05-006_Purchasing Policy_2020
FINANCE AND ACCOUNTING
Policy 5-006: Purchasing Policy
Approval Date: July 13, 2020
Approval Authority: Council, By-Law #2020-070
Effective Date: July 13, 2020
Next Scheduled Review Year: 2025
Department: Finance
Last reviewed: November 23, 2015
Revision Date/s:
Schedules: None
Contents
1. DEFINITIONS .................................................................................................................................................. 2
2. POLICY STATEMENT ................................................................................................................................... 4
3. ESTABLISHING PRICE RANGE ................................................................................................................. 4
4. ACCOUNTABILITY ........................................................................................................................................ 6
5. PRESCRIBED COUNCIL APPROVAL ....................................................................................................... 6
6. EXCEPTIONS ................................................................................................................................................. 7
7. NO LOBBYING................................................................................................................................................ 8
8. HEALTH AND SAFETY ................................................................................................................................. 8
9. CO-OPERATIVE PURCHASING ................................................................................................................. 8
10. DISPOSAL OF SURPLUS ............................................................................................................................ 8
11. TIE BIDS .......................................................................................................................................................... 8
12. DELEGATION OF AUTHORITY TO PURCHASE ..................................................................................... 8
13. OTHER ............................................................................................................................................................. 8
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1. DEFINITIONS
In this By-Law:
“Agent” shall mean the Treasurer or designate who has the sole authority to authorize, save and except
the Mayor and Clerk, to execute contract documents on behalf of the Town;
“Agreement” means a written document between the Town and another party upon legal consideration
for the procurement of goods, services or construction pursuant to this policy. Also called “Contract”;
“Award” means the acknowledgement of the authority to proceed to commit to an external Supplier(s) for
acquisition of goods, services or construction. An Award can only be made after the relevant bid award
form is signed or the Council resolution is ratified;
“Best Value” means the optimal balance of performance and cost determined in accordance with a pre-
defined evaluation plan which may include a cost/benefit analysis to define the best combinations of
quality, service, time, and cost considerations over the useful life of the acquired item or for the
immediate level of expected service and deliverable;
"Bid" shall mean
i. a specific price for specific works or
ii. where appropriate, a proposal;
“Bidder” means one who may or has submitted a response to an invitation to bid as issued by the Town;
“Buyer” shall mean any employee procuring goods and services for the Town;
“CAO” shall mean the Chief Administrative Officer of the Town of Tillsonburg;
“Clerk” shall mean the Clerk of the Town appointed pursuant to the Municipal Act 2001, as amended, or
in her absence, the Deputy-Clerk or such other person designated by the Council by resolution for the
purposes of this By-Law;
“Competitive Bidding Process” means a process for procurement of goods, services or construction
whereby a prescribed method is used to solicit three or more bids or proposals.
“Contract” means a written document between the Town and another party upon consideration for the
procurement of goods, services or construction pursuant to this policy. Also called “Agreement”;
“Department Manager” shall mean the individual or designate who is accountable for the budget and
responsible for the operations of any single department or division within the Town;
“Director” shall mean the individual accountable for the operation of overall departments within the Town;
"Emergency" shall mean a situation, or the threat of an impending situation, where serious delay may
affect the life, safety, health or welfare of the general public, cause damage to the environment or to the
property of the residents of the Town, or to prevent serious damage, disruption of work, or to restore or to
maintain essential service to a minimum level;
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1. DEFINITIONS - Continued
“Execute” in relation to any document developed pursuant to this policy means to sign by the authorized
officers of the parties, and “Executed” has a corresponding meaning;
"Goods and Services" shall include all supplies, materials, equipment, furniture, fixtures, general
maintenance and service construction contracts, construction maintenance, contractors, and or
subcontractors, food, drugs and professional services, but does not include real property;
“His” shall in all cases mean his or her and "he" shall in all cases mean he or she;
"Prescribed Forms or Forms" shall mean the standard documents as provided as part of the purchasing
procedure guidelines as approved by the CAO;
“Procurement” means the purchasing, renting, leasing, or otherwise acquiring of supplies, services, or
construction; includes all functions that pertain to the acquisition, including description of requirements,
selection and solicitation of sources, preparation and award of contract; and all phases of contract
administration such as inventory control, receiving, inspection (all as applicable); and disposal.
“Professional Services” shall mean the services of architects, engineers, designers, surveyors,
management and financial consultants, brokers, lawyers, planning consultants, project managers and
any other professional and consulting services required by the Town;
“Purchase” shall mean the acquisition of Goods and Services or any interest therein by purchase, lease,
rental or otherwise;
"Quotation" shall mean a written request for vendor bids for the supply of goods or services, from
selected sources of supply, not opened in public;
"Request for Proposal (RFP)" shall mean a formal request for details on the supply of goods or the
provision of services, which cannot be fully defined or specified at the time of the request;
“Sole Source” is defined as any contract entered into without a competitive process, based on a
justification that only one known source exists or that only one single supplier can fulfill the requirements.
