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HomeMy WebLinkAboutDocumentation_Regular_Tab 10_12/13/2018 345 Tequesta Drive 561-768-0700 Tequesta, FL 33469 �,�;;, � � www.tequesta.org _ ,, ;�. � MEMO To: Mayor, Vice Mayor and Council From: Christopher Quirk, Finance Director Date; 12/13/18 Re: Revised Purchasing Manual Attached is the revised Purchasing Manual with the Inspector General's recommendations for your review and consideration for approval. Vice-�1a5�or�'ince��rena �faj-or.1bby Brennan Council JSember Tom Paterno Council�fember Steve Okun Council llember Frank D',�mbra Village:�lanager Nlichael Couzzo VILLAGE OF TEQUESTA PURCHASING POLICY AND PROCEDURES STATEMENT OF PURPOSE To establish policies, procedures and guidelines to ensure that all goods, materials, supplies and/or services (herein after referred to as "Items") are acquired in the most efficient, effective and economical manner available. POLICY This policy will apply to all purchases of the Village irrespective of the funding source. It shall be the responsibility of the Village Manager and all employees involved in the purchasing process to comply with all procedures,guidelines and instructions as set forth in this policy. This policy is designed to ensure that the Village procures all Items at the lowest and best price consistent with the quality of materials, workmanship or level of service performance required. No purchase of Items shall be authorized unless adequate funds have been appropriated. EXCEPTION — Grant agreements may contain provisions or requirements related to purchasing procedures, the disposition of fixed assets, etc., that differ from the Village's procedures. In the event there is a conflict between a grant provision/requirements and a Village procedure, the grant provision/requirement will take precedence over the Village procedure. DEFINITIONS AGREEMENT—see contract. APPROPRIATION—An act of the Village Council that authorizes the expenditure of specific dollar amounts for various purposes including the purchase of Items. AUTHORIZATION - An act by an authorized officer, approving the expenditure of Village funds. For the originating department, the authorizing officer is the Department Director or designee. For the Finance Department, the authorizing officer is the Finance Director or designee. For all purchases over $10,000.00, authorization must also come from the Village Manager or designee. CHANGE ORDER—A modification to an original contact or change in contract scope,which occurs during the provision of contractual services which may result in an increase or decrease in contract cost and/or contract time. 1 COMPETITIVE PROCUREMENT—The use of an invitation to bid, a request for proposals, a request for qualifications, or an invitation to negotiate. CONTINUING CONTRACT — A contract for professional engineering, architecture, landscape architecture or surveying services entered in accordance with the Consultants Competitive Negotiating Act (F.S. 287.055) whereby the firm or individual provides the professional services to the Village on an on-going basis. CONTRACT—A written commitment between the Village and a vendor, which obligates the Village to pay the vendor a specific dollar amount for the provision of specific Items. DESIGNEE—An individual appointed by an authorized officer to approve expenditures. EMERGENCY PURCHASE — As used in this purchasing policy and procedures document, an emergency is a circumstance in which damage to Village facilities, personnel or serious damage to Village programs will result if prompt action is not taken. An emergency purchase would be required by a sudden and unexpected turn of events (acts of God or uncontrollable circumstances) which involves, or could involve, a threat to the health, safety and welfare of citizens, and which can be rectified in whole or in part by the immediate purchase of Items. Emergency Purchase Orders are considered on their individual merit. They will be processed as emergencies only when the Village Manager and the Finance Department determines that it is necessary, based on the originating department's written explanation. ENCUMBRANCE— Reservation of Village funds that have been authorized for a purchase that has not yet been completed. LAW ENFORCEMENT TRUST FUNDS(Forfeiture Funds)—Those funds governed as to their use by Chapter 932 F.S. These funds may only enter the purchasing process after a recommendation of funding use is provided by the Chief of Police and approved by the Village Council. PREPAYMENT—To pay an agreed upon sum before receiving the Item(s). PURCHASE REQUISITION — A request to proceed with a purchase. It is also called a purchase order request. It is originated and approved by the department requiring the Items. A purchase requisition is owned by the originating department and should not be changed without obtaining approval from the originating department. A purchase requisition is not a purchase order and should not be used to purchase items or be used as an authorization to pay an invoice from a supplier or service provider. PURCHASE ORDER — A document issued by a buyer to a seller indicating descriptions, types, quantities, agreed prices, date of performance or shipment for Items and other associated terms and conditions the seller will provide to the buyer. 