DENALI BOROUGH, ALASKA

ORDINANCE NO. 93-01B

INTRODUCED BY: Mayor Rick S. Brewer

AN ORDINANCE PROVIDING FOR PROCEDURES FOR PROCUREMENT

AND CONTRACTING STANDARDS FOR THE DENALI BOROUGH.

BE IT ENACTED by the Assembly of the Denali Borough, Alaska that:

Section A. Classification: This ordinance is of a general and permanent nature.

Section B. General Provisions:

A. These standards are applicable for the expenditure of financial assistance for the procurement of services, supplies and other property.

B. These standards are furnished to ensure that such material and services are obtained efficiently and economically.

C. Written records of all procurement activities will be maintained that include an explanation for the method of procurement, selection of contract type, contractor selection or rejection, and basis for cost or price.

Section 1. Statement of Policy:

A. It is the policy of the Denali Borough to discourage collusive bidding and sale practices and to encourage full and open competition whenever practical between all municipal suppliers, vendors, and contractors by competitive bidding practices, and to centralize purchasing, sales, and contracting to realize the economies resulting therefrom.

B. This article does not apply to:

(i) The election of municipal officials;

(ii) The hiring of municipal employees;

(iii) The purchase or rental of supplies, materials, equipment, or services with grant funds obtained from a federal agency, if the agency requires compliance by the Denali Borough with Federal Procurement Procedures. Such procurement shall utilize the procedures contained in the Denali Borough Code of Ordinances.

(iv) The Denali Borough's exercise of its powers or performance of its functions and participation in the financing thereof, jointly or in cooperation with the United States, State of Alaska, or any agency, instrumentality, or political subdivision thereof.

Section 2. Applicability to Authorities, Agencies, and Instrumentalities of the Denali Borough.

This article shall apply to the purchase of supplies, materials, equipment or services by an authority, agency or instrumentality of the Denali Borough. No contract shall be valid until approved by ordinance or resolution of the Assembly. All reference in this article to municipal officers, employees, or agents shall include Assembly members, officers, employees, or agents of an authority, agency, or instrumentality of the Denali Borough.

Section 3. Unauthorized contracts.

A. A Municipal officer, employee or agent shall not contract contrary to the provisions of this article. A contract with the Denali Borough, or change order to a contract, entered in violation of this article is void and is not binding on the Denali Borough.

Section 4. Mayor's Powers.

The mayor or his/her designee shall in conformity with this article:

A. Purchase, rent, or otherwise provide for the furnishing of supplies, materials, equipment and services for the Denali Borough;

B. Prescribe the manner in which the supplies, materials, equipment and services shall be purchased, delivered, stored and distributed;

C. Prescribe the time, manner, authentication and form of making requisitions for supplies, materials, equipment and services;

D. Fix standards of quality and quantity, and develop specifications for materials, supplies, equipment and services;

E. Prescribe the manner of inspecting deliveries of supplies, materials, and equipment, and of making tests of samples submitted with bids, and samples of deliveries to determine compliance with specifications;

F. Prescribe forms for bids, contracts for construction, purchases of supplies and other purposes;

G. Adopt regulations, policies and procedures to implement and interpret the provisions of this article.

Section 5. Conflict of Interest.

Municipal officers, employees, agents and consultants may bid on municipal contracts. However, a Municipal Officer, employee, agent or consultant may not bid or be awarded any municipal contract if performance of the contract by the Municipal Officer, employee, agent, or consultant would materially interfere with said person's ability to perform his/her official duties for the Denali Borough; or if the Municipal Officer, employee, agent, or consultant participated in the Borough's procurement action by preparing or influencing the content of any specifications, procurement standard, or procurement document, by administering the procurement process, by evaluating bids or proposals, by approving, disapproving, or recommending approval or disapproval, of award of the bid, or by acting in any advisory capacity to the Denali Borough regarding the procurement.

Section 6. Open Market Procedure.

A. The mayor or his/her designee may procure all materials, supplies, equipment, or services having an aggregate cost for any one contract or purchase of not more than twenty five thousand dollars ($25,000.00), on the open market without using competitive bids, competitive proposals, or other formal bidding procedures.

