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Purchasing Policy
Introduction
The City of Baytown’s purchasing policy provides for increased economy in purchasing activities, enabling the City to maximize, to the fullest extent practical, the purchasing value of public funds. This is achieved by fostering effective broad-based competition, while ensuring fair and equitable treatment of all responsible vendors/contractors who deal with City. In addition, this manual provides safeguards for maintaining a purchasing system of quality and fosters public confidence in the integrity of the City’s process.
Purchasing is a division of the City of Baytown within the Finance Department and is responsible for the process of acquiring goods and services necessary to provide the highest quality of public service at the best value to the citizens of Baytown. The primary objectives beyond obtaining goods and services include: supporting organizational goals and objectives, managing the purchasing and contracting process, and developing relationships with other departments and stakeholders. Only authorized City employees may apply for grants and any such grant must support the City's mission and priorities or otherwise benefit the City of Baytown. The City does not accept Purchase Orders from vendors and employees should never sign Purchase Orders received from vendors. Any employee receiving and Purchase Order from a vendor should contact a member of the Finance or Legal Departments immediately.
The City Purchasing Policy complies with local, state and federal codes, ordinances, and statutes where applicable. The City of Baytown does not discriminate against individuals, companies, or awarding of bids with respect to race, color, national origin, sex, age, disability, or religion, or any other federally protected class. This policy provides a fair and equitable treatment of all persons. Additionally, this Purchasing Policy ensures accountable, efficient, transparent, and ethical practices are used to acquire products and services.
One of the most important standards of public procurement is to recognize that each procurement action results in a legal contract between the City and the vendor. Each procurement activity is a legal action and obligates the City.
All purchases shall be in accordance with the laws of the State of Texas, including, but not limited to, Chapters 252 and 271 of the Texas Local Government Code, and the City of Baytown Charter. All purchasing shall adhere to sound purchasing procedures to ensure that Baytown taxpayers receive the best value for City purchases.
This policy supersedes any and all previous purchasing policies approved or utilized by the City of Baytown and became effective October 2023.
The acquisition of property, goods, and services by or on behalf of the City of Baytown, its departments, officials and authorized agents shall be made in accordance with the procurement policy contained herein unless otherwise specified by the City Charter or approved by the City Council.
Under the City of Baytown’s Charter Article 3, the Council may, by ordinance, confer upon the City Manager general authority to contract for expenditures without further approval of the Council for all budgeted items not exceeding limits set by the Council.
Under Ordinance No 13,026, dated November 16, 2015, City Council conferred upon the City Manager general authority to contract for expenditures without further approval of the Council for all budgeted items not exceeding limits as specified in Texas Local Government Code 252.021(a) or its successor statute City Council must approve all other purchases, except when an emergency purchase exists, as defined by state law. All contracts for expenditures involving more than the set limits must be expressly approved in advance by the Council. All contracts or purchases involving more than the limits set, shall be let to the bidder whose submittal is among those most responsive and responsible to the needs of the City after there has been opportunity for competitive bidding as provided by law or ordinance; provided that the Council, or City Manager in such cases as he/she is authorized to contract for the City, shall have the right to reject any and all bids.
Department Directors shall ensure their department’s adherence to this policy and are responsible for ensuring that purchases made within the department comply with budgetary requirements and the policies outlined in this document. The signatory authority levels are outlined below.
| Amount | Authorized By |
|---|---|
| Up to $25,000 | Director or Assistant Director |
| $25,000.01 - $49,999.99 | City Manager or Assistant City Manager |
| $50,000 and above | City Council |
At no time shall Director/Assistant Director signatory authority levels exceed the Council-Approval Threshold which is equal to or greater than the State of Texas bid law requirement (generally, $50,000 per vendor whether payment is made in a single year or across multiple years). Further, Directors and Assistant Directors are responsible for ensuring that vendor payments, across all Departments, do not exceed the Council-Approval Threshold.
Objective
Purchasing is one of the key functions in the success of any local government. The primary objective is to ensure the availability of goods and services as needed with optimal quality and at competitive pricing advantageous to the City of Baytown. The Purchasing Division shall provide guidance and assistance to Departmental personnel regarding purchasing. The Purchasing Division shall monitor compliance with purchasing laws, City policies and procedures.
