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By-law No. 2015-030 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM BY-LAW NUMBER 2015-030 BEING A BY-LAW TO DEFINE THE PROCUREMENT POLICIES AND PROCEDURES FOR THE CORPORATION OF THE MUNICIPALITY BAYHAM WHEREAS the Corporation of the Municipality of Bayham, pursuant to Section 271 of the Municipal Act, 2001,as amended, deems it prudent to enact a procurement policy; NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF BAYHAM HEREBY ENACTS A BY-LAW AS FOLLOWS: SHORT TITLE This by-law may be referred to as the 'Procurement By-law" Section 1 — Purposes, Goals & Objectives 1.1 The purposes, goals and objectives of this by-law and of each of the methods of procurement authorized herein are: a. to encourage competition among suppliers; b. to maximize savings for taxpayers; c. to ensure service and product delivery efficiency and effectiveness; d. to ensure service and product delivery quality; e. to make service and product providers accountable to the Municipality and the public; f. to encourage the procurement of goods and services with due regard to the product being accessible to persons with disabilities or be capable of being made accessible through the use of technology; g. to ensure environmentally responsible and sustainable purchasing where possible; h. to provide the highest level of government service at the least possible cost; i. to ensure fairness between bidders; j. to ensure objectivity in the procurement process; k. to the extent possible, ensure openness, accountability and transparency while protecting the financial best interests of the Municipality; I. to obtain the best value for the Municipality when procuring goods and services; m. to avoid conflicts between the interests of the Municipality and those of the Municipality's employees and elected officials. Section 2 - Definitions 2.1 In this by-law, a. "Award" shall mean authorization to proceed with the purchase of Goods, Services and Construction from a chosen supplier; b. "Bid" shall mean an offer or submission from a supplier in response to a Request for Quotation, Tender, Request for Proposal, Request for Price Agreement, an In House Bid or a Two Phase Bid request, which is subject to acceptance or rejection by the Municipality; c. "Bid Bond" shall mean the form of security required by the terms and conditions of Bid Solicitation documentation to guarantee that the Successful Bidder enters into a Contract with the Municipality, as required by Section 8 of this by-law; d. "Bid Solicitation" shall mean a formal request for Bids that may be in the form of a Request for Quotation, Request for Qualifications, Request for Tender, Request for Proposal, Request for Price Agreement, Request for In House Bid or a Two Phase Bid Request; e. "Conflict of Interest" shall mean a situation where a personal or business interest of a councillor, officer or employee of the Municipality is in conflict with the best interests of the Municipality, and includes: i. the giving or receiving of a direct or indirect personal gain or benefit, or a direct or indirect advantage or privilege, by any business or individual that provides advice, Goods, Services or Construction to the Municipality or a family member of such business that provides Goods, Services or Construction; ii. employment by the Municipality on a full time basis; and iii. a direct or indirect interest in any business that provides Goods, Services or Construction to the Municipality; f. "Construction" shall mean a construction, reconstruction, demolition, repair or renovation of a building, structure or other civil engineering or architectural work and includes site preparation, excavation, drilling, seismic investigation, soil investigation, the supply of products and materials and the supply of equipment and machinery if they are included in and incidental to the construction, and the installation and repair of fixtures of a building, structure or other civil engineering design or architectural work, but does not include professional services related to the construction contract unless they are included in the specifications for the procurement; g. "Consulting and Professional Services" shall mean those services requiring the skills of a professional for a defined service and includes but is not limited to architects, engineers, designers, surveyors, planners, accountants, auditors, management professionals, marketing professions, software and information technology experts, financial consultants, lawyers, law firms, real estate agents and brokers, planners, environmental planners and engineers, hydrogeologists, transportation planners and engineers, communications consultants and any other consulting of by the professional services which may be required by the Municipality; h. "Contract" shall mean a binding agreement between two or more parties that creates an obligation to do or provide a particular thing or service; i. "Employee-Employer Relationship" shall mean a relationship that exists where persons for pay or other consideration enter into the service of others and devote their personal labour for any given period and the other person has the power or right to control or direct the person in the material details of how the work is to be performed; j. "Employment" shall mean the act of being employed by the Corporation of the Municipality of Bayham; k. "Expression of Interest" shall mean a written detailed proposal submitted in response to a Request for Expression of Interest; "Extraordinary or Emergency Circumstance" shall mean an event or circumstance where the immediate purchase of Goods or Services or the entering into of a Construction Contract is essential or necessary to prevent or alleviate serious delay, a threat to public health, safety or welfare, the disruption of essential services or damage to public property or any expenditure that is necessary to respond to any emergency of the Municipality; m. "Fair Market Value" shall mean the price that would be paid, in an open and unrestricted market, by a knowledgeable and willing purchaser to a knowledgeable and willing vendor, both of whom are dealing at arm's length, are fully informed and are not under any compulsion to transact with one another; n. "Financing Lease" shall mean a lease which allows for the provision of Goods, Services or Construction if the lease may or will require payment by the Municipality of financing, interest, bonuses, premiums or other charges or costs for the Goods, Services or Construction over time and upon term; o. "Goods" shall mean moveable property including: i. the costs of installing, operating, maintaining or manufacturing such moveable property, and ii. raw materials, products, supplies, equipment and other physical objects of every kind and description whether in solid, liquid, gaseous or electronic form, unless they are procured as part of a Construction Contract; p. "Holdback" shall mean an amount withheld under the terms of a Contract to be used as security for the completion or performance of the Contract, and to avoid overpayment in relation to the progress of work; q. "In House Bid" shall mean a Bid made by a Department or a group of employees and authorized by Senior Staff submitted in response to a Bid