Section 1. Purpose s1

Administrative Policy Manual Chapter 4 – Fiscal Purchasing Policies and Article 3 Procedures Attachment: 4.3A) Summary of Methods for Purchases of $1,000 or less

Effective Date: 1/20/09 Responsible Department: Finance Prior Version, Related Policies & Notes:  Prior Version: December 14, 2004 and December 11, 2007  See also: Road Map to Purchasing (http:// jasmine/finpurchasing/index.htm)  See also: Travel Policy (Chapter 4, Article 5)  See also: Policy on the Use of Consultants (Chapter 4, Article 14)  See also: Petty Cash Policy (Chapter 4, Article 13)  See also: Environmental Procurement Policy  See also: City Charter Section 1317 Centralized Purchasing  See also: Sunnyvale Municipal Code Section 2.08 Purchases of Goods and Services  See also: City Charter Section 1309 Contracts on Public Works  See also: Sunnyvale Municipal Code Section 2.09 Public Works Contracting

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Section 1. Purpose

The City of Sunnyvale Charter (Section 1317) establishes a centralized purchasing system to be used by all City departments. This system is defined in Sunnyvale Municipal Code Sections 2.08 and 2.09. The purpose of this policy is to broadly describe the Sunnyvale purchasing system. For more detailed information refer to the Road Map to Purchasing on the City’s Intranet site ( http://jasmine/finpurchasing/index.htm ).

The intent of the centralized purchasing system is:

. To provide for the fair and equitable treatment of all suppliers and contractors; . To obtain the highest possible value in exchange for public funds; and . To safeguard the quality and integrity of the purchasing process.

Section 2. Policy

Subd. 1. Definitions

For the purposes of this policy, the following definitions shall be used:

Agreement (See contract.)

Authorized employee A City employee who has been authorized by his or her program manager and/or Department Director to purchase, or request that the Purchasing Division purchase goods and/or services required to support City operations in compliance with City policies and procedures.

Awarding authority An individual or group of individuals who have the legal authority to enter into contracts on behalf of the City. The city manager, or his or her designee, is the awarding authority for purchases of $100,000 or less in one transaction; and the City Council is the awarding authority for purchases of more than $100,000 in one transaction.

Blanket Purchase Order (See Purchase Order.)

Centralized purchasing system A system under which all goods and services, including professional services and public works projects, are either directly purchased, or purchased under the supervision of, the Department of Finance Purchasing Division. Purchasing includes leasing. "Purchase" and "procure" are synonymous.

City employee An individual who performs services for the City as an elected or appointed official or as a compensated employee of the City or of a temporary services agency retained by the City.

Competitive bid or proposal process A process whereby the City solicits bids or proposals from suppliers of goods or services and/or contractors to supply products or perform services for the City.

Contract A written agreement between the City and another party, such as a supplier, contractor, consultant, non-profit organization or governmental agency, to purchase services, including the construction of public works projects. Contracts define the contractual obligations of each party, including scope of services, compensation, time for performance, etc. The most common procurement contracts used by the City include Consultant Services Agreements, Service Agreements and General Construction Contracts. Contracts are signed by both parties and are typically used for purchases of services valued at $20,000 or more in one transaction. The City Attorney shall approve the form of all contracts made by the City.

Emergency procurement A purchase of goods and/or services or public works projects, regardless of the cost, for which there is an urgent necessity for the preservation of life, health or property.

End user A City department requiring goods, services, and/or public works projects.

Field Purchase Order (See Purchase Order.)

Incidental Purchases Non-repetitive purchases of little consequence, such as food, decorations, flowers, gifts, greeting cards, etc., often related to some type of employee or community event,

Independent Contractor An individual or business with whom the City contracts to provide services. In the simplest terms, an independent contractor differs from an employee in that the City specifies the deliverable that is to result from the contracted work but does not have the right to direct or control the manner in which the work is performed. However, determining whether a service provider consisting of a single individual is an independent contractor or an employee can be complicated with significant legal and financial ramifications for both parties. When considering contracting for services with an individual, City staff should first consult with either the Purchasing Officer or Director of Human Resources.

