Attachment 1 - Proposed Purchasing Policy (POL-0185-FIN) (including Schedules A–C)

PURCHASING POLICY

Council Policy: POL-0185-FIN
Amendment # N/A
Original Policy: POL-0031-FIN
Amended: Amendment No. 1, 2017
Presiding Council Member, Scott Goodmanson
Date: __________ Signature: __________

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1) PURPOSE

The purpose of this policy is to:

a) describe the City’s purchasing processes to ensure compliance with the City’s Financial Plan, applicable laws, and trade agreements;
b) establish purchasing authorization limits and cheque signing authority; and
c) ensure the City achieves the best value for its Expenditure including by considering, where appropriate, environmental sustainability, ethical standards, social value, and Indigenous procurement.

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2) APPLICABILITY

a) This policy applies to all purchases made by Staff.
b) Purchases exempt from the purchasing process requirements are listed in section 8 and Schedule “B” to this policy.

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3) DEFINITIONS

In this Policy:

a) “CAO” means the City’s Chief Administrative Officer pursuant to section 147 of the Community Charter.
b) “City” means the City of Langford.
c) “Construction” means the construction, reconstruction, demolition, repair or renovation of a building, structure, or other civil engineering or architectural work and includes site preparation, excavating, drilling, seismic investigation, the supply of products, materials, equipment and machinery if they are included in and incidental to the construction, and the installation and repair of fixtures of a building, structure or other civil engineering or architectural work, and includes consultants for capital projects.
d) “Council” means the Council of the City of Langford.
e) “Deputy Director” means Staff whose title includes deputy director.
f) “Direct Purchase” means the process for purchasing as outlined in Schedule “A”.
g) “Director” means Staff whose title includes director, not including deputies unless otherwise indicated.
h) “Expenditure” means the act of spending money or incurring costs related to a Purchase.
i) “Financial Officer” means the City’s financial officer pursuant to section 149 of the Community Charter.
j) “Financial Plan” means the City’s financial plan as required by the Community Charter and adopted by bylaw each year.
k) “Formal Competitive Process” means the processes for purchasing as outlined in Schedule “A”.
l) “Indigenous Vendors” includes all businesses, including sole proprietorships, limited companies, co-operatives, partnerships, and not-for-profit organizations that are at least 50% owned or controlled by First Nations, Metis, or Inuit persons, or a First Nations government, directly or indirectly.
m) “Manager” means Staff whose title includes manager.
n) “Purchase Order” means a document issued by the City to a vendor, indicating the types, quantities, and agreed prices for products or services. It is a contractual offer to buy and becomes legally binding once accepted by the vendor.
o) “Purchasing Group” means an organization that facilitates public sector entities to pool their purchasing power to obtain competitive pricing and streamline purchasing processes.
p) “Quote” means the process for purchasing as outlined in Schedule “A”.
q) “Senior Manager” means Staff whose title includes senior manager.
r) “Staff” means all employees, officers, volunteers, and agents of the City, but does not include elected officials.

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4) GENERAL

a) Council provides strategic direction to Staff by approving Expenditures through the City’s Financial Plan. However, Council is not involved in purchasing activities unless Staff refer a purchase to Council for decision or direction.
b) All Expenditure must be in accordance with the City’s Financial Plan, and any Expenditure not within the City’s Financial Plan must be referred to Council for direction.
c) All contracts and agreements must be executed in accordance with the City’s Statutory Officers and Delegation of Authority Bylaw No. 2260, 2026, as amended or replaced.
d) Purchasing activities are decentralized to staff within the limits of this policy.
e) Directors are responsible, within their area of control, for ensuring that:
i. all Expenditure complies with the City’s Financial Plan;
ii. the risk of fraud, embezzlement and error is minimized; and
iii. this policy is followed by Staff within their area of control.
f) Purchases must not be split or separated into parts with the intention of avoiding the requirements of this policy.
g) Any reference to the CAO includes their deputy or delegate.
h) The City reserves the right to seek reimbursement for any Purchases not authorized by this policy and consider appropriate disciplinary actions for breaches of this policy.
i) All contracts for services to be provided on City property require the vendor to provide proof of registration, where applicable, and remain in good standing with WorkSafeBC throughout the term of the contract.
j) The City reserves the right to require bid bonds to be posted by bidders, or a labour or material bond or other security if deemed necessary by the Staff responsible for that Purchase. Such bond or security may be by way of irrevocable letter of credit or as otherwise required by Staff.