Solicitation, where the provision of the Good, Service or Construction will be provided entirely by the employees of the Municipality; "Low Value Purchase" shall mean a purchase of Goods, Services or Construction which is random in nature, is not included as part of a Price Agreement, and does not exceed a value of$1,000.00; s. "Lowest Compliant Bid" shall mean the Bid that would provide the Municipality with the desired Goods, Services and Construction at the lowest cost, meets all the specifications and requirements and contains no major irregularities or qualifications; t. "Municipality" shall mean the Corporation of the Municipality of Bayham; u. "Online Tendering" shall mean the use of a computer-based system authorized by the Municipality and directly accessible by suppliers, that provides suppliers with information related to Bid solicitations; v. "Payment Security" shall mean the form of security required by the terms and conditions of Bid Solicitation documentation to guarantee the payment of labour and materials to be supplied in connection with a Contract, as required by Section 8 of this by-law; w. "Performance Security" shall mean the form of security required by the terms and conditions of Bid Solicitation documentation to guarantee the faithful performance of the Contract by a supplier, as required by Section 8 of this by-law; x. "Price Agreement" shall mean an agreement between the Municipality and the supplier of a Good, Service or Construction arrived at following a competitive tender or proposal process, whereby the supplier commits to the Municipality to provide Goods, Services or Construction, as and when needed by the Municipality, at a pre-determined price, for a pre- determined period of time, upon pre-determined terms and conditions; y. "Pre-qualification Submission" shall mean a detailed written proposal submitted in response to a Request for Pre-qualification but which does not create any contractual obligation between the party submitting the Pre-qualification Submission and the Municipality, but which may be a pre- condition to further procurement Contracts with the Municipality; z. "Progress Payment" shall mean a payment made under the terms of a Contract after the performance of the part of the Contract in respect of which payment is made but before the performance of the whole contract; aa. "Proposal" shall mean an offer submitted in response to a Request for Proposal, acceptance of which may be subject to further negotiation; bb. "Purchase" shall mean to acquire Goods, Services or Construction by purchase, rental, lease or trade; cc. "Purchase Order" shall mean a written order to a supplier formally stating ail terms and conditions for the purchase of Goods, Services or Construction or a written acceptance of an offer received in accordance with this by-law; dd. "Quotation" shall mean a binding offer submitted in response to a Request for Quotation; ee. "Request for Expressions of Interest" shall mean a request made by the Municipality to the market place for the purposes of compiling a list of persons or corporations who may be interested in providing Goods, Services or Construction to the Municipality from time to time. Acceptance of an expression of interest by the Municipality does not create any contractual obligation between the party submitting the expression of interest and the Municipality, but may be a precondition to Pre- qualification or further procurement Contracts with the Municipality; ff. "Request for Pre-qualification" shall mean a request for the detailed submission of the experience, financial strength, education, background and personnel of persons, firms or corporations who may, from time to time, qualify to supply Goods, Services and Construction to the Municipality; gg. "Request for Price Agreement" shall mean a request for the submission of a Tender or Proposal to enter into a Price Agreement with the Municipality; hh. "Request for Proposal" shall mean a request for proposals made pursuant to this by-law, which may or may not result in further negotiation, or the creation of Contractual obligations between the parties, depending on the terms of the Request for Proposal; ii. "Request for Quotation" shall mean a request for Quotations for the provisions of Goods, Services or Construction to the Municipality made pursuant to this by-law; jj. "Sole Source Purchase" shall mean the purchase of a Good, Service or Construction where there is only one available supplier of that Good, Service or Construction that meets the needs or requirements of the Municipality; kk. "Substantive Objection" shall mean a written objection provided to Senior Staff or the CAO by an interested party giving specific reasons for the objection; II. "Successful Bidder" shall mean the Bid that would provide the Municipality with the best product or service as measured by the evaluation criteria and which is compliant; mm. "Tender" shall mean a written detailed offer from a vendor or service provider, to supply Goods, Services or Construction to the Municipality; nn. "Two Phase Bid" shall mean a Proposal submitted in response to a Request for Proposals which requires the submission of the Proposal in phases, either in separate bid envelopes or at different times, whereby the proposal is evaluated in the first phase, and price is evaluated in the second. 2.2 To establish the definition of any other purchasing term not herein included, reference shall be made to the latest edition of the National Institute of Governmental Purchasing Inc.'s Dictionary of Purchasing Terms. 2.3 Schedules "A" and "B"attached hereto form part of this By-law. Section 3 —General Procurement Polices & Procedures 3.1 The policies and procedures prescribed in this by-law, including all of the purposes, goals and objectives of Section 1 hereof, shall be followed for the procurement of all Goods and Services and for the awarding of any Construction Contract by the Municipality or any of its officers, servants and employees with the exception of any of those pertaining to the Drainage Act or Municipal Drains. 3.2 This by-law shall not apply to those procurement processes enumerated in Schedule "A". Section 4— Responsibilities &Authorities 4.1 Senior Staff shall be responsible for and shall have authority for all procurement activity and decisions within their Department (including the Awarding of any Contract), subject to all of the following: a. all of the purposes, goals and objectives of Section 1 of this by-law shall be complied with; b. all procurement activities and decisions must be authorized by this by- law and must be carried out within the financial and other limits set out herein; c. no procurement activity or decision shall be contrary to any specific direction of the CAO or Council; d. ensuring that all necessary authorizations to proceed have been given and that sufficient funds are budgeted. 4.2 The CAO has the authority to instruct Senior Staff to not to award Contracts and to direct Senior Staff to report to Council for approval and may provide additional restrictions concerning procurement where such is considered necessary and in the best interest of the Municipality. 