One Transaction The Purchasing Ordinance, as well as many City policies and procedures, require certain actions, based on the value of “one transaction”. Circumstances vary from procurement to procurement as does the definition of “one transaction”.

Contracts for a purchase of goods to be provided in a single delivery. Examples: the purchase of one dump truck or the purchase of six patrol vehicles. In this case, the entire purchase, including product cost, delivery charge, sales tax, etc., constitutes “one transaction”.

Contracts for the purchase of goods to be provided through scheduled deliveries over time. Example: The purchase of 100 computers to be delivered at the rate of 25 per month for four months. In this case, the cost of all 100 computers, delivery charges, sales tax, etc., constitutes “one transaction”.

Contracts for the purchase of goods during a specified period of time, if and when required. Example: A one-year contract for the purchase of water system supplies, as required. In this case, each individual purchase, including delivery charge, sales tax, etc., constitutes “one transaction”.

Contracts for the purchase of goods and/or services when actual expenditures exceed anticipated expenditures, thereby requiring a contract modification. Example: A one-year contract for “on call” roof repair that was issued with an expenditure cap of $50,000 but which exceeded that amount due to an unusual series of storms. In this case, total expenditures under the contract constitute “one transaction”.

Contracts for the purchase of services with a defined scope of work and a specific completion date. Example: A contract to clean the carpet in the City Hall. In this case, the entire project constitutes “one transaction”.

Contracts for the purchase of services to be performed regularly over a specified period of time. Example: A two-year contract for the monthly sweeping of a parking lot. In this case, all work performed over a period of two years constitutes “one transaction”.

Contracts for “on call” services, if and when, needed, during a specified period of time. Example: A one-year contract for typewriter repair, if and when needed. In this case, each service call constitutes “one transaction”.

Contracts for ongoing services during a specified period of time with an option to extend the contract for additional period(s) of time. Example: A one-year contract to monitor the Landfill slope stability on a quarterly basis with an option to extend the contract for an additional one-year period. In this case, since the extension may or may not occur, the initial contract term constitutes “one transaction” as does the optional extension.

Petty Cash A bank account established to reimburse City employees and volunteers for the out-of-pocket purchase of goods valued at $100 or less. For more information, refer to the Petty Cash Policy (Administrative Policy Manual, Chapter 4, Article 13.)

Professional services Services which require the exercise of professional discretion and independent judgment, based on an advanced or specialized knowledge, expertise or training gained by formal studies or experience. Examples of professional service providers include appraisers, architects, attorneys, engineers, instructors, physicians, etc. For detailed information about the use of consultants, refer to the policy on the Use of Consultants (Administrative Policy Manual, Chapter 4, Article 14).

Purchase Order A contract between the City and another party, such as a supplier, contractor, consultant, non-profit organization or governmental agency under which the City agrees to purchase goods and/or services under certain terms and conditions for specified compensation. The most common Purchase Orders used by the City are:

. Field Purchase Orders (purchases valued at $1,000 or less in one transaction, issued and signed by an end user); . Individual Purchase Orders (purchases of goods of any value and purchases of services valued at $20,000 or less in one transaction), issued and signed by a Purchasing Division staff member; and . Blanket Purchase Orders (term contracts for purchases of goods and/or services, issued and signed by a Purchasing Division staff member.

Purchasing Card A credit card issued in the name of a City employee for the purchase of goods ordinarily valued at $1,000 or less in one transaction). Although purchases are made by the individual employee, the goods purchased are the property of the City of Sunnyvale, and the obligation to pay for the purchase rests with the City. Purchasing cards are the most efficient and cost effective way to pay for small dollar purchases of goods. Purchasing Cards cannot be used for purchases of onsite services (such as equipment repairs) or food.

Purchasing Officer The person who purchases, or supervises the purchase of, all goods and/or services and public works projects for the City, in cooperation with end users and in accordance with all legal requirements. Also disseminates bid solicitation documents and supervises the bidding process and supervises the evaluation of bids and proposals. Also processes all contracts awarded and the payment of any funds due.

Purchase Requisition The purchase requisition is your means of communicating to Purchasing that you need materials or services procured for your program's use. The completed form is submitted to Purchasing. NOTE: Only the Department of Public Works shall be responsible for providing technical specifications for a public works project.

