1. PURCHASING TRAINING WORKSHOP

2. AGENDA General Purchasing Procedures & Information Emergency vs. Urgent Purchases Sole Source Procedures Requisition Preparation Guidelines Purchase Orders Guidelines for Preparation of Request for Purchase Change Orders

3. P URCHASING M ISSION To ensure compliance with Federal, State and City Purchasing Laws To provide guidance to all City Departments engaged in purchasing To promote fair and impartial competition to vendors for the City’s business To coordinate the Bid Process for all City purchases $25,000+

4. G ENERAL P URCHASING P ROCEDURES Texas Constitution states… " after final approval of the budget, the governing body may spend municipal funds only in strict compliance with the budget, except in an emergency.” The Bottom Line… ensure Neither the State of Texas or its municipalities may spend in deficit. The Purchase Order procedures ensure that you are in compliance with the law.

5. G ENERAL P URCHASING P ROCEDURES When submitting a Purchase Requisition, H.T.E. provides a “check and balance” to keep you in compliance with Texas Law: 1. It verifies you have monies for the expenditure in your budget. 2. It encumbers (reserves) the funds, so that future spending is verified against an updated balance.

6. G ENERAL P URCHASING P ROCEDURES Why should you care? 1. It’s the Law!… Any City employee who violates the purchasing laws can be charged with a Class B or Class C misdemeanor (a fine not to exceed $2,000; and/or confinement in jail for a term not to exceed 180 days) 2. If you are any part of the procurement process, it is your responsibility to ensure compliance. Effective 6/1/10, any Purchase Requisition reflecting invoices numbers, will be rejected and returned.

7. Q UOTE & B ID R EQUIREMENTS AmountsCurrent $0 to $500.00  Department makes selection based on best value.  No quotes are required, Select “Best Value”  Requires Department Manager approval $500.01 to $4,999.99  Two or more documented verbal quotes  Requires at least TWO HUB* quote s if $3000+  Requires Department Manager approval $5,000.00 to $25,000.00**  Two or more written quotes, signed by the vendor.  Requires at least TWO HUB* quotes  Requires Director approval $25,000.01 to $50,000.00  Must be processed by Purchasing Department  Requires at least two HUB* quotes  Two or more written quotes, signed by the vendor.  Requires authorization by the City Manager Over $50,000.00**  Must be processed by Purchasing Department  Utilizes a formal competitive bid process  Requires approval by City Council  Requires authorization by the City Manager

8. H ISTORICALLY U NDERUTILIZED B USINESSES (HUB) The State of Texas requires cities to solicit bids from registered HUB’s from within Tom Green County on any purchase between $3K and $50K. A HUB is a minority or women owned business registered with the State of Texas. A listing of those business can be found at : http://www.window.state.tx.us/procurement/cmbl/hubonly.html Effective 6/1/10, Purchasing will begin rejecting all purchase requisitions that do not reflect HUB solicitation documentation.

9. H ISTORICALLY U NDERUTILIZED B USINESSES (HUB) Purchase Requisition Entries: After searching the State of Texas HUB database, if no HUB’s are located within Tom Green County for the product/service you are trying to acquire, include with your quote information “HUB Exempt”. Note: “HUB Exempt” does not count as a quote! If you obtain a quote from a HUB, enter the Business Name and note that they are a registered HUB, e.g., Dane Plumbing (HUB)-$99.99 If you request a quote from HUB and they do not respond, enter the business name, HUB, and “Did Not Respond.” e.g., ACME (HUB)-Did not respond

10. V ERBAL Q UOTES Required for all Purchases from $500.01 to $4,999.99 All quotes must be documented as outlined in the City Purchasing Policy AND the following information entered in H.T.E.  The date the quote was obtained  The vendor’s business name  Tom Green County State Certified HUB  The person giving the quote  The price - including shipping cost A standard quote form is located on the intranet Quotes must be kept in department’s file.

11. W RITTEN Q UOTES Required for all Purchases from $5,000.01 to $24,999.99 All quotes must be documented as outlined in the City Purchasing Policy AND the following information entered in H.T.E.  The date the quote was obtained  The vendor’s business name  Tom Green County State Certified HUB  The person giving the quote  The price - including shipping cost A standard quote form is located on the intranet. Quotes must be retained in Department files.

12. W RITTEN Q UOTES For Purchases over $25,000.00 All quotes must be obtained through the Purchasing Department as directed by the City Council. Departments Responsibility - Send specifications and mailing list to Purchasing. Contact Purchasing for a vendor list. Purchasing Responsibility - review and distribute specifications, tabulate results and report purchase to City Council.

