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Ordinance 23-013 federal procurement CITY OF SPOKANE VALLEY SPOKANE COUNTY, WASHINGTON ORDINANCE NO.23-013 AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON, AMENDING TITLE 3 OF THE SPOKANE VALLEY MUNICIPAL CODE RELATING TO FEDERALLY-FUNDED PROCUREMENT THRESHOLDS AND PROCEDURES,AND OTHER MATTERS RELATED THERETO. WHEREAS, Title 3 of the Spokane Valley Municipal Code (SVMC) regulates Revenue and Finance, and establishes procurement procedures for the City to acquire goods and services; and WHEREAS, federal laws and regulations have specific thresholds and procedures that apply to procurement of goods and services,which the City follows when utilizing federal funds; and WHEREAS, the amendments contained herein document the thresholds and procedures established in 2 CFR 200.318 2 CFR 200.327 that apply to the City. NOW, THEREFORE, the City Council of the City of Spokane Valley, Washington ordains as follows: Section 1. Purpose. The purpose of this Ordinance is to amend Title 3 SVMC to formally document thresholds and procedures when utilizing federal funds. Section 2. Amendment. SVMC 3.35.005, 3.40.010, 3.41.010, 3.41.040,3.42.010, 3.42.020, 3.45.020,3.46.010,3.47.010,3.47.020, 3.47.030, and 3.48.010,are amended as follows: 3.35.005—Definitions. The terms defined in SVMC 3.35.005 shall apply to Chapters 3.35,3.36, 3.40,3.41, 3.42, 3.45, 3.46, 3.47, 3.48,and 3.49 SVMC and shall have the following meanings: "Architectural and engineering services" means professional services rendered by any person, other than an employee of the City, contracting to perform activities within the scope of the general definition of professional practice in Chapter 18.08, 18.43, or 18.96 RCW. "Bid"means an offer submitted by a bidder to furnish services,labor,supplies,materials,goods,equipment, and other property in conformity with the specifications, delivery terms, and conditions, and other requirements included in the invitation for bids or otherwise required by the City. "Bid bond"means a bond or other appropriate bid proposal deposit as approved in advance by the City,the purpose of which is to provide security to the City in the event the successful bidder fails to enter into a contract with the City. "Bidder"means a firm or individual who regularly maintains a place of business,transacts business,solicits business, or maintains an inventory of merchandise for sale in, and whose business is registered with, the City and who submits or has submitted a bid to the City. "Bidding" means the procedure used to solicit quotations on price and delivery from prospective suppliers of contractual services, materials, goods, and equipment which can be through either a formal or informal competitive bid process. "Capital equipment" means any equipment of the City having an initial value of$5,000 or more and an estimated useful life of three or more years. Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 1 of 18 "Change orders" and "requests for additional work" mean a request for additional or alternative services, work or procurement where there are changed conditions, a requirement that extra work or service be performed, or such other circumstances that necessitate a modification to the contract, and where such additional or alternative services,work, or procurement is in the best interest of the City. "City manager"means the city manager or designee. "City property" means any property or equity interest in real or personal property held or owned by the City. "Consultant" means any person providing professional services to the City who is not an employee of the City. "Contractual services"means services provided by professional and general service contracts to accomplish a particular project or service. "Federal micro-purchase threshold" means the dollar amount at or below which the City may purchase property or services using federal micro-purchasing procedures pursuant to 2 CFR 200.320 and chapter 3.36 SVMC. Under no circumstance can the City's federal micro-purchase threshold exceed the dollar values established in 48 CFR Part 2, Subpart 2.1 (micro-purchase threshold), $10,000; except as follows: 1. For acquisitions of construction subject to 40 U.S.0 chapter 31,subchapter IV,Wage Rate Requirements (Construction), $2,000; 2.For acquisitions of services subject to U.S.0 chapter 67, Service Contract Labor Standards, $2,500; 3.For acquisitions of supplies or services that,as determined by the City Manager,are to be used to support a contingency operation;to facilitate defense against or recovery from cyber,nuclear, biological,chemical, or radiological attack; or to support response to an emergency or major disaster (42 U.S.C., 5122), as described in 13.201(g)(1), except for construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) (41 U.S.0 1903),$20,000; 4. For acquisitions of supplies or services from institutions of higher education (20 U.S.C. 1001(a)) or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes, $10,000,or such higher threshold as determined appropriate by the City Manager consistent with clean audit findings under 31 U.S.C. chapter 75, Requirements for Single Audits; an internal City risk assessment; or Washington state law. "Federal simplified acquisition threshold" means the dollar amount below which the City may purchase property or services using small purchase methods to expedite purchase of items at or below the federal simplified acquisition threshold while using federal funding. In no circumstances can the City's threshold exceed the dollar values established in 48 CFR Part 2, Subpart 2.1 (simplified acquisition threshold), $250,000;except the dollar value is$800,000 for acquisitions of supplies or services that,as determined by the City Manager,are to be used to support a contingency operation;to facilitate defense against or recovery from cyber,nuclear,biological, chemical,or radiological attack; or to support response to an emergency or major disaster(42 U.S.C. 5122), (41 U.S.0 1903). "Lowest responsible bidder" means the responsible bidder who submits the lowest bid; or if all of the criteria set forth in RCW 35.23.352(2) are met, the responsible bidder who submits the second lowest bid, provided the bid is within five percent of the lowest bid and the second lowest bidder meets the same criteria as the lowest bidder. Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 2 of 18 "Person" means any individual, organization, group, association, partnership, firm, joint venture, corporation, or any combination thereof. "Public work"has the meaning set forth in RCW 39.04.010, as adopted or may be amended. "Purchase" means the acquisition of supplies,materials, goods or equipment, and other property. "Purchase order" means a written authorization calling on a vendor or supplier to furnish supplies, materials,goods,equipment,and other personal property to the City with a promise for payment to be made later. "Purchasing agent" means a person who purchases supplies, materials, goods, equipment, and other property on behalf of the City. "Requisition" means a standard form providing detailed information as to quantity, description, estimated price, possible vendors, fiend account, signature, and other information necessary to make purchasing decisions. "Responsible bidder"means a bidder who meets the requirements set forth in RCW 39.04.350 as adopted or may be amended. Additionally, a bidder shall prove by experience or information furnished to the satisfaction of the city manager that current financial resources, production or service facilities, service reputation and experience are adequate to make satisfactory delivery of supplies of acceptable quality, equipment, or contractual services and who has not violated or attempted to violate any provision of Chapter 3.35 SVMC. In addition to price,the City shall take into account the following when determining the responsible bidder: 1. The ability, capacity, and skill of the bidder to perform the contract or provide the service required; 2. The character, integrity, reputation,judgment, experience, and efficiency of the bidder; 3. Whether the contractor can perform the required work within the time specified by the City; 4. Quality of the contractor's performance under previous contracts with the City or other governmental entity; and 5. The previous and existing compliance by the contractor with laws relating to contracts or services with the City. The five supplemental criteria described above shall be included in the documents for all bids so prospective bidders may be aware of such supplemental criteria. The City may include additional supplemental criteria as provided in RCW 39.04.350 for particular projects as is determined necessary. 3.40.010—Competitive bidding—Public work in excess of$350,000. Except as required by federal law and chapter 3.36 SVMC,for public work contracts in excess of$350,000, or such amount as provided pursuant to RCW 39.04.155 as adopted or may be amended, the following competitive bid process shall be used. A. Publication of Notice. Sealed bids shall be invited by a single publication in a newspaper of general circulation at least 13 days before the date and time set for receiving such bids,and shall include an estimate of the probable cost, together with a description of the work, and shall state that plans/specifications may be obtained from the City, and include the manner, place, date, and time for submitting a bid to the City. The city clerk shall also post notice of the request in a public place. Ordinance 23-013 Amending Title 3 SVMC Federally-Funded Procurement Page 3 of 18 B. Rejection of Bids.The city manager may reject,without cause,any and all bids and may re-advertise for bids pursuant to the procedures herein described. If no bids are received on the first call or any subsequent re-advertisement, the city manager may negotiate a contract with a contractor at the lowest cost possible to the City. C. Performance and Payment Bonds.Before entering into a contract for any public work or work by contract on which prevailing wage is required to be paid, regardless of the amount of such contract except as provided below, a performance bond and a payment bond shall be required in such amounts as are reasonably necessary to protect the best interests of the City and to ensure complete, proper and full performance of the contract and full payment of all laborers, mechanics, and subcontractors and material suppliers. A performance bond and a payment bond shall be required on all public work projects pursuant to RCW 39.08.010 through 39.08.030, as adopted or amended. Performance and payment bonds shall be released upon completion of all necessary performance and payment conditions. Pursuant to RCW 39.08.010, for certain public works and works by contract on which prevailing wage is required to be paid, at the contractor's option, the City may, in lieu of requiring payment and performance bonds, retain a percentage of the contract amount until the later of 30 days after final acceptance or until receipt of all necessary releases from the Washington State Department of Revenue, the Employment Security Department, and the Washington State Department of Labor and Industries and settlement of any labor,material,or tax liens filed pursuant to Chapter 60.28 RCW.This option is only available for contracts at the amount set forth in RCW 39.08.010 as adopted or hereafter amended. The amount retained by the City shall be the amount as set forth in RCW 39.08.010. Retainage in lieu of payment and performance bonds may only be used by the City for contracts when the requirement of bonds substantially increases the cost of the contract. D. Bid Bonds. As a condition of bidding, a bid bond in the amount of five percent of the bid amount shall be required. Such bid bond shall be required on all formally bid public work construction projects,and shall be due at such time as the bid is submitted to the City. When the contract is let, all bid bonds shall be returned to the bidders except that of the successful bidder,which shall be retained until a contract is entered into and a bond to perform the work furnished as provided above. If the successful bidder fails to enter into the contract in accordance with the bid within 10 days from the date at which the bidder is notified of bid award, the bid bond shall be forfeited. E. Bid Protest. SVMC 3.40.010 shall apply to all public works bids. The City shall comply with the bid request and bid protest procedures set forth in RCW 39.04.105, as adopted or amended. F. Award of Bid. Except as otherwise provided herein,the City will accept the bid of the lowest responsible bidder. If no proposals are received, City staff shall not be required to resubmit for additional proposals, but may negotiate with any available contractor. G. Award to Other Than Low Bidder. When the bid award is not given to the lowest responsible bidder, a full and complete statement of the reasons shall be prepared by the city manager and placed in the City file relating to the transaction. 