4.3 The exercise of all authority to award a Contract is subject to the identification and availability of sufficient funds in appropriate accounts within Council approved estimates or upon a determination being made by the Treasurer that the required funding can reasonably be expected to be made available in the current, or future years. Section 5 - Restrictions 5.1 No Contract for Goods, Services or Construction may be divided into two or more parts to avoid the application of the provisions of this by-law. 5.2 No Contract for Services shall be Awarded where the services could result in the establishment of an Employee -Employer Relationship. 5.3 No personal purchases shall be made by the Municipality for members of Council or any appointed member of a local board or commission or for Municipal employees or their families. 5.4 An employee who has the responsibility of declaring Goods surplus shall not bid or personally obtain any Goods that the employee has declared as surplus unless approved by the CAO. 5.5 No employee of the Municipality having responsibility for sending items to a public auction may bid on any of the Municipality's Goods unless approved by the CAO. 5.6 No employee or Council member shall purchase, on behalf of the Municipality, any Goods, Services or Construction, except in accordance with this By-law. 5.7 No councillor, officer or employee or member of an employee's family of the Municipality shall accept, directly or indirectly, from any person, company, firm or corporation to which any purchase order or contract is, or might be awarded, any rebate or gift or money, except: a. gifts of a very small intrinsic value; b. gifts given for the use and benefit of the Municipality; c. moderate hospitality during the normal course of business that would not significantly exceed what the Municipality, through the employee's expense account, would likely provide in return and would not be perceived by others as influencing the making of a business decision. 5.8 All councillors, officers and employees of the Municipality shall declare any Conflict of Interest to the CAO such persons shall refrain from participating in the procurement process to which the Conflict of Interest relates. The CAO shall report any personal conflicts to Council. 5.9 All procurement undertaken by the Municipality shall be undertaken in accordance with the Municipality's Code of Conduct, policies and procedures manual and in accordance with the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50. 5.10 Where an applicable national or international trade agreement is in conflict with this by- law, the trade agreement shall take precedence. 5.11 The Municipality may only enter into a Financing Lease if: a. a by-law authorizing the Financing Lease is passed; b. before the by-law authorizing the Financing Lease is enacted,the Municipality has adopted a statement of the Municipality's lease financing policies and goals; and c. the Financing Lease includes a schedule of all fixed amounts of payment, if any, required under the lease and that may be required under any possible extensions or renewals of the lease. 5.12 The statement required by Section 5.11, shall include, ata minimum, a discussion of the financial and other risks for the Municipality of Financing Leases. 5.13 Before entering into a Financing Lease, the Treasurer shall: a. prepare a report to Council with a recommendation, assessing, in the opinion of the Treasurer, the costs and financial and other risks associated with the proposed Financing Lease, including, a comparison between the fixed and estimated costs and the risks associated with the proposed Financing Lease, and those associated with other methods of financing; i. a statement summarizing the effective rate or rates of financing for the Financing Lease, the ability for lease payment amounts to vary, and the methods or calculations, including possible financing rate changes, that may be used to establish that variance under the Financing Lease; ii. a statement summarizing any contingent payment obligations under the Financing Lease that in the opinion of the Treasurer would result in a material impact for the Municipality, including lease termination provisions, equipment loss, equipment replacement options, and guarantees and indemnities; iii. a summary of the assumptions applicable to any possible variations in the Financing Lease payment and contingent payment obligations; and iv. any other matters the Treasurer or Council considers advisable; b. obtain legal advice and financial advice with respect to the proposed Financing Lease and if the scope of the proposed transaction warrants it, ensure that the legal and financial advice is from a source independent from the advice ordinarily obtained by the Municipality for legal or financial matters; c. provide an opinion about whether the costs of the financing for the proposed Financing Lease are lower than other methods of financing available to the Municipality, and whether the risks associated with the Financing Lease are reasonable. 5.14 The costs and risks associated with a proposed Financing Lease in a report made under Section 5.13 shall be assessed as of the date the report is made. 5.15 If at any time after a report under Section 5.13 is made, but before the Financing Lease is executed, the Treasurer becomes of the opinion that a changed circumstance with respect to the proposed Financing Lease may result in a material impact for the Municipality, the Treasurer shall, as soon as is reasonably possible update the report and present it to Council. 5.16 A report made under Section 5.13 shall summarize the information required by that section for the entire term of the Financing Lease, including any possible extensions or renewals. 5.17 Where applicable each of the procurement procedures set out in Section 8 of this by-law shall be undertaken in compliance with the following steps: a. the scope of the Goods, Services and Construction shall be clearly and extensively defined by the Bid Solicitation documentation; b. the form of Bid Solicitation documentation shall be, to the extent possible, standardized using common forms and processes; c. the Bid Solicitation documentation shall be circulated and advertised in as wide and extensive a manner as will ensure the best, most comprehensive and most competitive response to the Bid Solicitation; d. all Bids shall be fairly and completely evaluated using as open, fair and transparent a process as may be possible in the circumstances of the particular Bid Solicitation. Evaluation criteria shall be established for each class of procurement undertaken by the Municipality; e. the evaluation of each Bid shall be carefully recorded using a standardized form of evaluation record, such as a tally card or other method of point tabulation method. The evaluation record shall be stored and shall not be destroyed until three years following completion of the procurement Contract; f. all Successful Bidders shall,where required by this by-law, be required to comply with the Contract negotiation, preparation and execution requirements of Section 8 of this by-law; g. all Contracts shall be monitored to ensure that performance is in accordance with the requirements of the Contract and steps shall be taken to correct the performance of suppliers where it falls below the standard required by the Contract; h. all Bids