The purpose of this policy is to provide County departments, citizens and vendors with purchasing and contracting services of the highest professional standards. This policy will also guide County employees, officers or agents in the purchase of items at the best price and quality, promote and maintain a good working relationship with suppliers, and emphasize cooperation between and among departments in identifying and implementing standardized organizational programs to save time and money.
Responsibility
County staff is responsible for developing all contracts in accordance with this policy, applicable state statutes and in conformance with applicable Federal Law and Uniform Guidance Standards, to ensure a full awareness and understanding by affected employees. County staff is responsible to maintain oversight to ensure that contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders.
Wadena County will maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection and the basis for the contract price.
Wadena County alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to, source evaluation, protests, disputes and claims.
II. SCOPE
This policy applies to all procurement procedures for all departments of the County, unless otherwise stated.
III. QUOTATION AND BID REQUIREMENTS
All departments shall comply with the following policies regarding the purchase of commodities and services. Contract requirements shall not be artificially divided to avoid bidding requirements. All departments of the County shall comply with Minn. Stat. § 471.345.
A contract for services for work or repair (maintenance) that changes the property shall comply with procurement requirements for commodities as detailed above, in accordance with Minn. Stat. § 471.345.
A. QUALITY
The County will strive to secure goods and services at the lowest lifecycle cost possible proportionate with quality requirements.
Wadena County has written procedures for procurement transactions. These procedures ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product or service to be procured. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, will set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications will be avoided if at all possible. Such description will not, in competitive procurements, contain features which unduly restrict competition. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a “brand name or equivalent” description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers will be clearly stated. All requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals will be identified. Wadena County will ensure that any list of all prequalified persons, firms or product which are used in acquiring goods and services is current and includes enough qualified sources to ensure maximum open and free competition. Potential bidders will not be precluded from qualifying during the solicitation period.
B. FULL AND OPEN COMPETITION
The County maintains a policy of full and open competition, where all responsible sources are permitted to compete in the purchasing process. Wadena County will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statues expressly mandate or encourage geographic preference. No state licensing laws will be preempted. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.
In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work and invitations for bids or requests for proposals will be excluded from competing for such procurements. Situations considered to be restrictive of competition include, but are not limited to, a) placing unreasonable requirements on firms in order for them to qualify to do business, b) requiring unnecessary experience and excessive bonding, c) noncompetitive pricing practices between firms or between affiliated companies, d) noncompetitive contracts to consultants that are on retainer contracts, e) organizational conflicts of interest, f) specifying only “brand name” products instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurements and g) any arbitrary action in the procurement process.
Wadena County may use time and material type contracts only after a determination that no other contract is suitable, and, if the contract includes a ceiling price that the contractor exceeds at its own risk. Time and material type contract means a contract whose cost to Wadena County is the sum of a) actual cost of materials and b) direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses and profit. Since the formula generates an open-ended contract price, a time and materials contract provides no positive profit incentive to the contractor for cost control or labor efficiency. Therefore, each contract will have a ceiling price that the contractor exceeds at its own risk. Further, Wadena County will assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.
C. ETHICS
County employees, officers and agents in a position to procure goods or services will abide by the County’s Ethics and Conflict of Interest policy, located within Article 44 of Wadena County’s Personnel Policy dated May 6, 2014. This provision includes an employee’s documentation of potential and actual conflicts of interest. County employees, officers or agents must neither solicit nor accept any payment of expense, compensation, gift reward, gratuity, favor, service or promise of future employment or any other future benefit from any source except the County for any activity related to the duties of the employee unless otherwise provided by law. County employees, officers or agents must neither solicit nor accept anything of monetary value from contractors or parties to subcontractors.
Wadena County does not have any affiliate organizations but is aware that it is responsible for maintaining written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with an affiliate or subsidiary organization, Wadena County is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization.
D. PROCUREMENT OF COMMODITIES AND SERVICES
Contract Defined: A “contract” means an agreement entered into by Wadena County for the sale or purchase of supplies, materials, equipment or the rental thereof, or the construction, alteration, repair, or maintenance of real or personal property.
Wadena County will award contracts only to responsible contactors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance and financial and technical resources.
Consideration will be given to consolidating or breaking out procurements to obtain a more economical purchase.
Due to potential County liability, all service contracts of any dollar amount shall have a legal review by the Wadena County Attorney.
MICRO-PURCHASES
Contracts $1 - $3,000 (or $2,000 in the case of acquisitions for construction subject to the Davis Bacon Act): To the extent practicable, Wadena County will distribute micro-purchases equitably among qualified suppliers. Micro purchases may be awarded without soliciting competitive quotations if Wadena County considers the price to be reasonable. Competitive bidding is not required and department heads or their designee(s) shall handle purchases for commodities if price is considered reasonable. Purchases may be made on the open market, and may be procured using a County issued credit card if applicable and within the holder’s limit. The County shall make an effort to ensure the lowest acceptable price is received; a minimum of two verbal quotes is preferred, but not required. Any quotation support shall be maintained by the department for a period of at least one year in accordance with Minn. Stat. § 471.345, subd. 5.
SMALL PURCHASES
Contracts $3,001 - $25,000: A minimum of two written or verbal quotes is required. Department heads or their designee(s) are responsible for initiating the procurement process and complying with procurement policies and procedures. Each department will maintain supporting quotation documents for a period of at least one year in accordance with Minn. Stat. § 471.345, subd. 5.
Contracts $25,001 - $100,000: Procurement of commodities may be made either through bid process or by direct negotiation. The County must consider the availability, price and quality of supplies, materials, or equipment available through the state’s cooperative purchasing venture before purchasing through another source, per Minn. Stat. § 471.345 sub. 15. In a direct negotiation, a “Request for Quote” will be prepared and distributed to vendors. The County shall attempt to obtain a minimum of two quotes. All quotes must be written and will be scanned for retention, and all parties will be notified in writing of the outcome. The department will maintain supporting quotation documents for a period of at least one year in accordance with Minn. Stat. § 471.345, subd. 5.
FORMAL SEALED BIDS
Contracts exceeding $100,001: The County must consider the availability, price and quality of supplies, materials, or equipment available through the State’s cooperative purchasing venture before purchasing through another source, per Minn. Stat. § 471.345 subd. 15. If purchases through the State’s cooperative purchasing agreement are not feasible, the County shall undergo a formal sealed bid process. Under the sealed bid process the following conditions will be met: a) a complete, adequate and realistic specification or purchase description will be available, b) two or more responsible bidders are willing and able to compete effectively for the business and c) the procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price.
Further, if sealed bids are used, the following requirements will apply: a) bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids by the County; the invitation for bids will be publically advertised, b) the invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond, and c) all bids will be opened at the time and place prescribed in the invitation for bids; the bids will be opened publicly.
Bids will be publicly solicited and a firm fixed price contract (lump sum or unit price) will be awarded to the responsible bidder whose bid, conforms to all the material terms and conditions of the invitation for bids and, is the lowest in price. This firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in the bidding documents, factors such as discounts, transportation cost and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicated that such discounts are usually taken advantage of, and all bids may be rejected if there is a sound documented reason.
Procurements in Excess of the Simplified Acquisition Threshold: Wadena County will perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, Wadena County will make independent estimates before receiving bids or proposals.
The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used.
Any contract for the procurement of a biddable service in excess of $100,000 annually shall be
approved by the County Board. All service contracts shall be maintained and reviewed periodically
for relevance and applicability.
County Board approval is required for public advertisement for the receipt of sealed bids. Final bid award will be made by the County Board, and the contract will be approved by the County Board.
E. Value Engineering
- Wadena County encourages the use of value engineering, a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost, clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions.
F. PROCUREMENT BY COMPETITIVE PROPOSALS, INCLUDING, BUT NOT LIMITED TO, LARGE
INTELLECTUAL IN NATURE TYPE CONTRACTS SUCH AS ARCHITECTURAL OR ENGINEERING.
The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost reimbursement type contract is awarded and is generally used when conditions are not appropriate for the use of sealed bids.
When this method is used the following requirements will apply: a) requests for proposals must be publicized and identify all evaluation factors and their relative importance; any response to publicized requests for proposals must be considered to the maximum extent practical, b) proposals must be solicited from an adequate number of qualified sources, c) there will be a written method for conducting technical evaluations of the proposals received and for selecting recipients, d) contracts will be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered, and e) Wadena County will use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. This method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort.
G. PROCUREMENT OF SOFTWARE OR TECHNOLOGY
- In any consideration of the purchase of software or technology, a department must consult with IT as early in the process as feasible, in order to ensure the new software or technology is one that is able to be supported by the County. The department must also work with IT to consider any ongoing or future maintenance fees, license fees, upgrade fees, or other known fees.
H. CONTRACT RENEWALS
- A department head or their designee(s) is granted the authority to renew a contract provided that the only changes are to the terms of the contract (i.e., length of service, charges). Should the contract contain changes in the verbiage of the contract or in the description of services provided, the renewal must be treated as a new contract and follow procedures detailed in this policy. In order to ensure appropriate oversight by the County Board, all renewals shall be presented to the County Board for review.
