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HomeMy WebLinkAbout2018-PAD-051 Purchasing COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 1 of 13 POLICY PURPOSE: To establish purchasing authority, set expenditure limits and ensure consistent procedures are followed in the procurement of goods and services. The overriding objective is to ensure goods and services are acquired in a manner that results in the best overall value to the County through a fair, open, transparent and competitive process while complying with relevant legislation and legal requirements. DEFINITIONS: Alberta Purchasing Connection (APC): is the internet based provincial electronic tendering system. This system enables the MASH sector to place tendering offers nationally without any cost. Approval Authority: Council or employees who possess the authority to approve purchases up to or beyond a specified threshold. Bid: a submission in response to a request for tenders or proposal process. Bidder: a person or company responding to a request for tender or proposal process who is capable of fulfilling the requirements, based upon an assessment of financial, technical and commercial capabilities of the person or company, of procurement. Bid Document: a solicitation made by the County in the form of a Request for Proposal (RFP), Request for Quotations (RFQ) or as a Request for Tenders (RFT). Canada-European Union Comprehensive Economic and Trade Agreement (CETA): is a progressive free trade agreement which covers virtually all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers. Canada Free Trade Agreement (CFTA): is an intergovernmental trade agreement that entered into force on July 1, 2017 and replaces the former Agreement on Internal Trade (AIT). Its objective is to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services and investments within Canada and to establish an open, efficient, and stable domestic market. Commercial Goods or Services: means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 2 of 13 Competitive Pricing: acquiring services based on lowest overall pricing, including upfront, operational, overhead and transactional costs. Competitive pricing requires that three quotes be obtained from competing businesses. (Competitive pricing is used in RFQ, RFT, and RFP processes). Construction: means a construction, reconstruction, demolition, repair or renovation of a building, structure or other civil engineering or architectural work and includes site preparation, excavation, drilling, seismic investigation, the supply of products and materials, the supply of equipment and machinery if they are included in and incidental to the construction, and the installation and repair of fixtures of a building, structure or other civil engineering or architectural work, but does not include professional consulting services related to the construction contract. Cost-Effective & Suitable Bidder: a Bidder who offers the best Value for Money and meets all the outlined requirements highlighted in the bid document. Direct Purchase: a supplier awarded procurement without the use of competitive pricing. MASH: municipalities, municipal organizations, school boards, and publicly funded academic, health and social entities. These entities are known as the MASH sector. New West Partnership Trade Agreement (NWPTA): economic partnership between the governments of British Columbia, Alberta, Saskatchewan and Manitoba. The agreement creates an interprovincial free trade zone. Procurement: the acquisition of goods or services or combination thereof, by means of purchase, rental, lease or conditional sale. Purchasing Authority: an individual who has been delegated the authority to initiate purchases from a Qualified Supplier up to a specified threshold. Qualified Supplier: any entity that, based on assessment of that firm’s financial, technical and commercial capacity, is capable of fulfilling the requirements of procurement. A Qualified Supplier meets the minimum requirements with respect to service, delivery, quality and other criteria. Related Party: includes close family members of employees or Councillors, or an entity controlled by or under the shared control of an employee or Councillor. Close family members include a spouse, domestic partner, child or relative living in a common household, a grandparent, parent, grandchild, brother or sister, and the COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 3 of 13 spouse or domestic partner of a child, a parent-in-law, a brother-in-law or a sister- in-law. Request for Proposal (RFP): this format is used for more complex deliverables where Bidder ranking is based on price, quality, value and customer service. Bidder responses may help inform the development of final specifications or performance terms. This format allows for negotiation of the contract with the successful Bidder. Request for Quotations (RFQ): this format is used to procure simple goods and services where specifications may not be conclusive and a review process may be required after the quotes have been received. The Bidder is typically, but not always, assessed based on lowest price. Request for Tender (RFT): formal written request for vendors to offer in writing pricing for goods or services whereby