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Purchasing and Tendering | Policy No. 2024-03
H a r v e y R u r a l C o m m u n i t y P a g e 1 | 8
Purchasing and Tendering Policy No. 2024-03
Policy Statement:
Harvey Rural Community has adopted this policy to ensure that all necessary goods and services
are acquired in a consistent manner that results in the best overall value to Harvey Rural
Community. Harvey Rural Community intends to make purchases and contract agreements
through an open, competitive, and non-discriminatory selection process which will identify
qualified suppliers through competitive bids and written quotations.
The purpose of this policy is to:
Comply with purchasing practices legislated by the federal, provincial governments, and Harvey
Rural Community.
Where appropriate, Harvey Rural Community administration will give priority to local businesses for
the supply of goods and services and construction contracts.
1. Definitions
For the purposes of this policy:
a. "Best Value" means
i. Obtained by determining the total cost of performing the intended function
over the lifetime of that function.
ii. To include quantitative and qualitative factors.
b. "Local Businesses" means
i. Any person, firm, partnership, or corporation which supplies goods or
services, or construction contract services, is in Harvey Rural Community,
and has a current business license, unless otherwise exempt from the
requirement to obtain a business license.
c. "Invited Tender" means
i. Written solicitation to selected qualified suppliers.
d. "Local Suppliers" (see Harvey Rural Community Businesses)
e. "Procurement Act" means
i. Provincial legislative Procurement Act, RSNB 2012, c 20 and governs all
public procurement of goods, services, and construction services for
government organizations in New Brunswick. The current version has been
in force since Jan 1, 2023.
f. "Public Tender" means
i. Advertised solicitation to qualified suppliers. A public tender differs from
invited tenders in that any supplier may respond.
g. "Purchasing Agent" means
i. Any individual authorized to enter into contracts, agreements and purchase
orders that bind Harvey Rural Community to the terms thereof for goods and
services.
2. Purchasing Guidelines
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a. Purchasing shall follow guidelines set out in the Procurement Act for purchases of
goods over $25,000, services over $50,000 and construction services over
$100,000.
b. In evaluating all quotations and tender bids from suppliers and contractors, Harvey
Rural Community shall consider the following purchasing criteria, as appropriate:
i. Quality
ii. Price
iii. Innovation
iv. Functionality
v. Assurance of supply and deliverability
vi. Anticipated customer service
vii. Compatibility with existing equipment
viii. Impact on local economy
ix. Other as deemed appropriate
c. For goods and services and construction contracts that are not governed by
provincial or federal legislation, Harvey Rural Community will apply the following
guidelines:
i. Purchases under $5,000 do not require a quote or tender award process.
Discretion should be used to obtain best value; this may include occasional
price shopping for routine purchases. When possible, purchases should be
made locally.
ii. Purchases or contracts over $5,000 will be obtained by way of a competitive
bid process. Where reasonable, local businesses should be contacted for
bids. See schedule "A" for determining the best bid process to use. It will be
at the discretion of the Chief Administrative Officer (CAO) to determine
whether bid proposals will be by invited tender or public tender. A minimum
of three proposals should be obtained whenever possible.
iii. Purchases or contracts $5,000 - $25,000 require three quotes when it is
sensible and prudent to do so. Process costs and costs of time needs to be
balanced against due diligence to obtain best value. Quotations may be in
the form of written, fax, email, online, web, or price catalogues. For
purchases in this category, a record of price quotes should be kept on file.
When possible, local businesses should be contacted for price quotes.
iv. Purchasing agents or department heads may at their discretion use a formal
bid process for purchases under $25,000 if the need arises. See schedule
"A" to determine when such cases may be necessary.
v. Where not governed by legislation, Harvey Rural Community will give
preference to local suppliers after considering purchasing criteria in 2.b. and
in consideration of overall best value to Harvey Rural Community.