received by the Municipality shall be kept together in a secure place until the time for opening. All Bids shall remain sealed until the opening, which shall occur in public. Bid Solicitations requiring the submission of proprietary information or information containing intellectual property protected by law shall contain provisions providing for protecting the confidentiality of same, in accordance with the provisions of the Municipal Freedom of Information and Protection of Privacy Act; all Bid Solicitation documentation shall clearly set out the requirements for the price element of the submission, specifying whether the Bid price is submitted on a unit price or total price basis and whether it is net of any taxes, early payment discounts, premiums, financing charges, administrative costs, cost of living or other escalations, contingencies or other deductions or additions and how any Contract extras shall be dealt with; all Bid Solicitation documentation shall clearly specify how each of the following criteria shall be utilized in evaluating all Bids (criteria is not listed and any order of preference): i. price; ii. quality of Goods, Services and Construction; iii. experience and qualifications of Bidder(s); iv. risk; v. strategy; vi. approach; vii. methodology; viii. scheduling of work; ix. past performance; x. facilities and equipment to be utilized in Contract performance; xi. personnel to be used in Contract performance. Section 6—Total Project Cost 6.1 Where this by-law prescribes financial limits on Contracts that may be Awarded on the authority of Senior Staff, or provides for financial limits on Contracts required to be reported to Council, for the purpose of determining whether a Contract falls within these prescribed limits, the Contract amount shall be the sum of all costs to be paid to the supplier under the contract plus all taxes and less any rebates. Section 7— Prescribed Council Approval 7.1 Despite any other provision of this by-law, the following Contracts are subject to Council approval: a. any Contract requiring approval from the Ontario Municipal Board; b. any Contract prescribed by statute to be made by Council; c. where the cost amount proposed for acceptance is higher than the Council approved estimates and the necessary adjustments cannot be made; d. where a Substantive Objection emanating from the Bid solicitation has been filed with Senior Staff; e. where a major irregularity precludes the Award of a Tender to the supplier submitting the Lowest Complaint Bid; f. where authority to approve has not been expressly delegated; g, any contract having a value in excess of ten thousand dollars ($10,000.00); h. where the final costs of the contract exceed the amount originally submitted and approved in the contract by 10%or$10,000.00 whichever is less. Section 8— Procurement Procedures 8.1 The following are hereby authorized as the acceptable procedures for all procurement undertaken by or on behalf of the Municipality. They may be utilized individually or in combination with one another, as may be appropriate in the circumstances: Request for Expression of Interest 8.2 Senior Staff may conduct a Request for Expression of Interest for the purposes of determining the availability of suppliers of any Good, Service or Construction and for the purposes of keeping a list of available suppliers (which shall be deemed to be the "goal" of the Request for Expression of Interest form of procurement). The submission of an Expression of Interest does not create any contractual obligation between the Municipality and the interested supplier. The submission of an Expression of Interest may be made a specific pre- condition of any other procurement procedure utilized by the Municipality. Request for Pre-Qualification 8.3 Senior Staff may conduct a Request for Pre-qualification for any Good, Services or Construction to select the number of acceptable Bidders that may Bid on the subsequent competitive sealed Bid process under the following circumstances, which for the purposes of this section, shall also be deemed to be the "goal" of the Request for Pre-qualification form of procurement: a. the work is considered "high risk"with respect to Regulations governed under the Occupational Health and Safety Act; b. the work is such that Contract administration costs (work inspection, follow-up, extra fee negotiations) could result in a substantial cost to the Municipality if the work is not satisfactorily performed the first time; c. the Goods or equipment to be purchased must meet national safety standards or has demonstrated an acceptable level of performance; or d. the work involves complex, multi-disciplinary activities; 8.4 When the Request for Pre-qualification is utilized, a Pre-qualification Proposal document shall be provided to the potential Bidders setting out the criteria for pre-qualification which may include: a. experience on similar work (firm and staff assigned); b. references provided from other customers for similar work; c. verification of applicable licences and certificates; d. health and safety policies and staff training; e. financial capability; f. past performance with the Municipality. 8.5 The selection of Bidders following a pre-qualification process does not create any contractual obligation between the Municipality and the pre-qualified bidder. Pre-qualification may be made a specific pre-condition of any other procurement procedure utilized by the Municipality. Low Value Purchase (Less Than $1,000.00) 8.6 A Low Value Purchase may be utilized for purchases involving Contracts which do not exceed one thousand dollars ($1,000.00) (which shall be deemed to be ''le "goal" of the Low Value Purchase form of procurement). These purchases may be made utilizing a Purchase Order, petty cash, a cheque, or a Municipal credit card. Senior Staff shall appoint individuals within their department who have authority to make Low Value Purchases. These purchases are within the discretion of Senior Staff or the Senior Staffs delegate. Only purchases which can be demonstrated to have been made at Fair Market Value shall be made. Request for Quotation — Informal (Purchases Between $1,000.00-$10,000.00 8.7 For the procurement of Goods, Services and Construction having a Contract value of one thousand dollars ($1,000.00) or more but not exceeding ten thousand dollars ($10,000.00), an informal Request for Quotation shall be utilized (which shall be deemed to be the "goal" of the Informal Request for Quotation form of procurement). Three Quotations, either by telephone or in writing, shall be obtained. These purchases do not require formal advertising nor the receipt of sealed Bids. The Quotations shall be reviewed, and the results tabulated to determine the Award of the Contract for same upon approval of Senior Staff. Request for Quotation — Formal (Purchases Between $10,000.00-$50,000.00) 8.8 For the procurement of Goods, Services and Construction having a Contract value of ten thousand dollars ($10,000.00) or more but not exceeding fifty thousand dollars ($50,000.00), a formal Request for Quotation shall be utilized (which shall be deemed to be the "goal" of the Formal Request for Quotation form of procurement). At least three Quotations shall be obtained, in writing. These purchases