the exact specifications are known and providing that all tenders terms and conditions have been met the only determining factor for the award is price. There is no negotiation with the successful Bidder. Sole Source: a term that applies to procurement of good(s) or service(s) where no competitive market exists by reasons of uniqueness of the goods or services or by vendor limitations. Tender: means a submission from a supplier in response to a tender notice. Tender Notice: means a notice published by the County inviting interested suppliers to submit a tender, a response to a request for prequalification, or both. Trade, Investment and Labour Mobility Agreement (TILMA): agreement between the governments of British Columbia and Alberta. The agreement provides for open and non-discriminatory access to procurements of government entities. The agreement has created a more open, competitive economy where goods, services, workers and investments can move more freely between BC and Alberta. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 4 of 13 Treasury Services: means services or financial products relating or ancillary to any of the following: a) Borrowing, lending, investing, managing or holding money, securities or other property; and b) Without limiting the generality of paragraph (a), i. Managing debt, loan, asset or investment portfolios, ii. Entering into commodity or other derivative transactions, or iii. Acquiring, exchanging, disposing of or otherwise transacting in securities, foreign currencies or any property acquired as a result of borrowing, lending, managing or investing money or securities. Value for Money: a foundational objective of the County is to maximize the value it receives from use of public funds. A value for money approach aims to deliver products and services with a lower total life cycle cost while maintaining high performance and satisfaction standards. Value can be received in terms of both quantitative and qualitative measures. These measures can include cost, customer service, firm’s experience, delivery time, quality, etc. Evaluation criteria may differ for each bid and project requirements, said criteria will be identified in any bid document. GENERAL GUIDELINES: A purchase may only be made if it has been approved through the annual budget process or otherwise authorized by separate resolution of Council; for an emergency; or legally required to be paid. No contract or purchase shall be divided to avoid any requirements of this policy. Invoices should be compared to the original purchase authorization document and/or supplier quotation and must be approved by the authorized employee prior to issuing payment. Commonly tendered services will be reviewed at minimum every 5 years and re- tendered. These services include but are not limited to: Audit Services, Investment Management Services, Cell Phone Service, etc. The transactional cost associated with tendering such services must not outweigh the potential benefits received from tendering new bids and must be practical in terms of needed time investment. Failure to adhere to the requirements outlined in this Policy may lead to disciplinary action up to and including termination of employment. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 5 of 13 ETHICS AND CODE OF CONDUCT: No purchase shall be made for personal goods and/or services for employees of the County, any member of Council, or the public. Purchases of goods or services from any employee or Councillor of the County, or from any entity in which an employee or Councillor of the County has an interest, should be avoided. A contract for goods or services placed with a Related Party of an employee, or Councillor, of the County shall be declared and that employee or Councillor shall not be placed in a position to supervise or approve the execution of that contract. All suppliers or potential suppliers must be treated equally. Any information made available to one supplier must be made available to all potential suppliers. Information that is not available to the public on request should not be released. Budget or cost estimates shall not be released during the bidding process. County personnel must not solicit, or accept gifts, gratuities or favours from suppliers or potential suppliers other than promotional items of nominal value. RESPONSIBILITIES: The CAO is responsible for:  All purchases and expenditures of the County of Newell.  Delegating, revoking or amending purchasing authorities to employees.  Ensuring Employee’s with Purchasing Authority are familiar with the purchasing policy and any other purchasing regulations.  Providing the Manager of Finance with the list of purchasing delegations and limits initially and any time there is a change to the authorizations. Directors/Managers are responsible for:  Carrying out the mandate of their department(s) as approved in budget.  Ensuring their employees understand the requirements of the purchasing policy prior to being given Purchasing Authority.  Reviewing and approving all Request for Tender (RFT) and Request for Proposal (RFP) documents before they are issued.  Reviewing bids, evaluation results and other relevant documents prior to a contract being awarded.  Authorize purchases that are within their delegated authority. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 6 of 13 Employees with Purchasing Authority are responsible for:  Obtaining applicable authorization(s) prior to asking for, obtaining, or securing bids, proposals, services or goods.  Using a fair and transparent process when calling for, receiving, and evaluating quotes and proposals.  Obtaining the best Value for Money by achieving the specified needs of quality, health & safety standards, productivity, service life, customer service, firm experience and expertise, delivery time, capability, and total cost of ownership.  Ensuring contractors meet the requirements of the County’s “Contractor Safety Program” where applicable. APPROVAL AUTHORITY: CAO, Directors and Managers may approve purchases and contracts up to $350,000 which have been included in the budget of their respective departments. Approval Authority may be delegated by Directors and Managers to their staff in writing to the Manager of Finance. Council must approve purchases and contracts greater than $350,000. Council approval is required if there is a significant change beyond the originally approved project nature and scope of work. APPROVAL AUTHORITY QUICK GUIDE: $ Value Minimum Approval Authority within (exclusive of taxes, and Requirements Approved Budget shipping) $0 - $2,500 Direct Purchase CAO/Directors/Managers $2,501 - $74,999 RFQ CAO/Directors/Managers $75,000 - $349,999 RFP, RFT CAO/Directors/Managers $350,000 and up RFP, RFT Council COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 7 of 13 VALUATION: The value of a procurement shall be estimated as of the date the tender notice will be published and shall include the estimated maximum total value of the procurement over its entire duration, whether awarded to one or more suppliers, taking into account all forms of remuneration, including: a) Premiums, fees, commissions, and interest; and b) The total value of options if the procurement provides for the possibility of options. SPECIFICATIONS: Specifications are the responsibility of the issuing department within the framework of the Purchasing Policy except where one department has been given the responsibility to develop common specifications for all departments. Specifications should:  Define the product or service required  Provide the minimum acceptable standards expected  Enable suppliers to bid requirements in a manner that will permit fair and equitable evaluation to select the successful supplier  Protect the County’s position with regard to the legal requirements for suitability and acceptability of the potential or actual offerings of prospective suppliers Specifications should document the requirements to be met in broad terms, avoiding reference to manufacturers or brand names. Reference to manufacturers or brand names may be used for the purpose of indicating quality only and must not denote preference. Specifications should include but not be limited to quality, performance, availability of parts or service or other characteristics necessary. Technical standards must clearly delineate between mandatory requirements (e.g. CSA Approved) and those which are preferable. The acceptability of alternative or equivalent product standards should be identified where possible. If substitutions or equivalencies are not acceptable, a statement to this effect should be included in the specifications. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 8 of 13 ADVERTISING & PUBLICATION OF AWARD REQUIREMENTS: All RFP’s & RFT’s must be advertised as follows:  On the County website  On Alberta Purchasing Connection where the request is for, o Goods or Services of $75,000 or greater, or o Construction of $200,000 or greater.  If advertising is required on Alberta Purchasing Connection ensure advertising meets the minimum posting period requirements and that award information is published: o Minimum posting period of 14 days (10 days if electronic tender submissions are accepted) for Commercial (off the shelf) Goods and Services and for all other goods and services less than $200,000 and Construction less than $5,000,000. o Minimum posting period of 30 days (25 days if electronic tender submissions are accepted) for all other goods and services of $200,000 or greater and Construction of $5,000,000 or greater. o RFT/RFP award information must be published no later than 72 days after the award of the contract. The notice shall include at least the following information: a) A description of the goods or services procured; b) County name and address; c) Name and address of the successful supplier; d) The value of the successful tender; e) Date of the award; and f) if limited tendering was used, the conditions and circumstances described in Article 513 of the CFTA that justified its use. AWARD CONSIDERATIONS: In addition to price, consideration may be given to the following in determining the lowest Cost-Effective and Suitable Bidder: 1. The ability of, and skill of the Bidder to provide the goods and services requested. 