Contract Administration - Procedure 022

  1. PURPOSE:

    To establish procedures for processing contracts.

     

  2. SCOPE:

    These procedures are applicable to all written agreements for goods/services, leases, and construction, in which City funds are expended. The only exception is purchases under $750.00.

     

  3. GENERAL:

    The City Commission has the power and authority to enter into contracts and bind the City by contract when authorized by law. Certain departmental and governmental officials are delegated the responsibility and authority to approve contracts on behalf of the City pursuant to Resolution 809 as amended by 988.

    The outline below indicates representative contract classifications and examples. Those individuals involved in contract administration should become familiar with these classifications and determine which classification is appropriate for the different types of contracts for which they are responsible.

     

    1. Intergovernmental/Inter-local Agreements

      Utility and roadway construction/maintenance, grants, etc.

       

    2. Procurement

       

      1. Goods - supplies/commodities

         

      2. Equipment - capital and non-capital

         

      3. Services - professional and consulting

         

      4. Services - non-professional, technical, equipment, etc.

         

      5. Maintenance - equipment, utilities, preventive, technical, etc.

         

      6. Construction - buildings, utilities, roads, etc.

         

      7. Insurance

         

      8. Real Property - fee ownership, easements, permanent, etc.

       

    3. Leases and Lease Purchases

         

      1. Property - land

         

      2. Property - buildings

         

      3. Property - personal (equipment, software, etc.)

         

      4. Third Party Leases

         

      5. Other Financial Matters

         

  4. RESPONSIBILITIES:

     

    1. Originating Department:

       

      1. It is the responsibility of the Department Director or designee to:

         

           

        1. Designate one or more individuals in the department to coordinate the administration of the project and insure compliance of this procedure.

           

        2. Insure that sufficient funds have been appropriated and are available.

           

        3. Monitor implementation and performance of the contract after award, where applicable.

           

        4. Insure that the contract (preferably two original sets) is forwarded to the Procurement Division.

           

        5. Responsible for the coordination and routing of the contract and subsequent documentation throughout the contracting process.

         

      2. Additional responsibilities that may be required by the Department Director or designee:

           

        1. Defining the details of contractual agreements (i.e. terms, conditions, duration, etc.).

           

        2. Conduct or participate in contract negotiations (if a formal competitive sealed proposal).

          Prepare draft contracts.

    2. Procurement Division

         

      1. Review all terms, conditions and specifications of applicable contracts to insure compliance with the procurement procedures, Florida Statutes and Federal laws.

         

      2. Issue all notices relating to contracts (Notice of Award, Notice to Proceed, Contract Renewals, etc.)

         

      3. Insure that all change orders or modifications to contracts are properly approved.

         

      4. Maintain a "contract file" of contracts which may include the following information:

           

        1. Contract number

           

        2. Contract title

           

        3. Vendor name, address, telephone, and contact representative

           

        4. Contract amount

           

        5. Contract change orders

           

        6. Contract Amendments/Modifications

           

        7. Bonding and Certificates of Insurance (where applicable)

         

      5. Participate in negotiations and meetings concerning contractual procedures and policies.

       

    3. Risk Management

         

      1. Determine adequate levels and types of insurance coverage to be provided for the City’s protection.

         

      2. Assure that proper indemnification provisions are included in contract provisions.

         

      3. Verification and approval of appropriate bonding (where applicable)

       

    4. Legal Consultant

      The City Attorney shall participate in all contractual obligations involving the City. Routine or standard contractual matters do not require the City Attorney’s involvement. Contracts which are unique may require significant involvement by the City Attorney at a very early stage of the contracting process. The City Attorney’s responsibilities include, but shall not be limited to, the following:

         

      1. Review all contracts to assure their legal sufficiency.

         

      2. Participate in contract negotiations as required.

         

      3. Provide comments regarding the ramifications of certain contractual situations.

      E.Finance/Accounting Division

      1. Review terms and conditions of contracts assuring to the extent possible that:
        1. it is not an open-ended obligation.

           

        2. provisions and payments do not violate constitutional or statutory requirements imposed on City government.

           

         

      2. The Accounting Division’s role and responsibility may include the coordination of alternative means of financing lease purchase/buy-out options.

  5. PROCEDURES:

       

    1. Intergovernmental Agreements/Grant Applications

      Grant applications create a contractual obligation upon the City. The City Commission serves as the grantee or the sub-grantee for the City.

       

      1. Functions - The user department performs all necessary functions, obtains budget funds, writes the application, creates the service area, etc. These activities should be coordinated with the Accounting Division.

         

      2. Submission - The user department submits the grant package to the Accounting Division for review and signature. The grant application is reviewed by the Finance Director, City Manager, and possibly the City Attorney. The user department may then send the grant application to the appropriate agency.

         

      3. Approval - Upon acceptance by the appropriate agency, the Finance Director shall obtain City Commission approval.

         

      4. Purchase Request - If the grant is approved by the Commission, the user department shall process a requisition for the goods/services identified in the grant and forward a copy of the grant to the Procurement Division.

         

      5. Purchase Authorization - Upon approval of the requisition and receipt of a copy of the grant, the Procurement Division will issue a purchase order.

       

    2. Procurement

         

      1. Goods, Services (all types) and Maintenance Contracts - $750.00 to $15,000.00

           

        1. Purchase Request - User department shall enter a requisition (see Procedure No. 007).

           

        2. Submission & Review - After requisition has been entered, user department shall forward original contract, signed by the vendor, to the Procurement Division. The Procurement Division will review the terms and conditions and will forward for others to review, if necessary.

           

        3. Approval - The Procurement Division will have the document executed by the appropriate City official.

           

        4. Purchase Authorization - Upon approval of the contract, a purchase order will be issued.

           

        5. Contract Distribution - The Procurement Division shall distribute original(s) and copies, as appropriate.

           

        6. Changes/Amendments -

          (1) All requests for changes or amendments to the contract shall be submitted to the Procurement Division on a Purchase Order Change Order Request Form (see Exhibit 011-A).

          (2) The Procurement Division will review the change order request and may forward for other approvals, if necessary.

          (3) Once approved, the Procurement Division will process and issue a change order to the purchase order.

         

      2. Goods, Non-Professional Services and Maintenance Contracts - over $15,000.00 (Competitive Formal Sealed Bid)

           

        1. Contract Document - Upon approval of the bid award, the Procurement Division shall prepare the contract document. The successful bidder may supply a sample contract.

           

        2. Submission & Review - The Procurement Division will review the terms and conditions. The Procurement Division may forward the contract for other approvals, if necessary.

           

        3. Supporting Documentation - The Procurement Division will request, process, and obtain approval of all supporting contract documentation (such as Certificate of Insurance, Payment and Performance Bonds, etc.).

           

        4. Approval - The Procurement Division will have the approved final contract document executed by the awarded vendor and signed by the authorized City official.

           

        5. Contract Number/Notice of Contract - Once the contract has been executed by both parties, a contract number may be assigned and a Notice of Contract issued.

           

        6. Purchase Request - If an annual requirements bid or as otherwise directed by the Procurement Division, the user department shall enter a requisition.

           

        7. Purchase Authorization/Notice To Proceed - Upon approval of the requisition(s), a purchase order will be issued. The Purchase Order serves as the official Notice To Proceed/Authorization to Deliver.

           

        8. Contract Distribution - Procurement will distribute the completed contract as follows:

          (1) Original to vendor (with purchase order if possible)

          (2) Original to City Clerk Department

          (3) Copy to User Department

          (4) Copy to Project Manager

          (5) Copy to Procurement Division

          (6) Copy to Engineer/Architect (if applicable)

           

        9. Contract File - The Procurement Division shall maintain a contract file.

           

        10. Contract Changes/Amendments -

          (1) Under $5,000.00 Cumulative:

          (a) User department shall forward two original sets of change order documents, signed by the vendor, to the Procurement Division with a Purchase Order Change Order Request Form.

          (b) The Procurement Division will review the change order request as it relates to the procurement policy and procedure. If necessary, it may be forwarded to others for approval.

          (c) The Procurement Division shall have the appropriate City official execute the Contract Change Order and issue a change to the purchase order.

          (d) Procurement will distribute the contract change orders to the appropriate parties.

          (2) $5,000.00 and Over Cumulative:

          (a) User department shall prepare a memo to the City Manager requesting City Commission approval of the Contract Change Order. Attached to this memo should be two signed original sets of the Contract Change Order and a Purchase Order Change Order Request Form. This packet shall be forwarded to the Procurement Division prior to Commission approval to assure that procurement procedures are not being violated and to Accounts Payable to assure funding is available or to resolve any budgetary concerns.

          (b) The City Clerk Department shall obtain the Mayor’s signature on the Contract Change Order. One original is kept by the City Clerk Department and the other original shall be forwarded to the Procurement Division.

          (c) After execution of the Contract Change Order, the Procurement Division will issue a change to the purchase order and forward an original to the vendor (with the purchase order if possible).

          (d) Copies of the completed Contract Change Order will be forwarded to the appropriate parties.