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5) AUTHORIZED PURCHASES

a) With the approval of the CAO or Financial Officer, Directors may assign purchasing authority of up to $10,000.00 to Staff within their department (“Authorized Staff”).
b) Authorized Staff must not further delegate purchasing authority.
c) The following positions are authorized to commit the City to a Purchase in accordance with the following limits, excluding GST:

d) Any contract, agreement, or document resulting in an Expenditure over $100,000.00 must also be signed by the CAO, or where the CAO is the primary signatory, the CFO.
e) Despite subsection (c), the CAO may direct Staff to submit any contracts or agreements to Council for approval.

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6) CHEQUE SIGNING AUTHORITY

a) All cheques must be signed by two individuals in accordance with the following table:

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7) PURCHASING PROCESS REQUIREMENTS

a) Subject to the exemptions in this policy, the City must provide a fair opportunity for vendors to supply goods, services or Construction to the City by conducting competitive processes in accordance with the following thresholds and Schedule “A” which defines the processes:

b) In determining the estimated Expenditure, the City must consider the estimated total financial commitment resulting from a Purchase, not considering optional renewals when the compulsory part of a contract is of at least one year’s duration.
c) Where section 7 (a) provides for a choice in process, the Director responsible or Authorized Staff may determine which process to follow, taking into account the type of Purchase and the benefits and disadvantages of each process.

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8) PURCHASING PROCESS EXEMPTIONS

a) Purchases exempt from the purchasing process requirements in section 7 are listed in Schedule “B” to this policy.
b) The CAO or Financial Officer may authorize the City to make a purchase without a Quote or Formal Competitive Process.

c) Emergency Purchases:
i. Where due to an emergency which necessitates an urgent purchase, and the good, service, or Construction required cannot be obtained in time by following a Quote or Formal Competitive Process, the CAO or Financial Officer may authorize the City to make the purchase without a Quote or Formal Competitive Process.
ii. For the purpose of this policy, an emergency exists when an unforeseeable situation or event occurs that is a threat to public health or safety, the maintenance of essential services, or the security of the City’s interests.

d) Sole Source Purchases:
Where Staff believe that only one vendor is capable of providing the required goods or services, including but not limited to cases where exclusive licences, copyright, software, warranty, or specialized products required are only offered by one vendor, a Director together with the CAO or Financial Officer may authorize the City to make the purchase without a Quote or Formal Competitive Process.

e) Preferred Vendor Purchases:
Where multiple vendors can provide the required goods or services, but one vendor is preferred due to factors such as superior performance or reliability, established relationship, strategic alignment, or reduced risk, a preferred vendor purchase must be weighted against the benefits of a Quote or Formal Competitive Process.

A Director may authorize the City to make a purchase up to $74,999.99 without inviting a Quote or Formal Competitive Process where:
i. the good or service is purchased for testing and trial use;
ii. the good or service is currently rented with a contract that has a purchase option, and the purchase option is beneficial to the City;
iii. a good or service is offered for sale by tender, auction or negotiation and it can be demonstrated that purchasing the good or service is in the best interest of the City;
iv. there are strong indicators of a good or service’s superior performance or reliability; or
v. there is an established relationship, strategic alignment or other consideration that justifies the purchase without a Quote or Formal Competitive Process.

