Loading...
Resolution - 2023 - 23-18 - Purchasing Policy - 06/13/2023 RESOLUTION NO. 23-18 A RESOLUTION OF THE CITY OF EAGLE, IDAHO, AMENDING THE CITY OF EAGLE PURCHASING POLICY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council recognizes that efficient and cost-effective procurement of goods, services and public works construction is an important aspect of local government operations; and WHEREAS, the City Council desires to endeavor to buy goods, services and public works construction by way of a public accountable process that respects the shared goals of economy and quality, as contemplated by Idaho Code §§67-2801 et seq.; and WHEREAS, the Mayor and Council wish to amend the Purchasing Policy to conform with recent changes to Idaho State Legislature, Senate Bill No. 1083. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF EAGLE, IDAHO as follows: Section 1: That the City of Eagle hereby rescinds Resolution 22-04; Section 2: That the City of Eagle hereby amends the Purchasing Policy, which policy is attached hereto as Exhibit A and incorporated herein by reference as if set forth in full. Section 3: That this resolution shall be in full force and effect on July 1, 2023 upon its adoption and approval. A ADOPTED by the Eagle City Council, Eagle, Idaho, this day of June, 2023. APPROVED: Jas Pie ce, Mayor ATTEST: E ••O • P •;'� Tracy E. orn, CMC o ° Q p City Cld& W } : �:• o co {;�• o ; 1 City of Eagle Procurement Policy Resolution 23-18 Adopted by City Council Approval Date: June 13, 2023 Effective Date: July 1, 2023 1 TABLE OF CONTENTS OVERVIEW ................................................................................................................................... 3 PURCHASES EXEMPT FROM COMPETITIVE BIDDING ....................................................... 3 PURCHASING SERVICES AND PERSONAL PROPERTY Purchases under $5,000 ................................................................................................................ 4 Purchases $5,000 - $74,999 .......................................................................................................... 5 Purchases $75,000 - $150,000 ...................................................................................................... 5 Purchases Greater than $150,000 Competitive Sealed Bid option ................................................................................................ 5 Request for Proposal option ..................................................................................................... 7 JOINT PURCHASING AGREEMENTS ..................................................................................... 7 PURCHASING PUBLIC WORKS CONSTRUCTION Public Works Contracts for Less than $50,000 .............................................................................8 Public Works Construction Projects $50,000 - $200,000............................................................. 8 Public Works Construction Projects greater than $200,000 ........................................................... Option A: Formal Bidding .......................................................................................................... 8 Option B: Prequalified Bidders ................................................................................................ 10 Required Use of Licensed Public Works Contractors ............................................................... 13 Use of City Employees for Public Works Construction Projects ............................................... 15 EMERGENCY AND SOLE SOURCE PROCUREMENT ....................................................... 15 RECIPROCAL PURCHASING PREFERENCE LAW ............................................................. 16 SALES & USE TAX EXEMPTION ............................................................................................ 17 QUALIFICATIONS-BASED SELECTION OF DESIGN PROFESSIONALS CONSTRUCTION MANAGERS AND PROFESSIONAL LAND SURVEYORS ................... 18 MISCELLANEOUS ..................................................................................................................... 19 Page 3 of 20 OVERVIEW The purpose of this policy is to establish goals and clarify the procedures for purchasing supplies, materials, and services by the City of Eagle and ensure compliance with Idaho law. Procedures vary for bidding on public works; for purchasing materials and supplies unrelated to public works; and for purchasing architectural, engineering or landscape architectural services. There are also different thresholds that determine whether the City may make purchases without going out for bid. These processes establish sound policies and procedures in the pursuit of efficient and cost-effective procurement that will result in the most beneficial outcome for the City. All City employees shall be diligent in practicing good stewardship of public resources. Throughout the entirety of this policy the following criteria shall be applied in addition to the other processes and procedures identified. Confirmation of budgeted item and fund availability: All purchases of goods or services must be within the current year appropriated budget. For purchases of goods or services over $5,000: Mayor approval prior to purchase and confirmation of availability of funds must be received by the City Treasurer or designee. Contracts/Agreements: The City Attorney shall review all contracts/agreements prior to Council action. Council approval is required prior to the execution of the document by the Mayor. PURCHASES EXEMPT FROM COMPETITIVE BIDDING Exclusions from competitive bidding are established in Idaho State Code §67-2803 and §67-2807 as follows: §67-2803(1) The acquisition of personal property when the procurement duplicates the price and substance of a contract for like goods or services that has been competitively bid by the state of Idaho, one (1) of its political subdivisions, or an agency of the federal government; §67-2803(2) Contracts or purchases where expenditures to procure public works construction are less than fifty thousand dollars ($50,000), or where expenditures to procure services or personal property are less than seventy-five thousand dollars ($75,000), provided such contracts or purchases shall be guided by the best interests of the political subdivision procuring the goods and services as determined by the governing board; §67-2803(3) Disbursement of wages or compensation to any employee, official or