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3140 To adopt a Policy on ProcurementCORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NO. 3140 BEING A BY-LAW TO ADOPT A POLICY ON PROCUREMENT WHEREAS the Municipal Act, S.O. 2001 requires a municipality to have a procurement policy; AND WHEREAS the Council of the Town Of Tillsonburg recognizes the need for a clear and concise set of policies concerning procurement; THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWN OF TILLSONBURG ENACTS AS FOLLOWS: 1. THAT effective upon passage the Policy on Procurement attached hereto as Schedule "A" and forming part of this By-law is hereby adopted as the policies and procedures for procurement for the Town of Tillsonburg. 2. THAT this Procurement Policy By-law may be amended from time to time as directed and deemed necessary by the Council of the Corporation of the Town of Tillsonburg. 3. THAT any procurement or purchasing policies previously adopted are hereby repealed; 4. AND THAT this by-law shall come into full force and effect upon final passing. READ A FIRST, SECOND AND THIRD TIME AND FINALLY PASSED THIS 13th DAY OF DECEMBER, 2004. CLERK - 2 - Schedule "A" to By-law 3133 Schedule "A" to By -Law 3140 Procurement Policy OBJECTIVES 1. This procurement policy outlines the procedures to be followed in order to help achieve the best value for time and money when purchasing or contracting for goods and services for the Town of Tillsonburg. 2. The guiding principal is that procurement decisions will be made using a competitive process that is objective, open, transparent and equitable. 3. This procurement policy will promote and maintain the integrity of the purchasing process and protect Council, vendors and staff involved in the process by providing clear direction and accountabilities. RESPONSIBILTIES 4. The Department Head, the Treasurer and the CAO are responsible for ensuring that the procedures of the Purchasing Policy are adhered to. 5. This purchasing policy may be overridden by Council if Council, in its' sole discretion, determines it to be appropriate and in the best interests of the Town. PROCEDURES 6. Prior to the approval of the current year's business plan and budget, a department may incur normal operating expenditures. 7. Council approval of the current budget shall be sufficient authority for departments to proceed with the procurement of materials, supplies and contractors, subject to the procedures and limitations contained herein. 8. All purchasing shall be conducted by the Department Head or his/her designate in accordance with the policies and procedures established herein. 9. Purchases of a small value, i.e. under $100, may be made by a Department Head or his/her designate via a petty cash fund. 10. A Department Head or his/her designate shall initiate a purchase, using a purchase order where applicable, in the following manner: a. For purchases up to $1,000.00, comparison pricing should be done where practical. b. For purchases between $1,000.00 and $5,000.00, three (3) verbal quotations shall be obtained where possible. The supplier shall be selected consistent with the standard terms and conditions as determined by the Finance Department. c. For purchases between $5,000.00 and $25,000.00, three (3) informal, written quotations shall be obtained where possible. The supplier shall be selected consistent with the standard terms and conditions as determined by the Finance Department. All purchases of new equipment, tools and/or chemicals must meet Health and Safety regulatory compliance. d. Annually, collective purchases where the anticipated volume on a Town wide basis is above $25,000 (for example stationery and supplies) will be tendered and reported to Council. e. For purchases greater than $25,000.00, a Department Head or his/her designate shall, at his/her sole discretion, select one of the following procedures to gather quotation infonnation: i) formal invitation to quote/request for quotation/request for proposal OR ii) sealed tenders. -3 - Schedule "A" to By-law 3133 The quotations or tenders shall be submitted by the Department Head or his/her designate to Council upon receipt along with a recommendation for supplier. f. Notwithstanding the forgoing, Council may, by resolution, direct the method of obtaining quotation information. g. Resolutions approving budget amendments, capital expenditures or special appropriations shall contain the purpose of the expenditure, cost estimates or expenditure limitation, a cost/benefit analysis if applicable, and the appropriate fund. All staff reports recommending such resolutions shall contain the GAO's endorsement. h. All purchases of new equipment, tools and/or chemicals must meet Health and Safety regulatory compliance and should involve a Joint Health and Safety Committee Representative. EXCEPTIONS 11. Where an emergency occurs that, in the opinion of the Department Head or his/her designate, constitutes immediate danger to health, safety, life or property, or requires the immediate procurement of goods and services, the Department Head or his/her designate may purchase such goods or services through the open market upon consultation with the CAO and Mayor. As soon as practical following the emergency, a full written report shall be submitted to the CAO for review and immediate submission to Council. 12. A tendering process may not be required where the goods or services are proprietary, 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. Upon staff recommendations, Council shall, in its' sole discretion, determine whether a tender process may be forgone for these reasons. 