Services Work performed or labor, time and effort expended by an independent contractor.

Sole Source Situations in which the City's requirements can be met solely by goods or services available from a single source.

Subd. 2. Methods of Procurement

As a general rule and unless exempt by the City's Purchasing Ordinance, purchases shall be based on a competitive bidding process. The complexity of the bidding process increases with the dollar value of the purchase. Although competitive bidding typically results in lower purchase prices, there are costs associated with the process in terms of time and effort. For that reason, the smaller the purchase, the less stringent the competitive bidding requirements and vice versa.

The city manager shall review the results of all formal competitive bid and proposal solicitations and make recommendations to the City Council as to the action to be taken.

Under no condition should purchases be artificially split to use a more simplified process.

Purchases Valued at $1,000 or Less in One Transaction

Where possible and advisable, procedures have been established by the Department of Finance whereby authorized City employees can make small individual purchases from suppliers without direct involvement by Purchasing Division staff.

The following procurement methods have been established to make small dollar purchases as fast and simple as possible for authorized City employees to obtain the goods and/or services they need to do their jobs:

Petty Cash up to $100 – Purchases valued at $100 or less can be made directly from suppliers using personal funds which can be reimbursed from one of the City’s petty cash funds upon presentation of original proof of purchase. For more detailed information, refer to the Petty Cash Policy (Administrative Policy Manual, Chapter 4, Article 13.)

Purchasing Card under $1,000 in one transaction – City purchasing cardholders can use their cards to purchase goods directly from suppliers up to their individual transaction limits (typically $1,000). Cardholders are encouraged to use Sunnyvale suppliers or suppliers with whom the City already has a contractual relationship, such as a Blanket Purchase Order.

Field Purchase Order under $1,000 in one transaction – Designated employees throughout the City have a supply of these forms which can be used to make purchases of goods and/or services up to $1,000.

For more detail about purchases of $1,000 or less in one transaction, refer to Attachment A.

For purchases that cannot appropriately be purchased using petty cash, purchasing cards, Field Purchase Orders, and Blanket Purchase Orders, the end user should submit to the Purchasing Officer a Purchase Requisition which includes technical specifications for the required goods and/or services.

Purchases Valued at $1,000 to $5,000 in One Transaction

Whenever possible, end users should purchase goods and/or services valued from $1,000 up to $5,000 in one transaction directly from a supplier with whom the Purchasing Division has established a Blanket Purchase Order.

In those instances where a Blanket Purchase Order does not exist, the end user shall submit a Purchase Requisition, authorizing Purchasing Division staff to issue an individual Purchase Order to the supplier. Competitive quotes are not required although care must always be taken to ensure that the City receives good value for each expenditure.

Purchases Valued at $5,001 through $24,999 in One Transaction

Unless exempt from bidding, goods and/or services valued at $5,001 through $24,999 in one transaction shall be made through an informal competitive bid or proposal process in which a minimum of three written responses are solicited by either the end user or the Purchasing Division. Regardless of who solicited the bids or proposals, the end user shall submit a Purchase Requisition authorizing Purchasing Division staff to make the purchase; and Purchasing Division staff will issue a contract to the successful bidder.

Purchases Valued at $25,000 through $50,000 in One Transaction

Purchases of goods and/or services valued at $25,000 through $50,000 in one transaction shall be initiated by the end user’s preparation of a Purchase Requisition and its submission to the Purchasing Division. Unless the purchase is exempt from bidding, Purchasing Division staff shall solicit competitive bids or proposals from qualified firms. All bids or proposals received shall be evaluated, using criteria selected prior to soliciting bids or proposals. Upon completion of this evaluation, Purchasing Division staff will issue a contract to the successful bidder or proposer.