agent of a political subdivision for the performance of personal services for the political subdivision; §67-2803(4) Procurement of personal or professional services to be performed by Page 4 of 20 an independent contractor for the political subdivision; §67-2803(5) Procurement of an interest in real property; §67-2803(6) Procurement of insurance; §67-2803(7) Costs of participation in a joint powers agreement with other units of government; §67-2803(8) Procurement of used personal property; §67-2803(9) Procurement from federal government general services administration (GSA) schedules or federal multiple award schedules (MAS); §67-2803(10) Procurement of personal property or services through contracts entered into by the division of purchasing of the department of administration of the State of Idaho; §67-2803(11) Procurement of goods for direct resale; §67-2803 (12) Procurement of travel and training; §67-2803(13) Procurement of goods and services from Idaho correctional industries; §67-2803(14) Procurement of repair for heavy equipment; §67-2803(15) Procurement of software maintenance, support and licenses of an existing system or platform that was bid in compliance with state law; §67-2803(16) Procurement of public utilities; §67-2803(17) Procurement of food for use in jails or detention facilities; or §67-2803 (18) Procurement of used equipment at an auction if authorized by the governing board. As a matter of practice, staff should consult the Idaho State Code section referenced above to stay abreast of legislative changes. COOPERATIVE PURCHASING With the approval of its governing board, a political subdivision may participate in cooperative purchasing agreements with the state of Idaho, other Idaho political subdivisions, other government entities, or associations thereof. Political subdivisions may also participate in cooperative purchasing programs established by any association that offers its goods or services as a result of competitive solicitation processes. Goods or services procured by participation in such cooperative agreements or programs shall be deemed to have been acquired in accordance with the requirements of this chapter. I.C. 67-2807 PURCHASING SERVICES AND PERSONAL PROPERTY Purchasing of services (e.g. janitorial services, landscape maintenance) and personal property (e.g., automobiles, equipment, supplies) follows the process outlined as follows: • For Purchases under $5,000 I.C. 67-2806 Department Supervisor approval is required for purchases under $5,000. Department Supervisors are responsible for monitoring budget revenue and expenditure balances and ensuring that all expenses are within the current year appropriated budget. Additional internal controls may be implemented to ensure Page 5 of 20 efficient, cost effective and responsible purchasing within each Department. • For Purchases Between $5,000 and $74,999 I.C. 67-2806 If the price of the contract or purchase is estimated between $5,000 and $74,999 the City has the discretion to purchase from any vendor believed to provide the best value. Department Supervisors shall obtain Mayoral approval prior to the purchase. Purchases must be within the current year appropriated budget, and confirmation of fund availability confirmed with City Treasurer or designated representative. Additional internal controls may be implemented to ensure efficient, cost effective and responsible purchasing within each Department. • For Purchases Between 75,000- $150,000 I.C. 67-2806(1) o The city must make a written request for bids (by electronic or physical delivery) to at least three (3) vendors. The request should describe: the personal property or services to be purchased or leased; the method(s) for vendors to submit their bids (again, by either electronic or physical delivery); the date and time by which bids must be received by the clerk or other authorized official; and a reasonable time to respond, with a minimum of at least three (3) business days, except in an emergency. o Written objections to specifications or bid procedures must be received by the clerk or other authorized official at least one (1) business day before the bids are scheduled to be received. o When the bids are received, they are compiled and submitted to the city council (or an official authorized by the council) for approval of the lowest responsive bid or all bids are rejected, and the process starts over again. o If the city determines that it is impractical or impossible to obtain three (3) bids, the city may acquire the property (services or personal property) in any manner the city deems best from the qualified vendor quoting the lowest price. When fewer than three (3) bids are considered, the city must document its efforts to obtain three (3) bids and maintain this documentation, along with the written trail from solicitation to acceptance of bids, for at least six (6) months after the purchase. If two (2) or more vendors tie for the lowest bid, the council or its authorized official may select either vendor at its discretion. • For Purchases Greater than150,000: I.C. 67-2806(2) There are two options for purchases greater than $150,000. Competitive Sealed bid and Request for Proposal (RFP) Alternative. Option A : Competitive Sealed Bid: For Purchases Greater than $150,000: I.C. 67-2806(2) COMPETITIVE SEALED BID: The purchase or lease must be made following a competitive sealed bid process from the qualified vendor submitting the lowest bid in compliance with bidding procedures and meeting the city’s specifications. Page 6 of 20 Publication requirement: The process begins when the city publishes two (2) notices soliciting bids in the official city newspaper, with the first notice at least two (2) weeks before bid opening and the second notice at least a week prior to bid opening. The notice must succinctly describe the personal property or services to be procured and must state that specifications, bid forms, instructions, contract documents and other information are available upon request to any interested bidder. Written objections by bidders concerning specifications or bidding procedures must be received by the clerk or other authorized official at least three (3) business days before the scheduled bid opening. Bid Security: The city may require bid security of at least five percent (5%) of the amount of the bid. If security is required, a bid may not be considered unless security is provided in the form required by the city, including: • Cash, • Cashier’s check payable to the city, • Certified check payable to the city, or • Bidder’s bond executed by a qualified surety company payable to the city. Public Bid Opening: Any bid received by the city may not be withdrawn after the time set for opening of bids. The sealed bids are opened in public at the date, time and place specified in the published notices and thereafter are compiled and submitted to the city council. Contract Award: The city council may award the contract to the vendor submitting the lowest responsive bid, reject all bids and go through the process again, or it may decide that the goods or services can be purchased more economically on the open market. If two (2)or more bids are the same and are the lowest responsive bids, the city council may accept either in its discretion. The city council may also preauthorize the purchase of equipment at public auction. If the city council chooses to award to a bidder other than the apparent low bidder, the council must declare its reasons on the record and must communicate these reasons in writing to all vendors submitting bids. Objections: Participating bidders have seven (7) calendar days from the date of transmittal of the notice to respond in writing with their objections. If objections are received, the purchase is stayed while the city council reviews its decision and determines whether to affirm its prior award, modify the award or choose to re- bid, stating its reasons. After completion of the review process, the city may proceed as it determines is in the public interest. Failure to execute contract: If the successful bidder fails to execute the contract, Page 7 of 20 the bid security may be forfeited to the city at the discretion of the council and the proceeds deposited in a designated fund out of which reasonable expenses of procuring substitute performance are paid. Upon failure or refusal of the successful bidder to execute the contract, the city may award to the next lowest qualified bidder. The lowest bidder’s security may be applied by the city to the difference between the two (2) bids. The surplus, if any, shall be returned to the lowest bidder if cash or check is used, or to the surety on the bidder’s bond if a bond is used, less reasonable administrative costs not to exceed twenty -five percent (25%) of the amount of the bidder’s security. I.C. §67-2806 Option B: Request for Proposal Alternative (RFP) For Purchases Greater than $150,000: I.C. 67-2806(2) REQUEST FOR PROPOSAL ALTERNATIVE (RFP) I.C. §67-2806: The city may utilize a request for proposal process as an alternative to the competitive bid process for procurement of goods or services for which fixed specifications might preclude discovery of a cost-effective solution, or where a problem may be amenable to several solutions, or price is not the sole determining factor. Evaluation of vendors: Evaluation of vendors can be based on a variety of factors including innovative solutions, unique product features, price, experience, financial stability, the ability to perform contract requirements in a timely or efficient manner, the ability to meet product specifications, product quality or performance records, past vendor performance, future product maintenance or service requirements, and product warranties. RFP required contents: The request for proposal should describe the instructions of the process, the scope of work, the selection criteria, contract terms and the scoring methodology to be applied. Notification requirements: Notification, solicitation and consideration of contests concerning the award of procurement pursuant to a request for proposal shall be in accordance with the minimum requirements established in Idaho Code §67- 2806 which states: The process begins when the city publishes two (2) notices soliciting bids in the official city newspaper, with the first notice at least two (2) weeks before bid opening and the second notice at least a week prior to bid opening. Scoring record retention: Records compiled during the scoring process shall be made available for public inspection when the purchasing recommendation is made to the city council. I.C. §67-2806 JOINT PURCHASING AGREEMENTS A city may enter into joint purchasing agreements with the State of Idaho and other local governments, and local governments may also participate in such agreements established by nonprofit associations of local governments. Purchases of personal property by the joint Page 8 of 20 purchasing programs must comply with the competitive bidding law. Goods and services procured by participation in such purchasing agreements and programs shall be deemed as having been acquired in accordance with the competitive bidding process. I.C. §67-2807 PURCHASING PUBLIC WORKS CONSTRUCTION Cities are granted express authority to prequalify public works contractors, thus ensuring that contractors have the requisite experience, equipment and personnel to undertake a particular project. Cities are required to use a licensed public works contractor for jobs over $50,000. The competitive bidding thresholds for public works construction are as follows: For Public Works Construction Projects Less Than $50,000 I.C. §67-2803: The city can purchase from any public works contractor believed to provide the best value. For Construction Projects Between $50,000 & $200,000 I.C. §67-2805(1): • The city must submit a written request (by electronic or physical delivery) for bids, describing the work to be done, to at least three (3) licensed public works contractors selected by the city. The request should also specify the method for contractors to submit their bids (either by electronic or physical delivery) and the date, time and place by which bids must be received. The city must allow a reasonable time for bidders to respond at least three (3) business days, except in an emergency. • Prospective bidders may submit objections to the bidding procedures or specifications up to one (1) business day before bids are scheduled to be received. • The city must accept the lowest responsive bid of the licensed public works contractors chosen by the city to submit bids or reject all bids and go through the process again. • If the city finds it is impractical or impossible to obtain three (3) bids, the city may acquire the work in the manner it deems best from the qualified public works contractor quoting the lowest price. When fewer than three (3) bids are considered, the city needs to document its