2. The ability of the Bidder to perform the contract or provide the services promptly or at the time specified without delay or interference, 3. The character, integrity, reputation, judgment, experience and efficiency of the Bidder, 4. The quality and performance of previous contracts, goods or services, 5. The sufficiency of the financial resources and ability of the Bidder to perform the contact or provide the goods or services, COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 9 of 13 6. The quality, availability and adaptability of the goods or contractual services to the particular use required, 7. The ability of the Bidder to provide future maintenance and services for the items acquired, 8. The number and scope of conditions attached to the bid. METHODS OF PROCUREMENT: Direct Purchases: The direct purchase process may be used to obtain incidental goods and services. These low dollar value procurements do not require competitive pricing. Negotiated Method: This method of purchase refers to the negotiation of an agreement for the purchase of goods and services from a supplier where there is no open competition. It is used in cases where the following conditions may be present: 1. when goods or services are available from only one source; 2. where compatibility within an existing product or process is the overriding consideration; 3. when two or more identical lowest bids have been received; 4. when, due to market conditions, goods are in short supply; 5. when all acceptable bids exceed the amount budgeted and re-tendering would not be beneficial; 6. when the extension or reinstatement of the existing contract would be the most cost effective or beneficial method and is in the best interest of the County; 7. in an emergency, where goods and services are deemed necessary and time and safety concerns reasonably limit the use of any other prescribed procurement process; 8. when no bids are received on a formal quotation, tender or request for proposal; 9. when goods are required for resale and thus an important factor in choosing a successful Bidder is marketability and profitability; 10.where the County would be best served through negotiations. Request for Quotation (RFQ): Used to request bids from vendors for specific goods or defined services that are low risk to the County, and where requirements and specifications are clearly defined. This informal procurement process is normally used when the cost and/or nature of the work does not warrant the time and level of effort required for a formal process. In the RFQ process the Purchasing Authority must: COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 10 of 13  Provide specifications to describe the requirements;  Provide any acceptable criteria if applicable;  Obtain written quotations from three Qualified Suppliers where possible;  Document results of the quotations and attach to the winning invoice; and  Purchase from a Qualified Supplier that provides the best Value for Money. Request for Proposal (RFP): An RFP is a formal invitation to suppliers to describe how their goods and services can meet specific needs of the County. Through the RFP a supplier is invited to demonstrate their expertise by proposing a solution to a problem, requirement or objective, for more complex deliverables. An RFP is less formal than the tender process. In the RFP process the Purchasing Authority must:  Clearly describe the nature of the goods or services requested  Follow the advertising and publication of award requirements of this policy  Where possible, invite a minimum of three Qualified Suppliers to respond.  Provide specifications regarding the problem, objective, or requirement  Provide any acceptable criteria if applicable  Document and file proposals. Proposals will be linked to the winning invoice.  Purchase from a Qualified Supplier that provides the best Value for Money.  All proposals over $350,000 shall be recommended to Council for approval. Request for Tender (RFT): This formal, competitive, sealed bidding process is used for goods and services defined by clearly stated, well-defined criteria and specifications, in respect of which an award can be made without negotiation. Tenders may be prepared and bids requested for the sole purpose of eliciting the lowest price from a specific supplier of a specific product. Pre-qualification of Bidders may be desirable to ensure that prospective Bidders have the necessary knowledge, experience, and financial resources to complete the work. Certain portions of the tender documents (i.e. specifications) may be made available if pre-qualification is required for a particular tender. In the RFT process the Purchasing Authority must:  At a minimum, include the following information in the tender notice: o County name and address; o The place where a person may obtain information and tender documents; o A brief description of the procurement; o The nature and the quantity, or estimated quantity, of the goods or services to be procured unless those requirements are included in tender documentation; COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 11 of 13 o The address and final date and time, specific to the second, for the submission of tenders; o The date, time, and place for any public opening of tenders; o A list and brief description of any conditions for participation of suppliers, including any requirements for specific documents or certifications to be provided by suppliers, unless those requirements