HomeMy WebLinkAboutFCS-12-100 - Purchasing By-law ReviewREPORT TO:
Finance and Corporate Services Committee
DATE OF MEETING:
May 28, 2012
SUBMITTED BY:
Dan Chapman, Deputy CAO Finance and Corporate
Services
PREPARED BY:
Larry Gordon, Director, Supply Services
WARD(S) INVOLVED:
N/A
DATE OF REPORT:
May 18, 2012
REPORT NO.:
FCS-12-100
SUBJECT:
Purchasing By-law Review
RECOMMENDATION:
That By-law 2001-238 being a by-law to cover Purchasing and Materials Management policies
and regulations, and to define authority and responsibilities, be repealed; and,
That the by-law attached as Schedule ‘1’ to Finance and Corporate Services Department report
FCS-12-100, be approved; and further,
That the City of Kitchener Municipal Code Chapter 170, Purchasing and Materials Management,
be amended to be consistent with the terms of the new by-law.
BACKGROUND:
The purchasing by-law outlines purchasing and materials management policies, regulations and
procedures to be followed in order to obtain the best value in the procurement of goods and
services for the Corporation of the City of Kitchener. The guiding principles of the by-law are
that the procurement process be effective, objective, fair, transparent, accountable and efficient.
The purchasing by-law is reviewed periodically to ensure that it continues to meet the needs of
the City. The last review was completed in 2001. The purpose of this report is to summarize
the findings of the most recent review and the associated updates to the by-law.
REPORT:
The proposed purchasing by-law (attached) was reviewed by a team comprised of staff from
Finance, Engineering, Operations, Fleet, Facilities Management and Utilities. The Ontario
Public Buyers Association website was also used as a reference for comparison of the City’s
purchasing by-law to the purchasing by-laws of other Ontario municipalities.
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The summary of the updates made is as follows:
Title and Organizational Changes
A number of title and organizational changes have been made to the document to reflect the
current organization structure within the City.
For example:
“Deputy CAO” replaces “Department Head”
“Director of Supply Services” replaces “Manager of Purchasing”
References to “Purchasing” (division) have been replaced with “Supply Services”
Purchasing Parameters
The purchasing parameters have been amended to reflect inflationary increases that have
occurred since the purchasing by-law was last revised in 2001. As prices increase each year,
the volume of purchase orders and tenders being processed also increase. By adjusting the
thresholds to keep pace with inflationary increases, the procurement process can continue to be
effective and efficient. This adjustment helps to maintain a reasonable relationship between the
level of effort expended to undertake a purchase and the value of the purchase.
The threshold changes in the bylaw are as follows:
$2,500 has increased to $3,000
$10,000 has increased to $15,000
$20,000 has increased to $25,000
$100,000 has increased to $125,000
Additional Content
The purchasing by-law has been updated to include the following articles and additional content:
Green Procurement Program
Article 2.9 has been added to ensure the City’s commitment to the environment is considered in
all decisions related to the purchase of goods and services.
Local Preference
Article 3.2 has been added to ensure that the City is not in violation of the “Discriminatory
Business Practices Act of Ontario” by awarding contracts based on local preference. This
section also ensures the procurement process is fair and objective.
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Requests for Proposals (RFP) - Standards
Additional content has been added to Article 5.1 to clarify the Request for Proposal selection
process. This additional content ensures the RFP selection process is objective, fair and
transparent.
Requests for proposals may be called where the requirements or function of goods or services
cannot be definitely specified and where such proposals would result in specific offers by the
bidders to fulfill the requirements or function at a particular price. Where a request for proposals
is utilized, the Director of Supply Services and at least two (2) employees from a Department or
Departments requiring the goods or services shall form a committee that:
a) Establish the terms and conditions for the request for proposals along with the criteria that
will be utilized for the evaluation of the proposals;
b) Advertises the request for proposals if the value of the goods or services is estimated to
exceed $125,000.00;
c) Evaluates the proposals and tabulates the results in accordance with the established
criteria;
Public-Private Partnership (PPP)
In recent years the City has had the occasion to solicit bids from private sector participants for
certain public-private partnership projects. In anticipation of the possibility of more such
partnerships, Article 7 has been added to clarify the general process for selecting a preferred
private sector partner. The addition of this article demonstrates a commitment to objective, fair
and transparent PPP processes.
Disputes
The previous by-law did not address dispute resolution. Article 12 has been added to the
purchasing by-law to identify the process available to a bidder if they choose to dispute a
decision regarding their bid. A dispute resolution process improves the accountability of the
procurement process.
Persons with Disabilities
Article 16.4 has been added to the purchasing by-law to support the City’s compliance with the
regulations regarding the Ontarians with Disabilities Act, 2001, the Accessibility for Ontarians
with Disabilities Act 2005 and the City’s Barrier Free Design Guidelines 2006. To ensure the
procurement process is accountable and efficient, City staff need to be aware of the
requirements and apply these requirements when preparing specifications for the purchase of
goods or services.
Protection of Personal Information
Article 16.5 has been added to support the City’s compliance with the Municipal Freedom of
Information and Protection of Privacy Act (MFIPPA). Over the past few years, there has been an
increase in the number of vendors engaged, who offer data storage services or Software as a
Service (SaaS), in which the City’s data is hosted on a server that is not under the City’s control
and is accessible to the City via the web. In some cases the vendors perform data conversion
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on behalf of the City. The addition of this section ensures the procurement of data services
involving personal information will meet the MFIPPA requirements.
Other
The following housekeeping changes were made to the document to reflect changes in
technology or to reflect current generally accepted best practices:
Reference to advertising in a local newspaper has been removed. With the increased
use of technology, the by-law has been changed to reflect general practice to advertise
through the Ontario Public Buyers Association’s “Electronic Tendering Information
System” as well as through municipal websites.
External legal counsel has been added to “Schedule ‘A’ Exclusions. Matters that require
expertise of external counsel often arise on short notice and may be time sensitive.
Because many of these matters are extremely specialized, it can be critical to obtain a
firm or individual with very specific expertise rather than the least expensive alternative.
In certain matters it may also be necessary to retain a lawyer that has a comprehensive
understanding of the history of a matter and the business of the City in order to meet
court and other legal deadlines.
Previously, under Article 13, all contracts in excess of $125,000 required the signatures
of both the Mayor and City Clerk. A review of the authorization process determined that
all contracts in excess of $125,000, upon approval by resolution of Council, are reviewed
for form by Legal, approved by the Director of Supply Services and signed by the Mayor
and City Clerk. To improve the efficiency of the process, the Mayor and Clerk will no
longer be required to sign these contracts. Instead the bylaw now stipulates these
agreements must be reviewed for form by Legal before being signed by the Director of
Supply Services.
Changes have been made to the by-law to provide improved wording or to provide further
clarification. For example:
Definitions have been added for “City”, “H.S.T.” and “Immediate family”.
“Consulting Services” has been replaced with “Professional and Consulting Services”
and the definition has been expanded for clarification.
SUMMARY:
The updates made to the purchasing by-law will ensure the procurement process continues to
be effective, objective, fair, transparent, accountable and efficient. As stated in Article 19, By-
law Administration, the Director of Supply Services will update the purchasing bylaw at least
every five years.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The purchasing by-law which forms the basis for Chapter 170 (Purchasing and Materials
Management) of the City of Kitchener Municipal Code supports the City’s commitment to
efficient and effective government by obtaining the best value in the procurement of goods and
services for the Corporation of the City of Kitchener. This supports the City’s Strategic
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Directions for Financial Management which call for the responsible stewardship of public funds
within a supportive policy framework.
FINANCIAL IMPLICATIONS:
None
ACKNOWLEDGED BY:
Dan Chapman, Deputy CAO
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