efforts to obtain three (3) bids, along with the written trail from solicitation to acceptance of bids and must keep the documentation for at least six (6) months after the contract is awarded. If two (2) or more contractors submit the same low bid, the city council or its authorized official may select whichever contractor it desires. For Construction Projects Greater than $200,000 I.C. §67-2805(2): Two Options are available: Option A: Formal Bidding Under this option, the city must accept bids from any licensed public works contractor, and the city may only consider: Page 9 of 20 a. The amount of the bid. b. The bidder’s compliance with administrative requirements c. Whether the bidder holds the requisite public works contractor’s license. Publication requirement: The city must publish two (2) notices soliciting bids in the official city newspaper, the first at least two (2) weeks before bid opening and the second at least a week before bid opening. The notices must succinctly describe the project to be constructed and inform prospective bidders that specifications, bid forms, instructions, contract documents and other materials are available upon request for a reasonable copying fee. Written objections: Written objections to specifications or bidding procedures must be received by the clerk or other authorized official at least three (3) business days before scheduled bid opening. The clerk/authorized official or city council must respond, in writing, to the objector and all other prospective bidders, adjusting the timeframe for submission of bids if necessary. Security: The city may require bid security of at least five percent (5%) of the amount of the bid. If security is required, a bid may not be considered unless security is provided in the form required by the city, which may include: • Cash, • Cashier’s check payable to the city, • Certified check payable to the city, or • Bidder’s bond executed by a qualified surety company payable to the city. Sealed bids: Submitted bids must be sealed, with an indication on the outside identifying the project. Any bid received by the city may not be withdrawn after the date and time of bid opening. The sealed bids are opened in public at the date, time and place specified in the published notices and thereafter are compiled and submitted to the city council. Award of bid: The city council awards the contract to the qualified bidder submitting the lowest responsive bid or may reject all bids and re-bid the project. The city council may also, after determining it to be true, declare that the project can be performed more economically by purchasing goods and services on the open market. If identical bids are submitted and are the low bid, the city council may choose the bidder it prefers. If no bids are received, the city council may procure without further competitive bidding procedures. If the city council chooses to award to a bidder other than the apparent low bidder, the city council must declare its reasons on the record and must communicate these reasons in writing to all those submitting bids. Page 10 of 20 Objection to bid: Participating bidders have seven (7) calendar days from the date of transmittal of the notice to respond in writing with their objections. The procurement is stayed while the city council reviews its decision and determines whether to affirm its prior award, modify the award or choose to re-bid, as it deems to be in the public interest. Failure to Execute Contract: If the successful bidder fails to execute the contract, the bid security may be forfeited to the city and the proceeds may be deposited in a designated fund out of which the expenses of procuring substitute performance are to be paid. If the successful bidder refuses or fails to execute the contract, the city may award the contract to the qualified bidder submitting the next lowest responsive bid. If this occurs, the original contractor’s security may be applied to the difference between the two (2) bids, and any surplus remaining must be returned to the original contractor if cash or check is used or to the surety on the bidder’s bond if a bond is used (less reasonable administrative costs not to exceed twenty-five percent (25%) of the amount of the security). Option B: Prequalifying Bidders: Under this option, bidding is open only to those licensed public works contractors meeting the required qualifications established by the city. This process consists of two (2) stages: a. The first establishing a list of prequalified contractors, and b. The second where sealed bids are submitted from prequalified contractors. Prequalification process: The city publishes notice of prequalification of contractors twice (2) in the official newspaper, providing a date and time by which statements of qualifications must be received and the standards for evaluating qualifications of prospective bidders. The first publication must be at least two (2) weeks before the deadline and the second publication at least one (1) week before the deadline. The city may establish prequalification standards based on the following criteria: • Demonstrated technical competence; • Experience constructing similar facilities; • The contractor’s prior experiences with the city; • The contractor’s available non-financial resources, equipment and personnel as they relate to the particular project; and • The contractor’s overall performance history. Licensed contractors desiring to be prequalified must submit a written response to the city’s request for qualifications. Written objections to prequalification procedures must be received by the clerk or other authorized official at least three (3) business days before statements of qualifications are due. The clerk/authorized official or city council must respond to the objections in writing, to all those seeking to prequalify, adjusting the timeframe for submission of statements of Page 11 of 20 qualifications if necessary. Selection of Qualified Contractors: After reviewing statements of qualifications, the city may select the licensed contractors meeting its criteria. The city must provide a written explanation to any licensed contractor that fails to meet the prequalification standards. Any licensed contractor that fails the prequalification stage can appeal to the city council within seven (7) days after transmittal of the prequalification results. If the council upholds the decision, it must state its reasons on the record. Decisions of the city