Public Purchasing Goals
- Purchase the proper goods and services to best serve the City’s needs
- Procure the best possible price for the goods or services required
- Goods and services are available when and where they are needed
- Compliance with all applicable Federal, State, and Local purchasing laws and regulations, including, but not limited to, Chapters 252 and 271 of the Texas Local Government Code, the City of Baytown Charter, and Part 200 of Title 2 of the Code of Federal Regulations.
Public Purchasing Must Assure That:
- Responsible bidders are given a fair opportunity to compete for the City’s business
- Public funds are safeguarded to ensure the best value is received for the public dollar
- Staff guard against misappropriation of City funds
- Public spending is not used to confer favors to anyone
- Suppliers are treated fairly
Public employment is a public trust. It is the policy of the City of Baytown to promote and balance the objective of protecting government integrity and the objective of facilitating the recruitment and retention of personnel needed by the City of Baytown. Such policy is implemented by prescribing essential standards of ethical conduct without creating unnecessary obstacles to entering public service.
Public employees must discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public confidence in the integrity of the City of Baytown procurement organization.
To achieve the purpose of this Article, it is essential that those doing business with the City of Baytown also observe the ethical standards prescribed herein. It shall be a breach of ethics:
- To attempt to realize personal gain through public employment with the City, other than the employee’s normal duties
- No employee of the City shall solicit, demand, accept or agree to accept from another person or business, a gratuity or an offer of employment in connection to any solicitation pending or make available information not provided to all potential respondents
- For any employee or former employee of the City to knowingly use confidential information for actual or anticipated personal gain
- Solicit or accept anything of value from an actual or potential vendor with the exception of promotional items of negligible value, in the form of note pads, pens, calendars, etc., which may be accepted and used in normal City business operations.
- A city employee; an immediate family member (spouse, child, parent, parent-in-law, sibling, or sibling in-in-law); partner; or an organization that employs, or is about to employ, any of the above has a direct or indirect financial or other interest in or will receive a tangible personal benefit from a firm or individual considered for the contract award.
- No City employee shall purchase supplies, materials or equipment of any kind for personal use
Purchasing Types and Terms
All purchases requiring a Purchase Order must be requested through the Purchasing Division before any orders or scheduling takes place. Any unauthorized purchases placed prior to Purchasing Division approval will result in disciplinary action. In certain circumstances, the employee may be personally responsible for any unauthorized charges.
Most purchases will follow these steps:
- Quote or Bid
- Contract
- Requisition
- Purchase Order
- Order Goods or Schedule Services
- Confirm Receiving
- Invoice
- Payment
Federal Awards
All purchases by an employee, acting as an agent of the City, must be made in an open, fair and ethical manner to promote competition to the extent practicable. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of section 2 CFR 200.319.
In relation to federal awards, the City of Baytown is restricted from conducting business with parties debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities as listed on the System of Award Management (www.sam.gov) website.
The City of Baytown will perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold of $250,000 including contract modifications. The profit will be negotiated as a separate element of the price for each contract in which price competition does not exist and in all cases where cost analysis is performed. Costs or prices may be based on estimated costs only to the extent that cost incurred or estimated are included in negotiated price and would be allowable under 2 CFR 200.400 Subpart E.
As appropriate and to the extent consistent with law, the City of Baytown, 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).
Federal award agencies or pass-through entity have the ability, upon request to review procurement records, procurement systems, and technical specifications of proposed procurements.
Per Appendix II to Part 200 of 2 CFR, contractual provisions under federal awards must contain provisions covering the following, as applicable.
- Termination for cause and convenience
- Equal Employment Opportunity
- Davis-Bacon Act
- Contract Work Hours and Safety Standards Act
- Right to Inventions Made Under Contract or Agreement
- Clean Air Act
- Byrd Anti-Lobbying Amendment
- State Awards
In accordance with Chapters 252 and 271 of the Texas Local Government Code, the City of Baytown prefers the “best value” method to award any contracts for any solicitated goods or services. The City will indicate in the bid specifications that the contract may be awarded either to the lowest responsible bidder or to the bidder who provides goods and services at the best value to the City. The City will further indicate in the bid specifications that it reserves the right to reject any or all bids and reopen the bidding process if it is in the best interest of the City.