(i) If the cost of the materials, supplies, equipment, or services to be procured does not exceed ten thousand dollars ($10,000.00), the mayor or his/her designee may procure them from any source and in any manner which he deems advantageous to the Denali Borough, without obtaining informal quotes.

(ii) If the cost of materials, supplies, equipment or services to be procured exceeds ten thousand dollars ($10,000.00), but does not exceed twenty five thousand dollars ($25,000.00), the mayor or his/her designee must obtain at least three (3) informal quotes prior to purchasing said items. The mayor or his/her designee may solicit and receive informal quotes either orally or in writing, but the solicitation must be in a form reasonably calculated to yield the lowest responsive quote by a responsible vendor and supplier. The mayor or his/her designee may require quotes exceeding a stated price or relating to a specified categories of property or services to be in writing. Award shall be made to the responsible vendor or supplier submitting the lowest responsive quote. The mayor or his/her designee shall keep a written record of all open market quotes received and awards made thereon.

B. Regardless of the cost of the materials, supplies, equipment, or services to be procured, the mayor or his/her designee may purchase or rent materials, supplies, equipment, or services which fall into any of the following categories without utilizing competitive bids, competitive proposals, or informal bids:

(i) Supplies, materials, equipment, or services which can only be furnished only by a single dealer or which have uniform price wherever purchased.

(ii) Supplies, materials, equipment or services purchased from the United States, the State of Alaska, or an agency, instrumentality or political subdivision thereof.

(iii) Supplies, materials, equipment or services purchased from a public utility at a price or rate determined by a regulatory body.

(iv) Supplies, materials, equipment or services which must be purchased from a specific source in order to prevent incompatibility with previously purchased supplies, materials, equipment or services. For the purpose of this subparagraph, the term incompatibility is defined as, (a) the inability to interconnect, combine interchange or join, or (b) that which causes or necessitates maintenance, expertise, or training where the acquisition of such would result in substantial duplication.

(v) Accounting, medical, legal, architectural, engineering, or other similar professional services.

C. Regardless of the cost of the supplies, materials, equipment, or services to be procured, the mayor or his/her designee may purchase or rent supplies, materials, equipment or services without utilizing competitive bids, competitive proposals, or informal quotes, if he determines that an emergency threatening the public health, safety or welfare requires that a contract be awarded without delay, or when required by unforeseeable conditions, if the time required for competitive bidding will produce delays in an ongoing project, or will disrupt the efficient functioning of the Denali Borough, such that the efficiency of an open market procurement will outweigh any potential advantage that might be produced by competitive bidding. To the extent practible under the circumstances, written or verbal proposals shall be solicited. As soon as reasonably practicable, the mayor or his/her designee shall report procurements under this subsection which exceed twenty five thousand dollars ($25,000.00) to the Assembly.

Section 7. Competitive Bid Procedure.

A. Except as otherwise provided in this article, all purchases and rentals of supplies, materials, equipment or services shall be made pursuant to the competitive bid procedures.

B. The mayor or his/her designee shall solicit competitive bids by an invitation for bids which shall state, or incorporate by reference, all specifications, contract terms, conditions, and evaluation criteria applicable to the procurement. The contents of the invitation for bids shall be sufficient to inform interested readers of the general nature of supplies, materials, equipment or services or construction being procured and the procedure for submitting a bid. The invitation for bids shall also specify the date, time, and place at which bids must be received. If specifications, contract terms, conditions, and evaluation criteria are incorporated in the invitation for bids by reference, the invitation shall state how these may be obtained.

C. The mayor or his/her designee shall solicit bids from all perspective bidders listed on the current bidders list maintained pursuant to Section 17 of this article.

D. The mayor or his/her designee may solicit bids from persons who have not placed their names on the bidders list if they are known to provide supplies, materials, equipment or services of the type to be acquired. The failure of any person to receive notice of the invitation for bids under this section shall not affect the validity of a bid award or contract.

E. The mayor or his/her designee shall solicit bids by publication of notice thereof for a reasonable time prior to the last day on which bids will be accepted, in a newspaper of general circulation in the Denali Borough.

Section 8. Pre-Bid Conference.