council may be appealed to the public works contractor licensing board no more than fourteen (14) days following any decision on appeal made by the council. The board must decide the appeal within thirty - five (35) days after an appeal is filed. The appealing contractor and the city can participate in the hearing by either written or oral communication. The board shall not substitute its judgment for that of the city, and the board’s review is limited to determining the following: • Was the city council’s decision consistent with the announced prequalification standards? • Do the prequalification standards meet the requirements of the law? • Is the council’s decision supported by the entirety of the record? The board must issue its decision in writing, outlining the reasons for its decision. Any licensed contractor deemed unqualified by a decision of the board may seek judicial review of the decision within twenty-eight (28) days after the board’s decision. The prequalification process is stayed during a pending appeal to the board, but in no instance for more than forty-nine (49) days after the council’s appellate decision. Post Prequalification of Bidders Notice to Pre-qualified Prime Contractor: The bidding stage commences by a notice of the time, date and place of the public opening of bids. If the city is seeking a prequalified prime contractor, the notice is sent to the prequalified prime contractors at least two (2) weeks prior to bid opening. Notice to Pre-Qualified Specialty or subordinate contractor: If the city is seeking a prequalified specialty or subordinate contractor, then the notice is published, with the first publication at least two (2) weeks prior to bid opening and the secon d publication at least one (1) week prior to bid opening. The notice must succinctly describe the project and indicate that copies of specifications, bid forms, instructions, contract documents and general and special instructions are available upon request and payment of a reasonable copying fee. Bid Submittal: Sealed bids must be presented to the clerk or other authorized official, with a concise statement on the outside indicating the particular project. Page 12 of 20 Bid Objections: Written objections to the specifications or bidding procedures must be received by the clerk or other authorized official at least three (3) business days before the scheduled bid opening. Bid Security: The city may require bid security of at least five percent (5%) of the amount of the bid. If security is required, a bid may not be considered unless security is included in the form required by the city, including: • Cash, • Cashier’s check payable to the city, • Certified check payable to the city, or • Bidder’s bond executed by a qualified surety company payable to the city. Bid opening: Any bid received by the city may not be withdrawn after the date and time of bid opening. The sealed bids are opened in public at the date, time and place specified in the notice, and are then compiled and submitted to the city council for award. Award of bids: The council awards to the prequalified bidder submitting the lowest bid; rejects all bids and re-bids the project; or declares that the project can be performed more economically by purchasing goods and services on the open market. If identical low bids are received, the city council may choose the bidder it prefers. If no bids are received, the council may purchase without further competitive bidding. If the city council chooses to award to a bidder other than the apparent low bidder, the council must declare its reasons on the record and communicate these reasons in writing to those submitting bids. Objection to bid: Participating bidders have seven (7) calendar days from the date of transmittal of the notice to respond in writing with their objections. The procurement must be stayed while the city council reviews its decision and determines whether to affirm its prior award, modify the award or choose to re- bid, as it deems in the public interest, stating its reasons. Failure to Execute contract: If the successful bidder fails to execute the contract, the bid security may be forfeited to the city and the proceeds may be deposited in a designated fund out of which the expenses of procuring substitute performance are paid. The city may thereafter award the contract to the qualified bidder submitting the next lowest responsive bid. If this occurs, the original contractor’s security may be applied to the difference between the two (2) bids, and any surplus remaining must be returned to the original contractor if cash or check is used or to the surety on the bidder’s bond if a bond is used (less reasonable administrative costs not to exceed twenty-five percent (25%) of the amount of the security). I.C. §67-2805 Page 13 of 20 If a bidder has made a clerical or mathematical mistake on a bid, the bidder may be eligible to be released from the bid provided the city receives written notice within five calendar days of the opening of the bids. The city must be satisfied that a material mistake has actually been made. The bidder will not be allowed to rebid on that project. Any bid security will be returned by the city. Bidders failing to execute a contract and not satisfying the conditions of a mistake shall forfeit any bid security. If the city determines that a bidder is entitled to relief, it shall prepare a written report documenting the facts. The report is to be available for inspection as a public record and filed with the city. If the second lowest responsible bidder fails or refuses to execute the contract, the city may likewise award it to the next lowest responsible bidders. On the failure or refusal of the second or next lowest responsible bidders to execute a contract, their bidder’s security shall be likewise forfeited. A city may determine it is in its best interests to cancel and rebid the public works project and retain any forfeited bid security. I.C. §54-1904C Cities which contract for public works construction may not require that a contractor, subcontractor, material supplier or carrier pay its employees a predetermined wage rate or specific employee benefits unless required by state or federal law. Cities shall ensure that neither they nor any agent working on their behalf require or prohibit bidders to enter into or adhere to any agreement with labor organizations. I.C. §67-2809 Required Use of Licensed Public Works Contractors Idaho law requires state and