In determining the “best value” for the City, the City may consider:
- Purchase Price;
- Extent to which the goods or services meet the City’s needs;
- Quality of the bidder’s goods or services;
- Impact on the ability of the City to comply with laws and rules relating to contracting with historically underutilized businesses and nonprofit organizations employing persons with disabilities;
- Bidder’s past relationship with the City;
- Total long-term cost to the City to acquire the bidder’s goods or services;
- Reputation of the bidder and the bidder’s goods and services; and
- Any relevant criteria specifically listed in the request for bids.
The City may use any procurement method authorized by State or Federal law.
Sales Tax
The City of Baytown is exempt from payment of taxes under Chapter 20, Title 122A, Article 20.04, Revised Civil Statutes of Texas, for the purchase of tangible personal property. Any use of the City’s tax exemption certificate for personal purchase is prohibited. The Texas Sales Tax Exemption Certificate may be requested from the Purchasing or Accounting Divisions. If an employee is charged sales tax it will be their responsibility to get a credit back from the vendor or pay the City back for the taxes charged. (Please consult the Legal Department and HR before attempting to collect payback from any employee under any circumstance.)
Freight and Shipping
The preferred method for shipping items to the City is FOB (Free on Board) Destination, which makes the vendor responsible for the shipment until the City inspects and accepts it. The vendor selects the shipper and is responsible for the risk of transportation, including filing for losses or damages.
Procurement Records
All procurement records shall be retained and disposed of in accordance with records retention guidelines and schedules. Procurement records, which include and are not limited to solicitation responses, tabulations, contracts, correspondence, purchase orders, etc., must be made available to the City Clerk in order to remain in compliance with the City’s records retention schedule. The Purchasing Division is responsible for maintaining all procurement records pertaining to but not limited to RFPs, RFQs, ITBs, bid tabulations, evaluations, etc. for auditing purposes.
Historically Underutilized Businesses (HUB)
Under Texas State Local Government Code 252 before the City plans to make purchases between $3,000 and $50,000 with a vendor in a fiscal year, the City must meet the Historically Underutilized Business (HUB) purchasing requirements. These purchases require at least three written quotes/bids/proposals. The Department shall contact at least two vendors from the State’s current certified HUB list (Appendix — HUB Search). If the listing fails to identify a HUB vendor in the counties in which the City is situated (Harris), the City is exempt from this requirement.
If HUB vendors are unresponsive, the Department has met the HUB requirement by notifying them and giving them the opportunity to submit. The City retains all submitted quotes/bids/proposals and email correspondence with the HUB vendors for auditing purposes.
- Some exceptions to the HUB Purchasing Requirements include the following:
- Vendor Contract covered by an Interlocal Agreement
- Vendor Contract covered by a Cooperative Agreement
- Formal competitive sealed bid/proposal resulting in a City contract
- Professional Services Exemption
- Sole Source Exemption
- Emergency Purchase Exemption
- Other Exemptions as defined in State Law
If the purchase is procured under Competitive Purchasing Requirements, the HUB purchasing requirements are not applicable to the purchase. See the Competitive Purchasing Requirements – Purchases of more than $50,000 section of the Policy for documentation requirements.
Users Role and Responsibilities
City Departments
- Directors are responsible for ensuring that signatory authority levels do not exceed Council-Approval Threshold, including confirming that vendor payments across all Departments do not exceed the Council-Approval Threshold. No other employee shall sign any document originating from a vendor that purports to bind the City regardless of whether the document calls itself a "contract" or "agreement". Documents calling themselves "purchase orders," "quotes," "term sheets," terms and conditions," memoranda of understanding (MOUs)," letters of intent (LOIs)," and the like, that seek payment from the City, obligate the City to do or not to do some task, or purport to bind the City in any way, shall not be signed by unauthorized personnel.
- Directors must approve all procurement transactions within their department.
- Directors are responsible for designating personnel within his/her department to coordinate with Purchasing on all day to day procurement matters. Designate a back-up to carry out duties as needed. Each designee will undergo training by the Purchasing Division prior to being given access to the Purchasing system.
- Directors are responsible for providing clear and concise scope of work for the procurement of goods and services, receiving of goods and services and submitting invoice for payment.
- Directors are responsible for ensuring that all employees understand no purchase is authorized until a Purchase Order (PO) is approved and processed. Exceptions include purchases using petty cash or Procurement Card (P-Card). See sections for Procurement Cards for more detailed instructions.
- Directors are responsible for ensuring that all Purchasing and P-Card policies and procedures are followed.
