Southern Ontario Library Service

Policy Requirements under the Municipal Act, 2001

Considerations When Drafting Policies Required by the Municipal Act

Appendix A: SOLS Purchasing Policy 

Prepared by Southern Ontario Library Service June 2004

Appendix A  / Appendix B /  Part 1 - Procurement /  Part 2 - Hiring of Employees

Introduction

Following the Purchasing for Public Libraries workshop held in Barrie, Brockville and London in October and November 2004, SOLS reviewed its Purchasing policy and the requirements of the Municipal Act. Although SOLS is not subject to the terms of the Municipal Act, the Act presents requirements that are prudent for all public service organizations to respect.

SOLS used the questions suggested in the Checklist for Maintaining Integrity and Protecting Interests in Appendix B to review its Purchasing policy. While certain requirements simply do not apply to SOLS (e.g., in-house bids), some additions and modifications were made to those sections of the policy that did apply. The resulting new SOLS Purchasing Policy is presented below as Appendix A.

Appendix A: SOLS Purchasing Policy 

3.0 Purchasing

3.1 General

Under the Policy Governance® Model, the SOLS Board requires the CEO to develop and adhere to purchasing policies and procedures which ensure value for money, open and documented processes and equitable access for vendors to SOLS’ business.

Commodities over a certain dollar value are sourced and rigorously evaluated to ensure value for money. Separating responsibilities between Spending Authority (authorizing expenses from a budget) and Commitment Authority (actually entering into a contractual agreement with a vendor) captures the principle of joint authority. Finally, fair access for vendors directs us to give a variety of vendors a chance at our business, to follow proven tendering procedures, and to adopt objective evaluation criteria.

Purchasing policies shall be reviewed regularly and in all cases no less frequently that every three years.

Vendors may access SOLS’ purchasing policies and procedures on the SOLS’ web site at www.sols.org. A statement to this effect is included on all Tenders and Requests for Proposal issued by SOLS.

Open Tenders are advertised on the SOLS web site www.sols.org and on other web sites traditionally associated with public sector purchasing, e.g., MERX.

Unsolicited proposals will not be considered under any circumstances. Vendors submitting unsolicited proposals may, however, be added to the SOLS’ Vendors list.

All dealings with vendors shall adhere to and respect the Freedom of Information and Protection of Privacy Act.

Any vendor who considers that SOLS’ Purchasing policies have been violated or do not adequately protect the interests of the vendor may register a written complaint with the CEO.

Conflict of Interest

Unless a specific approval has been obtained from the CAO, quotations are not solicited from, nor any order placed with a company, individual, or organization which is in a real or perceived conflict of interest situation with SOLS, its staff or board members.

Gifts and Benefits

SOLS employees shall not use, or seek to use their positions or employment to

a) gain direct or indirect benefit for themselves or their spouses, same sex partners or children;
b) solicit or accept favours or economic benefits from any individuals, organizations or entities known
    to be seeking business or contracts with SOLS.

a) are appropriate, a common expression of courtesy, or within the normal standards of hospitality;
b) do not cause suspicion about the objectivity and impartiality of the SOLS employee,
c) would not compromise the integrity of SOLS.

A SOLS employee receiving a gift or benefit as described above shall complete and file a Disclosure of Gifts and Benefits with the CEO as soon as possible after receiving a gift or benefit if: a) the value of the gift or benefit exceeds $200 or b) the total value received directly or indirectly from one source in one calendar year exceeds $200.

3.2 Responsibilities

Spending Authority

Commitment Authority

3.3 Guidelines

3.3.1 Identifying Needs and Planning Purchases

When planning purchases, requirements must be stated clearly.

Total Costs

In planning purchases, all costs and cost implications must be considered. There are three main considerations; purchase or lease price, cost of supplies and maintenance, and staff costs associated with using or maintaining the equipment or service. The first two considerations represent actual cash outlays and this total financial commitment to a vendor must be shown on a requisition.

Selection Criteria

Criteria on which selection is to be based must be developed in advance. Those criteria may include, but are not limited to: price, quality, understanding of the project, capability, project management, qualifications and experience, strategy, approach, methodology, scheduling, past performance, ability to meet delivery date, record for after sales service, overall performance, satisfactory references from other clients, facilities and equipment.

