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MSD Purchasing Policy 2-18-2020Issued: 2/18/2020 MSD GENERAL MANAGEMENT POLICY APPROVED BY: de,...a,/ EXECUTIVE DIRECTOR TOPIC: Purchasing Policy Supersedes Policy Issued: 7/20/16 and updated 3/1/18 and 11/15/19 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 of $10,000.00 or more. Purchases of $10,000.00 or more must be accomplished through the Purchasing Division. Where applicable, supplies, materials or services less than $10,000.00 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 15310 sets forth requirements for non -capital procurement. General requirements are as follows: a) Purchases less than $10,000.00, competition is not required but is encouraged; b) Purchases between $10,000.00 and less than $50,000.00, at least 3 competitive quotes must be solicited. c) Purchases of $50,000.00 or greater require formal bidding. d) Professional services procurements of $50,000.00 or greater 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. f) Co-operative purchases with other agencies may be permissible. g) Multi -year contracts are permissible under certain circumstances as set forth in Ordinance 15310 and Charter. Page 1 of 9 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. 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. Purchases made with a credit card may be exempt from this requirement but must comply with the Purchasing Card Policy. 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 b'ut only to the extent it is not contrary to the interest of the District or the fair treatment of other bidders. Page 2 of 9 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 15310 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 of Fifty Thousand Dollars ($50,000.00) or greater shall be purchased by formal written contract. c) The District will advertise bid opportunities in accordance with Ordinance 15310 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. Page 3 of 9 g) 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. I) 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. Page 4 of 9 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. 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. Page 5 of 9 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. Page 6 of 9 0 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. Page 7 of 9 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 Departments 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. Page 8 of 9 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). Page 9 of 9