HomeMy Public PortalAboutMSD Purchasing Policy 3-2018Page 1 of 9
Issued: 3/1/18
MSD GENERAL MANAGEMENT POLICY
APPROVED BY:
EXECUTIVE DIRECTOR
TOPIC: Purchasing Policy
Supersedes Policy Issued:
7/20/16
PURPOSE:
In accordance with current Charter, Ordinances and Resolutions adopted by the Board of Trustees,
this policy establishes requirements for how supplies, materials, and all services, except those
governed by State Statute, are to be procured. This policy also establishes who is to review, sign,
and distribute various documents associated with the procurement process.
POLICY STATEMENT:
It is the policy of The District that all procurement is accomplished in accordance with State Law,
Charter and Ordinance. To the extent possible, competition is required on purchases over $3,000.
Purchases over $3,000 must be accomplished through the Purchasing Division. Where applicable,
supplies, materials or services below $3,000 may be procured by the MSD department creating the
requisition but in no case will a purchase for supplies, materials or services be split to avoid the
requirement for competition.
This Policy covers thresholds for obtaining competition and requirements by which purchases are to
be accomplished. The District's various procedures establish the methods by which supplies,
materials or services are to be purchased.
1. Ordinance 14824 sets forth requirements for non -capital procurement. General requirements are
as follows:
a) Purchases under $3,000, competition is not required but is encouraged;
b) Purchases between $3,000 and $25,000, at least 3 competitive quotes must be solicited.
c) Purchases of $25,000 and above require competition on the open market.
d) Professional services procurements greater than $25,000 must be approved by the Board of
Trustees prior to the contract being executed.
e) Single source procurements must be documented and approved prior to purchase.
0 Co-operative purchases with other agencies may be permissible.
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g) Multi -year contracts are permissible under certain circumstances as set forth in Ordinance
14824 and Charter.
h) MSD will provide opportunities for meaningful participation of Minority and Women Owned
Business Enterprises in the procurement of supplies, materials, services, and construction.
Specific goals and requirements can be found in the District's MWBE procedures included in
each procurement. Bid requirements for MWBE participation will be in accordance with the
guidelines included in the bid.
i) Purchasing Cards and Credit Cards: The District will consider the use of purchasing cards in
cases of travel or special circumstances. Credit applications will be processed on a case by
case basis. In no case shall a credit application be submitted to a supplier before the terms
are reviewed by General Counsel and approved by the Director of Finance or his/her
designee.
j)
The Purchasing Manager may transfer surplus stock to other agencies and/or sell or dispose
of all surplus supplies as prescribed by Ordinance and policy.
k) Emergency and Immediate Need procurements are authorized only under specific
circumstances as outlined in Ordinance and the District's Emergency Declaration Policy.
Every effort will be made to meet the requirements of the MWBE guidelines in place at the
time of an Emergency or Immediate Need but guidelines may be waived if circumstances
dictate.
1) In no case may a purchase be subdivided to avoid the requirement for competition.
m) Purchase orders are required for all purchases prior to delivery, to the extent possible. This
includes emergencies and documented single source procurements.
n) Contracts for supplies, materials and services must be generated by the Purchasing Division
and reviewed for form by General Counsel prior to being executed. Any non-MSD contracts
must also be reviewed by Purchasing for adherence to MSD requirements and by General
Counsel for form prior to being executed.
o) Requests for bids and proposals shall be made in general terms and by general specifications
and not by brand, trade name or other individual mark whenever possible.
p)
Mistakes in Bids: If a mistake is attributable to an error in judgment, the bid may not be
corrected or withdrawn. Bid correction or withdrawal by reason of a nonjudgmental mistake
is permissible but only to the extent it is not contrary to the interest of the District or the fair
treatment of other bidders.