3. Used Equipment
a. Purchasing agents or department heads may at their discretion purchase used
equipment. It is often a challenge to compare two or more pieces of used
equipment and discretion is required by purchasing agents. In order to obtain best
value and minimize risk to Harvey Rural Community, purchasing agents should
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follow the criteria set out in 1.c. of this policy, in addition to the following guidelines
when purchasing used equipment:
i. Prior to purchase, obtain comparable information on at least 2 similar
pieces of equipment. The following should be documented and used in
comparing alternatives:
-
Price
-
Km's or hours on equipment
-
Rating of general condition
-
List of extras or accessories included
-
Estimated freight and shipping costs
-
Year
-
Purchase price of new piece of equipment
-
Mechanical inspection report
-
Warranties available
-
Budget
ii. Once comparable information has been established, a purchasing agent
may purchase used equipment provided it is comparable to recent actual
sales and represents best value for Harvey Rural Community.
b. Disposal of Surplus Equipment
i. Goods, supplies and assets which are declared surplus by the Department
Head or CAO shall be offered to other departments of Harvey Rural
Community, or sold in the most efficient manner to obtain the highest return
by trade-in (vehicles and equipment), request for quotation, public tender, or
public auction in accordance with this policy.
ii. Elected officials and employees of Harvey Rural Community or their agents
shall not be permitted to bid on the purchase of surplus material.
4. Authority to Purchase
a. Contracts and Tender Awarding
i. In all cases, the CAO will carry out the business of the contract negotiation
with the contractor. The contractor will not negotiate directly with the
Council, rather through the CAO to Council.
ii. All contracts which are essential for the day-to-day operations of Harvey
Rural Community, or to satisfy capital work requirements, and which are
approved within the annual budget shall be negotiated and concluded by the
CAO.
iii. If there is ambiguity as to whether a contract requires approval of Council,
the CAO shall present the contract to Council for advice and a resolution if
required.
iv. The CAO will submit recommendations to Council for approval and provide
additional restrictions concerning procurement where in their opinion such
action is considered necessary and in the best interests of the Harvey Rural
Community.
b. Use of Purchase Order
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i. Purchases up to $5,000 require a signed purchase order prior to employees
making a purchase of goods or services. Department heads and up to one
alternate purchasing agent per department may authorize purchase orders
in this range. In the event that department heads or alternate purchasing
agents are not able to create a purchase order, they may call in to the office
to request a purchase order. All employees purchasing goods or services
must give the PO number to vendors at time of purchase.
ii. Purchases over $5,000 must be authorized by the Chief Administrative
Officer (CAO) or designate. Department heads may place a requisition for
the purchase of goods greater than $5,000, which will be subsequently
reviewed and approved or disapproved by the CAO or designate.
iii. Purchase of goods greater than $25,000 will follow guidelines set out in the
Procurement Act and will be reviewed for approval by the CAO or designate.
iv. Services greater than $50,000 will follow guidelines set out in the
Procurement Act and will be reviewed for approval by the CAO or designate.
v. Construction services greater than $100,000 will also follow guidelines set
out in the Procurement Act and will be reviewed for approval by the CAO or
designate.
c. Documentation and Authorization for Payment
i. All vendors shall reference PO numbers on invoices. Invoices without PO
numbers are at risk of nonpayment.
ii. Employees purchasing goods or services are required to sign invoices at
time of purchase. Employees should check to see that the PO is referenced
on the invoice at time of signing.
iii. Department heads are required to authorize payment and indicate the
proper general ledger code and project allocation. If there are any
unauthorized purchases, the department head will discuss discrepancies
with purchasing employee and/or vendors to correct the issue.
d. All purchases require an approved budget. Items that have not been included in the
budget, must receive approval from Council prior to purchase.
e. In an emergency situation, defined by the CAO, authority is granted to spend up to
$25,000 without the need for a formal bid process, on the sole authority of the CAO.