13. C OMPETITIVE B IDS For Purchases over $50,000.00 Bids must be obtained by the Purchasing Department Departments Responsibility - specifications, mailing list, grant provisions (if any), liquidated damages justification, length of the contract, payment terms, etc. Purchasing Responsibility - review all specifications, coordinate with Legal and Risk Dept, send invitation to bid to potential bidders, upload bid package to City’s website, write and advertise bids (minimum of 2 consecutive weeks), issue all addendums, publicly open and tabulate results. Review and approve Council Background memo. This process can take over 30 days to complete

14. W HEN A RE Q UOTES /B ID S N OT R EQUIRED Purchases Under $500.00 When utilizing a city contract, e.g., RFB Contract Emergency Purchases When making a purchase from: Purchasing Co-ops Sole Source Suppliers When procuring Personal or Professional Services Note: Personal or Professional Services do require a RFQ Or RFP

15. WHEN ARE QUOTES/BIDS NOT REQUIRED A listing of all City RFB product/service contracts are posted on the intranet. When utilizing a city contract, the following must be placed on the Purchase Requisition: 1. The bid number 2. The expiration date If a contract is in place, you may not purchase from another provider.

16. E MERGENCY VS. U RGENT P URCHASES Urgent Purchases occur a situation arises that could have been anticipated or pre-planned.  Example:Department running out of paper  Reason:Did not watch supply on hand Emergency Purchases occur when a situation arises that was unforeseen and must be remedied immediately.  Example:Acts of God, i.e., flood damage Machinery that is critical to the operation of the City and rendered out of service To preserve and protect the health and safety of the municipality’s residents Procurement necessary because of unforeseen damage to public machinery, equipment or other property

17. E MERGENCY P URCHASES Emergency Purchases are exempt from competitive bidding. For emergency purchases, the following procedures apply: 1. Department recognizes an emergency situation has occurred 2. Department estimates cost of correcting the emergency 3. Department Identifies vendor to perform service/supply materials 4. Department Buyer enters requisition into HTE. 5. Department Buyer states the reason for the emergency on the Purchase Req. 6. Purchasing reviews validity of for request based on the reason provided and approves. 7. Department coordinates completing the work, ensures the vendor follows the City’s prevailing wages guidelines and has the proper insurance coverage. Note: Only the City Manager, Assistant City Manager or Finance Director are authorized to sign any contracts. 8. If the purchase is over $50,000.00, the department is also responsible for preparing the necessary information to advise the City Council of the emergency situation, action taken, cost and subsequently obtain their approval.

18. P URCHASING C O - OP P URCHASES  The City of San Angelo has established purchasing co-op agreements with several organizations. These organization have solicited bids, following the State’s purchasing laws. and their products are available for City purchases. Some of those organizations are: Texas DIR, Buyboard.com, TIPS, Houston- Galveston Council of Governments, TXMAS, etc.  Each organization’s ordering procedures may different.  Don’t assume that their pricing is best. Some co-ops charge a 2-5% Service Fee. Do your homework!  Their contracts for products, services and/or installation, must be reviewed by our Legal Department and Risk Department  Purchases over $50,000 still require City Council approval.

19. S OLE S OURCE P ROCEDURES Vendor  Is the original equipment manufacturer and there are no regional distributors  Parts or equipment are not interchangeable with similar parts or equipment available from another manufacturer  No other equipment is available that will meet the specialized needs of the division or perform the intended function  Detailed justification is available which establishes beyond a doubt that the vendor is the only source available to provide the item or service required Vendor must complete a “Sole Source Affidavit”  Original signed affidavit must be turned into the Purchasing Department  Purchasing or Legal must approve the Affidavit  Copy of signed affidavit must remain within the Department  All affidavits must be renewed annually

20. P URCHASE O RDERS There are three types of PO’s: Standard - for one time payments Blanket - For recurring purchases, e.g., equipment leases, office supplies, utility bills, etc. Inverted - used when making progress payments, e.g., construction projects If you require a Blanket or Inverted PO, place a comment on the Purchase Req.

21. P URCHASE R EQUISITION P REPARATION

22. R EQUISITION P REPARATION G UIDELINES Reason  Enter reason for purchase  RFB or Quote number/Expiration Date Dell/Calence/SHI/CDW/ BuyBoard By  Your Name  If purchasing for other than yourself (i.e.. Di for Roger) Vendor Number/Name Itemizing Purchases  Invoice Numbers in description

23. C OMMENTS (F20) Justifications for a purchase (e.g. selecting a higher bid) Referencing a Quote # or Purchase Order New Vendor Information Sole Source information

24. U TILIZING E XTENDED D ESCRIPTIONS Use this when Extended Descriptions needed