Chapter 2.92
CONTRACT APPROVAL
Sections:
2.92.010 Authorization.
2.92.020 Procurement process.
2.92.100 Severability.
2.92.010 Authorization.
A. The city council authorizes the mayor, or mayor’s designee, to enter into and execute on behalf of the city the following contracts without individual approval of each contract by the city council, so long as the contract is consistent with the approved annual budget for the city, and the city’s liability under the contract does not exceed available fund balances:
1. Contracts for purchase of goods, supplies, materials, postage or equipment issued through central stores operations involving a cost or fee (excluding sales tax) of less than $35,000. However, these types of contracts which specifically implement the annual budget may exceed $35,000; provided, that such contracts:
a. Are “fully disclosed” to the city council on or before January 31st following adoption of the city budget;
b. Result directly from the aggregation of approved budgetary programs and services for the current year; and
c. The mayor through the finance director may authorize purchases under a “disclosed contract” of up to 20 percent of the estimated amount through February of the current budget year;
2. Professional service contracts, including contracts for architectural, engineering, legal, and consulting services involving a cost or fee (excluding sales tax) of less than $7,500;
3. Maintenance contracts involving a cost or fee (excluding sales tax) of less than $10,000 per year;
4. Public works projects involving a cost or fee of less than $35,000, involving multiple trades, and $20,000 involving a single trade;
5. Settlement agreements involving a cost or fee of less than $50,000, and retention of legal counsel and expert consultants, involving risk management claims or suits;
6. Other routine agreements where no expenditure is involved, or the cost, expenditure, or fee (excluding sales tax) does not exceed $10,000;
7. Lease agreements for materials, supplies, and equipment where the expenditure or fee does not exceed $10,000 per year;
8. Sale of unneeded property with an estimated value of $10,000 or less, which has been certified for disposition, such sale or disposition to be made by the administration in accordance with informal procedures and in the best interest of the city;
9. Contracts which carry out or implement a provision of the Lynnwood Municipal Code or established city policy, e.g., maintenance or performance bonds for plat improvements;
10. Emergency Contracts. “Emergency” means a set of unforeseen circumstances that either:
a. Presents a real, immediate threat to the proper performance of essential functions; or
b. May result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken; or
c. For public works projects, may result in a substantial loss to the city if the contract is not immediately entered into;
11. Employment and Personnel Matters. Unless otherwise provided by statute or ordinance, e.g., salaries and compensation are subject to city ordinance;
12. Contracts of a “continuing nature” for the operation of programs and services approved in the annual budget or for a schedule of payments, including but not limited to inter-local agreements (ILA) and multiple-year personal service contracts which have been expressly approved by the city council before June 1, 1996, do not require subsequent annual approvals; provided, that such contract is listed specifically as a line item in the annual budget under BARS Code Category 40;
13. All contract approvals, and directly related purchasing actions taken since January 1, 1997, through the effective date of this contract approval amendment, and which are consistent with the provisions of this amendment are hereby expressly ratified as though prior approval was given.
B. The breaking down of any purchase or contract into units or phases for the purpose of avoiding the maximum dollar amount is prohibited. The amount of a contract includes all amendments, provided, amendments that do not exceed in total 10 percent of the contract amount may be entered into without prior city council approval.
C. The mayor, in the mayor’s discretion, may present any contract to the city council for prior approval, even if the contract is allowed to be approved without prior city council approval.
D. All interlocal agreements shall be presented to the city council for prior approval, except for interlocal agreements that create no liability or expense to the city, e.g., interlocal purchasing agreements.
E. The mayor shall promptly provide to the city council a copy (or summary) of any contract (or amendment) that has not received prior approval by the city council.
F. “Contract” means any agreement creating a legal relationship between the city and another person or entity, or any amendment thereto. (Ord. 2650 § 1, 2006; Ord. 2129 § 1, 1997; Ord. 2087 § 1, 1996)
2.92.020 Procurement process.
A. General Provisions.
1. Procurement Process Subject to Contract Approval Authorization. The provisions set forth in this section provide processes governing city purchasing, contracting, hiring, and disbursing. Specified types of contracts and maximum dollar thresholds of contracts that require individual approval of each contract before the city, through the mayor or mayor’s designee, enters into the contract, are set forth in LMC 2.92.010, Authorization. The processes set forth in this section are subject to the requirements of LMC 2.92.010, Authorization.