do not require formal advertising, nor the receipt of sealed Bids. The Quotations shall be reviewed and the results tabulated, to determine the Award of the Contract for same. In appropriate circumstances, the Request for Proposal or the Request for Tender processes may be utilized for Contracts in this value range, if the criteria for each procurement method is otherwise met. Request for Tender(Purchases Exceeding $50,000) 8.9 For the procurement of Goods, Services and Construction having a Contract value of fifty thousand dollars ($50,000.00) or more, a Request for Tender shall be used where all of the following criteria apply which for the purposes of this section, shall also be deemed to be the "goals" of the Request for Tender form of procurement: a. two or more sources are considered capable of supplying the Good, Service or Construction; b. the Good, Service or Construction is adequately defined to permit the evaluation of Tenders against clearly stated criteria, c. the market conditions are such that Tenders can be submitted on a common pricing basis, and d. it is intended that the lowest priced Compliant Tender will be accepted without negotiations; 8.10 Notice of the Tender shall be given by formal advertising or On-line Tendering. Notice shall also be given to all Bidders who were required to be Pre-qualified and to all bidders who were required to submit an Expression of Interest. 8.11 Sealed Tenders with a public opening shall be required. 8.12 The Award shall be made to the Lowest Compliant Bidder. 8.13 The Tender shall beopened and read out in public. All Bid amounts shall be recorded on a Summary of Bidders sheet. 8.14 Any irregularities in the Tender shall be dealt with in accordance with Schedule "B"of this by-law. 8.15 The Tender documents shall require the Successful Bidder to execute those documents and take those steps set out in Section 8 of this by-law. 8.16 The Award of any Tender having a Contract value in excess of ten thousand dollars($10,000.00)requires Council approval. Request for Proposals (Purchases Exceeding $50,000) 8.17 For the procurement of Goods, Services and Construction having a Contract value of fifty thousand dollars ($50,000.00) or more, a Request for Proposal shall be used where after applying the following criteria, it is determined that the Request for Proposal is a more appropriate form of procurement than Tender which for the purposes of this Section shall also be deemed to be the "goals" of the Request for Proposal form of procurement: a. the procurement is required as a result of a peculiar problem, requirement or objective; b. the selection of the supplier depends more upon the effectiveness of the proposed solution, than the price alone; c. one or more of the criteria for issuing a Tender cannot be met; d. it is expected that negotiation with one or more Bidders may be required with respect to any aspect of the Contract; e. the precise Good, Service or Construction, or the specifications therefore are not known or are not definable and it is expected that Bidders will further define them; 8.18 Notice of the Request for Proposal shall be given by formal advertising or On-line Tendering. Notice shall also be given to all Bidders who were required to be Pre-qualified and to all bidders who were required to submit an Expression of Interest. 8.19 The Award of any Request for Proposal having a Contract value in excess of ten thousand dollars($10,000.00) requires Council approval. 8.20 Any irregularities in the Request for Proposal shall be dealt with in accordance with Schedule "B"of this by-law. 8.21 Where an Award may be made following an evaluation of the Proposals, without further negotiation, the successful Bidder shall be required to comply with the Contract requirements of Section 8 of this by-law. Request for Price Agreement—Any Price 8.22 A Request for Price Agreement shall be used for the procurement of Goods, Services and Construction of any Contract value when the following criteria apply, which for the purposes of this Section shall also be deemed to be the "goals" of the Request for Price Agreement form of procurement: a. where it is important that the Municipality be guaranteed a continuous supply of Goods, Services or Construction; b. the volume of Goods, Services and Construction over the course of a year is high; c. economies of scale can be achieved by eliminating multiple low-value Bids; d. demand is not known in advance; e. the use of the Goods, Services or Construction required is repetitive in nature; f. delivery of the Goods, Services or Construction is Contracted for as the need arises; 8.23 Notice of the Request for Price Agreement shall be given by formal advertising or On-line Tendering. Notice shall also be given to all Bidders who were required to be Pre-qualified and to all bidders who were required to submit an Expression of Interest. 8.24 The Award of any Price Agreement having a Contract value in excess of one hundred thousand dollars($100,000.00) requires Council approval. 8.25 Any irregularities in a Price Agreement submission shall be dealt with in accordance with Schedule "B"of this by-law. 8.26 The Award shall be made to the Lowest Compliant Bidder. 8.27 The Tender shall be opened and read out in public at a time and date established by the CAO. All Bid amounts shall be recorded on a Summary of Bidders sheet. 8.28 The Tender documents shall require the Lowest Compliant Bidder to execute those documents and take those steps set out in Section 8 of this by- law. 8.29 No Contractual obligation shall arise between a supplier and the Municipality who have executed a Price Agreement until the Goods, services or Construction are actually ordered. 8.30 Negotiation may be used for the procurement of Goods, Services or Construction for Contracts of any Contract value when any of the following criteria apply, which for the purposes of this Section shall also be deemed to be the "goals" of the Negotiation form of procurement: a. due to abnormal market conditions, the Goods, Services or Construction required are in short supply; b. where competition is precluded due to the existence of any patent rights, copyright, technical secret or control of raw material; c. where there is only one source of the Goods, Services or Construction which would be acceptable and cost effective; d. where two or more identical Bids are received; e. where all Bids received are not acceptable or exceed the amount budgeted for the procurement; f. where the extension or reinstatement of an existing Contract would be more cost effective or beneficial to the Municipality; g. where Extraordinary or Emergency Circumstances exist; h. where for security or confidentiality reasons it is in the public interest; or i. where authorized by Council so to do; 8.31 The Award of any negotiated Contract having a Contract Value in excess of ten thousand dollars($10,000.00) requires Council approval. 8.32 The Award of any negotiated Contract shall comply with Section 8 of this by- law. Extraordinary or Emergency Circumstances Purchases 8.33 When Senior Staff is of the opinion that an Extraordinary Circumstance exists, Senior Staff, in consultation with the CAO or the Mayor may authorize the purchase of such Goods, Services and Construction as is considered necessary to remedy the situation without regard to the requirement for a Bid solicitation and may award the necessary Contract provided that the Contract does not exceed $10,000 (which for the purposes of this Section, shall also be deemed to be the "goal" of the Extraordinary Circumstance Purchase). 