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HomeMy WebLinkAboutDocumentation_Regular_Tab 21_05/14/2015 VILLAGE CLERK'S OFFICE AGENDA ITEM TRANSMITTAL FORM Meeting Date: Meeting Type: Regular Ordinance #: N/A 05/14/2015 Consent Agenda: Yes Resolution #: Originating Department: Legal ` � ` � • • � : - • • -�• Revise Purchasing Policy and Procedures (Rev. May 2015) : � . . .. Account #: N/A Amount of this item: N/A Current Budgeted Amount Available for Amended Budgeted Amount Available for this project: this project. N/A N/A Budget Transfer Required: No Appropriate Fund Balance: No `' • � •' • • • • To establish policies, procedures and guidelines to insure 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. : � . , •. . Department Head Submitted by Legal Finance Director Reviewed for Financial Sufficiency ❑ No Financial Impact ❑ Attorney: (for legal sufficiency) Village Manager: Submit for Council iscussion: ❑ - Approve Item: � Deny Item: � • � • •' • • _• -- - • -• •- • •- - •- • •• - • • -• _ • • . • - - - • - Form Amended: ��.� �`i.� �.�' �.����s�"�'.� PURCHASING POLICY AND PROCEDURES Rev May 2015 STATEMENT OF PURPOSE To establish �licies, procedures and guidelines to insure that all goods, materials, supplies and/or services (herein after referred to as items) are acquired in the most efficient, effective and economical ma.nner availa.ble. POLICY This policy will apply to all purchases of the Village inespective of the funding source. It shall be the responsibility of the Village Mana.ger and a11 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 insure that the Village procures a11 items at t11e lowest and best price consistent with the quality of materials, workmanship or level of service performa.nce required. No purchase of items shall be aui3�orized unless adequate funds have been appropriated. EXCEPTION - Grant agreements may conta.in provisions or requirements relaxed to pu.rchasing prac�ures, the disposition of fixed assets, etc., that differ from the Village's procedures. In the event there is a conflict between a grant provision/requirement and a Village procedure, the grant provision /requirement will take precedence over the Village pr�edure. DEFINITIONS AGREEMENT - see contract. APPROPRIATION - An act of the Village Council that authorizes the expenditure of specific dollar amounts for various purposes includin� the purchase of items. AUTHOItIZATION - An act by a specific authorized officer, approving the ex�nditure of Village , funds. For the originating department, the authorizing officer would be the Depattment Director or designee. For the Fii�ance Depa.rtment, which must authorize all purchases, the authorizing officer would be the Finance D'uector or designee. For all purchases over $5,000, authorization must a.lso come from the Village Manager or designee. CHANGE ORDER - A modification to an original contract or change in contract scope which occurs during the provision of contractual services (after bidding and contractual award) which may rasult in an increase or decrease in contract cost and/or contract time. COMPETITIVE PROCUREMENT - The use of an invitation to bid, a request for proposals, a request for qualifications, or an invitation to negotiate. CONTIlVUING CONTRACT - A contract for professiona.l services entered into in a.ccordance with the Consultants Competitive Negotiating Act (FS 287.055) whereby the firm or individual provides 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 goods and/or services. - -- -------- - - -- ------------ — -- - - - 1 �Page DESIGNEE - An individual appointed by an authorized officer to approve e�enditures. EMERGENCY PURCHASE - For purchasing purposes, 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. This purchase would be required by a sudden and une�ted turn of events (acts of God or uncontrollable circumsta.nces) which involves, or could involve, a tbreat to the health, safety and welfare of citiz�ns, and which can be rectified in whole or in part by the immediate purcha.se of items. Emergency Purchase Orders are considered on their individual merits. They will be processed as emergencies only when the Village Manager and the Fina.nce deparime� determines that it is necessary, based on the requesting department's written explana.tion. ENCUMBRANCE - Reservation of Village funds that have been authorized for a purchase that has not yet been completed. LAW ENFORCEMENT TRUST FiTNDS (Forfeiture Funds) - Those funds governed as to their use by Chapter 932 Florida. Statutes. These funds may only enter the purchasing process after a recommendaxion of funding use is provided by the Chief of Police and approved by the Village Council. PREPAYMENT - To pay a.n agreed upon sum before receiving the item(s). PURCHASE REQUISITION – Is a request to praceed with a purcbase. It is also called a Purchase Order Reques�t. It is originated and approved by the depariment requiring the go�s or services. 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 goods or services or be used as an authori�,tion to pay an invoice from a suplier or service provider. PURCHASE ORDER – Is a document issued by a buyer to a seller indicating descriptions, types, quandties, agreed prices, date of performance or shipment for products or services and other associated terms and conditions the seller will provide to the buyer. 