2 SOLE SOURCE — The acquisition of Items that for all practical purposes can only be obtained from a single vendor, usually because of limiting technology, technological compatibility with existing systems or Items already in use by the Village or other unique qualities of the Items that preclude a competitor's price comparison. The Village Manager, regardless of the cost of the Item, must approve all sole source purchases. ETHICAL CONDUCT Ethical business standards shall govern all procurement transactions. Infractions of the Village's procurement policy will be reported to the Village Manager. Disciplinary action for those infractions will be taken in accordance with applicable Village policy. Village personnel shall not solicit any gift or accept any gift from any supplier or prospective supplier. Village personnel shall comply with the Palm Beach County Code of Ethics as well as the State of Florida Code of Ethics relative to the solicitation, acceptance and/or reporting of gifts. Questions about the value of a gift or the appropriateness of an invitation should be referred to the recipient's supervisor or the Village Manager to ensure compliance with Village policy. The Village values its vendors and assumes that vendors, in turn, value the Village's business. No token or display or this appreciation is necessary or encouraged. The Village's reputation for impartiality and objectivity,as well as sound business practice, requires that employees not make decisions for the Village if their personal economic interests are directly affected by the outcome. Moreover, the Palm Beach County Code of Ethics as well as the State of Florida Code of Ethics prohibits the Village from contracting for goods or services with any Village official or employee. This prohibition includes the official's or the employee's outside business interests, as provided in both the county and state code of ethics. AUTHORITY AND RESPONSIBILITY The Village has determined that purchasing and contracting decisions are made most effectively by the end-user of the Items. This approach requires that employees involved at every stage of the purchasing process take responsibility for understanding the Village's policies and procedures regarding purchasing and vendor relations. Employees must be authorized to commit the Village's resources to make a purchase and are subject to disciplinary action up to and including the termination of employment if proper authorization is not obtained. The Finance department has the right to review and question any purchasing transaction. Department Department personnel are responsible for: 3 ♦ Ascertaining needs and determining the bona-fide business purpose of the transaction. ♦ Conducting price or cost analysis to ensure the Village is making the most efficient, effective and economical purchases reasonably possible. ♦ Monitoring department budgets and verifying funding is available prior to committing to the purchase. ♦ Selecting a vendor in a fair, impartial and consistent manner when competitive procurement is not required. ♦ Initiating a purchase requisition/purchase order. ♦ Verifying that all purchases for their department follow the Village's purchasing policies and procedures. ♦ Ensuring the proper receipt of ordered Items. ♦ Reviewing invoices or purchases, verifying that the receipt of ordered purchases agrees with the purchase order and forwarding approved invoices to the Finance Department in a timely manner for payment. ♦ Negotiating and resolving disputes with vendors. Finance Department The Finance Department is responsible for: ♦ Reviewing all purchase requisitions: o For completeness; and o For proper usage of ascounts; and o To ensure that funding is available in the applicable budget; and o For compliance with current purchasing policies and procedures. ♦ Preparing purchase orders from completed purchase requisitions and forwarding them to departments. ♦ Paying invoices. Designees Department Directors are ultimately responsible for the purchasing activities of their departments and must sign all purchase requisitions. Directors may delegate requisition approval authority to another employee within their department by completing a Delegation of Authority Form and sending it to the Finance Department where it will be kept on file. Directors are responsible for ensuring that their designees have access to and are knowledgeable of current purchasing policies and procedures. PURCHASE REQUISITION/PURCHASE ORDERS Purchase requisitions and purchase orders are required for acquisitions of Items with a total purchase price of$10,000.00 or more. 4 Purchase Requisitions The originating department will be responsible for completely and accurately preparing the requisition. The purchase requisition must include descriptions, prices, quantities, terms, delivery, vendor, contract numbers, charge (account) codes and any other standard or special instructions or explanations. Purchase requisitions may not be approved for any purchases that would result in spending in excess of amounts authorized in the annual budget. Departments may take advantage and "piggyback" a State or other government entities' purchasing contract as long as the contract is current and was procured with the same level of formality as the Village would have otherwise required. Purchase requisitions for piggyback contract Items must comply with the specifications of the piggyback contract listing. If circumstances do not allow for or require competitive procurement (e.g. emergencies, sole-source, piggyback, etc.), reasons for the exception to policy must be fully documented and approved by the respective director. Purchase Orders All purchase orders are to be processed prior to the purchase of goods or services from outside vendors. Blanket Purchase Orders — Blanket purchase orders permit multiple purchases from the same vendor using the same index, and may be used when the originating department: ♦ Needs to purchase specific items or services repetitively over a specified time period (usually one (1) year); or ♦ Needs to frequently purchase low dollar goods or services and can obtain more favorable pricing through volume commitments. Blanket purchase orders should not be used when: ♦ A price agreement or business terms are not pre-negotiated with the vendor; or ♦ A control over the department's expenditures would be weakened significantly. The Finance Department will generate the purchase order once the Village Manager and the appropriate directors or designees have approved the requisition. Orders must be placed only for items included on the approved requisition. Splitting orders, or even failing to combine orders when this logically should be done in the interest of economy, for the purpose of keeping total cost of each order below purchase order and/or bid limits, will be construed as a deliberate evasion of this policy, subjecting the violator to discipline per Village policy. 5 LEASE AGREEMENTS Department Directors are required to submit a copy of all lease agreements associated with their department to the Finance Department at the beginning of each fiscal year or when entered into during the fiscal year. No lease agreement invoices will be processed without this supporting documentation. The originating department will prepare an annual requisition and the Finance Department will create and issue purchase orders from properly approved purchase requisitions. These purchase orders shall not exceed the end of the fiscal year in which they were issued. Lease invoices will then be paid by the Finance Department each month or as noted in the signed lease agreement. CONTRACTS All contracts in excess of$10,000.00, and all progress payments will be entered through the purchasing system as a purchase order so that the entire contract amount for the fiscal year is encumbered in the accounting system immediately. Contracts in progress will need to be requisitioned at the beginning of a new fiscal year. Department Directors may administratively approve change orders to contracts previously approved by the Village Council provided that the total cost of the project budget approved by the Village Council is not exceeded. The Department Director may administratively renew those contracts previously approved by the Village Council, which contain renewal options, provided that the total cost and ultimate expiration date of the contract is not exceeded. PROCUREMENT THRESHOLDS In order to ensure that all Items are procured in the most efficient, effective and economical manner available, the Village of Tequesta uses a four (4) tiered procurement process: Discretionary Procurement Purchases of less than $10,000.00 are at the discretion of department staff. The department staff inember making the purchase is required to make a reasonable attempt to ensure that the Village receives the lowest and best price that is consistent with the desired quality of Items, physical convenience/distance, workmanship and/or level of performance. Informal Procurement Purchases of$10,000.00 but less than $25,000.00 require at least three written quotes, which will be on company letterhead, and attached to the purchase requisition. 6 Formal Procurement Purchase of$25,000.00 but less than $200,000.00 require public notice and at least three written quotes, which will be on the company letterhead, and attached to the purchase requisition. Competitive Procurement Purchases of$200,000.00 or more require the use of a Competitive Procurement process. ADDITIONAL REQUIREMENTS All contracts shall be approved by the Village Attorney as to form and legal sufficiency, by the Finance Director, or designee, as to sufficiency of appropriated funds, and by the Village Manager. All contracts with a value less than the threshold amount as set by Resolution of the Village Council may be signed and executed by the Village Manager, providing that such contracts be presented to the Village Council after execution. All contracts exceeding the threshold amount as set by Resolution of the Village Council must be approved by the Village Council before being signed and executed. The procurement of engineering, architecture, landscape architecture and surveying services that exceed thresholds set by state law for planning and construction activities shall be pursuant to the requirements of the Consultants Competitive Negotiations Act (287.055, F.S.). It is an express violation of this policy to intentionally "split" contracts or purchase orders or otherwise manipulate them for the purpose of avoiding dollar limitations or any of the Village's purchasing policies. EXCEPTIONS Contracts for artistic services, academic program reviews, lectures, legal services, health services, services for persons with mental or physical disabilities, Medicaid services, family placement services, prevention services (mental health, child abuse, drug abuse, and runaway services),workers'compensation related training services contracts entered into with other government agencies, and contracts with other persons possessing a high degree of professional skill shall be exempt from the Village's various procurement threshold requirements. The Finance Director and Village Manager's authorization, as evidenced by a manual signature, shall not be required for any normal and customary payroll related expenditure. 