Purchasing Division
- Ensures all purchases are timely processed within the guidelines established by Federal Law, State of Texas Statute, City of Baytown Ordinance or Administrative Policy.
- Issues Purchase Orders (PO) for all goods and services purchases once required document are provided.
- Establishes and administer term contracts for commodity goods and services.
- Administers the City of Baytown Procurement Card (P-Card) program.
- Provides quality customer service with timely delivery of requests and services.
- Maintains all procurement records including, but not limited to procurement history, procurement rationale, method of selection of contract type, why contract rejected or selected, and basis for contract price.
Legal
- Prepares and/or reviews purchasing contracts, agreements and amendments for the Mayor or City Manager’s signature
- Recommends changes to terms and conditions
- Provides legal advice on purchasing issues and prepares formal correspondence.
Finance
- Ensures proper funding sources are used for purchases.
- Approves all budgetary changes and budget transfers.
- Ensures expenses are charged to the correct account.
- Approves change orders to ensure funding is available.
- Makes timely payments through Accounts Payable for received goods and services.
$3,000 or Less – Informal Quote
Purchases up to $3,000 require one informal quote. Departments shall use Purchase Orders especially for items or services not received on the same day, unless Petty Cash or P-Card payment is otherwise authorized under this Policy. However, the use of procurement cards (P-Cards) is permitted for single purchases up to $1,000. P-Card limits may be adjusted for certain purchases such as travel expenses. Other exceptions are considered at the Purchasing Division’s discretion.
A single purchase shall not be purposely split or separated into smaller components to stay within this dollar limit. Attempts to circumvent purchasing policies and limits by dividing purchases into multiple separate invoices or payments will not be tolerated and is subject to disciplinary and/or legal actions.
Procurement Method:
- Purchase Order – Preferred method for goods
- P-Card up to $1,000 single transactions
$3,000.01 to $49,999.99 – Informal Quote (Request for Quotes (RFQu) – Goods and Services)
Purchases between $3,000.01 to $49,999.99 require a minimum of three (3) written quotes which may be obtained by the Department or through Purchasing. At least two (2) quotes should be contacted from a minority vendor or historically underutilized vendor (HUB). If there are no identified historically underutilized vendor (HUBs) in the county where the municipality is located, the City is exempt from this requirement.
Director/Assistant Director signatory authority levels shall not exceed $25,000. Directors are responsible for ensuring that signatory authority levels do not exceed the Council-Approval Threshold, including confirming that vendor payments across all Departments do not excess the Council-Approval Threshold.
In general, the City does not accept contracts or other documents that purport to bind the City from vendors. Departments should use the City's contract templates supplied by the Legal Department. Should a vendor desire to use its own form or make changes to a City template, please contact the Legal Department.
Attempts to circumvent purchasing policies and limits by dividing purchases into multiple separate invoices or payments will not be tolerated and is subject to disciplinary and/or legal actions. If a person fails to comply with the competitive bidding or competitive proposal procedures required by the Local Government Code, that person may be convicted of a Class B misdemeanor; TX. LGC §252.062. This includes a situation in which a person makes or authorizes separate, sequential, or component purchases in an attempt to avoid competitive bidding requirements. A Class B misdemeanor may be punished by a fine of up to $2,000, confinement in jail for up to 180 days, or both the fine and confinement. TX Penal Code §12.22.
Governing Policy:
$50,000.00 and Above - Formal (Invitation for Bid (IFB) – Goods and Services)
Before the City may enter into a contract that requires an expenditure of more than $50,000 from one or more municipal funds, the City must comply with certain statutory procedures for competitive and sealed bids or proposals as described in the Texas Local Government Code, including but not limited to, Chapters 252 and 271 and, where applicable, 2 CFR Part 200 All purchases of $50,000 or more must be approved by the City Council. Invitation for Bid (IFB) is the most common competitive bid type and allows potential vendors to a fair and equitable opportunity to do business with the City. IFBs are typically those that have a set quantity or specific project excluding construction.
Purchases requiring bids must adhere to the following:
- Suppliers must be provided sufficient response time prior to the date set for opening the bids.
- The invitation for bids must be publicly advertised.
- The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services.
- All bids will be publicly opened at the time and place prescribed in the invitation for bids.
- Any or all bids may be rejected if there is sound documented reason.
