending on the degree of complexity or dollar value associated with the proposal it will be necessary to carry out many of these activities albeit to a varying extent. Some or all of the specifications and contract terms and conditions may not be determined prior to proposals being solicited. Depending upon the terms of the proposal call, the process may involve negotiations subsequent to the.submission of proposals on any or all of the specifications, contract terms and price. Proponents mayor may not be invited or permitted to submit a final and best offer. The use of proposals allows for greater flexibility in selecting a successful bidder, however, all proponents are to be given the same information, and must be treated equally and fairly. The RFP document still forms the basis for the contract. The contract may include information that was not originally specified in the RFP document. - With regard to professional services, it is the intention of the City to employ consultants generally on the basis of their perceived competence and expertise relative to the project in hand, the cost of their services, their ability to complete the work within the required time, and their past record in performing similar work. A Request for Information or Request for Expression of Interest may be issued in advance of a proposal to assist in the development of a more definitive set ofterms and conditions, scope of work and the selection of qualified Vendors. Alternatively, it may be incorporated into the proposal document where pre-qualification of Vendors is required. 11.2 Prohibitions, Restrictions and Compliance No purchase of goods and services having a price in excess of $500 shall be authorized unless it is from an agreement established by the Manager and is in compliance with the Purchasing By-law and purchasing procedures. Goods or services that are obtained without following the Purchasing By-law and purchasing procedures will not be accepted and any invoices received will not be processed for payment. Any employee who knowingly contravenes any of the above is committing an act of misconduct and is liable for the purchase as well as disciplinary action. 11.3 Procedures - Client responsibilities: 39 1. Pickering draft policies and procedures September 19,2001 Complete Online Purchasing Requisition. DRAFT Submit any attachments by email or internal mail quoting the requisition number. 2. Supply & Services responsibilities (and Client where indicated): 1. Review requisition and/or meet with Client for an initial meeting to ensure all required information is available and the Request for Proposal is the most appropriate Purchasing Method. 2. If not already submitted, request the Client to prepare (in point form) and submit a Scope of Work/Service and a requisition ifnot already submitted. 3. Assign document number. 4. Prepare draft proposal document (may be prepared by the Client if applicable). 5. Review draft document with Client. Discuss specific areas such methodology, timelines, evaluation process and criteria. 6. In conjunction with the Client, complete criteria and establish a weight for each criteria. - 7. Establish an evaluation committee with a mImmum composItion of two representatives from the Client department and one from Supply & Services. 8. Advertise proposal (only if required) including a general description of the proposal; where and how the document can be obtained, the closing date, time and location, and the cost for the documents (if any). 9. Circulate bid documents to prospective bidders. 10. Respond to enquiries during bidding period. 11. Receive proposals. Note: Not a public opening. 12. Meet with Client to review proposals received. Each member of the evaluation committee is given a copy of the proposal response and an evaluation criteria. Members are requested to evaluate each response against the criteria and upon completion forward to Supply & Services representative. 13. Receive the completed evaluation from each committee member and transfers all figures to a summary to show the complete evaluation from all members for each bid response. Total all committee member responses for each vendor and establish an average score. - 40 14. Pickering draft policies and procedures septemben>>OI Review the results with the evaluation committee. The committee has the OPti~J:.,. of the following: A) Select proponent who has the highest average score. Supply & Services then sets up a meeting with the selected proponent and the committee members. This meeting is called to confirm understanding of the Scope of Wode/Services as set out in the proposal and to finalize timelines. OR B) If scoring is close, the committee could decide to interview all or the three proponents with the highest scores. Supply & Services sets up an interview session with each proponent. The committee prepares interview questions. Proponents mayor may not get a copy of the questions prior to interview. A matrix is then created to evaluate the proponent's responses in the interview session and to establish the successful proposal. 15. Award proposal call as follows: - . For proposals over $50,000 selection committee to prepare report with recommendation to Council . For proposals between $25,000 and $50,000 Manager/Department Head submit (joint report) with recommendation to Chief Administrative Officer . For proposals under $25,000 submit recommendations to the Manager 16. Receive approvals, notify successful Vendor, issue Purchase Order and/or contract agreement. 17. Send a letter of regret to unsuccessful proponents (optional). 18. Resolve any contract administration or pricing issues with Accounting, Client, and Vendor. - 41