8.34 The relevant details surrounding an Extraordinary or Emergency Circumstance Award shall be reported to Council at the next possible meeting following the Award. Sole Source Purchase 8.35 A Sole Source Purchase may be used for the procurement of Goods, Services or Construction for Contracts of any Contract value, in the following circumstances, which for the purposes of this section shall also be deemed to be the "goals" of the Sole Source Purchase form of procurement: a. where the compatibility of a purchase with existing equipment, facilities or service is a paramount consideration and the purchase must be made from a sole source; b. where a Good is purchased for testing or trial use; c. where the Municipality purchases supplies for resale; d. where the Municipality has a rental contract with a purchase option and such purchase option could be beneficial to the Municipality; e. notwithstanding anything in this policy, where a purchase is determined by Council to be fair and reasonable and is made from a non-profit corporation supported by the Municipality, the Municipality may make such a purchase as a Sole Source Purchase; f. where Goods are offered for sale by tender, auction or negotiation such purchase will be deemed to be a Sole Source Purchase and the CAO may authorize the submission of a Bid or the conduct of negotiations where the CAO determines the purchase to be clearly in the best interest of the Municipality; g. for matters involving security, police matters, or confidential issues, a purchase may be made in a manner that protects the confidentiality of the contractor or the Municipality. Such purchases may be made as a Sole Source Purchase; h. in any situation where the Council of the Corporation of the Municipality of Bayham deems it appropriate. 8.36 The Award of any Sole Source Purchase Contract having a Contract Value in excess of ten thousand dollars ($10,000.00) requires Council approval. 8.37 The Award of any Sole Source Purchase Contract shall comply with Section 8 of this by-law. Two Phase Bid 8.38 A Request for Proposal may require the submission of the Proposal in two phases. Phase 1 would assess the Proposal and Phase 2 would assess the price. 8.39 The Two Phase bid may require one submission containing two sealed envelopes, the first containing the Proposal and the second the Price. In the case of a two envelope submission, the first envelope shall be opened first and assessed. Only the second envelopes of those Bids meeting the specifications of the Request for Proposal shall be opened. The unsuccessful Bidders price envelopes shall be returned unopened. The Price envelopes of successful Phase 1 Bids shall be treated as Tenders. The Proposal envelopes shall be treated as Proposals. 8.40 The Two Phase Bid may require two separate submissions. The first submission shall contain the Proposal, without price. It shall be evaluated and only those Bidders meeting the Request for Proposal specifications would be asked to submit a Phase 2 price Bid envelope. The Phase 1 envelopes shall be treated as Proposals and the Phase 2 envelopes shall be treated as Tenders. 8.41 The goal of the Two Phase Bid form of procurement shall be to deal with procurement situations that require the combined advantages of the Proposal and the Tender forms of procurement. 8.42 In House Bids may be used for the procurement of Goods, Services and Construction of any Contract value only in the following circumstances, which for the purposes of this Section shall be deemed to be the "goals" of the In House Bid form of procurement: a. where a Good, Service or Construction has historically been provided by an external supplier and Council determines that it is in the best interests of the Municipality to allow its staff to compete for the provision of the Good, Service or Construction; b. where a Good, Service or Construction has historically been provided by staff of the Municipality and Council determines that it is in the best interests of the Municipality to allow its staff to compete for the provision of the Good, Service or Construction; c. in any other circumstances that Council determines may be appropriate; and d. where proper cost accounting, allocation and other infrastructure are in place to permit an accurate and thorough examination of all of the direct and indirect costs associated with the provision of the particular Good, Service or Construction; 8.43 In House Bids shall only be utilized where external suppliers have also been requested to submit Bids; 8.44 In House Bids must be authorized by Council, in advance; 8.45 only one In House Bid will be permitted for each Bid Solicitation; 8.46 If any Bid Solicitation permits In House Bids, all Bidders shall be made aware of this fact in the Bid Solicitation documentation; 8.47 where an In House Bid will require the services of a unionized employee of the Municipality and the provisions of the Good, Service or Construction will require a change to a collective agreement, then the concurrence of the Union which has collective bargaining rights with respect to that agreement shall be required before the In House Bid will be accepted; 8.48 In determining whether an In House Bid is in the best interests of the Municipality, the following criteria shall be taken into account by Council: a. whether the Bid will result in a significant increase or decrease in capital equipment and infrastructure expenditures by the Municipality; b. the extent to which the In House Bid will affect the future ability of the Municipality to deliver essential health, emergency or other vital services to the public, in a cost effective and efficient manner; c. the extent to which the In House Bid will affect staffing and personnel complement of the Municipality; d. the extent to which the In House Bid will affect the financial position of the Municipality; and e. the extent to which the In House Bid will affect service levels provided to the public; 8.49 if an In House Bid is selected as the Successful Bid, then compliance with Section 8 of this by-law shall not be required, but instead, a memorandum of understanding shall be drafted. In all other respect, the Bid documentation required shall be the same for all Bids. Section 9— Bid &Contract Administration Submission of Bids 9.1 Bids shall be accepted by the CAO or designate in paper form or where provided, as an On-line Tender. 9.2 If two equal Bids are received, a means of breaking the tie consistent with the provisions of the solicitation shall be employed. 9.3 Factors to be considered in breaking the tie include: a. whether a prompt payment discount has been offered; b. when delivery is an important factor, the Bidder offering the best delivery date shall be given preference; c. a Bidder in a position to provide better after sales service, with a good record in this regard, shall be given preference; d. a Bidder with an overall satisfactory performance record shall be given preference over a Bidder known to have an unsatisfactory performance record. 