A city may not avoid the application of competitive bidding or proposal laws by purposely dividing a single purchase into smaller components so that each component purchase is less than $50,000. Attempts to circumvent purchasing policies and limits by dividing purchases into multiple separate invoices or payments will not be tolerated and is subject to disciplinary and/or legal actions. If a person fails to comply with the competitive bidding or competitive proposal procedures required by the Local Government Code, that person may be convicted of a Class B misdemeanor; TX. LGC §252.062. This includes a situation in which a person makes or authorizes separate, sequential, or component purchases in an attempt to avoid competitive bidding requirements. A Class B misdemeanor may be punished by a fine of up to $2,000, confinement in jail for up to 180 days, or both the fine and confinement. TX Penal Code §12.22.
Governing Policy:
Request for Proposals (RFP)
Request for Proposals (RFP) are used for services that are high technology or complex projects when price is not the major factor for award. Other factors that are often considered include experience and past performance depending on the scope of work.
The award criteria must include relative importance of various criteria, typically structured using percentage points, must be clearly stated in the RFP specifications. If price is part of the evaluation criteria it cannot be the highest value of the total evaluation criteria. Minor revisions of proposals and price negotiations may be permitted after submission and prior to award.
Unless required or authorized by other law, proposals shall be opened so as to avoid disclosure of contents to competing offers. All openings are public and may be held in person, via Zoom or other electronic meeting application and will be on the City of Baytown eBidding software platform, however, only the name of the responding vendors will be announced. A tabulation shall be prepared after the opening and may be open for public inspection after the award of the contract.
Governing Policy:
Request for Qualifications (RFQ)
A Request for Qualifications (RFQs) is a competitive procurement method used when qualifications are the only criteria rather than cost. Request for Qualifications is a two-stage procurement process in which firm’s qualifications are submitted, reviewed, and evaluated in order to identify the most qualified firm(s). Once the most qualified firm is identified, the City will request pricing and negotiate both price and terms with the most qualified firm.
In certain cases, it may be beneficial to use the RFQ method to procure a professional service. The RFQ method is the only formal solicitation method that can be used for procuring professional services as defined under the Professional Services Procurement Act in Chapter 2254 of the Texas Local Government Code. Using the RFQ method for professional services, requires a government entity to make the selection and award on the basis of demonstrated competence and qualifications and then formally negotiate with the most qualified provider for a contract at a fair and reasonable price.
Governing Policy :
Construction and Engineering Contracts
Construction project bids/proposals follow Texas Local Government Code 2269.
The Government Code mandates that a municipality contracting for a public work in excess of $50,000 shall require its contractor to execute a payment bond. The Government code also mandates that a municipality contracting for public work in excess of $100,000 shall require its contractor to execute a performance bond. Both the payment and performance bonds must be written for the total contract value. The City may also choose to require a vendor to include a bid bond with their bid to ensure the successful bidder executes contract documents and proceeds with performance. The bid bond is 5% of the total bid price.
The City Council has the right to reject any and all bids.
Governing Policy:
Electronic Bids or Proposals
The City of Baytown adopted the standardized rules for the receipt of electronic bids and proposals for its competitive bidding with Council Resolution No. 2659. These rules are established by the City of Baytown (the "City") for electronic solicitation procedures in accordance with Section 252.0415, Texas Local Government Code, to ensure the identification, security and confidentiality of electronic bids or proposals, and to ensure that bids or proposals remain effectively unopened until the proper time (the "Rules"). The Rules will apply to both bids and proposals that are submitted to the City pursuant to the requirements of Chapter 252, Texas Local Government Code, as well as those contracts and procurements for which the City has voluntarily elected to follow the competitive processes outlined in Chapter 252, Texas Local Government Code.
Interlocal Agreements
Inter-local agreements are used when two public entities agree in advance to utilize the other’s contract and are sometimes referred to as “piggybacking”. An interlocal agreement is not valid unless approved by the governing bodies of both entities. For the City of Baytown, this means that all interlocal agreements must be approved by City Council.
Cooperative Agreements
Cooperative agreements are contracts using an alliance of buyers who coordinate some of their purchasing needs so they can join in purchases to the mutual benefit of all entities concerned.
In Texas, cooperative purchasing is addressed in two main statutes:
- VTCS Article 4413 (32C) - Interlocal Cooperation Act.