local governments to use licensed public works contractors for public works construction projects over $50,000. I.C. §54-1901(c) Public works construction includes any or all of the following branches: (i) Heavy construction, which is defined as constructing substantially in its entirety any fixed works and structures (not including “building construction”), without limitation, for any or all of the following divisions of subjects: irrigation, drainage, sanitation, sewage, water power, water supply, reservoirs, flood control, reclamation, inland waterways, railroads, grade separations, track elevation, elevated highways, hydroelectric developments, aqueducts, transmission lines, duct lines, pipelines, locks, dams, dikes, levees, revetments, channels, channel cutoffs, intakes, drainage, excavation and disposal of earth and rocks, foundations, piers, abutments, retaining walls, viaducts, shafts, tunnels, airports, air bases and airways, and other facilities incidental to the same; (ii) Highway construction, which is defined as all work included in highway construction contracts, including, without limitation, highways, roads, streets, bridges, tunnels, sewer and street grading, street paving, curb setting, surfacing and other facilities incidental to any of the same; (iii) Building construction, which is defined as all work in connection with any structure now built, being built, or hereafter built, for the support, shelter and enclosure of persons, chattels, personal and movable property of any kind, requiring Page 14 of 20 in its construction the use of more than two (2) unrelated building trades or crafts. Specialty construction, which is defined as any work in connection with any public works construction, requiring special skill and the use of specially skilled trades or crafts. (iv) Specialty construction, which is defined as any work in connection with any public works construction, requiring special skill and the use of specially skilled trades or crafts. I.C. §54-1901(c) Public Works Contracts for Less than $50,000 Since the state law requirement for use of a licensed public works contractor has increased from $10,000 to $50,000, the number of small contracts that won’t require a licensed contractor will increase substantially. This gives public owners more flexibility, but it now opens up a new responsibility to be sure that everyone who contracts understands the implications. Because public property is not subject to lien laws that protect contractors from owners who won’t pay, the contracting parties need to engage their city attorneys or use payment and performance bonds on small contracts (an expensive practice). Payment and performance bonds exist as a substitute for lien remedies in public construction. For public works construction contracts with a value less than $50,000, lien authority should be expressly disclaimed. An alternative method to resolve performance and payment disputes should be incorporated in the contracts for smaller public works projects. The types of projects we are highlighting include building remodeling, small paving jobs, landscaping, etc. Naming of Subcontractors: General contractors must include in their bids the names and addresses of the subcontractors responsible for plumbing, heating and air conditioning, and electrical work under the contract. Subcontractors named by the general contractor must possess the appropriate licenses or certificates of competency issued by the state of Idaho covering the contractor work classification in which each respective subcontractor is named. Failure of a general contractor to name subcontractors renders any bid submitted by the contractor unresponsive and void. In the event the general contractor secures the contract and is unable to finalize the terms of agreement with a subcontractor for any reason other than cost, the general contractor names another subcontractor within ten (10) days of being awarded the contract. The general contractor must disclose to the city the cost of work to be performed by the substitute subcontractor, and if less than the original subcontractor’s bid, the reduction in cost must be passed on to the city. I.C. §67-2310 Payment and Performance Bonds Idaho law requires contractors selected for public works construction projects equal to or greater than $50,000 to provide performance and payment bonds: • Performance bond of at least 85% of the contract amount, conditioned upon the faithful performance of the contract in accordance with plans, specifications and conditions, solely for the protection of the city. Page 15 of 20 • Payment bond of at least 85 % of the contract amount, solely for the protection of persons supplying labor, materials or renting, leasing or otherwise supplying equipment to the contractor or subcontractors. • Cities requiring performance or payment bonds in excess of 50% of total contract amount shall not withhold from the contractor or subcontractor any amount exceeding 5% of the total amount payable as retainage. The city shall release to the contractor any retainage for those portions of the project accepted by the city and the contractors as complete with 30 days after such acceptance. Bonds shall be executed by a surety company or companies authorized to do business in Idaho, or the contractor may deposit any of the type of government obligations listed in I.C. §54-1901(2)(h), in lieu of furnishing a surety company performance or payment bond or bonds. • It shall be illegal for the invitation for bids, or any person acting or purporting to act, on behalf of the city to require that such bonds be furnished by or through a particular source. I.C. §54-1926 Any city that fails to obtain the necessary payment bond is required to make payment, upon demand, to all persons supplying materials or labor under the contract and such persons have a right of action against the city for up to one (1) year after the materials and/or labor were furnished. I.C. §54-1928 Use of City Employees for Public Works Construction Projects Idaho law does not restrict cities’ ability to undertake public works construction projects with city employees (whether permanent or temporary). City employees are exempt from the requirements for public works contractor licensing. Since the local government purchasing law expressly exempts “disbursement of wages” to any city employee from the requirements for competitive bidding, the city is only required to go through the competitive bidding process