“Successful Bidder” means a Bidder who has met or exceeded the minimum requirements of the bid
document in its entirety as determined by the Town of Tillsonburg in its absolute discretion and to whom
award is recommended pending the necessary internal approvals;
“Supplier” shall mean any company or organization that provides, or has the capacity to provide, certain
Goods or Services to the Town in accordance with the terms of this By-Law;
"Tender" shall mean a formal request for sealed Bids for the supply of Goods and Services in response to
an advertised solicitation;
“Town” shall mean The Corporation of the Town of Tillsonburg;
"Vendor of Record" shall mean an approved vendor.
5-006 Page 4 of 9
2. POLICY STATEMENT
A. Objectives
The objective of the policy is to ensure:
a) Best value is achieved consistent with the required quality and service;
b) Integrity in the purchasing process;
c) Openness, accountability and transparency and fair treatment of all bidders;
d) Encouraging bids through e-bidding, newspaper(s) and website(s).
B. Guidelines
a) No Purchase shall be made except as provided in this By-Law.
b) No Purchase shall be split so as to avoid the purchasing process as outlined within this
By-Law.
c) Council has the ultimate authority for all expenditures. Council delegates this authority by
the authorization of budgets or by specific resolution.
d) Prior to the approval of the current year’s business plan and budget, a department may
incur normal operating expenditures that are required to maintain services. This shall
include the payment of expenditures on previously approved capital items and projects.
e) No contract shall be entered into and no expenditure shall be authorized unless Council
has provided funds for such purpose in the annual budget or agreed to the provision of
such funds.
f) The Department Managers, Directors, Fire Chief or the CAO shall ensure that all
provisions of this By-Law are complied with in respect of the purchase of Goods and
Services for or on behalf of his department and are responsible for the approval of
accounts within the approved budget for the department.
g) This purchasing policy may be overridden by Council if Council, in its own discretion
determines it to be appropriate and in the best interest of the Town.
h) The Director of Finance shall maintain written procurement procedures and procurement
shall adhere to those procedures.
3. ESTABLISHING PRICE RANGE
Purchase prices (excluding HST) shall be obtained as follows:
• Up to $1,000 – Purchases are to be made using buyers own pricing discretion; vendor of record
is preferred.
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• $1,001 to $4,000 - For any purchases, other than those covered by a vendor of record, when the
amount is between $1,001 and $4,000, comparison pricing must be completed by the assigned
Buyer.
• $4,001 to $15,000 - For any purchases, other than those covered by a vendor of record, when the
amount is between $4,001 to $15,000, the assigned Buyer making the purchase shall obtain
quotations from more than one source using catalogues, suppliers lists, online pricing or through
negotiations, upon assuring themselves that all prices offered are fair and equitable.
• $15,001 to $50,000 - For all purchases between $15,001 and $50,000, a minimum of three
written quotations must be obtained by the assigned Buyer.
• Over $50,001 – By Tender or Request for Proposal.
The above mechanisms are the minimum acceptable practices for the listed threshold. Any
mechanism can be used for a lower purchase bracket.
The above prices shall be on a before-tax basis. Adherence to the above does not apply to
circumstances addressed in section 6.
Purchases made for a project which is receiving grant or external funding are subject to
purchasing thresholds as set in the funding agreement. If no funding thresholds are identified
within the funding agreement, the above purchasing thresholds shall be followed.
QUICK GUIDE TO PURCHASING GUIDELINES
Minimum
Purchasing
Mechanism
Dollar Value
of Purchase
Approval Authority
& Authority to Award
Small Order
Purchase* Up to $250 Employee
Small Order
Purchase* $251 - $1,000 Supervisor or Assigned
Buyer
Comparison
pricing*
$1,001 to
$4,000 Department Manager
Price Quotes* $4,001 to
$15,000 Department Manager
5-006 Page 6 of 9
Written
Quotation*
$15,001 to
$50,000 Director and Treasurer
Tender, Request
for Proposals or
Sole Source
Purchases*
$50,001 to
$75,000 Director and CAO
Tender, Request
for Proposals or
Sole Source
Purchases*
$75,001 +
Council
(unless in accordance with
section 6.0 (d))
*Unless prescribed through a funding agreement
4. ACCOUNTABILITY
a) The CAO shall maintain accountability to Council during the procurement process.
b) No purchase of Goods and Services shall be made by the Town for the personal use of
elected or appointed officials or employees of the Town.
c) No Goods and Services shall be purchased from an employee of the Town, or from any
associate of such employee, unless the extent of the interest of such employee has been fully
disclosed and the purchase has been approved by the Treasurer.
d) The Agent oversees the Town’s purchasing process and compliance thereof. Only the Agent,
Mayor or Clerk has the authority to execute contract documents on behalf of the Town.