3.41.010--Small works roster. Except as required by federal law or chapter 3.36 SVMC,the following requirements apply. A. The city clerk shall maintain one or more small works rosters comprised of contractors who (A) have requested to be on the roster, and(B)are properly licensed or registered to perform contracting work in the state of Washington. The city clerk may maintain the small works roster(s) by (1) contracting with public or private entities to maintain such roster(s) on behalf of the City, or (2) through compliance with the Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 4 of I procedures set forth in Chapter 3.41 SVMC. Use of a small works roster by contract shall comply with the procedures set forth in state law. Use of a small works roster by contract shall not excuse performance with any other contracting requirements of Chapter 3.41 SVMC or state law, such as requirements for performance and payment bonds. B.A small works roster may be used in lieu of formal sealed competitive bid procedures to award contracts for public work where the estimated cost of the work is$350,000 or less, or such other amount as set forth in RCW 39.04.155 as adopted or amended. Small works rosters shall be maintained pursuant to the laws of the state of Washington as now enacted or hereafter amended. 3.41.040—Use of small works rosters. A. Except as required by federal law or chapter 3.36 SVMC, the City may utilize a small works roster when seeking to construct any public work or improvement with an estimated cost including labor,material, supplies,and equipment of$350,000 or less,or such other amount as set forth in RCW 39.04.155 as adopted or may be amended. B. Procedures shall be established for securing quotations from contractors on the appropriate small works roster to ensure that a competitive price is established and to award contracts to the lowest responsible bidder, as provided in SVMC 3.41.040(C). Invitations for bids shall include the scope and nature of the work to be performed as well as materials and equipment to be furnished.Detailed plans and specifications need not be included in the invitation. Quotations shall be invited from all appropriate contractors on the appropriate small works roster. C. When awarding a contract for work from a small works roster, the City shall award the contract to the lowest responsible bidder. However, the City reserves the right under applicable law to reject any or all bids and to waive procedural irregularities in the bid or bidding process. D. The City may receive bids in writing, which may be submitted electronically. The time and date of receipt shall be recorded to ensure all bids are presented in a timely fashion for review and consideration. After expiration of the time and date for submission of all bids or quotations,the City shall review the bids submitted and either offer a contract to perform the public work or reject all bids. If no proposals are received, City staff shall not be required to resubmit for additional proposals, but may negotiate with any available contractor. E. The City shall comply with applicable state law requirements to equitably distribute bids to qualified contractors. F. Immediately after an award is made, the bid quotations obtained shall be recorded, open to public inspection, and available by telephonic or electronic request. G. The City shall post on the City's website a list of the contracts awarded pursuant to Chapter 3.41 SVMC at least once every year. The list shall contain the name of the contractor or vendor awarded the contract, the amount of the contract, a brief description of the type of work performed or items purchased under the contract and the date it was awarded. The list shall also state the location where the bid quotations for these contracts are available for public inspection. H.A contract awarded from a small works roster under Chapter 3.41 SVMC need not be advertised in a legal newspaper of general circulation. Immediately after an award is made, the bid quotations shall be recorded, open to public inspection, and available by telephone inquiry. I. Performance and Payment Bonds.Before entering into a contract for any public work or work by contract on which prevailing wage is required to be paid, regardless of the amount of such contract except as Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 5 of 18 provided below, a performance bond and a payment bond shall be required in such amounts as are reasonably necessary to protect the best interests of the City and to ensure complete, proper and full performance of the contract and full payment of all laborers, mechanics, and subcontractors and material suppliers. A performance bond and a payment bond shall be required on all public work projects, as provided for and in the manner set forth in RCW 39.08.0I0 through 39.08.030, as adopted or amended. Performance and payment bonds shall be released upon completion of all necessary performance and payment conditions. Pursuant to RCW 39.08.010, for certain public works and works by contract on which prevailing wage is required to be paid, at the contractor's option,the City may, in lieu of requiring payment and performance bonds, retain a percentage of the contract amount until the later of 30 days after final acceptance or until receipt of all necessary releases from the Washington State Department of Revenue, the Employment Security Department, and the Washington State Department of Labor and Industries and settlement of any labor,material,or tax liens filed pursuant to Chapter 60.28 RCW.This option is only available for contracts at the amount set forth in RCW 39.08.010 as adopted or hereafter amended. The amount retained by the City shall be the amount as set forth in RCW 39.08.010. Retainage in lieu of payment and performance bonds may only be used by the City for contracts when the requirement of bonds substantially increases the cost of the contract. 