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9) PURCHASING GROUPS AND JOINT PURCHASING VENTURES

a) The City may participate in a Purchasing Group or joint purchasing venture if doing so is determined to be in the best interests of the City, and with the approval of the CAO or Financial Officer.
b) If the City participates in a Purchasing Group or joint purchasing venture:
i. the City may adhere to the policies of the entity conducting the purchasing process, provided that such policies are not inconsistent with the principles in this policy; and
ii. the City will follow this policy if leading the purchasing process.

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10) PURCHASING PROCESS EVALUATION

a) When making purchasing decisions, paramount regard is given to schedule, quality, price, and previous experience. However, achieving the best overall value for the City may require considering, where appropriate:
i. Sustainability: Where vendors minimize environmental harm and carbon emissions, including end of life impacts, and maximize resource efficiency.
ii. Social Value: Where vendors facilitate employment, training and apprenticeship opportunities in the community, or for Indigenous peoples, groups or individuals facing systemic barriers, or persons with disabilities. The City may also consider any corporate social responsibility initiatives undertaken by a vendor that contributes to social and community well-being.
iii. Ethical Standards: Where vendors maximize fair trade opportunities and ensure sound working conditions throughout the supply chain that meet or exceed provincial, national or international employment standards.

b) Despite the general guidelines in subsection (a), any Formal Competitive Process will provide the specific criteria used to evaluate bids for that competition.
c) When evaluating Direct Purchases and Quotes, where all things are equal, the City may consider the location of a vendor and give priority to businesses located in the following order:
i. Langford;
ii. Capital Regional District;
iii. Vancouver Island;
iv. British Columbia;
v. Canada.

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11) PURCHASE ORDERS AND STANDING ORDERS

a) A Purchase Order may not always be required or the preferred method for purchasing, and the purchasing Staff will determine when another method is appropriate.
b) When a Purchase Order is used, it should contain, where applicable:
i. information to identify the buyer and seller;
ii. items or services being purchased;
iii. specific quantities and prices;
iv. delivery dates and terms; and
v. any payment terms and conditions.
c) The Staff responsible for a purchase must:
i. ensure that the goods and services received are as requested and priced as quoted; and
ii. submit in a timely manner, a copy of the Purchase Order, when applicable, and associated invoice to the City’s Finance Department.
d) Standing orders may be used to guarantee a continuous supply of goods and services required on a frequent recurring basis.

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12) CHANGE ORDERS

a) Change orders used to update, alter, extend or otherwise modify a contract must be within the approved Financial Plan and must comply with the following:
i. any change orders that result in:
(1) more than a 5% increase to the total contract price (excluding GST) of a good, service, or Construction not including earthworks; or
(2) more than a 20% increase to the total contract price (excluding GST) of earthworks,
must be approved by the CAO or Financial Officer.
ii. any change order that results in an increase above subparagraph (i) may result in a second quote for comparative analysis, and, if in the City’s best interest, the required goods, services, or Construction may be obtained from a different vendor.

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13) INDIGENOUS PROCUREMENT

a) The City encourages Indigenous entrepreneurship, business, and economic development by providing Indigenous Vendors opportunities to provide the City with goods, services, and Construction.
b) When the City is purchasing goods, services, or Construction services, the City may give priority to Indigenous Vendors, provided that any such purchases will:
i. be awarded at market competitive rates;
ii. meet the City’s expectations with respect to all technical qualifications, safety and performance standards; and
iii. consider key operational factors including but not limited to supply, schedule, market competition, program costs, and efficiency.

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14) CONFLICTS OF INTERESTS

a) Staff must not, in respect of a proposed purchase by the City:
i. give any preference to a vendor, supplier, service provider, contractor or consultant to obtain a personal benefit; or
ii. be the decision maker in awarding the Expenditure if that Staff or the Staff’s immediate family is an owner, shareholder, employee, principal, partner, or sole proprietor of a prospective vendor, supplier, service provider, contractor or consultant.

b) Staff must inform their Director – or if they are a Director, the CAO – of any situation that could affect, or appear to affect, their impartiality in a proposed City purchase, such as a business relationship or personal interest. In such cases, the Director or CAO:
i. may choose to make the decision themselves; or
ii. assign someone else to be the decision maker for that purchase.

c) All communications with potential bidders during a Formal Competitive Process must be through a single contact person designated in the solicitation document.