are included in tender documentation that is made available to all interested suppliers at the same time as the tender notice; o For goods and services in excess of $100,000 and Construction in excess of $250,000, a statement that the procurement is subject to Chapter 5 of the CFTA. o The time-frame for delivery of goods or services, or the duration of the contract; o A description of any options, unless those requirements are included in tender documentation; o The procurement method that will be used, and whether it will involve negotiation or electronic auction; o If the County intends to select a limited number of qualified suppliers to be invited to tender, the criteria that will be used to select them and, if applicable, any limitation on the number of suppliers that will be permitted to tender, unless the criteria and any limitations are included in tender documentation; and o The language or languages in which tender or responses to requests for prequalification may be submitted, if they may be submitted in a language other than that of the tender notice.  Follow the advertising and publication of award requirements of this policy  Ensure tender specifications are reviewed by at least two persons.  When the possibility exists that the lowest tender will not necessarily be accepted, this must be stated.  If the tenderer’s bid will not be accepted if it is not in the prescribed format, specifically state the format which must be used,  If a closed tender process is being used, not accepting faxed or electronic submissions.  Never accept tenders, or changes to tenders, after the closing time.  Never reveal results of tender openings until after spreads are completed.  Open tenders with at least two witnesses of the source department in attendance.  Award the tender to the most Cost-Effective & Suitable Bidder that provides the best Value for Money. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 12 of 13  If the lowest Bidder is the most Cost-Effective & Suitable Bidder, the tender can be awarded, provided it is within budget limits and within the Approval Authority of the appropriate supervisor.  When tender award is recommended to a Bidder other than the lowest Bidder, this recommendation must be presented to Council for their award.  Present any awards to be made that exceed budget estimates or are in excess of $350,000 to Council for their award. EXCEPTIONS: The following are not subject to the provisions of this policy: 1. Treasury services; 2. Services provided by lawyers and notaries; 3. The rental, lease, purchase and sale of property, land or accommodation; 4. Registration for conferences, conventions, courses, workshops and seminars; 5. Memberships in professional and vocational associations; 6. Utilities including electric, gas, basic telephone; 7. Employee benefits, payroll premiums; 8. Insurance 9. Hiring of contract employees 10.Licenses, certificates, software and software licenses 11.Advertising services - newspaper, radio, television 12. Catering/food services 13. Emergency Procurement: where an urgent situation requires the immediate procurement of goods and services that could not be obtained in time using open tendering, the CAO or designate may purchase the required goods or services notwithstanding any other provision of this policy. Such situations include those which might involve danger to life, health or safety of employees or the public, or to prevent damage to property and the environment. 14. Sole-Source Procurement: where it can be demonstrated that only one supplier is able to meet the requirements of a procurement. In the event that the minimum number of quotations, proposals or tenders is not received the County may move forward and purchase goods and services as long as a fair, open and transparent effort was made in advertising the purchase opportunity. A fair opportunity to all suppliers will be deemed to have been provided if the above requirements and all relevant legislation is adhered to. COUNTY OF NEWELL - POLICY HANDBOOK POLICY NO: 2018-PAD-051 TITLE: PURCHASING ADOPTED: July 19, 2018 (C-219/18) SUPERCEDES NO: 2011-PAD-051; 2014-PAD-029 TO BE REVIEWED: PAGE NO: 13 of 13 RECORD KEEPING: The Bidder Submission Form, or equivalent, must be utilized in conjunction with this policy when competitive pricing is used. Any additional pertinent information (e-mails, written submissions, etc.) should be included with the Bidder Submission Form. These forms are to be given to the Accounts Payable (AP) Clerk who is responsible to scan the forms and attach them to the successful invoice in Laserfiche. Purchasing Policy – Bidder Submissions To be utilized in conjunction with Purchasing Policy #2018-PAD-051 Quotation/Tender No. _______________ Item(s) to be Purchased: __________________________________________________________________ __________________________________________________________________ Date Format Quote Submission Received (Name of Tender/Quote Quote Received (Fax Company) Amount Received E-Mail, etc.) $ $ $ Name of Company & Amount of Successful Submission: __________________________________ $_______________ Reason Submission was Successful: __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Date: ____________ Signed: __________________________