3.42.010—Public work equal to or less than $75,000 for one trade and $116,155 for two or more trades and greater than $25,000. Except as required by federal law or chapter 3.36 SVMC, the following requirements apply. When entering into a contract for public work equal to or less than $75,000 if only one trade or craft is involved, or$116,155 if two or more trades are involved, or such other maximum amounts as set forth in RCW 35.23.352 as adopted or may be amended, but greater than$25,000,the responsible department shall obtain three or more proposals for the public work required, select the lowest responsible proposal, and maintain a record of the process followed.Alternatively, the department may utilize the small works roster and process pursuant to Chapter 3.41 SVMC. If less than three proposals are received, City staff shall not be required to resubmit for additional proposals, but shall select from the proposals submitted. If no proposals are received, City staff shall not be required to resubmit for additional proposals, but may negotiate with any available contractor. 3.42.020—Public work equal to or less than $25,000. Except as required by federal law or chapter 3.36 SVMC,when entering into a contract for public work in an amount equal to or less than $25,000,the responsible department is encouraged, but is not required, to use a competitive bidding process, including obtaining three proposals pursuant to SVMC 3.42.010, or using the small works roster and process pursuant to Chapter 3.41 SVMC. If a competitive process is not utilized,the responsible department shall seek to achieve maximum quality at minimum cost by making an award based on its experience and knowledge of the market. 3.45.020 — Selection process — Consultant roster for architectural and engineering services for contracts up to$100,000—Request for qualifications for contracts over$100,000. Except as required by federal law or chapter 3.36 SVMC,the following requirements apply. A. For contracts up to $100,000, the City may use the consultant roster for architectural and engineering services, or may use the formal request for qualifications process pursuant to SVMC 3.45.020(B)to select a consultant. Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 6 of 18 B. For contracts over $100,000, the City shall, at least 13 days prior to contracting for architectural or engineering services, publish a notice stating the specific project or scope of work or announce generally the category or type of professional services required. The notice shall contain the name and address of a City representative who can provide information and details on the request for qualifications or request for proposals. 3.46.010—Contracts for services. Except as required by federal law or chapter 3.36 SVMC,the following requirements apply. A. Chapter 3.46 SVMC shall not apply to architectural and engineering services,the procurement of which is governed by Chapter 3.45 SVMC. B. When entering into a contract for services where the contract is expected to exceed $200,000, a competitive selection process shall be used. This process may include a "request for qualifications" or "request for proposals" process or formal competitive bidding procedures pursuant to SVMC 3.40.010. C. When entering into a contract for services where the contract is not expected to exceed $200,000 but is expected to be greater than$25,000,the responsible department shall obtain three or more proposals for the services required, and maintain a record of the process followed. The responsible department may use the consultant roster pursuant to SVMC 3.46.020 to obtain proposals. D. When entering into a contract for services where the contract is not expected to exceed $25,000, the responsible department is encouraged, but is not required,to use a competitive selection process, such as obtaining three proposals pursuant to SVMC 3.46.010(C). If a competitive process is not utilized, the responsible department shall seek to achieve maximum quality at minimum cost by making an award based on its experience and knowledge of the market. 3.47.010—Purchases of goods greater than $100,000. Except as required by federal law or chapter 3.36 SVMC,the following requirements apply. A. When making a purchase of goods, equipment, or supplies in excess of $100,000, the responsible department shall,at least 13 days prior to purchasing such goods,publish a notice of request for bids stating the written specifications of the goods required and desire of the City to purchase such goods. The notice shall contain the written specifications, the date for submitting bids, and name and address of the City representative who can provide information on the request for bids. Upon receipt of the written bids, the City shall select and purchase the goods from the vendor submitting the lowest bid; provided,that such bid meets all specifications provided in the notice. When determining the lowest bid, the City may take into account sales tax revenues received by the City, shipping, and transportation costs. All purchases of goods in the amount of$2,500 or more shall also comply with SVMC 3.48.030. B. For purposes of this section, the threshold limits shall only apply to a single good, piece of equipment, or supply item. 3.47.020—Purchases of goods equal to or less than$100,000 and greater than$25,000. Except as required by federal law or chapter 3.36 SVMC,the following requirements apply. A. When making a purchase of goods, equipment, or supplies equal to or less than $100,000, but greater than $25,000, the responsible department shall obtain three or more quotes for the goods, equipment, or supplies required,select and purchase the goods from the vendor submitting the lowest quote,and maintain a record of the process followed. Alternatively, the department may utilize the vendor list and process set forth in Chapter 3.48 SVMC. The department may consider quotes by any vendor with which the City has Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 7 of 18 a vendor account as one of the three required quotes. City staff may take verbal quotes and reduce them to writing. When determining the lowest quote, the City may take into account local sales tax revenues, shipping, and transportation costs. If less than three quotes are received, City staff shall not be required to resubmit for additional quotes, but shall select from the quotes submitted. All