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15) DISQUALIFICATION OF BIDDERS

a) The CAO may disqualify a vendor from participating in a Quote or Formal Competitive Process for up to three years where:
i. there is sufficient evidence of consistent failures to meet standards specified by the City; or
ii. there is a serious breach of contract, a criminal conviction related to the vendor or their directors or officials, or there is an improper gift or offer to Staff intended to influence the Quote or Formal Competitive Process.

b) Vendors who have been involved in litigation against the City in the two years before the tender closing date may be disqualified from participating in a Formal Competitive Process.
c) A written decision will be issued to any vendor disqualified or suspended setting out the reasons for disqualification and suspension, and the vendor may appeal the decision to the CAO within 10 days of receiving the written decision.

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16) DISPOSAL OF SURPLUS, OBSOLETE, OR DAMAGE ASSETS

a) Directors, in consultation with the CAO or Financial Officer, are responsible for managing surplus, obsolete, or damaged assets in their department, or may delegate this responsibility to an Authorized Staff.
b) Directors, in consultation with the CAO or Financial Officer, may dispose of any surplus, obsolete, or damaged assets by any method the Director considers to be in the City’s best interests, including but not limited to:
i. public auction;
ii. public tender;
iii. negotiated sale;
iv. trade-in;
v. destruction; or
vi. donation to other governments or not-for-profit organizations.
c) Staff are not permitted to receive or take any surplus, obsolete, or damaged assets, nor purchase them from the City, unless that sale is open to the public.
d) This section does not apply to:
i. property collected by the Police as evidence;
ii. the disposal of unclaimed property by the Police; or
iii. property seized pursuant to a statute, bylaw or process of law where another method of disposition is prescribed or ordered.
e) All disposals must be reported to the Manager of Financial Management and Reporting.
f) Council must approve any donation over $50,000.00.

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17) CORPORATE CREDIT CARDS

a) Cardholders must sign an Employee Credit Card Agreement, attached as Schedule “C” to this Policy, which states card limits, procedures and responsibilities to ensure a high standard of care is achieved. Agreements are renewed annually to remind cardholders of expectations.
b) The credit cards are the property of the City and will be issued jointly in the name of the cardholder and the City.
c) The cardholder is responsible for all expenses charged to the cards and transactions should be for City business purposes only. Any non-reimbursable charges (e.g. meal cost exceeds allowable meal per diem) will be paid to the City immediately or deducted from the cardholder’s next pay.
d) Credit card expenditures will comply with established spending limits and authorities, approved budgets and in accordance with City policies. Any transactions allocated to expenses for which the cardholder does not have budget authority over, will require pre-approval by the appropriate budget authority.
e) Staff cardholders will undertake to protect the card and the card account number and realize that it is for their use only.
f) When using the card for making purchases on the internet, the cardholder will take every reasonable precaution to ensure that they are transacting on a reputable and secure website and will refer to security guidelines for internet purchases provided on the Employee Credit Card Agreement.
g) Lost or stolen cards are to be reported immediately according to the procedure in the Employee Credit Card Agreement.
h) Transaction approval will involve the submission of a Credit Card Spreadsheet by the cardholder every month. All purchases will be verified and matched with supporting receipts and documentation and assigned to an expense account.
i) The Credit Card Spreadsheet will be signed and dated by the cardholder, confirming that all charges are correct and incurred for business purposes. The cardholder’s supervisor (or in the case of the CAO, the Director of Finance) will sign and date the statement confirming that all purchases are appropriate, business-related charges.