for any materials or equipment purchased for the project. I.C. §67-2803 EMERGENCY AND SOLE SOURCE PROCUREMENT Emergency Expenditures: In the case of emergency expenditures, the city council declares that an emergency exists (reciting with some detail why that is the case) and that public interest and necessity demand the immediate expenditure of public money, as a result of: • A great public calamity, such as an extraordinary fire, flood, storm, epidemic or other disaster. • It is necessary to do emergency work to prepare for the national or local defense. • It is necessary to do emergency work to safeguard life, health or property. Once the council declares an emergency, the city may proceed to purchase without competitive bidding. Page 16 of 20 Sole Source Procurement: In the case of sole source procurement, the council must declare that there is only one (1) source reasonably available for the public works construction, services or personal property to be acquired, which includes: • Where public works construction, services or personal property is required to respond to a life-threatening situation or a situation that is immediately detrimental to the public welfare or property. • Where the compatibility of equipment, components, accessories, computer software, replacement parts or service is the paramount consideration. • Where a sole supplier’s item is needed for trial use or testing. • The purchase of mass-produced movies, videos, books or other copyrighted materials. • The purchase of public works construction, services or personal property for which it is determined there is no functional equivalent. • The purchase of public utility services. • The purchase of products, merchandise or trademarked goods for resale at a local government facility. • Where competitive solicitation is impractical, disadvantageous or unreasonable under the circumstances. Publication Requirements for Sole Source Procurement: For sole source procurement, the city council declares that there is only one (1) vendor for the public works construction, services or personal property to be acquired, and then publishes notice of the sole source procurement in the official newspaper at least fourteen (14) days before awarding the contract (publication is not required in the case of a life-threatening situation or a situation that is immediately detrimental to public welfare or property). I.C. §67-2808 RECIPROCAL PURCHASING PREFERENCE LAW Several states and provinces have established “purchasing preference” laws, providing that bids from out-of-state vendors/contractors automatically have a specified percentage added to the bid for the purpose of determining the low bidder. Idaho operates under a “reciprocal preference” system that adds to the bids of out-of-state bidders the same percentage that the bidder’s home state provides as preference for in-state vendors. This applies to bids for procurement of public works, materials, supplies, services or equipment. I.C. §67-2348, I.C. §67-2349 For the purposes of this section, any bidder domiciled outside the boundaries of the state of Idaho may be considered as an Idaho domiciled bidder, provided that there exists for a period of one (1) year preceding the date of the bid a significant Idaho economic presence as defined herein. A significant economic presence shall consist of the following: a) That the bidder maintain in Idaho fully staffed offices, or fully staffed sales offices or divisions, or fully staffed sales outlets, or manufacturing facilities, or warehouses or other necessary related property; and b) If a corporation be registered and licensed to do business in the state of Idaho Page 17 of 20 with the office of the secretary of state. In the evaluation of paper product bids, those items that meet recycled content standards may be given not more than a five percent (5%) purchasing preference. As such, those qualifying paper products may be considered to cost five percent (5%) less when choosing the lowest responsible bidder. I.C. §67-2349 There are several important considerations to keep in mind when examining purchasing preferences: • Purchasing preferences only apply to purchases of materials, supplies, equipment, services and public works construction that are competitively bid (anything over $50,000 and any other purchases that the city decides to competitively bid). • Preferences do not apply to sole source or emergency purchases. • State of domicile means: where a corporation is chartered or incorporated, or where a sole proprietor or partnership is located or has its permanent headquarters. • The purchasing preference is only added to the amount of the bid for the purpose of determining the low bidder, and the city does not pay that amount to the low bidder. SALES & USE TAX EXEMPTION The State of Idaho and local governments are exempt from Idaho sales and use tax. Tax- exempt entities must provide merchants with a completed Sales Tax Resale or Exemption Certificate (ST-101). Merchants are required to keep a copy of this form in their records to verify the tax-exempt status of the governmental entity. Once this form is on file with the merchant, it covers all of the city’s future purchases. In addition to filling out the buyer and seller information in the boxes on the top of this form, the buyer must checkmark the “Federal/Idaho Government Entity” box in Paragraph 3, “Exempt Buyers.” Finally, the buyer must sign, indicate a title, fill in the city’s Federal EIN and date the form at the bottom. For tax-exempt cash purchases, a form ST-104G must be filled out for the vendor and must be signed by the purchasing agent as well as the buyer. Costs of hotel rooms for city officials on city business are exempt from sales tax when the hotel is charged to a city credit card (form ST-104-HM is required)—cash payments, payments with personal credit cards and payments reimbursed to the traveler are subject to sales tax. Purchases made by cities from out-of-state vendors that are delivered within Idaho are tax- exempt. If the out-of-state vendor is registered to collect Idaho state sales tax, the city must provide a valid, completed ST-101 to the vendor. Under no circumstances should a city Page 18 of 20 pay sales tax to another state when the product is delivered in Idaho by the out-of-state vendor or a common carrier. If items are purchased in another state and possession is taken in that state, then the tax laws of that state determine what tax, if any, is owed. For