3.36.050 Procurement of goods and services

3.36.050 Procurement of goods and services.

(1) Application. The provisions of this section are applicable to all purchases of goods and services except the following:

(a) Contracts or agreements to which the state code, ORS Chapters 279A, 279B, and 279C, do not apply.

(b) Contracts, intergovernmental and interstate agreements executed pursuant to ORS Chapter 190 between the city and other public contracting agencies. Such contracts or agreements shall be approved by the city council.

(c) Contracts pursuant to 10 USC Section 381 (relating to law enforcement equipment suitable for counter-drug activities through the Department of Defense), the Electronic Government Act of 2002 (relating to automated data processing equipment, including firmware, software, supplies, support equipment, and services from federal supply schedules), or other federal laws that the city council determines are similar to those acts in effectuating or promoting transfers of property to the city.

(d) Professional, technical and expert contracts governed by NBCC 3.36.060 and other contracts specifically designated as personal service contracts by the city council.

(e) Change orders or contract amendments reasonably related to the scope of work under the original contract up to 25 percent. Change orders or other amendments that increase the initial price of the contract by more than 25 percent must be separately approved by the city council.

(f) Sole source expenditures when rates are set by law or ordinance for purposes of these rules concerning source selection.

(g) Revenue-generating contracts whose primary purpose is generating revenue and are typically awarded to the offeror proposing the most advantageous or highest monetary offer to the city, or both. The city council may designate a particular contract as a revenue-generating contract.

(h) An emergency contract, provided the city administrator adheres to the requirements of ORS 279B.080 or 279C.335(5) and the Attorney General’s Model Public Contracting Rules applicable to this type of contract.

(i) Contracts for sale of advertising in city publications. The right to advertise in city publications may be sold without competitive bidding. The city may utilize this exclusion when it publishes material and wants to recoup part of the cost by selling advertising to be placed in that publication. Revenue generated from the sale of advertising shall be applied to the cost of the publication.

(j) Contracts for public improvements which are governed by NBCC 3.36.080.

(k) Any other contract (including sole source and brand name specification contracts) where the public interest would be promoted by exempting the contract from the competitive bidding process; provided, that the city council adheres to the state code in making the exemption.

(l) The city council finds that use of special procurement procedures for the contracts contained in this section will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts and will result in a substantial cost savings to the city and the public.

(2) Source Selection. The city shall award a public contract for goods and services covered by this chapter using any method authorized by state statute or city code. Such different methods are called “methods of source selection.” Source selection methods include cooperative procurements, competitive sealed bidding, competitive sealed proposals, and small, intermediate, sole source, emergency and special procurements.

(a) Once the appropriate source selection method has been chosen, the city may consider the best method of selecting a contractor within the source selection method it has chosen, provided the method is amenable to such discretion.

(b) The city may employ methods of contractor selection for the procurement of goods and services by using any process authorized by state statute, including multi-tiered processes as set forth in ORS 279.060(6)(b) including, but not limited to:

(i) An award or awards based solely on the ranking of proposals;

(ii) Discussions leading to the best and final offers in which the city may not disclose private discussions leading to the best and final offers;

(iii) Discussions leading to the best and final offers in which the city may not disclose information derived from proposals submitted by competing proposers;

(iv) Serial negotiations, beginning with the highest-ranked proposer;

(v) Competitive simultaneous negotiations;

(vi) Multiple-tiered competition designed to identify, at each level, a class of proposers which fall within a competitive range or to otherwise eliminate from consideration a class of lower rank proposers;

(vii) A multi-step request for proposals requesting the submission of unpriced technical submittals, and then later issuing a request for proposals limited to the proposers whose technical submittals the contracting city had determined to be qualified under the criteria set forth in the initial requests for proposals;

(viii) Any combination of methods set out in subsections (2)(b)(i) through (vii) of this section, or as otherwise adopted by the city council.

(c) The methods of contractor selection identified in the preceding section shall conform to the procedures identified in these rules.

(d) The city administrator or his or her designee is authorized to waive any nonconformity with the rules of contractor selection if he or she determines that the defect was minor and likely would not have an effect on the outcome of the selection process.

(a) The city may award a public contract without competition as a sole source procurement if the city administrator, the city administrator’s designee, or the city council, depending on the amount of the contract, makes a written finding that:

(i) Efficient utilization of existing goods requires the acquisition of compatible goods or services;

(ii) The goods or services required for the exchange of software or data with other public or private agencies are available from only one source;

(iii) The goods or services are for use in a pilot or experimental project;

(iv) Any other findings that support the conclusion that the goods or services are available from only one source.

(b) Negotiation with a sole source contractor is desirable. The city is entitled to negotiate with any sole source provider to obtain a favorable price, terms, or conditions.