2. Federal Funds. When procurement involves the expenditure of federal funds, purchasing shall be conducted in accordance with any applicable federal laws or regulations.
3. Grants. When procurement involves the expenditure of a grant, purchasing shall be conducted in accordance with any applicable grant laws or regulations.
4. Breaking Down of Purchase and Amount of Purchase. The breaking down of any purchase or contracts into units of phases for the purpose of avoiding the maximum dollar amount is prohibited. The amount of a contract includes all amendments, provided amendments that do not exceed in total 10 percent of the contract shall be considered within the limitations set forth herein.
5. Disbursements.
a. General. Disbursement shall be based on a requisition signed by the applicable department head, and approved by the finance director, or their designees.
b. Small Items Not Stocked – Monthly Purchase Orders. The finance director is authorized to establish monthly purchase orders with local vendors for periods of not more than 12 months for the purchase of items which are not stocked by the departments of the city and are available at usual market prices. Such local vendors shall be selected on the basis of overall price policies, breadth, and depth of stocks and delivery service.
6. Emergency Procurements. Notwithstanding any other provisions of this section, the mayor of his/her designated agent may make or authorize others to make emergency procurements of materials, supplies, equipment, or services, without complying with the requirements of this section when there exists a threat to public health, welfare, or safety or where the city may suffer a substantial monetary loss by reason of the time required to follow regular purchasing procedures; provided, that such emergency procurements shall be made with such competition as is practicable under the circumstances. A written determination of the basis for the emergency and for the selection of the particular contractor shall be included in the contract file. As soon as practicable, a record of each emergency procurement shall be made and shall set forth the contractor’s name, the amount and type of the contract, and listing of the item(s) procured under the contract, which shall be reported to the city council at the next subsequent meeting.
7. Credit Cards. The mayor or designee is authorized to establish credit card agreements for issuance of credit cards to eligible users for purchase of items, products and services required pursuant to city purpose. The mayor or designee shall adopt procedures to implement this section. Credit cards shall be distributed in a manner that is controlled and under approval of the mayor or designee, for any user that has a recognizable need for such a card. The mayor or designee shall establish credit limits, pursuant to the card issuer, that establish controls on card use. The mayor or designee shall authorize payment of credit card bills, establishing city procedures for the review, controls and audits of such bills.
8. Local Preference. The city may consider a local tax preference to determine the lowest responsive and responsible bidder, when purchasing materials, supplies or equipment. This consideration is at the city’s option for each purchase and shall not be mandatory. In this determination, the city shall consider the sales tax that would be charged by each supplier, in calculation of the lowest responsive and responsible bidder. The city shall then calculate and credit towards the offer price the share of such tax revenue it would specifically receive as a result of purchasing from a supplier located within city boundaries. The purchase must then be awarded to the lowest bidder after such tax revenue has been considered, whenever this local preference is utilized by the city as a factor in determination of lowest bidder. Such tax revenue consideration shall comply with the provisions of RCW 39.30.040 now and as amended.
B. Purchase of Materials, Supplies, or Equipment.
1. Small Purchases. Purchase of materials, supplies, or equipment, where the cost (excluding sales tax) is $2,000 or less, may be made by the administration in accordance with procedures adopted by the finance director, and approved by the mayor, in the best interests of the city.
2. Purchase by Quotations. Except as provided in subsection (A)(6) of this section, Emergency Procurements, and subsection (B)(4) of this section, Noncompetitive Purchases, or other specifically approved by the city council, the city shall follow the following process to obtain telephone or written quotes from vendors for the purchase of materials, supplies, or equipment where the cost (excluding sales tax) is in excess of $2,000, and less than $35,000:
a. Requests for Quotation.