Purchases Over $50,000 in One Transaction

Unless exempt from bidding, purchases of goods and/or services valued at more than $50,000 in one transaction shall be made through a competitive bid or proposal process conducted by the Purchasing Division upon receipt of a Purchase Requisition from the end user. The solicitation shall be advertised--either by posting the contract opportunity on the City’s website or placing a legal advertisement in The Sun. All bids or proposals received shall be evaluated, using criteria selected prior to advertising the contract opportunity. If the value of the contract is more than $100,000, the end user and Purchasing Division staff shall jointly prepare a Report to Council, recommending contract award to the selected bidder or proposer. Purchasing Division staff will issue a contract to the awardee upon evaluation and following Council action if the value of the contract is more than $100,000.

Procurement Authority

Ordinarily, responsibility for purchasing activities rests with the Purchasing Officer. However, the Purchasing Ordinance authorizes the city manager, after consultation with the Finance Director, to delegate procurement authority to City employees other than the Purchasing Officer under certain circumstances.

Absent this specific delegation, City employees are authorized to make purchases directly from providers of goods and offsite services only through the use of petty cash accounts, purchasing cards, Field Purchase Orders and Blanket Purchase Orders. City employees are authorized to make purchases of onsite services directly from service providers only through the use of Field and Blanket Purchase Orders. All other purchases are considered unauthorized; and the City is under no obligation to pay unauthorized purchases. City employees making unauthorized purchases may be personally liable for any debts so incurred.

On occasion, a contract may be issued under the city manager’s contract award authority of $100,000 but expenditures unexpectedly exceed that amount. In this case, payment of the expenditures in excess of $100,000 must be authorized by Council.

The city manager, or his or her designee, is the awarding authority for any procurements, regardless of amount, the cost of which will be fully reimbursed by others.

Subd. 3. Purchases Exempt from Competitive Bidding

The Purchasing Ordinance exempts certain types of purchases from the City's standard competitive bidding requirement. The most common exempt purchases with citywide implications include professional services, emergency procurements, sole source goods or services, media advertisements, and goods procured for resale to the public. Other exempt purchases are more Department-specific, such as purchases of public library collection materials and grant-funded procurements when special conditions attached to the grants require the procurement of particular goods and/or services. Being exempt from bidding does not mean a purchase is exempt from being processed by the Purchasing Division. Being legally exempt from bidding does not preclude bidding, when possible.

The end user should always inspect goods and/or services and public works projects and authorize payment if contractually compliant.

Subd. 4. Incidental Purchases

Under the following circumstances, incidental purchases may be made using public funds:

Employee-Related Purchases

 Purchases for Annual Employee Week activities that are open to all City employees in an amount determined annually by the Director of Human Resources

 Purchases for the City’s Annual Employee Service Awards Event

 Purchases for any Citywide employee event if approved in advance by the city manager

 Purchases for employee recognition events, provided that they are authorized by the department’s approved recognition program

 Purchases during Emergency Management Organization events, planned or unplanned, if no or limited release time is allowed and if approved in advance by the Director of Emergency Services

 Purchases of food and/or other unanticipated staff requirements resulting from inclement weather conditions, hazardous materials spills, public safety incidents, etc., if no or limited release time is allowed and if approved in advance by the Department Head

 Retirement plaques purchased by the Department of Human Resources

 Purchases, the total cost of which does not exceed $100, for retirement celebrations, provided that the retiree has been employed by the City for a minimum of five years

 Flowers or similar items, the total cost of which does not exceed $100, purchased as gestures of condolence in the event of the death of an employee or an employee’s spouse, domestic partner, child, or stepchild

 Purchases by staff who are required to participate in a community group or community events

 Purchases of meals or other related costs incurred during attendance at meetings of relevant professional organizations

Council-Related Purchases

 Purchases of meals for Council members during any meeting where breaks cannot be accommodated, provided that the meeting lasts four hours or longer and extends through times commonly reserved for lunch and dinner

 Purchase of dinner for Council members and staff required to attend Council meetings that start at 6 p.m. or earlier

 Purchase of lunch for Council members during the Council Budget Workshop

 Purchase of lunch for Council members during the Council Study Issues Workshop

 Purchases made as gestures of appreciation to Council members at the end of their Council membership in accordance with the Council Policy Manual

Purchases Relating to Boards and Commissions

 Purchase of meals for board and commission members during any meeting where breaks cannot be accommodated, provided that the meeting lasts four hours or longer and extends through times commonly reserved for lunch or dinner

 Purchases made as gestures of appreciation to members of boards and commissions in accordance with the Council Policy Manual

Volunteer-Related Purchases

 Purchases made as gestures of appreciation on an individual or group basis (limited to once per year per volunteer)

Miscellaneous Purchases

 Purchases of lunch and break refreshments for members of recruitment oral boards

 Purchases relating to authorized City events

 Purchases in connection with visitors on official City business, including meals during business meetings if such business meetings cannot be scheduled at any other time

 Purchases for non-recurring Department-sponsored special occasion events, such as a grand opening or ground breaking ceremony, if authorized in advance by the City Manager

Subd. 5. Prohibited Purchases

The following items are prohibited from purchase using public funds, regardless of the procurement method or the funding source:

 Alcoholic beverages.

 Food for staff meetings, staff training sessions or staff “working” lunches or dinners. Meetings and training sessions should be scheduled in a manner that allows time for breaks and lunch. An exception is a staff “retreat”, approved in advance by the Department Director, in which a group of employees are confined together for an extended period of time for creative thinking wherein a lunch break would be counterproductive.

 Food or food service items (with the exception of cups for drinking water) for lunch or break rooms.

 Flowers, food, gifts, decorations, greeting cards or similar items for employee birthdays or illnesses.

 Holiday decorations except in public areas and if approved in advance by the Department Head.

 Holiday greeting cards.

 Business lunches in which a staff member treats a visitor to lunch to discuss matters which could otherwise be discussed in a non-meal setting. An exception is a “recruitment lunch”, approved in advance by the city manager, wherein a staff member is recruiting a visitor for employment with the City, for donation of valuable goods and/or services to the City, or for location of a business or other significant real estate investment within Sunnyvale.

Subd. 6. Buy Sunnyvale

Whenever goods and services are available from Sunnyvale businesses at competitive prices, City employees shall locally purchase goods and services required to support City programs and services.

Subd. 7. Central Stores

Commonly-used products shall be purchased in volume and stocked at Central Stores for issuance to City employees.

Subd. 8. Purchasing Manual

The Purchasing Division shall provide accurate, up-to-date and detailed procurement procedures, including forms, for the use of City employees who need to obtain goods and/or services to do their jobs. This manual, entitled "Roadmap to Purchasing", shall be displayed on the City's Intranet site; and a hardcopy version shall be available, upon request, for those employees who do not have ready access to a computer.

Changes to the City's purchasing policies and procedures shall be included in the "Roadmap to Purchasing" within thirty days of their effective date, and direct notice shall be given to City employees who are commonly involved in purchasing activities. Changes reflecting a significant change in policy direction shall be approved in advance by the city manager.

Subd. 9. Purchasing Liaisons

Department Directors shall appoint one or more persons within their departments to serve as Purchasing Liaisons. The role of each Purchasing Liaison shall include:

. Act as the primary points of contact with the Purchasing Division; . Serve as the "resident expert" relative to purchasing and payment policies and procedures; and . Disseminate purchasing and payment information to others within their work units.

Subd. 10. Ethics Policy

A. Statement of Policy

All City employees are responsible for impartially assuring fair competitive access to City procurement opportunities by responsible suppliers and contractors. In addition, all City employees shall conduct themselves in a manner that avoids any impropriety, or appearance of impropriety, and that fosters public confidence in the integrity of the Sunnyvale procurement process.

B. Conflict of Interest

No City employee shall participate in a City procurement when the employee knows that:

. The employee or the employee’s spouse, domestic partner, child, stepchild, parent or stepparent will benefit financially from the procurement; and/or

. The employee or the employee’s spouse, domestic partner, child, stepchild, parent or stepparent is negotiating or has an employment arrangement which is contingent upon or will be affected by the procurement.

Upon discovery of an actual or potential conflict of interest, an employee shall immediately withdraw from further participation in the procurement.

C. Gratuities

No City employee shall solicit, demand, accept or agree to accept a gift of goods or services, payment, loan, advance, deposit of money, or employment offer presented, promised in return for, or in anticipation of favorable consideration in a City procurement.