The mayor or his/her designee may provide for a pre-bid conference to be held a reasonable time before the last day for submitting bids. At the pre-bid conference or at other times deemed appropriate by the mayor or his/her designee, the terms of an invitation for bids may be modified or interpreted only by written addenda issued by the mayor or his/her designee. Addenda to invitations for bids shall be sent to each known recipient of the original invitation for bids. Only a bid acknowledging receipt of all addenda may be considered responsive, unless the addendum, in the opinion of the mayor or his/her designee, would have no material effect on the terms of the bid. If an addendum is issued less than five working days before the last day on which bids are to be accepted, the mayor or his/her designee may extend the time for accepting bids for a reasonable time, by so notifying all known recipients of the invitation for bids.

Section 9. Bid Opening Procedure.

A. Bids shall be sealed and designated as bids on the outside of the envelope and shall be submitted by mail or in person at the place and not later than the time specified in the invitation for bids. Bids not submitted at the proper place or within the time specified shall not be considered, and shall be returned to the bidder unopened.

B. Bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the invitation for bids. Any bidder may review bids immediately after opening and prior to tabulation or summary. The mayor or his/her designee shall tabulate the amount of each bid and shall record such other information as may be necessary for evaluation together with the name of each bidder. The tabulation shall be open to public inspection and a copy of the tabulation shall be furnished to each bidder, upon request.

C. Bids shall only be accepted unconditionally without alteration or correction. For purposes of determining the low bidder and the responsiveness of bids, no criteria except those set forth in the invitation for bids, including all specifications and addenda, may be used.

Section 10. Late Bids.

A. It is the responsibility of the bidder to insure that his/her bid is in the proper place before the time scheduled for receipt of bids.

B. Bids received after the scheduled time are late. The time shown by the clock used by the mayor or his/her designee shall be conclusively presumed to be accurate. A postmark, indicating the bid was mailed in advance of the time scheduled for receipt of the bids, is irrelevant except as provided in subsection C of this section.

C. A bidder who is concerned that his/her bid, or a change thereto, will not be received timely may reserve the right to have his/her bid, or the change thereto, read if:

(i) In advance of the time for receipt of bids, he/she gives telegraphic or other written notice to the mayor or his/her designee that his/her bid, or a change thereto, is in the mail; and

(ii) The envelope containing his/her bid, or a change thereto, bears a postmark no later than the day preceding the date on which the bids will be opened.

Section 11. Bid Irregularities.

A. A bid that is unsigned, or which contains a material altercation or erasure that is not initialed by the signer of the bid, shall be rejected.

B. A bid containing conditional, qualified, contingent, or alternative bids that are not solicited by the Denali Borough, or containing unauthorized additions, shall be rejected.

C. A bid containing material irregularities which would permit the bidder to choose whether to perform if a contract is awarded, or which would otherwise give the bidder a competitive advantage, shall be rejected.

D. The mayor or his/her designee shall have the authority to waive all other irregularities in any and all bids, if he determines waiver to be advantageous to the Denali Borough.

Section 12. Bid Bonds.

If the mayor or his/her designee determines that posting of bid bonds is required to insure that the successful bidder will execute a contract or otherwise perform in accordance with his/her bid, the mayor or his/her designee may require that all bids submitted include a bid bond in an amount sufficient to achieve this purpose. The mayor or his/her designee shall determine the form of payment which is acceptable,and this determination shall apply equally to all bidders. Upon receiving notice of award, if the successful bidder refuses to execute a contract with the Denali Borough in accordance with the terms of his/her bid, or otherwise refuses to perform in accordance with said terms, the successful bidder's bond shall be forfeited to the Denali Borough. The mayor or his/her designee shall promptly return the bid bonds of all bidders after he otherwise determines that the successful bidder has executed a contract or otherwise will perform in accordance with his/her bid.

Section 13. Payment and Performance Bonds.

If the mayor or his/her designee determines that posting of performance bonds is required to insure that the successful bidder or proposer completes performance of the contract or that posting of payment bonds is required to insure that the successful bidder or proposer pays all persons supplying labor or materials for the contract, the mayor or his/her designee may require that all bids or proposals submitted include such bonds in amounts sufficient to achieve these purposes. The mayor or his/her designee shall determine the form of bond which is acceptable, except that a bond issued by a surety company is not acceptable unless said surety company is licensed to do business in the State of Alaska.

Section 14. Procedures for Award.