- Allows local governments to contract with and between each other, to provide governmental functions and services and to join together in contracting with others to provide goods and services.
- Local Government Code Chapter 271, Subchapter D,271.081-271-083 -
- State Cooperation in Local Purchasing Programs. Allows a local government to purchase goods on the State's purchasing contracts, and allows the State to solicit bids on the local government's behalf, when considered feasible by the State Purchasing and General Services Commission. The Commission is also required to provide information and technical assistance to local governments about the purchasing program.
Purchase requests using cooperative agreements must include a written quote from the vendor with cooperative agreement name, contract number, and the discount or contract pricing reflected on their quote.
Sole Source / Proprietary Purchases
Under State law, a purchase of a service/product that is available from only one source due to patents, copyrights, secret processes, natural monopolies or captive replacement parts or components for equipment, is exempt from competitive purchasing requirements.
To qualify as a sole source there cannot be any like items available or similar items that perform substantially the same function. The goods or service may be a component of an existing system that is only available from one supplier. All requests for a sole source purchase must be accompanied by a letter from the manufacturer stating that the item is not available from any other source and that there are no like or similar items available. The letter should be no older than records and include any unique features that make the good or service one of a kind.
Professional Services
Professional Services are defined in Texas Local Government Code 2254 as professions requiring a State License or State Registered practice. Under State law, professional services are exempt from competitive purchasing requirements for purchases of personal, professional, or planning services. Common examples include Accounting, Architecture, Medicine, Professional Engineer and Real Estate Appraiser. Although not required, it may be beneficial to utilize the RFQ procurement method when comparing multiple professional service firms.
Other Exemptions
Under State law, there are other less common exemptions to the competitive purchasing requirements. If the Department needs additional assistance determining the best way to meet the competitive purchasing requirements, it should contact Purchasing to discuss.
Change Orders
Change Orders are used when changes to plans or specifications are necessary after the performance of the contract is begun which may result in decreases or increases of work to be performed or of materials, equipment, or supplies.
Directors must approve all change orders.
Under Local Government Code §252.048, change orders shall not increase the original contract amount by more than 25% without additional bidding processes or reduce the original contract by more than 25% without vendor approval. If an increase causes the total estimated annual vendor payment to exceed the Council-Approval Threshold, additional bid/proposal requirements may be required. Directors must approve change orders. Contact Purchasing to determine if additional requirements apply.
Receiving
Departments are required to inspect the products received for damage, defect, and whether the product received is the product ordered, and verify the quantity received or the service provided is per agreement and any/all deliverables are received. The receipt of goods (packing slip) must be saved in the Q:\AP Invoices folder within five working days after goods have been delivered and accepted by the department. Payment will not be made for items not yet received.
Surplus Property & City Auctions
According to the City of Baytown Charter Article VII Sec. 72 (4), the Purchasing Division shall have the authority and be required to sell surplus, obsolete or unused supplies, materials and equipment.
Purchasing will follow Texas Local Government Code Sec. 263 for the selling or disposal of surplus or salvage property. The City may dispose of surplus property items that are routinely discarded as waste, that because of use, time, accident, or any other cause is so worn, damaged, or obsolete that it has no value for the purpose for which it was originally intended. For items with no estimated net auction value, the City may donate the item to a nonprofit organization, utilize a recycler, or dispose of the item.
The Procurement Card (P-Card) program provides an efficient, cost-effective method of purchasing goods and services for the City. The intent of this program is to enhance the capabilities of field personnel to perform operational tasks without administrative delay and to reduce paperwork.
The P-Card is another tool for financial transactions and is governed by the City of Baytown Purchasing Division. Each authorized cardholder is assigned a unique P-Card and is solely responsible for all charges related to their assigned P-Card including all receipts.
P-Cards are used for point of sale, small dollar purchases and/or City travel related expenses. Small dollar purchases are described as being under $1,000. Each P-Card will have a single purchase limit $1,000 with the exception of expenses related to travel. Any purchases exceeding the $1,000 single purchase limit, must be approved by the Purchasing Manager or Assistant Director. P-Cards cannot be used to purchase fixed assets, capital improvement projects, or grant related items to ensure proper procurement. Typical P-Card purchases would include:
- Catering
- Internet purchases
- Memberships
- Subscriptions
- Registration for training
- Books
- Over the counter purchases
- Travel, excluding meals
Emergency situations may necessitate a temporary increase of a P-Card, which must be requested by the Director and approved by the Purchasing Manager or Assistant Director of Finance. When an emergency is declared by City Council, the Purchasing Division at the direction of the Director of Finance will increase limits in preparation of the EOC activation.