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q) Rejection of Bids: All bids may be rejected. Bids may also be rejected and projects re -bid
when the lowest bid is deemed non -responsive. Except for such rejections, the District shall
let the contract to the lowest responsive and responsible bidder.
r) The prospective contractor or supplier must provide satisfactory Certificates of Insurance to
the District as required by the bid documents, and shall carry and maintain for the life of the
contract adequate insurance with a company satisfactory to the District.
s) Protests: A supplier or contractor may protest a Purchasing action taken by the District. All
activities undertaken by the Purchasing Manager on protests will be first reviewed and
approved by General Counsel. No verbal protests will be accepted, all protests must be in
writing. A bid or proposal award protest must be submitted in writing and must be received
by the District within ten (10) business days after the date of issuance of the notice of award.
A protest submitted after the ten (10) business day period shall not be considered.
2. Ordinance 14824 also sets forth requirements for procurement under the Capital Improvement
Replacement Plan. General requirements are as follows:
a) All contracts for capital improvements shall be purchased, at a minimum, in accordance with
the requirements set forth in the MSD Charter and Missouri State law when not in conflict
with Charter.
b) Capital Improvements over Twenty Five Thousand Dollars ($25,000) shall be purchased by
formal written contract.
c) The District will advertise bid opportunities in accordance with Ordinance 14824 unless the
project is an IMMEDIATE NEED or an EMERGENCY.
d) Sealed bids shall be opened in public at the time specified in the bid documents. Bid
summaries will be available within five (5) days after the bid opening.
e) Sealed bids are required to have bid security when bid is submitted. The amount of bid
security will not be less than five percent (5%) of the bid, less allowances specified in the bid
documents.
f) Mistakes in Bids: If a mistake is attributable to an error in judgment, the bid may not be
corrected or withdrawn. Bid correction or withdrawal by reason of a nonjudgmental mistake
is permissible but only to the extent it is not contrary to the interest of the District or the fair
treatment of other bidders.
g)
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Rejection of Bids: All bids may be rejected. Bids may also be rejected and projects re -bid
when the lowest bid is deemed non -responsive. Except for such rejections, the District shall
let the contract to the lowest responsive and responsible bidder.
h) All contracts for improvements which involve labor shall contain provisions that the
prevailing rates of pay shall be paid to skilled and unskilled labor and that there be no
discrimination in the selection or employment of labor.
i) The District may use design -build and other alternative delivery methods to make any
improvements as permitted by Missouri law, Charter, and ordinance.
j)
Prior to the execution of the contract documents, the apparent successful bidder will file with
the District sufficient bond(s) and insurance as required by Ordinance and State Law. For
projects less than $50,000 the requirement for payment and performance bonds is waived
unless specifically required in the bid documents.
k) If any bidder awarded a contract fails to enter into a binding contract or furnish required
performance security or insurance within the time specified in the bid documents, the bidder
will forfeit bidder's bid security to the District.
1) As soon as a contract for capital improvements has been awarded, the District will return to
each unsuccessful bidder the bid security accompanying each respective bid. The bid
security of the next lowest responsive and responsible bidder will be retained until the
contract documents with the apparent low bidder have been signed, delivered and accepted
by the District. Once the contract has been executed the District will return bid security to
the next lowest responsive bidder.
m) The District may require prequalification of prospective bidders. In order to prequalify for a
project, a prospective bidder must provide all information requested on forms approved by
the District and must comply with all reasonable requirements designated by the District.
n) Contracts for capital improvements must specify method and timing of payment. All
contracts for capital improvements must specify that the District and the contractor shall
comply with the prompt payment requirements of Missouri law.
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3. Signatures on Procurement Related Documents:
a) Contracts:
1. When an Ordinance is passed that states that the Board has authorized the District to
enter into a contract, that contract is to be signed by the following individuals:
i. a representative of the company that is authorized to enter into a contract for that
company;
ii. the District's General Counsel or his/her representative;
iii. the Director of Finance or his/her representative, attesting that funds are available
for the financial obligation incurred;
iv. the Executive Director or his/her representative; and
v. the Secretary Treasurer or his/her representative attesting to the validity of the
document.