A. At the discretion of the mayor or his/her designee all bids may be rejected.

B. Subject to the bidder preference provisions of Subsection (c) of this section, a contract or purchase, if awarded, shall be awarded to the lowest responsible bidder, whose bid conforms to the plans and specifications, terms of delivery, and other conditions contained in the invitation for bids.

C. In determining the lowest bidder, the following bidder preferences shall be applied:

(i) The bid shall be awarded to a responsive, responsible Denali Borough bidder if his/her bid is not more than five percent (5%) higher than the lowest bid by a non-Denali Borough Alaskan bidder. A bid shall be awarded to a responsive, responsible Denali Borough bidder if his/her bid is not more than ten percent (10%) higher than the lowest bid by a non-Alaskan bidder. A Denali Borough bidder is a person who maintains a major place of business within Borough boundaries, and an Alaskan bidder is a person who maintains a major place of business within the State of Alaska outside the Borough boundaries.

(ii) Major place of business within the Borough boundaries means an office, distribution house, sales house, warehouse, or other similar facility maintained within the Borough boundaries for at least six months immediately preceding submission of a bid by an organization which is licensed to conduct business in the State of Alaska. Major place of business within the State of Alaska means an office, distribution house, sales house, warehouse, or other similar facility maintained within the State of Alaska outside the Borough boundaries for at least six months immediately preceding submission of a bid by an organization which is licensed to conduct business in the State of Alaska.

D. If the lowest responsive, responsible bid exceeds the amount of funds certified by the mayor or his/her designee to be available for the procurement, and if sufficient additional funds are not available, the scope of the procurement may be reduced to bring its estimated cost within the amount of available funds. The mayor or his/her designee shall issue a new invitation for bids for the reduced procurement, or, upon a finding by the mayor or his/her designee that additional bidding will prevent construction of a needed project during the construction season or that the efficient operation of the municipal government requires that the contract be awarded without delay, he may negotiate with the three lowest responsive, responsible bidders, and may award the reduced contract to the best negotiated proposal.

E. If the competitive bids are required and all bids are rejected, new bids shall be solicited as in the first instance, unless the mayor or his/her designee determines, for reasons authorized in subsection (D) above, to negotiate with the three lowest responsible bidders and award a contract to the best negotiated proposal.

F. All bids, together with all documents pertaining to the award of a contract, shall be made apart of a file or record and retained for three years, and these files or records are open to public inspection at all reasonable times.

Section 15. Determining Responsibility.

In determining whether a bidder is responsible, the mayor or his/her designee may consider the following factors:

A. The ability, capacity and skill of the bidder to perform the contract or provide the service required;

B. The character, integrity, reputation, judgement, experience, and efficiency of a bidder;

C. The quality of the bidder's performance of previous contracts or services;

D. The previous and existing compliance by the bidder with laws and ordinances relating to the contract or service;

E. The sufficiency of financial resources available to the bidder for the performance of the contract or service;

F. The ability of the bidder to provide future maintenance and service for the use of the subject of the contract;

G. Whether the bidder has performed in a timely manner on previous and current municipal contracts. If the bidder is more than thirty (30) days past due on a contract delivery date without a written extension of time having been granted by the mayor or his/her designee, or is otherwise in default on a municipal contract, the bidder is ineligible for the award of any other municipal contract until the bidder completes the existing contract.

Section 16. Bid Protest.

Not more than five days following the date on which the act complained of occurred, a bidder may protest the handling of a bid or awarding of a contract by filing written notice of protest with the mayor stating the grounds thereof. If the mayor made the decision which is the subject of the protest, the protest shall be deemed a request for reconsideration. The mayor shall promptly hold a hearing at which the protesting bidder may appear and present evidence. If the protesting bidder establishes by clear and convincing evidence that the Denali Borough's handling of a bid or award of a contract violated this article, the mayor shall grant the protest. Otherwise the mayor shall deny the protest. If the mayor grants the protest, the damages recoverable by the protesting bidder against the Denali Borough shall not exceed the reasonable cost of preparing his/her bid.

Section 17. Bidders' List.

The mayor of his/her designee shall maintain a bidders' list of persons willing to bid or submit proposals to sell or rent supplies, materials, equipment or services to the Denali Borough. To be placed on the bidders' list, a person shall complete and submit to the mayor or his/her designee a bidders' information form containing information required by the mayor or his/her designee.