           

        11. Monitoring - It is the responsibility of the using department(s) to take the necessary steps to assure implementation of the contract. These contracts should be monitored to assure proper performance of the terms and conditions contained therein and that the invoices reflect the correct contract amount. Any need for corrective measures should be submitted in writing to the vendor and a copy forwarded to the Procurement Division.

           

        12. Contract Renewals - The Procurement Division shall:

          (1) Monitor all term contracts for renewal period dates.

          (2) Contact using department(s) prior to contract renewal date and verify desire to renew the contract.

          (3) Contact contractor and solicit pricing adjustments for renewal.

          (4) Review response received and coordinate with appropriate user department(s) for approval of renewal.

          (5) Obtain approval for renewal as necessary.

          (6) Execute renewal/rejection as appropriate.

          (7) Make changes to contract as required.

          (8) Distribute notifications of actions to all appropriate parties receiving the original contract.

           

        13. Contract Closeout

          (1) Contracts Without Payment & Performance Bonds

          (a) Upon delivery of the goods or services procured, the using department(s) shall verify acceptance thereof, by forwarding the receiving copy of the purchase order (pink copy) to the Accounting Division with the final/last invoice and voucher.

          (b) The using department shall process and forward to the Procurement Division a Purchase Order Change Order Request Form to delete any outstanding items on the purchase order.

          (c) The Procurement Division will issue a change order to close out the purchase and liquidate any encumbered funds.

          (2) Contracts With Payment & Performance Bonds

          (a) User Department shall prepare a memo to the City Manager requesting City Commission approval to make final payment and close the contract. Attached to this memo should be original sets of the documents required to complete the contract (such as Release of Lien, Maintenance Bond, Certificate of Substantial Completion, Consent Of Surety). A copy of this memo shall be forwarded to the Procurement Division prior to Commission approval.

          (b) Upon approval by the Commission, the City Clerk Department shall retain an original and return any other originals or copies of the closing contract documents to the using department.

          (c) The using department shall submit a voucher with the final invoice and receiving copy of the purchase order (pink copy) to the Accounting Division.

          (d) After the last invoice has been entered, the using department should verify that the purchase order status is "completed". If not, then a Purchase Order Change Order Request Form to delete any outstanding items on the purchase order shall be completed and forwarded to the Procurement Division.

          (e) The Procurement Division will issue a change order to close out the purchase and liquidate any encumbered funds.

         

      3. Professional Services - Competitive Formal Sealed Proposals

           

        1. Submission - Once a contract has been successfully negotiated, the user department should forward two (2) original sets that have been signed by the successful respondent to the Procurement Division.

           

        2. Review - The Procurement Division shall review the terms and conditions appropriate for the procurement. The Procurement Division may forward the contract, if deemed appropriate, the contract to the user Department, Accounting Division, Risk Management and/or City Attorney for their review.

           

        3. Supporting Documentation - The Procurement Division will process and request approval of all supporting contract documentation (such as Certificate of Insurance, etc.).

           

        4. Approval - The Procurement Division will have the final approved contract document executed by the vendor and mayor.

           

        5. Contract Number/Notice of Contract - Once the contract has been executed by both parties, a contract number may be assigned and a Notice of Contract issued.

           

        6. Purchase Request - The Procurement Division or the user department (if directed by Procurement) shall enter a requisition.

           

        7. Purchase Authorization/Notice To Proceed - Upon approval of the requisition(s), a purchase order will be issued. The purchase order serves as the official Notice To Proceed.

           

        8. Contract Distribution - The Procurement Division will distribute the completed contract as follows:

          (1) Original to vendor (with purchase order if possible)

          (2) Original to City Clerk Department

          (3) Copy to User Department

          (4) Copy to Project Manager

          (5) Copy to Procurement Division

           

        9. Contract File - Procurement Division shall maintain a contract file.

           

        10. Contract Changes/Amendments

          (1) Under $5,000.00 Cumulative

          (a) User department shall forward two original sets of change order documents, signed by the vendor, to the Procurement Division with a Purchase Order Change Order Request Form.

          (b) The Procurement Division will review the change order request as it relates to the procurement policy and procedure. It may be forwarded to others for approval, if necessary.

          (c) Procurement shall have the appropriate City official execute the Contract Change Order and issue a change to the purchase order.

          (d) The Procurement Division will distribute the contract change orders to the appropriate parties.

          (2)$5,000.00 and Over Cumulative

          (a) User department shall prepare a memo to the City Manager requesting City Commission approval of the Contract Change Order. Attached to this memo should be two signed original sets of the Contract Change Order and a Purchase Order Change Order Request Form. This packet shall be forwarded to the Procurement Division prior to Commission approval to assure that procurement procedures are not being violated and to Accounts Payable to assure funding is available or to resolve any budgetary concerns.

          (b) The City Clerk Department shall obtain the Mayor’s signature on the Contract Change Order. One original is kept by the City Clerk Department and the other original shall be forwarded to the Procurement Division.

          (c) After execution of the Contract Change Order, the Procurement Division will issue a change to the purchase order and forward an original to the vendor (with the purchase order if possible).

          (d) Copies of the completed Contract Change Order will be forwarded to the appropriate parties.

           

        11. Contract Expiration/Renewals - The Procurement Division shall:

          (1) Monitor all contracts for expiration and renewal period dates.

          (2) If renewable:

          (a) Contact using department(s) prior to contract renewal date and verify desire to renew the contract.

          (b) Contact contractor and solicit pricing adjustments for contract renewal.

          (c) Review response received and coordinate with appropriate user department(s) for approval of renewal.

          (d) Obtain approval for renewal as necessary.

          (e) Execute renewal/rejection as appropriate.

          (f) Make changes to contract.

          (g) Distribute notifications of actions to all appropriate parties receiving the original contract.

          (3)If due to expire (not renewable)

          The user department(s) should be notified that the contract is due to expire and that the City will need to process a formal competitive sealed proposal.

           

        12. Contract Closeout

          (1) Upon completion of the services, the using department(s) shall verify acceptance thereof, by forwarding the receiving copy of the purchase order (pink copy) to the Accounting Division with the final/last invoice and voucher.

          (2) After the last invoice has been entered for payment, the using department shall process and forward to the Procurement Division a Purchase Order Change Order Request Form to delete any outstanding items on the purchase order.

          (3) The Procurement Division will issue a change order to close out the purchase order and liquidate any encumbered funds.

    3. Leases and Lease Purchase

         

      1. Real Property (Land and Buildings)

           

        1. Submission - Upon completion of the lease transaction and approval by the appropriate City official, the user department shall obtain lessor’s signature on two originals and forward both to the Procurement Division.

           

        2. Review - The Procurement Division shall review the terms and conditions. It may be forwarded for others to review, if necessary.

           

        3. Supporting Documentation - The Procurement Division will request, process, and obtain approval of all supporting contract documentation.

           

        4. Approval - The Procurement Division will have the final approved contract document executed by the appropriate City official.

           

        5. Contract Number/Notice of Contract - Once the contract has been executed by both parties, a contract number may be assigned and a Notice of Contract issued.

           

        6. Purchase Request - The Procurement Division or the user department (if directed by Procurement) shall process a requisition.

           

        7. Purchase Authorization/Notice To Proceed - Upon approval of the requisition(s), a purchase order will be issued. The purchase order serves as the official Notice To Proceed.

           

        8. Contract Distribution - The Procurement Division will distribute the completed contract as follows:

          (1) Original to vendor (with purchase order if possible)

          (2) Original to City Clerk Department

          (3) Copy to User Department

          (4) Copy to Procurement Division

           

        9. Contract File - The Procurement Division shall maintain a contract file.

           

        10. Contract Changes/Amendments

          (a) User department shall forward two original sets of change order documents, signed by the vendor, to the Procurement Division with a Purchase Order Change Order Request Form.

          (b) The Procurement Division will review the change order request as it relates to the procurement policy and procedure. It may be forwarded to others for approval, if necessary.

          (c) Procurement shall have the appropriate City official execute the Contract Change Order and issue a change order to the purchase order.

          (d) The Procurement Division will distribute the contract change orders to the appropriate parties.

           

        11. Contract Expiration/Renewals - The Procurement Division shall:

          (1) Monitor all contracts for expiration and renewal period dates.

          (2) If renewable:

          (a) Contact using department(s) prior to contract renewal date and verify desire to renew the contract.

          (b) Contact contractor and solicit pricing adjustments for contract renewal.

          (c) Review response received and coordinate with appropriate user department(s) for approval of renewal.

          (d) Obtain approval for renewal as necessary.

          (e) Execute renewal/rejection as appropriate.

          (f) Make changes to contract.

          (g) Distribute notifications of actions to all appropriate parties receiving the original contract.

           

        12. Contract Closeout

          (1) Final Payment

          (a) Upon completion of the services, the using department(s) shall verify acceptance thereof, by forwarding the receiving copy of the purchase order (pink copy) to the Accounting Division with the final/last invoice and voucher.

          (b) After the last invoice has been entered for payment, the using department shall process and forward to the Procurement Division a Purchase Order Change Order Request Form to delete any outstanding items on the purchase order.

          (c) The Procurement Division will issue a change order to close out the purchase and liquidate any encumbered funds.

      2. Personal Property

        Same as Procurement Contracts