example, Oregon and Montana have no sales tax, but Washington allows no tax exemptions for government agencies. A prime or subcontractor is not exempt from sales and use tax simply because it is performing a service for a government agency. The contractor must pay sales tax to the vendor upon purchase of supplies or equipment or must pay use tax to the state if items are purchased without paying tax or materials are directly received from a governmental entity. QUALIIFICATIONS-BASED SELECTION OF: DESIGN PROFESSIONALS, CONSTRUCTION MANAGERS AND PROFESSIONAL LAND SURVEYORS I.C. §67-2806 and I.C. § 67-2320 Idaho law requires “qualifications-based selection” (QBS) of design professionals, including architects, engineers, landscape architects, land surveyors, and construction managers. All contracts/agreements for services must be approved by the City Council prior to the execution of the document by the Mayor. The QBS process differs from competitive bidding in that selection is based on qualifications and demonstrated competence, not merely submission of the lowest bid. For projects under $25,000: If the price of the service is estimated under $25,000 the City has the discretion to purchase from any vendor believed to provide the best value. Department Supervisors shall obtain Mayoral approval prior to the purchase. Purchases must be within the current year appropriated budget, and confirmation of fund availability confirmed with City Treasurer or designated representative. Additional internal controls may be implemented to ensure efficient, cost effective and responsible purchasing within each Department. For projects over $25,000: The city is required to use the QBS process outlined below. Request for Qualifications Publication Requirements: Establishes the criteria, procedures and qualifications for the services being sought. Publish a Request for Qualifications (RFQ) twice, the first publication at least two (2) weeks before the deadline for submission of statements of qualifications, the second publication at least one (1) week before the deadline, in the official newspaper. The RFQ does not include price information, since this is negotiated with the top-ranked firm once the scope of the project has been fully defined. RFQ Contents: A brief description specifying the type, scope and location of the project, along with the projected project completion date. A description of the professional services required. Page 19 of 20 The criteria used to evaluate firms submitting statements of qualifications, specifically: prior experience in similar projects, familiarity with federal and state laws and regulations, experience with certain types of grants, etc. That specifications, instructions and other documents are available to interested persons. That interested persons should submit statements of qualifications including: a brief history of the firm; experience in similar projects; capability to undertake the project; the names and qualifications of the project team; familiarity with the city; project approach and preliminary schedule. The deadline for submission of statements of qualifications, the physical address and/or e-mail address to which statements should be sent and the name of a contact person to answer questions and provide specifications and instructions. The city may request information regarding a person’s or firm’s rates, overhead and multipliers, if any, but shall not use the information provided for the purpose of ranking in order of preference. Selection of Firm: The city selects the individual or firm it determines to be best qualified to provide the required services, ranked in order of preference, according to the established criteria. • The city negotiates with the highest-ranking individual/firm to perform the services at a price determined by the city. • If the city and the preferred individual/firm are unable to agree on contract terms, including price, the city may repeat the process with the second ranked individual/firm. If necessary, the process is repeated by continuing down the list until the city reaches an agreement. Allowance for Pre-Qualified Individuals/Firms: Cities are also permitted to establish a list of prequalified individuals/firms for different types of projects. The list must have at least two prequalified individuals/firms, and the city is required to provide public notice of the prequalification process in the same manner as for the RFQ process (outlined above). When a project comes up, the city can choose the top ranked individual/firm from the prequalified list, rather than going through the public notice and RFQ process each time. I.C. §67-2320 Prequalified lists should be updated every three (3) years, following the method prescribed above. MISCELLANEOUS Donations The City Council, with recommendation of the Mayor shall approve acceptance of all donations of land and any donation of equipment or services valued over $5,000 including those that may require expenditures of City funds for installation, maintenance, etc. Page 20 of 20 Surplus Property When the economic or useful life of property owned by the City is less than the cost of maintenance, transportation, storage or other requirements, that property may be deemed “surplus property”. These procedures do not address the disposal of real property. Note: Disposal of real property is addressed in Title 50 Chapter 14, Idaho Code -. The procedures established therein shall be followed. • Property with a value of less than $1,000 requires Department Supervisor and Mayor approval prior to be declared surplus and disposal action is taken. • Property with a value of over $1,000 requires recommendation of declaration of surplus property by the Department Supervisor, Mayor and adoption of a resolution by the City Council. • Surplus property will be disposed of in a variety of methods which may include the following: • Donation to a charitable organization that qualifies under qualifies under Section 501-C and 501-C(19) of the Internal Revenue Service or to any state or local government, • Surplus property may be transferred to a state or local government. • Sold at public auction conducted by a licensed auctioneer. • Sold to the highest bidder in response to notice of public sale advertised for at least two (2) weeks in a newspaper of general circulation prior to such offering. • The item(s) may be disposed of at a local refuse site. • Be removed by an outside party willing to pay for its removal.