i. Written requests for quotations shall specify at a minimum the following:
(A) Specific material(s), equipment, or supplies to be purchased;
(B) Number, quantity, quality, and type of units;
(C) Tax;
(D) Delivery time requirement;
(E) Freight costs;
(F) Point of delivery; and
(G) Terms of payment;
ii. A city representative shall make an effort to contact at least three vendors. The number of vendors contacted may be reduced if the item or items being sought are only available from a smaller number of vendors. When fewer than three quotes are requested or if there are fewer than three replies, an explanation shall be placed in the procurement file;
iii. Whenever possible, quotes will be solicited on a lump sum or fixed unit price basis;
iv. At the time such telephone quotes are solicited, the city representative shall not inform a vendor of any other vendor’s quote on the materials, supplies, or equipment;
v. A written record shall be made by the city representatives of each vendor’s quote on the materials, equipment, and supplies, and of any conditions imposed on the quote by such vendor;
vi. All of the quotes shall be collected, determination of the lowest responsive bidder shall be made by the applicable department director, or designee, and documentation of the selection and selection process shall be placed in the procurement file;
b. Determining Lowest Responsible Bidder. The city shall purchase the materials, equipment, or supplies from the lowest responsible bidder; provided, that whenever there is a reason to believe that the lowest responsible bidder has not presented the best price obtainable, all quotes may be rejected and the city may call for new quotes or enter into direct negotiations to achieve the best possible price. The following factors, in addition to price, may be taken into account by the city in determining the lowest responsible bidder:
i. Any preferences provided by law to Washington products and vendors;
ii. The quality of materials, equipment, and supplies to be purchased;
iii. The conformity of the materials, equipment, and supplies to the city’s specifications;
iv. The purposes for which the materials, equipment, and supplies are required;
v. The time for delivery of materials, equipment, and supplies;
vi. The character, integrity, reputation, judgment, experience and efficiency of the vendor; and
vii. Such other information as may have a bearing on the decision to purchase the material, equipment, or supplies;
c. Life Cycle Costing. In considering quotes for the purchase of materials, equipment, or supplies, whenever there is reason to believe that applying the “life cycle costing” method of quote evaluation would result in the lowest total cost to the city, first consideration shall be given to the quote with the lowest life cycle cost which complies with the specifications. “Life cycle cost” means the total cost of an item to the city over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life. The “estimated useful life” of an item means the estimated time from the date of acquisition to the date of replacement or disposal, determined in any reasonable manner;
d. Award. Immediately after the award is made, the bid quotations of each vendor’s quotes shall be recorded, open to public inspection, and shall be available to the public by telephone inquiry. Any contract awarded under this subsection need not be advertised;
e. Filing of Statements on Awards to Other than Contractors Submitting Lowest Quotation. When the award for a contract is not given to the contractor submitting the lowest quotation, a statement of the reasons for placing the contract elsewhere shall be prepared and filed with the other contract documents relating to the contract, and shall be open to public inspection during regular office hours;
f. Rejection of Quotations. The city may reject all quotations or parts thereof, when it is determined the public interest will be served thereby, and upon rejection shall include the reasons therefore in the records, which shall be open for public inspection;
g. Vendor Lists. At least twice per year, the city shall publish in a newspaper of general circulation a notice of the existence of vendor lists and solicit the names of vendors for the lists. Purchases shall be made from the vendors listed in accordance with procedures developed by the finance director.