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 compabbility with existing systems or goods or services alrea.dy in use by the village or other unique qualities of the goods or services that preclude a competitor's price comparison. The Village Manager, in�espective of the cost of the item, must approve all sole source purchases. ETHICAL CONDUCT: Ethical business standazds sha11 govem all procurement tra.nsactions. Infractions of the Village's procurement �licy 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 prosgective supplier. Village personnel shall comply with the Pa1m Beach County Code of Ethics as well as the State of Florida Code of Ethics relaticve to the solicitation, acceptance and/or reporting of gifts. Questions about the value of a gift or the appropriateness of an invita.tion should be referred to the staff person'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 displa.y or this appreciation is necessary or encouraged. _ - — ----- - -- - - - -- ----- - - - --------- 2�Page 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 Pa.lm Beach County Cade 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 contra.cting decisions are made most effectively by the end-user of the materials, supplies, equipment, or services. This approach requires that employees involved at every stage of the purchasing process take responsibility for uaderstanding the Village's policies and procedures regazding purchasing and vendor relations. Employees must be authorized to commit the Village's resources to a purchase, and are subject to disciplinary action up to a.nd including the termination of employment if proper authorization is not obtained. � The Finance department has the right to review and question any purchasing transaction. Departments Department personnel aze responsible for. ♦ Ascertaining needs and determinimg the bona-fide business purpose of the transaction. ♦ Conducting price or cost analysis to ensure the Village is receiving the most efficient, effective and economical purchases/services available. ♦ Monitoring department budgets and verifying funding is available prior to commiting 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 aze in compliance with the Village's purchasing policies and procedures. ♦ Ensuring the proper receipt of ordered goods or services. ♦ Reviewing invoices or purchases, verifying receipt of ordered purchases agree with the purchase order and forwarding approved invoices to the finance depariment in a timely manner for payment. ♦ Negotiating and resolving disputes with vendors. Finance Department The Finance department is responsible for: ♦ Reviewing all purchase requisitions: ♦ For completeness; ♦ For proper usage of accounts; ♦ To ensure that funding is available in the applicable budge� and ♦ For compliance with current purchasing policies and pracedures. ♦ Preparing purchase orders from completed purchase requisitions a.nd forwatding them to departments. ♦ Paying invoices. - - - ----- - -- - ------- — -----... - - -- - 3�Page Design� 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 a.ccess to and are knowledgeable of current purchasing policies and procedures. PURCHA5E REOUISITION/PURCHASE ORDER5 Purchase requisitions and purchase orders are required for acquisitions of goods and/or services with a total purchase price of $5,000.00 or more. Purchase Reqnisitions: The originating department will be responsible for completely and accurately preparing the requisition. The purchase requisitions 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 purcha.ses which would result in spending in excess of amounts authorized in the annual operating budget. Departments may take advantage and `piggy-back' a Sta.te ar other government entities' purchasing contra.ct as long as the contract is cutrent and was procureci with the same level of forma,lity as the Village would ha.ve otherwise required. Purchase requisitions for piggy-back contract items must comply with the specifica.tions of the piggy-back contract listing. In the event that competitive procurement cannot be obtained (e.g. sole source purchase) or circumstances do not allow for competitive procurement when otherwise required (e.g. emergency situations), 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 n� the pwchase of goods or seivices from outside vendors. Blanket purchase orders Blanket purchase orders permits multiple purchases from the same vendor using the sasne index, and may be used when the ordering department: ♦ Needs to purchase specific items or services repetitively over a sgecified 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 � 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. - - - -- -- -- - - - - -- -- - ------ ---- --- - -- ------- 4�Page Splitting orders, or even failing to combine orders when this logically should be done in the interest of economy, for the purpose of k�ping total cost of each order below purchase order and/or bid limits, will be construed as a deliberate evasion of this policy. LEASE AGREEMENTS Department Directors a.re required to submit a copy of all lease agreements associated with their depa.rtment to the Fina.nce Department at the beginning of each fiscal yeaz or when entered into during the fiscal year. No lease agreement invoices will be processed without this supporting documentation. The originating department will prepa.re an annual requisition and the Fina.nce Department will create and issue purchase orders from properly approved purchase requisitions. These purchase orders shall not exceed the end of the fiscal yea.r in which they were issued. Lease invoices will then be paid each month or as noted in signed lea,se agreements, by the Fina.nce Department. CONTRACTS All contracts and 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. Contra.cts 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 a.dministr�atively renew those contra.cts 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 TffitESHOLDS In order to insure that all items are acquired in the most ef6cient, effective and economical manner available, the Village of Tequesta uses a our (41 tiered �rocurement process. Discretionarv Procnrement Purchases of less than $5,000.00 are at the discretion of departffient staff. The department staff member making the purchase is required to malce a reasonable attempt to insure that the Village receives the lowest and �st price that is consistent with the desired quality of materials, physical convenience/distance, workmanship and/or level of performance. Informal Procnrement Purchases of $5,000.00 but less than $25,000.00 require at least three � quotes which sha11 be attached to the purchase requisition. Formal orocurement hases of $25 000 00 but less than $200 000 00 reauire t�ublic notice and at least three written �uotes which shall be on the comuanv letterhead and attached to the �urchase reauisi ' Comoet�tive Procarement Purchases of $200 000 00 or more require the use of a Comoetitive Procurement �rocess - -- - - --- ---- - - - --- – - -- ---- ------------ — -- - S�Page ADDITIONAL REOUIREMENTS All contracts shall be approved by the Village Attomey as to form and legal sufficiency, by the Finance Director, or designee, as to sufficiency of appropropriated funds, and by the Village Manager. All contra.cts with a value less than the amount as set by Resolution of the Village Council may be signed and executed by the Village Manager, providing tha.t such contracts be presented to the Village Council after execution. All contra.cts exceeding the amount as previously set by Resolution of the Village Council must be approved by the Village Council before being signed and executed. The procurement of azchitecture, engineering, landscape architecture, and surveying services for planning or study activities when the fee for such professional services exceeds $25,000.00, or for projects with a basic construction cost that exceeds $250,000.00 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 aRistic 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), worker's compensation related training services, contracts entered into with other government agencies, and contracts with other persons possessing a high degree of professional skill sha11 be exempt from the requirements of advertising and competitive procurement and/or shall be as sgecified in Florida's Statute 287.055 (Consultants Competitive Negotiation Act), if applicable. 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. 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 depariment's responsibility to approve invoices and submit them to the fina.nce 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 ai�er the invoice da.te. The Village's standard for payment of vendor's invoices is within thirty days of the invoice da.te. The Village must pay its obligations in a timely manner. Failure to comply with payment terms often leads to: - - - — - ---- ---- - - ----- --- - ------- — 6�Page ♦ Credit hold, where a vendor refuses to fill any subsequent order until the outstanding obligation has been paid ♦ Stiffer terms where the vendor may even dema.nd payment in advance ♦ Higher prices on future purchases. Finance does what is necessary to prevent any of the above from happening while acting within sound financial controls. Departments must ensure thax purchases are properly accounted for to enable the invoice to be paid once it is received in Finance. Finance pays against approved original invoices - not statements, proposals or quotations The accounts payable ataa.ff will match invoices submitted against pwchase orders and will give highest payment priority to original invoices supported by properly issued and approved purchase order and confirmation of receipt of goods and services. SALES AND USE TAX The Village of Tequesta is exempt from paying sales tax, thus sales and use tax are generally not reimbursable, except for approved business travel and entertainment services. An individua.l may request reimbursement from the department director where it can be shown that it was not reasonable to require the individual to obtain the tax exemption. 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 a11 credit memos there for processing. ADVANCING PERSONAL FUNDS Individuals, as a general rule, should not adva.nce 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 arra.nge for the receipt of go�s and the payment of obligations. In limited instances, most often related to business travel and entertainment exgenses, the department or individual may pay for the item and be reimbursed. If it is necessary that an,individual advance funds to purchase supplies or services 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 reimbursements lacking these signatures will be returned to departments. The immediate supervisor should always review and approve a reimbursement request. This is a basic fmancial control pursuant to Generally Accepted Accounting Principles. Any actions thax might � construed to be an intentional manipulation or circumvention of these policies will be documented and forwazded to the Village Manager. 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 sta.tements in a timely ma.nner. The following policies are being implemented In order to accomplish this goal. - -- - --------- - - - - - -- ----- - - - - -- _ - - — 7�Page All ,nz�chase ordet�s must be received in the Finance depa.r�ent by August 31� in order to be processed in the fiscal year ending September 30�'. Any purchase orders received after August 31�` will be held and processed in the following fiscal year and encumbered against the following fiscal year budget The Accounts Payable staff must re�eive a11 invoices by November 15"' of the following fiscal year in order to be pr�essed in the prior fiscal year ending September 30�'. Any invoices received after that da.te will be recorded in the following yeaz and charged against the following yeaz's budget. Village of Tequesta Purchasing PoGcy 8c Procedure Revised May 2015 - — --- --- - - - — — ---- - - ------ - --- -- — — 8�Page