Selection criteria for Requests for Proposal or tenders may include mandatory and desirable criteria (see Appendix 2).

Pre-Qualification: In the event that there might be a large number of suppliers who could supply the required goods or services, vendors may be pre-qualified. In this case all prospective vendors are given the opportunity to respond to the mandatory requirements of the Tender or RFP. Only those who comply with the mandatory criteria will be offered a full Tender or RFP package.

Preparing Request for Proposal and Tender Documents

To ensure consistency and fairness in evaluation, Tender and Proposal documents should clearly indicate 1) how costs are to be presented ( e.g., PST and GST included or separate, shipping and handling included or extra, discounts for early payments, maintenance, equipment rental, per usage charges) and 2) how submissions are to be formatted.

All Requests for Proposal and Tenders must contain Terms of Reference.

Terms of Reference must include provisions for a schedule of interim milestones against which suppliers will be monitored and evaluated throughout the contract.

When developing Terms of Reference for consulting services avoid implications of employer-employee relationships, as defined by CCRA Guidelines. Terms of Reference may not be written in such as manner as to deliberately favour former staff or frequently-used vendors who might have an intimate knowledge of SOLS and its operations.

Every Request for Proposal or Tender shall include a statement indicating that awards may be split or no award made in relation to a tender or RFP. This statement protects SOLS should all bids received exceed budget, fail to respond to business needs or fail to reflect fair market value.

Request for Proposal or Tender specifications must address any potential for renewal of contracts or expansion of requirements in order that vendors may be aware of the full scope of a contract.

3.3.2 Sourcing Procedures

Work Splitting

Purchases may not be split into a series of small orders to circumvent Sourcing requirements.

Goods and Services under $2,000

Use the Corporate Purchasing Card (Visa) for all goods and services under $2,000 and not on the exemption list (see below). In instances in which the vendor cannot accept Visa, use either petty cash (up to $100) or a Cheque Requisition.

The Spending Authority gives verbal approval.

The Corporate Purchasing Cardholder selects the goods and uses Visa.

The Corporate Purchasing Cardholder records the purchase in the Visa Purchasing Log, attaches packing slips and cash register receipts, and forwards them to the Finance Administrator at the end of every month.

Exemption List

consulting & creative services

letterhead, stationery, and envelopes which require SOLS' visual identity

computer hardware and software unless pre-authorized by the Network Administrator

telecom and office equipment

furniture and filing equipment

lease and renewals of office space, parking, depots, etc.

These items must be treated as Goods and Services or Consulting and Creative Services as appropriate over $2,000.

Goods and Services $2,001 to $10,000
(Note: normal duration of process one to two weeks)

• The staff member initiating an expenditure (Requisitioner) completes a Purchase Requisition, ensures the
      appropriate Spending Authority signs the Purchase Requisition, and forwards it to the Purchaser.
• The Purchaser obtains three telephone quotes.
• The Purchaser selects a vendor.
• The Purchaser issues a Purchase Order.

Goods and Services $10,001 to $25,000
(Note: normal duration of process two to four weeks)

1. The Requisitioner completes a Purchase Requisition, ensures the appropriate Spending Authority signs Purchase Requisition, and forwards to the Purchaser.
2. The Purchaser obtains three written quotes.
3. The Purchaser selects a vendor.
4. The Purchaser prepares a Purchase Order for the CAO’s signature.

Goods and Services over $25,000
(Note: normal duration of process three to six weeks)

Workshop Presenters and Excel Tutors under $10,000

Use the Contract for Workshop Presenters (see Appendix 13) or Excel Tutor Contract (see Appendix 14) attaching the Excel Tutor Handbook (see Appendix 14A).

Consulting & Creative Services under $10,000
(Note: normal duration of process one to two weeks)

NOTE: The Purchaser is available for Terms of Reference review, fee structure comparison, and contract dispute resolution. The Purchaser can assist in finding vendors, if none are known to program staff, and in coordinating a competitive process for any dollar level consulting assignment, if requested by program staff.