3. Contract by Sealed Bid.
a. General. Unless otherwise specifically approved by the city council, all contracts relating to purchases or materials, equipment, or supplies where the cost (excluding sales tax) is in excess of $35,000, shall be by sealed bid and approved by the city council;
b. Invitation for Bids. An invitation for bids shall be issued which shall include the specifications and the contractual terms and conditions applicable to the procurement;
c. Public Notice. Public notice of the invitation for bids shall be given not less than 13 calendar days prior to the date set forth therein for the opening of bids, unless for good cause shown, the city council authorizes a different period of time. Such notice shall be published at least once in a newspaper of general circulation. The public notice shall state the date and time of bid opening. Bids not received by the date and time stated for bid opening will not be accepted or considered;
d. Bid Opening. Bids shall be opened publicly by the finance director or his/her designee at the time and place designated in the invitation for bids. The amount of each bid, and such other relevant information as the finance director deems appropriate, together with the name of each bidder, shall be recorded. The record and each bid shall be open to public inspection;
e. Determining Lowest Responsible Bidder. The city shall purchase the materials, equipment, or supplies from the lowest responsible bidder; provided, that whenever there is a reason to believe that the lowest responsible bidder has not presented the best price obtainable, all quotes may be rejected and the city may call for new quotes or enter into direct negotiations to achieve the best possible price. The following factors, in addition to price, may be taken into account by the city in determining the lowest responsible bidder:
i. Any preferences provided by law to Washington products and vendors;
ii. The quality of materials, equipment, and supplies to be purchased;
iii. The conformity of the materials, equipment, and supplies to the city’s specifications;
iv. The purposes for which the materials, equipment, and supplies are required;
v. The time for delivery of materials, equipment, and supplies;
vi. The character, integrity, reputation, judgment, experience and efficiency of the vendor; and
vii. Such other information as may have a bearing on the decision to purchase the material, equipment, or supplies;
f. Life Cycle Costing. In considering the purchase of materials, equipment, or supplies, whenever there is a reason to believe that applying the “life cycle costing” method of quote evaluation would result in the lowest total cost to the city, first consideration shall be given to purchases with the lowest life cycle cost which complies with the specifications. “Life cycle cost” means the total cost of an item to the city over its estimated useful life, including costs of selection, acquisition, operation, maintenance, and where applicable, disposal, as far as these costs can reasonably be determined, minus the salvage value at the end of its estimated useful life. The “estimated useful life” of an item means the estimated time from the date of acquisition to the date of replacement or disposal, determined in any reasonable manner;
g. Correction or Withdrawal of Bids – Cancellation of Awards. Correction or withdrawal of inadvertently erroneous bids before or after bid opening, or cancellation of awards or contracts based on such bid mistakes, may be permitted by the city. Mistakes discovered before bid opening may be modified or the bid may be withdrawn by written or telegraphic notice received in the office designated in the invitation for bids prior to the time set for opening. After bid opening, corrections in or withdrawal of bids shall be permitted only to the extent that the bidder can show by clear and convincing evidence that a mistake was made, the nature of the mistake, and the bid price actually intended. However, downward correction of a bid, which would displace the apparent low bidder, shall only be permitted if the error made and the intended bid price can be determined solely from the bid documents. All decisions to permit the correction or withdrawal of bids after bid opening, or to cancel awards or contracts based n bid mistakes, shall be made by the city council;
h. Award. The bids shall be submitted to the city council by the finance director, along with the recommendation of the appropriate department. The city council may award the bid to the lowest responsible bidder, or may reject all bids in its discretion. The contract shall be awarded to the lowest responsible bidder whose bid meets the specifications and evaluation criteria set forth in the invitation for bids.
4. Noncompetitive Purchases. The finance director is authorized to make open market purchases without obtaining competitive bids or quotations as required under LMC 2.92.020(B), and otherwise if specifically approved by the city council, under the following conditions:
a. Items of Special Design. When an item required is of special design, shape or manufacture to match or fit in with an existing installation and competitive bidding is impracticable;
b. Surplus or Distress Sale. When it is possible to procure obvious bargains in surplus or distress material, supplies or equipment;
c. Items for Quick Delivery. When the obtaining of competitive bids or quotations will cause delay resulting in an appreciable loss to the city;
d. Interlocal Agreements. Materials, equipment, and supplies may be purchased on a city, state (or other governmental) bid contract or cooperative purchasing arrangement without following the procedures outlined in this section if the city has an interlocal agreement with the city, state (or other government) prior to the bid;
e. Materials, Supplies, and Equipment – Sole Source Procurement. A contract for the purchase of materials, supplies, or equipment may be awarded without complying with the bidding requirements of this chapter when the finance director determines in writing, subject to the approval of the city attorney, after conducting a good faith review of available resources, that there is only one source of the required materials, supplies, or equipment. The finance director shall conduct negotiations, as appropriate, as to price, terms, and delivery time. A record of sole source procurements shall be maintained that lists each contractor’s name, the amount and type of each contract, and a listing of the item(s) procured under each contract.