9.4 Following the closing of a Bid Solicitation, there shall be no informal contact between any Bidder and any elected official or staff member of the Municipality relating to the Tender. Any contact shall only occur in a formai manner, to the extent permitted by the Bid Solicitation documentation. 9.5 Prior to the closing of a Bid Solicitation, the only contact that a Bidder may have with the Municipality or any of its staff or elected officials shall be made in writing, and only if made for the purposes of requesting clarification about the Bid Solicitation documentation. The Municipality may only respond to such clarification requests in writing, either in the form of a letter response or in the form of an addenda, but in either case, a copy of both the clarification request and the response or the addenda shall be provided to all Bidders at the same time. 9.6 In spite of Section 9.5, a bidders meeting may be held where applicable at the discretion of Senior Staff to allow bidders to seek clarification on the requirements of the tender/proposal. 9.7 A Bidders meeting is to be held for all tenders and bidder attendance may be a mandatory requirement at Senior Staffs discretion. 9.8 Prior to the opening of a proposal or tender a bidder can request the return of such proposal or tender. The bidder may submit another proposal or tender provided such submission is within the time limits set out in the bid document. Guarantees of Contract Execution & Performance 9.9 Senior Staff may require that a Bid be accompanied by a Bid Bond or other similar security to guarantee entry into a Contract. 9.10 In addition to the security referred to in Section 9.9, the Successful Bidder may be required to provide, a. a Performance Bond to guarantee the faithful performance of a Contract, and b. a Payment Bond to guarantee the payment for labour and materials to be supplied in connection with a Contract. 9.11 Senior Staff shall select the appropriate means to guarantee execution and performance of the Contract. Means may include one or more of, but are not limited to, financial bonds or other forms of security deposits, provisions for liquidated damages, progress payments, and Holdbacks. 9.12 Prior to the commencement of work and where deemed appropriate, evidence of Liability Insurance Coverage satisfactory to Senior Staff must be obtained, ensuring indemnification of the Municipality from any and all claims, demands, losses, costs or damages resulting from the performance of a Bidder's obligations under the Contract and from any other risk determined by Senior Staff as requiring coverage. 9.13 Prior to payment to a supplier, a Certificate of Clearance from the Workplace Safety and Insurance Board shall be obtained ensuring all premiums or levies have been paid to the Board to date or that independent Operator Status has been secured. 9.14 Senior Staff shall ensure that the guarantee means selected will: a. not be excessive but sufficient to cover financial risks to the Municipality; b. provide flexibility in applying leverage on a supplier so that the penalty is proportional to the deficiencies; and c. comply with provincial statutes and regulations. 9.15 Financial bonds for Contract performance shall only be required where the Municipality will be exposed to costs if the supplier does not complete the requirements of the Contract. 9.16 If the risk to the Municipality is not adequately limited by the progress payment provisions of the Contract, a minimum payment Holdback of 10% shall be mandatory on all Contracts exceeding $10,000. 9.17 Senior Staff may release the Holdback funds on construction contracts upon: a. the contractor submitting a statutory declaration that all accounts have been paid and that all documents have been received for all damage claims; b. receipt of clearance from the Workplace Safety and Insurance Board for any arrears of Workplace Safety and Insurance Board assessment; c. all the requirements of the Construction Liens Act being satisfied; d. receipt of certification from the Municipality's Solicitor, where applicable, that liens have not been registered; and e. certification from the consulting engineer architect, under whom the work has been performed, that the conditions of the Contract have been satisfied. 9.18 The conditions for release of Holdback funds provided in Section 9. 17 apply to other Goods or Services Contracts with necessary modifications. 9.19 The conditions for release of Holdback funds provided in Section 9.17 apply to either Goods or Services Contracts, with necessary modifications. Bid Irregularities 9.20 The process for administering irregularities contained in Bids pertaining to all Contracts shall be as set out in Schedule "B" 9.21 For an irregularity listed in the first column of Schedule "B",the response applicable to it is set out opposite to it in the second column of Schedule "B". Form of Contract 9.22 The Award of a Contract may be made by way of an agreement, or by letter of approval. 9.23 An approval letter is to be used when the resulting Contract is straightforward and will contain the Municipality's standard terms and conditions. 9.24 A formal agreement is to be used when the resulting Contract is complex and will contain terms and conditions other than the Municipality's standard terms and conditions. 9.25 It shall be the responsibility of Senior Staff to determine if it is in the best interest of the Municipality to establish a formal agreement with the supplier. 9.26 Where it is determined that Section 9.24 is to apply, the formal agreement shall be reviewed and approved for execution by the CAO or the Municipality's Solicitor. 9.27 Where a formal agreement is not required, Senior Staff shall issue a Purchase Order incorporating the terms and conditions relevant to the Award of Contract. Co-operative Purchasing 9.28 The Municipality may participate with other government agencies or public authorities in Co-operative Purchasing where it is in the best interests of the Municipality to do so. 9.29 The policies of the government agencies or public authorities calling the co- operative Tender are to be the accepted policy for that particular Tender. Supplier Performance 9.30 Senior Staff shall monitor the applicable performance of all procurement Contracts and shall document evidence related to same and shall advise the CAO where the performance of a supplier has been unsatisfactory in terms of failure to meet Contract specifications, terms and conditions or for Health and Safety, environmental or other violations. 9.31 Senior Staff may, in consultation with the CAO or the Municipality's Solicitor, prohibit an unsatisfactory supplier from bidding on future contracts. 9.32 Where it is found that a supplier has performed poorly or below Contract requirements, Senior Staff shall make recommendations to Council about ways to deal with such performance. Receipt of Goods 9.33 Senior Staff shall, a. arrange for the prompt inspection of Goods on receipt to confirm conformance with the terms of the Contract; and b. inform the CAO of significant discrepancies immediately. 8.34 The CAO shall coordinate an appropriate course of action with Senior Staff for any non-performance or discrepancies. Reporting to Council 9.34 The Treasurer shall submit to Council an information report semi-annually containing the details relevant to the exercise of delegated authority for all Contracts awarded by Senior Staff exceeding ten thousand dollars ($10,000.00) including amendments and renewals. 9.35 Where a professional services supplier is awarded Contract(s) of a cumulative total value of $10,000 or more in a calendar year, all Contracts relative to the supplier shall be included in an annual information report to Council submitted by the Treasurer 9.36 Senior Staff shall certify in the report that the awards are in compliance with the Purchasing By-law. Access to Information 9.37 The disclosure of information received relevant to the issue of Bid solicitations or the Award of Contracts emanating from Bid Solicitations shall be made by the appropriate officers in accordance with the provisions of the Municipal Freedom of Information and Protection of Privacy Act, as amended. Surplus Stock 9.38 Senior Staff shall submit to the CAO reports of furniture, vehicles, equipment, stocks of all supplies, and other Goods and material, which are no longer, used or which have become obsolete, worn out, or incapable of being used. 9.39 The CAO shall have the authority to transfer furniture, vehicles, equipment, surplus stock, and other Goods and material from one department to other departments. 9.40 Senior Staff with the approval of the CAO shall have the authority to sell or dispose of all furniture, vehicles, equipment, surplus stock, supplies, or other Goods and material which have become unsuitable for use by the Municipality or to exchange or trade the same for new furniture, vehicle, equipment, surplus stock, supplies, or other goods and material. 9.41 Sale of surplus furniture, vehicles, equipment, stock, supplies and other Goods and material shall be made to the highest responsive Bidder and the sale shall be made in accordance with the provisions of this by-law where applicable. 9.42 Senior Staff with the approval of Council shall have the authority to donate to a charitable non-profit or religious organization, all furniture, vehicles, equipment, surplus stock, supplies, or other Goods and material which have become unsuitable for use by the Municipality. Section 10— By-law Review 10.1 The Procurement By-law shall be reviewed prior to the end of each Council term and any amendment thereto shall be made prior to the inaugural meeting of the next Council. 10.2 The review shall determine how effective the Procurement By-law has been in achieving the objectives set out in Section 1 of the by-law as well as the requirements of the Municipal Act, 2001, as amended. 10.3 The review shall be undertaken by the CAO, and Treasurer, and the following consultations: a. The Association of Municipalities of Ontario; b. The Minister of Municipal Affairs; c. The Federation of Canadian Municipalities; d. The National Institute of Governmental Purchasing. READ A FIRST, SECOND and THIRD TIME and finally passed this 19th day of March, 2015 MA R CLEK SCHEDULE "A" The acquisition methods described in this by-law may not apply to the following items: 1. Training and Education Conferences, conventions, courses and seminars; ii. Magazines, books, periodicals; iii. Memberships. 2. Refundable Employees Expenses Advances; ii. Meal Allowances; iii. Travel and Entertainment; iv. Miscellaneous -Non-Travel. 3. Employer's General Expenses Payroll Deductions Remittances; ii. Medical; iii. Licenses (Vehicle, etc.); iv. Debenture Payments including principal interest and foreign exchange; v. Insurance Premiums; vi. Grants to Agencies; vii. Damage Claims; viii. Petty Cash Replenishment; ix. Payments to Real Property; x. Tax Remittances; xi. Regional charges to and from other government bodies; xii. Payments for employment; xiii. Legal; xiv. Planning; xv. Engineering; xvi. Specialty Consulting. 4. Professional and Special Services Committee Fees; ii. Medical, Laboratory, and Pharmacy Services; iii. Legal fees for expert or professional legal services for ail Regional and Insurance Matters; iv. Payments to Social Service and Health Agencies that are subject to purchase of Service Agreements; v. Medical and Dental fees; vi. Appraisal Fees; vii. Witness fees; viii. Honorariums. 5. Utilities (monthly charges and utility relocations) i. Postage; ii. Water and Sewer; iii. Hydro; iv. Gas. Schedule `B' IRREGULARITY RESPONSE 1. Late Bids. Automatic rejection and not opened or read publicly. 2. Unsealed Envelopes. Automatic rejection. 3. Insufficient Financial Security (No Bid Automatic rejection. Security or agreement to bond or insufficient Bid bond or agreement to bond). 4. Bids not Completed in non-erasable Automatic rejection. medium and signed in ink. 5. Incomplete Bids (Part bids -all items Automatic rejection unless, in the not bid). opinion of Senior Staff in consultation with CAO, the incomplete nature is trivial or insignificant. 6. Qualified Bids (Bids qualified or Automatic rejection unless, in the restricted by an attached statement). opinion of Senior Staff in consultation with CAO, the qualification or restriction is trivial or not significant. 7. Bids received on documents other Automatic rejection unless, in the than those provided by the opinion of Senior Staff in consultation Municipality. with CAO, the matter is trivial or insignificant. 8. Bids Containing Minor Obvious 48 hours to correct and initial errors. Clerical Errors. 9. Failure to execute Agreement to Bond Automatic rejection. (Performance Security) or Bonding company corporate seal or signature missing from agreement to bond. 10. Failure to execute Bid Security Automatic rejection. (Financial Security). _ (a) Corporate seal or signature or both of 48 hours to correct. the Bidder, missing. (b) Corporate seal or signature of Automatic rejection. bonding company missing. 11. Bids Delivered to the wrong location. Automatic rejection 12. Other Bid Security- Uncertified Automatic rejection. Cheques. 13.Documents - Execution (a) Corporate seal or signature missing. 48 hours to rectify situation. (b) Corporate seal and signature Automatic rejection. missing. 14.Erasures, Overwriting or Strike-Outs which are not Initialed: (a) uninitiated changes to the Tender 48 hours to initial. documents which are minor (example: the tenderer's address is amended by over-writing but not initialed); (b) unit prices in the Schedule of Prices 48 hours to initial. have been changed but not initialed and the Contract totals are consistent with the price as amended; (c) unit prices in the Schedule of Prices Automatic rejection. which have been changed but not initialed and the Contract totals are not consistent with the price as amended; (d) other mathematical errors, which are 48 hours to initial corrections as not consistent with the unit prices. made by the Purchasing Services Division. (e) Documents, in which all necessary Automatic rejection. Addenda, which have financial implication, have not been acknowledged. (f) Other Minor Irregularities. The CAO and Senior Staff shall have authority to waive irregularities, which they jointly consider to be minor. (g) Any Irregularity. Despite the provisions herein contained, Council may waive any irregularity where it considers it to be the best interest of the Municipality.