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18) RECORD MANAGEMENT

a) The City’s purchasing records are subject to the Freedom of Information and Protection of Privacy Act.
b) Staff must ensure that all purchases are documented, and that all receipts and related documents are properly recorded and stored in accordance with City policies.

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19) RESCIND

a) POL-0031-FIN – “Purchasing Policy” is rescinded.
b) POL-0038-FIN – “Assets – Recording, Identification and Disposal Policy” is rescinded.
c) POL-0045-FIN – “Cheque Signing Authority (up to $50,000) Policy” is rescinded.
d) POL-0046-FIN – “Cheque Signing Authority (over $50,000) Policy” is rescinded.

Adopted by Council
Meeting Date: __________

CERTIFIED CORRECT
ADMINISTRATOR __________ DATE: __________

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Schedule “A”

Purchasing Processes

A. Specifications

1. Staff should prepare specifications that can be easily interpreted by all qualified vendors.
2. Unless it can be demonstrated that there are valid technical, operational or financial reasons for not doing so, specifications must be prepared that can be fulfilled by more than one product or vendor.
3. All quotations, requests for proposals and invitations to tender should be completed using standardized templates where such are available.
4. A Formal Competitive Process should generally be open for responses for a minimum of 25 calendar days.

B. Market Research Methods

1. Request for Information
   a) A request for information is a non-binding, exploratory tool used to gather information from vendors, or the market at large about products, services, capabilities, or solutions available to meet a City requirement.
   b) A request for information is not a solicitation for bids or proposals and does not result in a contract award.

2. Request for Expressions of Interest
   a) A request for expressions of interest is a public invitation to gauge interest from vendors who have the capability to deliver specific goods or services and may lead to a shortlist of qualified respondents for a subsequent competitive process.
   b) A request for expression of interest is non-binding and does not guarantee future contract award or participation.

3. Other Market Research Methods
   a) The City may employ other market research methods such as:
   (i) industry engagement sessions;
   (ii) surveys and questionnaires;
   (iii) supplier pre-qualification programs.

C. Direct Purchase

1. Direct Purchases refer to the purchase of goods and services where Quotes or a Formal Competitive Process is not required.
2. Only Staff authorized by this policy may initiate Direct Purchases and must do so in accordance with this policy.
3. Staff making a Direct Purchase must document and send to the Finance Department any Purchase Order or invoice arising from the purchase.

D. Quotes

1. A Quote refers to a process to obtain pricing and terms from vendors.
2. Only Staff authorized by this policy may initiate Quotes and must do so in accordance with this policy.
3. Staff should draft applicable details of materials, equipment or services required on the quotation summary.
   a) When a material, equipment or service is tax exempt, this should be stated on the quotation summary.
   b) A quotation summary may specify a deadline for receiving quotations.
4. Staff should attempt to request at least three vendors to provide quotes, more where appropriate. If it is not possible to obtain quotes from three vendors, two vendors are acceptable.
5. Staff should summarize the quoted responses.
6. Staff make the award by issuing a Purchase Order, or by another acceptable method.

E. Formal Competitive Process

1. Invitation to Tender

a) An invitation to tender is used to solicit competitive bids when the solutions, specifications, performance standards, and timeframes are defined.
b) A formal written tender document is prepared which includes:
i. detailed scope of work required;
ii. submission instructions including a deadline for submissions; and
iii. terms and conditions;
c) The tender is advertised on BC Bid, the City’s website, or a local newspaper.
d) Sealed tenders will be received from bidders at the location and up to the time specified in the tender document.
e) Tendered bids must be presented for submission, sealed and stamped as to time and date of receipt, and maintained in a sealed condition.
f) The responsible Staff will convene a formal tender opening on the closing date of the tender that may be attended by interested parties and must includes at least two witnesses.
g) At the time of tender opening, Staff will:
i. open each tender, announce the name of the bidder and the price, and complete a tender record form;
ii. declare all late tenders invalid and record as such on the tender record form;
iii. evaluate the tenders and as soon as reasonably practicable, prepare a contract that must meet all of the terms and conditions set out in the tender document.
h) If a bid offers features that either adds or limits the terms and conditions of supply as specified in the tender document, then the bid may be rejected.