5. Electronic Data Processing and Telecommunication Systems – Competitive Negotiations.
a. Purchase by Competitive Negotiations Authorized. Purchase of electronic data processing and telecommunications systems may be made by “competitive negotiations”;
b. Competitive Negotiation Requirements. “Competitive negotiations,” shall include as a minimum, the following requirements:
i. A request for proposal shall be prepared and submitted to an adequate number of qualified sources, as determined by the finance director for contracts under $35,000, and by the city council for contracts over $35,000, to permit reasonable competition consistent with the requirements of the procurement. Notice of the request for the proposal must be published in the official newspaper at least 13 days before the last date upon which proposals will be received. The request for proposal shall identify significant evaluation factors, including price, and their relative importance;
ii. The city shall provide reasonable procedures for technical evaluation of the proposals received, identification of qualified sources, and selection for awarding the contract;
iii. The award shall be made to the qualified bidder whose proposal is most advantageous to the city with price and other factors considered. The city may reject any and all proposal for good cause and request new proposals.
C. Architectural, Landscape Architectural, and Engineering Services Contracts. Procedures set forth in Chapter 39.80 RCW shall be followed for contracts for architectural and engineering services, as defined in RCW 39.80.020.
D. Contracts for Nonprofessional and Other Service Contracts. Contracts for professional (other than architectural, landscape architectural, and engineering) and other service contracts shall be made in accordance with procedures adopted by the finance director in the best interest of the city.
E. Public Works Contracts.
1. General. Public works contracts shall follow bid requirements applicable to code cities with a population in excess of 20,000, as set forth in RCW 35.22.620.
2. Small Works Roster.
a. Establishment.
i. There is established for the city of Lynnwood a small works roster contract award process for accomplishment of public works projects with an estimated value of $200,000 or less. The administration may create a single small works roster, or may create a small works roster for different categories of anticipated work.
ii. The breaking down of any contract into units or phases for the purpose of avoiding the maximum dollar amount is prohibited. The amount on a contract includes all amendments.
b. Roster List. The director of public works shall establish the small works roster or rosters which shall consist of all responsible contractors who have requested to be on the list, and where required by law are properly licensed or registered to perform such work in the state of Washington. The director of public works shall determine whether or not a contractor who has requested to be on the small works roster is a responsible contractor, based on the factors set forth in subsection (E)(2)(c) of this section, Responsible Contractors. At least twice a year, the city shall publish in a newspaper of general circulation within the city a notice of the existence of the roster or rosters and solicit the names of contractors for such roster or rosters.
c. Responsible Contractors. A contractor shall be evaluated for inclusion on the small works roster based on the following, and the contractor shall supply information on forms developed by the director of public works, as follows:
i. The contractor’s state license and registration, where required by law;
ii. The contractor’s financial standing and responsibilities;
iii. The contractor’s experience, organization, and technical qualifications necessary to perform proposed contracts;
iv. The contractor’s ability to comply with the required performance schedules taking into account its existing business commitments;
v. The contractor’s satisfactory record of performance, integrity, judgment, and skills;
vi. The contractor’s ready availability to perform work in and for the city of Lynnwood;
vii. Such other information necessary in the director of public works’ opinion concerning the contractor’s ability to satisfactorily perform a contract with the city of Lynnwood.
d. Appeal. Any contractor whose request to be on the list has been denied may appeal, within 10 days after the denial by the director, to the city council, and the city council shall hold a hearing on the issue and make a decision within 45 days of the notice of appeal. A decision by the city council is subject to review by the superior court upon a petition for review being filed within 10 days of the city council’s decision. A denial that is not appealed or that is appealed and results in a final decision against the contractor prevents the contractor from applying to be on the list for a period of one year.