13. Notwithstanding the provisions of this policy, the following expenditures may be made without following the formal purchasing procedures detailed herein: a. petty cash items; b. training and education including: 1) conferences courses 111) memberships iv) seminars V) staff development vi) subscriptions subject to the provision that CAO approval be received; c. mileage, travel and accommodation; d. employer expenses including: i) payroll ii) payroll deduction remittances 111) insurance premiums iv) group benefits V) pension remittances; e. utilities; f. maintenance and support for existing computer hardware and software previously presented to Council subject to all new hardware and software purchases meeting the limitations contained herein must be presented to Council; g. other professional and special services including: 1) legal costs for general issues; ii) planning consultant for general issues; 111) engineering consultants for general issues. - 4 - Schedule "A" to By-law 3133 GOALS 14. Objectivity Quotations and tenders shall be solicited, reviewed and selected in an unbiased atmosphere. Staff and Council members involved with the solicitation, review and selection process for any particular bid shall not submit their own, personal bid for consideration. Further, should a bid be submitted from an immediate family member (parent, spouse, same-sex partner or any child) of the staff or Council member involved with the process, it should be disclosed to Council in the final recommendation report. Personal preferences shall not be given priority unless the bid submitted demonstrates that it is the lowest priced, compliant bid. 15. Equity The terms of selection shall be detailed in the procurement documents and shall be applied equally to all bidders. Tenders and Requests for Proposals shall be advertised locally as well as in daily papers that are deemed appropriate by the department head involved. Invitations to bid may be extended rather than by a general advertisement if staff is of the opinion that there are a limited number of appropriate suppliers that can meet the Town's needs at that time. No action shall be undertaken by staff or Council that would give any bidder an unfair advantage. This does not require, however, that the Town change existing conditions to ensure that conversion costs from the incumbent to another supplier are ignored in an evaluation. 16. Openness and Transparency The Town's specifications and the terms of selection shall be clearly defined in each invitation or tender document. The decision for the successful bidder shall be based solely on the specifications requirements as documented and the bidder's documents.. 17. Accountability The CAO shall maintain accountability on behalf of Council during each process. Informal contact with staff or Council members not specified as official contacts in the tender/request for proposal documents shall be considered unethical and may threaten the validity of that supplier's bid or even the process as a whole. Sealed quotations, tenders or proposals, marked with the time and date of receipt, shall be maintained in a locked tender box until the time specified in the procurement documents. If the lowest bidder's price is higher than the Town's budget, this will be brought to Council's attention at the time of the final recommendation report and Council, in its' sole discretion, will decide whether to proceed or to investigate alternatives. 18. Risk Management Suppliers will be required to provide proof of insurance along with a WSIB clearance certificate (or municipal waiver, if applicable) for all contracts. .Insurance requirements will be detailed in the procurement documentation and must be adhered to throughout the term of the contract. Perfonnance bonds may be required and will be disclosed during the bidding process. These bonds will be held by the Town until end -of -contract indicators are in place (ie. final clearance certificates are issued) at which time they will be released. EVALUATION 19. Effectiveness The Town shall endeavour to define its' needs in a clear and simple format to minimize the occurrence of amendments to bidding documents or changes to contracts once in place. A listing of all changes required shall be maintained with the contract documents for review. An analysis of whether ratepayers' needs are being met in a satisfactory manner shall be performed throughout the term of a contract and changes or difficulties encountered shall be documented and considered upon renewal or re -tendering for those particular services - 5 - Schedule "A" to By-law 3133 or goods. This analysis shall Involve on-going monitoring of service or product quality and a compilation of ratepayer complaints and resolutions. Further, prior to contract renewal or re -tendering, performance criteria will be defined and an evaluation of these criteria shall be made by the department head directly involved with the contract and shall be formally reported to Council. Poor performance on the part of the supplier/contractor may preclude future contracts being awarded. In the event that there are no successful bidders, the procurement documents shall be reviewed immediately by the department head and the CAO. The review shall include contacting persons or businesses that took out tender documents but did not submit or were not successful. This review shall detennine if there was an error on the part of the Town in drawing up the documents, setting unreasonable requirements or anything else that prevented the successful completion of the procurement process. 20. Review This policy shall be reviewed every five (5) years at a minimum. An evaluation of the goals set out and the level of achieving those goals shall be made by staff and reported to Council. If significant problems are discovered, priorities have changed or the current policy has become unmanageable, changes must be reported to and proposed for Council's consideration. Further, procurement procedures will be reviewed at the same time to determine if the procedures outlined in this policy are being followed and whether they are supporting the goals of the policy. Variations in practice from the desired procedures should be evaluated to determine the underlying reasons for the changes and reported to Council.