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PURCHASING POLICY AND PROCEDURES

Approved by council, March 9, 2004

Purpose:

The purpose of the Purchasing Policy and Procedures is to provide a means for the acquisition of supplies and services that are required for the operations of the City of Lake Worth.

Responsibility:

 Each city employee authorized to purchase supplies, equipment or services must be familiar with the purchasing procedures and should adhere to them in order to obtain the best results. 

 This policy will not answer all questions, but will be used as a guide and aid in securing materials and services needed to operate each department.

Duties of the Finance Department

1.0             To observe and enforce the procedures as outlined and any related regulations.

2.0             To encourage that the purchasing policies and procedures are followed whenever possible.

3.0             To review each account being charged for sufficient funds before authorizing a purchase or issuing a purchase order.

4.0             To process approved request to purchase and issue purchase orders.

5.0             To explore the possibilities of quantity buying in order to take full advantage of discounts.

6.0             To assist in disposal  of surplus, obsolete, worn-out scrap material at city sales or other methods.

7.0             To maintain a listing of vendors, classified according to materials, equipment, supplies, and services. To advise vendors the proper procedure in which they may be placed on the vendors list.

8.0             To coordinate the preparation of all formal bid specifications to ensure minimum requirements and non-exclusion before submission to the City Council or mailing.

9.0             To assist with opening of bids at a designated time and prepare a tabulation of the results.

10.0         To review the bids received and, with the Department Head determine the lowest most responsible bidder or the bidder whose bid gives the “best value” to the city.

11.0         To complete a bid memorandum with the Department Head’s consent, making a recommendation to award the bid.

12.0         To turn in the bid tabulation, along with a memorandum addressed to the City Manager for recommendation to award the bid, to the City Secretary for inclusion on the City Council agenda.

Duties of Department Heads

1.0    Departments should plan their work so that “rush orders” and emergencies will be held to an absolute minimum.  The Purchasing Division should be notified for formal bid requests far enough in advance to allow sufficient time to obtain quotes through the proper bid procedures.

2.0     In the event that sufficient funds do not exist in a line item to cover a purchase request, the Department Head must complete and submit to the Director of Finance written line item adjustment correcting insufficient accounts.

3.0        Department Heads must sign and verify all invoices.

4.0     No city employee shall purchase supplies, material or equipment of any kind through the City for personal use.

5.0     Minimum specifications on all formal bids must be submitted to the Director of Finance for review and finalization.

Purchase Orders:

 A purchase order number is required on all purchases over $500, with the exception of those listed below.  The Department Head, or an authorized employee must present a requisition to the Finance Department and request a purchase order before proceeding to the vendor’s place of business or placing an order.

 If an emergency should arise after normal hours, the Department Head or designee will make the purchase that is needed, The Department Head must notify the Director of Finance immediately upon opening the next business day and turn in the proper documentation.

 The following payments and services do not require the issuance of a purchase order for payment authorization.

1. Tax Payments

2. Insurance Premium Payments

3. Retirement System Payments

4. Debt Service Payments

5. Investment Payments

6. Utility Services and Cell Phone/Pager Payments

7. Petty Cash fund purchases

8. Operating Leases/Maintenance Agreements

9. Annual Contracts

10.  Invoices for Professional Services (i.e. Attorney Fees and Engineering)

11.  Payments made for Employee Payroll Deductions

12.  Inter-local Agreements

13.  Reimbursements/Payments to other Agencies

14.  Contract Services

15.  When a Check Request Form is used

16.  Travel and Lodging

17.  Items/Services acquired through the competitive bid process

18.  Customer Deposit Refunds

19. Purchases under $500.00

Purchase Dollar Limits and Authorization Required:

The following dollar limits and authorization requirements are to be followed whenever possible.  Any exceptions shall be noted and approved by the appropriate authorization on the invoice. Employees are encouraged to use the City's purchase card based upon the limit that is assigned to each individual.  See attached quick reference sheet.

Purchases of $.01 to $50.00

1. May be purchased using the purchase card or by using petty cash

2. Requires Department Head approval

3. No Purchase Order Required

Purchases of $50.01 to $500.00

1. May be purchased using the purchase card

2. Requires Department Head approval

3. No Purchase Order Required

Purchases of $500.01 to $1,500.00

1. May be purchased using the purchase card

2. Requires 3 telephone quotes or catalog quotes

3. Requires Department Head approval

4. Requires Director of Finance approval

5. Purchase Order Required

Purchases of $1,500.01 to $5,000.00

1. May be purchased using the purchase card

2. Requires 3 written quotes (must be supplied by the vendor - not from catalog or internet)

3. Requires Department Head approval

4. Requires Director of Finance approval

5. Purchase Order Required

Purchases of $5,000.01 to $24,999.99

1. May be purchased using the purchase card

2. Requires 3 written quotes (must be supplied by the vendor - not from catalog or internet)

3. Requires Department Head approval

4. Requires Director of Finance approval

5. Requires City Manager approval

6. Purchase Order Required

Purchases $25,000 or more

1. May be purchased using the purchase card

2. Requires competitive bids/proposals as required by state law

3. Requires Department Head approval

4. Requires Director of Finance approval

5. Requires  City Manager approval

6. Requires Council approval

7. Purchase Order required if requested by vendor

The Requisition Process:

Requisitioning is formally requesting that a purchase be made and the issuance of a purchase order. It is the first step after the need for a good or a service is recognized. It includes a system of authorization and safeguards so that improper or illegal purchasing is difficult both to initiate and to conceal. 

The requisition form must be signed by the Department Head before it is forwarded to the Finance Department to receive a purchase order.

The requisition form originates in the using department.  Preparation must be done far enough ahead of the date that the goods/services are needed to allow sufficient time for processing including;

 Attach quotes to the requisition and forward to Finance.

Use of Cooperative Purchasing Agreements:

 Whenever possible the City of Lake Worth will utilize cooperative purchasing agreements.   Cooperative purchasing agreements are normally agreements that will include a list of items that have already been through the bids process and the lowest or best qualified bidders have been approved.  Listed below are examples of authorized purchasing agreements.  However, the City is not limited to only those listed.

1.      Houston Galveston Area Council of Governments (HGAC)

2.      Texas Association of School Boards (TASB)

3.      Tarrant County Purchasing

4.      State of Texas

Single Source Purchases:

From time to time certain items and/or services may qualify as a "single" source item, meaning that the item being requested is available from only one source.  In these cases, any requirements for quotes will not apply.

PURCHASING POLICY QUICK REFERENCE

Note: all categories are eligible to be purchased with purchase card