Charitable/Consortia Purchasing Agreement

If a Charitable/Consortia Purchasing Agreement has been negotiated and is in place, the Purchaser may use the CPA vendor(s) without the need for additional sourcing, regardless of dollar value.

Single Sourcing

Single sourcing of goods and services (excluding Consulting Services) over $2,000 must be documented and approved by either the CEO or CAO.

Single sourcing of consulting services between $10,000 and $25,000 must be documented and approved by either the CEO or CAO.

Single sourcing over $25,000 is usually not permitted. In unusual circumstances single sourcing may be justified when urgency precludes competitive selection.

Sourcing inquires are not always made of the same few vendors. Diligent attempts should be made to provide fair access to vendors for SOLS business.

For non-competitive or low dollar value purchases when there has been no tender issued, vendors are encouraged to inform SOLS about their products and services so that they may be added to the SOLS’ Vendor list.

3.3.3 Evaluation of Request for Proposal and Tender Submissions

Once an RFP or Tender has been issued and until the evaluation process is complete, Board members and all staff must avoid any contact with potential suppliers. Contact with potential suppliers is limited to vendor briefings. Once a contract has been awarded, appropriate staff maintains the necessary contact with suppliers.

Request for Proposal and Tender submissions are evaluated by a selection committee.

All requests for proposal, tenders, or quotations received after a closing date are returned to vendors unopened.

Submissions that fail to respond to or meet mandatory requirements as specified in the RFP or Tender will be disqualified.

The lowest of any bid is not necessarily accepted.

When all things are equal, the vendor offering the lowest price is chosen.

Unsuccessful bidders may request debriefings with regard to why their proposals were rejected. These requests will be handled in accordance with the requirements of the Freedom of Information and Protection of Privacy Act.

3.3.4 Purchase Orders and Contracts

Generally, Purchase orders are issued for goods and straightforward services (e.g., cleaning or water cooler maintenance).

 All Purchase Requisitions are signed by the appropriate Spending Authority.

All Purchase Orders/Contracts are signed by the appropriate Commitment Authority.

All standing and blanket Purchase Orders require a Purchase Requisition every time an order is placed.

Purchasing cannot issue Purchase Orders "after the fact", that is once any commitment has already been made. "After the fact" invoices will require documentation with CEO approval in order for the invoices to be processed.

Contracts are generally used for more complex purchases of goods and services. In the case of an extremely high value or contentious contract, a specific legal review may be sought.

Contracts cover complexities not normally required in straightforward purchases of goods. Contracts cover such topics as ownership of intellectual property, conflict of interest, insurance requirements and contractor’s responsibilities with regard to contractor’s employees (e.g., WSIB Clearance Certificate).

SOLS negotiates termination provisions in all contracts.

3.3.5 Monitoring Performance

In the event that a contract is terminated for poor performance or a contract is completed but overall performance is considered mediocre or less than satisfactory, this must be documented by theRequisitioner in relation to the original Terms of Reference and requirements. The Purchaser will then place the documentation on the vendor’s file to serve as a reference in the event of future opportunities.

Appropriate handling of disputes over performance will be determined by the terms of the contract.

3.3.6 Receipt of and Payment for Goods and Services

All goods will be inspected on receipt by the Requisitioner and discrepancies reported to the Purchaser immediately. The Purchaser will follow up with the vendor for resolution.

Goods: For complete shipments, the Requisitioner notes that all goods have been received in good order on the Packing Slip and forwards the Packing Slip to the Purchaser.

Services: On receipt of the invoice for services rendered, the Requisitioner checks services rendered against the terms of the contract and reports discrepancies to the CAO for resolution. If services have been satisfactorily rendered, the Requisitioner approves the invoice for payment.

Payment: Packing slips for goods and approved invoices for services rendered are forwarded to the Finance Assistant for payment according to the vendor’s payment terms.

Records: All relevant records including packing slips, Purchase Requisitions, Purchase Orders, Contracts, Written Quotes, Tender/Proposal submissions, and evaluation material are filed in accordance with SOLS Records Information Management guidelines.

3.4 Definitions

Following are some terms often used by professional purchasers: