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10.05.01 Procedure for Formal Bids CITY OF BOYNTON BEACH ADMINISTRATIVE POLICY MANUAL CHAPTER: 10 Purchasing POLICY NO: 10.05.01 SECTION: 05 Bids and Proposals PAGE: Page 1 of 9 SUBJECT: 01 Procedure for Formal Bids PURPOSE: Formal sealed bids and proposals are the most effective methods for soliciting competitive prices from vendors in the governmental purchasing sector. This policy will establish the procedures to use for sealed bids POLICY: The City shall award all contracts by competitive sealed bidding except as otherwise provided in Purchasing Policy 10.05.02 – Alternatives to Formal Sealed Bids. All Bids, Request for Proposals (RFP's), Request for Qualifications (RFQ's), Contracts, Agreements, Leases, etc., shall meet the insurance requirements as stipulated in the Administrative Policy Manual (APM) 12.01.12. The following process should be used for formal sealed bids of $25,000 or more (non-construction) and $75,000 or more (construction). A. Bid Request Form. A department must complete and submit a Departmental Bid Request form and submit it to Procurement Services for the preparation of an Invitation for Bids. Departments must submit this form along with all information required to complete the package. Incomplete forms will be returned to the requesting Department Head. B. Invitation for Bids. An Invitation for Bids shall be issued for each solicitation for offers equal to or exceeding the mandatory bid amount and shall include a purchase description, and all applicable terms and conditions. C. Bid Specifications. Except for Citywide and Warehouse requirements, specifications for all other departmental bids should be provided by the requesting department in hard copy and electronically. Reasons for this are: • As prime user, the department is best aware of any special characteristics or problems associated with the bid. • Because they probably utilize the bid item on a daily basis, the department is best aware of any new developments in that product field. Policy 10.05.01 – Procedure for Formal Bids Page 1 of 10 Policy 10.05.01 – Procedure for Formal Bids Page 2 of 10 • Scientific, engineering, or other technical descriptions must be provided by department staff that is qualified to do so. • Purchasing staff should not be placed in the position of deciding upon and specifying bid items for individual department usage. Purchasing may be called upon to assist in writing specifications; and may make needed and necessary changes. However, the using department must review and approve all changes. Specifications are the basis for a vendor's bid. Realizing that the bid will be compared primarily based on price, a vendor will seek to offer an item that only meets the specifications. Consequently, it is vital that specifications make no assumptions, but rather detail every important facet of the item in question. To neglect to do so invites delivery of items that meet specifications, but fail to meet the department's expectations. D. Insurance. Insurance is required to safeguard the City from all claims resulting from damage to property and/or injury to persons caused by the vendor or his actions. The successful bidder shall be required to obtain, at their own expense, all minimum insurance coverage required under the terms and conditions of all Bids, Request for Proposal (RFP), Request for Qualifications (RFQ), Contracts, Leases, and Agreements. Administrative Policy Manual (APM) 12.01.12, Insurance Requirements for Contracts, Agreements, Leases (provided by Risk Management) identifies the insurance requirements. This same policy stipulates that the Department doing the project is responsible to assure that the necessary insurance requirements are in the subject document. Under the terms and conditions of all contracts, leases, and agreements, the City requires appropriate insurance coverage listing the City of Boynton Beach as Additional Insured. This is accomplished by providing a Certificate of Insurance listing the City as "Certificate Holder" and "The City of Boynton Beach is Additional Insured as respect to liability". ((NOTE: The City may accept an insurance contract or binder as proof of insurance if a Certificate is provided upon selection of the vendor). Risk Management will review the insurance coverage and limits for the Certificate of Insurance to ascertain that the insurance requirements will be met. No Bid, RFP, RFQ, Contract, Agreement, Leases, etc., shall be awarded or purchase order issued until notification is received from Risk Management that the Certificate of Insurance satisfactory meets the insurance requirements of the City. This includes "piggy-backing" of other governmental entity bids. Policy 10.05.01 – Procedure for Formal Bids Page 3 of 10 Insurance coverage generally required for construction and installation bids are: • Worker's Compensation: extending coverage for worker's injury on the job. • Liability: extending coverage for personal injury, accidental death, and property damage. • Builder's Risk: extending coverage of total value for the duration of construction project for any loss. E. Bonds. Bonds offer tangible protection in the form of monetary assurances that the bidder will meet their obligations. For awards of $25,000 or more, the successful bidder shall furnish a 5% bid bond as a security for faithful performance of order(s) awarded as a result of the bid, and for the payment of all persons performing labor, and on their furnishing material in connection therewith. Surety of such bond should be in the amount equal to the bid. Simultaneously with the delivery of the executed contract, the successful bidder shall deliver to the City, an executed bond or a letter of credit for 100 percent of the accepted bid as security for faithful performance of the contract and for payment of all persons performing labor or furnishing materials in connection therewith. The attorney-in-fact that signs the bond must file with the bond a certificate and effective copy of power of attorney. Bonds must be secured by the bidder at their own cost, and generally may be classified as: • Bid Bond or Bid Security. This is a document, usually in an amount of 5% (five percent) of the bid, which guarantees that the bidder will enter into a contract with the City, and agrees to hold bid pricing until the award is made. Bid bonds protect the City from erroneous or deliberate low bids which the vendor has no intention of honoring. Should bidder fail to enter into a contract, the bid bond is forfeited. Bid security must be submitted with the bid, and can be in the form of a certified check, cash, or bond. The awarded vendor’s Bid Security Bond will be returned after receipt of a Construction Bond or a Letter of Credit for 100% of the project. • Performance/Construction Bond. This bond is a surety instrument guaranteeing that the vendor will perform according to the terms of the contract, and is generally in an amount of 100% of the bid. This bond affords protection from non-performance in completion of major contracts, the effects of which would result in considerable injury to the City. Should the vendor default, the bond is cashed and the City may then utilize the funds to complete the contract Policy 10.05.01 – Procedure for Formal Bids Page 4 of 10 with another vendor. Vendors are to submit performance bonds upon award of contract, prior to the City issuing a Notice to Proceed. The successful bidder’s Performance Bond will be retained if the Contractor does not conform to specifications, fails to perform as agreed upon in the Invitation to Bid. The City shall be entitled to collect or retain part or all of the deposit; whichever is necessary to rectify the bidder’s unacceptable performance as to not conforming to specifications or fails to perform as agreed upon in the Invitation to Bid. • Cash Bond. In the amount of the bid or contract award. • Irrevocable Letter of Credit. Sometimes used in lieu of a bond in the case of some construction projects or multi-year contracts. F. Bid Conditions. In addition to the general conditions of most formal bids, some bids require special conditions that pertain specifically to the bid in question. Conditions differ from specifications in that conditions refer to requirements, which must be met by the bidder before specifications of his bid are even considered. G. Public Notice/Request to Advertise. Public notice shall be given a minimum of eight (8) calendar days prior to the date set forth therein for the opening of bids. Such notice shall include publication in a newspaper of general circulation no later than eight (8) calendar days prior to bid opening. The notice shall state the bid title, scope of services or reason for the bid, and place, date, and time of bid opening. A Request to Advertise (attachment) must be completed with signatures of the Purchasing Agent and the City Attorney prior to the City Clerk's process to advertising. H. Bid Opening. a. Time of Bid Receipt. Procurement Services must receive bids no later than the time and date identified in the Invitation for Bids. Bids received after this time shall be returned unopened to the bidder. Purchasing will stamp date and time received on all bids held for formal bid opening. The City reserves the the right to consider Bids that have been determined by the City to be received late due to mishandling by the City after receipt of the Bid and no award has been made. b. Public Bid Opening. All bids received shall be publicly opened in the presence of witnesses at the place designated in the Invitation for Bids. No additional bids, except stated in “Item a” above, will be accepted after the assigned receiving date and time. c. All Bids Unopened. If no bids are opened at the assigned receiving date and time of the bid, for any reason other than failure of the vendors to present their bids or cause their bid to be presented at the appropriated time, the bid opening Policy 10.05.01 – Procedure for Formal Bids Page 5 of 10 may occur the following workday at the same time as originally scheduled. I. Bid Acceptance and Bid Evaluation. Bids shall be unconditionally accepted without alteration or correction, except as authorized in Purchasing policies. Bids shall be evaluated based on the requirements set forth in the Invitation for Bids, which may include criteria to determine suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award, excluding cash discounts, shall be objectively measurable, such as trade discounts, transportation costs, and total or life cycle costs. The Invitation for Bids shall set forth the evaluation criteria to be used. No criteria may be used in bid evaluations that are not set forth in the Invitation for Bids. J. Corrections, Cancellation, or Withdrawal of Bids. Corrections or withdrawal of inadvertently erroneous bids shall be permitted up to the time of bid opening. After bid opening, no changes in bid prices or other provisions shall be permitted; provided however, the City Manager or his designee shall have the authority to waive minor irregularities as provided by law. K. Bid Evaluation and Award. Bids should be evaluated based on the requirements set forth in the Invitation to Bid, which may include criteria to determine acceptability, such as inspection, testing, quality, workmanship, delivery, service, price and suitability for a particular purpose. Those criteria that will affect the bid price and be considered in evaluation for award shall be objectively measurable, such as discounts, transportation costs and total or life cycle cost. The Invitation to Bid shall set forth the evaluation criteria to be used. The contract shall be awarded to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the Invitation to Bid. In determining "lowest responsible bidder", in addition to the bid evaluation criteria above, the following may may be considered: a. The ability and skill of the bidder to perform the contract. b. Whether the bidder can perform the contract or provide the supplies/services as required, without delay or interruption within the time specified. c. The quality of performances of previous contracts or services. Policy 10.05.01 – Procedure for Formal Bids Page 6 of 10 L. Tie Bids. If two or more bidders are tied, the tie may be broken and the successful vendor selected by the following criteria presented in order of importance. a. Quality of the items or services bid if such quality is ascertainable. b. Delivery time if provided in the bid by the bidders. c. Location of the vendor with the following award preferences: • City of Boynton Beach vendor. • Palm Beach County vendor • Florida vendor d. If the above criteria are impossible to determine with any reasonableness or do not resolve the issue, the award will be given to that vendor whose bid was received first as indicated by the time stamp on the envelope containing the bid. M. Bid Term for Contracts a. Generally, contract duration is contract specific. The project engineer would provide an estimate as to the duration of the contract to the City and the City would then approve the engineer’s estimate. b. On FDOT projects, to establish a contract’s duration, the the following procedure should be followed: 1. Review the project plans and specifications with special emphasis on maintenance of traffic. If the project has more than one phase, determine what work can be done in each of the phases. 2. List the required activities for each phase. This list does not need to be exhaustive but does need to include all controlling items of work or activities on the critical path. 3. List each quantity of the unit of work that will be used as a basis for estimating the duration of that activity. On a project with more than one phase, use only the quantity associated with that phase. 4. Use the production rates and charts provided for on the State Construction Office’s web page, under the title of “Specialized Area/Scheduling Engineer”, to convert the units of work into workdays. This is done for each activity in each phase. The production rates may have to be supplemented with information from other sources and should be tempered with good engineering judgment and experience with similar work. Policy 10.05.01 – Procedure for Formal Bids Page 7 of 10 5. Review the appropriate Utility Work Schedule and/or Agreements to determine what part of the requested potentiality affects the Contractor’s work. A delay occurs only if the prime contractor cannot work because of utility conflicts. Utility relocation duration should be handled as an activity if it will contribute to the project duration. 6. Multiply each of the workdays by a factor of 1.48 to convert them to contract days. • The factor of 1.48 is based on 5 working days per week. Implicit in this factor is the assumption that the contractor will use "normal" crews and equipment, and will work a "normal" workday. • If special provisions modify the time requirements of the project, then it may be appropriate to use another factor based on number of allowable working days and allowable working hours, either larger or smaller. For a project with incentive/disincentive, a factor of 1.0 or less could be used. This would be based on the assumption that the contractor would work 7 days per week with extended work hours. On the other hand, if the special provisions curtail the number of hours per day the contractor may work, the factor used may be larger than 1.48. • On Compressed Time or Time Priority Projects, the Scheduling Engineer may assume longer working hours, multiple crews, and six or seven day work weeks to accomplish a decrease in the project duration. Projects containing a No Excuse Bonus provision should have reduced project durations. Projects with a Liquidated Savings provision should be calculated using a 6-day workweek. • On A+B projects, the maximum number of days is calculated using normal production rates and 5-day workweek. 7. If a computerized scheduling software package, workdays will be converted to calendar days using the calendar function in the program. Holidays, vacation time and other non-work days are entered into the project calendar. Depending on the time of year this may or may not replicate the 1.48 factor normally used for converting workdays to calendar days. 8. The report(s) from the scheduling software and/or non-computerized form should show, as a minimum, for each activity: name, units of work, production rate, duration, beginning contract day and ending contract day. Policy 10.05.01 – Procedure for Formal Bids Page 8 of 10 N. Contract Extension. All invitations for bids for open-end contracts shall, when practical, provide for an extension of the contract for a period up to the amount of the original time, upon mutual consent of the buyer and seller and written analysis by the Purchasing Agent that renewal is in the best interest of the City. Any contract extension less than $25,000 will require the approval of the City Manager, and contract extensions above $25,000 will require approval of the City Commission. O. Cancellation of Solicitation. A request for solicitations may be canceled and/or any or all responses to solicitations may be rejected in whole or in part when it is in the best interest of the City. The reasons therefore shall be made part of the bid file. After solicitations are opened, such rejection shall be made part of the bid file. P. Contract Duration. Generally, contract duration is contract specific. The project engineer would provide an estimate as to the duration of the contract to the City and the City would then approve the engineer’s estimate. On FDOT projects, to establish a contract’s duration, the following procedure should be followed: 1. Review the project plans and specifications with special emphasis on maintenance of traffic. If the project has more than one phase, determine what work can be done in each of the phases. 2. List the required activities for each phase. This list does not need to be exhaustive but does need to include all controlling items of work or activities on the critical path. 3. List each quantity of the unit of work that will be used as a basis for estimating the duration of that activity. On a project with more than one phase, use only the quantity associated with that phase. 4. Use the production rates and charts provided for on the State Construction Office’s web page, under the title of “Specialized Area/Scheduling Engineer”, to convert the units of work into workdays. This is done for each activity in each phase. The production rates may have to be supplemented with information from other sources and should be tempered with good engineering judgment and experience with similar work. 5. Review the appropriate Utility Work Schedule and/or Agreements to determine what part of the requested potentiality impacts the Contractor’s work. A delay occurs only if the prime contractor cannot work as a result of utility conflicts. Utility relocation duration should be handled as an activity if it will contribute to the project duration. Policy 10.05.01 – Procedure for Formal Bids Page 9 of 10 6. Multiply each of the workdays by a factor of 1.48 to convert them to contract days. • The factor of 1.48 is based on 5 working days per week. Implicit in this factor is the assumption that the contractor will use "normal" crews and equipment, and will work a "normal" workday. • If special provisions modify the time requirements of the project, then it may be appropriate to use another factor based on number of allowable working days and allowable working hours, either larger or smaller. For a project with incentive/disincentive, a factor of 1.0 or less could be used. This would be based on the assumption that the contractor would work 7 days per week with extended work hours. On the other hand, if the special provisions curtail the number of hours per day the contractor may work, the factor used may be larger than 1.48. • On Compressed Time or Time Priority Projects, the Scheduling Engineer may assume longer working hours, multiple crews, and six or seven day work weeks to accomplish a decrease in the project duration. Projects containing a No Excuse Bonus provision should have reduced project durations. Projects with a Liquidated Savings provision should be calculated using a 6-day workweek. • On A+B projects, the maximum number of days is calculated using normal production rates and 5-day workweek. If a computerized scheduling software package, workdays will be converted to calendar days using the calendar function in the program. Holidays, vacation time and other non-work days are entered into the project calendar. Depending on the time of year this may or may not replicate the 1.48 factor normally used for converting workdays to calendar days. The report(s) from the scheduling software and/or non-computerized form should show, as a minimum, for each activity: name, units of work, production rate, duration, beginning contract day and ending contract day. PREPARED BY: Procurement Services EFFECTIVE DATE: February 1, 1998 REVISED: April 11, 2006 REVISED: November 1, 2008 Kurt Bressner Kurt Bressner Policy 10.05.01 – Procedure for Formal Bids Page 10 of 10 City Manager