(c) Public Notice. The city shall give notice of a determination that the goods or services or class of goods or services are available from only one source when the contract will be greater than $25,000 by publishing a notice at least once in at least one newspaper of general circulation in the area where the contract is to be performed. The public notice shall describe the goods and services to be acquired by a sole source procurement and identify the prospective contractor and include the time due for protests and where. The city shall give such public notice at least seven days before the award of the contract.

(a) The city may award a public contract as an emergency procurement without the use of competitive sealed bidding or competitive sealed proposals as authorized by ORS 279B.050(2) when the requirements of ORS 279B.080 and this rule are met.

(b) The council or person authorizing the emergency procurement shall document the nature of the emergency and describe the method used for the selection of the particular contractor. The city shall encourage competition for emergency procurement to the extent reasonable under the circumstances.

(i) The city administrator or his or her designee may declare the existence of an emergency and authorize the city to enter into an emergency procurement contract under $75,000.

(ii) The city administrator or his or her designee may declare the existence of an emergency and authorize the city to enter into an emergency procurement contract over $75,000.

(A) Following the declaration of emergency, the city administrator or his or her designee shall immediately prepare an ordinance for approval of the emergency procurement contract by the city council at its next regularly scheduled session or as soon as possible thereafter. That contract shall be added to the regular agenda without the need for approval for inclusion on the agenda by the council.

(B) If the council adopts the ordinance, the city will pay for the work required by the contract. If the council disapproves the ordinance, the city will only pay for work performed prior to the date that the council considered the ordinance for approval. If for any reason presentation of the ordinance to the council is delayed, the city still will only be liable for work performed prior to the time when the ordinance was first presented to the council.

(d) Any contract awarded under this section shall be awarded within 60 days.

(e) All emergency procurement contracts awarded when there was no emergency or reasonable perception of emergency are void unless the contract was otherwise valid under another portion of this chapter.

(a) The city may participate in, sponsor, conduct or administer cooperative procurements.

(b) The city may participate in, sponsor, conduct or administer joint cooperative procurements to establish contracts or price agreements for goods or services, as defined in these rules, that use source selection methods substantially equivalent to those set forth in ORS 279B.055, 279B.060, or 279B.085.

(c) The city may participate in, sponsor, conduct or administer permissive cooperative agreements to establish contracts or price agreements for the acquisition of goods or services, as defined in these rules, that use source selection methods substantially equivalent to those set forth in ORS 279B.055 or 279B.060.

(d) The city may participate in, sponsor, conduct or administer interstate cooperative procurements to establish contracts or price agreements for the acquisition of goods or services, as defined in these rules, that use source selection methods substantially equivalent to those set forth in ORS 279B.085 or 279B.060.

(e) The solicitation and award process uses source selection methods substantially equivalent to those identified in ORS 279B.055, 279B.060, or 279B.085 if the solicitation and award process:

(i) Calls for an award of a contract on the basis of a lowest responsible bidder or a lowest and best bidder determination in the case of competitive bids on the basis of a determination of the proposer whose proposal is most advantageous based on evaluation factors set forth in the request for proposals in the case of competitive proposals;

(ii) Does not permit the application of any geographic preference that is more favorable to bidders or proposers who reside in the jurisdiction or locality favored by the preference than the preferences provided in ORS 279A.120(2);

(iii) Uses reasonably clear and precise specifications that promote suitability for the purposes intended and that reasonably encourage competition.

(f) The city shall determine, in writing, whether the solicitation and award process for an original contract arising out of a cooperative agreement is substantially equivalent to those identified in ORS 279B.055, 279B.060, or 279B.085, in accordance with ORS 279A.200(2) and this rule.

(g) Protests. Protests regarding the use of all types of cooperative procurements shall be governed by subsection (10) of this section.

(h) If the city is the administering contracting agency, then:

(i) It may charge a fair and reasonable fee to purchasing contract agencies that represents the excess costs of administering the contract in light of the purchasing contracting agency’s use of that contract.

(ii) Determine whether the purchasing contract agency must enter into a written agreement with it.

(i) If the city is a purchasing contracting agency, it is authorized to pay a fee to the administering contracting agency that the city administrator or his or her designee determines is fair and reasonable in light of all the circumstances surrounding the procurement, including the savings that may be obtained if a cooperative procurement is used, the cost of the procurement in relationship to the fee, and other factors as may be considered.

(a) For procurements of goods and services not exceeding $5,000, the city may award a public contract as a small procurement pursuant to ORS 279B.065. The city may choose any method of selecting such contractors, including, but not limited to, offering the contract to only one firm, or conducting a competition for the contract.

(b) State law prohibits a procurement from being artificially divided or fragmented so as to constitute a small procurement under this section.

(c) Notwithstanding any other provisions of this chapter, small procurements shall not be amended beyond $5,000 without prior approval of the city administrator.

(a) For procurements of goods and services not exceeding $150,000, the city may award a public contract as an intermediate procurement pursuant to ORS 279B.070. A procurement shall not be artificially divided or fragmented so as to constitute an intermediate procurement under this section.

(i) For procurement of goods and services that cost $50,000 or less, the city may award a public contract after obtaining three oral price quotations.

(ii) For procurement of goods or services anticipated to cost more than $50,000 up to $150,000, the city may award a contract after obtaining three written quotes, bids or proposals.

(b) For all intermediate procurements, the city shall seek at least three informally solicited competitive price quotations or competitive proposals from prospective contractors, and shall keep written records of the sources of the quotations or proposals received. If three quotations or proposals are not reasonably available, the city may proceed with the procurement, but only after making a written record of the effort made to obtain the quotations or proposals.

(c) The city may negotiate with an offeror to clarify its quote or proposal or to effect modifications that will make the quote or proposal acceptable or make the quote or proposal more advantageous to the city; provided, that all offerors contacted are able to compete on the same basis. The city may procure goods and services by competitive sealed bidding as set forth in the procedures in ORS 279B.055.

(8) Competitive Sealed Proposals. The city may procure goods and services by competitive sealed proposals as set forth in ORS 279B.060.

(9) Special Procurements. The city may award a public contract as a special procurement pursuant to the requirements of ORS 279B.085, which permits class special procurements. Such procurements allow the city to enter into a series of contracts over time without following the requirements of competitive sealed bidding, competitive sealed proposals, or intermediate procurements.

(a) The city council declares the following as classes of special procurements:

(i) Manufacturer-Direct Supplies. The city may purchase goods directly from a manufacturer without competitive bidding if a large volume purchase is required and the cost from the manufacturer is the same or less than the cost the manufacturer charges to its distributors. Procurements of this type are made on a contract-by-contract basis and are not requirement contracts.

(ii) Advertisements. The city may purchase advertising in newspapers and written publications.

(iii) The city may purchase copyrighted materials where there is only one known supplier available for such goods.

(iv) Financial Products. The city may directly purchase financial products such as bond insurance, surety bonds for city bond reserves and liquidity facilities such as letters of lines of credit.

(v) Insurance Contracts. Contracts for insurance, including employee benefit insurance, may be awarded directly to an insurer after the city obtains proposals from an insurance consultant. The consultant shall be selected pursuant to NBCC 3.36.060.

(vi) Purchase of used personal property or equipment. The city may directly purchase used personal property and equipment. Used property and used equipment is property or equipment that has been placed in use by a previous owner or user for a period of time, and which is recognized in the relevant trade or industry, if there is one, as qualifying the personal property or equipment as “used.”

(vii) Hazardous materials removal and oil cleanup. The city may directly acquire services to remove or clean up hazardous material or oil from any vendor when ordered to do so by the Oregon Department of Environmental Quality pursuant to its authority under ORS Chapter 466. In so doing, to the extent reasonable under the circumstances, the city will encourage competition by attempting to obtain informal price quotations or proposals from potential suppliers of goods and services.

(viii) Amendments to contracts and price agreements. The city may execute contract amendments in the following circumstances:

(A) When an original valid contract exists between the parties.

(B) When unit prices or “add alternates” were provided in a solicitation document that established the cost basis for the additional work or product, or in a lump sum contract the contract has provided an estimate of additional cost which has been verified by the city.

(D) When the original contract was let pursuant to an emergency declared under this chapter.

(E) When the additional work is required by reason of existing regulations or ordinances of federal, state or local agencies dealing with the prevention of environmental pollution and the preservation of natural resources that affect the performance of the original contract and such regulations or ordinances either were not cited in the original contract, or were enacted or amended after submission of the successful bid or proposal.

(ix) Use of Existing Contractor. When a public improvement is in need of minor alteration, repair or maintenance at or near the site of work being performed by another city contractor, the city may hire that contractor to perform the work.

(x) Contracts for the disposal of surplus property that was originally acquired by the city as unclaimed property under the provisions of ORS 98.245.

(b) The city shall give public notice of (i) its request for approval, and (ii) the city’s approval of the special procurement in a similar manner as provided for in the public notice of competitive sealed bids under ORS 279B.055(4). The public notice shall describe the goods or services or class of goods or services to be acquired through the special procurement. The city shall give public notice of its request for approval of the special procurement at least 14 days prior to the approval of the special procurement by the city council.

(c) If the city plans to conduct competitive special procurement, it shall give notice of intent to award to all prequalified offerors who sought the award of a contract in the manner provided for competitive sealed bids.

(10) Legal Remedies. Any protest of an action by this city under this section of this chapter for a violation of these rules or ORS Chapter 279A or 279B will be administered pursuant to ORS 279B.400 through 279B.425 and OAR 137-047-0700 through 137-047-0760, which are made a part of this chapter by this reference. (Ord. 1976 § 2, 2010; Ord. 1933 § 5, 2005)