2. Requests for Proposal (RFP)

a) An RFP is a process which solicits proposals from vendors for goods, services or Construction and provides a vendor an opportunity to propose a solution to the City’s requirements.
b) Staff prepares an RFP document with criteria such as:
i. detailed scope of work required;
ii. evaluation criteria which includes a disclaimer that the lowest or any bid is not necessarily accepted;
iii. submission instructions including a deadline for submissions; and
iv. terms and conditions.
c) Staff may permit a question period to allow vendors to seek clarification.
d) Vendors must submit their detailed proposals by the deadline.
e) Staff evaluate submissions based on the evaluation criteria, with potential short listing, interviews, or presentations as required.
f) RFP’s may result in negotiations with the City on scope, pricing, or terms with the vendor.
g) Staff prepare a contract that must meet all of the terms and conditions as negotiated.

F. Evaluation Criteria (for RFPs)

1. Staff must ensure that evaluation criteria are developed for all chosen factors and that the evaluation procedure in place is fair and objective.
2. In creating the evaluation criteria, Staff should consider schedule, price, quality, and if appropriate:
   (a) training, maintenance, delivery, warranties, methodology, experience, and performance;
   (b) sustainability and reducing negative environmental impacts;
   (c) ethical standards;
   (d) social value.

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Schedule “B”

Purchasing Process Requirement Exemptions

The following purchases are exempt from the purchasing process requirements in section 7:

i. the purchase or disposition of land and improvements;
ii. payments required by statute;
iii. licences, leases, or agreements related to real property owned by the City;
iv. subscriptions, publications, professional dues and fees;
v. travel expenses (including mileage and lodging);
vi. Staff training (including exams, courses and conventions);
vii. utilities (including hydro, gas, water, sewer, waste, recycling, internet, phone, cable);
viii. mailing and distribution including postage charges;
ix. any form of financial assistance including grants, loans, and fiscal incentives;
x. refunds issued by the City;
xi. insurance premiums;
xii. legal or notary services;
xiii. legal costs and damages;
xiv. payroll including salaries and wages to Staff;
xv. tax remittances;
xvi. licences or permits for software;
xvii. work orders under the City’s roads and parks maintenance contracts; and
xviii. payments to other government entities or public bodies.

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Schedule “C”

Agreement to Accept the Credit Card

The Credit Card represents the City of Langford’s trust in you. You are empowered as a responsible agent to safeguard the City of Langford’s assets. Your signature below is verification that you have read and agree to comply with the Credit Card Guidelines as set out below:

1. I understand the Credit Card is for City of Langford approved purchases only, and I agree not to charge personal purchases to the card.
2. Improper use of this card can be considered misappropriation of the City of Langford funds. This will result in disciplinary action, up to and including termination of employment.
3. If the card is lost or stolen, I will immediately notify the Bank of Montreal and the Plan Administrator by telephone. I will confirm the telephone call with a written notice sent by mail or email with a copy of the notification to the Plan Administrator.
4. I agree to surrender the card immediately upon termination of employment.
5. The card is issued in my name. I will not allow any other person to use the card without my authority. I am considered responsible for any and all charges against the card.
6. All charges will be billed directly to and paid directly by the City of Langford.
7. I will provide a monthly Credit Card Spreadsheet which will report all activity during the statement period with supporting documentation and receipts.
8. Since I am responsible for all charges (but not for payment) on the card, I will resolve any discrepancies by either contacting the supplier or the Bank of Montreal.
9. I understand the credit card is not provided to all employees. Assignment is based on my need to purchase materials for the City of Langford. My card may be revoked based on change of assignment. I understand that the card is not an entitlement nor reflective of title or position.