Procurement Administrator
- Establishes accounts and authorization controls with the direction of the Director of Finance.
- Provides training and assistance to departments.
- Maintains proper documentation and storage of receipts, logs, reconciliations, and approvals.
- Immediately notifies the Finance Director of a suspected abuse or fraudulent activity.
City Departments
- Directors must review to ensure compliance and approve all P-Card reconciliations with receipts prior to submission to the Purchasing Division.
- P-Card holders must complete the P-Card reconciliation form and attach all receipts as back-up. The proper account code must be used for all transactions.
- P-Card holders must comply with the policies and procedures outlined in the policy and attend departmental training provided by the Purchasing Division.
Sales Tax
The City is sales tax-exempt. Cardholders must ensure card purchases do not include sales tax. If sales tax is inadvertently charged, inform the vendor at the time of purchase so they can credit the card appropriately. Sales tax charges discovered later will need to be corrected by the cardholder contacting the individual vendor and having them issue a credit to the card. A copy of the City Tax Exempt Certificate can be obtained from Accounts Payable. A cardholder that signs a receipt that includes sales tax may elect to pay to the City the amount of the sales tax. This option would be in lieu of the sales tax credit process. In any event, one of the two options must occur unless approved by the Purchasing Manager. An exception to this rule is tax paid to restaurants, hotels, airlines, and other travel related merchants. Cities are not exempt from hotel tax and certain other federal and state taxes that are not the standard sales tax. The continual charge of sales tax will result in suspension of charging privileges.
Documentation & Reconciliation
With the authority to purchase specific goods and services comes the responsibility to maintain adequate documentation at the source of the transaction. All original itemized receipts, invoices and supporting documentation should be acquired and maintained by the cardholder for reconciliation to the statement and delivered to Purchasing by the due date. All receipts must be original and itemized. Travel related charges such has hotel stays should have conference agenda or reason for overnight stay. Business meal receipts should be attached to the Business Meal Request Form.
Keep current records of transactions and receipts for your own protection. They are an important part of any purchasing process and essential to the success of the card program. If an itemized receipt is lost, the cardholder must attach a written memo, signed by the Director, explaining the purchase transaction and the reason for the missing receipt.
Failure to comply with the policy and procedures outlined will result in progressive discipline. The first offense will be a warning, second offense will be a 3-month suspension, and the third offense will result in the cancellation of the P-Card and disciplinary action up to termination.
Definitions
Addendum: a written change to a Bid, Quote, RFQ, or RFP during the solicitation process
Bid: a formal written offer of a price by a vendor to the City to furnish specific goods and/or services in response to a solicitation
Bid Award: an award of a bid for which funds have lawfully been appropriated by the City Council
Bid Bond: An insurance agreement in which a third party agrees to be liable to pay the City a certain amount of money in the event the successful bidder does not execute the contract documents, furnish required bonds or insurance, or proceed with performance. The bid bond, naming the bidder as principal, is given to the City at the time of bid.
Bid Deposit/Cashier’s Check: a guaranteed check furnished in lieu of a bid bond at the time of bid submittal.
Capital Improvement Project (CIP): any public improvement the City undertakes, including the construction or reconstruction in whole or in part of any building, road, highway, street improvements, physical plant, structure or facility necessary in carrying out the functions of the City government. It does not include any routine maintenance, operation or repair of existing structures, buildings or real property.
Change Order: a modification, deletion or addition to an existing purchase order or contract by means of a formally executed document signed by both parties. A change order shall not exceed 25% of the original contract.
Consultant Services: See Professional Services.
Construction: the process of constructing a building, structure, road or drainage utilities; altering, repairing, improving or demolishing any structure or building; or other improvements of any kind.
Contract: (a) a deliberate verbal or written agreement between two or more competent parties to perform a specific act or acts; or (b) any type of agreement, regardless of what it is called, for the procurement or disposal of goods, services or construction, usually for exchange of goods or services for money or other consideration.
Contractor: any person having a contract with the City
Designee: a duly authorized representative of a person.
eBidding: (electronic bidding) is the process of using online procurement (eProcurement) platforms to automatically solicit bid tenders and evaluate suppliers.
End-User Department/Division: the department/division within the City government, that requests and utilizes goods and/or services, procured according to the Purchasing Procedures Manual.
Fixed Asset: Any purchase of $10,000.00 or more for a single item or with an expected life of one (1) year or more is a fixed asset. A fixed asset number will be assigned to the item at time of purchase. All fixed assets must be processed through Purchasing.
Formal Bid: the solicitation document that is used for competitive sealed bidding for procurement of construction, goods and/or services and award is based on the lowest responsible bid or best value for the City.
Goods: any tangible property other than services or real property.
Historically Underutilized Business (HUB) Program: affirmative action program to increase the participation of disadvantaged or businesses normally used; includes minority and women owned businesses.
Informal Quote: A document or verbally communicated price for a specified good or service. Informal quotes may be obtained via email, phone or vendor website.
Item: a separate single unit, article, product, material or service.
Payment Bond: a form of security, required on contracts over $50,000, executed subsequent to award by a successful bidder that guarantees the payment of debts to persons furnishing services or materials on account of the contract work and/or payment of other responsibilities of the contractor; provided prior to contract execution.
Performance Bond: a form of security, required on contracts over $100,000, executed subsequent to award by a successful bidder that guarantees the proper performance of the contract; provided prior to contract execution.
Petty Cash: a cash fund established for minor purchases under $50.
Procurement/Purchase: the buying, purchasing, renting, leasing or otherwise acquiring of any goods and/or services for public purposes in accordance with the laws, rules, regulations and procedures intended to provide for the economic expenditure of public funds. It includes but is not limited to all functions which pertain to the obtaining of any supplies, materials, equipment and/or services including construction projects and Capital Improvement Projects, as defined herein, required by any department/division or agency of the City government regardless of the source of funds.
Procurement Card (P-Card): an instrument used to purchase goods/services in accordance with established procedures.
Professional Services: any certified public accountant; architect; land surveyor; physician, surgeon, or optometrist; state certified or stated licensed real estate appraiser; or registered nurse as defined under TX LGC 252.
Proposal: an executed formal document submitted by an offeror to the City stating the good(s) and/or service(s) offered to satisfy the need as requested in the Request for Proposal or quote solicitation.
Purchase Order: The City’s document used to authorize a purchase transaction with a vendor. It should contain provisions for construction, goods and/or services ordered; applicable terms as to payments, discounts, date of performance and transportation; and other factors or conditions relating to the transaction. Acceptance of a Purchase Order by a vendor shall constitute a contract, except instances in which a Purchase Order is issued only as an internal encumbrance document. The City does not accept Purchase Orders issued by a vendor.
Purchase Request: End user approved document or email submitted to purchasing to request a Purchase Order.
Quote or Informal Solicitation: written solicitation request and/or response offered to the City by a vendor for furnishing specific goods and/or services at a stated price, under $50,000.
Request for Proposal (RFP): a solicitation for goods and/or services for which the scope of work, specifications or contractual terms and conditions cannot reasonably be closely defined. Evaluation of proposal is based on stated criteria and shall state the relative importance of all evaluation factors; other factors may be considered as stated in the RFP.
Request for Qualifications (RFQ): may be a formal or informal request to solicit qualifications and experience for specific services. Responses are evaluated and a top responder is selected. Price may not be known or considered during the evaluation process. Once a top respondent is identified, City staff negotiates a firm price and the City Manager or Assistant City Manager sign an agreement with the individual or firm.
Request for Quotes (RFQu): A formal or informal request to solicit pricing for specified goods or services.
Retainage: A portion of the agreed upon contract price deliberately withheld until the work is substantially complete to assure that the Contractor or Subcontractor will satisfy its obligations and complete the project.
Services: the furnishing of labor, time and/or effort by professionals or contractors, wherein the submission of goods or other specific end products other than reports, studies, plans, advisories, contractual documents or other documents relating to the required performance is incidental or secondary.
Specifications: a concise, descriptive statement of a set of requirements to be satisfied by a product, material or process used in a solicitation to illustrate the goods and/or services to be purchased or otherwise acquired.
Successful Bidder: vendor awarded the contract through solicitation, regardless of the method used or dollar amount.
Vendor: an actual or potential provider of goods or services.