OVERVIEW
This chapter summarizes the methods and means for procuring goods, services, materials and supplies.

Procurements are not City obligations until all guidelines, procedures and policies are approved by Purchasing or the City Council.

Depending on the requirements and the estimated cost, one of seven methods will be used to acquire a needed product or service.

The first step is to determine what is needed. The item and its purchase price will determine the procurement method that will be used to purchase the City’s supplies, services and equipment. Following is a step-by-step method to determining the procurement method to be used.

• Is the item available on an existing City contract?
• Should Petty Cash be used for the purchase?
• Is the item within the $2,500 transaction limit of the Purchasing Card (P-Card)?
• Is the item within the $2,500 transaction limit of a Department Purchase Order (DPO)?
• Is the item within the $2,500 transaction limit of a Blanket Purchase Order (BPO) and has a BPO been issued to a company able to provide the item?
• Is the item the type of commodity that may be purchased using a Request for Check (RFC)?
• If none of the above methods are applicable, submit a requisition to the Purchasing Division. Purchasing will use the most efficient method to procure the goods or services. Competitive bids or quotations will be secured for all contracts over $2,500, except as noted in Chapter 5, Bid Requirements and Procedures.

ACQUISITION PROCESS
The City of Visalia has seven separate methods for acquiring goods, materials, services and labor. The method used is determined by the dollar value of the final award.

Purchases Less Than or Equal To $2,500

• Annual Contract
• Purchasing Card
• Department Purchase Order
• Blanket Purchase Order
• Petty Cash
• Purchase Requisition
• Request for Check

Purchases Greater Than $2,500 But Less Than $25,000

• Annual Contract
• Purchase Requisition
• Informal Bid Process (Chapter 5)

After receiving the purchase requisition, Purchasing will contact vendors informally by telephone or by written invitation or Facsimile for price quotes. The number of vendors considered will vary depending on the dollar amount of the purchase, the number of available vendors and the time available. Normally, a minimum of three vendors is contacted.

Purchases Greater Than $25,000

• Annual Contract
• Purchase Requisition
• Formal Bid Process

Purchasing will notify potential bidders a minimum of ten (10) days prior to bid opening by advertisement in trade journal, newspapers or other media. Written bids are solicited for purchases in this range.

Special Considerations

• When purchasing with Federal or State funds, the City’s portion of matching funds shall determine the type of bid procurement category, up to $25,000, when allowed by the fund-granting agency.
• Request for Quotations shall not be solicited from prospective vendors unless it is intended that an order shall be placed, if the vendor is responsive and responsible
• To the extent possible, three or more prospective vendors shall be solicited. All local and minority vendors known for the commodity being requested, will be included in solicitations.

REQUISITIONING OF GOODS AND SERVICES
All requirements for supplies, equipment, materials or services with an estimated cost of $2,500 or more shall be issued in written form on a requisition or by written memo. To be processed, the requisition requires an account number and two signatures. One of the signatures must be that of a supervisor or the fund manager authorized to expend funds from the account number listed on the requisition.

Every attempt shall be made by the using department to specifically identify the type and quality of supplies, equipment materials or services to be procured.

Definition of Specification: A concise statement of a set of requirements to be satisfied by a product, material or process by means of its performance or design (See Chapter 3, Specifications).

Purchase Requisitions
The processing of all purchases through the Purchasing Division ultimately requires the use of three major documents: Purchase Requisition, Purchase Order and Receiving Report.

The Purchase Requisition begins the procurement process for goods, services, supplies, materials, labor and projects having an estimated cost of $2,500 or more. The requisition is a request for an order. The request comes from the user department. The Requisition will identify the equipment, material or supplies required, provide recommended or potential vendors and will be signed by a Fund Manager, Department Head or their designated representative.

Purchasing’s first step is to review the requisition to see if the information it contains is accurate and complete In some instances, requisitions from various departments may be combined as a single purchase when requests are similar in nature (e.g., employee t-shirts).

Purchasing’s next step is to determine what type of procurement process should be used, based on the previously mentioned award levels. The informal and formal bid processes are detailed in Chapter 5.

SPECIAL CIRCUMSTANCES
Goods or services related to data processing systems, communications equipment, legal services, grant-funded programs and emergency procedures require special processing as follows:

• Data Processing Systems: Departments requesting data processing systems shall refer such requests to the MIS Division for a recommendation prior to sending a written request to the Purchasing Division.
  
  The request shall be made on a requisition form and shall describe the hardware or software item(s) to be ordered along with any other pertinent information such as special ordering or delivery requirements, a description of the functions to be performed by the equipment, special requirements of the department and workload projections and accounting or budget information. The requisition must have the signature of the MIS Director before it will be processed by Purchasing.
  
  Once this is done, MIS will review the request and make a final determination on whether or not to approve the order and/or modify the request. The requesting department will then be notified as to the status of their request.
  
  All requests for computer cabling will be submitted to MIS. MIS will arrange installation.

• Lease or Rental: The lease or rental form of acquisition is used either to satisfy a temporary need for equipment, to provide equipment for the start up of an operation until more permanent arrangements can be made, when funds are not available to purchase and limited acquisition would be financially acceptable, or in areas of rapidly changing technology.
  
  Acquiring equipment through lease or rental is not to be used to circumvent purchasing policy and procedures. The use of lease, lease purchase or rental will be determined by the Purchasing Agent with the approval of the requesting Department Head based on economic considerations.