Section 18. Competitive Proposal Procedure.

A. If the mayor or his/her designee determines that procurement of supplies, materials, equipment or services, using the competitive bid procedure is not practicable or advantageous to the Denali Borough, the mayor or his/her designee may utilize competitive proposals for said procurement.

B. The mayor or his/her designee shall solicit competitive proposals by a request for proposals. The request for proposals shall state, or incorporate by reference, all specifications, contract e\terms, conditions, and evaluation criteria applicable to the procurement. Contents of the request for proposal shall be sufficient to inform interested readers of the general nature of the supplies, materials, equipment, or services being procured and the procedure for submitting a proposal. The request for proposals shall also specify the date, time and place where proposals must be received. If specifications, contract terms, conditions, and evaluation criteria are incorporated in the request for proposals by reference, the request for proposals shall state how these may be obtained.

C. The mayor or his/her designee shall solicit proposals from persons known to provide supplies, materials, equipment or services of the type to be acquired. The bidders list maintained pursuant to Section 17 may be used as a source for identifying such persons. The mayor or his/her designee shall also solicit proposals by publication of a notice of request for proposals a reasonable time prior to the last day on which proposals will be accepted, in newspaper of general circulation in the Denali Borough.

Section 19. Pre-Proposal Conference.

The mayor or his/her designee may hold a pre-proposal conference and may issue addends to the request for proposals in the same manner as provided in Section 8 for invitation for bids.

Section 20. Proposal Opening Procedure.

Proposals shall be opened in a manner provided in Section 9 for opening competitive bids except that the contents of each proposal shall remain confidential and shall not be revealed to the public or to competing proposers, until after final execution of the contract by the successful proposer. Thereafter, the contents of all proposals shall be available for public inspection.

Section 21. Procedures for Award.

Proposals shall be evaluated using only those evaluation criteria specified in the request for proposals. The contract shall be awarded to the proposer whose proposal best meets the requirements of the Denali Borough at a fair and reasonable cost, as determined by said evaluation.

Section 22. Negotiation with Proposers.

After opening proposals, but prior to award of a contract to a proposer, the mayor or his/her designee may conduct negotiations with one or more proposers whose proposals are reasonably susceptible of the award. The purpose of negotiations may be to refine proposals, to establish a contract price which is fair and reasonable, or both. The mayor or his/her designee may require all proposers with whom negotiations were conducted to submit best and final proposals. At the conclusion of negotiations, the contract shall be awarded to the proposer whose proposal best meets the needs of the Denali Borough at a fair and reasonable cost, based on the evaluation criteria contained in the request for proposals.

Section 23. Other Bid Procedures Applicable.

The following sections relating to the competitive bid procedure, shall also apply to the competitive proposal procedure:

A. Section 10. Late bids;

B. Section 11. Bid Irregularities;

C. Section 12. Bid Bonds;

D. Section 13. Payment and Performance Bonds;

E. Section 16. Bid Protest.

Section 24. Design/Build Proposals.

If the mayor or his/her designee determines that it is advantageous to the Denali Borough, he may combine in one request for proposals, several procurements which would normally be conducted separately and by different procedures. This procedure will normally be utilized in contracts for the construction of public works, but may also be used in other situations. A single request for proposals may solicit proposals, from single entities and/or joint ventures, to finance, design, construct, and operate a public facility, or to perform any combination of these functions.

Section 25. Multi-Step Procurements.

If the mayor or his/her designee determines that it is advantageous to the Denali Borough to do so, he may conduct any procurement in multiple stages. Such procurements may require an initial submission of sealed bids or proposals which are evaluated according to published criteria, to produce a shortlist of bidders or proposers who will be requested to submit additional bids or proposals. Final award will be made from among the persons on the shortlist according to the procedures established above for competitive bids or competitive proposals, as the case may be.

Section 26. Contracts Executed by Other Governmental Agencies.

If the mayor or his/her designee determines that it is advantageous to the Denali Borough to do so, he may purchase or rent supplies, materials, equipment, or services for the Denali Borough through a contract with a vendor, supplier, or contractor which was executed by the United States, the State of Alaska, or an agency instrumentality or political subdivision thereof, if said contract was executed under circumstances which provided competitive procedures substantially similar to those contained in this article. Such procurements can be made without utilizing competitive bids, competitive proposals or other procurement mechanisms contained in this article.