purchases of goods in the amount of$2,500 or more shall also comply with SVMC 3.48.030. B. For purposes of this section, the threshold limits shall only apply to a single good, piece of equipment, or supply item. 3.47.030—Purchases of goods equal to or less than$25,000. Except as required by federal law or chapter 3.36 SVMC, the following requirements apply. When purchasing goods,equipment,or supplies in an amount equal to or less than$25,000,the responsible department is encouraged, but is not required, to use a competitive selection process, including obtaining three quotes pursuant to SVMC 3.47.020, or using the vendor list and process set forth in Chapter 3.48 SVMC. The responsible department shall contact vendors at least once annually to establish prices on common items that may be purchased in bulk. Such prices may be used when determining the threshold limits for purposes of Chapter 3.47 SVMC.A City department may aggregate a group of common items so long as each of such items individually is less than $25,000, Any individual items greater than $25,000 shall be bid pursuant to SVMC 3.47.010 or 3.47.020. If a competitive process is not utilized, the responsible department shall seek to achieve maximum quality at minimum cost by making an award based on its experience and knowledge of the market. All purchases of goods in the amount of$2,500 or more shall also comply with SVMC 3.48.030. 3.48.010—Use of vendor list. Except as required by federal law or chapter 3.36 SVMC, the following requirements apply. A vendor list is authorized and maintained for the purchase of goods,equipment,and supplies in an amount less than $40,000. The vendor list shall be maintained by the city clerk. Alternatively, the city clerk may maintain the vendor list by contracting with public or private entities to maintain such list(s) on behalf of the City. Section 3. New chapter. Chapter 3.36 SVMC is hereby adopted as follows: 3.36 Federally-funded Procurement 3.36.0.10—General Federally-funded Procurement Standards. When procuring property and services under a federal award, the City shall follow the same policies and procedures it uses for procurements from its non-federal funds, including following the procurement standards in SVMC 3.36.010 through 3.36.100, and 2 CFR 200.318 through 200.327. (A)The City shall develop documented procurement procedures, consistent with applicable State,and City laws and regulations for the acquisition of property or services required under a federal award or subaward. (B) The City shall maintain oversight to ensure that contractors perform pursuant to the terms, conditions, and specifications of their contracts or purchase orders with the City. (C) The City shall maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award, and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 8 of 18 when the employee, officer, or agent, any member of his or her immediate family,his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract.The officers,employees, and agents of the City may neither solicit nor accept gratuities,favors, or anything of monetary value from contractors or parties to subcontracts. However, the City may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the City. (D)The City's procedures shall avoid acquisition of unnecessary or duplicative items.Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach. (E)To foster greater economy and efficiency,and pursuant to efforts to promote cost-effective use of shared services across the Federal Government, the City may enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. (F) The City should use federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. (G) The City should use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions.Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. (H)The City shall award contracts to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity,compliance with public policy,record of past performance,and financial and technical resources. (I) The City shall maintain records sufficient to detail the history of procurement. These records will include,but are not limited to, the following: rationale for the method of procurement, selection of contract type,contractor selection or rejection,and the basis for the contract price. (J)For time and materials contracts, the following applies: (1) The City may use a time-and-materials type contract only after determining that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk. Time-and-materials type contract means a contract whose cost to the City is the sum of: (a)The actual cost of materials; and (b) Direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses,and profit. (2) Since this formula generates an open-ended contract price, a time-and-materials contract provides no positive profit incentive to the contractor for cost control or Iabor efficiency.Therefore, each contract must set a ceiling price that the contractor exceeds at its own risk. Further,the City shall assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. Ordinance 23-013 Amending Title 3 SVJvIC—Federally-Funded Procurement Page 9 of 18 (K)The City is responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes, and claims. These standards do not relieve the City of any contractual responsibilities under its contracts.The federal awarding agency will not substitute its judgment for that of the City unless the matter is primarily a federal concern. Violations of law will be referred to the local, state, or federal authority having proper jurisdiction. 