e. Process. Whenever work that has received city council approval in the current budget, or otherwise been approved by the city council, is sought to be accomplished using a small works roster, the director of public works shall:
i. Secure telephone or written quotations from, whenever possible, at least five contractors on the general small works roster, or a specific small works roster for the appropriate category of work, to ensure that a competitive price is established. Pursuant to RCW 39.04.155(4), when the estimated value of the work is from $100,000 to $200,000, the director shall, in addition to securing quotations from at least five contractors, notify the remaining contractors on the small works roster that quotations are being sought;
ii. Such invitations or quotations shall include an estimate of the scope and nature of the work to be performed as well as materials and equipment to be furnished;
iii. Once a contractor has been afforded an opportunity to submit a proposal, that contractor shall not be offered another opportunity until all other appropriate contractors on the small works roster have been afforded an opportunity to submit a proposal on a contract;
iv. Proposals may be invited from all appropriate contractors on the small works roster;
v. Whenever possible, invite at least one proposal from a minority or woman contractor who shall otherwise qualify under this chapter;
vi. Invitation for quotations shall be posted at Lynnwood City Hall and received from any contractor who shall otherwise qualify under this chapter.
f. Award. The public works director shall award the contract to such contractor as the public works director determines to have submitted the lowest responsible quotation, in accordance with the provisions of subsection (E)(2)(g) of this section, Letting Contract.
g. Letting Contract. In determining the “lowest responsible bidder,” in addition to price, the following elements shall be given consideration:
i. The ability, capacity, and skill of the bidder to perform the contract;
ii. The character, integrity, reputation, judgment, experience, and efficiency of the bidder;
iii. Whether the bidder can perform the contract within the time specified;
iv. The quality of performance of previous contracts or services;
v. The previous and existing compliance by the bidder with laws relating to the contract;
vi. Such other information as may be secured having a bearing on the decision to award the contract.
h. Filing of Statements on Awards to Other than Contractors Submitting Lowest Quotation. When the award for a contract is not given to the contractor submitting the lowest quotation, a statement of the reasons for placing the contract elsewhere shall be prepared and filed with the other contract documents relating to the contract, and shall be open to public inspection during regular office hours.
i. Cancellation of Invitations for Bids. An invitation for bids may be canceled in the discretion of the public works director. The reasons shall be made part of the contract file. Each invitation for quotations issued by the city shall state that the invitation may be canceled. Notice of cancellation shall be sent to all parties that have been provided with a copy of the invitation. The notice shall identify the invitation for bids and state briefly the reasons for cancellation.
j. Rejection of Quotations. The public works director shall have the authority to reject all quotations, when the director determines the public interest will be served thereby, and upon rejection of such quotations shall include the reasons therefor in the record of the transaction, which shall be open for public inspection during regular office hours.
k. Noncompetitive Contracts. The public works director shall be authorized to enter into contracts without obtaining competitive bids or quotations under the following conditions:
i. Emergency Contracts. “Emergency” means a set of unforeseen circumstance that either:
(A) Presents a real, immediate threat to the proper performance of essential functions, or
(B) May result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken, or
(C) May result in substantial loss to the city if the contract is not immediately entered into;
ii. Public works projects involving a cost or fee (excluding sales tax) of less than $5,000.
l. City Records.
i. All determinations and other written records pertaining to the invitation to bid, award, or performance of a contract shall be maintained for the city in a contract filed by the public works director.
ii. All records relating to contracts shall be retained and disposed of by the city in accordance with state law and city ordinances, regulations, and guidelines. If a contract is being funded in whole or in part by assistance from a state or federal agency, then all procurement records pertaining to that contract shall be maintained in accordance with any applicable requirements of state or federal law.
3. Limited Public Works Projects. In lieu of awarding contracts under subsection (E)(2) of this section, the mayor or the mayor’s designee may award a contract for work, construction, alteration, repair, or improvement project meeting the requirements of a limited public works project and using the limited public works process provided under RCW 39.04.155, as may be amended from time to time.
F. Other Contracts. Contracts which are not otherwise provided shall be made in accordance with procedures adopted by the finance director in the best interest of the city. (Ord. 2412 § 1, 2002; Ord. 2406 § 1, 2002; Ord. 2375 § 1, 2001; Ord. 2366 § 1, 2001; Ord. 2102 § 1, 1996)
2.92.100 Severability.
If any section, subsection, sentence, clause, phrase, or work of this chapter should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality thereof shall not affect the validity or constitutionality of any other section, subsection, sentence, clause, phrase, or word of this chapter. (Ord. 2102 § 2, 1996)