Section 27. Persons Who May Award Contracts - Change Orders.

A. The mayor or his/her designee may award any contract for the purchase of rental of supplies, materials, equipment or services for the Denali Borough, if the total amount to be paid by the Denali Borough to the vendor, supplier, or contractor is twenty five thousand dollars ($25,000.000) or less. Only the Assembly may award such contracts where the amount to be paid exceeds twenty five thousand dollars ($25,000.000).

B. The mayor may authorize change orders to any such contract if the amount to be paid to the vendor, supplier, or contractor under the change order does not exceed twenty five thousand dollars ($25,000.00), and if the change order does not cause the aggregate amount to be paid to all vendors, suppliers, or contractors under the contract and all change orders to exceed twenty five thousand dollars ($25,000.00) or any multiple thereof. Only the Assembly may authorize change orders which authorize payment in excess of twenty five thousand dollars ($25,000.00), or which cause the aggregate amount to be paid under contract and all change orders to exceed twenty five thousand dollars ($25,000.00) or any multiple thereof. After the Assembly has approved a change order which causes the aggregate amount to exceed twenty five thousand dollars ($25,000.00), or any multiple thereof, the mayor may approve change orders which produce an aggregate amount which is between multiples of twenty five thousand dollars ($25,000.00).

Section 28. Circumvention of Bidding Requirements Prohibited.

No person shall subdivide a procurement of supplies, materials, equipment or services into more than one contract or change order, if the procurement of said items or services would normally , reasonably, and customarily be conducted under a single contract or change order, for the purpose of avoiding or circumventing the competitive bidding requirements, or the limitations on authority to award contracts or change orders, contained in this article.

Section 29. Disqualification of Bidders and Suppliers.

A. The mayor may disqualify a person from selling or renting supplies, materials, equipment, or services to the Denali Borough if he determines that any of the following circumstances apply. The mayor may not delegate this authority.

(i) The person has committed fraud or intentional misrepresentation in procuring or performing a contract with the Denali Borough, or in an application for payment from the Denali Borough within the last ten (10) years;

(ii) The Denali Borough has terminated a contract with the person prior to completion because of the person's material breach or nonperformance within the last three (3) years;

(iii) The person has materially breached or failed to perform a contract with the Denali Borough, whether or not terminated within the last three (3) years;

(iv) The person was convicted of a criminal offense committed in the course of obtaining or performing a public contract within the last ten (10) years.

B. The mayor shall send written notice of the proposed disqualifications, including the grounds therefore and the proposed period of disqualification to the person by certified mail at the last address contained in the Denali Borough procurement records. The notice shall advise the person of his/her right to request a hearing on the matter before the mayor and if he/she serves a written request therefore on the mayor not more than ten (10) days after the date on which he/she received notice, the mayor shall conduct a hearing. At the hearing the person shall have the opportunity to present evidence concerning the reasons for disqualification. If the mayor determines, based on a preponderance of the evidence, that disqualification is justified under this section, he shall disqualify this person. Otherwise he shall not disqualify him.

C. The mayor may disqualify a person for a period of not more than five (5) years from the date of disqualification. A disqualification shall apply to the disqualified person and to all businesses in which the disqualified person holds substantial interest, or serves in a management position.

Section 30. Audit of Contractor's Records.

All vendors, suppliers, or other contractors who sell or rent supplies, materials, equipment, or services to the Denali Borough under this article shall keep and maintain books and records of its activities under the contract sufficient to enable the Denali Borough to determine the accuracy of bills and invoices submitted by the contractor and the adequacy of the contractor's performance of its obligations. Contractors shall maintain these records for a period of two years and shall make them available for audit by the Denali Borough or its agents at reasonable times upon reasonable notice.

Section 37. Effective Date. This ordinance becomes effective upon adoption.

DATE INTRODUCED: January 10, 1993

FIRST READING: January 10, 1993

PUBLIC HEARING: March 14, 1993

PASSED and APPROVED by the DENALI BOROUGH ASSEMBLY this 14th day of March, 1993.

SIGNATURE ON FILE

Mayor

ATTEST: SIGNATURE ON FILE

Borough Clerk