3.36.020—Competition In Federally-funded Procurements. (A)All procurement transactions for the acquisition of property or services required under a federal award shall provide full and open competition consistent with the standards of SVMC 3.36.020 and SVMC 3.36.030. (B) To ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements,statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to: (1) Placing unreasonable requirements on firms in order for them to qualify to do business; (2) Requiring unnecessary experience and excessive bonding; (3)Noncompetitive pricing practices between firms or between affiliated companies; (4)Noncompetitive contracts to consultants that are on retainer contracts; (5) Organizational conflicts of interest; (6) Specifying only a"brand name" product instead of allowing "an equal" product to be offered and describing the performance or other relevant requirements of the procurement; and (7)Any arbitrary action in the procurement process. (C) The City prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals, except where applicable federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified films,given the nature and size of the project, to compete for the contract, (D) The City shall have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product,or service to be procured. Such description must not, in competitive procurements,contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary,must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "brand name or equivalent" description may be used as a means to define the performance or other salient requirements of procurement.The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. (E)The City shall ensure that all prequalified lists of persons,firms,or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 10 of 18 competition. Also, the City shall not preclude potential bidders from qualifying during the solicitation period. (F) Noncompetitive procurements can only be awarded in accordance with SVMC 3.36.030 and 2 CFR 200.320. 3.36.030—Methods of procurement to be followed in Federally-funded Procurement. The City shall use the following procurement procedures for the acquisition of property or services required under a federal award or sub-award. (A) Informal procurement methods. When the value of the procurement for property or services under a federal award does not exceed the federal simplified acquisition threshold or a lower threshold established by the City,formal procurement methods are not required.The City may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the federal simplified acquisition threshold include: (1)Micro-purchases: (a) Distribution. The acquisition of supplies or services, the aggregate dollar amount of which does not exceed the federal micro-purchase threshold. To the maximum extent practicable, the City should distribute micro-purchases equitably among qualified suppliers. (b) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the City considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly.Purchase cards can be used for micro-purchases if procedures are documented and approved by the City. (c) Micro-purchase thresholds. The City shall determine and document an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micro-purchase threshold used by the City must be authorized or not prohibited under State or local laws or regulations. The City may establish a threshold higher than the federal threshold established in the Federal Acquisition Regulations (FAR) pursuant to SVMC 3.36.030(A)(1)(d) and SVMC 3.36.030(A)(I)(e), (d) City increase to the micro-purchase threshold up to $50,000. The City may establish a threshold higher than the micro-purchase threshold identified in the FAR pursuant to SVMC 3.36.030(A)(1)(d).The City may self-certify a threshold up to$50,000 on an annual basis and must maintain documentation to be made available to the federal awarding agency and auditors pursuant to 2 CFR 200.334. The self-certification shall include a justification, clear identification of the threshold, and supporting documentation of any of the following: (i) A qualification as a low-risk auditee, in accordance with the criteria in 2 CFR 200.520 for the most recent audit; (ii) An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or, Ordinance 23-013 Amending Title 3 SVMC—FederalIy-Funded Procurement Page 11 of 18 (iii)A higher threshold consistent with State law. (e) Non-Federal entity increase to the micro-purchase threshold over $50,000. Micro- purchase thresholds higher than$50,000 must be approved by the federal cognizant agency for indirect costs.The City shall submit a request with the requirements included in SVMC 3.36.030(A)(1)(d).The increased threshold is valid until there is a change in status in which the justification was approved. (2) Small purchases: (a) Small purchase procedures.The acquisition of property or services,the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the City. (b) Simplified acquisition thresholds. The City shall be responsible for determining an appropriate federal simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the City shall be authorized or not prohibited under State, or local laws or regulations. (B) Formal procurement methods. When the value of the procurement for property or services under a federal financial assistance award exceeds the federal simplified acquisition threshold,or a lower threshold established by the City, formal procurement methods are required. Formal procurement methods require following documented procedures. Foimal procurement methods also require public advertising unless a non-competitive procurement can be used pursuant to SVMC 3.36.020 or SVMC 3.36.030(C), below. The following formal methods of procurement shall be used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the City determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract(lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction. (a)In order for sealed bidding to be feasible,the following conditions should be present: (i) A complete, adequate, and realistic specification or purchase description is available; (ii) Two or more responsible bidders are willing and able to compete effectively for the business;and (iii)The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (b) If sealed bids are used,the following requirements apply: (i)Bids must be solicited from an adequate number of qualified sources,providing them sufficient response time prior to the date set for opening the bids, and the invitation for bids must be publicly advertised; (ii) The invitation for bids, which shall include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond; (iii) All bids shall be opened at the time and place prescribed in the invitation for bids, and the bids must be opened publicly; Ordinance 23-013 Amending Title 3 SVMC—FederalIy-Funded Procurement Page 12 of 18 (iv) A firm fixed price contract award shall be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents,factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest.Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (v) Any or all bids may be rejected if there is a sound documented reason. (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals may be used when conditions are not appropriate for the use of sealed bids. They are awarded pursuant to the following requirements: (a) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical; (b) The City shall have a written method for conducting technical evaluations of the proposals received and making selections; (c) Contracts shall be awarded to the responsible offeror whose proposal is most advantageous to the City, with price and other factors considered; and (d) The City may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected,subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms that are a potential source to perform the proposed effort. (C)Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the federal micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the City; or (5)After solicitation of a number of sources, competition is determined inadequate. 3.36.040 — Contracting With Small and Minority Businesses, Women's Business Enterprises, and Labor Surplus Area Firms in Federally-funded Procurement. (A)The City shall take all necessamy affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. (B)Affirmative steps shall include: Ordinance 23-013 Amending Title 3 SVMC Federally-Funded Procurement Page 13 of 18 (1) Placing qualified small and minority businesses and women's business enterprises on solicitation lists; (2) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources; (3) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses,and women's business enterprises; (4)Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and wornen's business enterprises; (5) Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and (6)Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in SVMC 3.36.040(B). 3.36.050—Domestic Preferences In Federally-funded Procurements. (A) As appropriate and to the extent consistent with law,the City should, to the greatest extent practicable under a federal award, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including but not limited to iron, aluminum, steel, cement, and other manufactured products).The requirements of this section shall be included in all subawards including all contracts and purchase orders for work or products under the federal award. (B) For purposes of this section: (1) "Produced in the United States" means, for iron and steel products, that all manufacturing processes,from the initial melting stage through the application of coatings,occurred in the United States. (2)"Manufactured products"means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber. 3.36.060-Use of Recovered Materials In Federally-funded Procurements, The City and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act.The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable,consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded$10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in applicable EPA guidelines. 3.36.070- Contract Cost and Price For Federally-funded Procurements. (A) The City shall perform a cost or price analysis in connection with every procurement action in excess of the federal simplified acquisition threshold including contract modifications. The method and degree of analysis shall depend on the facts surrounding the particular procurement situation,but shall at least include an independent estimate before receiving bids or proposals. Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 14 of 18 (B)The City shall negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed.To establish a fair and reasonable profit, consideration shall be given to the complexity of the work to be performed,the risk borne by the contractor, the contractor's investment,the amount of subcontracting,the quality of its record of past performance,and industry profit rates in the surrounding geographical area for similar work. (C) Costs or prices based on estimated costs for contracts under the federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable for the City pursuant to 2 CFR Part 200 Subpart E.The City may reference its own cost principles that comply with the Federal cost principles. (D)Use of a methodology of cost plus a percentage of cost and percentage of construction cost is prohibited. 3.36.080—Federal Awarding Agency or Pass-through Entity Review. (A) The City shall make available, upon request of the federal awarding agency or pass-through entity, technical specifications on proposed procurements where the federal awarding agency or pass-through entity believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. Such review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the City desires to have the review performed after a solicitation has been developed, the federal awarding agency or pass-through entity may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. (B)The City shall make available upon request, for the federal awarding agency or pass-through entity pre- procurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates,when: (1)The City's procurement procedures or operation fails to comply with the procurement standards in 2 CFR Part 200; (2) The procurement is expected to exceed the federal simplified acquisition threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation; (3) The procurement, which is expected to exceed the federal simplified acquisition threshold, specifies a"brand name" product; (4) The proposed contract is more than the federal simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or (5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the federal simplified acquisition threshold. (C) The City is exempt from the pre-procurement review pursuant to SVMC 3.36.080(B) if the federal awarding agency or pass-through entity determines that its procurement systems comply with these standards. (1)The City may request that its procurement system be reviewed by the federal awarding agency or pass-through entity to determine whether the City's system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high-dollar funding, and third-party contracts are awarded on a regular basis; (2) The City may self-certify its procurement system. Such self-certification shall not limit the federal awarding agency's right to survey the system. Under a self-certification procedure, the Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 15 of 18 federal awarding agency may rely on written assurances from the City that the City is complying with these standards. In such circumstances, the City must cite specific policies, procedures, regulations, or standards as being in compliance with these requirements and have its system available for review by the federal awarding agency or pass-through entity. 