2. When a contract does not require prior authorization of the Board of Trustees in order to
be entered into, that contract is to be signed by the following individuals:
i. a representative of the company that is authorized to enter into a contract for that
company;
ii. the District's General Counsel or his/her representative;
iii. the Purchasing Manager or his/her representative; and
iv. the Director of Finance or his/her representative, attesting that funds are available
for the financial obligation incurred.
b) Contract Options:
Signatures for exercising contract option periods will follow the same signature
protocols as set forth in Section 3 (a). Options under contracts that were authorized by
Ordinance are required to be approved through resolution by the Board of Trustees.
c) Change Orders:
i. Change orders for improvement contracts and professional service contracts for
architects, engineers or engineering design services, land surveyors, and
landscape architects are generated and managed by Engineering. Change Orders
require approval of the Director of Finance.
ii. Change orders for contracts other than those specified in Section 3 (c) (i) are
generated and executed by Purchasing. Change Orders increasing the contract
above the original amount requires approval of the Board of Trustees.
d) Purchase Orders:
Purchase orders are issued by the District via Oracle and have established security
as to who has authority to approve the purchase orders. All non-CIRP purchase
orders must be created from a requisition, which is checked for funds availability
automatically by Oracle.
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4. Final review and distribution of documents:
a) The Purchasing Manager is responsible for final review of contracts to ensure all
signatures have been obtained as identified in this policy and that distribution of
the signed contracts is made to the following individuals listed:
✓ Contractor
✓ General Counsel
✓ Official file
b) The Director of Engineering is responsible for final review for improvement contracts
and professional service contracts for architects, engineers or engineering design services,
land surveyors, and landscape architects to ensure the contract has all necessary
signatures and distribution of contracts is made at a minimum to the following:
✓ Contractor
✓ General Counsel
✓ Official file
5. Definitions:
For the purposes of this policy, the following terms, phrases, words and their derivations
shall have the following meanings:
a) BIDDERS' LIST shall be a list of suppliers, vendors and contractors that have
requested to participate in bidding for District work.
b) BUILDING CONSTRUCTION: The process of building, altering or improving any public
structures or buildings (vertical construction) that include multiple trades. It does not
include the routine maintenance of existing structures, buildings, or real property. If more
than one type of work is involved, the predominant percentage of work type governs.
c) CAPITAL IMPROVEMENT PROCUREMENT is any procurement that is made under
the Capital Improvement and Replacement Program (CIRP) except for infrastructure
repair that does not result in an extension of the useful life of an asset, ordinary
maintenance, and items purchased using capital outlay.
d) CAPITAL IMPROVEMENT REPLACEMENT PROGRAM is a multi -year program to
expand and rehabilitate MSD's storm water and wastewater collection and treatment
capabilities.
e) CONSENT DECREE is a court order memorializing an agreement between the United
States Environmental Protection Agency (EPA) and MSD requiring MSD to achieve
and maintain compliance with the Federal Clean Water Act, entered on April 27, 2012.
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f) CONTRACTUAL SERVICES: Services not defined as any of the other categories. This
could include minor repairs to an existing structure such as roof patching (but not
replacement). This could also include, but not be limited to, temp services, consultant
services that do not require a certification or license, lawn maintenance, or janitorial
services.
g)
COOPERATIVE PROCUREMENT is when MSD purchases supplies, materials or
services through a joint purchasing program with political subdivisions and other public
governmental bodies such as the State of Missouri.
h) DEPARTMENT shall be construed to mean any and all Departments, Divisions,
Sections, Boards, Commissions or other units in the District using supplies or
procuring contractual services that derive their support wholly, or in part, from funds of
the District.
i) DESIGN BUILD CONTRACTS are contracts between MSD and a design build
contractor to furnish the engineering and related design services and the labor, materials
and other construction services required for a specific construction project.
j)
DISTRICT or MSD is The Metropolitan St. Louis Sewer District.
k) EMERGENCY is a situation or condition which may vitally affect the life, safety,
health and/or welfare of employees and/or citizens of the District or their property. An
emergency shall also include those situations or conditions where the supplies, materials,
equipment, property, and real property of the District are likely to be lost or severely
damaged, or the condition may result in disruption of District operations or cause the
District to not be in compliance with regulatory requirements.