• Lease-Purchase Equipment and/or Facilities: The lease-purchase is used when there is a long-term need for the capital item and fiscal constraints prohibit a cash purchase. Lease-purchases must be appropriately budgeted and all requests for lease purchase must first be submitted to purchasing. Acquiring equipment through lease-purchase is not to be used to circumvent purchasing policy and procedures. It should be noted that a lease-purchase agreement differs from a regular lease or rental agreement in that the City acquires ownership of the asset in the former case.
  
• Grant-Funded Programs: Many state or federally funded grant programs have special requirements covering the acquisition of supplies, equipment, materials and services. It is each department's responsibility to make Purchasing aware of these provisions so any required procedures may be followed.
  
• Emergency Purchases: In the event of a bona fide emergency, Purchasing shall be contacted (if possible) and the matter discussed with the Purchasing Agent. If no one is available in Purchasing, the department head or his/her designated representative shall use his or her own best judgement in making the purchase.
  In all instances, report the purchase and immediately prepare a requisition covering the emergency purchase, and forward to Purchasing. Each emergency purchase shall be submitted on a separate requisition and shall not be mixed with routine items being requisitioned in the regular manner.
  
  An emergency purchase requires the subsequent approval and confirmation of Purchasing. If the purchase is over specified dollar limits, it may also require approval of the City Manager. Check with Purchasing as soon as possible after the obligation has been made.

Unless emergency purchases are approved and confirmed by either the Purchasing Agent or the City Manager, the cost shall not constitute a legal charge against the City. It shall become the personal obligation of the individual who made the purchase.

Competitive bids or proposals are not required in an emergency when goods or services are immediately necessary for the preservation of the public health, welfare, or safety or for the protection of City property. In such case, the City Manager may determine and declare that the public interest or necessity demands the immediate expenditure of public money to safeguard life, health or property, and thereupon they may proceed without advertising for bids or receiving the same, to expend or enter into a contract involving the expenditure of any money required in such emergency and on hand in the City treasury and available for such purposes.

REQUISITIONING FLEET EQUIPMENT
Vehicles and equipment are crucial to many City operations. Consequently, the development of specifications for equipment/vehicles should take into consideration the function(s) for which the equipment/vehicle will be operated; the acquisition process; operating and maintenance costs, and; other relevant factors.

The City provides centralized Fleet Services. Acquisition of new or used vehicles or equipment requires review of the Fleet Services Division. Draft specifications for vehicles and heavy equipment will, in most instances, be prepared by the Fleet Services Division cooperatively with the using department and the Purchasing Division.

Fleet Services should be the primary resource for specification development. They maintain a library of equipment and component specifications and keep abreast of the current types of equipment available.

• Normal Budget Cycle Replacement Equipment: Departments requesting replacement of department assigned vehicles or equipment shall submit requests to the Fleet Services Division. The departments should develop the initial operating requirements of the equipment. Fleet services will develop these requirements into detailed bid specifications within Purchasing guidelines. The specifications will be forwarded to Purchasing for the bid process.
  
• Non-Budgeted Items: Departments requesting additional or mid-fiscal year vehicles or equipment shall formally request the Finance Department to appropriate funds for the purchase of the vehicles or equipment. The appropriation will require prior approval of the City Manager.

REQUISITIONING COMMUNICATIONS EQUIPMENT
All requests for communications equipment and service such as mobile and portable phones and pagers shall be submitted in writing to the MIS Telephone Services Division.

DIRECT PURCHASES BY USER DEPARTMENTS
Nearly all purchases must be pre-authorized by Purchasing with the following exceptions:

• Petty Cash
  
• Purchasing Card (P-Card): Purchasing Cards facilitate small-dollar purchases while reducing the administrative costs associated with authorizing, tracking, paying and reconciling those purchases.
  
• Blanket Purchase Order (BPO): The BPO is a multi-purpose document serving the ordering, receiving and payment functions. The BPO procedure is intended to facilitate the economical, timely and limited procurement of supplies and materials by City departments.
  
  The delegated authority extended to operating departments under this procedure is NOT INTENDED TO SUBSTITUTE FOR PURCHASING AGREEMENTS, CONTRACTS OR OTHER APPROVED METHODS OF CENTRALLY PURCHASING SUPPLIES OR MATERIALS. Departments are encouraged to provide justification and to obtain competitive pricing when economically practical.
  
  Blanket Purchase Orders are issued to vendors for the minor purchase of goods and services and are generally issued for an indefinite period of time. Each purchase must not exceed $2,500.00, inclusive of all taxes and transportation charges. The monetary limits are the aggregate cost of items shown on a single order. Sales may not be split between invoices to avoid exceeding the authorized monetary limit. Doing so would be considered by Purchasing as grounds for revoking the designated authority to use the BPO. Only those employees whose names appear on the BPO Authorization List are authorized to use the BPO's.
  
• Department Purchase Order (DPO): Department Purchase Orders are intended to facilitate the economical, timely and limited procurement of supplies and materials by City departments. DPO’s are to be used only for those goods and services having an aggregate value of $2,500 or less. Multiple DPO’s may not be issued to avoid the $2,500 limit. DPO’s must be accompanied by a signed, itemized invoice and sent to the Finance Department Accounts Payable Division for payment.
  
• Request for Check (RFC): The RFC is a multi-purpose document serving the ordering, receiving and payment functions. The RFC is intended to facilitate the economical, timely and limited procurement of specified materials by the City departments. The RFC can be used to issue advance payments.
  
  The RFC is used for payment of:
• Books and subscriptions
• Insurance
• Memberships and dues
• Tuition reimbursement
• UPS/Federal Express charges
• Conference Registration
• Employee reimbursements not related to travel or petty cash
• Customer reimbursements