IV. COUNTY ISSUED CREDIT CARDS
The County has elected to issue certain County employees a County credit card under Minn. Stat. § 375.171. The Request for County Issued Credit Card form will be completed by the department head and submitted to Auditor-Treasurer for processing. Credit limits and approval will be set by the Board of Commissioners without exception. Purchases exceeding these limits will not be allowed; personal use of the credit card is prohibited. See the Wadena County Credit Card Policy for additional guidance.
V. LEASES
Prior to seeking County Board approval, any department considering entering into a lease or purchase shall consider and evaluate the potential benefit of direct purchase over a lease to avoid unnecessary purchases or the acquisition of duplicative items. Consideration will be given to consolidating or breaking out procurements to obtain a more economical purchase. Further, the department shall consult with the Wadena County Attorney to ensure no similar lease is already in place and to ensure the best pricing can be obtained.
VI. EXCEPTIONS TO BIDDING
A. COOPERATIVE PURCHASES
Wadena County is a member of the Joint Purchasing Cooperative with the State of Minnesota and the National Joint Powers Alliance (NJPA) and Resource Training & Solutions. Purchases from the State of Minnesota contracts, NJPA and Resource Training & Solutions are excluded from bid process procedures, but are still required to obtain County Board approval.
Wadena County encourages all departments to utilize state and nationwide contracts to promote cost effective use of shared services. All departments are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.
B. SOLE SOURCE/BRAND PROCUREMENT
An exception to the standard bid process may be granted based on the following:
- Only a single company or organization can supply the needed product or service.
- Only a single “brand/model” will meet the department’s technical/functional requirements.
- The Federal awarding agency or pass through entity, expressly authorizes noncompetitive proposals in response to a written request from Wadena County, or
- After solicitation of a number of sources, competition is determined inadequate.
Sole source requests should not be made unless the department is confident that the request is reasonable, appropriately justified to meet the County’s requirements, and can withstand a possible audit or other public scrutiny. Sole source/brand purchasing minimizes or eliminates competition and should be avoided whenever possible. These purchases are excluded from standard bid process procedures, but are still required to obtain County Board approval.
C. EMERGENCIES
A valid emergency is one where the items purchased or services provided are immediately necessary for the continued operation of the office or department involved; OR are immediately necessary for the preservation of life or property. An emergency need is one that could not have been foreseen. Failure to submit a requisition on time does not constitute a valid emergency. The County shall comply with Minn. Stat. § 375.21 and 375.22 for emergency procurements.
VII. Contract Provisions for non-Federal Entity Contracts Under Federal Awards.
Wadena County incorporates all aspects of Appendix II to Part 200, including but not limited to, a) contracts for more than the Simplified Acquisition Threshold, b) cancellations of contracts in excess of $10,000, c) Equal Employment Opportunity, d) Davis-Bacon Act, as amended, e) Contract Work Hours and Safety Standards Act, f) Rights to Inventions Made under a Contract or Agreement, g) Clean Air Act, h) Debarment and Suspension, i) Byrd Anti-lobbying Amendment and j) Section 200.322 Procurement of recovered materials. For detail, see Appendix II to Part 200.
Further, Wadena County will abide by the provisions listed in a) 200.212, regarding parties who have been debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities and with b) 180.300 regarding verification that a specific person or business is not excluded or disqualified by 1) checking System for Award Management (SAM) exclusions; or 2) collecting a certification from that person or business; or 3) adding a clause or condition to the covered transaction with that person or business.
VIII. PROCUREMENT POLICY ADOPTION
The County’s Procurement Policy shall be adopted by resolution of the County Board. The policy shall be reviewed on an annual basis by the Budget Committee and any modifications made thereto must be approved by the County Board.
References for the Administrative Policy Manual - Contracts
Minn. Stat. § 373.01 - Delineates powers and duties of a county, including requirements for bidding on contracts for the sale, lease, or conveyance of real and personal property owned by the county
Minn. Stat. § 373.02 - Delegates authority to execute written documents to Board Chair and Board Clerk (County Administrator)
Minn. Stat. § 375.21 - Addresses bid and bond requirements for work or labor purchase of furniture, fixtures, other property; construction or repair of roads, bridges, or buildings
Minn. Stat. § 471.345 - Uniform Municipal Contracting Law
Minn. Stat. § 471.59 - Provides basic statutory framework for joint operations between units of government
Minn. Stat. § 160.17 - Road construction requirements
Minn. Stat. § 162.04 - Final payment on applicable highway projects
Minn. Stat. § 290.92 – Tax withheld on wages
Minn. Stat. § 574.26 - Performance and payment bonds requirements for contracts in excess of $75,000 for the doing of any public work
Code of Federal Regulations (CFR) Title 200 – Uniform Administrative Requirements, and all amendments thereto
Code of Federal Regulations (CFR) Part 200, Appendix II to Part 200 - Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, and all amendments thereto