3.36.090—Bonding Requirements. For construction or facility improvement contracts or subcontracts exceeding the federal simplified acquisition threshold, the federal awarding agency or pass-through entity may accept the bonding policy and requirements of the City provided that the federal awarding agency or pass-through entity has made a determination that the federal interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows: (A)A bid guarantee from each bidder equivalent to five percent of the bid price. The"bid guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified; (B)A performance bond on the part of the contractor for 100 percent of the contract price. A"performance bond"is one executed in connection with a contract to secure fulfillment of all the contractor's requirements under such contract; and (C)A payment bond on the part of the contractor for 100 percent of the contract price. A"payment bond" is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. 3.36.100—Contract Provisions. In addition to other provisions required by the federal agency or City, all contracts made by the City under the federal award must contain provisions covering the following, as applicable. (A) Contracts for more than the simplified acquisition threshold, which is the inflation adjusted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) as authorized by 41 U.S.C. 1908, must address administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate. (B)All contracts in excess of$10,000 must address termination for cause and for convenience by the City including the manner by which it will be effected and the basis for settlement. (C) Equal Employment Opportunity. Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of"federally assisted construction contract" in 41 CFR Part 60-1.3 must include the equal opportunity clause provided under 41 CFR 60-1.4(b), in accordance with Executive Order 11246, "Equal Employment Opportunity" (30 FR 12319, 12935, 3 CFR Part 1964-1965 Comp., p. 339), as amended by Executive Order 11375, "Amending Executive Order 11246 Relating to Equal Employment Opportunity," and implementing regulations at 41 CFR Part 60, "Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor." (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-federal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C.3141-3144 and 3146-3148)as supplemented by Department of Labor regulations (29 CFR Part 5,"Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction").In accordance with the statute, contractors must Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 16 of 18 be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The City must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The City must report all suspected or reported violations to the federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback"Act(40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The City must report all suspected or reported violations to the Federal awarding agency. (E) Contract Work Hours and Safety Standards Act(40 U.S.C. 3701-3708). Where applicable,all contracts awarded by the City in excess of$100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C.3702 and 3704,as supplemented by Department of Labor regulations(29 CFR Part 5). Under 40 U.S.C.3702 of the Act,each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C.3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence. (F) Rights to Inventions Made Under a Contract or Agreement. If the Federal award meets the definition of "funding agreement" under 37 CFR § 401.2(a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or perfonnance of experimental, developmental, or research work under that "funding agreement,"the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,"and any implementing regulations issued by the awarding agency. (G) Clean Air Act(42 U.S.0 7401-7671q.) and the Federal Water Pollution Control Act(33 U.S.C. 1251- 1387), as amended - Contracts and subgrants of amounts in excess of$150,000 must contain a provision that requires the non-Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act(42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.0 125]-1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA). (H) Debarment and Suspension (Executive Orders 12549 and 12689) - A contract award (see 2 CFR 180.220) must not be made to parties listed on the governrnentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp.,p. 189) and 12689 (3 CFR part 1989 Comp., p, 235), "Debarment and Suspension." SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. (I) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) - Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency,a member of Congress,officer or employee of Congress, Ordinance 23-013 Amending Title 3 SVMC Federally-Funded Procurement Page 17 of 18 or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award. (J) SVMC 3.36.060 related to use of recovered materials in federally-funded procurements. (K) Prohibition on certain telecommunications and video surveillance services or equipment pursuant to 2 CFR § 200.216. (L) SVMC 3.36.050 related to domestic preferences in federally-funded procurements. Section 4. Other sections unchanged. All other provisions of Title 3 SVMC not specifically referenced hereto shall remain in full force and effect. Section 5. Severability. If any section, sentence, clause or phrase of this Ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction,such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section,sentence,clause or phrase of this Ordinance. Section 6. Effective Date. This Ordinance shall be in full force and effect five days after publication of the Ordinance Summary. Passed this 27th day of June, 2023. ()Pa' 6V6..(1 Pam Haley,Mayor AT ES Christine Bainbridge, City Clerk Approved as to form: e of the City Attorney Date of Publication: I 7 r ,V,71 Effective Date: 9 ,/,2 0/©63 Ordinance 23-013 Amending Title 3 SVMC—Federally-Funded Procurement Page 18 of 18