1) IMMEDIATE NEED is a situation or condition which does not qualify as an
EMERGENCY, however, the failure to take prompt action may result in an unnecessary
delay which could cause the situation or condition to become an EMERGENCY.
Generally, this shall mean that the supplies, materials, or services are required in less
than 14 days or the condition may result in disruption of District operations or cause
the District to not be in compliance with regulatory requirements.
m) INFRASTRUCTURE REPAIR is construction work funded under the CIRP and
generally related to repair, rehabilitation, replacement, or minor improvements to
infrastructure.
n) MAINTENANCE: the repair, but not the replacement, of existing facilities when the size,
type or extent of the existing facilities is not thereby changed or increased.
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o) NON -BUILDING CONSTRUCTION: Construction not defined as building construction.
This could include demolition, below ground sewer construction (horizontal construction)
or major repair. If more than one type of work is involved, the predominant percentage of
work type governs.
p)
q)
NON -CAPITAL PROCUREMENT shall mean purchase of all supplies, materials,
services or capital outlay that do not fall under the CIRP Program, or services that are
governed by State Statute.
PREVAILING WAGE: the hourly wage, usual benefits and overtime, paid to the majority
of workers, laborers, and mechanics within a particular area. Prevailing wages are
currently established by regulatory agencies for each trade and occupation employed in
the performance of public work, as well as by Depai linents of Labor or their equivalent,
including the Missouri Department of Labor.
r) PROFESSIONAL SERVICES: Non construction work rendered by an independent
consultant with a professed knowledge of some department of learning or science in a
profession or vocation that is founded on prolonged and specialized intellectual training
that enables an individual or company to provide advice, opinions and/or
recommendations. Professional services typically imply professed attainments in special
knowledge that require certification or license.
s) PUBLIC WORKS: construction, alteration, repair, or maintenance of any building,
structure, highway, bridge, viaduct, pipeline, public works, or any other works dealing
with construction.
t) QUOTE shall mean a response from a bidder that is not required to be in sealed bid form
and may be received by the District via fax or other non -sealed means.
u) RESPONSIBLE shall mean the bidder has the technical expertise, purchasing
&/or manufacturing capacity, product &/or service quality, and financial ability to
accomplish the contemplated procurement. In determining a responsible bidder, the
following may be considered: The ability, capacity, or skill of the bidder to perform the
contract or provide the supplies, materials or services promptly or within the time
specified, without delay or interference; the character, integrity, reputation, judgment,
experience, and efficiency of the bidder; the quality of performance on previous
contracts or services; the previous and existing compliance by the bidder with laws and
ordinances relating to the contract or supplies, materials or services; the sufficiency of
the financial resources and ability of the bidder to perform the contract or provide the
supplies, materials or services; the quality, availability and adaptability of the supplies,
materials or services to the particular use required; the ability of the bidder to provide
future maintenance and service for the use of the subject of the contract; and the number
and scope of conditions attached to the bid.
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v) RESPONSIVE shall mean the bid was received prior to the established bid opening
time, in the manner and format prescribed in the solicitation, and the bid is in full
compliance with District bid specifications and requirements.
w) SEALED BID shall mean a bid that is required to be completely sealed when received by
the District.
x) SERVICES covered in this policy shall mean construction, consulting, professional and
other services. SERVICES covered in this policy shall not mean engineering,
architecture, surveying, or construction management as defined by State Statute. The
procurement of these services shall be per State Statute or as modified by District policy
as allowed by State Statute.
y) SINGLE SOURCE shall mean the supplies; materials or services are only available
from a single source.
z) SUPPLIES shall mean and include supplies, materials, equipment, contractual services and
all articles and things except utility services and items specified in Section 3 (c) (i).