During the emergency, spending in excess of $25,000 is to be approved by a simple
majority of council.
f. Purchase orders will not be required for the following purchases:
i. Membership renewals
ii. Fuel purchases at card lock or fuel station
iii. Registration renewals
iv. Insurance
v. Minor office supplies
vi. Conference and staff training
vii. Hotel bookings
viii. Meals
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ix. General Operational Payments - i.e. utility & phone, freight, refund of credits,
minor office, payroll disbursements, etc.
x. Professional services - i.e. legal, audit, engineering (these services should
be accompanied by a contract or engagement letter).
xi. Expenses approved in program budgets
xii. Annual requisitions from approved requisitioning authorities
xiii. Contract payments
xiv. Donations
xv. Minimal purchases where the petty cash fund is used
5. Opportunity Notification
a. Depending on the nature of goods or services required, the advertisement should be
posted locally, regionally, or nationally in reliable advertising media. The CAO or
designate will determine how tenders will be advertised. Tenders should be sealed,
and time stamped when received by Harvey Rural Community.
b. For goods or services that are expected to be $5,000 - $25,000 department heads
should obtain at least three quotes from suitable vendors. In cases where there are
not sufficient suitable vendors, as many quotes as can be obtained will suffice.
Department heads are to use judgement in determining the best possible vendors
for soliciting quotes. Whenever possible, local vendors should be solicited for
quotes.
c. For contracts or bids obtained under legislation, see notification requirements in
the Procurement Act.
6. Consulting and Services Contracts
a. Consulting and service contracts will be awarded on the basis of price,
demonstrated competence and qualifications for the type of services to be
rendered. Requirements in Purchasing Guidelines 2(c) are to be followed when
accepting new consulting and services contracts.
b. All significant recurring services or consulting contracts/arrangements will be
subject to review at least once every five years or more often if deemed necessary
by the department head. (Recurring service contracts/arrangements would
constitute services provided on a regular basis regardless of a formal contract or
agreement).
c. To safeguard against the practice of underbidding followed by disproportionate rate
increases in subsequent terms, which undermines fair competition and best value
for the municipality, whenever possible contracts should include future price
protection clauses that strictly regulate and limit the escalation of rates.
d. Furthermore, the municipality should reserve the unequivocal right in agreements to
terminate or cancel contracts at its convenience, ensuring flexibility and the
protection of public interest.
7. Evidence of Policy Compliance
a. Staff purchasing goods and services over $5,000 are required to maintain adequate
record of quotation/ tender submissions and document reasons for accepting
successful submissions.
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SCHEDULE A:
Formal Bid Process
The following is a list of the possible bid processes that may apply for a given purchase of goods or
general services.
Request for
Information
Used for goods or services of any value where Harvey Rural Community has an idea and
is looking for the best approach to execute it. The intent is to source technical or
commercial data for possible inclusion in a follow up process; a contract is not
intended at the end of this process
Request for
Proposal
Used for goods or services of any dollar value where requirements and specifications
are not clearly defined, the vendor is considered the expert, a high degree of flexibility is
required, and negotiations may be required. A contract is intended at the end of the
process for which a formal legal agreement may be required.
Request for
Quotation
Used when goods or services are of a low-dollar value, requirements and specifications
are clearly defined, Harvey Rural Community is considered the expert, and the award
criteria is heavily weighted to price.
Request for
Tender
Used where goods or services are of a high-dollar value, requirements and specifications
are clearly defined, Harvey Rural Community is the expert, and award criteria is heavily
weighted to price. A contract is intended at the end of the process for which little
flexibility is required and a formal legal agreement may be required.
Request for
Pre-
qualification
Used to establish the technical abilities of a vendor and to ensure that the vendor will be
capable of providing the required goods or services. Used to create bid lists when
requirement is repetitive.
Expressions of
Interest
Used to develop a list of potential bidders by gauging public interest in an expected
future procurement.
The Chief Administrative Officer or designate will determine the best advertising medium for the
above-mentioned bid processes and will use their professional judgment to determine low-dollar
versus high dollar values for request for quotation and request for tender processes. When
possible, a minimum of three suppliers should be contacted to obtain the best value. Requests
may be advertised locally, regionally, or nationally as determined by the purchasing agent. Request
may also take the form of an invited tender or public tender.
Schedule B:
QUOTATION AND SUMMARY SHEET
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To be used by departments for obtaining quotations for purchases over $5,000.
Date of approval:
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Clerk's Signature: