1.  Competitive bidding required.

         2.  Purchase generally.

         3.  Purchasing agent.

         4.  Bid invitation.

         5.  Bid deposits.

         6.  Bid submittal and opening.

         7.  Rejection of bids.

         8.  Award of contract.

         9.  Open market purchases.

         10. Contractor bonding.

         11. Professional services contracts.

         12. Construction contracts ‑‑ letting.

         13. Construction contracts ‑‑ administration.

         14. Disbursements setoffs.

         15. Local preference ‑‑ contractors.

         16. Local preference ‑‑ subcontractors.



Section 1.  Competitive bidding required.

            A.  All purchases of and contracts for supplies and contractual services shall, except as specifically provided in this chapter, be based whenever possible on competitive bids.

            B.  When competitive bids are not deemed to be possible, a purchase or contract or supplies may be entered into if the estimated cost of the supplies or contractual services is:

            1.  greater than $2,500 and the assembly by resolution finds that competitive bids are impossible, reciting the reasons therefore, and specifies how the purchase shall be made or the contract shall be awarded; or,

            2.  not greater than $2,500 if the mayor certifies in writing that competitive bids are impossible, reciting the reasons therefore, and specifies how the purchase shall be made of the contract shall be entered into.


Section 2.  Purchase generally.  All supplies and contractual services, except as otherwise provided in this chapter, when the estimated cost thereof exceeds $2,500 shall be purchased by formal, written contract from the lowest responsible bidder as defined in Section         after due notice inviting proposals.


Section 3.  Purchasing agent.

            A.  The mayor is the purchasing agent for the borough.  However, the mayor may designate the clerk or other borough employee to be the borough purchasing agent, subject to assembly approval by resolution.

            B.  There shall be a borough purchasing agent.  The purchasing agent shall make all purchases of supplies, materials, equipment and contractual services needed by the offices, departments and agencies of the borough government, in accordance with the ordinances of the borough and such rules and regulations as may be prescribed by the mayor and approved by the assembly.

            C.  The purchasing agent shall recommend joint purchases with other units of government when the best interests of the borough would be served.


Section 4.  Bid invitation.

            A.  When competitive bidding is required, notice inviting bids shall be published in a newspaper or newspapers of general circulation within the state selected by the clerk.  Invitation for bids shall be published at least once, at least ten days prior to the last day set for the receipt of proposals.  The invitation shall include information as to where the necessary bid forms and additional information may be obtained.

            B.  The clerk may also solicit bids from all responsible prospective suppliers who have indicated an interest in bidding on borough contracts.

            C.  The clerk shall also advertise all pending purchases by posting a notice on the public bulletin board of the borough office.


Section 5.  Bid deposits.  When deemed necessary by the mayor, bid deposits shall be prescribed in the invitation for bid.  Unsuccessful bidders shall be entitled to a return of surety where the mayor has required such.  A successful bidder shall forfeit any surety required by the mayor if the bidder fails or refuses to enter into a contract within ten (10) days after the award.


Section 6.  Bid submittal and opening.

            A.  When competitive bidding is required, bids shall be submitted to the clerk and shall be identified as bids on the envelope.  The clerk shall not accept submittal of bids after the time stated in the invitation for the opening of bids. 

            B.  Bids shall be opened in public at the time and place stated in the invitation for bids. 

            C.  A tabulation of all bids received shall be posted for public inspection.  A copy of the tabulation shall be forwarded to the assembly for acceptance or rejection of bid.


Section 7.  Rejection of bids.

            A.  The assembly shall have the authority to reject all bids, parts of bids, or all bids for any one or more supplies or contractual services included in the proposed contract, when such rejection is in the best interest of the borough.

            B.  The assembly may determine that rejection of all bids is in the best interest of the assembly for reasons which include but are not limited to the following:

                        1.  inadequate, ambiguous, or otherwise deficient specifications were cited in the invitation for bids;

                        2.  the supplies or services are no longer needed;

                        3.  the invitation for bids did not provide for consideration of all factors of cost to the assembly;

                        4.  the bids received indicate that the assembly's needs can be satisfied in a less expensive manner than that contemplated by the invitation for bids;

                        5.  all otherwise acceptable bids received are at unreasonable prices;

                        6.  the bids were not independently arrived at in open competition, were collusive, or were submitted in bad faith; or

                        7.  the bids received did not provide adequate competition to assure reasonable prices.

            C.  If the assembly rejects all bids under this section, it may later direct the clerk to issue an identical or similar invitation for bids.


Section 8.  Award of contract.

            A.  The assembly may award contracts within the purview of this chapter.

             B.  When competitive bidding is required, contracts shall be awarded, if at all, to the lowest responsible bidder whose bid is responsive to the invitation for bids.

            C.  In determining which bid is "lowest," the assembly may, in its discretion, apply the local contractor preference of Section      .

            D.  In determining whether the lowest bidder is "responsible," the assembly shall consider:

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

                        2.  whether the bidder can perform the contract or provide the service promptly or within the time specified, without delay or interference;

                        3.  the character, integrity, reputation, judgment, experience and efficiency of the bidder and the quality of performance of previous contracts or services;

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

                        5.  the sufficiency of the financial resources and ability of the bidder to perform the contract or provide the service;

                        6.  the quality, availability and adaptability of the supplies or contractual services to the particular use required;

                        7.  the ability of the bidder to provide future maintenance and service for the use of the subject of the contract, number and scope of conditions attached to the bid;

                        8.  the standardization requirements; and,

                        9.  the ability of the bidder to resolve the assembly's concerns as to the bidder's responsibility prior to the time when the contract must be executed.

            E.  For a bid to be "responsive," the bid must be an offer to perform, without exception, the exact thing called for in the invitation for bids, which will, upon acceptance, bind the bidder to perform in accordance with all the terms and conditions of the invitation.  The assembly may conclude that a bid is not "responsive" if, for example:

                        1.  The bidder has qualified or changed the terms or conditions of the invitation to bid;

                        2.  the bid is considered late under Section       having been received after the time for opening;

3.  the bid does not include bid or surety bonds, plans, specifications, samples, or other items called for in the invitation to bid; or

                        4.  the bidder does not acknowledge receipt of an amendment to the invitation.

            F.  The assembly may waive trivial or inconsequential deficiencies in a bid.

            G.  An aggrieved bidder may, within five (5) days after the opening of the bids, file an informal appeal pursuant to chapter


Section  9.  Open market purchases.  All purchases of supplies and contractual services of less than $2,500 shall be made on the open market, without observing the procedure prescribed in Sections      through      


Section 10.  Contractor bonding.  Contracts for construction, alteration or repair of public buildings or public works, where the cost is in excess of one hundred thousand dollars ($100,000) shall be awarded only after the contractor has provided payment and performance bonds pursuant to AS 36.25.010(A).


Section 11.  Professional services contracts.

            A.  A contract for engineering, architectural, legal, medical or other professional services shall not be binding, and effective until it has been approved by the assembly.  Any such contract awarded by the assembly is deemed approved.  Any other such contract shall be immediately submitted to the assembly for approval, which may be given by motion.

            B.  Contracts in amounts exceeding one thousand dollars ($1,000.00) for such services and other contractual services, which are in their nature unique and not subject to competition, shall be awarded by the assembly.  All such contracts for professional services, when deemed appropriate by the awarding authority, shall be awarded after public notice and mail solicitation inviting proposals for the furnishing of the required services.  The selection of professional assistance shall be based on competence, skill and experience.

            C.  No contract shall be subdivided to avoid the requirements of this section.

            D.  The borough shall not award a contract for architectural, engineering, or land surveying services to:

                        1.  an individual who is not registered under A.S. 08.48 to perform the architectural, engineering, or land surveying services required by the contract;

                        2.  a partnership that is not qualified under A.S. 08.48.251 to provide the architectural, engineering, or land surveying services required by the contract; or

                        3.  a corporation that is not authorized under A.S. 08.48.241 to offer the architectural, engineering, or land surveying services required by the contract.


Section 12.  Construction contracts ‑‑ letting.

            A.  For the purposes of this section, "contract" means and includes construction contracts.  The term shall not include professional services and other contractual services which are in their nature unique and not subject to competition.

            B.  All contracts shall be based wherever possible on competitive bids.

            C.  All contracts shall be awarded by formal, written contract to the lowest responsible bidder whose bid is responsive to the invitation for bids, as required by Section      , after due notice inviting proposals following the procedures established in Section      .  Each construction contract shall provide:

                        1.  that the work shall be performed in full compliance with all applicable building and safety codes, including but not limited to applicable portions of the National Electrical Code, the Uniform Building Code, the Uniform Fire Code, and the Uniform Mechanical Code, or such other, similar, codes as may be adopted from time to time by the Alaska Department of Public Safety, Division of Fire Prevention or by the Borough;

                        2.  that final payment on the contract shall not be due until the work has been certified by a licensed inspector to have been correctly performed in compliance with the contract and the codes referred to in the preceding subsection; and

                        3.  that final payment under the contract shall not be deemed a waiver of any defects in the work.

             D.  The assembly may not award a contract for the construction or repair of any building or other borough facility to a contractor who has not provided each of the following:

                        1.  the contractor's full name and permanent address, mailing address, and, if the contractor is not an individual, the name, mailing address, and telephone number of a contact person;

                        2.  a copy of the contractor's current certificate of registration, issued pursuant to A.S. 08.18.031, provided, however, that the assembly may tentatively award a contract to contractor to whom a certificate of registration has not yet been issued if the contractor provides a copy of the application filed pursuant to A.S. 08.18.021;

                        3.  a copy of the current bond filed with the State of Alaska as required by A.S. 08.18.071;

                        4.  a copy of the information regarding public liability and property damage insurance filed with the State of Alaska as required by A.S. 08.18.101; and

                        5.  a copy of the contractor's current State of Alaska Business License, provided, however, that the assembly may tentatively award a contract to contractor to whom a business license has not yet been issued if the contractor provided a copy of the application filed pursuant to A.S. 43.70.020.

            E.  Upon awarding a construction contract, the clerk shall:

                        1.  immediately notify the state Commissioner of Labor of the amount of the contract, the effective date of the contract, the identity of the contractor and all subcontractors, the site or sites of construction and provide a project description; and

                        2.  verify that the bonding requirements of A.S. 36.25 have been met and that the requirements of A.S. 08.18 have been met.


Section 13.  Construction contracts ‑‑ Administration.  All contracts, as defined in Section       shall be administered by the mayor in accordance with the following provisions:

            A.  Any change required in the work shall be made after receiving a written change order proposal from the contractor for additions to or deductions from the original contract sum and the original contract time for changes proposed.

            B.  Upon receipt of a change order proposal for a change in the contract sum in an amount not exceeding one thousand dollars ($1,000.00) and after determination that the contractor's proposal is reasonable, the clerk, at the direction of the mayor, may issue a written change order.  The aggregate sum of change orders so authorized shall not exceed five percent (5%) of the original contract sum or one thousand dollars ($1,000.00) whichever is greater.

            C.  When a proposed change order exceeds the limits set forth in subsection B. of this section, the proposal, together with recommendations of the mayor, shall be forwarded to the assembly.  The assembly shall then determine whether the proposal shall be accepted or rejected.

            D.  Whenever a change in the work is required immediately upon the discovery of unforeseen conditions, the mayor shall have the power to order such change.  If the change is otherwise subject to subsection C. of this section, a full report shall be made to the assembly not later than the second regular meeting following the change.  The emergency nature of such change order shall be determined by the mayor.

            E.  No partial payment for work completed shall be made to a contractor without approval of the mayor of the quantities and values submitted by the contractor.  No reduction in retained percentage not called for in the contract shall be made without prior approval of the assembly.


Section 14.  Disbursement setoffs.

            A.  Disbursements of monies to a person, firm or corporation will be made only after the various receivable accounts of the borough have been reviewed for outstanding balances owed.  The disbursement will be reduced by setting of the amount of indebtedness due to the borough from such person, firm or corporation.

            B.  All contracts to which the borough is a party which will or may involve the disbursement of borough funds shall contain the following clause or its substantial equivalent:

Disbursement of monies by the borough hereunder shall be subject to setoff pursuant to the provisions of  Section       of the Code of Ordinances.

Such contracts include, but are not limited to, oral contracts, employment contracts, construction contracts, and purchasing contracts.


Section 15.  Local preference ‑‑ contractors.  The assembly may, at its discretion, direct an award of a construction contract after competitive bidding to a responsible bidder who has submitted a bid, who holds a borough business license, and who maintains a business office within the borough, if that bid does not exceed the lowest responsible bid by more than ten percent (10%).


Section 16.  Local preference ‑‑ subcontractors.

            A.  The mayor shall, unless prohibited or otherwise restricted by funding sources, for all contracts awarded under the formal competitive bidding procedures, make incentive payments to a qualified contractor consisting of a percentage of the cost of salary and benefits paid by a qualified contractor directly or through his qualified subcontractors to employees for personal services of labor who were directly employed on the project for which the referenced contract applies.

            B.  In this section, "qualified contractor" or "qualified subcontractor" means a person, partnership, or corporation holding a borough business license on the date on which the contract bids are solicited.

            C.  Incentive payments may be applied for at the same time as periodic payments, if any, which are authorized under the contract.  The contractor shall submit supporting documentation as required by the clerk.

            D.  The incentive payment shall be equal to:

                        1.  Twelve percent (12%) of costs for qualified contractor or subcontractors under one million dollars ($1,000,000.00);

2.  Ten percent (10%) of costs for qualified contractors or subcontractors between one million dollars and one cent ($1,000,000.01) and five million dollars ($5,000,000.00);

3.  Eight percent (8%) of costs for qualified contractors or subcontractors between five million dollars and one cent ($5,000,000.01) and ten million dollars ($10,000,000.00);

4.  Six percent (6%) of costs for qualified contractors or subcontractors between ten million dollars and one cent ($10,000,000.01) and over.



                             DATE INTRODUCED: February 3, 1991


                             FIRST READING:   February 3, 1991


                             PUBLIC HEARING:  __________________



PASSED and APPROVED by the DENALI BOROUGH ASSEMBLY this ______ day of_________________________, l9___.






 ATTEST:                            ____________________________

                                                                  Borough Clerk