7 The approval of the Village Council shall not be required for any interim payment when the full cost has been previously approved. Changes to purchases previously approved may be authorized by the Village Manager provided the total dollar amount and other substantial matters do not exceed previously authorized maximum limits granted by the Village Council. PAYMENT By issuing a purchase order in advance of the purchase, funds are properly encumbered and set-aside to pay these obligations. The encumbrance is not a contract but ensures that the required funding is available to meet the financial obligations. Accounts payable pays invoices for the Village including those for external vendor purchases, employee business travel and entertainment reimbursements, and payments to non-employee independent contractors. It is the originating department's responsibility to approve invoices and submit them to the Finance Department/accounts payable within the proper timeframe. Every vendor's invoice is due for payment within some period of time after it is generated. This is normally computed as a number of days after the invoice date. The Village's standard for payment of vendor's invoices is within thirty days of the invoice date. The Village must pay its obligations in a timely manner. Failure to comply with payment terms often leads to: ♦ Credit hold, where a vendor refuses to fill any subsequent order until the outstanding obligation has been paid; or ♦ Stiffer terms where the vendor may even demand payment in advance; or ♦ Higher prices on future purchases. The Finance Department does what is necessary to prevent any of the above from happening while acting within sound financial controls. Departments must ensure that purchases are properly accounted for to enable the invoice to be paid once it is received by the Finance Department. The Finance Department pays against approved original invoices—not statements, proposals or quotations.The accounts payable staff will match invoices submitted against purchase orders and will give highest payment priority to original invoices supported by properly issued and approved purchase order and confirmation of receipt of Items. Payment on Construction Service Contracts Pursuant to the Florida Prompt Payment Act (F.S. 218.735), payment requests under contracts for construction services shall be paid within 20 days after being stamped "received" by the Village department (unless an agent is used to approve the payment 8 request, in which case the payment request shall be paid within 25 days after being stamped "received" by the Village department). The payment request may be rejected in writing by the Village department within 20 days after being stamped "received" by the Village department, in which case the contractor shall revise the payment request and re-submit it for payment, which must then be paid within 10 days after being stamped "received" by the Village department. See the Florida Prompt Payment Act (F.S. 218.735)for additional requirements. CREDIT MEMOS If a department believes it is entitled to a credit from a vendor or receives a credit memorandum that is deemed to be valid,the department should notify accounts payable and send all credit memos there for processing. ADVANCING PERSONAL FUNDS Individuals, as a rule generally, should not advance their own funds to purchase supplies and services on behalf of the Village. Purchases should be made through established purchasing policies and procedures. The Village should deal directly with vendors to arrange for the receipt of Items and the payment of obligations. In limited instances, most often related to business travel and entertainment expenses, the department or individual may pay for the item and be reimbursed. If it is necessary that an individual advance money to purchase Items for Village business, the immediate supervisor must first authorize the purchase. The reimbursement request must be supported by the business purpose of the transaction, bona-fide proof of payment AND must include the signatures of the purchaser AND of a direct supervisor who can attest to the receipt of the supplies or services by the department. Requests for reimbursement lacking these signatures will be returned to departments. The immediate supervisor should always review and approve a reimbursement request. This is a basic financial control pursuant to Generally Accepted Accounting Principles. FISCAL YEAR-END PROCEDURES The Finance Department seeks to close the fiscal year, complete rate change calculations and prepare the Village of Tequesta's financial statements in a timely manner. In order to accomplish this goal, all purchase orders must be received in the Finance Department by August 315t in order to be processed in the fiscal year ending September 30th. Any purchase orders received after August 315t will be heid and processed in the following fiscal year and encumbered against the following fiscal year budget. Village of Tequesta Purchasing Policy and Procedures Revised Jan 2019 9