5. PRESCRIBED COUNCIL APPROVAL
The following Purchases shall be subject to Council approval:
a) Any contract prescribed by statute to be made by Council;
b) Any contract where this By-Law is being waived;
c) Any contract where Council has expressly directed staff to report prior to an award;
d) Any contract where a submission in response to a call for Bid contains an irregularity that
cannot be resolved by terms of the Bid; or,
e) Any contract for a Purchase made in accordance with section 6.0 (b);
5-006 Page 7 of 9
f) Any contract for a tender or request for proposal as required under this policy.
g) Any contract which is not contained within the approved budget and is in excess of a
$25,000 threshold.
h) Any contract which is in excess of the approved budgeted value.
i) All purchases of municipal land unless delegated by resolution.
Council may waive, by resolution, the application of any part of this By-Law in respect of any
given procurement.
6. EXCEPTIONS
a) When an emergency occurs that, at the discretion of the CAO, Director, Fire Chief, or
Department Manager, constitutes immediate danger to health, safety, life or property, or
requires the immediate procurement of goods and services, the Department Manager or
his/her designate may purchase through sole sources such required Goods or Services upon
consultation with the Director or Treasurer. A follow-up report to Council is required for all
Emergency Purchases over $25,000.
b) The Tendering, RFP or purchasing process may not be required where the Goods or Services
are proprietary to one vendor, where there is only one supplier that can meet the Town’s
needs within a reasonable distance or where the cost of changing suppliers for a product or
service already in place is deemed to be exorbitant by the Treasurer. Upon written staff
recommendations, Council shall, in its’ sole discretion determine whether a Bid, RFP or
purchasing process may be forgone for these reasons. Such exemption must be granted by
resolution.
c) Notwithstanding the provisions of this policy, the following expenditures must be made subject
to budget constraints and may be made without following the formal purchasing procedures
detailed herein;
i. Petty cash items
ii. Training and education including conferences, courses and seminars
iii. Mileage, travel and accommodations
iv. Payroll related expenses
v. Utilities, postage, bank charges
vi. Licensing, maintenance and software support for prior purchases;
vii. Professional Services identified as a vendor of record
d) Approved budgeted contracts received under budget and with a value less than $250,000 do
not require additional Council approval, regardless of funding source, except in accordance
with section 5.0 (i). Authorization of said approved budgeted contracts resides with the
Treasurer.
5-006 Page 8 of 9
7. NO LOBBYING
No bidder shall contact any member of Council or any Town staff in an attempt to influence the
award of a contract.
If a bidder contacts any member of Council or any Town staff in an attempt to influence the award
of a contract, the bidder may be disqualified at the discretion of the CAO.
8. HEALTH AND SAFETY
The Town is committed to the health and safety of their employees, contractors, visitors and the
general public. This includes a commitment to Health and Safety in the procurement process.
9. CO-OPERATIVE PURCHASING
The Town may participate with other government agencies or public authorities in co-operative
purchasing. The policies of the government agencies or public authorities calling the Co-operative
Bid are to be the accepted policy of that particular Bid.
10. DISPOSAL OF SURPLUS
Where any goods or personal property of the Town are declared surplus, cannot be used by
another Town department, and have a residual value greater than $1,500, the goods shall be
disposed of by public Bid or public auction. If no Bids are received, the Departmental Manager or
Buyer may dispose of the goods or personal property as deemed to be in the best interest of the
Town. This section shall not apply to goods or equipment traded in on new equipment or returned
for credit to original sources of supply.
11. TIE BIDS
In the event that two (2) or more compliant, equal bids are submitted during a competitive Bid
process, the Town shall determine the successful bidder by drawing a bidder’s name, as
determined by the Treasurer.
12. DELEGATION OF AUTHORITY TO PURCHASE
The authority to purchase Goods and Services may be delegated or assigned to a local Board
following the dollar thresholds as set out in this Policy.
13. OTHER
Where any other By-Law exists which is in conflict with a provision of this Policy, the provision of
this Policy shall be deemed to apply.
This Policy shall be reviewed and updated, as appropriate, every five (5) years, following the date
of its enactment.
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READ A FIRST AND SECOND TIME THIS 13 DAY OF JULY, 2020.
READ A THIRD AND FINAL TIME AND PASSED THIS 13 DAY OF JULY, 2020.
MAYOR – Stephen Molnar
CLERK – Michelle Smibert